| Page Range | 49117-49886 | |
| FR Document |
| Page and Subject | |
|---|---|
| 80 FR 49280 - Sunshine Act Meeting Notice | |
| 80 FR 49200 - Sunshine Act Meeting | |
| 80 FR 49318 - Funding Availability Under Supportive Services for Veteran Families (SSVF) Program | |
| 80 FR 49280 - Advisory Committee on Reactor Safeguards (ACRS); Meeting of the ACRS Subcommittee on Radiation Protection and Nuclear Materials; Notice of Meeting | |
| 80 FR 49196 - Taking and Importing Marine Mammals; Taking Marine Mammals Incidental to Northeast Fisheries Science Center Fisheries Research; Correction | |
| 80 FR 49298 - Notice of Opportunity for Public Comment on Surplus Property Release at Madras Municipal Airport, Madras, OR | |
| 80 FR 49134 - Modification of Restricted Areas R-3804A, R-3804B, and R-3804C; Fort Polk, LA | |
| 80 FR 49181 - Proposed Redesignation and Expansion of Restricted Area R-4403; Gainesville, MS | |
| 80 FR 49298 - First Meeting: RTCA Special Committee 235 (SC 235) | |
| 80 FR 49173 - Default Investment Fund Errors | |
| 80 FR 49202 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Korea, Mexico, and the Republic of Turkey: Initiation of Less-Than-Fair-Value Investigations | |
| 80 FR 49207 - Heavy Walled Rectangular Welded Carbon Steel Pipes and Tubes From the Republic of Turkey: Initiation of Countervailing Duty Investigation | |
| 80 FR 49201 - Foreign-Trade Zone (FTZ) 37-Orange County, NY; Notification of Proposed Production Activity; Takasago International Corporation (USA); (Fragrance Compounds); Harriman, NY | |
| 80 FR 49201 - Approval of Expansion of Subzone 92A; VT Halter Marine, Inc.; Pascagoula, Mississippi | |
| 80 FR 49201 - Foreign-Trade Zone 38-Spartanburg County, South Carolina; Application for Subzone; Springsteen Logistics, LLC; Rock Hill and Fort Lawn, South Carolina | |
| 80 FR 49138 - Program Fraud Civil Remedies | |
| 80 FR 49265 - Outer Continental Shelf, Gulf of Mexico, Oil and Gas Lease Sale, Central Planning Area Lease Sale 247 | |
| 80 FR 49177 - Abnormal Occurrence Reports | |
| 80 FR 49296 - Culturally Significant Objects Imported for Exhibition Determinations: “Painting the Modern Garden: Monet to Matisse” Exhibition | |
| 80 FR 49296 - Culturally Significant Objects Imported for Exhibition Determinations: “Joaquín Torres-García: The Arcadian Modern” Exhibition | |
| 80 FR 49168 - Lavandulyl Senecioate; Exemption From the Requirement of a Tolerance | |
| 80 FR 49155 - Safety Zone; U.S. Army Exercise, Des Plaines River, Channahon, IL | |
| 80 FR 49223 - Twenty-Eighth Update of the Federal Agency Hazardous Waste Compliance Docket | |
| 80 FR 49193 - Relaxation of the Federal Reid Vapor Pressure Gasoline Volatility Standard for Mecklenburg and Gaston Counties, North Carolina | |
| 80 FR 49264 - Advisory Board for Exceptional Children | |
| 80 FR 49164 - Approval of North Carolina's Request To Relax the Federal Reid Vapor Pressure Gasoline Volatility Standard for Mecklenburg and Gaston Counties | |
| 80 FR 49297 - 60-Day Notice of Proposed Information Collection: Request for Entry Into Children's Passport Issuance Alert Program | |
| 80 FR 49190 - Withdrawal of Approval and Disapproval of Air Quality Implementation Plans; California; San Joaquin Valley; Contingency Measures for the 1997 PM2.5 | |
| 80 FR 49173 - Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations; Delay of Effective Date and Addition of Comment Period | |
| 80 FR 49246 - Rare Diseases: Common Issues in Drug Development; Draft Guidance for Industry; Availability | |
| 80 FR 49269 - Notice of Statutory Reconsideration of Petitions for Trade Adjustment Assistance | |
| 80 FR 49186 - Periodic Reporting | |
| 80 FR 49184 - Periodic Reporting | |
| 80 FR 49236 - Sunshine Act; Notice of Meeting | |
| 80 FR 49240 - Botanical Drug Development; Draft Guidance for Industry; Availability | |
| 80 FR 49244 - Endotoxin Testing Recommendations for Single-Use Intraocular Ophthalmic Devices; Guidance for Industry and Food and Drug Administration Staff; Availability | |
| 80 FR 49244 - Qualification of Biomarker-Total Kidney Volume in Studies for Treatment of Autosomal Dominant Polycystic Kidney Disease; Draft Guidance for Industry; Availability | |
| 80 FR 49140 - Revision of Freedom of Information Act Regulation | |
| 80 FR 49263 - 60-Day Notice of Proposed Information Collection: Promise Zones | |
| 80 FR 49237 - Privacy Act of 1974: Report of New System of Records | |
| 80 FR 49211 - Atlantic Highly Migratory Species; Meeting of the Atlantic Highly Migratory Species Advisory Panel; Correction | |
| 80 FR 49171 - Fisheries of the Northeastern United States; Small-Mesh Multispecies Fishery; Adjustment to the Northern Red Hake Inseason Possession Limit | |
| 80 FR 49253 - National Institute on Minority Health and Health Disparities; Notice of Meeting | |
| 80 FR 49252 - Notice of Kidney Interagency Coordinating Committee Meeting | |
| 80 FR 49250 - Notice of Interest Rate on Overdue Debts | |
| 80 FR 49267 - Notice of Proposed Information Collection; Request for Comments for 1029-0119 | |
| 80 FR 49268 - Notice of Lodging of Proposed Consent Decree Under the Oil Pollution Act | |
| 80 FR 49311 - MCM Rail Services LLC, d/b/a Baltimore Industrial Railroad-Petition for Discontinuance of Service Exemption-in Baltimore County, Md. | |
| 80 FR 49252 - Center for Scientific Review; Notice of Closed Meetings | |
| 80 FR 49251 - Center for Scientific Review; Notice of Meeting | |
| 80 FR 49252 - National Institute of Allergy and Infectious Diseases; Notice of Closed Meeting | |
| 80 FR 49251 - National Institute of General Medical Sciences; Notice of Meeting | |
| 80 FR 49210 - Marine Mammals; File No. 17952 | |
| 80 FR 49198 - Agency Information Collection Activities: Proposed Collection; Comment Request-Food Program and Reporting System (FPRS) | |
| 80 FR 49212 - Pacific Fishery Management Council; Public Meeting | |
| 80 FR 49213 - Pacific Fishery Management Council; Public Meeting | |
| 80 FR 49213 - Western Pacific Fishery Management Council; Public Meetings | |
| 80 FR 49199 - Gallatin Resource Advisory Committee | |
| 80 FR 49221 - Silver State Solar Power South, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 80 FR 49220 - Columbia Gulf Transmission, LLC; Notice of Application | |
| 80 FR 49217 - Equitrans, L.P.; Notice of Intent To Prepare an Environmental Impact Statement for the Planned Equitrans Expansion Project, and Request for Comments on Environmental Issues | |
| 80 FR 49221 - Texas Eastern Transmission, LP; Notice of Intent To Prepare an Environmental Assessment for the Planned Access South, Adair Southwest, and Lebanon Extension Projects and Request for Comments on Environmental Issues | |
| 80 FR 49220 - Saddle Butte Rockies Midstream, LLC; Notice of Request for Waiver | |
| 80 FR 49219 - Oildale Energy, LLC; Supplemental Notice That Initial Market-Based Rate Filing Includes Request for Blanket Section 204 Authorization | |
| 80 FR 49216 - Combined Notice of Filings #1 | |
| 80 FR 49200 - Notice of Petitions by Firms for Determination of Eligibility to Apply for Trade Adjustment Assistance | |
| 80 FR 49215 - Submission for OMB Review; Comment Request; “Patents for Humanity Program” | |
| 80 FR 49214 - Invention Promoters/Promotion Firms Complaints | |
| 80 FR 49236 - Agency Forms Undergoing Paperwork Reduction Act Review | |
| 80 FR 49312 - Advisory Committee for Aviation Consumer Protection | |
| 80 FR 49302 - Qualification of Drivers; Exemption Applications; Vision | |
| 80 FR 49299 - Qualification of Drivers; Exemption Applications; Diabetes Mellitus | |
| 80 FR 49301 - Qualification of Drivers; Exemption Applications; Narcolepsy | |
| 80 FR 49304 - Qualification of Drivers; Exemption Applications; Diabetes Mellitus | |
| 80 FR 49299 - Buy America Waiver Notification | |
| 80 FR 49157 - Animals on VA Property | |
| 80 FR 49267 - Certain Magnesia Carbon Bricks from China and Mexico; Correction to Notice of Institution of Five-Year Reviews | |
| 80 FR 49235 - Change in Bank Control Notices; Formations of, Acquisitions by, and Mergers of Bank Holding Companies; Correction | |
| 80 FR 49202 - Transportation and Related Equipment, Technical Advisory Committee; Notice of Partially Closed Meeting | |
| 80 FR 49202 - Materials Technical Advisory Committee; Notice of Partially Closed Meeting | |
| 80 FR 49136 - Medical Devices; Neurological Devices; Classification of the Computerized Cognitive Assessment Aid | |
| 80 FR 49236 - Change in Bank Control Notices; Acquisitions of Shares of a Bank or Bank Holding Company | |
| 80 FR 49247 - Compounding Animal Drugs From Bulk Drug Substances; Draft Guidance for Industry; Extension of Comment Period | |
| 80 FR 49296 - Regulatory Fairness Hearing; Region IX-Springerville, Arizona | |
| 80 FR 49283 - Victory NextShares Trust, et al.; Notice of Application | |
| 80 FR 49285 - Proposed Collection; Comment Request | |
| 80 FR 49281 - Self-Regulatory Organizations; NYSE Arca, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Holdings By the iShares Interest Rate Hedged Corporate Bond ETF and iShares Interest Rate Hedged High Yield Bond ETF | |
| 80 FR 49288 - Self-Regulatory Organizations; BATS Exchange, Inc.; Notice of Filing of a Proposal To List and Trade Shares of the ProShares Managed Futures Strategy ETF of the ProShares Trust Under BATS Rule 14.11 on BATS Exchange, Inc. | |
| 80 FR 49286 - Self-Regulatory Organizations; The NASDAQ Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Modify NASDAQ Rule 7051 Fees Relating to Pricing for Direct Circuit Connections | |
| 80 FR 49285 - Self-Regulatory Organizations; New York Stock Exchange LLC; Designation of a Longer Period for Commission Action on a Proposed Rule Change Amending the Eighth Amended and Restated Operating Agreement of the Exchange To Establish a Regulatory Oversight Committee as a Committee of the Board of Directors of the Exchange and Make Certain Conforming Amendments to Exchange Rules | |
| 80 FR 49253 - Approval of Freeboard International as a Commercial Gauger | |
| 80 FR 49279 - Proposed Extension of Existing Collection; Comment Request | |
| 80 FR 49278 - Agency Information Collection Activities; Submission for OMB Review; Comment Request; Cadmium in Construction Standard | |
| 80 FR 49216 - Privacy Act of 1974; System of Records | |
| 80 FR 49254 - Accreditation and Approval of Saybolt LP as a Commercial Gauger and Laboratory | |
| 80 FR 49254 - Accreditation and Approval of AmSpec Services, LLC, as a Commercial Gauger and Laboratory | |
| 80 FR 49297 - Government/Industry Aeronautical Charting Forum Meeting | |
| 80 FR 49262 - Agency Information Collection Activities: Immigrant Petition for Alien Worker, Form I-140; Extension, Without Change, of a Currently Approved Collection | |
| 80 FR 49117 - Freedom of Information Act, Privacy Act, and Government in the Sunshine Act Procedures | |
| 80 FR 49264 - Revision of Agency Information Collection for the Tribal Reassumption of Jurisdiction Over Child Custody Proceedings | |
| 80 FR 49250 - Agency Information Collection Activities: Proposed Collection: Public Comment Request | |
| 80 FR 49242 - Disease Natural History Database Development-(U24) | |
| 80 FR 49243 - Scientific Inquiry Into How Mobile Health and Social Data Sources May Inform Medical Product Safety and Efficacy; Public Workshop; Request for Comments | |
| 80 FR 49268 - Agency Information Collection Activities; Proposed eCollection eComments Requested; Approval of an Extension of a Currently Approved Collection; Request To Change III/NGI Base Identifier(s) (1-542) | |
| 80 FR 49248 - Physiological Closed-Loop Controlled Devices; Public Workshop; Request for Comments | |
| 80 FR 49152 - Safety Zone, James River; Newport News, VA | |
| 80 FR 49312 - Sentencing Guidelines for United States Courts | |
| 80 FR 49314 - Sentencing Guidelines for United States Courts | |
| 80 FR 49187 - Determination of Attainment; Texas; Houston-Galveston-Brazoria 1997 Ozone Nonattainment Area; Determination of Attainment of the 1997 Ozone Standard | |
| 80 FR 49127 - Compliance Bulletin-Amendment to the Interstate Land Sales Full Disclosure Act | |
| 80 FR 49127 - Airworthiness Directives; REIMS AVIATION S.A. Airplanes | |
| 80 FR 49130 - Airworthiness Directives; British Aerospace Regional Aircraft Airplanes | |
| 80 FR 49132 - Airworthiness Directives; British Aerospace Regional Aircraft Airplanes | |
| 80 FR 49256 - Privacy Act of 1974; Department of Homeland Security, U.S. Customs and Border Protection, DHS/CBP-001, Import Information System, System of Records | |
| 80 FR 49175 - Privacy Act of 1974: Implementation of Exemptions; Department of Homeland Security DHS/CBP-001, Import Information System, System of Records, System of Records | |
| 80 FR 49845 - Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for Brickellia mosieri (Florida Brickell-bush) and Linum carteri var. carteri (Carter's Small-flowered Flax) | |
| 80 FR 49325 - Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System Policy Changes and Fiscal Year 2016 Rates; Revisions of Quality Reporting Requirements for Specific Providers, Including Changes Related to the Electronic Health Record Incentive Program; Extensions of the Medicare-Dependent, Small Rural Hospital Program and the Low-Volume Payment Adjustment for Hospitals | |
| 80 FR 49255 - Notice of Adjustment of Legitimate Amount in Dispute for the Dispute Resolution Pilot Program for Public Assistance Appeals |
Food and Nutrition Service
Forest Service
Economic Development Administration
Foreign-Trade Zones Board
Industry and Security Bureau
International Trade Administration
National Oceanic and Atmospheric Administration
Patent and Trademark Office
Federal Energy Regulatory Commission
Centers for Disease Control and Prevention
Centers for Medicare & Medicaid Services
Food and Drug Administration
Health Resources and Services Administration
National Institutes of Health
Coast Guard
Federal Emergency Management Agency
U.S. Citizenship and Immigration Services
U.S. Customs and Border Protection
Fish and Wildlife Service
Indian Affairs Bureau
Ocean Energy Management Bureau
Surface Mining Reclamation and Enforcement Office
Employment and Training Administration
Workers Compensation Programs Office
Federal Aviation Administration
Federal Highway Administration
Federal Motor Carrier Safety Administration
Surface Transportation Board
Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, and notice of recently enacted public laws.
To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.thefederalregister.org and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions.
National Council on Disability.
Final rule.
The National Council on Disability is finalizing regulations which implement the Freedom of Information Act, the Privacy Act of 1974, and the Government in the Sunshine Act. This rule describes the procedures for members of the public to request access to records. In addition, this document also describes procedures for the Council's responses to these requests, including the timeframe for response and applicable fees. These rules should be read in conjunction with the text of the Freedom of Information Act, the Privacy Act of 1974, the Government in the Sunshine Act, and the Uniform Freedom of Information Fee Schedule and Guidelines published by the Office of Management and Budget.
Effective September 16, 2015.
Joan Durocher, General Counsel, National Council on Disability, at 202-272-2004 or
These regulations in a proposed rule were published for public comment in the
The commenter provided various comments on the proposed Freedom of Information Act procedures at part 10000. First, the commenter recommended that § 10000.6(b) should state that responses to a FOIA request should include the case number and the date of the original request. Reasoning that the absence of this information can cause confusion and wasted effort should an administrative appeal be necessary. We agree with the suggestion and § 10000.6(b) has been modified to reflect that correspondence responding to FOIA requests should include the case number and date of the original request.
In addition, the commenter had several comments about the proposed § 10000.10 concerning fees. The commenter stated that a page duplication fee of $.10 per page should be identified. The commenter states that the fee is supposed to be a proxy based on actual duplication costs. The commenter states actual duplication costs are substantially less than $.10 per page, but the standard rate for most agencies is $.10. FOIA regulation 5 U.S.C. 552(a)(4)(A)(ii) states fees shall be limited to reasonable standard charges for document search, duplication, and review. No specific fee scale was applied in the regulation, the Council does not intend to cite a specific cost for duplication. Not having specific rates listed in the regulation allows the Council to adjust costs accordingly when a price fluctuation exists which allows the Council flexibility to adjust rates without first necessitating a change in the regulation.
In addition, the commenter states in § 10000.10(c) the reference to the operating costs for a central processing unit is obsolete as well as the reference to the salary of the operators performing the search. FOIA regulation 28 CFR 16.10(a)(2) defines direct costs as expenses that an agency incurs in searching for and duplicating (and, in the case of commercial use requests, reviewing) records in order to respond to a FOIA request. For example, direct costs include the salary of the employee performing the work (
The commenter states in § 100000.10(d) the rules are ambiguous and should clearly state unambiguously that noncommercial requesters are not charged review fees. The commenter added that OMB guidance is quite clear that noncommercial requesters are not charged. The commenter also stated charging review fees following the results of an appeal in which the written initial determination was reversed or remanded is procedurally unfair and could impose needless hurdles. Council maintains there is sufficient clarity in the current language “review fees shall be charged for requesters who make commercial use requests”. As to the assessment of review fees post an appeal, Council followed OMB guidelines when proposing review fees be assessed. We appreciate the commenter's perspective, the Council has decided to retain the language which mirrors the FOIA statute. Such fees are allowable under the FOIA regulations and therefore current language will remain unchanged.
Additionally, in § 10000.10(e) the commenter suggests changing the wording of “statutory entitlements of 100 pages of duplication . . .” To “statutory entitlements of 100 pages of duplication or equivalent”, so that other types of duplicated media can be accommodated. With the ever-changing nature in which data is collected the Council agrees with the commenter and will add specific language to the final rule indicating that duplication costs equivalent of 100 pages in print or equivalent will be processed at no charge.
This final rule is not a “significant regulatory action” within the meaning of Executive Order 12866. The economic impact of these regulations should be minimal, therefore, further economic evaluation is not necessary.
The Regulatory Flexibility Act, as amended by the Small Business Regulatory Enforcement Act of 1996 (5 U.S.C. 601
The Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, requires each agency to assess the effects of its regulatory actions on state, local, and tribal governments, and the private sector. Agencies must prepare a written statement of economic and regulatory alternatives anytime a proposed or final rule imposes a new or additional enforceable duty on any state, local, or tribal government or the private sector that causes those entities to spend, in aggregate, $100 million or more (adjusted for inflation) in any one year (defined in UMRA as a “federal mandate”). The Council determined that such a written statement is not required in connection with these final rules because they will not impose a federal mandate, as defined in UMRA.
The Council analyzed this action for purposes of the National Environmental Policy Act of 1969, 42 U.S.C. 4321
Under the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
This action has been analyzed in accordance with the principles and criteria contained in Executive Order 13132, dated August 4, 1999, and the Council determined that it does not have sufficient implications for federalism to warrant the preparation of a Federalism Assessment.
Administrative practice and procedure, Freedom of information, Confidential business information, Privacy.
Administrative practice and procedure, Privacy.
Administrative practice and procedure, Public availability of information, Meetings.
In consideration of the foregoing, the Council amends title 5, Code of Federal Regulations, by establishing chapter C, consisting of parts 10000-10049, to read as follows:
5 U.S.C. 552, as amended; E.O. 12600, 52 FR 23781, 3 CFR 1987, 1987 Comp., p. 235; 3 CFR 235.
The regulations in this part implement the provisions of the FOIA.
The following definitions apply to this part:
A request from a professor of geology at a university for records relating to soil erosion, written on letterhead of the Department of Geology, would be presumed to be from an educational institution.
A request from the same professor of geology seeking drug information from the Food and Drug Administration in furtherance of a murder mystery he is writing would not be presumed to be an institutional request, regardless of whether it was written on institutional stationery.
A student who makes a request in furtherance of the completion of a
(1) Commercial requestors;
(2) Non-commercial scientific or educational institutions or representatives of the news media; and
(3) All other requestors.
(1) The need to search for and collect the requested records from physically separate facilities;
(2) The need to search for, collect and appropriately examine a voluminous amount of separate and distinct records which are demanded in a single request; or
(3) The need for consultation, which shall be conducted with all practicable speed, with another agency having a substantial interest in the determination of the request.
Records that are required by the FOIA to be made available for public inspection and copying may be accessed through the Agency's Web site at
(a) The FOIA does not require disclosure of matters that are:
(1) Specifically authorized under criteria established by an executive order to be kept secret in the interest of national defense or foreign policy and are, in fact, properly classified under executive order;
(2) Related solely to the internal personnel rules and practices of the Council;
(3) Specifically exempted from disclosure by statute (other than the Government in the Sunshine Act, 5 U.S.C. 552b, as amended), provided that such statute:
(i)(A) Requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue; or
(B) Establishes particular criteria for withholding or refers to particular types of matters to be withheld; and
(ii) If enacted after October 28, 2009, specifically cites to Exemption 3 of the FOIA, 5 U.S.C. 552(b)(3);
(4) Trade secrets and commercial or financial information obtained from a person and privileged or confidential;
(5) Inter-agency or intra-agency memoranda or letters, which would not be available at law to a party other than an agency in litigation with the Council;
(6) Personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy;
(7) Records or information compiled for law enforcement purposes, but only to the extent that the production of such law enforcement records or information:
(i) Could reasonably be expected to interfere with enforcement proceedings;
(ii) Would deprive a person of a right to a fair trial or impartial adjudication;
(iii) Could reasonably be expected to constitute an unwarranted invasion of personal privacy;
(iv) Could reasonably be expected to disclose the identity of a confidential source, including a state, local, or foreign agency or authority or any private institution that furnished information on a confidential basis, and, in the case of a record or information compiled by a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, information furnished by a confidential source;
(v) Would disclose techniques and procedures for law enforcement investigations or prosecutions or would disclose guidelines for law enforcement investigations or prosecutions if such disclosure could reasonably be expected to risk circumvention of the law; or
(vi) Could reasonably be expected to endanger the life or physical safety of any individual.
(8) Contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions; or
(9) Geological and geophysical information and data, including maps, concerning wells.
(a) You may request copies of records under this part by email to
(b) Your request shall reasonably describe the records sought with sufficient specificity, and when possible, include names, dates, and subject matter, in order to permit the FOIA Officer to locate the records with a reasonable amount of effort. If the FOIA Officer cannot locate responsive records based on your written description, you will be notified and advised that further identifying information is necessary before the request can be fulfilled. Although requests are considered either FOIA or Privacy Act requests, the Council processes requests for records in accordance with both laws so as to provide the greatest degree of lawful access while safeguarding an individual's personal privacy.
(c) Your request should specify your preferred form or format (including electronic formats) for the records you seek. We will accommodate your request if the record is readily available in that form or format. When you do not specify the form or format of the response, we will provide responsive records in the form or format most convenient to us.
(a)
(b)
(1) FOIA case number and date of the original request;
(2) The name(s) of any person responsible for the determination to deny the request in whole or in part;
(3) A brief statement of the reason(s) for the denial, including any FOIA exemption applied in denying the request. The FOIA Officer will indicate, if technically feasible, the amount of information deleted and the exemption under which a deletion is made on the released portion of the record, unless including that indication would harm an interest protected by the exemption;
(4) An estimate of the volume of information withheld, if applicable. This estimate does not need to be provided if it is ascertainable based on redactions in partially disclosed records or if the disclosure of the estimate would harm an interest protected by an applicable FOIA exemption; and
(5) A statement that the adverse determination may be appealed and a description of the requirements for an appeal under § 10000.7.
(c)
(1)
(2)
(ii) Whenever the Council refers any part of the responsibility for responding to a request to another agency, it shall document the referral, maintain a copy of the record that it refers, and notify the requester of the referral and inform the requester of the name(s) of the agency to which the record was referred, including that agency's FOIA contact information.
(3)
(a) You may appeal an adverse determination related to your FOIA request, or the Council's failure to respond to your FOIA request within the prescribed time limits, to the Executive Director, National Council on Disability, 1331 F Street, NW., Suite 850, Washington, DC 20004.
(b) Your appeal must be in writing and must be postmarked or electronically received by the Executive Director within 60 days of the date of the letter denying your request, in whole or in part. For the most expeditious handling, your appeal letter and envelope should be marked “Freedom of Information Act Appeal” and reference the request number.
(c) The Executive Director shall respond to all administrative appeals in writing and within the time frame stated in § 10000.8(d). If the decision affirms, in whole or in part, the Chief FOIA Officer's determination, the letter shall contain a statement of the reasons for the affirmance, including any FOIA exemption(s) applied, and will inform you of the FOIA's provisions for court review. If the Executive Director reverses or modifies the Chief FOIA Officer's determination, in whole or in part, you will be notified in writing and your request will be reprocessed in accordance with that decision. The Council may work with Office of Government Information Services (OGIS) to resolve disputes between FOIA requestors and the Council. A requester may also contact OGIS in the following ways: Via mail to OGIS, National Archives and Records Administration, 8601 Adelphi Road—OGIS, College Park, MD 20740 (
(a)
(b)
(2) Using multitrack processing, the Council may provide requesters in its slower track(s) with an opportunity to limit the scope of their requests in order to qualify for faster processing within the specified limits of the Council's faster track(s). In doing so, the Council will contact the requester by telephone, letter, or email, whichever is more efficient in each case.
(c)
(d)
(e)
(1) One time to await information that we reasonably requested from you, as permitted by 5 U.S.C. 552(a)(6)(A)(iii)(I);
(2) As necessary to clarify with you any fee-related issue.
(3) If we toll the time frame for response under paragraphs (e)(1) or (2) of this section, the tolling period ends upon our receipt of your response.
(f)
(g)
(h)
(1) For requests for expedited processing, a “compelling need” involves:
(i) Circumstances in which the lack of expedited treatment could reasonably be expected to pose an imminent threat to the life or physical safety of an individual; or
(ii) A request made by a person primarily engaged in disseminating information, with a time urgency to inform the public of actual or alleged federal government activity.
(2) Your request for expedited processing must be in writing and may be made at the time of the initial FOIA request or at any later time.
(3) Your request for expedited processing must include a statement, certified to be true and correct to the best of your knowledge and belief, explaining in detail the basis for requesting expedited processing. If you are a person primarily engaged in disseminating information, you must establish a particular urgency to inform the public about the federal government activity involved in the request.
(4) The FOIA Officer will decide whether to grant or deny your request for expedited processing and notify the requester within ten calendar days of receipt. You will be notified in writing of the determination. Appeals of adverse decisions regarding expedited processing shall be processed expeditiously.
(a)
(b)
(i) Give you an opportunity to object to disclosure of your information, in whole or in part;
(ii) Describe the business information requested or include copies of the requested records or record portions containing the information; and
(iii) Inform you of the time frame in which you must respond to the notice.
(2) In cases involving a voluminous number of submitters, notice may be made by posting or publishing the notice in a place or manner reasonably likely to accomplish it.
(c)
(d)
(1) A statement of the reasons why each of your bases for withholding were not sustained;
(2) A description of the business information to be disclosed; and
(3) A specified disclosure date, which shall be a reasonable time after the notice.
(e)
(d) of this section shall not apply if:
(1) The Council determines that the information is exempt under the FOIA;
(2) The information lawfully has been published or has been officially made available to the public;
(3) Disclosure of the information is required by statute (other than the FOIA) or by a regulation issued in accordance with the requirements of Executive Order 12600;
(4) The designation made by the submitter under paragraph (a) of this section appears obviously frivolous, except that, in such a case, the Council shall, within a reasonable time prior to the date the disclosure will be made, give the submitter written notice of the final decision to disclose the information.
(f)
(a) We will charge fees that recoup the full allowable direct costs we incur in processing your FOIA request. Fees may be charged for search, review or duplication. We will use the most efficient and least costly methods to comply with your request.
(b) With regard to manual searches for records, we will charge the salary rate(s) (calculated as the basic rate of pay plus 16 percent of that basic rate to cover benefits) of the employee(s) performing the search.
(c) In calculating charges for computer searches for records, we will charge at the actual direct cost of providing the service, including the cost of operating the central processing unit directly attributable to searching for records potentially responsive to your FOIA request and the portion of the salary of the operators/programmers performing the search.
(d) Review fees shall be charged for requesters who make commercial use requests. Review fees shall be assessed only for the initial review—that is the review undertaken the first time we analyze the applicability of a specific exemption to a particular record or portion of a record. Records or portions of records withheld in full under an exemption that is subsequently determined not to apply may be reviewed again to determine the applicability of other exemptions not previously considered. We may assess the costs for such subsequent review. Review fees are charged at the same rates as those charged for a search.
(e) Notice of anticipated fees in excess of $25.00:
(1) When the Council determines or estimates that the fees to be assessed in accordance with this section will exceed $25.00, the Council shall notify the requester of the actual or estimated amount of the fees, including a breakdown of the fees for search, review or duplication, unless the requester has indicated a willingness to pay fees as high as those anticipated. If only a portion of the fee can be estimated readily, the Council shall advise the requester accordingly. If the requester is a noncommercial use requester, the notice shall specify that the requester is entitled to the statutory entitlements of 100 pages of duplication or equivalent at no charge. For example, 100 pages burned to a single CD would be considered equivalent to 100 pages of duplication. And, if the requester is charged search fees, two hours of search time at no charge, and shall advise the requester whether those entitlements have been provided.
(2) In cases in which a requester has been notified that the actual or estimated fees are in excess of $25.00, the request shall not be considered received and further work will not be completed until the requester commits in writing to pay the actual or estimated total fee, or designates some amount of fees the requester is willing to pay, or in the case of a noncommercial use requester who has not yet been provided with the requester's statutory entitlements, designates that the requester seeks only that which can be provided by the statutory entitlements. The requester must provide the commitment or designation in writing, and must, when applicable, designate an exact dollar amount the requester is willing to pay. The Council is not required to accept payments in installments.
(3) If the requester has indicated a willingness to pay some designated amount of fees, but the Council estimates that the total fee will exceed that amount, the Council shall toll the processing of the request when it notifies the requester of the estimated fees in excess of the amount the requester has indicated a willingness to pay. The Council shall inquire whether the requester wishes to revise the amount of fees the requester is willing to pay or modify the request. Once the requester responds, the time to respond will resume from where it was at the date of the notification.
(4) The Council shall make available its FOIA Public Liaison or other FOIA professional to assist any requester in reformulating a request to meet the requester's needs at a lower cost.
(f) We will charge you the full costs of providing you with the following services:
(1) Certifying that records are true copies; or
(2) Sending records by special methods such as express or certified mail.
(g) We may assess interest charges on an unpaid bill starting on the 31st calendar day following the day on which the billing was sent. Interest shall be at the rate prescribed in 31 U.S.C. 3717 and will accrue from the date of the billing.
(h) We will not charge a search fee for requests by educational institutions, non-commercial scientific institutions, or representatives of the news media. A search fee will be charged for a commercial use requests.
(i) Except for a commercial use request, we will not charge you for the
(j) If the Council fails to comply with the time limits in which to respond to a request, and if no unusual or exceptional circumstances, as those terms are defined by the FOIA, apply to the processing of the request, it may not charge search fees, or, in the instances of requests from requesters requests by educational institutions (unless the records are sought for a commercial use), noncommercial scientific institutions, or representatives of the news media, may not charge duplication fees.
(k) After processing, actual fees must be equal to or exceed $25, for the Council to require payment of fees.
(l) You may not file multiple requests, each seeking portions of a document or documents, solely for the purpose of avoiding payment of fees. When the Council reasonably believes that a requester, or a group of requesters acting in concert, has submitted requests that constitute a single request involving clearly related matters, we may aggregate those requests and charge accordingly.
(m) We may not require you to make payment before we begin work to satisfy the request or to continue work on a request, unless:
(1) We estimate or determine that the allowable charges that you may be required to pay are likely to exceed $250; or
(2) You have previously failed to pay a fee charged within 30 days of the date of billing.
(n) Upon written request, we may waive or reduce fees that are otherwise chargeable under this part. If you request a waiver or reduction in fees, you must demonstrate that a waiver or reduction in fees is in the public interest because disclosure of the requested records is likely to contribute significantly to the public understanding of the operations or activities of the government and is not primarily in your commercial interest.
(1) In deciding whether disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of operations or activities of the government, the Council shall consider all four of the following factors:
(i) The subject of the request must concern identifiable operations or activities of the Federal Government, with a connection that is direct and clear, not remote or attenuated.
(ii) Disclosure of the requested records must be meaningfully informative about government operations or activities in order to be “likely to contribute” to an increased public understanding of those operations or activities. The disclosure of information that already is in the public domain, in either the same or a substantially identical form, would not contribute to such understanding where nothing new would be added to the public's understanding.
(iii) The disclosure must contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area as well as the requester's ability and intention to effectively convey information to the public shall be considered. It shall be presumed that a representative of the news media will satisfy this consideration.
(iv) The public's understanding of the subject in question must be enhanced by the disclosure to a significant extent. However, components shall not make value judgments about whether the information at issue is “important” enough to be made public.
(2) To determine whether disclosure of the requested information is primarily in the commercial interest of the requester, the Council shall consider the following factors:
(i) The Council shall identify any commercial interest of the requester, as defined in § 10000.2, that would be furthered by the requested disclosure. Requesters shall be given an opportunity to provide explanatory information regarding this consideration.
(ii) A waiver or reduction of fees is justified where the public interest is greater than any identified commercial interest in disclosure. The Council ordinarily shall presume that where a news media requester has satisfied the public interest standard, the public interest will be the interest primarily served by disclosure to that requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return shall not be presumed to primarily serve the public interest.
(3) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver shall be granted for those records.
(4) Requests for a waiver or reduction of fees should be made when the request is first submitted to the component and should address the criteria referenced above. A requester may submit a fee waiver request at a later time so long as the underlying record request is pending or on administrative appeal. When a requester who has committed to pay fees subsequently asks for a waiver of those fees and that waiver is denied, the requester shall be required to pay any costs incurred up to the date the fee waiver request was received.
5 U.S.C. 552a.
The regulations in this part implement the provisions of the Privacy Act.
The following terms used in this part are defined in the Privacy Act:
(a)
(b)
(1) Your name, address, and telephone number;
(2) The system(s) of records in which the requested information is contained; and
(3) At your option, authorization for copying expenses.
(4)
(i)
(ii)
(iii) The Council, in its discretion, may require additional proof of identification depending on the nature and sensitivity of the records in the system of records(iv) For the quickest possible handling, your letter and envelope should be marked “Privacy Act Request.”
(5)
(c)
(d)
(e)
(2) If you are the parent or guardian of the individual to whom the requested record pertains, or the individual to whom the record pertains has been deemed incompetent by a court, your request for access to records about that individual must include:
(i) The identity of the individual who is the subject of the record, including his or her name, current address, and date and place of birth;
(ii) Verification of your identity in accordance with paragraph (b)(4) of this section;
(iii) Verification that you are the subject's parent or guardian, which may be established by a copy of the subject's birth certificate identifying you as his or her parent, or a court order establishing you as guardian; and
(iv) A statement certifying that you are making the request on the subject's behalf.
(a)
(b)
(c)
(1) The name and title or position of the person responsible for the denial;
(2) A brief statement of the reason for the denial(s), including any applicable Privacy Act exemption;
(3) A statement that you may appeal the denial and a brief description of the requirements for appeal under § 10001.5.
(d)
(a)
(2) Your appeal must be in writing, sent to the General Counsel at the address specified in § 10001.3(b) and contain the following information:
(i) Your name;
(ii) Description of the record(s) at issue;
(iii) The system of records in which the record(s) is contained;
(iv) A statement of why your request should be granted.
(3) The General Counsel shall determine whether to uphold or reverse the initial determination within 30 working days of our receipt of your appeal. The General Counsel shall notify you of his or her decision, including a brief statement of the reasons for the decision, in writing. The General Counsel's decision will be the final action of the Council.
(b)
(c)
We will not charge a fee for search or review of records requested under this part, or for the correction of records. If you request copies of records, we may charge a fee of $.10 per page.
Any person who makes a false statement in connection with any request for a record or an amendment or correction thereto under this part is subject to the penalties prescribed in 18 U.S.C. 494 and 495 and 5 U.S.C. 552a(i)(3).
5 U.S.C. 552b.
(a) The regulations in this part implement the provisions of the Sunshine Act.
(b) Requests for all records other than those described in § 10002.9, shall be governed by the Council's Freedom of Information Act procedures at 5 CFR part 10001.
The following definitions apply in this part:
(1) Notational voting or similar consideration of business for the purpose of recording votes, whether by circulation of material to members' individually in writing or by a polling of the members individually by phone or email.
(2) Action by five or more members to:
(i) Open or close a meeting or to release or withhold information pursuant to § 10002.6;
(ii) Set an agenda for a proposed meeting;
(iii) Call a meeting on less than seven days' notice, as permitted by § 10002.4; or
(iv) Change the subject matter or the determination to open or to close a publicly announced meeting under § 10002.7.
(3) A session attended by five or more members for the purpose of having the Council's staff or expert consultants, another federal agency, or other persons or organizations brief or otherwise provide information to the Council concerning any matters within the purview of the Council, provided that the members do not engage in deliberations that determine or result in the joint conduct or disposition of official business on such matters.
(4) A gathering of members for the purpose of holding informal, preliminary discussions or exchanges of views which do not effectively predetermine official action.
(a) Except as otherwise provided in this part, every portion of a Council meeting shall be open to public observation.
(b) Council meetings, or portions thereof, shall be open to public participation when an announcement to that effect is published under § 10002.4. Public participation shall be conducted in an orderly, non-disruptive manner and in accordance with any procedures the Chairperson may establish. Public participation may be terminated for good cause as determined by the Council upon the advice of the General Counsel based on unanticipated developments.
(a) Except as otherwise provided in this section, the Council shall make a public announcement at least seven days prior to a meeting. The public announcement shall include:
(1) The time and place of the meeting;
(2) The subject matter of the meeting;
(3) Whether the meeting is to be open, closed, or portions of a meeting will be closed;
(4) Whether public participation will be allowed;
(5) The name and telephone number of the person who will respond to requests for information about the meeting;
(b) The seven-day prior notice required by paragraph (a) of this section may be reduced only if:
(1) A majority of all members determine by recorded vote that Council business requires that such meeting be scheduled in less than seven days; and
(2) The public announcement required by this section is made at the earliest practicable time.
(c) If public notice is provided by means other than publication in the
A meeting, or portion thereof, may be closed and information pertinent to such meeting withheld if the Council determines that the meeting or release of information is likely to disclose matters that are:
(a) Specifically authorized under criteria established by an executive
(b) Related solely to the internal personnel rules and practices of the Council;
(c) Specifically exempt from disclosure by statute (other than 5 U.S.C. 552), provided that such statute:
(1) Requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue; or
(2) Establishes particular criteria for withholding or refers to particular types of matters to be withheld;
(d) Trade secrets and commercial or financial information obtained from a person and privileged or confidential;
(e) Involved with accusing any person of a crime or formally censuring any person;
(f) Of a personal nature, if disclosure would constitute a clearly unwarranted invasion of personal privacy;
(g) Either investigatory records compiled for law enforcement purposes or information which, if written, would be contained in such records, but only to the extent that the production of records or information would:
(1) Interfere with enforcement proceedings;
(2) Deprive a person of a right to either a fair trial or an impartial adjudication;
(3) Constitute an unwarranted invasion of personal privacy;
(4) Disclose the identity of a confidential source or sources and, in the case of a record compiled either by a criminal law enforcement authority or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source(s);
(5) Disclose investigative techniques and procedures; or
(6) Endanger the life or physical safety of law enforcement personnel;
(h) Contained in or relating to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions;
(i) If prematurely disclosed, likely to significantly frustrate implementation of a proposed action of the Council, except that this subsection shall not apply in any instance where the Council has already disclosed to the public the content or nature of its proposed action or is required by law to make such disclosure on its own initiative prior to taking final action on such proposal; and
(j) Specifically concerned with the Council's issuance of a subpoena, or its participation in a civil action or proceeding, an action in a foreign court or international tribunal, or an arbitration, or the initiation, conduct, or disposition by the Council of a particular case or formal agency adjudication pursuant to the procedures in 5 U.S.C. 554 or otherwise involving a determination on the record after opportunity for a hearing.
(a) A meeting or portion of a meeting may be closed and information pertaining to a meeting withheld under § 10002.5 only by vote of a majority of members.
(b) A separate vote of the members shall be taken with respect to each meeting or portion of a meeting proposed to be closed and with respect to information which is proposed to be withheld. A single vote may be taken with respect to a series of meetings or portions of a meeting that are proposed to be closed, so long as each meeting or portion thereof in the series involves the same particular matter and is scheduled to be held no more than 30 days after the initial meeting in the series. The vote of each member shall be recorded and no proxies shall be allowed.
(c) A person whose interests may be directly affected by a portion of a meeting may request in writing that the Council close that portion for any of the reasons referred to in § 10002.5(e) through (g). Upon the request of a member, a recorded vote shall be taken whether to close such meeting or portion thereof.
(d) For every meeting closed, the General Counsel shall publicly certify that, in his or her opinion, the meeting may be closed to the public and shall state each relevant basis for closing the meeting. If the General Counsel invokes the bases set forth in § 10002.5(a) or (c), he or she shall rely upon the classification or designation assigned to the information by the originating agency. A copy of such certification, together with a statement by the presiding officer setting forth the time and place of the meeting and the persons present, shall be retained by the Council as part of the transcript, recording, or minutes required by § 10002.8.
(a) The time or place of a meeting may be changed following the public announcement described in § 10002.4. The Council must publicly announce such change at the earliest practicable time.
(b) The subject matter of a meeting or the determination of the Council to open or close a meeting, or a portion thereof, to the public may be changed following public announcement only if:
(1) A majority of all members determine by recorded vote that Council business so requires and that no earlier announcement of the change was possible; and
(2) The Council publicly announces such change and the vote of each member thereon at the earliest practicable time.
Along with the General Counsel's certification and presiding officer's statement referred to in § 10002.6(d), the Council shall maintain a complete transcript or electronic recording adequate to record fully the proceedings of each meeting, or a portion thereof, closed to the public. Alternatively, for any meeting closed pursuant to § 10002.5(h) or (j), the Council may maintain a set of minutes adequate to record fully the proceedings, including a description of each of the views expressed on any item and the record of any roll call vote.
(a) The Council shall make available, in a place easily accessible, such as
(b) Copies of the nonexempt portions of the transcripts or minutes shall be provided upon receipt of the actual costs of the transcription or duplication.
(c) The Council shall maintain meeting transcripts, recordings, or minutes of each meeting closed to the public for a period ending at the later of two years following the date of the meeting, or one year after the conclusion of any Council proceeding with respect to the closed meeting.
Bureau of Consumer Financial Protection.
Compliance bulletin.
The Bureau of Consumer Financial Protection is issuing a compliance bulletin titled “Amendment to the Interstate Land Sales Full Disclosure Act” to provide information to developers and other interested parties relating to a recent Congressional amendment to the Interstate Land Sales Full Disclosure Act.
This bulletin is applicable August 17, 2015.
Amanda Quester, Senior Counsel, Office of Regulations, at (202) 435-7700.
The Consumer Financial Protection Bureau (Bureau) issues this compliance bulletin to provide information to developers and other interested parties relating to Public Law 113-167, 128 Stat. 1882 (2014), which amended the Interstate Land Sales Full Disclosure Act (ILSA). This ILSA amendment was signed by the President on September 26, 2014. It became effective on March 25, 2015, and is codified primarily at 15 U.S.C. 1702(b)(9) and (d).
The amendment exempts from ILSA's registration and disclosure requirements the sale or lease of a condominium unit that is not exempt under 15 U.S.C. 1702(a). Under 15 U.S.C. 1702(d), a “condominium unit” is defined for purposes of this new exemption as a unit of residential or commercial property to be designated for separate ownership pursuant to a condominium plan or declaration provided that upon conveyance: (1) The owner of such unit will have sole ownership of the unit and an undivided interest in the common elements appurtenant to the unit; and (2) the unit will be an improved lot.
Pursuant to § 1010.4(d) of the Bureau's ILSA regulations, eligibility for an exemption under 15 U.S.C. 1702, including the exemption of section 1702(b)(9), is self-determining, and a developer is not required to file notice with or obtain the approval of the Bureau in order to take advantage of an exemption. Section 1010.4(d) also provides that a developer is responsible for maintaining records to demonstrate that the requirements of an exemption have been met if a developer elects to take advantage of an exemption. The Bureau will continue to process filings made by developers seeking to fulfill their obligations under ILSA and its implementing regulations.
If you have questions about ILSA program operations, you may contact ILSA program staff via email to
If you have a question regarding the interpretation of ILSA or the Bureau's implementing regulations, please email
Bureau staff responding to queries cannot provide legal advice and are not authorized to provide official interpretations of ILSA or of the Bureau's implementing regulations.
This Compliance Bulletin summarizes existing requirements under the law, and does not itself establish any binding obligations. It is therefore exempt from notice and comment rulemaking requirements under the Administrative Procedure Act pursuant to 5 U.S.C. 553(b). Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. 5 U.S.C. 603(a), 604(a). The Bureau has determined that this Compliance Bulletin does not impose any new or revise any existing recordkeeping, reporting, or disclosure requirements on covered entities or members of the public that would be collections of information requiring OMB approval under the Paperwork Reduction Act, 44 U.S.C. 3501
Federal Aviation Administration (FAA), DOT.
Final rule; request for comments.
We are adopting a new airworthiness directive (AD) for REIMS AVIATION S.A. Model F406 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by the aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as detachment of the pilot's rudder control pedal in flight. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective August 18, 2015.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of August 18, 2015.
We must receive comments on this AD by October 1, 2015.
You may send comments by any of the following methods:
•
•
•
•
For service information identified in this AD, contact ASI Aviation, Aérodrome de Reims Prunay, 51360 Prunay, FRANCE; phone: +33 3 26 48 46 65; fax: +33 3 26 49 18 57; email: none; Internet:
You may examine the AD docket on the Internet at
Albert J. Mercado, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4119; fax: (816) 329-4090; email:
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Community, has issued AD No.: 2015-0159-E, dated July 31, 2015 (referred to after this as “the MCAI”), to correct an unsafe condition for the specified products. The MCAI states:
An occurrence was reported where one pilot rudder control pedal of an F 406 aeroplane detached in flight. No change in aeroplane attitude occurred. The rudder was controlled using the co-pilot rudder pedals, and the flight continued uneventfully until a safe landing was performed.
This condition, if not detected and corrected, could result in loss of directional control of the aeroplane.
To address this unsafe condition, ASI Aviation issued Service Bulletin (SB) F406-104 to provide inspection instructions.
For the reason described above, this AD requires inspection of the rudder control pedal torque tubes, both left-hand (LH) and right-hand (RH), and, depending on findings, replacement with a serviceable part.
This AD also requires inspection before new installation of rudder control pedal torque tubes.
You may examine the MCAI on the Internet at
ASI AVIATION has issued Service Bulletin No.: F406-104, dated July 28, 2015. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. The service information describes procedures for inspection of the left-hand and right-hand rudder control pedal torque tubes, and, depending on findings, replacement with a serviceable part. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
This product has been approved by the aviation authority of another country, and is approved for operation in the United States. Pursuant to our bilateral agreement with this State of Design Authority, they have notified us of the unsafe condition described in the MCAI and service information referenced above. We are issuing this AD because we evaluated all information provided by the State of Design Authority and determined the unsafe condition exists and is likely to exist or develop on other products of the same type design.
An unsafe condition exists that requires the immediate adoption of this AD. The FAA has found that the risk to the flying public justifies waiving notice and comment prior to adoption of this rule because detachment of the pilot rudder control pedal in flight could result in loss of airplane directional control. Therefore, we determined that notice and opportunity for public comment before issuing this AD are impracticable and that good cause exists for making this amendment effective in fewer than 30 days.
This AD is a final rule that involves requirements affecting flight safety, and we did not precede it by notice and opportunity for public comment. We invite you to send any written relevant data, views, or arguments about this AD. Send your comments to an address listed under the
We will post all comments we receive, without change, to
We estimate that this AD will affect 7 products of U.S. registry. We also estimate that it will take about 5 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the AD on U.S. operators to be $2,975, or $425 per product.
In addition, we estimate that any necessary follow-on actions would take about 20 work-hours and require parts costing $10,000, for a cost of $11,700 per product. We have no way of determining the number of products that may need these actions.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify that this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective August 18, 2015.
None.
This AD applies to Reims Aviation S.A. Model F406 airplanes, serial numbers 0001 through 0098, certificated in any category.
Air Transport Association of America (ATA) Code 27: Flight Controls.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as detachment of the pilot's rudder control pedal in flight. We are issuing this AD to detect and correct cracking of the pilot rudder control pedal which, if not corrected, could result in detachment of the pedal with possible loss of airplane directional control.
Unless already done, do the actions in paragraphs (f)(1) through (f)(4) of this AD.
(1) Before further flight after August 18, 2015 (the effective date of this AD), do a visual inspection and a dye or fluorescent penetrant inspection of the rudder control pedal torque tubes, LH (Part Number (P/N) 5115260-1) and RH (P/N 5115260-2), following the instructions of PART A of ASI AVIATION Service Bulletin No.: F406-104, dated July 28, 2015.
(2) If no crack is detected during the inspection required by paragraph (f)(1) of this AD, within 100 hours time-in-service (TIS) after August 18, 2015 (the effective date of this AD), do a magnetic particle inspection of the rudder control pedal torque tubes, LH (P/N 5115260-1) and RH (P/N 5115260-2), following the instructions of PART B of ASI AVIATION Service Bulletin No.: F406-104, dated July 28, 2015.
(3) If any crack is detected on a rudder control pedal torque tube during the inspection required by paragraph (f)(1) or (f)(2) of this AD, before further flight, replace the affected part with a serviceable part following the instructions of ASI AVIATION Service Bulletin No.: F406-104, dated July 28, 2015.
(4) For the purpose of this AD, a serviceable part is a rudder control pedal torque tube that has had a magnetic particle inspection following the instructions of PART B of ASI AVIATION Service Bulletin No.: F406-104, dated July 28, 2015, and no cracks were found.
(5) You may install a rudder control pedal torque tube P/N 5115260-1 (LH) or P/N 5115260-2 (RH) on an airplane, provided it is a serviceable part.
The following provisions also apply to this AD:
(1)
(2)
(3)
Refer to MCAI European Aviation Safety Agency (EASA) AD No.: 2015-0159-E, dated July 31, 2015, for related information. You may examine the MCAI on the Internet at
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) ASI AVIATION Service Bulletin No.: F406-104, dated July 28, 2015.
(ii) Reserved.
(3) For service information identified in this AD, contact ASI Aviation, Aérodrome de Reims Prunay, 51360 Prunay, FRANCE; phone: +33 3 26 48 46 65; fax: +33 3 26 49 18 57; email: none; Internet:
(4) You may view this service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. It is also available on the Internet at
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for British Aerospace Regional Aircraft Model Jetstream Model 3201 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as the in-service special detailed inspection technique required for the Jetstream 3200's life extension program was delayed; consequently, the in-service special detailed inspection technique is not formally part of the life extension program and may therefore not be accomplished as intended. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective September 21, 2015.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of September 21, 2015.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
Doug Rudolph, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4059; fax: (816) 329-4090; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to adding an AD that would apply to British Aerospace Regional Aircraft Model Jetstream Model 3201 airplanes. The NPRM was published in the
The Jetstream 3200 Life Extension Programme (LEP) permits the airframe life limit to be extended from 45 000 flight cycles (FC) to 67 000 FC. Entry into the LEP requires operators to accomplish inspections specified in the Jetstream 3200 Supplemental Structural Inspections Document (SSID). SSID task 57-10-227 is the inspection requirement for the wing main spar at Rib 36. The threshold for task 57-10-227 is 48 000 FC, with a repeat interval of 16 800 FC, using a Special Detailed Inspection (SDI). Development of the in-service SDI technique required for SSID task 57-10-227 was delayed by BAE Systems (Operations) Ltd, as a result of which it is not formally part of the LEP and may therefore not be accomplished as intended.
This condition, if not corrected, could lead to cracks in the wing main spar remaining undetected, possibly resulting in failure of the wing and loss of the aeroplane.
To address this potential unsafe condition, BAE Systems (Operations) Ltd issued SB 57-JA140140 to provide SDI instructions for the wing main spar at Rib 36, which includes a reduced repeat inspection interval.
For the reasons described above, this AD requires repetitive inspections of the wing main spar around Rib 36 to detect cracks and, depending on findings, accomplishment of the applicable corrective action(s).
The SSID will be revised in due course to include the SDI. The MCAI can be found in the AD docket on the Internet at:
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (80 FR 29988, May 26, 2015) or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (80 FR 29988, May 26, 2015) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (80 FR 29988, May 26, 2015).
We reviewed British Aerospace Regional Aircraft British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA140140, Original Issue, dated: June 26, 2014. The service information describes procedures for inspections of the wing main spar around Rib 36 to detect cracks and, depending on findings, accomplishment of the applicable corrective action(s). This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD will affect 22 products of U.S. registry. We also estimate that it will take about 96 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the AD on U.S. operators to be $179,520, or $8,160 per product.
We have no way of determining any necessary follow-on actions, costs, or the number of products that may need these actions.
A federal agency may not conduct or sponsor, and a person is not required to respond to, nor shall a person be subject to penalty for failure to comply with a collection of information subject to the requirements of the Paperwork Reduction Act unless that collection of information displays a current valid
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
You may examine the AD docket on the Internet at
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective September 21, 2015.
None.
This AD applies to British Aerospace Regional Aircraft Jetstream Model 3201 airplanes, all serial numbers, that are:
(1) Certificated in any category; and
(2) Modified in service following BAE Systems (Operations) Ltd Service Bulletin (SB) 05- JM8229.
Air Transport Association of America (ATA) Code 57: Wings.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as the in-service special detailed inspection technique required for the Jetstream 3200's life extension program was delayed; consequently, the in-service special detailed inspection (SDI) technique is not formally part of the life extension program and may therefore not be accomplished as intended. We are issuing this AD to detect and correct cracking in the wing main spar, which could result in structural failure of the wing with consequent loss of control.
Unless already done, do the following actions as specified in paragraphs (f)(1) through (f)(3) of this AD:
(1) Before accumulating a total of 53,950 flight cycles (FC) on the airplane or within the next 50 FC after September 21, 2015 (the effective date of this AD), whichever occurs later, and repetitively thereafter at intervals not to exceed 14,300 FC, accomplish an eddy current (EC) and an x-ray inspection of the wing main spar around rib 36 following the instructions of British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA140140, Original Issue, dated June 26, 2014. For the purposes of this AD, owner/operators who do not track total FC must multiply the total number of airplane hours time-in-service (TIS) by 0.75 to calculate the cycles.
(2) If any crack or corrosion is found during any inspection required by paragraph (f)(1) of this AD, before further flight, contact BAE Systems (Operations) Ltd for FAA-approved repair instructions approved specifically for this AD and accomplish those instructions. You can find contact information for BAE Systems (Operations) Ltd in paragraph (i)(3) of this AD. Use the Operator Report Form and follow the instructions in British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA140140, Original Issue, dated: June 26, 2014.
(3) Repair of an airplane as required in paragraph (f)(2) of this AD does not terminate the repetitive inspections required in paragraph (f)(1) of this AD for that airplane, unless the approved repair instructions state otherwise.
The following provisions also apply to this AD:
(1)
(2)
(3)
Refer to MCAI European Aviation Safety Agency (EASA) AD No.: 2015-0063, dated April 22, 2015, for related information. The MCAI can be found in the AD docket on the Internet at:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) British Aerospace Regional Aircraft British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA140140, Original Issue, dated: June 26, 2014.
(ii) Reserved.
(3) For British Aerospace Regional Aircraft service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
(4) You may view this service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. In addition, you can access this service information on the Internet at
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), Department of Transportation (DOT).
Final rule.
We are adopting a new airworthiness directive (AD) for British Aerospace Regional Aircraft Jetstream Series 3101 and Jetsream Model 3201 airplanes. This AD results from mandatory continuing airworthiness information (MCAI) issued by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as missing countersunk washers under the head of the main landing gear trunnion cap tension bolts that could cause fatigue in the bolt shanks. We are issuing this AD to require actions to address the unsafe condition on these products.
This AD is effective September 21, 2015.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in the AD as of September 21, 2015.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
Doug Rudolph, Aerospace Engineer, FAA, Small Airplane Directorate, 901 Locust, Room 301, Kansas City, Missouri 64106; telephone: (816) 329-4059; fax: (816) 329-4090; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 to adding an AD that would apply to British Aerospace Regional Aircraft Model Jetstream Series 3101 and Jetstream Model 3201 airplanes. The NPRM was published in the
The MCAI states:
The review of the BAE production drawing for main landing gear (MLG) fitting installation identified a risk of omitting installation of a countersunk washer under the head of the MLG trunnion cap tension bolts, potentially causing fatigue in the bolt shank under the head of such tension bolt(s).
This condition, if not detected and corrected, could lead to failure of the bolt(s), thereby compromising the structural integrity of the other MLG tension bolts holding the MLG in place, possibly resulting in collapse of the MLG on take-off or landing with consequent damage to the aeroplane and injury to occupants.
Although so far, no in-service bolt head failures have been reported since entry in to service of the type design in 1986, to address this potential unsafe condition, BAE Systems (Operations) Ltd issued Service Bulletin (SB) 57-JA120141 to provide inspection instructions.
For the reasons described above, this AD requires inspection and, depending on findings, replacement of the MLG trunnion cap tension bolts.
The MCAI can be found in the AD docket on the Internet at:
We gave the public the opportunity to participate in developing this AD. We received no comments on the NPRM (80 FR 32510, June 9, 2015) or on the determination of the cost to the public.
We reviewed the relevant data and determined that air safety and the public interest require adopting the AD as proposed except for minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (80 FR 32510, June 9, 2015) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (80 FR 32510, June 9, 2015).
We reviewed British Aerospace Regional Aircraft British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA120141, REVISION 1, dated April 8, 2014. The service information describes procedures for inspection and replacement of main landing gear trunnion cap tension bolts. This service information is reasonably available because the interested parties have access to it through their normal course of business or by the means identified in the
We estimate that this AD will affect 66 products of U.S. registry. We also estimate that it will take about 6 work-hours per product to comply with the basic requirements of this AD. The average labor rate is $85 per work-hour.
Based on these figures, we estimate the cost of the AD on U.S. operators to be $33,660, or $510 per product.
In addition, we estimate that any necessary follow-on actions will take about 1 work-hour and require parts costing $1,200, for a cost of $1,285 per product. We have no way of determining the number of products that may need these actions.
Title 49 of the United States Code specifies the FAA's authority to issue rules on aviation safety. Subtitle I, section 106, describes the authority of the FAA Administrator. “Subtitle VII: Aviation Programs,” describes in more detail the scope of the Agency's authority.
We are issuing this rulemaking under the authority described in “Subtitle VII, Part A, Subpart III, section 44701: General requirements.” Under that section, Congress charges the FAA with promoting safe flight of civil aircraft in air commerce by prescribing regulations for practices, methods, and procedures the Administrator finds necessary for safety in air commerce. This regulation is within the scope of that authority because it addresses an unsafe condition that is likely to exist or develop on products identified in this rulemaking action.
We determined that this AD will not have federalism implications under Executive Order 13132. This AD will not have a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.
For the reasons discussed above, I certify this AD:
(1) Is not a “significant regulatory action” under Executive Order 12866,
(2) Is not a “significant rule” under the DOT Regulatory Policies and Procedures (44 FR 11034, February 26, 1979),
(3) Will not affect intrastate aviation in Alaska, and
(4) Will not have a significant economic impact, positive or negative, on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
You may examine the AD docket on the Internet at
Air transportation, Aircraft, Aviation safety, Incorporation by reference, Safety.
Accordingly, under the authority delegated to me by the Administrator, the FAA amends 14 CFR part 39 as follows:
49 U.S.C. 106(g), 40113, 44701.
This airworthiness directive (AD) becomes effective September 21, 2015.
None.
This AD applies to British Aerospace Regional Aircraft Jetstream Series 3101 and Jetsream Model 3201 airplanes, all serial numbers, certificated in any category.
Air Transport Association of America (ATA) Code 32: Landing Gear.
This AD was prompted by mandatory continuing airworthiness information (MCAI) originated by an aviation authority of another country to identify and correct an unsafe condition on an aviation product. The MCAI describes the unsafe condition as missing countersunk washers under the head of the main landing gear (MLG) trunnion cap tension bolts that could cause fatigue in the bolt shanks. We are issuing this AD to detect and correct missing countersunk washers, which could lead to failure of the bolt(s), thereby compromising the structural integrity of the other MLG tension bolts holding the MLG in place, possibly resulting in collapse of the MLG on take-off or landing with consequent damage to the airplane and injury to occupants.
Unless already done, do the actions in paragraphs (f)(1) through (f)(4) of this AD, including all subparagraphs, following the Accomplishment Instructions in British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA120141, REVISION 1, dated April 8, 2014:
(1) This AD allows credit for the actions required in paragraphs (f)(3) and (f)(4), including all subparagraphs, of this AD if done before September 21, 2015 (the effective date of this AD) following the Accomplishment Instructions of British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA120141, Original Issue, dated: July 31, 2012.
(2) For the purposes of this AD, owner/operators who do not track total flight cycles (FC) must multiply the total number of airplane hours time-in-service by 0.75 to calculate the FC.
(3)
(i) If no crack is found during the MPI required by paragraph (f)(1) of this AD, before further flight, either re-install the crack-free bolt(s) or install a replacement bolt(s) having the same part number (P/N) as the original bolt. Install a countersunk washer under the bolt(s) ensuring the washer P/N is applicable to the diameter bolt installed as specified in figure 1 of paragraph (f)(3)(i) of this AD.
(ii) If a cracked bolt is found during the inspection required by paragraph (f)(3) of this AD, before further flight, replace each cracked bolt with a replacement bolt having the same P/N as the original bolt. Install a countersunk washer under the bolt ensuring the washer P/N is applicable to the diameter bolt installed as specified in figure 1 of paragraph (f)(3)(i) of this AD.
(4)
(i) If it is determined the installed bolts are P/N MS21134H07045 or P/N MS21134H07059 during the inspection required in paragraph (f)(4) of this AD, before further flight (except as specified in paragraph (f)(4)(i)(A) of this AD), replace each `old' bolt P/N with a `new' bolt P/N as specified in figure 2 of paragraph (f)(4)(i) of this AD and install a washer having P/N PKS1000-7-2-S under each bolt.
(A) If no `new' replacement bolt is available to comply with paragraph (f)(4)(i) of this AD, the `old' bolt may be reinstalled without a countersunk washer, provided that within 500 FC after reinstallation and repetitively thereafter at intervals not to exceed 500 FC, each affected bolt is inspected by MPI.
(B) Within 2,000 FC after reinstallation of a bolt as allowed by paragraph (f)(4)(i)(A) of this AD or before further flight if a crack was found during any MPI as required by paragraph (f)(4)(i)(A) of this AD, whichever occurs first, replace the `old' bolt P/N with a `new' bolt P/N as specified in figure 2 of paragraph (f)(4)(i) of this AD and install a washer having P/N PKS1000-7-2-S under each bolt.
(ii) If it is determined the installed bolts are P/N MS21250H07046 or P/N MS21250H07060 and no countersunk washer is installed during the inspection required in paragraph (f)(4) of this AD, before further flight, do an MPI of each MLG trunnion cap tension bolt.
(A) If no crack is found during the MPI required by paragraph (f)(4)(ii) of this AD, before further flight, either re-install the crack-free bolts or install replacement bolts having a `new' bolt P/N as specified in figure 2 of paragraph (f)(4)(i) of this AD and install a countersunk washer P/N PKS1000-7-2-S under each bolt.
(B) If any crack is found during the MPI required by paragraph (f)(4)(ii) of this AD, before further flight, replace each cracked bolt with a serviceable one having a `new' bolt P/N as specified in figure 2 of paragraph (f)(4)(i) of this AD and install a countersunk washer P/N PKS1000-7-2-S under each bolt.
The following provisions also apply to this AD:
(1)
(2)
Refer to MCAI European Aviation Safety Agency (EASA) AD No.: 2015-0061, dated April 20, 2015; and British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA120141, Original Issue, dated: July 31, 2012, for related information. The MCAI can be found in the AD docket on the Internet at:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this paragraph under 5 U.S.C. 552(a) and 1 CFR part 51.
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) British Aerospace Jetstream Series 3100 & 3200 Service Bulletin 57-JA120141, REVISION 1, dated April 8, 2014.
(ii) Reserved.
(3) For British Aerospace Regional Aircraft service information identified in this AD, contact BAE Systems (Operations) Limited, Customer Information Department, Prestwick International Airport, Ayrshire, KA9 2RW, Scotland, United Kingdom; telephone: +44 1292 675207; fax: +44 1292 675704; email:
(4) You may view this service information at the FAA, Small Airplane Directorate, 901 Locust, Kansas City, Missouri 64106. For information on the availability of this material at the FAA, call (816) 329-4148. In addition, you can access this service information on the Internet at
(5) You may view this service information that is incorporated by reference at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to:
Federal Aviation Administration (FAA), DOT.
Final rule.
This action expands the lateral boundary of restricted area R-3804B, Fort Polk, LA, and raises the restricted area ceiling to, but not including 10,000 feet mean sea level (MSL). The expanded restricted area airspace will contain new live fire ranges to support mission requirements of the U.S. Army in order to fully exploit the capabilities of modern weapons systems and complex training scenarios that replicate conditions encountered during military deployments today. This action also amends time of designation for R-3804A and R-3804B to better reflect when the restricted areas are in use by the U.S. Army and when the airspace is available to nonparticipants. Lastly, this action makes administrative editorial
Effective date: 0901 UTC, October 15, 2015.
Colby Abbott, Airspace Policy and Regulations Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority.
This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it amends the restricted area airspace at Fort Polk, LA, to enhance aviation safety and accommodate essential U.S. Army training requirements.
On September 25, 2014, the FAA published in the
Interested parties were invited to participate in this rulemaking effort by submitting written comments on the proposal. Fifteen comments were received with 14 of the commenters supporting the proposed action, and one commenter raising several concerns.
The commenter suggested the FAA offset a larger R-3804B by eliminating the R-3801A, R-3801B, and R-3801C restricted areas and/or the R-3803A and R-3803B restricted areas. The commenter offered that since the R-3801 complex and the Hackett and Jena Military Operations Areas (MOAs) all have the deactivated 917th Fighter Wing listed as the using agency, the FAA should consider them for deactivation. The R-3801 complex and associated MOAs mentioned by the commenter are used by U.S. Air Force B-52 aircraft operating from Barksdale Air Force Base (AFB), LA, for electronic combat training. The FAA has amended the legal descriptions of these Special Use Airspace (SUA) areas, effective April 30, 2015, to reflect the current using agency, the 307th Bomb Wing at Barksdale AFB, LA. The R-3803 complex noted by the commenter is used by U.S. Army units at Fort Polk for live fire training similar to that occurring in the R-3804 complex. The actual time the restricted area complexes are activated is roughly the same and consistent with the expected usage of the proposed R-3804B.
The commenter also stated that real-time deactivation of the restricted area complex during Notice to Airmen (NOTAM) periods of use is a disservice to civilian pilots who have flight planned to avoid the airspace. In the interest of maximizing navigable airspace availability to the flying public, the FAA considers real-time deactivation of SUA airspace, and making it available to non-participants, an efficient use of the National Airspace System. Under the FAA “joint use” concept, SUA is expected to be released to the controlling agency and become available for access by nonparticipating aircraft during periods when the airspace is not needed by the using agency for its designated purpose.
Lastly, the commenter questioned how much of the NOTAM activation period is actually going to be used by Fort Polk. The expected usage of R-3804B is approximately 2 weeks per month, continuously, during large unit training rotations. Modern weapons capabilities and tactics are optimized for around-the-clock employment, and training events to replicate combat scenarios can occur any time of the day or night. The R-3804 complex utilization reporting for 2013, the most recent year available, shows R-3804B to have been activated 5,412 hours out of a possible 8,760 hours. The FAA considers this utilization rate to be consistent with Fort Polk's planned use of the proposed R-3804B.
The amendments to R-3804A, R-3804B, and R-3804C are addressed below.
This action amends Title 14, Code of Federal Regulations (14 CFR) part 73 by expanding the lateral and vertical dimensions of restricted area R-3804B, Fort Polk, LA; changing the times of designation for R-3804A and R-3804B; and updating the using agency information for R-3804A, R-3804B, and R-3804C, and removing unnecessary verbiage from the designated altitudes and times of designation information for R-3804C.
The R-3804B boundary is expanded northward to match the northern boundary of R-3804A, as described in the NPRM, and the designated altitudes are raised from 3,000 feet MSL to, but not including, 10,000 feet MSL. This lateral and vertical expansion of R-3804B ensures containment of the hazardous artillery and mortar fires planned by the U.S. Army.
Additionally, the time of designation for R-3804A and R-3804B are changed from “Continuous” to “By NOTAM.” This amendment ensures the restricted areas are available to the U.S. Army when needed, continuously approximately two weeks each month, and provides a better indication to nonparticipants when the restricted areas are active and when they are available for use by the public.
Lastly, this action makes editorial updates to the using agency name for R-3804A, R-3804B, and R-3804C to incorporate the military service component of the using agency in the using agency name, removes the word “up” contained in the designated altitudes for R-3804C, and removes the words “As published” contained in the time of designation for R-3804C. These are purely administrative changes that do not affect the scheduling, use, or activities conducted within the restricted areas.
The FAA has determined that this regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal. Since this is a routine matter that only affects air traffic procedures and air navigation, it is certified that this rule, when promulgated, does not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
Regarding expansion of the lateral boundary and raising the designated altitudes of restricted area R-3804B, in
Regarding amending the time of designation for R-3804A and R-3804B, the FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, Environmental Impacts: Policies and Procedures, paragraph 311c. This action, by changing time of designation from “continuous” to “by NOTAM” serves to return all or part of special use airspace (SUA) to the National Airspace System (NAS). It is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exists that warrant preparation of an environmental assessment.
Regarding making using agency corrections to R-3804A, R-3804B, and R-3804C, the FAA has determined that this action qualifies for categorical exclusion under the National Environmental Policy Act in accordance with FAA Order 1050.1E, Environmental Impacts: Policies and Procedures, paragraph 311d. This action is an administrative change to the titles in the descriptions of the affected restricted areas to reflect the correct locations. It does not alter the dimensions, altitudes, times of designation or actual physical locations of the airspace; therefore, it is not expected to cause any potentially significant environmental impacts, and no extraordinary circumstances exists that warrant preparation of an environmental assessment.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration amends 14 CFR part 73 as follows:
49 U.S.C. 106 (f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
Designated altitudes. Surface to FL 180.
Time of designation. By NOTAM.
Controlling agency. FAA, Houston ARTCC.
Using agency. U.S. Army, Commanding General, Fort Polk, LA.
Designated altitudes. Surface to but not including 10,000 feet MSL.
Time of designation. By NOTAM.
Controlling agency. FAA, Houston ARTCC.
Using agency. U.S. Army, Commanding General, Fort Polk, LA.
Designated altitudes. FL 180 to but not including FL 350.
Time of designation. By NOTAM 24 hours in advance.
Controlling agency. FAA, Houston ARTCC.
Using agency. U.S. Army, Commanding General, Fort Polk, LA.
Food and Drug Administration, HHS.
Final order.
The Food and Drug Administration (FDA) is classifying the computerized cognitive assessment aid into class II (special controls). The special controls that will apply to the device are identified in this order, and will be part of the codified language for the computerized cognitive assessment aid's classification. The Agency is classifying the device into class II (special controls) in order to provide a reasonable assurance of safety and effectiveness of the device.
This order is effective September 16, 2015. The classification was applicable on June 5, 2015.
Peter Como, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. G242, Silver Spring, MD 20993-0002, 301-796-6919,
In accordance with section 513(f)(1) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360c(f)(1)), devices that were not in commercial distribution before May 28, 1976 (the date of enactment of the Medical Device Amendments of 1976), generally referred to as postamendment devices, are classified automatically by statute into class III without any FDA rulemaking process. These devices remain in class III and require premarket approval, unless and until the device is classified or reclassified into class I or II, or FDA issues an order finding the device to be substantially
Section 513(f)(2) of the FD&C Act, as amended by section 607 of the Food and Drug Administration Safety and Innovation Act (Pub. L. 112-144), provides two procedures by which a person may request FDA to classify a device under the criteria set forth in section 513(a)(1). Under the first procedure, the person submits a premarket notification under section 510(k) of the FD&C Act for a device that has not previously been classified and, within 30 days of receiving an order classifying the device into class III under section 513(f)(1) of the FD&C Act, the person requests a classification under section 513(f)(2). Under the second procedure, rather than first submitting a premarket notification under section 510(k) of the FD&C Act and then a request for classification under the first procedure, the person determines that there is no legally marketed device upon which to base a determination of substantial equivalence and requests a classification under section 513(f)(2) of the FD&C Act. If the person submits a request to classify the device under this second procedure, FDA may decline to undertake the classification request if FDA identifies a legally marketed device that could provide a reasonable basis for review of substantial equivalence with the device or if FDA determines that the device submitted is not of “low-moderate risk” or that general controls would be inadequate to control the risks and special controls to mitigate the risks cannot be developed.
In response to a request to classify a device under either procedure provided by section 513(f)(2) of the FD&C Act, FDA will classify the device by written order within 120 days. This classification will be the initial classification of the device. On June 24, 2013, Cerebral Assessment Systems, Inc., submitted a request for classification of the Cognivue under section 513(f)(2) of the FD&C Act. The manufacturer recommended that the device be classified into class II (Ref. 1).
In accordance with section 513(f)(2) of the FD&C Act, FDA reviewed the request in order to classify the device under the criteria for classification set forth in section 513(a)(1). FDA classifies devices into class II if general controls by themselves are insufficient to provide reasonable assurance of safety and effectiveness, but there is sufficient information to establish special controls to provide reasonable assurance of the safety and effectiveness of the device for its intended use. After review of the information submitted in the request, FDA determined that the device can be classified into class II with the establishment of special controls. FDA believes these special controls, in addition to general controls, will provide reasonable assurance of the safety and effectiveness of the device.
Therefore, on June 5, 2015, FDA issued an order to the requestor classifying the device into class II. FDA is codifying the classification of the device by adding § 882.1470.
Following the effective date of this final classification administrative order, any firm submitting a premarket notification [510(k)] for a computerized cognitive assessment aid will need to comply with the special controls named in the final order. The device is assigned the generic name computerized cognitive assessment aid, and it is identified as a prescription device that uses an individual's score(s) on a battery of cognitive tasks to provide an interpretation of the current level of cognitive function. The computerized cognitive assessment aid is used only as an assessment aid to determine level of cognitive functioning for which there exists other valid methods of cognitive assessment and does not identify the presence or absence of clinical diagnoses. The computerized cognitive assessment aid is not intended as a stand-alone or adjunctive diagnostic device.
FDA has identified the following risks to health associated specifically with this type of device, as well as the measures required to mitigate these risks in table 1:
FDA believes that the following special controls, in addition to the general controls, address these risks to health and provide reasonable assurance of safety and effectiveness:
• The technical parameters of the device's hardware and software must be fully characterized and be accompanied by appropriate non-clinical testing:
○ Hardware specifications must be provided. Appropriate verification, validation, and hazard analysis must be performed.
○ Software, including any proprietary algorithm(s) used by the device to arrive at its interpretation of the patient's cognitive function, must be described in detail in the Software Requirements Specification (SRS) and Software Design Specification (SDS). Appropriate software verification, validation, and hazard analysis must be performed.
• The device must be designed and tested for electrical safety.
• The labeling must include:
○ A summary of any testing conducted to demonstrate how the device functions as an interpretation of the current level of cognitive function. The summary of testing must include the following, if available: Any expected or observed adverse events and complications; any performance measurements including sensitivity, specificity, positive predictive value (PPV), and negative predictive value (NPV) per the device intended use; a description of the repeatability of measurements; a description of how the cut-off values for categorization of measurements were determined; and a
○ A warning that the device does not identify the presence or absence of clinical diagnoses.
○ A warning that the device is not a stand-alone diagnostic.
○ The intended use population and the intended use environment.
○ Any instructions technicians must convey to patients regarding the administration of the test and collection of cognitive test data.
Computerized cognitive assessment aids are prescription devices restricted to patient use only upon the authorization of a practitioner licensed by law to administer or use the device; see 21 CFR 801.109 (
Section 510(m) of the FD&C Act provides that FDA may exempt a class II device from the premarket notification requirements under section 510(k), if FDA determines that premarket notification is not necessary to provide reasonable assurance of the safety and effectiveness of the device. For this type of device, FDA has determined that premarket notification is necessary to provide reasonable assurance of the safety and effectiveness of the device. Therefore, this device type is not exempt from premarket notification requirements. Persons who intend to market this type of device must submit to FDA a premarket notification, prior to marketing the device, which contains information about the computerized cognitive assessment aid they intend to market.
The Agency has determined under 21 CFR 25.34(b) that this action is of a type that does not individually or cumulatively have a significant effect on the human environment. Therefore, neither an environmental assessment nor an environmental impact statement is required.
This final order establishes special controls that refer to previously approved collections of information found in other FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in part 807, subpart E regarding premarket notification submissions have been approved under OMB control number 0910-0120, and the collections of information in 21 CFR part 801, regarding labeling have been approved under OMB control number 0910-0485.
The following reference has been placed on display in the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852, and may be seen by interested persons between 9 a.m. and 4 p.m., Monday through Friday, and is available electronically at
Medical devices, Neurological devices.
Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs, 21 CFR part 882 is amended as follows:
21 U.S.C. 351, 360, 360c, 360e, 360j, 371.
(a)
(b)
(1) The technical parameters of the device's hardware and software must be fully characterized and be accompanied by appropriate non-clinical testing:
(i) Hardware specifications must be provided. Appropriate verification, validation, and hazard analysis must be performed.
(ii) Software, including any proprietary algorithm(s) used by the device to arrive at its interpretation of the patient's cognitive function, must be described in detail in the software requirements specification (SRS) and software design specification (SDS). Appropriate software verification, validation, and hazard analysis must be performed.
(2) The device must be designed and tested for electrical safety.
(3) The labeling must include:
(i) A summary of any testing conducted to demonstrate how the device functions as an interpretation of the current level of cognitive function. The summary of testing must include the following, if available: Any expected or observed adverse events and complications; any performance measurements including sensitivity, specificity, positive predictive value (PPV), and negative predictive value (NPV) per the devices intended use; a description of the repeatability of measurements; a description of how the cut-off values for categorization of measurements were determined; and a description of the construct validity of the device.
(ii) A warning that the device does not identify the presence or absence of clinical diagnoses.
(iii) A warning that the device is not a stand-alone diagnostic.
(iv) The intended use population and the intended use environment.
(v) Any instructions technicians must convey to patients regarding the administration of the test and collection of cognitive test data.
Department of State.
Final rule.
The Department of State is updating its regulations regarding its implementation of the Program Fraud Civil Remedies Act of 1986, to remove a conflict between the “reviewing official” and the “authority head” as defined by the implementing regulations.
This rule is effective August 17, 2015.
Alice Kottmyer, Attorney-Adviser,
The Program Fraud Civil Remedies Act of 1986, 31 U.S.C. 3801
Currently, the Under Secretary for Management is designated by the President as the Chief Financial Officer for the Department of State. Therefore, he is the reviewing official as well as the authority head, which of course is unacceptable. This rule corrects that anomaly, by defining the “reviewing official” as the Assistant Legal Adviser for Buildings and Acquisitions (hereinafter, “the ALA”). The Under Secretary for Management remains the authority head.
The Act (in 31 U.S.C. 3801(a)(8)) outlines the qualifications for the reviewing official, all of which are met by the ALA. (1) He or she must be designated by the authority head to make the determination under 31 U.S.C. 3803(a)(2) to send the case to the Department of Justice for its review and action, if appropriate. (2) He or she must be serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule; the ALA is a member of the Senior Executive Service, and thus has a rate of pay at least as high as GS-16, a grade which was eliminated under the provisions of the Civil Service Reform Act of 1978. (3) He or she must not be subject to supervision by, or required to report to, the investigating official, and not employed in the organizational unit of the authority in which the investigating official is employed; the ALA is not in the Office of the Inspector General and is not (nor will he or she ever be) subject to the supervision of anyone in that office.
Accordingly, 22 CFR 35.2(r), the definition of “reviewing official,” is changed by this rulemaking.
This regulation amends a “rule of agency organization, procedure, or practice”, which is not subject to the notice-and-comment rulemaking procedures set forth in 5 U.S.C. 553. See 5 U.S.C. 553(b). Therefore, the Department is issuing this amendment as a final rule.
Because this final rule is exempt from notice and comment rulemaking under 5 U.S.C. 553, it is exempt from the regulatory flexibility analysis requirements set forth by the Regulatory Flexibility Act. Nonetheless, consistent with the Regulatory Flexibility Act, the Department certifies that this rule will not have a significant economic impact on a substantial number of small entities.
Section 202 of the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 1532, generally requires agencies to prepare a statement before proposing any rule that may result in an annual expenditure of $100 million or more by State, local, or tribal governments, or by the private sector. This rule will not result in any such expenditure, nor will it significantly or uniquely affect small governments.
This rule is not a major rule as defined by 5 U.S.C. 804. The Department is aware of no monetary effect on the economy that would result from this rulemaking, nor will there be any increase in costs or prices; or any effect on competition, employment, investment, productivity, innovation, or the ability of United States-based companies to compete with foreign-based companies in domestic and import markets.
The Department of State has reviewed this rule to ensure its consistency with the regulatory philosophy and principles set forth in Executive Orders 12866 and 13563, and has determined that the benefits of this regulation outweigh any cost. The Department does not consider this rule to be a economically significant rulemaking action.
This regulation will not have substantial direct effects on the States, on the relationship between the national government and the States, or the distribution of power and responsibilities among the various levels of government. The rule will not have federalism implications warranting the application of Executive Orders 12372 and 13132.
The Department has reviewed the regulation in light of sections 3(a) and 3(b)(2) of Executive Order 12988 to eliminate ambiguity, minimize litigation, establish clear legal standards, and reduce burden.
The Department of State has determined that this rulemaking will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not preempt tribal law. Accordingly, the requirements of Executive Order 13175 do not apply to this rulemaking.
This rule does not impose or revise information collection requirements under the provisions of the Paperwork Reduction Act, 44 U.S.C. Chapter 35.
Administrative practice and procedure, Claims, Fraud, Penalties.
For the reasons stated in the preamble, amend part 35 of title 22 of the Code of Federal Regulations as follows:
22 U.S.C. 2651a; 31 U.S.C. 3801
(r)
(1) Not subject to supervision by, or required to report to, the investigating official;
(2) Not employed in the organizational unit of the authority in which the investigating official is employed; and
(3) Serving in a position for which the rate of basic pay is not less than the minimum rate of basic pay for grade GS-16 under the General Schedule.
Office of the Deputy Secretary, HUD.
Final rule.
This final rule amends HUD's regulations implementing the Freedom of Information Act (FOIA) to update and streamline HUD's current FOIA regulation. Specifically, it updates HUD's regulations to reflect statutory changes to the FOIA, current HUD organizational structure, and current HUD policies and practices with respect to the FOIA. In addition, the rule uses current cost figures in calculating and charging fees. This final rule also incorporates changes made upon further evaluation of HUD's FOIA Regulation and in response to public comments received.
Dolores W. Cole, Director, FOIA and Executive Correspondence, Office of Administration, Department of Housing and Urban Development, 451 7th Street SW., Room 10139, Washington, DC 20410-0500; telephone number 202-402-2671 (this is not a toll-free number). Hearing- or speech-impaired individuals may access this number via TTY by calling the Federal Relay Service at telephone number 1-800-877-8339 (this is a toll-free number).
HUD's regulations at 24 CFR part 15 contain the policies and procedures governing public access to HUD records under the FOIA (5 U.S.C. 552). Subject to certain statutory exceptions, the FOIA gives persons the right to request and receive a wide range of information from any Federal agency. The FOIA has been amended several times since its enactment in 1966. In 2007, significant amendments to the FOIA were made by the Openness Promotes Effectiveness in our National Government Act of 2007 (OPEN Government Act) (Pub. L. 110-175, approved December 31, 2007). The OPEN Government Act made several amendments to procedural issues affecting FOIA administration, including the protection of the fee status for news media, the time limits for agencies to act upon FOIA requests, the availability of agency records maintained by a private entity, the establishment of a FOIA Public Liaison and FOIA Requester Service Center, and the requirement to describe the exemptions authorizing the redaction of material provided under the FOIA.
In addition to these statutory changes, several policy directives have been issued that affect HUD's FOIA program. These policy directives include Presidential memoranda dated January 21, 2009, entitled “Freedom of Information Act” (74 FR 4683, January 26, 2009), which applies a presumption of disclosure in FOIA decision-making and “Transparency and Open Government” (74 FR 4685, January 26, 2009), which encourages Federal agencies to harness new technologies to proactively post online information about their operations and decisions consistent with applicable law. As required by the Presidential memoranda, on March 19, 2009, Attorney General Eric Holder issued comprehensive new FOIA guidelines (see
Consistent with this law and guidance, HUD undertook a comprehensive review of its FOIA regulation. As part of this review, HUD looked to the proposed updated FOIA regulation published by the Department of Justice (DOJ) on March 21, 2011 (76 FR 15236). DOJ intended that its regulation serve as a model for all agencies in updating their own FOIA regulations.
This final rule follows publication of the May 31, 2013, proposed rule and takes into consideration the public comments received on the proposed rule. In response to public comment, a discussion of which is presented in the following section of this preamble, and in further consideration of issues addressed at the proposed rule stage, the Department is making the following changes at this final rule:
• HUD is revising § 15.103(c) to state that HUD will provide written notice to requesters when the time limits for HUD's response will be delayed. HUD will also provide the requester with the date by which HUD expects to complete its processing of the request.
• HUD is revising § 15.104(c)(3) to mirror the language of the FOIA. Specifically, HUD is removing the requirement that a representative of the news media, if not a full-time member of the news media, should establish that he or she is a person whose main professional activity or occupation is information dissemination.
• HUD is revising § 15.106(c) to reduce the duplication costs that HUD will charge for a paper photocopy of a record from $0.18 per page to $0.10 per page.
• HUD is revising § 15.107(a) to refer to the most current Executive order regarding classified information, which is Executive Order 13526, issued December 29, 2009.
• HUD is removing proposed § 15.109 from this final rule. Upon review HUD has determined that, § 15.109, entitled “Mortgage sales,” directed itself to a specific HUD program rather than establish disclosure policy applicable
• HUD is revising § 15.110(a) of the proposed rule (redesignated as § 15.109(a) in this final rule) to clarify that appeals may be submitted electronically.
• HUD is revising § 15.111(a)(2) of the proposed rule (redesignated as § 15.110(a)(2) in this final rule) by adding paragraph (iii) to provide that HUD will notify requesters of dispute resolution services in its FOIA appeal determination response letter.
The public comment period for the May 31, 2013, proposed rule closed on July 30, 2013, and HUD received three public comments on the proposed rule. Comments were submitted by a nonprofit organization devoted to issues of effective government and by two members of the public. HUD reviewed the comments and considered responses to them. This section presents the significant issues, questions, and suggestions submitted by the commenters and HUD's responses.
Comment: HUD should expand online disclosures. One commenter recommended that HUD adopt a policy of proactively identifying records that are of interest to the public and posting such records online without waiting for FOIA requests. Accordingly, the commenter recommended that § 15.101 be revised to state that “HUD will proactively identify and disclose additional records of interest to the public.” The commenter added that the E-FOIA Act of 1996 mandates agencies to post online any information that has been released in response to a FOIA request and “is likely to become the subject of subsequent requests.” The commenter stated that some agencies have adopted the practice of posting all released records and suggested that HUD adopt this policy by revising its proposed rule to read: “HUD will post all records released in response to FOIA requests in a searchable format on the agency Web site.” Finally, the commenter stated that HUD should also revise § 15.101 by adopting a policy of publishing online its indexes of disclosed records.
Response: Section 15.101 revises HUD's FOIA regulation to reflect its current practice of proactively identifying and disclosing frequently requested records without waiting for a FOIA request. HUD developed the list of documents that it posts without request based on its prior experience regarding agency records that generally are of interest to the public. This list is not exhaustive and the final rule provides HUD the flexibility to post additional records without request. Releasing all records requested, along with an index, as requested by the commenter, would be excessively burdensome for the agency. HUD believes that § 15.101, as drafted, successfully balances its commitment to transparency as directed by President Obama's memorandum and Attorney General Holder's FOIA Guidance, within the scope of HUD's available resources. Accordingly, HUD has determined not to revise this section as the commenter recommended.
Comment: Information about the record sought. A commenter stated that clear and open communications between requesters and agency staff is vital to an effective, user-friendly FOIA process. Toward this end, the commenter recommended that HUD revise § 15.102(d)(2) to delete the first sentence that provides that FOIA requests “include, whenever possible, detailed and specific information about each record sought, such as the date, title or name, author, recipient, and subject matter of the record,” and substitute simply that FOIA requests should “reasonably describe the records sought.” The commenter also recommended that HUD delete the last sentence of this paragraph, which reads “Insufficient descriptions may lead HUD officials to contact the requester to seek additional information for their record search.”
Response: HUD agrees that clear and open communications is vital to an effective and user-friendly FOIA process. Based on HUD's experience, § 15.102(d)(2) supports this goal by describing the type of information that will assist HUD to more promptly and effectively respond to a FOIA request. HUD therefore declines to revise § 15.102(d)(2) as suggested by the commenter.
Comment: Notification of further clarification needed. A commenter stated that HUD should adopt a policy stating that it will contact the requester to seek clarification before denying a request on the basis of its not reasonably describing the records sought. The commenter suggested that HUD revise this section of the rule to state: “If HUD believes that a request may not reasonably describe the records sought, HUD will contact the requester to seek clarification. HUD will provide at least 30 days for the requester to respond. If the request has not been clarified after 30 days, HUD may decide to deny the request for not reasonably describing the records sought. If HUD determines that it must deny the request for not reasonably describing the records sought, it will notify the requester under the procedures in § 15.105(d)(2).”
Response: HUD's current policy is to request clarification prior to issuing an adverse determination based on a requester's failure to reasonably describe the records sought. In addition, depending on the specific request, HUD may on a case-by-case basis establish time limits for the requester to provide clarification. HUD, therefore, believes that imposing a 30-day time period would unnecessarily limit the staff's ability to exercise discretion in processing these requests. HUD, therefore, declines to revise § 15.105(d)(2) as recommended by the commenter.
Comment: Notification of delayed processing. A commenter recommended that HUD revise § 15.103(c) to state that HUD will notify requesters in writing as is required by FOIA when processing will be delayed.
Response: HUD agrees with the commenter and revises § 15.103(c) of the final rule to mirror the language of the FOIA by providing that, in unusual circumstances, the time limits prescribed in the regulation may be extended by written notice to the requester making such request. The written notice will also set forth the unusual circumstances for such extension and the date on which a determination is expected to be released.
Comment: Phrasing of revised language in § 15.104(c)(3). A commenter stated that language in proposed § 15.104(c)(3), which would require requesters who are not full-time members of the news media to submit a statement establishing that the requester “is a person whose main professional activity or occupation is information dissemination” when requesting expedited processing of a request, changes the meaning of FOIA. According to the commenter, this requirement is not found in FOIA and excludes an entire class of individuals, such as bloggers and other participants and thought leaders of the digital world who may be well positioned to expedite dissemination of information. The commenter recommended that the reference to “main professional activity or occupation” be removed and that § 15.104(c)(3) be revised to mirror FOIA.
Response: HUD agrees that the language in the final rule should mirror the language in the FOIA and therefore revises § 15.104(c)(3) to require that the
Comment: Notification of rerouting and referrals. Two commenters recommended that HUD revise the rule to improve communications with the requester. These commenters recommended that HUD notify the requester if it reroutes the request to another government agency or second HUD office, as is permitted during the 10-day window immediately following HUD's receipt of the initial FOIA request. The commenters described this change as a modest step that is consistent with the policies of other Federal agencies and which would benefit HUD by reducing the number of requester inquiries made to the HUD FOIA office.
Response: HUD's current policy is to notify requesters that their request is being rerouted or referred to another Federal agency or a second HUD office. Federal agencies to which requests are referred follow their own policies to ensure that requesters are notified that their FOIA requests have been received. In addition, requesters can identify the HUD FOIA office to which their request has been rerouted by checking the status of their request online at
Comment: Keeping requesters informed regarding updates on the status of their FOIA requests. A commenter recommended that HUD revise § 15.105 to include provisions that would require HUD to notify all requesters as soon as practicable of the estimated time it will take to complete a request and provide requesters with the opportunity to reformulate their requests. The commenter also recommended that HUD revise the rule to provide on the agency's Web site automated updates on the status of FOIA requests and suggested that HUD can implement this recommendation by joining the multiagency portal FOIA online, which allows requesters to track the status of requests online.
Response: Section 15.103(a) provides that HUD generally will respond to a FOIA request within 20 working days of receipt. As discussed in this preamble, HUD is revising this section in the final rule to state that it will provide written notice to requesters when it extends the time to process a request, and will also provide the requester with the date by which HUD expects to complete its processing of the request. Given the number, unpredictability, and variability in type and scope of FOIA requests that HUD receives, however, it would be extremely difficult for HUD to offer specific dates by which it could estimate the processing time for any specific FOIA request not subject to § 15.103(a). In addition, HUD provides requesters the ability to verify the status of their FOIA requests through an online tool that is similar to FOIAonline and that is available at
Comment: Electronic communications. A commenter recommended that HUD adopt a policy to communicate with requesters by email, where appropriate, as digital communications are changing the way government connects with citizens, and email communications could result in cost savings for the agency.
Response: The FOIA does not require agencies to use a specific means to communicate with requesters. HUD currently communicates with requesters by email, when appropriate, and will continue to do so. At the same time, HUD requires the discretion to use physical mail when it deems necessary. For these reasons, HUD declines to revise the rule as recommended by the commenter.
Comment: Plain communications. A commenter stated that the Plain Writing Act of 2010 directs agencies to use “writing that is clear, concise, well-organized, and follows other best practices appropriate to the subject or field and intended audience” in any document that “provides information about Federal Government benefit or service.” The commenter recommended that HUD revise § 15.105 to state: “HUD will use plain language in all communications with requesters.”
Response: HUD's current policy is to use plain language for all communications with the public. Some requests, however, require the production of records that are inherently technical or drafted for audiences with more technical backgrounds or expertise than the general public. As a result, HUD concludes that adding the language suggested by the commenter would be superfluous and may mislead requesters to expect HUD to translate technical documents into plain language. HUD therefore declines to amend this section in the final rule as requested by the commenter.
Comment: Release records on a rolling basis. A commenter stated that HUD should revise § 15.105 to require HUD to release records on a rolling basis, where requests involve a voluminous amount of material or searches in multiple locations.
Response: HUD's existing policy allows individual HUD FOIA offices to decide whether to release voluminous amounts of records on a rolling basis or all at once, depending on the specific request, the difficulty of collecting records responsive to the request, and the effective administration of the office's internal FOIA processing. HUD declines to revise this section of the rule in order to permit individual HUD FOIA offices the continued discretion over the appropriate approach to releasing records.
Comment: Rate of per-page printing. Two commenters stated that HUD's fee of $0.18 per page is a potential impediment to requests from members of the public, that it is higher than the rate imposed by other agencies, and that it does not reflect the amount that it costs HUD to print on a page. Both commenters recommended that HUD establish a standard fee of $0.10 per page. In addition, one commenter recommended that HUD revise the regulation to provide that it will not charge a fee if the total fee does not exceed $50, instead of the $25 threshold proposed by § 15.106(d)(4). The commenter stated that charging requesters the costs for producing small FOIA requests is uneconomical and contributes to processing delays. The commenter also stated that revising the $25 threshold would streamline the processing of requests that cost HUD less than $50.
Response: HUD appreciates the commenters' recommendations. HUD has reviewed its FOIA fee structure and agrees that it should revise its longstanding policy of charging $0.18 per page to the standard fee of $0.10 per page. Section 15.106(c) is revised to reflect this change. HUD's cost of responding to a request, however, has not changed. As a result, HUD will continue its practice of not charging the requester for processing a request if the total fee does not exceed $25. Based on HUD's experience, even at this $25
Comment: Fee Waivers. A commenter stated that the proposed § 15.106(k)(5), which would give HUD discretion to consider “the cost effectiveness of its investment of administrative resources” when deciding whether to grant requests for a fee waiver or reduction, contradicts the plain language of FOIA. The commenter asserted that FOIA provides that agencies do not have authority to consider additional factors when deciding to waive or reduce fees if the statutory conditions are met. Accordingly, the commenter recommended that § 15.106(k)(5) be struck from the final rule.
Response: Section 552(a)(4)(A)(i) of the FOIA states that, “[i]n order to carry out the provisions of this section, each agency shall promulgate regulations . . . establishing procedures and guidelines for determining when such fees should be waived or reduced.” Accordingly, HUD is properly exercising its statutorily granted discretion in establishing that it will consider additional factors in deciding whether to grant requests for a fee waiver or reduction. HUD therefore declines to remove § 15.106(k)(5) from the final rule.
Comment: Applying “foreseeable harm” standard for withholding. A commenter stated that HUD should adopt a policy of applying a presumption of openness in processing requests and of only withholding information if it reasonably foresees that disclosure would harm an interest protected by one of the statutory exemptions. According to the commenter, applying this “foreseeable harm” standard would help to ensure that HUD does not improperly withhold information. The commenter recommends that HUD revise § 15.107 to add that “HUD will conduct a foreseeable harm analysis, which clearly identifies the harm that would occur with disclosure.”
Response: HUD withholds documents according to the nine FOIA statutory exemptions that protect various records from disclosure (
Comment: Technical amendment to source reference. A commenter recommended that § 15.107(a) be updated to refer to the most current Executive order regarding classified information, which is Executive Order 13526, issued December 29, 2009.
Response: HUD agrees with the commenter and updates this reference in the final rule.
Comment: Avoiding frivolous claims of confidential business information. A commenter suggested that HUD require that submitters of confidential business information use good faith efforts to designate any information that such submitters consider exempt from disclosure under FOIA Exemption 4, and that HUD indicate in this final rule what constitutes a “good faith effort.” Specifically, the commenter suggested editing § 15.108(b) to read: “A blanket designation on each page of a submission that all information contained on the page is protected from disclosure under Exemption 4 presumptively will not be considered a good faith effort.”
Response: Section 15.108(b) of the rule already requires submitters of business information to “use good faith efforts to designate . . . any portion of its submission that it considers to be protected from disclosure under Exemption 4.” Furthermore, the commenter's suggested language could create undue processing delays by creating the presumption that entire pages marked as “business information” are not marked as such in good faith. In practice, the determination of what constitutes a good faith effort does not hinge on the number of submitted pages entirely marked as “business information.” HUD therefore declines to amend this provision.
Comment: Decreased notifications to submitters of “business information.” The commenter also suggested that in the interest of avoiding undue delays, HUD establish that it is unnecessary to notify submitters of business information if HUD determines that the claim of confidential business information is obviously frivolous. The commenter also recommended that HUD provide specific time limits, generally 5 working days, for submitters to object to the release of submitted information and this proposed change be incorporated in § 15.108(e).
Response: HUD's current policy regarding the obligation to notify submitters of business information is to provide all of the basic procedural protections that HUD is required to give submitters under Executive Order 12600. It currently is already HUD's practice to grant submitters a reasonable number of days to object to the release of submitted information, as is required by Executive Order 12600, and to require that such objections be justified. HUD therefore declines to amend this provision in the final rule.
Comment: Copies of the original request and adverse determination. A commenter stated that requiring requesters to provide a copy of their original request is unnecessary and unfair because original requests might be difficult to locate after years pass between the time of submission and the appeal. The commenter added that HUD should remove this requirement, as well as the requirement for a copy of the adverse determination, from the proposed rule because many individuals do not have access to a scanner or a photocopier. The commenter suggested that HUD instead “encourage” appellants to provide these two copies.
Response: Because HUD often processes multiple requests from the same requester, provision of a copy of the original request and of the original adverse determination helps HUD's reviewing staff to ensure that they issue accurate responses to the original concern or request. Requesting the submission of these copies with an appeal does not pose an unnecessary and unfair burden upon requesters. HUD believes that most requesters have several tools available to make photocopies of important documents, with no exceptional inconvenience to them. In exceptional circumstances, however, requesters might be able to obtain a scanned or printed copy of their original request by contacting the HUD FOIA office handling the request. HUD, therefore, declines to amend § 15.110 of the proposed rule as recommended.
Comment: Providing a longer time period to submit appeals. A commenter suggested that HUD provide requesters with a minimum of 60 days to submit their administrative appeals, instead of the 30 days provided under the rule. The commenter added that this would provide requesters adequate time to gather the necessary information and to formulate any arguments they wish to make in the appeal.
Response: The FOIA provides agencies discretion in setting forth deadlines by which requesters must file their administrative appeals of adverse determinations. HUD's current policy of allowing a requester 30 days to submit an appeal is intended to ensure that FOIA requests and disputes are resolved as promptly as possible. Because an extension of this filing period would defeat this policy goal, HUD declines to amend this provision to, instead, grant requesters 60 days to file appeals to
Comment: Electronic process for appeal submissions. A commenter recommended that HUD provide requesters the option to submit their administrative appeals by email or through the HUD Web site, as opposed to the current process, which requires the submission of appeals “in writing to the address specified in HUD's notice responding to a FOIA request.”
Response: HUD does not believe that § 15.110 of the proposed rule (redesignated as § 15.109 in this final rule) precludes the submission of an appeal electronically. Nevertheless, HUD has clarified that appeals may be submitted electronically by stating, “If the letter of appeal is
Comment: Notifying requesters of dispute resolution services available for appeal determinations. A commenter stated that HUD should adopt a policy of notifying requesters of dispute resolution services in appeal determination letters. The commenter added that HUD should revise the language at § 15.111(a)(2)(ii) of the proposed rule to add: “HUD will provide the requester with the name and contact information of the Office of Government Information Services, which offers mediation services to resolve disputes between FOIA requesters and Federal agencies as a non-exclusive alternative to litigation.”
Response: HUD has considered the commenter's suggestion and agrees to provide requesters notification of dispute resolution services in the appeal determination letters. In addition, HUD will post the contact information for the Office of Government Information Services on its FOIA Web site. See § 15.110(a)(2)(iii).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if the regulation is necessary, to select the regulatory approach that maximizes net benefits. Because this final rule incorporates changes enacted by the OPEN Government Act of 2007 and otherwise updates and streamlines HUD's current FOIA regulation, the rule was determined to not be a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, and therefore was not reviewed by the Office of Management and Budget.
This final rule is categorically excluded from environmental review under the National Environmental Policy Act (42 U.S.C. 4321). The revision of FOIA-related provisions of 24 CFR part 15 falls within the exclusion provided by 24 CFR 50.19(c)(1) in that it does not direct, provide for assistance or loan and mortgage insurance for or otherwise govern or regulate real property acquisition, disposition, leasing, rehabilitation, alteration, demolition, or new construction, or establish, revise, or provide for standards for construction or construction materials, manufactured housing, or occupancy.
The Regulatory Flexibility Act (RFA) (5 U.S.C. 601
Executive Order 13132 (entitled “Federalism”) prohibits an agency from publishing any rule that has federalism implications if the rule either imposes substantial direct compliance costs on state and local governments and is not required by statute, or the rule preempts state law, unless the agency meets the consultation and funding requirements of section 6 of the Executive order. This final rule does not have federalism implications and does not impose substantial direct compliance costs on state and local governments or preempt state law within the meaning of the Executive order.
Title II of the Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and on the private sector. This final rule does not impose any Federal mandates on any state, local, or tribal governments, or on the private sector, within the meaning of the Unfunded Mandates Reform Act of 1995.
Classified information, Courts, Freedom of information, Government employees, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, HUD amends 24 CFR part 15 as follows:
42 U.S.C. 3535(d), 5 U.S.C. 552.
(a)
(b)
(c)
(d)
(e)
(a) The following definitions apply to this part.
(b) The following definitions apply to subparts C and D of this part.
(a)
(b)
(1) Final opinions and orders.
(2) Public access to high-value, machine readable datasets via http://www/data/gov.
(3) Statements of policy and interpretation, including:
(i) HUD's Client and Information Policy Systems (HUDCLIPS);
(ii) Housing policy;
(iii) Public and Indian Housing policy and regulations;
(iv) Public and Indian Housing policy and guidance (PHA Plans); and
(v) Community Planning and Development policy and guidance.
(4) Administrative staff manuals.
(5) HUD's online library.
(6) Fair housing information.
(c)
(1) Highest-scoring funding grant applications.
(2) Purchase charge cardholders.
(3) FHA refunds.
(4) FHA-approved lenders.
(5) Homes for sale.
(6) How to buy a HUD home.
(7) How to apply for public housing and Section 8 housing.
(8) Housing for the elderly.
(9) Housing for individuals with disabilities.
(10) HUD contracting home page.
(11) FHA mortgage insurance programs.
(12) HUD handbooks.
(13) HUD programs.
(14) HUD telephone directory.
(15) HUD homes listing.
(16) HUD's organization.
(17) Multifamily housing data.
(18) Public housing authority contact information.
(19) Weekly listing of multifamily properties for sale.
(20) Catalog of Federal Domestic Assistance (CFDA) materials.
(21) Grants.
(22) FOIA request logs.
(a)
(b)
(c)
(d)
(1) Be in writing and clearly identifiable as a FOIA request. To facilitate identification, the requester should place the phrase “FOIA Request” on the front of the envelope or on the cover sheet or other transmittal document used when submitting the request in person or by mail, email, facsimile, or electronic request form;
(2) Include, whenever possible, detailed and specific information about each record sought, such as the date, title or name, author, recipient, and subject matter of the record. The more specific the FOIA request for records, the more likely HUD officials will be able to locate the records requested. Requests for categories of information should be for specific and well-defined categories. Insufficient descriptions may lead HUD officials to contact the requester to seek additional information for their record search;
(3) Indicate the form or format in which the requester would like the record made available, if the requester has a preference;
(4) Specify the fee amount the requester is willing to pay. In general, HUD provides records at no cost up to $25. Requesters are required to agree to pay for any costs that exceed $25. Requesters may also request a dollar amount above which HUD should consult with them before they agree to pay the fee. If a requester seeks a fee waiver or reduction, the requester should include this request with the FOIA disclosure request and should describe, consistent with § 15.106(k), how the disclosure of the requested information is likely to contribute significantly to public understanding of the operations or activities of the government and is not primarily in the commercial interest of the requester;
(5) Indicate the fee category that the requester believes applies to each of his or her requests (fee categories are defined in § 15.106(b));
(6) Include verification information of the requester's identity, if the requester requests agency records pertaining to the requester, a minor, or an individual who is legally incompetent. Information about what constitutes acceptable verification information can be found in HUD's Privacy Act regulations in 24 CFR part 16;
(7) Contain signed authorization from the other person, if the requester makes a request on another person's behalf for information about that person. If necessary, HUD will inform the requester of the authorization needed from the other person and give the requester an opportunity to provide such authorization. Requests for information about another person should be accompanied by either written, notarized authorization or proof that the individual is deceased (for example, a copy of a death certificate or an obituary), or the request will be deemed insufficient; and
(8) Contain a detailed explanation of the basis for the request, if the requester makes a request for expedited processing as provided by § 15.104(c). The requester should also include a statement certifying the truth of the circumstances alleged or other evidence, acceptable to HUD, of the requester's compelling need.
(a)
(b)
(1) One time to make a reasonable request for additional information from the requester; or
(2) As many times as necessary to clarify issues regarding fee assessment with the requester. The agency's receipt of the requester's response to the agency's request for information or resolution of all fee assessment issues ends the tolling period.
(c)
(1) The need to search for and collect records not located in the office processing the request;
(2) The need to search for, collect, and appropriately examine a voluminous amount of separate and distinct records; or
(3) The need to consult with another agency or two or more HUD components having a substantial interest in the determination of the FOIA request.
(d)
(i) Certain requests from the same requester or from a group of requesters acting in concert actually constitute a single request; and
(ii) The requests involve clearly related matters.
(2) Aggregation of requests for this purpose will be conducted independent of aggregation of requests for fee purposes under § 15.106(h).
(a)
(b)
(c)
(i) Circumstances in which the lack of expedited treatment could reasonably be expected to pose an imminent threat to the life or physical safety of an individual;
(ii) An urgency to inform the public about an actual or alleged Federal Government activity, if made by a person primarily engaged in disseminating information; or
(iii) The loss of substantial due process rights.
(2) A request for expedited processing may be made at the time of the initial request for records or at any later time. For a prompt determination, a request for expedited processing should be received by the proper office designated to receive FOIA requests as provided in § 15.102.
(3) A requester who seeks expedited processing should submit a statement, certified to be true and correct to the best of that person's knowledge and belief, explaining in detail the basis for requesting expedited processing. For example, a requester who makes a request under paragraph (c)(1)(ii) of this section, if not a full-time member of the news media, should establish that he or she is a person primarily engaged in disseminating information, though it need not be his or her sole occupation. A requester making a request under paragraph (c)(1)(ii) of this section also should establish a particular urgency to inform the public about the government activity involved in the request, beyond the public's right to know about government activity generally. The formality of certification may be waived as a matter of administrative discretion.
(4) HUD will make a determination within 10 calendar days of receipt by the appropriate component of HUD, as provided in § 15.103, whether to grant or deny a request for expedited processing and notify the requester of HUD's determination. FOIA requests accepted for expedited processing will be processed as soon as practicable and on a priority basis.
(d)
(2) When HUD uses multitrack processing, it may provide requesters in its slower track an opportunity to limit the scope of their requests in order to qualify for faster processing within the specified limits of HUD's faster track. When HUD chooses to provide this option, HUD will contact the requester by telephone, letter, or email, whichever is more efficient in each case.
(a)
(b)
(1) Respond to the request regarding that record, after consulting with the agency best able to determine whether to disclose it and with any other agency that has a substantial interest in it; or
(2) Refer the responsibility for responding to the request regarding that record to the agency that originated the record, but only if that agency is subject to the FOIA. Ordinarily, the agency with which the record originated will be presumed to be best able to determine whether to disclose it.
(c)
(d)
(2) Adverse determination of requests. If a determination is made to deny a request in any respect, HUD shall notify the requester of that determination in writing. Adverse determinations, or denials of requests, include: A determination to withhold any requested record, in whole or in part; a determination that a requested record does not exist, cannot be located, or has not been retained; a determination that a record is not readily reproducible in the form or format sought by the requester; a determination that what has been requested is not a record subject to the FOIA; a determination on any disputed fee matter, including a denial of a request for a fee waiver or reduction; and a denial of a request for expedited treatment. The denial letter shall be signed by the Director of the Office of the Executive Secretariat, or a
(i) The name and title or position of the person responsible for the denial;
(ii) A brief statement of the reason(s) for the denial, including any FOIA exemption applied by HUD in denying the request;
(iii) An estimate of the volume of records or information withheld, when appropriate, in number of pages or in some other reasonable form of estimation. This estimate does not need to be provided if the volume is otherwise indicated through deletions on records disclosed in part, or if providing an estimate would harm an interest protected by an applicable exemption; and
(iv) A statement that the denial may be appealed as provided by § 15.109 and a description of the requirements for appeal.
(a)
(b)
(i)(A) A preschool;
(B) A public or private elementary or secondary school;
(C) An institution of graduate higher education;
(D) An institution of undergraduate higher education;
(E) An institution of professional education; or
(F) An institution of vocational education, that primarily (or solely) operates a program or programs of scholarly research.
(ii) To be in this category, a requester should show that the request is authorized by, and is made under the auspices of, a qualifying institution and that the records are not sought for a commercial use but are sought to further scholarly research. Records requested for the intention of fulfilling credit requirements are not considered to be sought for a scholarly purpose.
(c)
(2)
(ii) For each hour spent by personnel searching for requested records, including electronic searches that do not require new programming, the fees will be $13 per quarter hour for professional personnel and $6 per quarter hour for clerical personnel.
(iii) Requesters will be charged the direct costs associated with conducting any search that requires the creation of a new program to locate the requested records.
(iv) For requests requiring the retrieval of records from any Federal records center, certain additional costs may be incurred in accordance with the Transactional Billing Rate Schedule established by the National Archives and Records Administration.
(3)
(4)
(d)
(2) Search and review fees will be charged in quarter-hour increments. HUD will round up a quarter hour when professional and clerical search and review time exceeds a quarter-hour increment.
(3) Except for requesters seeking records for a commercial use, HUD will provide without charge:
(i) The first 100 pages of duplication (or the cost equivalent); and
(ii) The first 2 hours of search (or the cost equivalent).
(4) No fee will be charged whenever a total fee calculated under paragraph (c) of this section is less than HUD's cost to process the payment. Currently, whenever a total fee calculated is $25 or less, no fee will be charged.
(e)
(f)
(g)
(h)
(i)
(2) If HUD determines or estimates that a total fee to be charged under this section will be more than $250, it may require the requester to make an advance payment of an amount up to the amount of the entire anticipated fee before beginning to process the request, except where it receives a satisfactory assurance of full payment from a requester who has a history of prompt payment.
(3) If a requester has previously failed to pay a properly charged FOIA fee to HUD within 30 days of the date of billing, before HUD begins to process a new request or continues to process a pending request from that requester, HUD will require the requester to pay the full amount due, plus any applicable interest, and to make an advance payment of the full amount of any anticipated fee. If HUD has a reasonable basis to believe that a requester has misrepresented his or her identity in order to avoid paying outstanding fees, HUD may require that the requester provide proof of identity.
(4) When HUD requires advance payment, the request will be held in abeyance for 15 working days to allow the requester an opportunity to make payment in advance and/or modify the scope of the request. If the requester does not pay the advance payment or modify the scope of the request within the allotted time frame, the request will be closed.
(j)
(k)
(i) Disclosure of the requested information is in the public interest because it is likely to contribute significantly to public understanding of the operations or activities of the government; and
(ii) Disclosure of the information is not primarily in the commercial interest of the requester.
(2) To determine whether the first fee waiver requirement is met, HUD will consider the following factors:
(i) The subject of the requested records should concern identifiable operations or activities of the Federal Government, with a connection that is direct and clear, not remote or attenuated.
(ii) The disclosable portions of the requested records should be meaningfully informative about government operations or activities and “likely to contribute” to an increased public understanding of those operations or activities. The disclosure of information that already is in the public domain, in either a duplicative or a substantially identical form, would not be as likely to contribute to such increased understanding, where nothing new would be added to the public's understanding.
(iii) The disclosure should contribute to the understanding of a reasonably broad audience of persons interested in the subject, as opposed to the individual understanding of the requester. A requester's expertise in the subject area and ability and intention to effectively convey information to the public will be considered. It will be presumed that a representative of the news media will satisfy this consideration.
(iv) The public's understanding of the subject in question, as compared to the level of public understanding existing prior to the disclosure, should be enhanced by the disclosure to a significant extent. However, HUD will not make value judgments about whether information at issue is “important” enough to be made public.
(3) To determine whether the second fee waiver requirement is met, HUD will consider the following factors:
(i) HUD will identify any commercial interest of the requester as defined in paragraph (b) of this section, or of any person on whose behalf the requester may be acting, that would be furthered by the requested disclosure. Requesters shall be given an opportunity in the administrative process to provide explanatory information regarding this consideration.
(ii) A fee waiver or reduction is justified where the public interest standard is satisfied and that public interest is greater than that of any identified commercial interest in disclosure. HUD ordinarily will presume that where a news media requester has satisfied the public interest standard, the public interest will be the interest primarily served by disclosure to that requester. Disclosure to data brokers or others who merely compile and market government information for direct economic return will not be presumed to primarily serve the public interest.
(4) Where only some of the records to be released satisfy the requirements for a waiver of fees, a waiver will be granted for those records.
(5) Requests for the waiver or reduction of fees should address the factors listed in paragraphs (k)(2) and (3) of this section, insofar as they apply to each request. In deciding to grant waivers or reductions of fees, HUD will exercise its discretion to consider the cost effectiveness of its investment of administrative resources.
The FOIA contains nine exemptions (5 U.S.C. 552(b)) that authorize agencies to withhold various records from disclosure. With regard to certain types of records, HUD generally applies the exemptions as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(a)
(b)
(c)
(d)
(1) The information has been designated in good faith by the submitter as information considered protected from disclosure under Exemption 4; or
(2) HUD has reason to believe that the information may be protected from disclosure under Exemption 4.
(e)
(f)
(1) A statement of the reason(s) why each of the submitter's disclosure objections was not sustained;
(2) A description of the business information to be disclosed; and
(3) A specified disclosure date, which shall be a reasonable time subsequent to the notice.
(g)
(1) HUD determines that the information should not be disclosed;
(2) The information lawfully has been published or has been officially made available to the public; or
(3) Disclosure of the information is required by statute (other than the FOIA) or by a regulation issued in accordance with the requirements of Executive Order 12600.
(h)
(i)
(a)
(b)
(2)
(3)
(c)
(1) A copy of the original request;
(2) A copy of the adverse determination;
(3) A statement of facts and legal arguments supporting the appeal; and
(4) Any additional information the appellant wishes to include.
(d)
(a)
(2) The decision on the appeal will be made in writing and will be considered the final action of HUD.
(i) A decision affirming an adverse determination, in whole or in part, will contain a statement of the reason(s) for the affirmation, including any FOIA exemption(s) applied, and will inform the appellant of the FOIA provisions for potential court review of the decision.
(ii) If the adverse determination is modified on appeal, in whole or in part, a written decision will be sent to the appellant and the FOIA request will be reprocessed in accordance with the appeal decision.
(iii) Adverse decisions will include the name and contact information of dispute resolution services that offer mediation services to resolve disputes between FOIA requesters and Federal agencies as a nonexclusive alternative to litigation.
(b)
(1) Overturns the adverse determination, in whole or in part, and remands the request to the appropriate office. The requester will be notified of the rationale for the determination in writing. The original office will then reprocess the request in accordance with the appeal determination and respond directly to the requester; or
(2) Affirms the adverse determination and declines to provide the requested records to the appellant.
(c)
(1) Waives the fee or charges the fee that the appellant requested;
(2) Modifies the original fee charged and explains why the modified fee is appropriate; or
(3) Advises the appellant that the original fee charged was appropriate and gives the reason behind this determination.
(d)
(1) Overturns the adverse determination and grants the expedited processing request; or
(2) Affirms the decision to deny expedited processing.
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a safety zone on the navigable waters of the James River, in the vicinity of the James River Reserve Fleet, in support of United States Navy explosives training on the M/V SS DEL MONTE. This safety zone will restrict vessel movement in the specified area during the explosives training. This action is necessary to provide for the safety of life and property on the surrounding navigable waters during the United States Navy explosives training.
This rule is effective and enforced from 8 a.m. on August 17, 2015 until 4 p.m. on August 21, 2015.
Documents mentioned in this preamble are part of docket [USCG-2015-0701]. To view documents
If you have questions on this rule, call or email LCDR Barbara Wilk, Waterways Management Division Chief, Sector Hampton Roads, Coast Guard; telephone (757) 668-5580, email
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior written notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking (NPRM) with respect to this rule due to the fact that this military training is necessary to train and qualify Navy personnel in the use of explosives. This training is imperative to ensure that Navy personnel located within the Fifth Coast Guard District are properly trained and qualified before conducting military and national security operations for use in securing ports and waterways. Navy policy requires that Navy personnel meet and maintain certain qualification standards before being allowed to carry out certain missions. Failure to conduct this required training at this time will result in a lapse in personnel qualification standards and, consequently, the inability of Navy personnel to carry out important national security functions at any time. The Coast Guard received the information about this event on July 20, 2015; delaying the effective date by first publishing an NPRM would be contrary to the safety zone's intended objectives as well as to the public interest because immediate action is needed to protect persons and vessels against the hazards associated. The Coast Guard will provide advance notification to users of the affected waterway via marine information broadcasts and local notice to mariners. The Coast Guard will provide advance notifications to users of the affected waterway via marine information broadcasts and local notice to mariners.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this rule effective less than 30 days after publication in the
The legal basis and authorities for this rule are found in 33 U.S.C. 1231; 33 CFR 1.05-1, 6.04-1, 160.5; Department of Homeland Security Delegation No. 0170.1, which collectively authorize the Coast Guard to propose, establish, and define regulatory safety zones.
The purpose of this safety zone is to protect the participants, patrol vessels, and other vessels transiting navigable waters of the James River, in the vicinity of the James River Reserve Fleet, from hazards associated with military explosives operations. The potential hazards to mariners within the safety zone include shock waves, flying shrapnel, and loud noises.
The Captain of the Port of Hampton Roads is establishing a safety zone on specified waters of the James River, in the vicinity of the James River Reserve Fleet, in Newport News, VA. The safety zone will encompass all navigable waters within a 1500 foot radius of the SS DEL MONTE location at position 37°06′11″ N., 076°38′40″ W. (NAD 1983). This safety zone will be established and enforced from 8 a.m. on August 17, 2015 until 4 p.m. on August 21, 2015. Access to the safety zone will be restricted during the specified dates and times. Except for participants and vessels authorized by the Captain of the Port of his Representative, no person or vessel may enter or remain in the regulated area.
The Captain of the Port will give notice of the enforcement of the safety zone by all appropriate means to provide the widest dissemination of notice to the affected segments of the public. This includes publication in the Local Notice to Mariners and Marine Information Broadcasts.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders. Although this safety zone restricts vessel traffic through the regulated area, the effect of this rule will not be significant because: (i) This rule will only be enforced for the limited size and duration of the event; and (ii) the Coast Guard will make extensive notification to the maritime community via marine information broadcasts so mariners may adjust their plans accordingly.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities. This rule affects the following entities, some of which might be small entities: The owners or operators of vessels intending to transit or anchor in waters of the Eastern Branch of the Elizabeth River during the enforcement period.
This safety zone will not have a significant economic impact on a substantial number of small entities for
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the FOR FURTHER INFORMATION CONTACT, above.
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call 1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one of a category of actions that do not individually or cumulatively have a significant effect on the human environment. This rule involves the establishment of a safety zone. This rule is categorically excluded from further review under paragraph 34-(g) of Figure 2-1 of the Commandant Instruction. We seek any comments or information that may lead to the discovery of a significant environmental impact from this rule.
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(1) All waters in the vicinity of the of the James River Reserve Fleet, in the James River, within a 1500 foot radius of the M/V SS DEL MONTE in approximate position 37°06′11″ N., 076°38′40″ W. (NAD 1983).
(c)
(2) With the exception of participants, entry into or remaining in this safety zone is prohibited unless authorized by the Captain of the Port, Hampton Roads or his designated representatives.
(3) All vessels underway within this safety zone at the time it is implemented are to depart the zone immediately.
(4) The Captain of the Port, Hampton Roads or his representative can be contacted at telephone number (757) 668-5555.
(5) The Coast Guard and designated James River Reserve Fleet security vessels enforcing the safety zone can be contacted on VHF-FM marine band radio channel 13 (165.65 Mhz) and channel 16 (156.8 Mhz).
(6) This section applies to all persons or vessels wishing to transit through the safety zone except participants and vessels that are engaged in the following operations:
(i) Enforcing laws;
(ii) Servicing aids to navigation; and
(iii) Emergency response vessels.
(7) The U.S. Coast Guard may be assisted in the patrol and enforcement of the safety zone by Federal, State, and local agencies.
(d)
Coast Guard, DHS.
Temporary final rule.
The Coast Guard is establishing a temporary safety zone on the Des Plaines River between mile marker 277.8 and mile marker 279.2, Channahon, IL. This safety zone is intended to restrict vessels from a portion of the Des Plaines River from August 18, 2015 to August 19, 2015, with a rain date of August 20, 2015. This temporary safety zone is necessary to protect the surrounding public and vessels from the hazards associated with low flying aircraft and bridging operations spanning the width of the river for a U.S. Army exercise.
This rule is effective from 12:01 a.m. on August 18, 2015 to 11:59 p.m. on August 20, 2015. This rule will be enforced with actual notice from 6:30 a.m. until 6:30 p.m. on August 18, 2015 and August 19, 2015, or alternatively if postponed due to inclement weather, from 6:30 a.m. until 6:30 p.m. on August 20, 2015.
Documents mentioned in this preamble are part of docket USCG-2015-0760. To view documents mentioned in this preamble as being available in the docket, go to
If you have questions on this rule, contact or email LT Lindsay Cook, U.S. Coast Guard Marine Safety Unit Chicago, at (630) 986-2155 or
The Coast Guard is issuing this temporary final rule without prior notice and opportunity to comment pursuant to authority under section 4(a) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). This provision authorizes an agency to issue a rule without prior notice and opportunity to comment when the agency for good cause finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Under 5 U.S.C. 553(b)(B), the Coast Guard finds that good cause exists for not publishing a notice of proposed rulemaking with respect to this rule because doing so would be impracticable. The final details for this event were not known to the Coast Guard until there was insufficient time remaining before the event to publish an NPRM. Thus, delaying the effective date of this rule to wait for a comment period to run would be impracticable because it would inhibit the Coast Guard's ability to protect the public and vessels from the hazards associated with low flying aircraft and bridging operations spanning the width of the river for a U.S. Army exercise.
Under 5 U.S.C. 553(d)(3), the Coast Guard finds that good cause exists for making this temporary rule effective less than 30 days after publication in the
The legal basis for the rule is the Coast Guard's authority to establish safety zones: 33 U.S.C. 1231; 33 CFR 1.05-1, 160.5; Department of Homeland Security Delegation No. 0170.1.
On August 18, 2015 and August 19, 2015, the U.S. Army will conduct a bridging exercise spanning the width of the river. The Captain of the Port, Lake Michigan, has determined that the low flying aircraft and bridging operations spanning the width of the river associated with this exercise will pose a significant risk to public safety and property. This safety zone is necessary to protect the public from the hazards associated with low flying aircraft and bridging operations.
With the aforementioned hazards in mind, the Captain of the Port, Lake Michigan, has determined that this temporary safety zone is necessary to ensure the safety of the public and the participants during a U.S. Army exercise on a portion of the Des Plaines River from mile marker 277.8 to mile marker 279.2. This safety zone will be enforced from 6:30 a.m. until 6:30 p.m. on August 18, 2015 and August 19, 2015. If the event is postponed due to inclement weather, the safety zone will be enforced from 6:30 a.m. until 6:30 p.m. on August 20, 2015, the allotted rain date. This zone will encompass all waters of the Des Plaines River from mile marker 277.8 to mile marker 279.2.
Entry into, transiting, or anchoring within the safety zone is prohibited unless authorized by the Captain of the Port, Lake Michigan, or a designated on-scene representative. The Captain of the Port or a designated on-scene representative may be contacted via VHF Channel 16.
We developed this rule after considering numerous statutes and executive orders related to rulemaking. Below we summarize our analyses based on these statutes and executive orders.
This rule is not a significant regulatory action under section 3(f) of Executive Order 12866, Regulatory Planning and Review, as supplemented by Executive Order 13563, Improving Regulation and Regulatory Review, and does not require an assessment of potential costs and benefits under section 6(a)(3) of Executive Order 12866 or under section 1 of Executive Order 13563. The Office of Management and Budget has not reviewed it under those Orders.
We conclude that this rule is not a significant regulatory action because we anticipate that it will have minimal impact on the economy, will not interfere with other agencies, will not adversely alter the budget of any grant or loan recipients, and will not raise any novel legal or policy issues. The safety zone created by this rule will be relatively small and enforced between the hours of 6:30 a.m. and 6:30 p.m. during a two day period. Under certain conditions, moreover, vessels may still transit through the safety zone when permitted by the Captain of the Port.
The Regulatory Flexibility Act of 1980 (RFA), 5 U.S.C. 601-612, as amended, requires federal agencies to consider the potential impact of regulations on small entities during rulemaking. The term “small entities” comprises small businesses, not-for-profit organizations that are independently owned and operated and are not dominant in their fields, and governmental jurisdictions with populations of less than 50,000. The Coast Guard certifies under 5 U.S.C. 605(b) that this rule will not have a significant economic impact on a substantial number of small entities.
Under the Regulatory Flexibility Act (5 U.S.C. 601-612), we have considered the impact of this temporary rule on small entities. This rule will affect the following entities, some of which might be small entities: The owners or operators of vessels intending to transit on a portion of the Des Plaines River from mile marker 277.8 to mile marker 279.2 on August 18, 2015 and August 19, 2015 or on August 20, 2015.
This safety zone will not have a significant economic impact on a substantial number of small entities for the reasons cited in the
Under section 213(a) of the Small Business Regulatory Enforcement Fairness Act of 1996 (Pub. L. 104-121), we want to assist small entities in understanding this rule. If the rule would affect your small business, organization, or governmental jurisdiction and you have questions concerning its provisions or options for compliance, please contact the person listed in the
Small businesses may send comments on the actions of Federal employees who enforce, or otherwise determine compliance with, Federal regulations to the Small Business and Agriculture Regulatory Enforcement Ombudsman and the Regional Small Business Regulatory Fairness Boards. The Ombudsman evaluates these actions annually and rates each agency's responsiveness to small business. If you wish to comment on actions by employees of the Coast Guard, call1-888-REG-FAIR (1-888-734-3247). The Coast Guard will not retaliate against small entities that question or complain about this rule or any policy or action of the Coast Guard.
This rule will not call for a new collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520).
A rule has implications for federalism under Executive Order 13132, Federalism, if it has a substantial direct effect on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. We have analyzed this rule under that Order and determined that this rule does not have implications for federalism.
The Coast Guard respects the First Amendment rights of protesters. Protesters are asked to contact the person listed in the
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires Federal agencies to assess the effects of their discretionary regulatory actions. In particular, the Act addresses actions that may result in the expenditure by a State, local, or tribal government, in the aggregate, or by the private sector of $100,000,000 (adjusted for inflation) or more in any one year. Though this rule will not result in such an expenditure, we do discuss the effects of this rule elsewhere in this preamble.
This rule will not cause a taking of private property or otherwise have taking implications under Executive Order 12630, Governmental Actions and Interference with Constitutionally Protected Property Rights.
This rule meets applicable standards in sections 3(a) and 3(b)(2) of Executive Order 12988, Civil Justice Reform, to minimize litigation, eliminate ambiguity, and reduce burden.
We have analyzed this rule under Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks. This rule is not an economically significant rule and does not create an environmental risk to health or risk to safety that may disproportionately affect children.
This rule does not have tribal implications under Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, because it does not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes.
This action is not a “significant energy action” under Executive Order 13211, Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use.
This rule does not use technical standards. Therefore, we did not consider the use of voluntary consensus standards.
We have analyzed this rule under Department of Homeland Security Management Directive 023-01 and Commandant Instruction M16475.lD, which guide the Coast Guard in complying with the National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321-4370f), and have determined that this action is one
Harbors, Marine safety, Navigation (water), Reporting and recordkeeping requirements, Security measures, Waterways.
For the reasons discussed in the preamble, the Coast Guard amends 33 CFR part 165 as follows:
33 U.S.C. 1231; 50 U.S.C. 191; 33 CFR 1.05-1, 6.04-1, 6.04-6, and 160.5; Department of Homeland Security Delegation No. 0170.1.
(a)
(b)
(c)
(2) This safety zone is closed to all vessel traffic, except as may be permitted by the Captain of the Port Lake Michigan or a designated on-scene representative.
(3) The “on-scene representative” of the Captain of the Port, Lake Michigan is any Coast Guard commissioned, warrant or petty officer who has been designated by the Captain of the Port, Lake Michigan to act on his or her behalf.
(4) Vessel operators desiring to enter or operate within the safety zone shall contact the Captain of the Port, Lake Michigan or an on-scene representative to obtain permission to do so. The Captain of the Port Lake Michigan or an on-scene representative may be contacted via VHF Channel 16. Vessel operators given permission to enter or operate in the safety zone must comply with all directions given to them by the Captain of the Port Lake Michigan, or an on-scene representative.
Department of Veterans Affairs.
Final rule.
The Department of Veterans Affairs (VA) amends its regulation concerning the presence of animals on VA property. This final rule expands the current VA regulation to authorize the presence of service animals consistent with applicable Federal law when these animals accompany individuals with disabilities seeking admittance to property owned or operated by VA.
This rule is effective September 16, 2015.
Joyce Edmonson, RN, JD, Patient Care Services, (10P4), Veterans Health Administration, Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (410) 637-4755. (This is not a toll free number.)
On November 21, 2014, VA published in the
Interested persons were invited to submit comments to the proposed rule on or before January 20, 2015, and VA received 96 comments. All of the issues raised by the commenters that concerned at least one portion of the rule can be grouped together by similar topic, and we have organized our discussion of the comments accordingly. For the reasons set forth in the proposed rule and below, we are adopting the proposed rule as final, with changes, explained below, to proposed 38 CFR 1.218(a)(11).
Multiple commenters stated that it was unclear to what groups of individuals the proposed rule would apply. One commenter specifically expressed concern as to whether a service animal that assisted a visitor of a veteran would be permitted on VA property. We clarify for these commenters that this VA regulation applies to everyone seeking access to VA property, to include employees, veterans, and visitors. The rule as proposed did not contain any limiting language to restrict applicability to only certain groups of individuals, and we therefore do not make any changes to the final rule based on these comments. Several commenters applauded the development by VA of a uniform regulation for service animal access for all VA property, and did not recommend any changes. VA appreciates these comments and believes that this regulation will allow for more consistent access of VA property by service animals.
One commenter asserted that VA should use the term “assistance animal” instead of “service animals” throughout the proposed regulation because, they assert, the term “service animals” is understood more narrowly in the service animal industry to refer only to those animals that assist with mobility impairments. We do not make any changes based on these comments. We disagree that the term “assistance animal” is better understood than “service animal” by those in the service animal industry. Additionally, this regulation is written for a broader audience than just those in the service animal industry, to include any member of the public that may have need to access VA property. Indeed, the term “service animal” as defined in the proposed rule is well understood by the general public because it is consistent with the definition of “service animal” in the regulations that implement the Americans with Disabilities Act (ADA). We therefore do not make any changes based on these comments. A commenter
One commenter was concerned that breed restrictions may be imposed based on a perception that certain breeds of dogs are prone to violence. This VA regulation does not impose breed restrictions, and VA will not otherwise pose breed restrictions for purposes of access of service animals on VA property. VA will only deny access to VA property or will remove a service animal from VA property based on an individual assessment in accordance with objective criteria of the risks that the individual service animal poses to the health or safety of people or other service animals. VA makes no changes based on this comment.
Several commenters sought clarification between a “service animal” and a “pet,” and whether animals other than dogs were included in the definition of “service animal.” As proposed, § 1.218(a)(11)(viii) defined a “service animal” as any dog that accompanies an individual with a disability and that is individually trained for that purpose. The definition in proposed § 1.218(a)(11)(viii) specifically excluded any species of animal other than a dog, and specifically required that the work or tasks performed by the service animal be directly related to the individual's disability. Further, § 1.218(a)(11)(viii) distinguished that the crime deterrent effects of an animal's presence, or the provision of emotional support or well-being, comfort, or companionship do not constitute “work or tasks.” The definition as proposed in § 1.218(a)(11)(viii) clearly excluded any animal other than a dog, and also excluded any dog that is not individually trained to assist an individual with a disability. As proposed, § 1.218(a)(11)(viii) makes clear that unless the animal is a dog that is individually trained to do something that qualifies as work or a task, the animal is a pet or other type of animal and does not qualify as a service animal. We believe the definition in proposed § 1.218(a)(11)(viii) is clear enough to exclude a “pet,”, and we therefore do not make any changes based on these comments.
Several commenters wanted VA to permit miniature horses on VA properties. As discussed in the proposed rule, VA believes the presence of a miniature horse poses legitimate safety concerns, both to people on VA property and the miniature horse, especially on VA healthcare properties. This final rule reiterates VA's determination from the proposed rule, that, in light of a review of the multiple assessment factors, miniature horses are excluded from VA properties. We restate from the proposed rule that these assessment factors include the larger size of a miniature horse as well as their reduced predictability in behaving in accordance with typical standards of public access required of service animals. Additional factors from the proposed rule that VA considers to support the exclusion of miniature horses include elimination of horse waste, a heightened flee response of a miniature horse, the smooth flooring common to VA properties, and the likely disruptive attention a horse would receive. We therefore do not make any changes based on these comments.
Many commenters expressed concern that the proposed rule restricted access to only those dogs trained or certified by Assistance Dogs International (ADI), International Guide Dog Federation (IGDF), or one of their affiliated organizations. The proposed rule did not create such restrictions; as proposed, VA's standard for service animal access is consistent with regulations that implement the ADA and is not dependent on how the service animal was trained or by whom, but instead depends on the service animal's ability to behave in accordance with typical public access standards for public settings. Therefore, we do not make any changes based on these comments. VA notes that a service animal must be certified by ADI or IGDF as a requirement for veterans seeking service dog benefits under 38 CFR 17.148, however, those requirements for benefits do not apply to access. Conversely, several commenters asserted that service animal access to VA properties should be restricted to only those animals that are certified or trained by ADI, IGDF, or an affiliate—these commenters articulated various negative experiences where a “fake service animal” threatened their person, their service animal, or another person while on VA property or other property. VA recognizes that these commenters have legitimate concerns related to dogs that are not appropriately trained possibly being able to access VA property under the guise of a “service dog,” because VA will not be requiring any proof of training or certification for purposes of access. However, the lack of such a documentation requirement is consistent with regulations that implement the ADA, and otherwise provides the benefit of the doubt to individuals with disabilities unless the service animal's behavior necessitates that access be denied or the service animal be removed. VA does not make any changes based on these comments, but we stress that § 1.218(a)(11)(ii) still provides for removal of a service animal from certain areas on VA property if the animal exhibits behavior or other signs that it is a threat to the health or safety of individuals or other service animals on VA property.
Several commenters objected to the requirements in proposed § 1.218(a)(11)(vii) to provide proof of a service animal's good health when an individual will be accompanied by a service animal while receiving treatment in a Veterans Health Administration (VHA) residential program. Some of these commenters alluded to an administrative burden of “registering” a service animal to obtain access to the VA property. We clarify for these commenters that § 1.218(a)(11)(vii) only applies to situations where an individual would be accompanied by a service animal for the duration of his or her treatment in a VHA residential program—these documentation requirements would not apply for more general access to a VA property, such as to receive outpatient care provided by VA. The presentation of certain records as proof of an animal's health required in § 1.218(a)(11)(vii) is necessary when a service animal will have routine and constant interaction with employees, veterans, patients, and visitors over the course of an extended period of time in a residential setting, so that VA may ensure patient care, patient safety, and infection control standards are met. However, we do agree with the commenters who noted that some of the
One commenter suggested that the mere presence of a flea or tick on a service animal should not be grounds for removal of a service animal under § 1.218(a)(11)(ii)(C)(2), particularly for individuals being treated in VA residential settings. VA does not make any changes based on this comment. We reiterate from the proposed rule that the presence of a flea or tick poses a threat to the health and safety of others, as fleas, ticks, and other parasites can be spread by physical contact and close proximity and can reproduce quickly and in great volume to create infestation conditions that are much more difficult to remediate, versus removing a service animal with visible external parasites. We note, however, that under § 1.218(a)(11)(ii)(C), VA staff must complete an individualized assessment based on objective indications, such as external signs of parasites, to ascertain the severity of risk to the health or safety of people or other service animals.
Several commenters suggested that VA revise § 1.218(a)(11)(viii) to permit service dogs in training to access VA property. Some of these commenters reasoned that a service dog in training could be well trained enough to dependably behave safely in public settings, even without having fully completed their training. Other commenters expressed that VA properties could be used as training opportunities for service animals. VA seeks to maintain a safe and therapeutic environment at its properties. In a complex hospital environment, we believe that service animals should be fully trained and a “service animal in training” is not fully trained. We therefore do not revise § 1.218(a)(11)(viii) to permit service animals in training.
Several commenters inquired as to how VA's service animal access rule would be enforced, particularly with regard to staff training. Some commenters expressed concerns about “fake service animals” interfering with the need for people and service animals to safely access VA properties. Others expressed concerns that VA's proposed rule would establish a barrier to access or expressed concern regarding the authority of varying facility directors to devise implementation criteria that would restrict access outside of the proposed rule. VA does not make any changes based on these comments. The final rule establishes a set of standardized criteria that can be uniformly enforced on VA property, and removes variation amongst individual facilities that existed prior to this final rule. A service animal meeting VA's requirements under this final rule will not be subject to any barrier to access. And once on VA property, service animals are subject to the same terms, conditions and regulations that govern the admission of the public to VA property, to include certain exceptions on VHA properties to ensure patient care, patient safety, and infection control standards are not compromised. Therefore, service animals would only be denied access or removed if, based on an individualized assessment that is subject to objective indications in the final rule to ascertain severity of risk, there is cause for access denial or removal. VA anticipates that in most cases concerns related to access and removal will be communicated by veterans, employees, or visitors to VA staff members (including security and law enforcement) who will manage any concerns and facilitate an appropriate response. VA anticipates all appropriate staff members will be trained on what is and what is not allowed under this regulation and how it should be implemented.
Several commenters expressed concern about the requirement in proposed § 1.218(a)(11)(i) that the service animal be in a guiding harness or on a leash, as well as under the control of the individual with a disability, at all times while on VA property. These commenters asserted that multiple disabilities might prevent an individual from physically controlling a service animal via a harness or leash, or that the service animal's presence on a leash or other tether at all times might prevent that service animal from completing work or tasks they are trained to perform. Further, some commenters urged VA to adopt a standard that mimics that of the regulations that implement the ADA, whereby control over the service animal by the handler can be in the form of voice control. VA agrees with these comments, and amends § 1.218(a)(11)(i) to incorporate comparable language to that used in the regulations that implement the ADA.
Likewise, after considering related comments, VA recognizes that individuals with disabilities may require the assistance of an alternate handler to control the service animal while on VA property. The need for an alternate handler may arise when the individual with the disability is unable to control the service animal because of the care the individual receives; or when the service animal, individual with a disability, and the alternate handler routinely operate as part of a team when accessing public areas. For this reason, VA amends § 1.218(a)(11)(i) and (a)(11)(ii)(A) to allow for an alternate handler to also be in control of the service animal. Specifically, § 1.218(a)(11)(i) will state that a service animal shall be under the control of the person with the disability or an alternate handler at all times while on VA property. Section 1.218(a)(11)(i) will also state that a service animal shall have a harness, leash, or other tether,
Several commenters inquired into whose responsibility is it to clean up animal waste and if VA properties have to designate an area for animals to relieve themselves. Commensurate with the requirements for access is a properly housebroken service animal. Should a service animal relieve bowel or bladder on VA property, it is the responsibility of the handler or the alternate handler to properly dispose of the waste in accordance with standards appropriate for public settings. VA again notes that at no time is any employee to be responsible to control a service animal and part of the access requirements is that an animal is housebroken. VA makes no change based on this comment.
Several commenters objected to the absolute prohibition of service animal access to certain areas of VHA property in proposed 1.218(a)(11)(iii), citing contrary standards that permit such access in regulations that implement the ADA as well as guidance issued by the Centers for Disease Control and Prevention (CDC). Particularly, commenters objected to the categorical exclusion of service animals from inpatient hospital settings to include locked mental health units (in proposed § 1.218(a)(11)(iii)(C)), and from patient rooms or treatment areas where patients may have an animal allergy or phobia (in proposed § 1.218(a)(11)(iii)(E)). VA cited three examples of acute inpatient hospital settings in proposed § 1.218(a)(11)(iii)(C) (intensive care units, stabilization units, and locked mental health units) in a representative but not exhaustive list of areas that could be covered by this exclusion. In light of the comments received, VA revises § 1.218(a)(11)(iii)(C) to remove these examples, and instead qualify the exclusion of service animals in acute inpatient settings to exclude such animals when their presence is not part of a documented treatment plan. VA agrees with the commenters that there are scenarios in which a service animal on any of the specific areas in proposed § 1.218(a)(11)(iii)(C) may provide its services when the individual being treated or an alternate handler can control a service animal as part of a treatment plan established by the clinical care team. Although VA used CDC guidance to justify the area-based exclusions in proposed § 1.218(a)(11)(iii)(C) (see 79 FR 69379, 69381), VA believes that this revision is still consistent with CDC's guidance because the service animal would not be permitted to access the inpatient area if not part of a documented treatment plan. The animal would require a staff assessment under § 1.218(a)(11)(ii)(C) to evaluate any threat to the health or safety of patients or staff. A service animal could still be removed under § 1.218(a)(11)(ii) if it presented a risk to patient safety or infection control standards after gaining access to an acute inpatient setting. For these same reasons, VA removes proposed § 1.218(a)(11)(iii)(E), the prohibition of the presence of service animals in patient rooms or areas where a patient may have an animal allergy or phobia. Again, a service animal could be removed from such an area if the animal posed a risk to patient safety or health, under § 1.218(a)(11)(ii). By removing proposed § 1.218(a)(11)(iii)(E), we will renumber proposed § 1.218(a)(11)(iii)(F) and (iii)(G) as (iii)(E) and (iii)(F), respectively.
However, VA will not remove all categorical area-based exclusions of service animals on VHA property from proposed § 1.218(a)(11)(iii). VA's healthcare facilities reflect evidence based standards governing safe operation of a healthcare facility, patient care, and infection control. Consistent with CDC guidance, VA still finds certain locations such as operating rooms, surgical suites, areas where invasive procedures are being performed, decontamination, sterile processing, sterile storage areas, food preparation areas (not to include public food service areas), and any areas where protective barrier measures are required, to be inappropriate environments for a service animal. One commenter recommended removing the representative examples in proposed § 1.218(a)(11)(iii)(A)-(C) as redundant of places where protective barrier measures are required. We decline to remove these examples because they add clarity regarding the types of areas where access must be restricted to ensure patient care, patient safety or infection control standards are not compromised. While we will retain these area-based exclusions and the examples provided in the final rule, in response to comments we will revise § 1.218(a)(11)(iii)(F) as proposed, renumbered as § 1.218(a)(11)(iii)(E), to include the clarifying parenthetical “(not to include public food service areas).” We will also revise § 1.218(a)(11)(iii)(G) as proposed, renumbered as § 1.218(a)(11)(iii)(F), to refer to areas “where personal protective clothing must be worn or barrier protective measures must be taken to enter,” instead of referring to areas that require “personal protective equipment” to be worn. We agree with commenters that “personal protective equipment” in proposed § 1.218(a)(11)(iii)(G) could be interpreted to encompass even the wearing of basic equipment by patients, staff, or visitors like paper face masks or examination gloves, which could qualify nearly any area of a VHA medical facility as categorically excluding the presence of a service animal. The revisions to proposed § 1.218(a)(11)(iii)(G) (§ 1.218(a)(11)(iii)(F) as renumbered) more accurately describe the types of areas that a service animal will be restricted from entering.
We emphasize that even with these changes to the area-based exclusions in § 1.218(a)(11)(iii), a specific service animal may still be individually denied access or removed if it does not meet the standards in § 1.218(a)(11)(i) and (a)(11)(ii), namely that the animal must be controlled (by the individual or an alternate handler that is not a VA employee), be housebroken, and not pose a threat to the health and safety of people or other service animals.
Several commenters expressed concerns regarding the provision of service dogs, service dog training, and service dog benefits by VA. Particularly, some commenters asserted that VA should assist veterans to obtain a service dog and have such a dog trained and certified. These comments are beyond the scope of this rule, and we therefore do not make any changes. We note, however, that the provision of service dog benefits by VA is regulated at 38 CFR 17.148. Other commenters noted the benefits of service animals for the treatment of PTSD, but did not necessarily suggest any changes to the proposed rule. Again, these comments are beyond the scope of this rule, and we therefore do not make any changes. Some commenters requested that the final rule provide examples of what VA considers to be “work” or “tasks” that a service animal may be trained to perform, either in the preamble or through revisions to the regulation text. Commenters noted that such examples would be particularly helpful for a service animal that might assist an individual with a mental disability or illness. We decline to make revisions to
One commenter urged VA to include emotional support animals in the definition of “service animal” in § 1.218(a)(11)(viii) as proposed. The commenter asserted that because many veterans with PTSD use emotional support animals in their homes, that refusing access to emotional support animals on VA property could discourage use of VA services by such veterans. This same commenter also made a reference to Department of Housing and Urban Development (HUD) regulations and guidance that create exclusions for public housing's “no pet” policies for certain animals, to include permitting access for emotional support animals in applicable circumstances, and suggested that VA consider developing a similar rule regarding emotional support animal access on VA property. Another commenter suggested adopting HUD's approach in the context of VA's residential treatment programs. VA does not disagree that some veterans may use emotional support animals, nor disagree with the commenters' subjective accounts that such animals have improved the quality of their lives. However, the HUD regulations and guidance referenced by the commenters appropriately apply in the context of public housing. In particular, the HUD regulations and guidance do not require an animal to be individually trained to do work or perform tasks for the benefit of the individual with a disability. However, there is a distinction between the presence of an animal in public areas and the functions that animal performs to enable an individual to use public services and public accommodations (service animal), as compared to the presence and use of a comfort or emotional support animal in the home (emotional support animal). Regarding VHA's residential treatment programs, these programs involve shared spaces amongst multiple veterans, where there is an active treatment component that involves the participation of not only the veterans but also treatment providers as well as other members of the public at times. Therefore, we interpret VHA residential programs to be public treatment spaces (just as the other areas of VHA property that are specified in this final rule), rather than a residential space analogous to the HUD public housing context. We therefore do not make any changes based on these comments.
Commenters expressed concern about the area-based restrictions for property under the control of the National Cemetery Administration (NCA) in proposed § 1.218(a)(11)(iv). We interpret such comments to be the result of a misunderstanding by commenters that new restrictions were being created in the proposed rule when in fact the proposed area-based restrictions reflect existing restrictions on NCA property in accordance with rules requiring access on the same terms, conditions, and regulations that generally govern admission of the public to the property. That is, the proposed and final rules only clarify that where an individual may not access NCA property (
VA makes one technical correction in § 1.218(a)(11)(viii). In the last sentence, VA is replacing “of this chapter” with a complete citation “38 CFR 17.148.” VA also makes several minor, non-substantive edits for clarity such as removing the first commas appearing in proposed § 1.218(a)(11)(ix)(C) and (D), replacing the word “on” with the word “in” three places in § 1.218(a)(11)(ix)(E) in reference to VA Community Living Centers, and adding the clarifying phrase “with respect to an individual” to the definition of a disability in § 1.218(a)(11)(x).
One commenter asked for clarification if animals other than dogs can participate in Animal Assisted Activities (AAA) or Animal Assisted Therapy (AAT) programs under § 1.218(a)(11)(ix)(C) and (ix)(D) as proposed. Unlike service animals under the proposed and final rules, there is no species restriction for AAA or AAT animals, and AAA or AAT animals are permitted on VHA property only at the discretion of the VA facility head or designee. Should an AAA or AAT animal that is not a dog meet the requirements in § 1.218(a)(11)(ix)(C) and (D), a VA facility head or designee may grant that animal access to VA property. Another commenter suggested that VA allow for pets to visit patients in unique circumstances such as end-of-life situations. As with other species of animals, there is no categorical restriction for AAA or AAT animals that would necessarily exclude a personal pet in an end-of-life or other special circumstance. Should an animal serve an AAA or AAT purpose and meet the requirements in § 1.218(a)(11)(ix)(C) and (D), a VA facility head or designee may grant that animal access to VA property. In addition, a commenter suggested that AAA and AAT animals be allowed on VA property only when their handler or organization has liability insurance. We do not disagree that liability insurance would be a sensible requirement, particularly as AAA is often conducted in group settings. However, VA believes that any liability insurance would be better addressed outside of a regulatory requirement by the VA facility head or designee and the AAA or AAT handler or organization prior to establishing a particular program at a facility. VA makes no changes based on these comments.
For all of the reasons noted above, VA is adopting the rule as final with changes as noted to 38 CFR 1.218.
Title 38 of the Code of Federal Regulations, as revised by this rulemaking, represents VA's implementation of its legal authority on this subject. Other than future amendments to this regulation or governing statutes, no contrary guidance or procedures are authorized. All existing or subsequent VA guidance
This final rule includes a collection of information under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521) that requires approval by the Office of Management and Budget (OMB). Accordingly, under 44 U.S.C. 3507(d), VA has submitted a copy of this rulemaking action to OMB for review.
OMB assigns a control number for each collection of information it approves. VA may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Section 1.218(a)(11) contains a collection of information under the Paperwork Reduction Act of 1995. OMB has approved the information collection requirement in this section as an emergency clearance under control number 2900-0831. This emergency clearance expires on December 31, 2015, before which time VA will submit to OMB a request for permanent clearance.
The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-612. This final rule directly affects only individuals and will not directly affect small entities. Therefore, pursuant to 5 U.S.C. 605(b), this rulemaking is exempt from the final regulatory flexibility analysis requirements of 5 U.S.C. 604.
Executive Orders 12866 and 13563 direct agencies to assess the costs and benefits of available regulatory alternatives and, when regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, and other advantages; distributive impacts; and equity). Executive Order 13563 (Improving Regulation and Regulatory Review) emphasizes the importance of quantifying both costs and benefits, reducing costs, harmonizing rules, and promoting flexibility. Executive Order 12866 (Regulatory Planning and Review) defines a “significant regulatory action,” requiring review by OMB, unless OMB waives such review, as “any regulatory action that is likely to result in a rule that may: (1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; (2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or (4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in this Executive Order.”
The economic, interagency, budgetary, legal, and policy implications of this final rule have been examined and it has been determined not to be a significant regulatory action under Executive Order 12866. VA's impact analysis can be found as a supporting document at
The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 1532, that agencies prepare an assessment of anticipated costs and benefits before issuing any rule that may result in an expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. This final rule will have no such effect on State, local, and tribal governments, or on the private sector.
The Catalog of Federal Domestic Assistance numbers and titles for the programs affected by this document are 64.007, Blind Rehabilitation Centers; 64.009, Veterans Medical Care Benefits; 64.010, Veterans Nursing Home Care; and 64.011, Veterans Dental Care.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert L. Nabors II, Chief of Staff, Department of Veterans Affairs, approved this document on June 5, 2015, for publication.
Administrative practice and procedure, Cemeteries, Government property, Security measures.
For the reasons stated in the preamble, VA amends 38 CFR part 1 as follows:
38 U.S.C. 501(a), and as noted in specific sections.
(a) * * *
(11)
(ii) A service animal will be denied access to VA property or removed from VA property if:
(A) The animal is not under the control of the individual with a disability or an alternate handler;
(B) The animal is not housebroken. The animal must be trained to eliminate its waste in an outdoor area; or
(C) The animal otherwise poses a risk to the health or safety of people or other service animals. In determining whether
(
(
(iii) Service animals will be restricted from accessing certain areas of VA property under the control of the Veterans Health Administration (VHA properties) to ensure patient care, patient safety, or infection control standards are not compromised. Such areas include but are not limited to:
(A) Operating rooms and surgical suites;
(B) Areas where invasive procedures are being performed;
(C) Acute inpatient hospital settings when the presence of the service animal is not part of a documented treatment plan;
(D) Decontamination, sterile processing, and sterile storage areas;
(E) Food preparation areas (not to include public food service areas); and
(F) Any areas where personal protective clothing must be worn or barrier protective measures must be taken to enter.
(iv) Service animals will be restricted from accessing certain areas of VA property under the control of the National Cemetery Administration (NCA properties) to ensure that public safety, facilities and grounds care, and maintenance control are not compromised. Such areas include but are not limited to:
(A) Open interment areas, except as approved to observe an individual interment or inurnment.
(B) Construction or maintenance sites; and
(C) Grounds keeping and storage facilities.
(v) If a service animal is denied access to VA property or removed from VA property in accordance with (a)(11)(ii) of this section, or restricted from accessing certain VA property in accordance with paragraphs (a)(11)(iii) and (iv) of this section, then VA will give the individual with a disability the opportunity to obtain services without having the service animal on VA property.
(vi) Unless paragraph (a)(11)(vii) of this section applies, an individual with a disability must not be required to provide documentation, such as proof that an animal has been certified, trained, or licensed as a service animal, to gain access to VA property accompanied by the service animal. However, an individual may be asked if the animal is required because of a disability, and what work or task the animal has been trained to perform.
(vii) An individual with a disability, if such individual will be accompanied by the service animal while receiving treatment in a VHA residential program, must provide VA with documentation that confirms the service animal has had a current rabies vaccine as determined by state and local public health requirements, and current core canine vaccines as dictated by local veterinary practice standards (
(viii) A service animal means any dog that is individually trained to do work or perform tasks for the benefit of an individual with a disability, including a physical, sensory, psychiatric, intellectual, or other mental disability. Other species of animals, whether wild or domestic, trained or untrained, are not service animals for the purposes of this definition. The work or tasks performed by a service animal must be directly related to the individual's disability. The crime deterrent effects of an animal's presence and the provision of emotional support, well-being, comfort, or companionship do not constitute work or tasks for the purposes of this definition. Service dogs in training are not considered service animals. This definition applies regardless of whether VA is providing benefits to support a service dog under 38 CFR 17.148.
(ix) Generally, animals other than service animals (“non-service animals”) are not permitted to be present on VA property, and any individual with a non-service animal must remove it. However, a VA facility head or designee may permit certain non-service animals to be present on VA property for the following reasons:
(A) Animals may be permitted to be present on VA property for law enforcement purposes;
(B) Animals under the control of the VA Office of Research and Development may be permitted to be present on VA property;
(C) Animal-assisted therapy (AAT) animals may be permitted to be present on VHA property when the presence of such animals would not compromise patient care, patient safety, or infection control standards. AAT is a goal-directed clinical intervention, as provided or facilitated by a VA therapist or VA clinician, that incorporates the use of an animal into the treatment regimen of a patient. Any AAT animal present on VHA property must facilitate achievement of patient-specific treatment goals, as documented in the patient's treatment plan. AAT animals must be up to date with all core vaccinations or immunizations, prophylactic parasite control medications, and regular health screenings as determined necessary by a licensed veterinarian consistent with local veterinary practice standards. Proof of compliance with these requirements must be documented and accessible in the area(s) where patients receive AAT.
(D) Animal-assisted activity (AAA) animals may be permitted to be present on VHA property when the presence of such animals would not compromise patient care, patient safety, or infection control standards. AAA involves animals in activities to provide patients with casual opportunities for motivational, educational, recreational, and/or therapeutic benefits. AAA is not a goal-directed clinical intervention that must be provided or facilitated by a VA therapist or clinician, and therefore is not necessarily incorporated into the treatment regimen of a patient or documented in the patient's medical record as treatment. AAA animals must be up to date with all core vaccinations or immunizations, prophylactic parasite control medications, and regular health screenings as determined necessary by a licensed veterinarian consistent with local veterinary practice standards. Proof of compliance with these requirements must be documented and accessible in the area(s) where patients may participate in AAA.
(E) Animals participating in a VA Community Living Center (CLC) residential animal program or a Mental Health Residential Rehabilitation Treatment Program (MHRRTP) may be permitted to be present on VHA property, when the presence of such animals would not compromise patient care, patient safety, or infection control standards. A residential animal program in a VA CLC or a MHRRTP is a program that uses the presence of animals to create a more homelike environment to foster comfort for veterans, while also stimulating a sense of purpose, familiarity, and belonging. Any VA CLC or MHRRTP residential animal present on VHA property must facilitate achievement of therapeutic outcomes (such as described above), as documented in patient treatment plans. Residential animals in a VA CLC or MHRRTP must be up to date with all core vaccinations and immunizations, prophylactic parasite control
(F) Animals may be present on NCA property for ceremonial purposes during committal services, interments, and other memorials, if the presence of such animals would not compromise public safety, facilities and grounds care, and maintenance control standards.
(x) For purposes of this section, a disability means, with respect to an individual, a physical or mental impairment that substantially limits one or more major life activities of the individual; a record of such an impairment; or being regarded as having such an impairment.
(OMB has approved the information collection requirements in this section under control number XXXX-XXXX.)
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking direct final action to approve a request from the state of North Carolina for the EPA to relax the Reid Vapor Pressure (RVP) standard applicable to gasoline introduced into commerce from June 1 to September 15 of each year for Mecklenburg and Gaston counties. Specifically, the EPA is approving amendments to the regulations to allow the RVP standard for the two counties to rise from 7.8 pounds per square inch (psi) to 9.0 psi for gasoline. The EPA has determined that this change to the federal RVP regulation is consistent with the applicable provisions of the Clean Air Act (CAA). This action is being taken without prior proposal because the EPA believes that this rulemaking is noncontroversial for the reasons set forth in this preamble, and due to the limited scope of this action.
This rule is effective on October 16, 2015 without further notice, unless EPA receives adverse comment by September 16, 2015. If EPA receives adverse comment, we will publish a timely withdrawal in the
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2015-0208, to the Federal eRulemaking Portal:
Patty Klavon, Office of Transportation and Air Quality, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, Michigan, 48105; telephone number: (734) 214-4476; fax number: (734) 214-4052; email address:
The contents of this preamble are listed in the following outline:
The EPA is making this revision as a direct final rule without prior proposal because the EPA views this revision as noncontroversial and anticipates no adverse comment. The rationale for this rulemaking is described in detail below. In the Proposed Rules section of this
Entities potentially affected by this rule are fuel producers and distributors who do business in North Carolina.
The
Do not submit CBI to the EPA through
When submitting comments, remember to:
• Identify the rulemaking by docket number and other identifying information (subject heading,
• Follow directions—The EPA may ask you to respond to specific questions or organize comments by referencing a Code of Federal Regulations (CFR) part or section number.
• Explain why you agree or disagree, suggest alternatives, and substitute language for your requested changes.
• Describe any assumptions and provide any technical information and/or data that you used.
• If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.
• Provide specific examples to illustrate your concerns, and suggest alternatives.
• Explain your views as clearly as possible, avoiding the use of profanity or personal threats.
• Make sure to submit your comments by the comment period deadline identified.
You may be required to pay a reasonable fee for copying docket materials.
This direct final rule approves a request from the state of North Carolina to change the summertime gasoline RVP standard for Mecklenburg and Gaston counties from 7.8 psi to 9.0 psi by amending the EPA's regulations at 40 CFR 80.27(a)(2). In a previous rulemaking, the EPA approved a redesignation request and maintenance plan for the Charlotte-Gastonia-Salisbury, North Carolina 2008 ozone area (“the Charlotte area”) and a CAA section 110(l) non-interference demonstration that relaxing the federal RVP gasoline requirement from 7.8 psi to 9.0 psi for gasoline sold from June 1 to September 15 of each year in Mecklenburg and Gaston counties would not interfere with maintenance of the national ambient air quality standards (NAAQS) in the Charlotte area. Mecklenburg and Gaston counties are part of the Charlotte area. For more information on North Carolina's redesignation request and maintenance plan for the Charlotte area, please refer to Docket ID. No. EPA-R04-OAR-2015-0275 for the rulemaking that was signed on July 17, 2015. The preamble for this rulemaking is organized as follows: Section III. provides the history of the federal gasoline volatility regulation. Section IV. describes the policy regarding relaxation of volatility standards in ozone nonattainment areas that are redesignated as attainment areas. Section V. provides information specific to North Carolina's request for Mecklenburg and Gaston counties. Finally, Section VI. presents the final action in response to North Carolina's request.
On August 19, 1987 (52 FR 31274), the EPA determined that gasoline nationwide was becoming increasingly volatile, causing an increase in evaporative emissions from gasoline-powered vehicles and equipment. Evaporative emissions from gasoline, referred to as volatile organic compounds (VOC), are precursors to the formation of tropospheric ozone and contribute to the nation's ground-level ozone problem. Exposure to ground-level ozone can reduce lung function, thereby aggravating asthma and other respiratory conditions, increase susceptibility to respiratory infection, and may contribute to premature death in people with heart and lung disease.
The most common measure of fuel volatility that is useful in evaluating gasoline evaporative emissions is RVP. Under CAA section 211(c), the EPA promulgated regulations on March 22, 1989 (54 FR 11868) that set maximum limits for the RVP of gasoline sold during the regulatory control periods that were established on a state-by-state basis in the final rule. The regulatory control periods addressed the portion of the year when peak ozone concentrations were expected. These regulations constituted Phase I of a two-phase nationwide program, which was designed to reduce the volatility of gasoline during the high ozone season. On June 11, 1990 (55 FR 23658), the EPA promulgated more stringent volatility controls as Phase II of the volatility control program. These requirements established maximum gasoline RVP standards of 9.0 psi or 7.8 psi (depending on the state, the month, and the area's initial ozone attainment designation with respect to the 1-hour ozone NAAQS.)
The 1990 CAA Amendments established a new section 211(h) to address fuel volatility. CAA section 211(h) requires the EPA to promulgate regulations making it unlawful to sell, offer for sale, dispense, supply, offer for supply, transport, or introduce into commerce gasoline with an RVP level in excess of 9.0 psi during the high ozone season. CAA section 211(h) also prohibits the EPA from establishing a volatility standard more stringent than 9.0 psi in an attainment area, except that the EPA may impose a lower (more stringent) standard in any former ozone nonattainment area redesignated to attainment.
On December 12, 1991 (56 FR 64704), the EPA modified the Phase II volatility regulations to be consistent with CAA section 211(h). The modified regulations prohibited the sale of gasoline with an RVP above 9.0 psi in all areas designated attainment for ozone, effective January 13, 1992. For areas designated as nonattainment, the regulations retained the original Phase II standards published on June 11, 1990 (55 FR 23658), which included the 7.8 psi ozone season limitation for certain areas. As stated in the preamble to the Phase II volatility controls and reiterated in the proposed change to the volatility standards published in 1991, the EPA will rely on states to initiate changes to their respective volatility programs. The EPA's policy for approving such changes is described below in Section IV. of this action.
The state of North Carolina has initiated this change by requesting that the EPA relax the 7.8 psi gasoline RVP standard to 9.0 psi for Mecklenburg and Gaston counties, which are subject to the 7.8 gasoline RVP requirement during the summertime ozone season. Accordingly, the state of North Carolina provided a technical demonstration showing that relaxing the federal gasoline RVP requirements in the two counties from 7.8 psi to 9.0 psi would not interfere with maintenance of the NAAQS in the Charlotte area or with any other applicable CAA requirement.
As stated in the preamble for the EPA's amended Phase II volatility standards (56 FR 64706), any change in the volatility standard for a nonattainment area that was subsequently redesignated as an attainment area must be accomplished through a separate rulemaking that revises the applicable standard for that area. Thus, for former 1-hour ozone nonattainment areas where the EPA mandated a Phase II volatility standard of 7.8 psi RVP in the December 12, 1991 rulemaking, the federal 7.8 psi RVP gasoline requirement remains in effect, even after such an area is redesignated to attainment, until a separate rulemaking is completed that relaxes the federal RVP gasoline standard in that area from 7.8 psi to 9.0 psi.
As explained in the December 12, 1991 rulemaking, the EPA believes that relaxation of an applicable gasoline RVP standard is best accomplished in conjunction with the redesignation process. In order for an ozone nonattainment area to be redesignated as an attainment area, CAA section 107(d)(3) requires the state to make a showing, pursuant to CAA section 175A, that the area is capable of maintaining attainment for the ozone NAAQS for ten years. Depending on the area's circumstances, this maintenance plan will either demonstrate that the area is capable of maintaining attainment for ten years without the more stringent gasoline volatility standard or that the more stringent gasoline volatility standard may be necessary for the area to maintain its attainment with the ozone NAAQS. Therefore, in the context of a request for redesignation, the EPA will not relax the gasoline volatility standard unless the state requests a relaxation and the maintenance plan demonstrates to the satisfaction of the EPA that the area will maintain attainment for ten years without the need for the more stringent volatility standard.
North Carolina requested relaxation of the federal RVP gasoline standard from 7.8 psi to 9.0 psi for Mecklenburg and Gaston counties concurrent with its request that the EPA approve a redesignation request and maintenance plan for the Charlotte area for the 2008 ozone NAAQS.
On March 11, 2015, the state of North Carolina, through the North Carolina Department of Environment and Natural Resources (NCDENR), submitted a redesignation request and maintenance plan for the Charlotte area, which was classified as Marginal for the 2008 ozone NAAQS. Mecklenburg and Gaston counties are part of the Charlotte area. Additionally, the state submitted a CAA section 110(l) non-interference demonstration that removal of the federal RVP requirement of 7.8 psi for gasoline during the summertime ozone season in Mecklenburg and Gaston counties would not interfere with maintenance of any NAAQS, including the 2008 ozone NAAQS. Specifically, the state provided a technical demonstration showing that relaxing the federal gasoline RVP requirement in the two counties from 7.8 psi to 9.0 psi would not interfere with maintenance of the ozone NAAQS in the Charlotte area or with any other applicable requirement of the CAA.
In a rulemaking that was signed on July 17, 2015, the EPA evaluated and approved North Carolina's March 11, 2015 redesignation request and maintenance plan for the Charlotte area. See Docket ID. No. EPA-R04-OAR-2015-0275. In a separate rulemaking signed on July 17, 2015, the EPA approved North Carolina's non-interference demonstration for Mecklenburg and Gaston counties. See Docket ID. No. EPA-R04-OAR-2015-0260.
Both rulemakings were subject to public notice-and-comment. The EPA received two comments on the redesignation request and maintenance plan rulemaking, and those comments were addressed in the final rule for that rulemaking. The comments received can be found in the docket for that rulemaking (Docket ID. No. EPA-R04-OAR-2015-0275). No comments were received on the non-interference demonstration for Mecklenburg and Gaston counties (Docket ID. No. EPA-R04-OAR-2015-0260).
In this action, the EPA is taking the second and final step in the process to approve North Carolina's request to relax the summertime ozone season gasoline RVP standard for Mecklenburg and Gaston counties from 7.8 psi to 9.0 psi. Specifically, the EPA is amending the applicable gasoline RVP standard from 7.8 psi to 9.0 psi provided at 40 CFR 80.27(a)(2) for the two counties. This action to approve North Carolina's request to relax the summertime ozone season RVP standard for Mecklenburg and Gaston counties from 7.8 psi to 9.0 psi is based on the EPA's previous approval of North Carolina's March 11, 2015 redesignation request and maintenance plan for the Charlotte area, as well as the non-interference demonstration. This approval is also based on the fact that the Charlotte area is currently in attainment for both the 1997 ozone NAAQS and the 2008 ozone NAAQS.
The EPA is taking direct final action to approve the request from North Carolina for the EPA to relax the RVP applicable to gasoline introduced into commerce from June 1 to September 15 of each year in Mecklenburg and Gaston counties. Specifically, this action amends the applicable gasoline RVP standard from 7.8 psi to 9.0 psi provided at 40 CFR 80.27(a)(2) for Mecklenburg and Gaston counties.
The EPA is making this revision without prior proposal because the EPA views the revision as noncontroversial and anticipates no adverse comment. However, in the Proposed Rules section of this
If the EPA receives adverse comments on the rule or any portion of the rule, the EPA will withdraw the direct final rule or the portion of the rule that received adverse comment. The EPA will publish a timely withdrawal in the
This action is not a “significant regulatory action” under the terms of Executive Order 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under Executive Orders 12866 and 13563. (76 FR 3821, January 21, 2011).
This action does not impose any new information collection burden under the provisions of the
I certify that this action will not have a significant economic impact on a substantial number of small entities under the RFA. In making this determination, the impact of concern is any significant adverse economic impact on small entities. An agency may certify that a rule will not have a significant economic impact on a substantial number of small entities if the rule relieves regulatory burden, has no net burden or otherwise has a positive economic effect on the small entities subject to the rule. The small entities subject to the requirements of this action are refiners, importers or blenders of gasoline that choose to produce or import low RVP gasoline for sale in North Carolina and gasoline distributers and retail stations in North Carolina. This action relaxes the federal RVP standard for gasoline sold in Mecklenburg and Gaston counties during the summertime ozone season (June 1 to September 15 of each year) to allow the RVP for gasoline sold in Mecklenburg and Gaston counties to rise from 7.8 psi to 9.0 psi. This rule does not impose any requirements or create impacts on small entities beyond those, if any, already required by or resulting from the CAA section 211(h) Volatility Control program. We have therefore concluded that this action will have no net regulatory burden for all directly regulated small entities.
This final rule does not contain an unfunded mandate of $100 million or more as described in UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect small governments. The action implements mandates specifically and explicitly set forth in CAA section 211(h) without the exercise of any policy discretion by the EPA.
This action does not have federalism implications. It will not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.
This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000). This final rule affects only those refiners, importers or blenders of gasoline that choose to produce or import low RVP gasoline for sale in the Birmingham area and gasoline distributers and retail stations in the Birmingham area. Thus, Executive Order 13175 does not apply to this action.
The EPA interprets Executive Order 13045 as applying only to those regulatory actions that concern environmental health or safety risks that the EPA has reason to believe may disproportionately affect children, per the definition of “covered regulatory action” in section 2-202 of the Executive Order. This action is not subject to Executive Order 13045 because it approves a state program.
This action is not subject to Executive Order 13211 because it is not a significant regulatory action under Executive Order 12866.
This action does not involve technical standards.
The EPA believes the human health or environmental risk addressed by this action will
This action is subject to the CRA, and the EPA will submit a rule report to each House of the Congress and to the Comptroller General of the United States. This action is not a “major rule” as defined by 5 U.S.C. 804(2).
Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by September 16, 2015. Filing a petition for reconsideration by the Administrator of this direct final rule does not affect the finality of this action for the purposes of judicial review nor does it extend the time within which a petition for judicial review may be filed, and shall not postpone the effectiveness of such rule or action. Parties with objections to this direct final rule are encouraged to file a comment in response to the parallel document of proposed rulemaking for this action published in the Proposed Rules section of this
The statutory authority for this action is granted to the EPA by Sections 211(h) and 301(a) of the Clean Air Act, as amended; 42 U.S.C. 7545(h) and 7601(a).
Environmental protection, Administrative practice and procedures, Air pollution control, Fuel additives, Gasoline, Motor vehicle and motor vehicle engines, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements.
For the reasons discussed in the preamble, the Environmental Protection Agency is amending 40 CFR part 80 as follows:
42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
The additions read as follows:
(a) * * *
(2) * * *
(ii) * * *
Environmental Protection Agency (EPA).
Final rule.
This regulation establishes an exemption from the requirement of a tolerance for residues of the arthropod pheromone, lavandulyl senecioate, in or on all raw agricultural commodities when applied or used in microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year in accordance with good agricultural practices. Suterra, LLC submitted a petition to EPA under the Federal Food, Drug, and Cosmetic Act (FFDCA), requesting an exemption from the requirement of a tolerance. This regulation eliminates the need to establish a maximum permissible level for residues of lavandulyl senecioate.
This regulation is effective August 17, 2015. Objections and requests for hearings must be received on or before October 16, 2015, and must be filed in accordance with the instructions provided in 40 CFR part 178 (see also Unit I.C. of the
The docket for this action, identified by docket identification (ID) number EPA-HQ-OPP-2015-0017, is available at
Robert McNally, Biopesticides and Pollution Prevention Division (7511P), Office of Pesticide Programs, Environmental Protection Agency, 1200 Pennsylvania Ave. NW., Washington, DC 20460-0001; main telephone number: (703) 305-7090; email address:
You may be potentially affected by this action if you are an agricultural producer, food manufacturer, or pesticide manufacturer. The following list of North American Industrial Classification System (NAICS) codes is not intended to be exhaustive, but rather provides a guide to help readers determine whether this document applies to them. Potentially affected entities may include:
• Crop production (NAICS code 111).
• Animal production (NAICS code 112).
• Food manufacturing (NAICS code 311).
• Pesticide manufacturing (NAICS code 32532).
You may access a frequently updated electronic version of 40 CFR part 180 through the Government Printing Office's e-CFR site at
Under FFDCA section 408(g), 21 U.S.C. 346a, any person may file an objection to any aspect of this regulation and may also request a hearing on those objections. You must file your objection or request a hearing on this regulation in accordance with the instructions provided in 40 CFR part 178. To ensure proper receipt by EPA, you must identify docket ID number EPA-HQ-OPP-2015-0017 in the subject line on the first page of your submission. All objections and requests for a hearing must be in writing, and must be received by the Hearing Clerk on or before October 16, 2015. Addresses for mail and hand delivery of objections and hearing requests are provided in 40 CFR 178.25(b).
In addition to filing an objection or hearing request with the Hearing Clerk as described in 40 CFR part 178, please submit a copy of the filing (excluding any Confidential Business Information (CBI)) for inclusion in the public docket. Information not marked confidential pursuant to 40 CFR part 2 may be disclosed publicly by EPA without prior notice. Submit the non-CBI copy of your objection or hearing request, identified by docket ID number EPA-HQ-OPP-2015-0017, by one of the following methods:
•
•
•
Additional instructions on commenting or visiting the docket, along with more information about dockets generally, is available at
In the
Section 408(c)(2)(A)(i) of FFDCA allows EPA to establish an exemption from the requirement for a tolerance (the legal limit for a pesticide chemical residue in or on a food) only if EPA determines that the exemption is “safe.” Section 408(c)(2)(A)(ii) of FFDCA defines “safe” to mean that “there is a reasonable certainty that no harm will result from aggregate exposure to the pesticide chemical residue, including all anticipated dietary exposures and all other exposures for which there is reliable information.” This includes exposure through drinking water and in residential settings, but does not include occupational exposure. Pursuant to FFDCA section 408(c)(2)(B), in establishing or maintaining in effect an exemption from the requirement of a tolerance, EPA must take into account the factors set forth in FFDCA section 408(b)(2)(C), which require EPA to give special consideration to exposure of infants and children to the pesticide chemical residue in establishing a tolerance and to “ensure that there is a reasonable certainty that no harm will result to infants and children from aggregate exposure to the pesticide chemical residue. . . .” Additionally, FFDCA section 408(b)(2)(D) requires that the Agency consider “available information concerning the cumulative effects of a particular pesticide's residues” and “other substances that have a common mechanism of toxicity.”
EPA performs a number of analyses to determine the risks from aggregate exposure to pesticide residues. First, EPA determines the toxicity of pesticides. Second, EPA examines exposure to the pesticide through food, drinking water, and through other exposures that occur as a result of pesticide use in residential settings.
Consistent with FFDCA section 408(b)(2)(D), EPA has reviewed the available scientific data and other relevant information in support of this action and considered its validity, completeness and reliability, and the relationship of this information to human risk. EPA has also considered available information concerning the variability of the sensitivities of major identifiable subgroups of consumers, including infants and children.
Lavandulyl senecioate (5-methyl-2-(1-methylethenyl)-4-hexenyl 3-methyl-2-butonate) is a technical grade synthetic arthropod pheromone. This arthropod pheromone is structurally similar to and mimics a naturally occurring pheromone produced by the female vine mealybug (
As an arthropod pheromone, lavandulyl senecioate is exempt from the requirement of a tolerance when used in retrievably sized polymeric matrix dispensers in or on all raw agricultural commodities when applied to growing crops only at a rate not to exceed 150 grams active ingredient/acre/year in accordance with good agricultural practices (40 CFR 180.1124). The petitioner is requesting to apply this arthropod pheromone in an aqueous suspension of micro-bead/dispensers via normal spray equipment; therefore, the proposed new use of lavandulyl senecioate is not covered under the existing tolerance exemption listed in 40 CFR 180.1124. See the document entitled, “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for Lavandulyl Senecioate” (June 30, 2015), available in the docket for this action.
All applicable mammalian toxicology data requirements supporting the petition to exempt residues of the arthropod pheromone, lavandulyl senecioate, from the requirement of a tolerance in or on all raw agricultural commodities when applied or used in microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year have been fulfilled. No significant toxicological effects were observed in any of the acute toxicity studies. Three mutagenicity studies submitted indicate that lavandulyl senecioate is not a mutagen. There are no known effects on endocrine systems via oral, dermal, or inhalation routes of exposure.
In the preamble to the final rule that exempted arthropod pheromones from the requirement of a tolerance when used in retrievably sized polymeric matrix dispensers, the Agency indicated that it did not have a toxicology
To address the subchronic and prenatal developmental toxicity data requirements for this exemption from the requirement of a tolerance for this arthropod pheromone, lavandulyl senecioate, the petitioner submitted scientific rationales that demonstrate that it is highly unlikely that there will be significant repeated exposure, including dietary exposure and exposure to female humans, to this pheromone when used as proposed based on the extremely low application rate, low emission rate, rapid volatilization after emission from the microbeads, and rapid biodegradation. Taking into account the petitioner's rationale, EPA has concluded that there is unlikely to be exposure that could result in subchronic and developmental effects and so has waived the requirements for subchronic and prenatal developmental testing.
For a full discussion of the data and rationale upon which EPA relied, and its human health risk assessment based on that data and rationale, please refer to the document entitled, “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for Lavandulyl Senecioate” (June 30, 2015). This document, as well as other relevant information, is available in the docket for this action as described under
In examining aggregate exposure, FFDCA section 408 directs EPA to consider available information concerning exposures from the pesticide residue in food and all other non-occupational exposures, including drinking water from ground water or surface water and exposure through pesticide use in gardens, lawns, or buildings (residential and other indoor uses).
In the preamble to the final rule, the Agency stated that limiting the exemption to applications of arthropod pheromones in retrievably sized dispensers would severely limit the possibility of direct dietary exposure. The Agency believed that restriction was necessary to protect public health due to a lack of data on repeat exposure but acknowledged that petitioners wanting to use other application methods or formulations could petition for an amendment by demonstrating that the new formulation did not increase the likely dietary exposure. For this tolerance exemption, based on the petitioner's submission concerning the proposed use, the Agency has determined that the proposed use (applying this arthropod pheromone in an aqueous suspension of microbead/dispensers via normal spray equipment with a limitation of 150 grams active ingredient/acre/year) will not result in detectable residues in or on all food commodities. That use is unlikely to result in significant dietary exposure to lavandulyl senecioate based on the extremely low application rate, low emission rate, rapid volatilization after emission from the microbeads, and rapid biodegradation (see document entitled, “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for Lavandulyl Senecioate” (June 30, 2015), available in the docket for this action). No significant exposure via drinking water is expected based on the previous information for dietary exposure and the fact that the arthropod pheromone is not to be applied directly to water. However, should any dietary and/or drinking water exposure occur, minimal to no risk is expected for the general population, including infants and children, due to the low toxicity of lavandulyl senecioate as demonstrated in the data submitted and evaluated by the Agency, as fully explained in the document entitled, “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for Lavandulyl Senecioate” (June 30, 2015), available in the docket for this action.
Other non-occupational exposure (other than dietary) is not expected because the arthropod pheromone, lavandulyl senecioate, is not approved for residential uses.
Section 408(b)(2)(D)(v) of FFDCA requires that, when considering whether to establish, modify, or revoke a tolerance, the Agency consider “available information” concerning the cumulative effects of a particular pesticide's residues and “other substances that have a common mechanism of toxicity.”
EPA has not found lavandulyl senecioate to share a common mechanism of toxicity with any other substances, and lavandulyl senecioate does not appear to produce a toxic metabolite produced by other substances. For the purposes of this tolerance action, therefore, EPA has assumed that lavandulyl senecioate does not have a common mechanism of toxicity with other substances. For information regarding EPA's efforts to determine which chemicals have a common mechanism of toxicity and to evaluate the cumulative effects of such chemicals, see EPA's Web site at
FFDCA section 408(b)(2)(C) provides that, in considering the establishment of a tolerance or tolerance exemption for a pesticide chemical residue, EPA shall assess the available information about consumption patterns among infants and children, special susceptibility of infants and children to pesticide chemical residues, and the cumulative effects on infants and children of the residues and other substances with a common mechanism of toxicity. In addition, FFDCA section 408(b)(2)(C) provides that EPA shall apply an additional tenfold (10X) margin of safety for infants and children in the case of threshold effects to account for prenatal and postnatal toxicity and the completeness of the database on toxicity and exposure, unless EPA determines that a different margin of safety will be safe for infants and children. This additional margin of safety is commonly referred to as the Food Quality Protection Act Safety Factor. In applying this provision, EPA either retains the default value of 10X, or uses a different additional or no safety factor when reliable data are available to support a different additional or no safety factor.
As part of its qualitative assessment, EPA evaluated the available toxicity and exposure data on lavandulyl senecioate and considered its validity, completeness, and reliability, as well as the relationship of this information to human risk. EPA considers the toxicity database to be complete and has identified no residual uncertainty with regard to prenatal and postnatal toxicity or exposure. No hazard was identified based on the available studies, as fully explained in the document entitled, “Federal Food, Drug, and Cosmetic Act (FFDCA) Considerations for Lavandulyl
Based on the available data, EPA determines that there is a reasonable certainty that no harm will result from aggregate exposure to lavandulyl senecioate to the general U.S. population, including infants and children when applied to growing crops using microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year. EPA concludes that an exemption from the requirement of a tolerance for residues of lavandulyl senecioate in or on raw agricultural commodities when applied to growing crops using microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year is safe.
An analytical method is not required for enforcement purposes since the Agency is establishing an exemption from the requirement of a tolerance without any numerical limitation.
Therefore, an exemption is established for residues of the arthropod pheromone, lavandulyl senecioate, in or on all raw agricultural commodities when applied or used in microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year.
This action establishes an exemption from the requirement of a tolerance under FFDCA section 408(d) in response to a petition submitted to the Agency. The Office of Management and Budget (OMB) has exempted these types of actions from review under Executive Order 12866, entitled “Regulatory Planning and Review” (58 FR 51735, October 4, 1993). Because this action has been exempted from review under Executive Order 12866, this action is not subject to Executive Order 13211, entitled “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) or Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997). This action does not contain any information collections subject to OMB approval under the Paperwork Reduction Act (PRA), 44 U.S.C. 3501
Since tolerances and exemptions that are established on the basis of a petition under FFDCA section 408(d), such as the exemption in this final rule, do not require the issuance of a proposed rule, the requirements of the Regulatory Flexibility Act (RFA) (5 U.S.C. 601
This action directly regulates growers, food processors, food handlers, and food retailers, not States or tribes, nor does this action alter the relationships or distribution of power and responsibilities established by Congress in the preemption provisions of FFDCA section 408(n)(4). As such, the Agency has determined that this action will not have a substantial direct effect on States or tribal governments, on the relationship between the national government and the States or tribal governments, or on the distribution of power and responsibilities among the various levels of government or between the Federal Government and Indian tribes. Thus, the Agency has determined that Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999) and Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000) do not apply to this action. In addition, this action does not impose any enforceable duty or contain any unfunded mandate as described under Title II of the Unfunded Mandates Reform Act (UMRA) (2 U.S.C. 1501
This action does not involve any technical standards that would require Agency consideration of voluntary consensus standards pursuant to section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) (15 U.S.C. 272 note).
Pursuant to the Congressional Review Act (5 U.S.C. 801
Environmental protection, Administrative practice and procedure, Agricultural commodities, Pesticides and pests, Reporting and recordkeeping requirements.
Therefore, 40 CFR chapter I is amended as follows:
21 U.S.C. 321(q), 346a and 371.
An exemption from the requirement of a tolerance is established for residues of the arthropod pheromone, lavandulyl senecioate (5-methyl-2-(1-methylethenyl)-4-hexenyl 3-methyl-2-butonate), in or on all raw agricultural commodities when applied or used in microbeads/dispensers at a rate not to exceed 150 grams active ingredient/acre/year in accordance with good agricultural practices.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; inseason adjustment.
We announce the reduction of the commercial possession limit for northern red hake for the remainder of the 2015 fishing year. This action is
Effective August 12, 2015
Reid Lichwell, Fishery Management Specialist, 978-675-9112.
The small-mesh multispecies fishery is managed primarily through a series of exemptions from the Northeast Multispecies Fisheries Management Plan. Regulations governing the red hake fishery are found at 50 CFR part 648. The regulations describing the process to adjust inseason commercial possession limits of northern red hake are described in § 648.86(d)(4) and (5). These regulations require the Regional Administrator to reduce the northern red hake possession limit from 3,000 lb (1,361 kg) to 1,500 lb (680 kg) when landings have been projected to reach or exceed 45 percent of the total allowable landings (TAL). The northern red hake possession limit is required to be further reduced to 400 lb (181 kg) if landings are projected to reach or exceed 62.5 percent of the TAL, unless such a reduction would be expected to prevent the TAL from being reached. The setting of these inseason adjustment thresholds were established in the final rule implementing the small-mesh multispecies specifications for 2015-2017, published in the
These measures were imposed because the annual catch limits (ACL) for northern red hake were exceeded for the 2012 and 2013 fishing years, and northern red hake was experiencing overfishing. To reduce the risk of continued overfishing on the stock and to better constrain catch to the ACL, we implemented this possession limit reduction trigger.
Based on commercial landings data reported through July 30, 2015, the northern red hake fishery is projected to reach 45 percent of the TAL on August 10, 2015. Based on this projection, reducing the commercial northern red hake possession limit to 1,500 lb (680 kg) is required to prevent the TAL from being exceeded. Upon the effective date of this action, no person may possess on board or land more than 1,500 lb (680 kg) of northern red hake, per trip for the remainder of the fishing year.
This action is taken under 50 CFR part 648 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Office of Personnel Management.
Proposed rule with request for comments.
The U.S. Office of Personnel Management (OPM) is issuing a proposed rule to delay the effective date that appeared in the final rule published in the
OPM must receive comments on or before September 16, 2015.
You may submit comments, identified by RIN number “3206-AM68”, using the Federal eRulemaking Portal:
Mary Capule by telephone at (202) 606-2564; by FAX at (202) 606-5056; or by email at
OPM proposes to delay the effective date of the final rule entitled “Solicitation of Federal Civilian and Uniformed Service Personnel for Contributions to Private Voluntary Organizations” (FR Doc. 2014-08574, in the
Federal Retirement Thrift Investment Board
Proposed rule with request for comments.
The Federal Retirement Thrift Investment Board (Agency) proposes to amend its regulations to codify procedures for correcting certain default investment fund errors.
Submit comments on or before September 16, 2015.
You may submit comments using one of the following methods:
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The most helpful comments explain the reason for any recommended change and include data, information, and the authority that supports the recommended change.
Austen Townsend at (202) 864-8647.
The Agency administers the Thrift Savings Plan (TSP), which was established by the Federal Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514. The TSP provisions of FERSA are codified, as amended, largely at 5 U.S.C. 8351 and 8401-79. The TSP is a tax-deferred retirement savings plan for Federal civilian employees, members of the uniformed services, and spouse beneficiaries. The TSP is similar to cash or deferred arrangements established for private-sector employees under section 401(k) of the Internal Revenue Code (26 U.S.C. 401(k)).
On December 18, 2014, the President signed the Smart Savings Act (“the Act”), Public Law 113-255 (128 Stat. 2920). The Act directed the Agency to invest any sums available for investment in the TSP for which an election has not been made in an age-appropriate target date asset allocation investment fund. On July 13, 2015, the Agency published a proposed rule to change the TSP's default investment fund from the TSP's Government Securities Investment Fund to the age-appropriate TSP Lifecycle Fund (L Fund) for civilian employees. 80 FR 39974. This proposed regulation would update the TSP's existing error correction rules to address the correction of default investment fund errors caused by erroneous dates of birth.
Erroneous dates of birth can result from participant error, employing agency error, Agency error, or record-keeper error. A participant's date of birth is used to determine his or her age-appropriate L Fund. An erroneous date of birth might therefore cause a participant's TSP account to be invested in an L Fund that is different from the L Fund his or her account would have been invested in had the participant's correct date of birth been used. This proposed regulation provides that the Agency will pay breakage when an erroneous date of birth caused by Agency or record-keeper error results in default investment in the wrong L Fund.
In addition, the Agency will charge employing agencies breakage when an erroneous date of birth caused by employing agency error results in default investment in the wrong L Fund. To initiate a breakage calculation for an employee, the employing agency must notify the TSP that the participant is entitled to breakage. A date of birth change received from an employing agency will not trigger corrective action other than to update the date of birth.
Consistent with the existing error correction procedures at 5 CFR 1605.22 for contribution allocation and interfund transfer errors, the participant
I certify that this regulation will not have a significant economic impact on a substantial number of small entities. This regulation will affect Federal civilian employees and spouse beneficiaries who participate in the Thrift Savings Plan, which is a Federal defined contribution retirement savings plan created under the Federal Employees' Retirement System Act of 1986 (FERSA), Public Law 99-335, 100 Stat. 514, and which is administered by the Agency.
I certify that these regulations do not require additional reporting under the criteria of the Paperwork Reduction Act.
Pursuant to the Unfunded Mandates Reform Act of 1995, 2 U.S.C. 602, 632, 653, 1501-1571, the effects of this regulation on state, local, and tribal governments and the private sector have been assessed. This regulation will not compel the expenditure in any one year of $100 million or more by state, local, and tribal governments, in the aggregate, or by the private sector. Therefore, a statement under section 1532 is not required.
Government employees, Pensions, Retirement.
For the reasons stated in the preamble, the Agency proposes to amend 5 CFR chapter VI as follows:
5 U.S.C. 8351, 8432(a), 8432(d), 8474(b)(5) and (c)(1). Subpart B also issued under section 1043(b) of Public Law 104-106, 110 Stat. 186 and § 7202(m)(2) of Public Law 101-508, 104 Stat. 1388.
(b) * * *
(1) * * *
(i) Use the participant's contribution allocation on file for the “as of” date to determine how the funds would have been invested. If there is no contribution allocation on file, or one cannot be derived based on the investment of contributions, the TSP will consider the funds to have been invested in the default investment fund in effect for the participant on the “as of” date.
(c)
(a) The TSP will calculate and post breakage on date of birth errors that result in default investment in the wrong L Fund, contribution allocation errors, and interfund transfer errors.
(b) The TSP will charge the employing agency for positive breakage on incorrect dates of birth caused by employing agency error that result in default investment in the wrong L Fund. A date of birth change received from an employing agency will not trigger corrective action other than to update the date of birth. To initiate a breakage calculation for an employee, the employing agency must notify the TSP that the participant is entitled to breakage.
(a) * * *
(3) All contributions made under this paragraph (a) and associated breakage will be invested according to the participant's contribution allocation on the posting date. Breakage will be calculated using the share prices for the default investment fund in effect for the participant in accordance with § 1605.2 unless otherwise required by the employing agency or the court or other tribunal with jurisdiction over the back pay case.
(a)
(2) For errors involving incorrect dates of birth caused by employing agency error that result in default investment in the wrong L Fund, the employing agency must promptly notify the TSP that the participant is entitled to breakage if the error is discovered within 30 days of either the date the TSP provides the participant with a notice reflecting the error or the date the TSP makes available on its Web site a participant statement reflecting the error, whichever is earlier. If it is discovered after that time, the employing agency may use its sound discretion in deciding whether to pay breakage, but, in any event, must act promptly in doing so.
(b)
(2) For errors involving incorrect dates of birth that result in default investment in the wrong L Fund of which a participant or beneficiary has knowledge, he or she may file a claim for breakage with the employing agency
(3) If a participant or beneficiary fails to file a claim for breakage for errors involving incorrect dates of birth in a timely manner, the employing agency may nevertheless, in its sound discretion, pay breakage on any such error that is brought to its attention.
(b) * * *
(1) * * *
(2) For errors involving an investment in the wrong fund caused by Board or TSP record keeper error, the Board or the TSP record keeper must promptly pay breakage if it is discovered within 30 days of the issuance of the most recent TSP participant (or loan) statement, transaction confirmation, or other notice that reflected the error, whichever is earlier. If it is discovered after that time, the Board or TSP record keeper may use its sound discretion in deciding whether to pay breakage, but, in any event, must act promptly in doing so.
(c) * * *
(1) * * *
(2) For errors involving an investment in the wrong fund of which a participant or beneficiary has knowledge, he or she may file a claim for breakage with the Board or TSP record keeper no later than 30 days after the TSP provides the participant with a transaction confirmation or other notice reflecting the error, or makes available on its Web site a participant statement reflecting the error, whichever is earlier. The Board or TSP record keeper must promptly pay breakage for such errors.
(3) If a participant or beneficiary fails to file a claim for breakage concerning an error involving an investment in the wrong fund in a timely manner, the Board or TSP record keeper may nevertheless, in its sound discretion, pay breakage for any such error that is brought to its attention.
(d)
Privacy Office, Department of Homeland Security.
Notice of proposed rulemaking.
The Department of Homeland Security is giving concurrent notice for the newly established “Department of Homeland Security/CBP-001, Import Information System, System of Records” and this proposed rulemaking. In accordance with the Privacy Act of 1974, the Department of Homeland Security concurrently proposes to consolidate, update, and rename two current Department of Homeland Security systems of records titled, “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-001 Automated Commercial Environment/International Trade Data System System of Records” and “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-015 Automated Commercial System System of Records” as one new system of records. The consolidated system of records notice will be titled, “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-001 Import Information System System of Records.” This system of records will continue to collect and maintain records on all commercial goods imported into the United States, as well as information pertaining to the carrier, broker, importer, and other persons associated with the manifest, import, or commercial entry transactions for the goods. In this proposed rulemaking, the Department proposes to exempt portions of the system of records from one or more provisions of the Privacy Act because of criminal, civil, and administrative enforcement requirements.
Comments must be received on or before September 16, 2015.
You may submit comments, identified by docket number DHS-2015-0046, by one of the following methods:
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For general questions, please contact: John Connors (202) 344-1610, CBP Privacy Officer, Office of the Commissioner, U.S. Customs and Border Protection, Washington, DC 20229. For privacy questions, please contact: Karen L. Neuman, (202) 343-1717, Chief Privacy Officer, Privacy Office, Department of Homeland Security, Washington, DC 20528-0655.
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP) proposes to consolidate, update, and rename as one system of records notice (SORN) the information currently contained in two DHS SORNs titled, “DHS/CBP-001 Automated Commercial Environment/International Trade Data System (ACE/ITDS) System of Records” (71 FR 3109, January 19, 2006) and “DHS/CBP-015 Automated Commercial System (ACS) System of Records” (73 FR 77759, December 19, 2008) . This new SORN, entitled “DHS/CBP-001 Import Information System (IIS),” will inform the public about changes to the
ACS, a decades old trade information database and information technology (IT) system, was deployed to track, control, and process all commercial goods imported into the United States. ACE, part of a multi-year modernization effort since 2001 to replace ACS, continues to be designed to manage CBP's import trade data and related transaction information. ACE/ITDS serves three sets of core stakeholders: The internal DHS/CBP users, Participating Government Agencies (PGA), and the trade community. ACE is the IT backbone for the ITDS, an interagency initiative formalized under the SAFE Port Act of 2006 to create a single window for the trade community and PGAs involved in importing and exporting. DHS/CBP has provided notice to the public and trade community that in the future, ACS, the IT system, will be fully phased out and replaced by ACE. As such, and to simplify the trade community's and the public's understanding of how trade information will be handled after ACE implementation, DHS/CBP is publishing this Import Information System (IIS) SORN to identify a single repository for import trade information. DHS/CBP is also publishing a combined ACE-ITDS/ACS Privacy Impact Assessment on its Web site (
As part of this consolidation and issuance of IIS, the category of individuals and category of records sections in the former ACS and ACE-ITDS have been merged to account for the data in both IT systems, as well as paper records related to the information in these systems. The category of individuals section is amended to remove reference to DHS/CBP employees and employees of other federal agencies for purposes of maintaining their user access accounts to the ACE-ITDS Portal, because these individuals are now covered under a DHS-wide SORN, “DHS/ALL-004 General Information Technology Access Account Records System (GITAARS) (77 FR 70792, November 27, 2012). The category of records for IIS will also include notations and results of examinations and document review for cleared merchandise to clarify and better identify DHS and PGA-generated information related to the processing of the import entry transaction. Additionally, the category of records is being expanded to address the expansion of information DHS/CBP proposes to collect on its revised Importer ID Input Record (CBP Form 5106). DHS/CBP is adding required elements for the name (First, Middle, Last) and business contact information (job title and phone) of Senior Company Officers of the Importer; DHS/CBP is also adding optional data fields on the form for the Senior Officers to provide Social Security number (SSN) or Passport Number and Country of Issuance. These latter, optional data elements are to facilitate Importer screening and verification.
The authorities sections from the previous SORNs have been combined, reconciled to address duplication, and updated to account for expanded information collected about business associations as part of the ACE-ITDS Portal user account. The purpose section for IIS reflects an update to the combined purposes for ACS and ACE-ITDS and addresses DHS/CBP's broad use of its import trade transaction IT systems (ACS and ACE) to collect and manage records to track, control, and process all commercial goods imported into the United States.
Consistent with DHS's information-sharing mission, information stored in the DHS/CBP-001 Import Information System (IIS) may be shared with other DHS Components that have a need to know the information to carry out their national security, law enforcement, immigration, or other homeland security functions. In addition, information may be shared with appropriate federal, state, local, tribal, territorial, foreign, or international government agencies consistent with the routine uses set forth in this SORN and as otherwise authorized under the Privacy Act.
Information in IIS may be shared for the same routine uses as were previously published in ACS and ACE-ITDS, and are now updated in this document:
• ACS's former Routine Use K is now reclassified as Routine Use G.
○ Routine Use G permits sharing of data under the following circumstances: “To appropriate federal, state, local, tribal, or foreign governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, license, or treaty where DHS determines that the information would assist in the enforcement of civil or criminal laws.”
• ACE-ITDS's former Routine Use 3 is now reclassified as Routine Use K.
○ Routine Use K permits sharing of data under the following circumstances: “To a federal, state, local, tribal, territorial, foreign, or international agency, maintaining civil, criminal or other relevant enforcement information, or other pertinent information, which has requested information relevant to or necessary to the requesting agency's or the bureau's hiring or retention of an individual, or issuance of a security clearance, license, contract, grant, or other benefit.”
Additionally, DHS/CBP is adding another routine use to IIS, Routine Use R, to provide explicit coverage for the mandated release of Manifest Information as set forth in section 1431 of title 19, United States Code and implemented through title 19, Code of Federal Regulations, part 103:
• Routine Use R permits sharing of data under the following circumstances: “To paid subscribers, in accordance with applicable regulations, for the purpose of providing access to manifest information as set forth in 19 U.S.C. 1431.”
DHS/CBP will not assert any exemptions with regard to information provided by or on behalf of an individual. However, this data may be shared with law enforcement and/or intelligence agencies pursuant to the routine uses identified in the IIS SORN and as otherwise authorized under the Privacy Act. The Privacy Act requires that DHS maintain an accounting of such disclosures. Disclosing the fact that a law enforcement and/or intelligence agency has sought particular records may interfere with or disclose techniques and procedures related to ongoing law enforcement investigations. As such, DHS is issuing a Notice of Proposed Rulemaking to exempt this system of records from certain provisions of the Privacy Act elsewhere in the
The Privacy Act embodies fair information practice principles in a statutory framework governing the means by which Federal Government agencies collect, maintain, use, and disseminate personally identifiable information. The Privacy Act applies to information that is maintained in a “system of records.” A “system of
The Privacy Act allows government agencies to exempt certain records from the access and amendment provisions. If an agency claims an exemption, however, it must issue a Notice of Proposed Rulemaking to make clear to the public the reasons why a particular exemption is claimed.
DHS is claiming exemptions from certain requirements of the Privacy Act for DHS/CBP-001 Import Information System System of Records.
No exemption shall be asserted with respect to information maintained in the system as it relates to data submitted by or on behalf of a person who travels to visit the United States, nor shall an exemption be asserted with respect to the resulting determination (authorized to travel, not authorized to travel, pending).
Some information in DHS/CBP-001 Import Information System System of Records relates to official DHS national security, law enforcement or intelligence activities. This system may contain records or information pertaining to the accounting of disclosures made from IIS to other law enforcement or intelligence agencies (Federal, State, local, foreign, international, or tribal) in accordance with the published routine uses. For the accounting of these disclosures only, in accordance with 5 U.S.C. 552a(j)(2) and (k)(2), DHS will claim the original exemptions for these records or information from subsection (c)(3), (e)(8), and (g) of the Privacy Act of 1974, as amended, as necessary and appropriate to protect such information. Moreover, DHS will add this exemption to Appendix C to 6 CFR part 5, DHS Systems of Records Exempt from the Privacy Act. Such exempt records or information may be law enforcement or national security investigation records, law enforcement activity and encounter records, or terrorist screening records.
DHS needs these exemptions in order to protect information relating to law enforcement investigations from disclosure to subjects of investigations and others who could interfere with investigatory and law enforcement activities. Specifically, the exemptions are required to: Preclude subjects of investigations from frustrating the investigative process; avoid disclosure of investigative techniques; protect the identities and physical safety of confidential informants and of law enforcement personnel; ensure DHS's and other federal agencies' ability to obtain information from third parties and other sources; protect the privacy of third parties; and safeguard sensitive information.
Nonetheless, DHS will examine each request on a case-by-case basis, and, after conferring with the appropriate component or agency, may waive applicable exemptions in appropriate circumstances and where it would not appear to interfere with or adversely affect the law enforcement or national security investigation.
Again, DHS will not assert any exemption with respect to information maintained in the system that is collected from a person and submitted by that person's air or vessel carrier, if that person, or his or her agent, seeks access or amendment of such information.
Freedom of information, Privacy.
For the reasons stated in the preamble, DHS proposes to amend Chapter I of Title 6, Code of Federal Regulations, as follows:
Pub. L. 107-296, 116 Stat. 2135, 6 U.S.C. 101
74. DHS/CBP-001, Import Information System (IIS). A portion of the following system of records is exempt from 5 U.S.C. 552a(c)(3), (e)(8), and (g)(1) pursuant to 5 U.S.C. 552a(j)(2), and from 5 U.S.C. 552a(c)(3) pursuant to 5 U.S.C. 552a(k)(2). Further, no exemption shall be asserted with respect to information maintained in the system as it relates to data submitted by or on behalf of a person who travels to visit the United States and crosses the border, nor shall an exemption be asserted with respect to the resulting determination (approval or denial). After conferring with the appropriate component or agency, DHS may waive applicable exemptions in appropriate circumstances and where it would not appear to interfere with or adversely affect the law enforcement purposes of the systems from which the information is recompiled or in which it is contained. Exemptions from the above particular subsections are justified, on a case-by-case basis to be determined at the time a request is made, when information in this system of records is may impede a law enforcement, intelligence activities and national security investigation:
(a) From subsection (c)(3) (Accounting for Disclosure) because making available to a record subject the accounting of disclosures from records concerning him or her would specifically reveal any investigative interest in the individual. Revealing this information could reasonably be expected to compromise ongoing efforts to investigate a violation of U.S. law, including investigations of a known or suspected terrorist, by notifying the record subject that he or she is under investigation. This information could also permit the record subject to take measures to impede the investigation,
(b) From subsection (e)(8) (Notice on Individuals) because to require individual notice of disclosure of information due to compulsory legal process would pose an impossible administrative burden on DHS and other agencies and could alert the subjects of counterterrorism or law enforcement investigations to the fact of those investigations when not previously known.
(c) From subsection (g)(1) (Civil Remedies) to the extent that the system is exempt from other specific subsections of the Privacy Act.
Nuclear Regulatory Commission.
Proposed revision to policy statement; request for comments.
The U.S. Nuclear Regulatory Commission (NRC) is proposing revisions to its policy statement on reporting abnormal occurrences (AO) to Congress. The proposed revisions would clarify and restructure the criteria used by the NRC and Agreement States for determining whether to consider an incident or event as an AO. The proposed revisions to the policy statement would ensure consistency with current NRC guidance and
Submit comments by November 16, 2015. Comments received after this date will be considered if it is practical to do so, but the Commission is able to assure consideration only for comments received on or before this date.
You may submit comments by any of the following methods (unless this document describes a different method for submitting comments on a specific subject):
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For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
Luis A. Benevides, Office of Nuclear Regulatory Research, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-2457; email:
Please refer to Docket ID NRC-2015-0176 when contacting the NRC about the availability of information for this action. You may obtain publicly-available information related to this action by any of the following methods:
•
•
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Please include Docket ID NRC-2015-0176 in the subject line of your comment submission.
The NRC cautions you not to include identifying or contact information that you do not want to be publicly disclosed in your comment submission. The NRC will post all comment submissions at
If you are requesting or aggregating comments from other persons for submission to the NRC, then you should inform those persons not to include identifying or contact information that they do not want to be publicly disclosed in their comment submission. Your request should state that the NRC does not routinely edit comment submissions to remove such information before making the comment submissions available to the public or entering the comment into ADAMS.
Section 208 of the Energy Reorganization Act of 1974, as amended (Pub. L. 93-438), defines an AO as an unscheduled incident or event that the NRC determines to be significant from the standpoint of public health or safety. The Federal Reports Elimination and Sunset Act of 1995 (Pub. L. 104-66) requires that AOs be reported to Congress annually. As required by Section 208, the discussion for each event includes the date and place, the nature and probable consequences, the cause or causes, and the action taken to prevent recurrence. The Commission must also widely disseminate the AO report to the public within 15 days of publishing the AO report to Congress.
The Commission has developed the AO policy statement to comply with Section 208 of the Energy Reorganization Act of 1974, as amended. The intent of the act is to keep Congress and the public informed of unscheduled incidents or events that the Commission considers significant from the standpoint of public health and safety. The policy reflects a range of health and safety concerns and applies to incidents and events involving a single individual, as well as those having an overall impact on the general public. The AO criteria use a high reporting threshold so that only those events considered significant from the standpoint of public health and safety are reported to Congress.
Implementation of Section 208 of the Energy Reorganization Act of 1974, as amended, “Abnormal Occurrence Reports,” involves the conduct of Commission business and does not impose requirements on licensees or certified facilities. The reports cover certain unscheduled incidents or events related to the manufacture, construction, or operation of a facility or conduct of an activity subject to the requirements of parts 20, 30 through 37, 39, 40, 50, 61, 70, 71, 72, or 76 in chapter I of Title 10 of the
Agreement States provide information to the NRC on incidents and events involving applicable nuclear materials in their States. Agreement States are those States that have entered into formal agreements with the NRC, pursuant to Section 274 of the Atomic Energy Act of 1954, as amended (AEA) (Pub. L. 83-703), to regulate certain quantities of AEA material at facilities located within their borders. Events reported by Agreement States that reach the threshold for reporting as AOs are also published in the “Report to Congress on Abnormal Occurrences.”
The NRC is proposing revisions to the AO criteria to clarify the criteria for determining events that are significant from the standpoint of public health and safety and should therefore be considered AOs. The proposed revisions would also make the criteria consistent with NUREG-1614, Volume 6, “U.S. Nuclear Regulatory Commission's Strategic Plan for Fiscal Years 2014-2018,” issued August 2014 (ADAMS Accession No. ML14246A439), and new NRC requirements in 10 CFR part 37, “Physical protection of category 1 and category 2 quantities of radioactive material.” Further, the NRC proposes to revise the AO criteria to separate “Other Events of Interest” from the AO criteria to clearly delineate that events considered “Other Events of Interest” are not AOs, but do represent significant
The NRC is requesting public comments on the proposed revision to the policy statement at this time. The NRC is specifically seeking public comments on screening all reports for exposures to embryo/fetus or nursing child as an AO under Criteria l.A.2, unintended radiation exposure, versus screening reports required by 10 CFR 35.3047 for exposures to embryo/fetus or nursing child resulting from treatment to a patient as an AO under Criteria III.C, “Events involving the Medical Use of Radioactive Materials in Patients or Human Research Subjects.”
The entire text of the proposed revision of the policy statement is available as an attachment to this document.
The proposed changes to the general policy statement would not change the reporting requirements for NRC licensees in Commission regulations, license conditions, or technical specifications. The NRC licensees will continue to submit required reports on a wide range of events, including instrument malfunctions and deviations from normal operating procedures that may not be significant from the standpoint of the public health and safety but provide data useful to the Commission in monitoring operating trends of licensed facilities and in comparing the actual performance of these facilities with their design and/or licensing basis.
This policy statement does not contain information collection requirements that are subject to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
The NRC may not conduct or sponsor, and a person is not required to respond to, a request for information or an information collection requirement unless the requesting documents displays a currently valid Office of Management and Budget control number.
For the Nuclear Regulatory Commission.
The Commission will apply the following policy in determining whether an incident or event at a facility or involving an activity that is licensed or otherwise regulated by the Commission or an Agreement State is an abnormal occurrence (AO).
An incident or event is considered an AO if it involves a major reduction in the protection of public health or safety. The incident or event has a moderate or severe impact on public health or safety and could include, but need not be limited to, the following:
(1) Moderate exposure to, or release of, radioactive material licensed by or otherwise regulated by the Commission or Agreement States;
(2) major degradation of essential safety-related equipment;
(3) major deficiencies in design, construction, use of, or management controls for facilities or radioactive material licensed by or otherwise regulated by the Commission or Agreement States; or
(4) substantiated case of actual loss, theft, or diversion of risk significant radioactive material licensed by or otherwise regulated by the Commission or Agreement States.
The criteria for determining whether to consider an incident or event for reporting as an AO are set forth in Appendix A of this policy statement.
The Commission widely disseminates the AO reports to the public. The Commission will submit an annual report to Congress on AOs that occur at or are associated with any facility or activity that is licensed or otherwise regulated pursuant to the Atomic Energy Act of 1954, as amended, or the Energy Reorganization Act of 1974, as amended. This report gives the date, place, nature, and probable consequences of each AO; the cause or causes of each AO; and any action taken to prevent recurrence.
An accident or event is considered an abnormal occurrence (AO) if it involves a major reduction in the degree of protection of public health or safety. This type of incident or event has a moderate or severe impact on public health or safety and could include, but need not be limited to, the following:
(1) Moderate exposure to, or release of, radioactive material licensed by or otherwise regulated by the Commission or Agreement States;
(2) major degradation of essential safety-related equipment;
(3) major deficiencies in design, construction, use of, or management controls for facilities or radioactive material licensed by or otherwise regulated by the Commission or Agreement States; or
(4) substantiated case of actual loss, theft, or diversion of risk-significant radioactive material licensed by or otherwise regulated by the Commission or Agreement States.
The following presents the criteria, by types of events, used to determine which events will be considered for reporting as AOs.
1. Any unintended radiation exposure to an adult (any individual 18 years of age or older) resulting in:
(a) An annual total effective dose equivalent (TEDE) of 250 millisievert (mSv) (25 rem) or more;
(b) an annual sum of the deep dose equivalent (external dose) and committed dose equivalent (intake of radioactive material) to any individual organ other than the lens of the eye, the bone marrow, and the gonads of 2,500 mSv (250 rem) or more;
(c) an annual dose equivalent to the lens of the eye of 1 Sv (100 rem) or more;
(d) an annual sum of the deep dose equivalent and committed dose equivalent to the bone marrow of 1 Sv (100 rem) or more;
(e) a committed dose equivalent to the gonads of 2,500 mSv (250 rem) or more; or
(f) an annual shallow dose equivalent to the skin or extremities of 2,500 mSv (250 rem) or more.
2. Any unintended radiation exposure to any minor (an individual less than 18 years of age) resulting in an annual TEDE of 50 mSv (5 rem) or more, or to an embryo/fetus resulting in a dose equivalent of 50 mSv (5 rem) or more.
3. Any radiation exposure that has resulted in unintended permanent functional damage to an organ or a physiological system as determined by an independent physician
The release of radioactive material to an unrestricted area in concentrations that, if averaged over a period of 24 hours, exceeds 5,000 times the values specified in Table 2 of appendix B, “Annual Limits on Intake (ALIs) and Derived Air Concentrations (DACs) of Radionuclides for Occupational Exposure; Effluent Concentrations; Concentrations for Release to Sewerage,” to 10 CFR part 20, “Standards for protection against radiation,” unless the licensee has demonstrated compliance with 10 CFR 20.1301, “Dose limits for individual members of the public,” using 10 CFR 20.1302(b)(1) or 10 CFR 20.1302(b)(2)(ii). This criterion does not apply to transportation events.
1. Any stolen, diverted, abandoned, or unrecovered lost radioactive material that meets or exceeds the thresholds listed in appendix A of 10 CFR part 37, “Physical protection of category 1 and category 2 quantities of radioactive material.” Excluded from reporting under this criterion are those events involving sources that are lost or abandoned under the following conditions: Sources that have been lost and for which a reasonable attempt at recovery has been made without success or irretrievable well logging sources as defined in 10 CFR 39.2, “Definitions.” These sources are only excluded if there is reasonable assurance that the doses from these sources have not exceeded and will not exceed the reporting thresholds specified in AO Criteria I.A.1 and I.A.2 and the agency has determined that the risk of theft or diversion is acceptably low.
2. An act that results in radiological sabotage as defined in 10 CFR 73.2, “Definitions.”
3. Any substantiated
4. Any substantial breakdown
5. Any significant unauthorized disclosures (loss, theft, and/or deliberate) of classified information that harms national security or safeguards information that threatens public health and safety.
1. Exceeding a safety limit of license technical specification (TS) (10 CFR 50.36(c)).
2. Serious degradation of fuel integrity, primary coolant pressure boundary, or primary containment boundary.
3. Loss of plant capability to perform essential safety functions so that a release of radioactive materials, which could result in exceeding the dose limits of 10 CFR part 100, “Reactor Site Criteria,” or five times the dose limits of General Design Criteria (GDC) 19 in appendix A, “General Design Criteria for Nuclear Power Plants,” to 10 CFR part 50, “Domestic licensing of production and utilization facilities,” could occur from a postulated transient or accident (
1. Discovery of a major condition not specifically considered in the safety analysis report or TS that requires immediate remedial action.
2. Personnel error or procedural deficiencies that result in loss of plant capability to perform essential safety functions so that a release of radioactive materials, which could result in exceeding the dose limits of 10 CFR part 100 or five times the dose limits of GDC 19 in appendix A to 10 CFR part 50, could occur from a postulated transient or accident (
1. An accidental criticality.
2. A major deficiency in design, construction, control, or operation having significant safety implications that require immediate remedial action.
3. A serious safety-significant deficiency in management or procedural controls.
4. A series of events (in which the individual events are not of major importance), recurring incidents, or incidents with implications for similar facilities
1. Absence or failure of all safety controls (engineered and human) such that conditions were present for the occurrence of a high-consequence event involving an NRC-regulated hazard (radiological or chemical).
2. An NRC-ordered safety-related or security-related immediate remedial action.
1. A medical event, as defined in 10 CFR 35.3045, which results in a dose that:
(a) Is equal to or greater than 1 Gray (Gy) (100 rad) to a major portion of the bone marrow or to the lens of the eye; or equal or greater than 2.5 Gy (250 rad) to the gonads;
(b) exceeds, by 10 Gy (1,000 rad), the expected dose to any other organ or tissue from the administration defined in the written directive; and
2. A medical event, as defined in 10 CFR 35.3045, which involves:
(a) A dose or dosage that is at least 50 percent greater than that prescribed, or
(b) a prescribed dose or dosage that
(i) uses the wrong radiopharmaceutical or unsealed byproduct material; or
(ii) is delivered by the wrong route of administration; or
(iii) is delivered to the wrong treatment site; or
(iv) is delivered by the wrong treatment mode; or
(v) is from a leaking source or sources; or
(vi) is delivered to the wrong individual or human research subject.
This appendix discusses other events of interest that do not meet the AO criteria in Appendix A. The Commission may determine that events, other than AOs, may be of interest to Congress and the public and should be included in an appendix to the AO report as “Other Events of Interest.” Such events may include, but are not necessarily limited to, events that do not meet the AO criteria but that have been perceived by Congress or the public to be of high health and safety significance, have received significant media coverage, or have caused the NRC to increase its attention to or oversight of a program area, or a group of similar events that have resulted in licensed materials entering the public domain in an uncontrolled manner.
Federal Aviation Administration (FAA), DOT.
Supplemental notice of proposed rulemaking (SNPRM).
This SNPRM amends the notice of proposed rulemaking (NPRM) published in the
Comments must be received on or before October 1, 2015.
Send comments on this proposal to the U.S. Department of Transportation, Docket Operations, M-30, 1200 New Jersey Avenue SE., West Building Ground Floor, Room W12-140, Washington, DC 20590-0001; telephone: (202) 366-9826. You must identify FAA Docket No. FAA-2014-0370 and Airspace Docket No. 14-ASO-2, at the beginning of your comments. You may also submit comments through the Internet at
Paul Gallant, Airspace Policy and Regulations Group, Office of Airspace Services, Federal Aviation Administration, 800 Independence Avenue SW., Washington, DC 20591; telephone: (202) 267-8783.
The FAA's authority to issue rules regarding aviation safety is found in Title 49 of the United States Code. Subtitle I, Section 106 describes the authority of the FAA Administrator. Subtitle VII, Aviation Programs, describes in more detail the scope of the agency's authority. This rulemaking is promulgated under the authority described in Subtitle VII, Part A, Subpart I, Section 40103. Under that section, the FAA is charged with prescribing regulations to assign the use of the airspace necessary to ensure the safety of aircraft and the efficient use of airspace. This regulation is within the scope of that authority as it would restructure the restricted airspace at the Stennis Space Center, MS, to enhance aviation safety and accommodate essential NASA and Naval Special Warfare Command (NSWC) requirements.
Interested parties are invited to participate in this proposed rulemaking by submitting such written data, views, or arguments as they may desire. Comments that provide the factual basis supporting the views and suggestions presented are particularly helpful in developing reasoned regulatory decisions on the proposal. Comments are specifically invited on the overall regulatory, aeronautical, economic, environmental, and energy-related aspects of the proposal.
Communications should identify both docket numbers (FAA Docket No. FAA-2014-0370 and Airspace Docket No. 14-ASO-2) and be submitted in triplicate to the Docket Management System (see
Commenters wishing the FAA to acknowledge receipt of their comments on this action must submit with those comments a self-addressed, stamped postcard on which the following statement is made: “Comments to FAA Docket No. FAA-2014-0370 and Airspace Docket No. 14-ASO-2.” The postcard will be date/time stamped and returned to the commenter.
All communications received on or before the specified closing date for comments will be considered before taking action on the proposed rule. The proposal contained in this action may be changed in light of comments received. All comments submitted will be available for examination in the public docket both before and after the closing date for comments. A report summarizing each substantive public contact with FAA personnel concerned with this rulemaking will be filed in the docket.
An electronic copy of this document may be downloaded through the Internet at
You may review the public docket containing the proposal, any comments received and any final disposition in person at the Dockets Office (see
Persons interested in being placed on a mailing list for future NPRMs should contact the FAA's Office of Rulemaking, (202) 267-9677, for a copy of Advisory Circular No. 11-2A, Notice of Proposed Rulemaking Distribution System, which describes the application procedure.
On July 10, 2014, the FAA published in the
Subsequent to publication, both NASA and NSWC revised their airspace proposal by changing certain restricted area boundaries, eliminating some proposed activities and increasing the proposed times of use of the airspace. The changes are described in the next section, below.
Since these changes to the proposal are significant, the FAA has determined it is necessary to reopen the comment period to provide additional opportunity for public comment. The FAA will dispose of all the comments to the NPRM and SNPRM when it issues its final determination on the proposal.
The southern boundary of R-4403B and R-4403C is shifted slightly to the north to address a comment that the restricted areas were too close to Interstate I-10, which is used by some pilots as a visual flight reference.
The NPRM proposed to establish R-4403C, extending from the surface up to but not including 6,000 feet MSL; and to establish R-4403D, with the same lateral boundaries as R-4403C, and extending above R-4403C from 6,000 feet MSL up to 10,000 feet MSL. This SNPRM proposes to combine R-4403C and R-4403D into a single restricted area extending from the surface up to 10,000 feet MSL. This combined area would be designated R-4403C and the formerly proposed designation “R-4403D” would not be used.
The NPRM proposed the time of designation for restricted areas R-4403C, D, E and F as “Intermittent, 1800 to 2400 local time, as activated by NOTAM at least 24 hours in advance; other times by NOTAM with air traffic control (ATC) approval.” The SNPRM would revise the time of designation for R-4403C, E and F to “Intermittent, 2000 to 0500 local time, as activated by NOTAM at least 24 hours in advance; and 1800 to 2000 local time, November 1 to March 1, as activated by NOTAM at least 24 hours in advance, not to exceed 20 days per year.” The new times would expand the basic time frame during which the restricted areas could be activated from six hours per day to nine hours per day. Further, it would add a provision allowing for additional activation during the hours 1800 to 2000 local time between November 1 and March 1. However, use of the 1800 to 2000 time frame between November 1 and March 1 would be limited to a maximum of 20 days per year. The provision in the NPRM allowing for activation of R-4403C, E and F at “other times by NOTAM with ATC approval” is removed from consideration in this proposal.
The NPRM proposed the use of R-4403E and F for delivery of air-to-ground munitions at a ground target by aircraft, including AC-130 gunships and armed helicopters. The NSWC determined that the area is too small to contain the weapons safety footprint, so R-4403E and F would only be used to contain air-to-ground firing of non-eye-safe lasers. Ground forces would use lasers that are eye-safe in R-4403E and F to signal military aircraft operating overhead.
The southeastern-most point of the R-4403E boundary (where it intersects the Stennis International Airport Class D airspace boundary (at lat. 30°20′22″ N., long. 89°31′43″ W.) would be shifted northward by approximately 2.5 NM to intersect the Class D airspace area at lat. 30°22′35″ N., long. 89°32′06″ W. The airspace south of the new line would become a part of R-4403C.
The FAA is proposing an amendment to 14 CFR part 73 to remove restricted area R-4403, Gainesville, MS, and redesignate and expand the airspace to consist of five subareas: R-4403A, B, C, E and F, Stennis Space Center, MS. The FAA is proposing this action at the request of NASA and the NSWC to confine activities that potentially present hazards to nonparticipating aircraft. The existing airspace is too small to fully contain NASA activities and the proposed expansion would also enable NSWC to conduct realistic Special Operations Force training.
R-4403A and B would continue be used for NASA activities, such as rocket engine testing and untethered space vehicle propulsion system testing. The NSWC would use the proposed R-4403C, E and F for integrated Special Operations Forces training. The proposed restricted areas are described below.
R-4403A would be used by NASA to test rocket engine technology. It would consist of that airspace within a 2.5 NM radius of lat. 30°21′51″ N., long. 89°35′39″ W., centered on the rocket engine test complex. R-4403A would extend from the ground to 12,000 feet MSL. It would replace R-4403 with an expanded area to more fully contain rocket engine testing hazards. This area remains as proposed in the NPRM.
R-4403B would be used by NASA for untethered autonomous space vehicle testing. The area would extend upward from the ground to 6,000 feet MSL. These vehicles are utilized to explore planets and asteroids. Testing of these vehicles involves potential hazards since failure of the vehicle, its propulsion system or propellant tanks can result in explosion of the vehicle. The propensity for this to occur is greater with these vehicles than with a standard aircraft because of the extremely volatile nature of the propellants and the poor aerodynamic characteristics of the vehicle during earth-based operation. Proposed R-4403B is designed to contain the flight profiles of these vehicles as well as any potential hazards to nonparticipating aircraft. Except for the slight adjustment of the southern boundary, as described
R-4403C would be used for Special Operations Forces Integration Training. The NPRM proposed R-4403C to extend from the ground to 6,000 feet MSL. This SNPRM would expand R-4403C to extend from the ground to 10,000 feet MSL, incorporating the airspace from 6,000 feet MSL to 10,000 feet MSL, which was formerly proposed as R-4403D. The designation “R-4403D” will no longer be used. R-4403C would contain air-to-ground live-fire training for AC-130 gunships, armed helicopters and tilt-rotor (CV-22) aircraft and surface-to-surface weapons firing. R-4403C would contain two impact areas for air-to-ground munitions employment (up to 105mm), and air-to-ground non-eye-safe laser firing. Ground forces would use lasers that are eye-safe to signal military aircraft operating overhead. Anticipated use of R-4403C is 100-120 days per year.
R-4403D designation is removed from the proposal as described above.
R-4403E would also be used for Special Operations Forces Integration Training. It would extend upward from the ground to 10,000 feet MSL. It would contain a ground target to be used only for air-to-ground firing of non-eye safe lasers. The proposal in the NPRM to use this area for air-to-ground munitions delivery is eliminated. Ground forces would also use lasers that are eye-safe to signal military aircraft operating overhead.
R-4403F would extend upward from 4,000 feet MSL to 10,000 feet MSL. R-4403F would wrap around the northeast corner of R-4403E and would be used in conjunction with R-4403E.
R-4403E and F would always be activated together for AC-130 air-to-ground firing of non-eye-safe lasers. The two areas could be activated separately from R-4403C, but typically would be used in conjunction with R-4403C.
The proposed time of designation for R-4403A and R-4403B is “Intermittent, 1000 to 0300 local time, as activated by NOTAM at least 24 hours in advance.” This time frame is the same as proposed in the NPRM. The proposed time of designation for R-4403C, E and F is “Intermittent, 2000 to 0500 local time, as activated by NOTAM at least 24 hours in advance; and 1800 to 2000 local time, November 1 to March 1 (not to exceed 20 days per year).” The times for R-4403C, E and F are changed from those in the NPRM as explained in the “Differences from NPRM” section, above.
During periods when the restricted areas are not needed by the using agencies, the airspace would be returned to the controlling agency for access by other airspace users.
A revised color chart depicting the proposed restricted areas will be posted on the
The FAA has determined that this proposed regulation only involves an established body of technical regulations for which frequent and routine amendments are necessary to keep them operationally current. Therefore, this proposed regulation: (1) Is not a “significant regulatory action” under Executive Order 12866; (2) is not a “significant rule” under Department of Transportation (DOT) Regulatory Policies and Procedures (44 FR 11034; February 26, 1979); and (3) does not warrant preparation of a regulatory evaluation as the anticipated impact is so minimal.
Since this is a routine matter that will only affect air traffic procedures and air navigation, it is certified that this proposed rule, when promulgated, will not have a significant economic impact on a substantial number of small entities under the criteria of the Regulatory Flexibility Act.
This proposal will be subject to an environmental analysis in accordance with FAA Order 1050.1E, “Environmental Impacts: Policies and Procedures,” prior to any FAA final regulatory action.
Airspace, Prohibited areas, Restricted areas.
In consideration of the foregoing, the Federal Aviation Administration proposes to amend 14 CFR part 73 as follows:
49 U.S.C. 106(f), 106(g), 40103, 40113, 40120; E.O. 10854, 24 FR 9565, 3 CFR, 1959-1963 Comp., p. 389.
to lat. 30°29′37″ N., long. 89°32′33″ W.; thence clockwise along a 0.85-NM arc centered
at lat. 30°28′46″ N., long. 89°32′33″ W.;
to lat. 30°28′46″ N., long. 89°31′34″ W.;
to lat. 30°26′25″ N., long. 89°31′34″ W.;
to lat. 30°24′02″ N., long. 89°31′34″ W.;
thence counterclockwise along a 4.2-NM arc centered
at lat. 30°22′04″ N., long. 89°27′17″ W.;
to lat. 30°20′28″ N., long. 89°31′46″ W.;
to lat. 30°19′19″ N., long. 89°35′32″ W.;
to lat. 30°18′23″ N., long. 89°40′17″ W.;
to lat. 30°21′08″ N., long. 89°42′25″ W.;
to lat. 30°22′22″ N., long. 89°42′58″ W.;
to lat. 30°23′44″ N., long. 89°42′43″ W.;
to lat. 30°26′40″ N., long. 89°40′51″ W.;
thence counterclockwise along a 3-NM arc centered
at lat. 30°29′15″ N., long. 89°39′04″ W.;
to lat. 30°27′08″ N., long. 89°36′37″ W.;
to lat. 30°27′58″ N., long. 89°35′27″ W.;
to lat. 30°28′47″ N., long. 89°35′27″ W.;
to the point of beginning.
to lat. 30°22′35″ N., long. 89°35′27″ W.;
to lat. 30°22′35″ N., long. 89°32′06″ W.;
thence counterclockwise along a 4.2-NM arc centered
at lat. 30°22′04″ N., long. 89°27′17″ W.;
to lat. 30°20′28″ N., long. 89°31′46″ W.;
to lat. 30°19′19″ N., long. 89°35′32″ W.;
to lat. 30°18′23″ N., long. 89°40′17″ W.;
to lat. 30°21′08″ N., long. 89°42′25″ W.;
to lat. 30°22′22″ N., long. 89°42′58″ W.;
to lat. 30°23′44″ N., long. 89°42′43″ W.;
to lat. 30°26′40″ N., long. 89°40′51″ W.;
thence counterclockwise along a 3-NM arc centered
at lat. 30°29′15″ N., long. 89°39′04″ W.;
to lat. 30°27′08″ N., long. 89°36′37″ W.;
to the point of beginning.
to lat. 30°29′37″ N., long. 89°32′33″ W.;
thence clockwise along a 0.85-M arc centered
at lat. 30°28′46″ N., long. 89°32′33″ W.;
to lat. 30°28′46″ N., long. 89°31′34″ W.;
to lat. 30°26′25″ N., long. 89°31′34″ W.;
to lat. 30°24′02″ N., long. 89°31′34″ W.;
thence counterclockwise along a 4.2-NM arc centered
at lat. 30°22′04″ N., long. 89°27′17″ W.;
to lat. 30°22′35″ N., long. 89°32′06″ W.;
to lat. 30°22′35″ N., long. 89°35′27″ W.;
to lat. 30°27′58″ N., long. 89°35′27″ W,;
to lat. 30°28′47″ N., long. 89°35′27″ W.;
to the point of beginning.
thence clockwise along a 2.5-NM arc centered
at lat. 30°28′46″ N., long. 89°32′33″ W.;
to lat. 30°26′25″ N., long. 89°31′34″ W.;
to lat. 30°28′46″ N., long. 89°31′34″ W.;
thence counterclockwise along a 0.85-NM arc centered
at lat. 30°28′46″ N., long. 89°32′33″ W.;
to lat. 30°29′37″ N., long. 89°32′33″ W.;
to the point of beginning.
Postal Regulatory Commission.
Notice of proposed rulemaking.
The Commission is noticing a recent Postal Service filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to periodic reports (Proposal Seven). This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On August 5, 2015, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to the Postal Service's periodic reports.
This Petition was filed in response to Order No. 2472, which directed the Postal Service “to file a proposed methodology for determining the costs avoided for the Presorted FSS workshare discounts, as described in the body of [Order No. 2472], within 90 days of the date of [Order No. 2472].”
Under Proposal Seven, the Postal Service seeks to address the avoided costs relating to FSS mail. Petition, Proposal Seven at 1. The Postal Service bifurcates Proposal Seven into the Mail Processing and the Delivery elements of the avoided costs for FSS workshare discounts.
The Postal Service seeks to modify the modeling methodology used in the USPS-FY14-11 (Docket No. ACR2014) Standard Mail Flats Mail Processing Cost Model to estimate the mail processing cost avoidances of FSS presorted Standard Flats. Petition, Proposal Seven, Section One at 1. The Postal Service expands the Standard Mail Flats Mail Processing Cost Model to identify the unique characteristics and flows of FSS-prepared Standard Flats.
There are nine modifications proposed by the Postal Service in Section One of Proposal Seven, all of which apply to the Standard Mail Flats Cost Model. Petition, Proposal Seven, Section One at 4. Two of the proposed modifications also apply to the Periodicals Model.
The Postal Service presents a process to estimate the proportion of flat-shaped mail processed in mechanized incoming secondary operations.
The Postal Service proposes to adjust the bundle flow formulae for consistency with the mechanized incoming secondary piece distribution calculated under Modification One.
The Postal Service assumes that no FSS bundles will incur a sortation at the delivery unit.
The Postal Service states that FSS presorted pieces flow directly into piece sortation on the FSS, bypassing outgoing primary, outgoing secondary, managed mail, and incoming primary operations.
The Postal Service represents that 5-Digit pieces do not flow into FSS operations and proposes to update the 5-Digit piece model to reflect this flow.
The Postal Service proposes to update the area distribution center (ADC), mixed ADC, and 3-Digit models to incorporate the recalculation of the mechanized incoming secondary sortation.
The Postal Service states that the current model includes the hours associated with mail preparation for the FSS in the calculation of the FSS productivities.
The Postal Service uses the CRA adjustment factor to calibrate the model to CRA costs and to distribute non-modeled costs to the appropriate rate category.
The Postal Service represents that it introduced a FSS Realization Factor to measure the proportion of FSS eligible mail that is processed on the FSS.
The Postal Service proposes a method to disaggregate delivery costs for Periodicals Flats, Bound Printed Matter Flats, Standard Flats and Carrier Route Flats (not including High Density or Saturation) between those destinating in FSS zones and those destinating in non-FSS zones. Petition, Proposal Seven: Section Two at 1. This method uses operational assumptions and models rather than data directly collected from cost systems, and calculates separate delivery costs for the relevant products based on whether pieces are destinating in FSS or non-FSS zones.
The proposed computing method begins with a product's component group costs in three segments: Cost Segment 6, City Carrier In-Office Activities; Cost Segment 7, City Carrier Street Activities; and Cost Segment 10, Rural Carriers Office and Street Activities.
The Commission establishes Docket No. RM2015-16 for consideration of matters raised by the Petition. Additional information concerning the Petition may be accessed via the Commission's Web site at
It is ordered:
1. The Commission establishes Docket No. RM2015-16 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Seven), filed August 5, 2015.
2. Comments are due no later than September 25, 2015. Reply comments are due no later than October 16, 2015.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Katalin K. Clendenin to serve as an officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for publication of this Order in the
By the Commission.
Postal Regulatory Commission.
Notice of proposed rulemaking.
The Commission is noticing a recent Postal Service filing requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to periodic reports (Proposal Nine). This notice informs the public of the filing, invites public comment, and takes other administrative steps.
Submit comments electronically via the Commission's Filing Online system at
David A. Trissell, General Counsel, at 202-789-6820.
On August 5, 2015, the Postal Service filed a petition pursuant to 39 CFR 3050.11 requesting that the Commission initiate an informal rulemaking proceeding to consider changes to analytical principles relating to the Postal Service's periodic reports.
Under Proposal Nine, the Postal Service asserts that no changes to the methodology used to produce avoided cost estimates for Periodicals Mail Carrier Route bundle and container entry options is necessary and instead proposes changes to the model presentation that explicitly identify the bottom-up costs of processing Carrier Route pallets. Petition, Proposal Nine at 1, 2.
When a mailing has sufficient density to prepare 5-Digit or 5-Digit Scheme pallets, the mailer presorts nearly all of the mail on the pallet into Carrier Route bundles.
The Postal Service represents that for this reason it processes Carrier Route pallets (5-Digit or 5-Digit Scheme pallets containing only Carrier Route bundles) identically to other 5-Digit pallets.
According to the Postal Service, because the processing of Carrier Route pallets and other 5-Digit pallets does not differ, it proposes no changes to the methodology used to produce estimates of avoided costs.
The Commission establishes Docket No. RM2015-18 for consideration of matters raised by the Petition. Additional information concerning the Petition may be accessed via the Commission's Web site at
1. The Commission establishes Docket No. RM2015-18 for consideration of the matters raised by the Petition of the United States Postal Service for the Initiation of a Proceeding to Consider Proposed Changes in Analytical Principles (Proposal Nine), filed August 5, 2015.
2. Comments are due no later than September 8, 2015. Reply comments are due no later than September 22, 2015.
3. Pursuant to 39 U.S.C. 505, the Commission appoints Lawrence Fenster to serve as officer of the Commission (Public Representative) to represent the interests of the general public in this docket.
4. The Secretary shall arrange for publication of this order in the
By the Commission.
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to determine that the Houston-Galveston-Brazoria (HGB) 8-hour ozone nonattainment area is currently attaining the 1997 ozone National Ambient Air Quality Standard (NAAQS). This determination is based upon certified ambient air monitoring data that show the area has monitored attainment of the 1997 ozone NAAQS for the 2012-2014 monitoring period and continues to monitor attainment of the NAAQS based on preliminary 2015 data. If this proposed determination is made final, the requirements for this area to submit an attainment demonstration, a reasonable further progress (RFP) plan, contingency measures, and other State Implementation Plan (SIP) documents related to attainment of the 1997 ozone NAAQS shall be suspended for so long as the area continues to attain the 1997 ozone NAAQS. This proposed action is consistent with EPA's interpretation of certain requirements of part D of title I of the Clean Air Act (CAA or Act).
Comments must be received on or before September 16, 2015.
Submit your comments, identified by Docket No. EPA-R06-OAR-2015-0117, by one of the following methods:
•
•
•
Ms. Wendy Jacques, (214) 665-7395,
Throughout this document, “we,” “us,” and “our” means EPA.
Section 109 of the Act requires the EPA to establish a NAAQS for pollutants that “may reasonably be anticipated to endanger public health and welfare” and to develop a primary and secondary standard for each NAAQS. The primary standard is designed to protect human health with an adequate margin of safety and the secondary standard is designed to protect public welfare and the environment. The EPA has set NAAQS for six common air pollutants, referred to as criteria pollutants: carbon monoxide, lead, nitrogen dioxide, ozone, particulate matter, and sulfur dioxide. These standards present state and local governments with the minimum air quality levels they must meet to comply with the Act. Also, these standards provide information to residents of the United States about the air quality in their communities.
Ozone is a gas composed of three oxygen atoms. Ground-level ozone is generally not emitted directly from a vehicle's exhaust or an industrial smokestack, but is created by a chemical reaction between volatile organic compounds (VOCs) and oxides of nitrogen (NO
On July 18, 1997, the EPA promulgated an 8-hour ozone NAAQS of 0.08 parts per million (ppm), known as the 1997 ozone standard. See 62 FR 38856 and 40 CFR 50.10. Under the EPA regulations at 40 CFR part 50, Appendix I, the 1997 ozone standard is attained when the 3-year average of the annual fourth highest daily maximum 8-hour average ambient ozone concentration is less than or equal to 0.08 ppm.
On April 30, 2004, the EPA designated and classified the 8-county HGB area (consisting of Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery and Waller counties) as a Moderate nonattainment area under the 1997 ozone standard with an attainment date of no later than
On March 27, 2008 (73 FR 16436), the EPA promulgated a revised 8-hour ozone NAAQS of 0.075 ppm (the 2008 ozone standard). On April 30, 2012, the EPA promulgated designations under the 2008 ozone standard (77 FR 30088) and in that action the EPA designated the 8-county HGB area as a Marginal ozone nonattainment area.
If the EPA's determination that the HGB area is currently attaining the 1997 ozone standard is finalized, 40 CFR 51.1118 provides that the requirements for the TCEQ to submit certain RFP plans, attainment demonstrations, contingency measures and any other attainment planning requirements of the CAA related to attainment of that standard in the HGB area shall be suspended for as long as the area continues to attain the standard. This action is known as a Clean Data Determination or CDD. However, a CDD does not constitute a redesignation to attainment under section 107(d)(3)(E) of the Act, and if the EPA determines that the area subsequently violates the standard, that suspension of the requirement to submit the attainment planning SIP provisions is lifted, and those requirements are once again due. Even though the EPA has finalized revocation of the 1997 eight-hour ozone NAAQS, under 40 CFR 51.1118, an area remains subject to the obligations for a revoked NAAQS until either (i) the area is redesignated to attainment for the 2008 ozone NAAQS; or (ii) the EPA approves a demonstration for the area in a redesignation substitute procedure for a revoked NAAQS per the provisions of § 51.1105(b). Under this redesignation substitute procedure for a revoked NAAQS, and for this limited anti-backsliding purpose, the demonstration must show that the area has attained that revoked NAAQS due to permanent and enforceable emission reductions and that the area will maintain that revoked NAAQS for 10 years from the date of the EPA's approval of this showing. We also note that the CDD does not constitute a Determination of Attainment by an Area's Attainment Date under sections 179(c) and 181(b)(2) of the Act.
For ozone, an area is considered to be attaining the 1997 ozone NAAQS if there are no violations, as determined in accordance with 40 CFR part 50, based on three complete, consecutive calendar years of quality-assured air quality monitoring data. Under the EPA regulations at 40 CFR part 50, the 1997 ozone standard is attained when the 3-year average of the annual fourth-highest daily maximum 8-hour average ozone concentrations at an ozone monitor is less than or equal to 0.08 parts per million (ppm), (
The EPA reviewed the HGB area ozone monitoring data from ambient ozone monitoring stations for 2012-2014 and through July 2015. The 2012-2014 data for all the ozone monitors in the HGB area have been quality assured and certified by the EPA. The design value for 2012-2014 is 80 ppb. At the time of this writing, the preliminary ozone data for 2015 are posted on the Texas Commission on Environmental Quality (TCEQ) Web site and in AQS.
Table 1 shows the fourth-highest daily maximum 8-hour average ozone concentrations for the HGB nonattainment area monitors for the years 2012-2014. (To find the overall design value for the area for a given year, simply find the highest design value from any of the 20 monitors for that year.)
As shown in Table 1, the 8-hour ozone design value for 2012-2014, which is based on a three-year average of the fourth-highest daily maximum average ozone concentration at the monitor recording the highest concentrations, is 80 ppb, which meets the 1997 ozone NAAQS. Data for 2015 not yet certified also indicate that the area continues to attain the 1997 ozone NAAQS. In addition, ozone data for 2015 that are available in the EPA AQS database show this area continues to attain the 1997 ozone NAAQS. The AQS data reports for the HGB area for the three years 2012 through 2014 and the first quarter of 2015 are included in the docket for this rulemaking.
In accordance with 40 CFR 51.1118, the EPA is proposing to determine that the HGB 8-hour ozone nonattainment area is currently attaining the 1997 ozone NAAQS. This determination is based upon certified ambient air monitoring data that show the area has monitored attainment of the 1997 ozone NAAQS for the 2012-2014 monitoring period and continues to monitor attainment of the NAAQS based on preliminary 2015 data. Thus the requirements for such area to submit attainment demonstrations and associated reasonably available control measures, RFP plans, contingency measures for failure to attain or make reasonable progress and other planning SIPs related to attainment of the 1997 ozone NAAQS shall be suspended until such time as: (1) The area is redesignated to attainment for the 1997 ozone NAAQS or a redesignation substitute is approved as appropriate, at which time the requirements no longer apply; or (2) the EPA determines that the area has violated the 1997 ozone NAAQS, at which time the area is again required to submit such plans. This proposal is consistent with our interpretation of certain requirements of part D of title I of the Act.
This action proposes to make a determination of attainment based on air quality, and would, if finalized, result in the suspension of certain Federal requirements, and it would not impose additional requirements beyond those imposed by state law. For that reason, this proposed action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Orders 12866 (58 FR 51735, October 4, 1993) and 13563 (76 FR 3821, January 21, 2011);
• Does not impose an information collection burden under the provisions of the Paperwork Reduction Act (44 U.S.C. 3501
• Is certified as not having a significant economic impact on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
• Does not contain any unfunded mandate or significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4);
• Does not have Federalism implications as specified in Executive Order 13132 (64 FR 43255, August 10, 1999);
• Is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997);
• Is not a significant regulatory action subject to Executive Order 13211 (66 FR 28355, May 22, 2001);
• Is not subject to requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) because application of those requirements would be inconsistent with the CAA; and
• Does not provide the EPA with the discretionary authority to address, as appropriate, disproportionate human health or environmental effects, using practicable and legally permissible methods, under Executive Order 12898 (59 FR 7629, February 16, 1994).
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Ozone, Reporting and recordkeeping requirements, Volatile organic compounds.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
EPA is proposing to withdraw a May 22, 2014 final action approving a state implementation plan (SIP) revision submitted by the State of California under the Clean Air Act (CAA) to address contingency measure requirements for the 1997 annual and 24-hour national ambient air quality standards (NAAQS) in the San Joaquin Valley. Simultaneously, EPA is proposing to disapprove this SIP submission. These proposed actions are in response to a decision issued by the U.S. Court of Appeals for the Ninth Circuit (
Any comments must arrive by September 16, 2015.
Submit comments, identified by docket number EPA-R09-OAR-2013-0534, by one of the following methods:
•
•
•
Doris Lo, Air Planning Office (AIR-2), (415) 972-3959,
Throughout this document, “we,” “us” and “our” refer to EPA.
On July 18, 1997, EPA established new national ambient air quality standards (NAAQS) for particles less than or equal to 2.5 micrometers (µm) in diameter (PM
Between 2007 and 2011, California made six SIP submittals to address nonattainment area planning requirements for the 1997 annual and 24-hour PM
On May 22, 2014, EPA fully approved the 2013 Contingency Measure Submittal based on the Agency's conclusion that this SIP submittal corrected then outstanding deficiencies in the CAA section 172(c)(9) contingency measures for the 1997
Several environmental and community organizations filed a petition for review of EPA's November 9, 2011 action on the 2008 PM
Separately, environmental and community organizations also filed a petition for review of EPA's May 22, 2014 action on the 2013 Contingency Measure Submittal, arguing, among other things, that EPA violated the CAA by approving that submittal even though it did not include the waiver measures on which it relied to achieve the necessary emission reductions to meet contingency measure requirements.
As noted above, the Ninth Circuit rejected EPA's prior interpretation of the CAA under which EPA had allowed California SIPs to rely on waiver measures without requiring approval of those measures into the SIP in accordance with section 110 of the Act. This interpretation formed a necessary basis for EPA's approval of the 2013 Contingency Measure Submittal.
Under section 179(a) of the CAA, final disapproval of a SIP submittal that addresses a requirement of part D, title I of the Act or is required in response to a finding of substantial inadequacy as described in CAA section 110(k)(5) (SIP Call) starts a mandatory sanctions clock. Disapproval of a SIP element also triggers the requirement under CAA section 110(c) for EPA to promulgate a FIP no later than 2 years from the date of the disapproval unless the State corrects the deficiency, and the Administrator approves the plan or plan revision, before the Administrator promulgates such FIP.
EPA is proposing to determine that this disapproval of the 2013 Contingency Measure Submittal does not start a mandatory sanctions clock or FIP clock because the specific type of contingency measure at issue in that submittal is no longer a required attainment plan element under the facts and circumstances of this situation. CARB submitted the 2013 Contingency Measure Submittal to address the contingency measure requirement in CAA section 172(c)(9) as applied to the 2008 PM
Our proposed disapproval of the 2013 Contingency Measure Submittal, if finalized, would not trigger sanctions or FIP clocks because the contingency measure requirement that this SIP submittal addressed has been superseded by different planning obligations under subpart 4 of part D, title I of the Act. That is, because the State submitted the 2013 Contingency Measure Submittal to address a contingency measure requirement for failure to attain by a statutory attainment date that no longer applies to the area (April 5, 2015), this SIP submittal no longer addresses an applicable requirement of part D, title I of the Act, and our disapproval of it therefore would not trigger sanctions. For the same reason, our disapproval of the 2013 Contingency Measure Submittal would not create any deficiency in a mandatory component of the SIP for this area and, therefore, would not trigger the obligation for EPA to promulgate a FIP under section 110(c) to address this issue.
We will accept comments from the public on these proposals for the next 30 days. The deadline and instructions for submission of comments are provided in the “Date” and “Addresses” sections at the beginning of this preamble.
This action is not a “significant regulatory action” under the terms of Executive Order (EO) 12866 (58 FR 51735, October 4, 1993) and is therefore not subject to review under the EO.
This action does not impose an information collection burden under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501
The Regulatory Flexibility Act (RFA) generally requires an agency to conduct a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small not-for-profit enterprises, and small governmental jurisdictions. For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) A small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201; (2) a small governmental jurisdiction that is a government of a city, county, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise which is independently owned and operated and is not dominant in its field.
After considering the economic impacts of today's proposed rule on small entities, I certify that this action will not have a significant impact on a substantial number of small entities. This rule does not impose any requirements or create impacts on small entities. This proposed SIP disapproval under section 110 and subchapter I, part D of the Clean Air Act will not in-and-of itself create any new requirements but simply disapproves certain State requirements submitted for inclusion into the SIP. Accordingly, it affords no opportunity for EPA to fashion for small entities less burdensome compliance or reporting requirements or timetables or exemptions from all or part of the rule. The fact that the Clean Air Act prescribes that various consequences (
We continue to be interested in the potential impacts of this proposed rule on small entities and welcome comments on issues related to such impacts.
This action contains no Federal mandates under the provisions of Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. 1531-1538 for State, local, or tribal governments or the private sector.” EPA has determined that the proposed disapproval action does not include a Federal mandate that may result in estimated costs of $100 million or more to either State, local, or tribal governments in the aggregate, or to the private sector. This action proposes to
Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”
This action does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, because it merely disapproves certain State requirements for inclusion into the SIP and does not alter the relationship or the distribution of power and responsibilities established in the Clean Air Act. Thus, Executive Order 13132 does not apply to this action.
This action does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249, November 9, 2000), because the SIP EPA is proposing to disapprove would not apply on any Indian reservation land or in any other area where EPA or an Indian tribe has demonstrated that a tribe has jurisdiction, and EPA notes that it will not impose substantial direct costs on tribal governments or preempt tribal law. Thus, Executive Order 13175 does not apply to this action.
EPA interprets EO 13045 (62 FR 19885, April 23, 1997) as applying only to those regulatory actions that concern health or safety risks, such that the analysis required under section 5-501 of the EO has the potential to influence the regulation. This action is not subject to EO 13045 because it is not an economically significant regulatory action based on health or safety risks subject to Executive Order 13045 (62 FR 19885, April 23, 1997). This proposed SIP disapproval under section 110 and subchapter I, part D of the Clean Air Act will not in-and-of itself create any new regulations but simply disapproves certain State requirements submitted for inclusion into the SIP.
This proposed rule is not subject to Executive Order 13211 (66 FR 28355, May 22, 2001) because it is not a significant regulatory action under Executive Order 12866.
Section 12(d) of the National Technology Transfer and Advancement Act of 1995 (“NTTAA”), Public Law 104-113, 12(d) (15 U.S.C. 272 note) directs EPA to use voluntary consensus standards in its regulatory activities unless to do so would be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards (
The EPA believes that this action is not subject to requirements of Section 12(d) of NTTAA because application of those requirements would be inconsistent with the Clean Air Act.
Executive Order (EO) 12898 (59 FR 7629 (Feb. 16, 1994)) establishes federal executive policy on environmental justice. Its main provision directs federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice part of their mission by identifying and addressing, as appropriate, disproportionately high and adverse human health or environmental effects of their programs, policies, and activities on minority populations and low-income populations in the United States.
EPA lacks the discretionary authority to address environmental justice in this rulemaking.
Environmental protection, Air pollution control, Intergovernmental relations, Nitrogen oxides, Sulfur oxides, Particulate matter.
42 U.S.C. 7401
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve a request from the state of North Carolina for the EPA to relax the Reid Vapor Pressure (RVP) standard applicable to gasoline introduced into commerce from June 1 to September 15 of each year for Mecklenburg and Gaston counties, North Carolina. Specifically, the EPA is proposing to amend the regulations to allow the RVP standard for Mecklenburg and Gaston counties to rise from 7.8 pounds per square inch (psi) to 9.0 psi for gasoline. The EPA has preliminarily determined that this change to the federal RVP regulation is consistent with the applicable provisions of the Clean Air Act (CAA).
Written comments must be received on or before September 16, 2015 unless a public hearing is requested by September 1, 2015. If the EPA receives such a request, we will publish information related to the timing and location of the hearing and a new deadline for public comment.
Submit your comments, identified by Docket ID No. EPA-HQ-OAR-2015-0208, to the
The EPA will generally not consider comments or comment contents located outside of the primary submission (
Patty Klavon, Office of Transportation and Air Quality, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, Michigan, 48105; telephone number: (734) 214-4476; fax number: (734) 214-4052; email address:
The contents of this preamble are listed in the following outline:
In the “Rules and Regulations” section of this
The regulatory text for this proposed rule is included in the direct final rule, and parties should review that rule for the regulatory text. If the EPA receives no adverse comment, the EPA will not take further action on this proposed rule. If the EPA receives adverse comment on this rule or any portion of this rule, the EPA will withdraw the direct final rule or the portion of the rule that received adverse comment. All public comments received will then be addressed in a subsequent final rule based on this proposed rule. The EPA will not institute a second comment period on this rulemaking. Any parties interested in commenting must do so at this time.
Entities potentially affected by this proposed rule are fuel producers and distributors who do business in North Carolina.
The above table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. The table lists the types of entities of which the EPA is aware that potentially could be affected by this proposed rule. Other types of entities not listed on the table could also be affected. To determine whether your organization could be affected by this proposed rule, you should carefully examine the regulations in 40 CFR 80.27. If you have questions regarding the applicability of this action to a particular entity, call the person listed in the
The statutory authority for this action is granted to the EPA by Sections 211(h) and 301(a) of the Clean Air Act, as amended; 42 U.S.C. 7545(h) and 7601(a).
The EPA will not hold a public hearing on this matter unless a request is received by the person identified in the
The EPA is proposing to approve a request from the state of North Carolina to change the summertime RVP standard for Mecklenburg and Gaston counties, North Carolina from 7.8 psi to 9.0 psi by amending the EPA's regulations at 40 CFR 80.27(a)(2). In a previous rulemaking, the EPA approved a redesignation request and maintenance plan for the Charlotte-Gastonia-Salisbury, North Carolina 2008 ozone area (“the Charlotte area”) and a CAA section 110(l) non-interference demonstration that relaxing the federal RVP requirement from 7.8 psi to 9.0 psi for gasoline sold from June 1 to September 15 of each year in Mecklenburg and Gaston counties would not interfere with maintenance of any NAAQS in the Charlotte area, including the 2008 ozone NAAQS, or with any other applicable CAA requirement. Mecklenburg and Gaston counties are part of the Charlotte area. For more information on North Carolina's redesignation request and maintenance plan for the Charlotte area, please refer to Docket ID. No. EPA-R04-OAR-2015-0275 for the rulemaking that was signed on July 17, 2015.
The preamble for this rulemaking is organized as follows: Section III.B. provides the history of the federal gasoline volatility regulation. Section III.C. describes the policy regarding relaxation of gasoline volatility standards in ozone nonattainment areas that are redesignated as attainment areas. Section III.D. provides information specific to North Carolina's request for Mecklenburg and Gaston counties. Finally, Section IV. briefly discusses the associated direct final rule.
On August 19, 1987 (52 FR 31274), the EPA determined that gasoline nationwide was becoming increasingly volatile, causing an increase in evaporative emissions from gasoline-powered vehicles and equipment. Evaporative emissions from gasoline, referred to as volatile organic compounds (VOC), are precursors to the formation of tropospheric ozone and contribute to the nation's ground-level ozone problem. Exposure to ground-level ozone can reduce lung function, thereby aggravating asthma and other respiratory conditions, increase susceptibility to respiratory infection, and may contribute to premature death in people with heart and lung disease.
The most common measure of fuel volatility that is useful in evaluating gasoline evaporative emissions is RVP. Under CAA section 211(c), the EPA promulgated regulations on March 22, 1989 (54 FR 11868) that set maximum limits for the RVP of gasoline sold during the regulatory control periods that were established on a state-by-state
The 1990 CAA Amendments established a new section 211(h) to address fuel volatility. CAA section 211(h) requires the EPA to promulgate regulations making it unlawful to sell, offer for sale, dispense, supply, offer for supply, transport, or introduce into commerce gasoline with an RVP level in excess of 9.0 psi during the high ozone season. CAA section 211(h) also prohibits the EPA from establishing a volatility standard more stringent than 9.0 psi in an attainment area, except that the EPA may impose a lower (more stringent) standard in any former ozone nonattainment area redesignated to attainment.
On December 12, 1991 (56 FR 64704), the EPA modified the Phase II volatility regulations to be consistent with CAA section 211(h). The modified regulations prohibited the sale of gasoline with an RVP above 9.0 psi in all areas designated attainment for ozone, effective January 13, 1992. For areas designated as nonattainment, the regulations retained the original Phase II standards published on June 11, 1990 (55 FR 23658), which included the 7.8 psi ozone season limitation for certain areas. As stated in the preamble to the Phase II volatility controls and reiterated in the proposed change to the volatility standards published in 1991, the EPA will rely on states to initiate changes to their respective volatility programs. The EPA's policy for approving such changes is described below in Section III.C.
The state of North Carolina has initiated this change by requesting that the EPA relax the 7.8 psi gasoline RVP standard to 9.0 psi for Mecklenburg and Gaston counties, which are subject to the 7.8 gasoline RVP requirement during the summertime ozone season. Accordingly, the state of North Carolina provided a technical demonstration showing that relaxing the federal gasoline RVP requirements in the two counties from 7.8 psi to 9.0 psi would not interfere with maintenance of any NAAQS in the Charlotte area, including the 2008 ozone NAAQS, or with any other applicable CAA requirement.
As stated in the preamble for the EPA's amended Phase II volatility standards (56 FR 64706), any change in the gasoline volatility standard for a nonattainment area that was subsequently redesignated as an attainment area must be accomplished through a separate rulemaking that revises the applicable standard for that area. Thus, for former 1-hour ozone nonattainment areas where the EPA mandated a Phase II volatility standard of 7.8 psi RVP in the December 12, 1991 rulemaking, the federal 7.8 psi gasoline RVP requirement remains in effect, even after such an area is redesignated to attainment, until a separate rulemaking is completed that relaxes the federal gasoline RVP standard in that area from 7.8 psi to 9.0 psi.
As explained in the December 12, 1991 rulemaking, the EPA believes that relaxation of an applicable gasoline RVP standard is best accomplished in conjunction with the redesignation process. In order for an ozone nonattainment area to be redesignated as an attainment area, CAA section 107(d)(3) requires the state to make a showing, pursuant to CAA section 175A, that the area is capable of maintaining attainment for the ozone NAAQS for ten years. Depending on the area's circumstances, this maintenance plan will either demonstrate that the area is capable of maintaining attainment for ten years without the more stringent volatility standard or that the more stringent volatility standard may be necessary for the area to maintain its attainment with the ozone NAAQS. Therefore, in the context of a request for redesignation, the EPA will not relax the gasoline volatility standard unless the state requests a relaxation and the maintenance plan demonstrates to the satisfaction of the EPA that the area will maintain attainment for ten years without the need for the more stringent volatility standard.
North Carolina is requesting relaxation of the federal gasoline RVP standard from 7.8 psi to 9.0 psi for Mecklenburg and Gaston counties concurrent with its request that the EPA approve a redesignation request and maintenance plan for the Charlotte area for the 2008 ozone NAAQS.
On March 11, 2015, the state of North Carolina, through the North Carolina Department of Environment and Natural Resources (NCDENR), submitted a redesignation request and maintenance plan for the Charlotte area, which was classified as Marginal for the 2008 ozone NAAQS. Mecklenburg and Gaston counties are part of the Charlotte area. Additionally, the state submitted a CAA section 110(l) non-interference demonstration that removal of the federal RVP requirement of 7.8 psi for gasoline during the summertime ozone season in Mecklenburg and Gaston counties would not interfere with maintenance of any NAAQS, or with any other applicable CAA requirement. Specifically, the state provided a technical demonstration showing that relaxing the federal gasoline RVP requirement in the two counties from 7.8 psi to 9.0 psi would not interfere with maintenance of any NAAQS in the Charlotte area, of which the two counties are part, including the 2008 ozone NAAQS, or with any other applicable CAA requirement.
In a rulemaking that was signed on July 17, 2015, the EPA evaluated and approved North Carolina's March 11, 2015 redesignation request and maintenance plan for the Charlotte area. See Docket ID. No. EPA-R04-OAR-2015-0275. In a separate rulemaking signed on July 17, 2015, the EPA approved North Carolina's non-interference demonstration for Mecklenburg and Gaston counties. See Docket ID. No. EPA-R04-OAR-2015-0260.
Both rulemakings were subject to public notice-and-comment. The EPA received two comments on the redesignation request and maintenance plan rulemaking, and those comments were addressed in the final rule for that rulemaking. The comments received can be found in the docket for that rulemaking (Docket ID. No. EPA-R04-OAR-2015-0275). No comments were received on the non-interference demonstration for Mecklenburg and Gaston counties (Docket ID. No. EPA-R04-OAR-2015-0260).
In this action, the EPA is taking the second and final step in the process by proposing to approve North Carolina's request to relax the summertime ozone season gasoline RVP standard for Mecklenburg and Gaston counties from 7.8 psi to 9.0 psi. Specifically, the EPA
A direct final rule that would make the same changes as those proposed in this action appears in the Rules and Regulations section of this
If the EPA receives adverse comments on the rule or any portion of the rule, the EPA will withdraw the direct final rule or the portion of the rule that received adverse comment. The EPA will publish a timely withdrawal in the
The changes to the regulatory text proposed in this document are identical to those for the direct final rule published in the Rules and Regulations section of this
For a complete discussion of all the administrative requirements applicable to this action, see the direct final rule in the Rules and Regulations section of this
The statutory authority for this action is granted to the EPA by Sections 211(h) and 301(a) of the Clean Air Act, as amended; 42 U.S.C. 7545(h) and 7601(a).
Environmental protection, Administrative practice and procedures, Air pollution control, Fuel additives, Gasoline, Motor vehicle and motor vehicle engines, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Proposed rule; correction; extension of public comment period.
This document contains corrections to the preamble to the proposed rule published on August 6, 2015, that would establish a framework for authorizing the take of marine mammals incidental to the NEFSC's fisheries research activities in the Atlantic coast region for a five-year period, 2015-2020. This action is necessary to correct typographical errors in the annual estimates presented for Level B harassment of northern bottlenose whales (
The
The comment period for the proposed rule published July 9, 2015, at 80 FR 39542, extended August 6, 2015, at 80 FR 46939, has been further extended. NMFS must receive written comments and information no later than September 16, 2015.
You may submit comments on this document, identified by NOAA-NMFS-2015-0078, by any of the following methods:
• Electronic submission: Submit all electronic public comments via the federal e-Rulemaking Portal. Go to
• Mail: Comments should be addressed to Jolie Harrison, Chief, Permits and Conservation Division, Office of Protected Resources, National Marine Fisheries Service, 1315 East West Highway, Silver Spring, MD 20910.
Jeannine Cody, Office of Protected Resources, NMFS, (301) 427-8401.
NMFS published a proposed rule on July 9, 2015 (80 FR 39542) to establish a framework for authorizing the take of marine mammals incidental to the NEFSC's fisheries research activities in
As published, the preamble to the proposed regulations contains errors or typographical mistakes which need to be clarified. These errors and omissions were also incorrectly recorded within the proposed regulatory text and should be clarified there as well.
1. On page 46941, in Table 20, the entries for northern bottlenose whales are corrected to read as follows:
2 . On page 46941, in the center column, in the amendatory text for § 219.33, remove “(Z) Northern bottlenose whale (Hyperoodon ampullatus)—10;” and add “(Z) Northern bottlenose whale (Hyperoodon ampullatus)—12;” in its place.
Food and Nutrition Service (FNS), USDA.
Notice.
In accordance with the Paperwork Reduction Act of 1995, this notice invites the general public and other public agencies to comment on a proposed information collection, which is a revision of a currently approved form.
The purpose of the Food Programs Reporting System (FPRS) is to facilitate data gathering for the reporting of data for the Supplemental Nutrition Assistance Program (SNAP) and the Special Nutrition Programs. FPRS consolidated certain programmatic and financial data reporting requirements in an electronic reporting system and is the primary collection point for FNS program performance statistics and financial data from State agencies, Indian Tribal Organizations and U.S. Territories participating in the nutrition assistance programs.
Written comments must be submitted on or before October 16, 2015.
Comments are invited on: (a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information has practical utility; (b) the accuracy of the agency's estimate of the burden hours, including the validity of the methodology and assumptions that were used; (c) ways to enhance the quality, utility, and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical or other technological collection techniques or other forms of information technology.
Comments may be sent to Jane Duffield, Chief, State Administration Branch, Program Accountability and Administration Division, Supplemental Nutrition Assistance Program, U.S. Department of Agriculture, Food and Nutrition Service, 3101 Park Center Drive, Room 818, Alexandria, VA 22302. Comments may also be submitted via fax to the attention of Jane Duffield at 703-605-0795, Room 824, or via email to
All written comments will be open for public inspection at the office of FNS during regular business hours (8:30 a.m. to 5:00 p.m. Monday through Friday) at 3101 Park Center Drive, Room 808, Alexandria, Virginia 22302.
All responses to this notice will be summarized and included in the request for the Office of Management and Budget (OMB) approval. All comments will also be a matter of public record.
Requests for additional information should be directed to Usha Kalro at
The EARS form (FNS-759) was approved by OMB in Fiscal Year (FY) 2007. FNS implemented the first phase of EARS in FY 2008, which required SNAP State agencies to report on financial items only. Full implementation of EARS reporting requirements was completed in FY 2010. EARS provides uniform data and information about the nutrition education activities of all participating States across the country, including the District of Columbia, the Virgin Islands and Guam. Data gathered through the EARS form includes demographic characteristics of participants receiving nutrition education benefits, information about education topics and strategies, and use of resources. The EARS form is designed as an annual report that SNAP State agencies submit using FNS' web-based Food Program Reporting System, OMB Control No: 0584-0594, Expiration Date 6/30/2017. State agencies submit data between October 15 and December 30 of each year for the prior FY's nutrition education activities.
In 2010, Congress passed the HHFKA. Section 241 of the HHFKA replaced the existing nutrition education program under Section 11(f) of the Food and Nutrition Act (“FNS” or the “Act”) (7 U.S.C. 2011
(1) A focus on the critical problem of obesity—The program now has a wider range of evidence-based intervention strategies. Specifically, SNAP-Ed includes any combination of educational strategies, accompanied by environmental supports, designed to facilitate the voluntary adoption of healthy food and physical activity choices, as well as other nutrition-related behaviors. It is conducive to the well-being of SNAP participants and other qualifying low-income individuals and may involve programs at complementary organizational and institutional levels in addition to community and public health approaches.
(2) A target population which more closely aligns SNAP-Ed participants with those in other FNS, Federal, and State-administered benefit programs. In the past, SNAP-Ed participants included those receiving SNAP or those eligible to receive SNAP. Following the implementation of the HHFKA, the target population is extended to individuals who are eligible to receive SNAP or other means-tested Federal assistance programs or those residing in a community with a significant low-income population. These means-tested programs include Medicaid and Temporary Assistance for Needy Families, among others.
(3) Requirement for evidence-based interventions—Evidence-based approaches have been defined by the FNS Administrator in consultation with the Director of the Centers for Disease Control and Prevention. FNS has provided States with more flexibility by permitting States to use funds for nutrition education and obesity prevention interventions that are developed by integrating the best available research evidence, practice-based evidence or emerging evidence. In accordance with the SNAP-Ed Guidance, these may include the implementation and measurement of policy, systems and environmental changes (PSEs). Expanding the types of environmental and policy approaches that can be used in SNAP-Ed allows State programs to build upon nutrition education and health promotion efforts in a way that better supports a more comprehensive focus on obesity prevention.
(4) A new funding mechanism—As opposed to matching State funds for SNAP-Ed programs, FNS allocates 100 percent Federal grant funding to States, which may coordinate SNAP-Ed activities through partnerships with public and private entities in order to better leverage their financial resources. The formula proscribed by the HHFKA builds progressively to a 50/50 weighting of SNAP-Ed expenditures to SNAP participation based on the funding from the previous 12-month period ending January 31. For Fiscal Year 2015, 80 percent of the funding was based on expenditures and 10 percent of the funding was based on the State's SNAP participation rate. The 50/50 weighting applies to Fiscal Year 2018 and beyond.
The revised form is available for review with this docket on
• Collect data on the number and percentage of SNAP-Ed eligibles and those reached through Direct Education, Social Marketing and PSE change interventions in a State (Item 1a-e).
• Collect data on the estimated percentage of SNAP-Ed funds expended to reach SNAP-Ed eligibles through the above intervention types (Item 1f).
• Added a statement about the Community Eligibility Provision as a special circumstance for determining SNAP status (Items 2a and 2b).
• Collect data on whether SNAP-Ed participation counts for each age group are actual or estimated values (Items 2a and 2b).
• Collect data on additional settings where education is provided to SNAP-Ed participants (Item 5).
• Collect data on whether Direct Education programs are part of a Social Marketing initiative (Item 6a).
• Collect data on whether Direct Education supports PSEs (Item 6b).
• Collect data on whether direct education programs are part of a social marketing and/or PSE interventions (Item 6a and 6b).
• Removed question 8 on Indirect Education (on the current form) and added the column on “Source(s) of Data” to the table “Description of All Social Marketing Campaigns” (Item 7).
• Collect data on PSEs (Item 8).
• Collect data focused on classifying partnerships and their role in SNAP-Ed programs (Item 9).
• Removed the last question on funding (Item 9 in the current form) since funds are now 100 percent federal allocations to States according to a specified formula and do not require a State match.
The form has been rearranged to better accommodate the instructions and improve the flow of questions. This revision also reflects an increase in burden estimates. FNS estimates that 53 State agencies will respond once a year for a total of 53 annual responses. The current burden it takes each State agency to respond is 54 burden hours. In the revised data collection instrument, it will take approximately 60 burden hours for each State agency to respond which reflects an increase of six burden hours per State from the last submission. The current burden for this collection is 2,808. FNS calculates the revised total burden for this collection is 3,180 annual burden hours which reflects an increase of 300 burden hours due to program changes and adjustments. There are no recordkeeping requirements imposed by this information collection. As this is a revision to the EARS form within the FPRS system, the total FPRS burden is summarized below.
Forest Service, USDA.
Notice of meeting.
The Gallatin Resource Advisory Committee (RAC) will meet in Bozeman, Montana. The committee is authorized under the Secure Rural Schools and Community Self-Determination Act (the Act) and operates in compliance with the Federal Advisory Committee Act. The purpose of the committee is to improve collaborative relationships and to provide advice and recommendations to the Forest Service concerning projects and funding consistent with Title II of the Act. Additional RAC information, including the meeting agenda and the meeting summary/minutes can be found at the following Web site:
The meeting will be held October 2, 2015, from 9:00 a.m. to 12:30 p.m.
All RAC meetings are subject to cancellation. For status of meeting prior to attendance, please contact the person listed under
The meeting will be held at the Bozeman Public Library, Large Community Room, 626 East Main Street, Bozeman, Montana.
Written comments may be submitted as described under
Mariah Leuschen-Lonergan, RAC Coordinator, by phone at 406-587-6735 or via email at
Individuals who use telecommunication devices for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 1-800-877-8339 between 8:00 a.m. and 8:00 p.m., Eastern Standard Time, Monday through Friday.
The purpose of the meeting is to:
1. Review project proposals; and
2. Recommend 2015 project proposals.
The meeting is open to the public. The agenda will include time for people to make oral statements of three minutes or less. Individuals wishing to make an oral statement should request in writing by September 21, 2015, to be scheduled on the agenda. Anyone who would like to bring related matters to the attention of the committee may file written statements with the committee staff before or after the meeting. Written comments and time requests for oral comments must be sent to Mariah Leuschen-Lonergan, RAC Coordinator, 10 East Babcock Avenue, Bozeman, Montana 59105; by email to
Wednesday, August 19, 2015 11 a.m. EDT
Broadcasting Board of Governors, Cohen Building, Room 3321, 330 Independence Ave. SW., Washington, DC 20237.
Notice of Closed Meeting of the Broadcasting Board of Governors.
The members of the Broadcasting Board of Governors (BBG) will meet in a special session, to be conducted telephonically, to discuss and approve a budget submission for Fiscal Year 2017. According to Office of Management and Budget (OMB) Circular A-11, section 22.1, all agency budgetary materials and data are considered confidential prior to the President submitting a budget to Congress. In accordance with section 22.5 of Circular A-11, the BBG has determined that its meeting should be closed to public observation pursuant to 5 U.S.C. 552b(c)(9)(B). In accordance with the Government in the Sunshine Act and BBG policies, the meeting will be recorded and a transcript of the proceedings, subject to the redaction of information protected by 5 U.S.C. 552b(c)(9)(B), will be made available to the public. The publicly-releasable transcript will be available for download at
Information regarding member votes to close the meeting and expected attendees can also be found on the Agency's public Web site.
Persons interested in obtaining more information should contact Oanh Tran at (202) 203-4545.
Economic Development Administration, Commerce.
Notice and opportunity for public comment.
Pursuant to Section 251 of the Trade Act 1974, as amended (19 U.S.C. 2341
Any party having a substantial interest in these proceedings may request a public hearing on the matter. A written request for a hearing must be submitted to the Trade Adjustment Assistance for Firms Division, Room 71030, Economic Development Administration, U.S. Department of Commerce, Washington, DC 20230, no later than ten (10) calendar days following publication of this notice.
Please follow the requirements set forth in EDA's regulations at 13 CFR 315.9 for procedures to request a public hearing. The Catalog of Federal Domestic Assistance official number and title for the program under which these petitions are submitted is 11.313, Trade Adjustment Assistance for Firms.
On June 19, 2015, the Acting Executive Secretary of the Foreign-Trade Zones (FTZ) Board docketed an application submitted by the Mississippi Coast Foreign Trade Zone, Inc., grantee of FTZ 92, requesting an additional site within Subzone 92A on behalf of VT Halter Marine, Inc., located in Pascagoula, Mississippi. The expanded subzone would be subject to the existing activation limit of FTZ 92.
The application was processed in accordance with the FTZ Act and Regulations, including notice in the
Pursuant to the authority delegated to the FTZ Board's Executive Secretary (15 CFR Sec. 400.36(f)), the application to expand Subzone 92A is approved, subject to the FTZ Act and the Board's regulations, including section 400.13, and with the overall subzone subject to FTZ 92's 2,000-acre activation limit.
An application has been submitted to the Foreign-Trade Zones (FTZ) Board by the South Carolina State Ports Authority, grantee of FTZ 38, requesting subzone status for the facilities of Springsteen Logistics, LLC, located in Rock Hill and Fort Lawn, South Carolina. The application was submitted pursuant to the provisions of the Foreign-Trade Zones Act, as amended (19 U.S.C. 81a-81u), and the regulations of the FTZ Board (15 CFR part 400). It was formally docketed on August 11, 2015.
The proposed subzone would consist of the following sites:
In accordance with the FTZ Board's regulations, Kathleen Boyce of the FTZ Staff is designated examiner to review the application and make recommendations to the Executive Secretary.
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The closing period for their receipt is September 28, 2015. Rebuttal comments in response to material submitted during the foregoing period may be submitted during the subsequent 15-day period to October 13, 2015.
A copy of the application will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
For further information, contact Kathleen Boyce at
Takasago International Corporation (USA) (Takasago), an operator of FTZ 37, submitted a notification of proposed production activity to the FTZ Board for its facility located in Harriman, New York. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on August 7, 2015.
Takasago already has authority to produce fragrance compounds within Site 10 of FTZ 37. The current request would add foreign-status materials to the scope of authority. Pursuant to 15 CFR 400.14(b), additional FTZ authority would be limited to the specific foreign-status materials and components and specific finished products described in the submitted notification (as described below) and subsequently authorized by the FTZ Board.
Production under FTZ procedures could exempt Takasago from customs duty payments on the foreign status materials used in export production. On its domestic sales, Takasago would be able to choose the duty rate during customs entry procedures that applies to fragrance compounds (duty-free) for the foreign status materials noted below and in the existing scope of authority. Customs duties also could possibly be deferred or reduced on foreign status production equipment.
The components and materials sourced from abroad include: Beeswax abs, myroxide, octacetal, syvertal, hydroxyl ambran, safralene, cresyl iso buty, geranyl butyrate, diisobutyl adipate, allyl amyl glyocolate, jasmodione, auirantiol pure, jasmolactone, octalactone delta, g-undecalactone, methyl dioxolan, okumal, grisalva, iso butyl quinolone, peppermint oil, styrax resoid and crystarome strawberry (duty rate ranges from free to 6.5%).
Public comment is invited from interested parties. Submissions shall be addressed to the FTZ Board's Executive Secretary at the address below. The
A copy of the notification will be available for public inspection at the Office of the Executive Secretary, Foreign-Trade Zones Board, Room 21013, U.S. Department of Commerce, 1401 Constitution Avenue NW., Washington, DC 20230-0002, and in the “Reading Room” section of the FTZ Board's Web site, which is accessible via
For further information, contact Kathleen Boyce at
The Transportation and Related Equipment Technical Advisory Committee will meet on September 2, 2015, 9:30 a.m., in the Herbert C. Hoover Building, Room 3884, 14th Street between Constitution & Pennsylvania Avenues NW., Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration with respect to technical questions that affect the level of export controls applicable to transportation and related equipment or technology.
1. Welcome and Introductions.
2. Status reports by working group chairs.
3. Public comments and Proposals.
4. Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 §§ 10(a)(1) and 10(a)(3).
The open session will be accessible via teleconference to 20 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at
A limited number of seats will be available during the public session of the meeting. Reservations are not accepted. To the extent time permits, members of the public may present oral statements to the Committee. The public may submit written statements at any time before or after the meeting. However, to facilitate distribution of public presentation materials to Committee members, the Committee suggests that presenters forward the public presentation materials prior to the meeting to Ms. Springer via email.
The Assistant Secretary for Administration, with the concurrence of the delegate of the General Counsel, formally determined on October 2, 2014, pursuant to Section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. app. 2 § (10)(d)), that the portion of the meeting dealing with pre-decisional changes to the Commerce Control List and U.S. export control policies shall be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 §§ 10(a)(1) and 10(a)(3). The remaining portions of the meeting will be open to the public.
For more information, call Yvette Springer at (202) 482·2813.
The Materials Technical Advisory Committee will meet on September 3, 2015, 10:00 a.m., Herbert C. Hoover Building, Room 3884, 14th Street between Constitution & Pennsylvania Avenues NW., Washington, DC. The Committee advises the Office of the Assistant Secretary for Export Administration with respect to technical questions that affect the level of export controls applicable to materials and related technology.
1. Introductions and opening remarks on ECR by senior management.
2. Foreign Policy brief on Cuba.
3. Open session report by on regime representatives.
4. Report from working groups (Composite Working Group, Biological Working Group, Pump and Valves Working Group, and the Chemicals Working Group).
5. Remarks by the Office of Technology Evaluation.
6. Public Comments and New Business.
7. Discussion of matters determined to be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 §§ 10(a)(1) and 10(a)(3).
The open session will be accessible via teleconference to 20 participants on a first come, first serve basis. To join the conference, submit inquiries to Ms. Yvette Springer at
A limited number of seats will be available during the public session of the meeting. Reservations are not accepted. To the extent time permits, members of the public may present oral statements to the Committee. Written statements may be submitted at any time before or after the meeting. However, to facilitate distribution of public presentation materials to Committee members, the materials should be forwarded prior to the meeting to Ms. Springer via email.
The Assistant Secretary for Administration, with the concurrence of the delegate of the General Counsel, formally determined on March 18, 2015, pursuant to Section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. app. 2 § 10(d)), that the portion of the meeting dealing with pre-decisional changes to the Commerce Control List and the U.S. export control policies shall be exempt from the provisions relating to public meetings found in 5 U.S.C. app. 2 § § 10(a)(1) and 10(a)(3). The remaining portions of the meeting will be open to the public.
For more information, call Yvette Springer at (202) 482-2813.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Elizabeth Eastwood at (202) 482-3874 (the Republic of Korea and Mexico), or Brandon Custard at (202) 482-1823 (the Republic of Turkey), AD/CVD Operations, Enforcement and Compliance, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On July 21, 2015, the Department of Commerce (the Department) received antidumping duty (AD) petitions concerning imports of heavy walled rectangular carbon steel pipes and tubes (HWR pipes and tubes) from the Republic of Korea (Korea), Mexico, and the Republic of Turkey (Turkey) filed in proper form on behalf of Atlas Tube, a division of JMC Steel Group, Bull Moose Tube Company, EXLTUBE,
On July 23, 2015, the Department requested additional information and clarification of certain areas of the Petitions.
In accordance with section 732(b) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that imports of HWR pipes and tubes from Korea, Mexico, and Turkey are being, or are likely to be, sold in the United States at less-than-fair value within the meaning of section 731 of the Act, and that such imports are materially injuring, or threatening material injury to, an industry in the United States. Also, consistent with section 732(b)(1) of the Act, the Petitions are accompanied by information reasonably available to the petitioners supporting their allegations.
The Department finds that the petitioners filed these Petitions on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. The Department also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the AD investigations that the petitioners are requesting.
Because the Petitions were filed on July 21, 2015, pursuant to 19 CFR 351.204(b)(1) the period of investigation (POI) is July 1, 2014, through June 30, 2015.
The product covered by these investigations is HWR pipes and tubes from Korea, Mexico, and Turkey. For a full description of the scope of these investigations, see the “Scope of the Investigations,” in Appendix I of this notice.
During our review of the Petitions, the Department issued questions to, and received responses from, the petitioners pertaining to the proposed scope to ensure that the scope language in the Petitions would be an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the preamble to the Department's regulations, we are setting aside a period for interested parties to raise issues regarding product coverage (scope). The Department will consider all comments received from parties and, if necessary, will consult with parties prior to the issuance of the preliminary determinations. If scope comments include factual information (
The Department requests that any factual information the parties consider relevant to the scope of the investigations be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact the Department and request permission to submit the additional information. All such comments must be filed on the records of each of the concurrent AD and CVD investigations.
Submissions to the Department must normally be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS).
The Department requests comments from interested parties regarding the appropriate physical characteristics of HWR pipes and tubes to be reported in response to the Department's AD questionnaires. This information will be used to identify the key physical characteristics of the subject merchandise in order to report the relevant factors and costs of production accurately as well as to develop appropriate product-comparison criteria.
Interested parties may provide any information or comments that they feel are relevant to the development of an accurate list of physical characteristics. Specifically, they may provide comments as to which characteristics are appropriate to use as: (1) General product characteristics and (2) product-comparison criteria. We note that it is not always appropriate to use all product characteristics as product-comparison criteria. We base product-comparison criteria on meaningful commercial differences among products. In other words, although there may be some physical product characteristics utilized by manufacturers to describe HWR pipes and tubes, it may be that only a select few product characteristics take into account commercially meaningful physical characteristics. In addition, interested parties may comment on the order in which the physical characteristics should be used in matching products. Generally, the Department attempts to list the most important physical characteristics first and the least important characteristics last.
In order to consider the suggestions of interested parties in developing and issuing the AD questionnaires, all comments must be filed by 5:00 p.m. ET on Monday, August 31, 2015, which is 21 calendar days from the signature date of this notice. Any rebuttal comments must be filed by 5:00 p.m. ET on Thursday, September 10, 2015. All comments and submissions to the Department must be filed electronically using ACCESS, as explained above, on the records of the Korea, Mexico, and Turkey less-than-fair-value investigations.
Section 732(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 732(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the petition. Moreover, section 732(c)(4)(D) of the Act provides that, if the petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall: (i) Poll the industry or rely on other information in order to determine if there is support for the petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigations. Based on our analysis of the information submitted on the record, we have determined that HWR pipes and tubes, as defined in the scope of the investigations, constitute a single domestic like product and we have analyzed industry support in terms of that domestic like product.
In determining whether the petitioners have standing under section 732(c)(4)(A) of the Act, we considered the industry support data contained in the Petitions with reference to the domestic like product as defined in the “Scope of the Investigations,” in Appendix I of this notice. To establish industry support, the petitioners provided their own shipments of the domestic like product in 2014 and compared their shipments to the estimated total shipments of the domestic like product for the entire domestic industry.
Our review of the data provided in the Petitions, General Issues Supplement, and other information readily available to the Department indicates that the petitioners have established industry support for all of the Petitions.
The Department finds that the petitioners filed the Petitions on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act and they have demonstrated sufficient industry support with respect to the AD investigations that they are requesting the Department initiate.
The petitioners allege that the U.S. industry producing the domestic like product is being materially injured, or is threatened with material injury, by reason of the imports of the subject merchandise sold at less than normal value (NV). In addition, the petitioners allege that subject imports exceed the negligibility threshold provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by reduced market share; underselling and price depression or suppression; lost sales and revenues; increased inventories and inventory overhang in the U.S. market; and decline in profitability.
The following is a description of the allegations of sales at less-than-fair value upon which the Department based its decision to initiate investigations of imports of HWR pipes and tubes from Korea, Mexico, and Turkey. The sources of data for the deductions and adjustments relating to U.S. price and NV are discussed in greater detail in the country-specific initiation checklists.
For Korea, Mexico, and Turkey, the petitioners based U.S. price on price quotes/offers for sales of HWR pipes and tubes produced in, and exported from, the subject country.
For Korea, Mexico, and Turkey, the petitioners provided home market price information obtained through market research for HWR pipes and tubes produced and offered for sale in each of these countries.
Based on the data provided by the petitioners, there is reason to believe that imports of HWR pipes and tubes from Korea, Mexico, and Turkey are being, or are likely to be, sold in the United States at less-than-fair value. Based on comparisons of export price to NV in accordance with section 773(a) of the Act, the estimated dumping margin for HWR pipes and tubes from Korea is 53.8 percent.
Based upon the examination of the AD Petitions on HWR pipes and tubes from Korea, Mexico, and Turkey, we find that Petitions meet the requirements of section 732 of the Act. Therefore, we are initiating AD investigations to determine whether imports of HWR pipes and tubes from Korea, Mexico and Turkey, are being, or are likely to be, sold in the United States at less-than-fair value. In accordance with section 733(b)(1)(A) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 140 days after the date of this initiation.
The petitioners named ten companies from Korea, ten companies from Mexico, and 14 companies from Turkey as producers/exporters of HWR pipes and tubes.
We invite interested parties to comment on this issue. Parties wishing to comment must do so within seven days of the publication of this notice in the
In accordance with section 732(b)(3)(A) of the Act and 19 CFR 351.202(f), copies of the public version of the Petitions have been provided to the governments of Korea, Mexico, and Turkey via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petitions to each exporter named in the Petitions, as provided under 19 CFR 351.203(c)(2).
We have notified the ITC of our initiation, as required by section 732(d) of the Act.
The ITC will preliminarily determine, within 45 days after the date on which the Petitions were filed, whether there is a reasonable indication that imports of HWR pipes and tubes from Korea, Mexico, and/or Turkey are materially injuring or threatening material injury to a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires; (ii) evidence submitted in support of allegations; (iii) publicly available information to value factors under 19 CFR 351.408(c) or to measure the adequacy of remuneration under 19 CFR 351.511(a)(2); (iv) evidence placed on the record by the Department; and (v) evidence other than factual information described in (i)-(iv). The regulation requires any party, when submitting factual information, to specify under which subsection of 19 CFR 351.102(b)(21) the information is being submitted and, if the information is submitted to rebut, clarify, or correct factual information already on the record, to provide an explanation identifying the information already on the record that the factual information seeks to rebut, clarify, or correct. Time limits for the submission of factual information are addressed in 19 CFR 351.301, which provides specific time limits based on the type of factual information being submitted. Please review the regulations prior to submitting factual information in these investigations.
Parties may request an extension of time limits before the expiration of a time limit established under part 351, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the expiration of the time limit established under part 351 expires. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
This notice is issued and published pursuant to sections 732 and 777(i) of the Act.
The products covered by these investigations are certain heavy walled rectangular welded steel pipes and tubes of rectangular (including square) cross section, having a nominal wall thickness of not less than 4 mm. The merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A-500, grade B specifications, or comparable domestic or foreign specifications.
Included products are those in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements below exceeds the quantity, by weight, respectively indicated:
• 2.50 percent of manganese, or
• 3.30 percent of silicon, or
• 1.50 percent of copper, or
• 1.50 percent of aluminum, or
• 1.25 percent of chromium, or
• 0.30 percent of cobalt, or
• 0.40 percent of lead, or
• 2.0 percent of nickel, or
• 0.30 percent of tungsten, or
• 0.80 percent of molybdenum, or
• 0.10 percent of niobium (also called columbium), or
• 0.30 percent of vanadium, or
• 0.30 percent of zirconium.
The subject merchandise is currently provided for in item 7306.61.1000 of the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may also enter under HTSUS 7306.61.3000. While the HTSUS subheadings and ASTM specification are provided for convenience and customs purposes, the written description of the scope of these investigations is dispositive.
Enforcement and Compliance, International Trade Administration, Department of Commerce.
Rebecca Trainor at (202) 482-4007 or Reza Karamloo at (202) 482-4470, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230.
On July 21, 2015, the Department of Commerce (the Department) received a countervailing duty (CVD) petition concerning imports of heavy walled rectangular welded carbon steel pipes and tubes (HRW pipes and tubes) from the Republic of Turkey (Turkey), filed in proper form, on behalf of Atlas Tube, a division of JMC Steel Group, Bull Moose Tube Company, EXLTUBE, Hannibal Industries, Inc., Independence Tube Corporation, Maruichi American Corporation, Searing Industries, Southland Tube, and Vest, Inc. (collectively, the petitioners).
On July 23, 2015, the Department requested information and clarification for certain areas of the Petition.
In accordance with section 702(b)(1) of the Tariff Act of 1930, as amended (the Act), the petitioners allege that the Government of Turkey (GOT) is providing countervailable subsidies (within the meaning of sections 701 and 771(5) of the Act) to imports of HWR pipes and tubes from Turkey, and that such imports are materially injuring, or threatening material injury to, an industry in the United States. Also, consistent with section 702(b)(1) of the Act, the Petition is accompanied by information reasonably available to the petitioners supporting their allegations.
The Department finds that the petitioners filed the Petition on behalf of the domestic industry because the petitioners are interested parties as defined in section 771(9)(C) of the Act. The Department also finds that the petitioners demonstrated sufficient industry support with respect to the initiation of the CVD investigation that the petitioners are requesting.
The period of the investigation is January 1, 2014, through December 31, 2014.
The product covered by this investigation is HWR pipes and tubes from Turkey. For a full description of the scope of this investigation,
During our review of the Petition, the Department issued questions to, and received responses from, the petitioners pertaining to the proposed scope to ensure that the scope language in the Petition would be an accurate reflection of the products for which the domestic industry is seeking relief.
As discussed in the preamble to the Department's regulations,
The Department requests that any factual information the parties consider relevant to the scope of the investigations be submitted during this time period. However, if a party subsequently finds that additional factual information pertaining to the scope of the investigations may be relevant, the party may contact the Department and request permission to submit the additional information. All such comments must be filed on the records of the Turkey AD and CVD investigations, as well as the concurrent Korea and Mexico AD investigations.
Submissions to the Department normally must be filed electronically using Enforcement and Compliance's Antidumping and Countervailing Duty
Pursuant to section 702(b)(4)(A)(i) of the Act, the Department notified representatives of the GOT of the receipt of the Petition. Also, in accordance with section 702(b)(4)(A)(ii) of the Act, the Department provided representatives of the GOT the opportunity for consultations with respect to the Petition.
Section 702(b)(1) of the Act requires that a petition be filed on behalf of the domestic industry. Section 702(c)(4)(A) of the Act provides that a petition meets this requirement if the domestic producers or workers who support the petition account for: (i) At least 25 percent of the total production of the domestic like product; and (ii) more than 50 percent of the production of the domestic like product produced by that portion of the industry expressing support for, or opposition to, the Petition. Moreover, section 702(c)(4)(D) of the Act provides that, if the Petition does not establish support of domestic producers or workers accounting for more than 50 percent of the total production of the domestic like product, the Department shall: (i) Poll the industry or rely on other information in order to determine if there is support for the Petition, as required by subparagraph (A); or (ii) determine industry support using a statistically valid sampling method to poll the “industry.”
Section 771(4)(A) of the Act defines the “industry” as the producers as a whole of a domestic like product. Thus, to determine whether a petition has the requisite industry support, the statute directs the Department to look to producers and workers who produce the domestic like product. The International Trade Commission (ITC), which is responsible for determining whether “the domestic industry” has been injured, must also determine what constitutes a domestic like product in order to define the industry. While both the Department and the ITC must apply the same statutory definition regarding the domestic like product,
Section 771(10) of the Act defines the domestic like product as “a product which is like, or in the absence of like, most similar in characteristics and uses with, the article subject to an investigation under this title.” Thus, the reference point from which the domestic like product analysis begins is “the article subject to an investigation” (
With regard to the domestic like product, the petitioners do not offer a definition of the domestic like product distinct from the scope of the investigation. Based on our analysis of the information submitted on the record, we have determined that HWR pipes and tubes, as defined in the scope of the investigation, constitute a single domestic like product and we have analyzed industry support in terms of that domestic like product.
In determining whether the petitioners have standing under section 702(c)(4)(A) of the Act, we considered the industry support data contained in the Petition with reference to the domestic like product as defined in the “Scope of the Investigation,” in Appendix I of this notice. To establish industry support, the petitioners provided their own shipments of the domestic like product in 2014 and compared their shipments to estimated total shipments of the domestic like product for the entire domestic industry.
Our review of the data provided in the Petition, General Issues Supplement, and other information readily available to the Department indicates that the petitioners have established industry support for the Petition.
The Department finds that the petitioners filed the Petition on behalf of the domestic industry because they are interested parties as defined in section 771(9)(C) of the Act and they have demonstrated sufficient industry support with respect to the CVD investigation that they are requesting the Department initiate.
Because Turkey is a “Subsidies Agreement Country” within the meaning of section 701(b) of the Act, section 701(a)(2) of the Act applies to this investigation. Accordingly, the ITC must determine whether imports of the subject merchandise from Turkey materially injure, or threaten material injury to, a U.S. industry.
The petitioners allege that imports of the subject merchandise are benefitting from countervailable subsidies and that such imports are causing, or threaten to cause, material injury to the U.S. industry producing the domestic like product. The petitioners allege that subject imports exceed the negligibility threshold of three percent provided for under section 771(24)(A) of the Act.
The petitioners contend that the industry's injured condition is illustrated by reduced market share; underselling and price suppression or depression; lost sales and revenues; increased inventories and inventory overhang in the U.S. market; and decline in profitability.
Section 702(b)(1) of the Act requires the Department to initiate a CVD investigation whenever an interested party files a CVD Petition on behalf of an industry that: (1) Alleges the elements necessary for an imposition of a duty under section 701(a) of the Act; and (2) is accompanied by information reasonably available to the petitioner supporting the allegations.
The petitioners allege that producers/exporters of HWR pipes and tubes in Turkey benefited from countervailable subsidies bestowed by the government. The Department has examined the Petition and finds that it complies with the requirements of section 702(b)(1) of the Act. Therefore, in accordance with section 702(b)(1) of the Act, we are initiating a CVD investigation to determine whether manufacturers, producers, or exporters of HWR pipes and tubes from Turkey receive countervailable subsidies from the government.
Based on our review of the Petition, we find that there is sufficient information to initiate a CVD investigation on each of the alleged programs. For a full discussion of the basis for our decision to initiate on each program,
In accordance with section 703(b)(1) of the Act and 19 CFR 351.205(b)(1), unless postponed, we will make our preliminary determinations no later than 65 days after the date of this initiation.
The petitioners named 14 companies as producers/exporters of heavy walled rectangular welded carbon steel pipes and tubes from Turkey.
Comments must be filed electronically using ACCESS. An electronically-filed document must be received successfully in its entirety by ACCESS, by 5 p.m. ET by the date noted above. We intend to make our decision regarding respondent selection within 20 days of publication of this notice. Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305(b). Instructions for filing such applications may be found on the Department's Web site at
In accordance with section 702(b)(4)(A)(i) of the Act and 19 CFR 351.202(f), a copy of the public version of the Petition has been provided to the GOT via ACCESS. To the extent practicable, we will attempt to provide a copy of the public version of the Petition to each known exporter (as named in the Petition), consistent with 19 CFR 351.203(c)(2).
We will notify the ITC of our initiation, as required by section 702(d) of the Act.
Within 45 days after the date on which the Petition was filed, the ITC will preliminarily determine whether there is a reasonable indication that imports of HWR pipes and tubes from Turkey are materially injuring, or threatening material injury to, a U.S. industry.
Factual information is defined in 19 CFR 351.102(b)(21) as: (i) Evidence submitted in response to questionnaires;
Parties may request an extension of time limits before the expiration of a time limit established under 19 CFR 351.301, or as otherwise specified by the Secretary. In general, an extension request will be considered untimely if it is filed after the time limit established under 19 CFR 351.301 expires. For submissions that are due from multiple parties simultaneously, an extension request will be considered untimely if it is filed after 10:00 a.m. on the due date. Under certain circumstances, we may elect to specify a different time limit by which extension requests will be considered untimely for submissions which are due from multiple parties simultaneously. In such a case, we will inform parties in the letter or memorandum setting forth the deadline (including a specified time) by which extension requests must be filed to be considered timely. An extension request must be made in a separate, stand-alone submission; under limited circumstances we will grant untimely-filed requests for the extension of time limits. Review
Any party submitting factual information in an AD or CVD proceeding must certify to the accuracy and completeness of that information.
Interested parties must submit applications for disclosure under APO in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
This notice is issued and published pursuant to sections 702 and 777(i) of the Act.
The products covered by this investigation are certain heavy walled rectangular welded steel pipes and tubes of rectangular (including square) cross section, having a nominal wall thickness of not less than 4 mm. The merchandise includes, but is not limited to, the American Society for Testing and Materials (ASTM) A-500, grade B specifications, or comparable domestic or foreign specifications.
Included products are those in which: (1) Iron predominates, by weight, over each of the other contained elements; (2) the carbon content is 2 percent or less, by weight; and (3) none of the elements below exceeds the quantity, by weight, respectively indicated:
• 2.50 percent of manganese, or
• 3.30 percent of silicon, or
• 1.50 percent of copper, or
• 1.50 percent of aluminum, or
• 1.25 percent of chromium, or
• 0.30 percent of cobalt, or
• 0.40 percent of lead, or
• 2.0 percent of nickel, or
• 0.30 percent of tungsten, or
• 0.80 percent of molybdenum, or
• 0.10 percent of niobium (also called columbium), or
• 0.30 percent of vanadium, or
• 0.30 percent of zirconium.
The subject merchandise is currently provided for in item 7306.61.1000 of the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may also enter under HTSUS 7306.61.3000. While the HTSUS subheadings and ASTM specification are provided for convenience and customs purposes, the written description of the scope of this investigation is dispositive.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; receipt of application for permit amendment.
Notice is hereby given that Daniel P. Costa, Ph.D., Department of Biology and Institute of Marine Sciences, University of California, Santa Cruz, CA 95064, has applied for an amendment to Scientific Research Permit No. 17952-01.
Written, telefaxed, or email comments must be received on or before September 16, 2015.
The application and related documents are available for review by selecting “Records Open for Public Comment” from the “Features” box on the Applications and Permits for Protected Species home page,
These documents are also available upon written request or by appointment in the Permits and Conservation Division, Office of Protected Resources, NMFS, 1315 East-West Highway, Room 13705, Silver Spring, MD 20910; phone (301) 427-8401; fax (301) 713-0376.
Written comments on this application should be submitted to the Chief, Permits and Conservation Division, at the address listed above. Comments may also be submitted by facsimile to (301)
Those individuals requesting a public hearing should submit a written request to the Chief, Permits and Conservation Division at the address listed above. The request should set forth the specific reasons why a hearing on this application would be appropriate.
Amy Sloan or Brendan Hurley, (301) 427-8401.
The subject amendment to Permit No. 17952-01 is requested under the authority of the Marine Mammal Protection Act of 1972, as amended (16 U.S.C. 1361
Permit No. 17952, issued on June 11, 2013 (78 FR 37796), authorizes the permit holder to conduct long-term research on California sea lions (
The permit holder is requesting the permit be amended to include authorization to (1) add remote darting as an approved capture method with use of various sedative drugs for adult and juvenile California sea lions, (2) increase incidental harassment takes of non-target California sea lions, (3) include incidental harassment takes for the Eastern stock of Steller sea lions (
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321
Concurrent with the publication of this notice in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting and webinar/conference call; correction.
This document corrects the
The HMS AP meeting and webinar will be held from 9 a.m. to 6 p.m. on Wednesday, September 9, 2015; and from 8:30 a.m. to 12 p.m. on Thursday, September 10, 2015.
The meeting will be held at the Sheraton Silver Spring, 8777 Georgia Avenue, Silver Spring, MD 20910. The meeting presentations will also be available via WebEx webinar/conference call.
On Wednesday, September 9, 2015, the conference call information is: phone number 1-866-509-5013; Participant Code: 1475429; and the webinar event address is:
On Thursday, September 10, 2015, the conference call information is: Phone number 1-866-509-5013; Participant Code: 1475429; and the webinar event address is:
Participants are strongly encouraged to log/dial in fifteen minutes prior to the meeting. NMFS will show the presentations via webinar and allow public comment during identified times on the agenda.
LeAnn Hogan or Margo Schulze-Haugen at (301) 427-8503.
The original notice (80 FR 46544) didn't contain all of the necessary information in the
In addition, we've included the new
In a Notice published on August 5, 2015 (80 FR 46544), on page 46545, please make the following correction: In the first column, in the second and third paragraphs under the
“On Wednesday, September 9, 2015, the conference call information is: phone number 1-866-509-5013; Participant Code: 1475429; and the webinar event address is:
On Thursday, September 10, 2015, the conference call information is: Phone number 1-866-509-5013; Participant Code: 1475429; and the webinar event address is:
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of public meeting (webinar).
The Pacific Fishery Management Council (Pacific Council) will convene a joint webinar meeting of its Coastal Pelagic Species Management Team (CPSMT) and Coastal Pelagic Species Advisory Subpanel (CSPAS). The meeting is open to the public.
The webinar meeting will be held Thursday, September 3, 2015, from 1 p.m. to 3 p.m. Pacific Daylight Time.
To attend the webinar, visit:
You may send an email to
Kerry Griffin, Staff Officer; telephone: (503) 820-2409.
The primary purpose of the meeting is to discuss agenda items on the September 2015 Pacific Council meeting agenda and to discuss future meeting plans. Action will be restricted to those issues specifically listed in this notice and any issues arising after publication of this notice that require emergency action under Section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the CPSMT and CPSAS' intent to take final action to address the emergency.
The public listening station is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt (503) 820-2280 at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Pacific Fishery Management Council's (Pacific Council) Habitat Committee (HC) will hold a webinar that is open to the public.
The HC meeting will be held Tuesday, September, 1, 2015, from 1 p.m. until 3 p.m.
To attend the webinar, visit:
You may send an email to Mr. Kris Kleinschmidt
Ms. Jennifer Gilden, Pacific Council, (503) 820-2418.
The primary purpose of the HC working meeting is to prepare for the September 2015 Pacific Council meeting, specifically Agenda Item H.8, Amendment to Modify Groundfish Essential Fish Habitat and to Adjust Rockfish Conservation Areas. Public comment will be accommodated if time allows, at the discretion of the HC Chair. The HC's task will be to develop recommendations for consideration by the Pacific Council at its September 9-16, 2015 meeting in Sacramento, CA.
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2425 at least 5 days prior to the meeting date.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice of a public meeting.
The Western Pacific Fishery Management Council (Council) will convene a meeting of Habitat Areas of Particular Concern (HAPC) Working Group comprised of Fishery Ecosystem Plan Team members. The working group will plan for producing a report exploring options in developing an HAPC designation process for the Western Pacific region.
The working group will meet on September 2, 2015. For specific times and agendas, see
The HAPC working group meeting will be held at the Council office, 1164 Bishop Street, Suite 1400, Honolulu, HI 96813; telephone: (808) 522-8220. WebEx and teleconference facilities will be provided for the meeting. The teleconference numbers are: U.S. toll-free: 1-888-482-3560 or International Access: +1-647-723-3959, and Access Code: 5228220; The Web conference can be accessed at
Kitty M. Simonds, Executive Director; telephone: (808) 522-8220.
HAPC working group members will explore different process options for designating Habitat Areas of Particular Concern in the Western Pacific Region. The purpose of this meeting is to identify which process options to evaluate in a report to the Council's Fishery Ecosystem Plan Team. A public comment period will be provided. The order in which agenda items are addressed may change. The meetings will run as late as necessary to complete scheduled business.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Kitty M. Simonds, (808) 522-8220 (voice) or (808) 522-8226 (fax), at least 5 days prior to the meeting date.
16 U.S.C. 1801
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Pacific Fishery Management Council's (Pacific Council) Salmon Technical Team (STT), Salmon Advisory Subpanel (SAS), and Model Evaluation Workgroup (MEW) will hold a webinar, which is open to the public.
The webinar will be held on Wednesday, September 2, 2015, from 1:30 p.m. until business for the day is complete.
To attend the webinar, visit:
You may send an email to Mr. Kris Kleinschmidt (
Mr. Mike Burner, Pacific Council, (503) 820-2414.
The STT, SAS, and MEW will discuss items on the Pacific Council's September 2015 meeting agenda. Major topics include: Salmon Methodology Review, Sacramento River Winter Chinook Update, 2016 Pacific Halibut Catch Sharing Plan and Annual Regulations, and the Unmanaged Forage Fish Regulations. Other topics may include one or more of the Pacific Council's scheduled Administrative Matters. Public comments during the webinar will be received from attendees at the discretion of the STT, SAS, and MEW Chairs.
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during this meeting. Action will be restricted to those issues specifically listed in this document and any issues arising after publication of this document that require emergency action under section 305(c) of the Magnuson-Stevens Fishery Conservation and Management Act, provided the public has been notified of the intent to take final action to address the emergency.
The meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Mr. Kris Kleinschmidt at (503) 820-2280, extension 425 at least 5 days prior to the meeting date.
Proposed collection; comment request
The United States Patent and Trademark Office (USPTO), as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to comment on the extension of a continuing information collection, as required by the Paperwork Reduction Act of 1995, Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)).
Written comments must be submitted on or before October 16, 2015.
Written comments may be submitted by any of the following methods:
•
•
•
Requests for additional information should be directed to Cathie Kirik, Mail Stop 24, Commissioner for Patents, United States Patent and Trademark Office, P.O. Box 1450, Alexandria, VA 22313-1450; by telephone at 571-272-8040; or by email at
Under the Inventors' Rights Act of 1999, as found in 35 U.S.C. 297 and implemented by 37 CFR part 4, the United States Patent and Trademark Office (USPTO) is required to provide a forum for the publication of complaints concerning invention promoters and responses from the invention promoters to these complaints. An individual may submit a complaint concerning an invention promoter to the USPTO, which will forward the complaint to the invention promoter for response. The complaints and responses will be published and made available to the public on the USPTO Web site. The USPTO does not investigate these complaints or participate in any legal proceedings against invention promoters or promotion firms.
Complaints submitted to the USPTO must (1) identify the name and address of the complainant and the invention promoter or promotion firm; (2) explain the basis for the complaint; and (3) include the signature of the complainant. The identifying information is necessary so that the USPTO can both forward the complaint to the invention promoter or promotion firm as well as notify the complainant that the complaint has been forwarded. Complainants should understand that the complaints will be forwarded to the invention promoter for response and that the complaint and response will be made available to the public as required by the Inventors' Rights Act. If the USPTO does not receive a response from the invention promoter, the complaint will still be published without the response. The USPTO does not accept complaints under this program if the complainant requests confidentiality.
This information collection includes one form, Complaint Regarding Invention Promoter (PTO/SB/2048A), which is used by the public to submit a complaint under this program. This form is available for download from the USPTO Web site. Use of this form is not mandatory, and the complainant may submit their complaint without the form via any of the approved methods of collection as long as the complainant includes the necessary information and the submission is clearly marked as a complaint filed under the Inventors' Rights Act. There is no associated form for submitting responses to the complaints.
By mail, facsimile, or hand delivery to the USPTO.
The USPTO expects that the responses to the complaints will be prepared by attorneys or invention promoters. Using the average of the professional rate of $389 per hour for attorneys in private firms and the estimated rate of $100 per hour for invention promoters, the USPTO estimates that the average rate for preparing the responses to the complaints will be approximately $244.50 per hour. The time per response, estimated annual responses, and estimated annual hour burden associated with each instrument in this information collection is shown in the table below.
For this collection, it is estimated that 30 complaints will be received by mail. The USPTO estimates that the first-class postage cost for a mailed complaint will be $0.49. Promotion firms may choose to send responses to complaints using overnight mail service at an estimated cost of $23.95 per response. The USPTO estimates that it will receive 20 responses to complaints. Therefore, the total postage cost associated with this collection will be approximately $493.70. As there are no other annual (non-hourly) costs associated with this collection, the USPTO therefore estimates that the total annual (non-hourly) cost burden for this collection, in the form of postage costs, is $493.70 per year.
Comments are invited on:
(a) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information shall have practical utility;
(b) the accuracy of the agency's estimate of the burden (including hours and cost) of the proposed collection of information, including the validity of the methodology and assumptions used;
(c) ways to enhance the quality, utility, and clarity of the information to be collected; and
(d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology,
Comments submitted in response to this notice will be summarized or included in the request for OMB approval of this information collection; they will also become a matter of public record.
The Department of Commerce will submit to the Office of Management and Budget (OMB) for clearance the following proposal for collection of information under the provisions of the Paperwork Reduction Act (44 U.S.C. Chapter 35).
Form Number(s):
The Patents for Humanity Program is designed to incentivize the distribution of patented technologies or products to address humanitarian needs, and is open to any patent owners or patent licensees, including inventors who have not assigned their ownership rights to others, assignees, and exclusive or non-exclusive licensees. Applications are considered in five categories: Medicine, Nutrition, Sanitation, Household Energy, and Living Standards.
The USPTO has developed two application forms that applicants can use to apply for participation in the Patents for Humanity Program—one application covers the humanitarian uses of technologies or products and the other application covers humanitarian research. Applicants may optionally provide contact information for the public to reach them with any inquiries. Additionally, applicants may provide non-public contact information by email to the USPTO in order to be notified about their award status. Applications must be submitted electronically as described at
The applications are reviewed by external judges working independently. A selection committee composed of representatives from other federal agencies and laboratories will make recommendations for the awards based on the judges' reviews. Those applicants who are selected for an award will receive a certificate redeemable to accelerate select matters before the USPTO and public recognition of their efforts, including an awards ceremony at the USPTO. The certificates can be redeemed to accelerate one of the following matters: an
Once submitted, the request will be publicly available in electronic format through reginfo.gov. Follow the instructions to view Department of Commerce collections currently under review by OMB.
Further information can be obtained by:
•
•
Written comments and recommendations for the proposed information collection should be sent on or before September 16, 2015 to Nicholas A. Fraser, OMB Desk Officer, via email to
Office of the Secretary of Defense, DoD.
Notice to delete a System of Records.
The Office of the Secretary of Defense is deleting a system of records notice from its existing inventory of record systems subject to the Privacy Act of 1974, as amended. The system of records notice is DA&M 02, Director of Administration and Management (DA&M) Mentoring Program (March 8, 2013, 78 FR 15006).
Comments will be accepted on or before September 16, 2015. This proposed action will be effective on the day following the end of the comment period unless comments are received which result in a contrary determination.
You may submit comments, identified by docket number and title, by any of the following methods:
*
*
Mrs. Cindy Allard at (571) 372-0461.
The Office of the Secretary of Defense systems of records notices subject to the Privacy Act of 1974 (5 U.S.C. 552a), as amended, have been published in the
Director of Administration and Management (DA&M) Mentoring Program (March 8, 2013, 78 FR 15006)
The mentoring program is no longer an active program and the records have been destroyed, therefore, this notice can be deleted.
Take notice that the Commission received the following exempt wholesale generator filings:
Take notice that the Commission received the following electric rate filings:
The filings are accessible in the Commission's eLibrary system by clicking on the links or querying the docket number.
Any person desiring to intervene or protest in any of the above proceedings must file in accordance with Rules 211 and 214 of the Commission's Regulations (18 CFR 385.211 and 385.214) on or before 5:00 p.m. Eastern time on the specified comment date. Protests may be considered, but intervention is necessary to become a party to the proceeding.
eFiling is encouraged. More detailed information relating to filing requirements, interventions, protests, service, and qualifying facilities filings can be found at:
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will discuss the potential environmental effects of the Equitrans Expansion Project (EEP, or Project) involving construction and operation of facilities by Equitrans, L.P. (Equitrans) in Allegheny, Washington, and Green Counties, Pennsylvania and Wetzel County, West Virginia, in the Commission's environmental impact statement (EIS) currently under preparation for the planned Mountain Valley Pipeline (MVP) Project (FERC Docket No. PF15-3-000). The Project is designed to transport natural gas from the northern portion of Equitrans' system south to a future interconnection with MVP, as well as existing interconnects on the southern portion of Equitrans' system with Texas Eastern Transmission, LP and Dominion Transmission, Inc. Because of the interconnection with MVP, the Commission staff will evaluate the two projects jointly in the EIS. This EIS will be used by the Commission in its decision-making process to determine whether the MVP and EEP Projects are in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the EEP. You can make a difference by providing us with your specific comments or concerns about the Project. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EIS. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before September 14, 2015.
If you sent comments on the EEP to the Commission before the opening of this docket on April 9, 2015, you will need to re-file those comments in Docket No. PF15-22-000 to ensure they are considered as part of this proceeding. This scoping period is established to receive comments on the EEP, and comments previously filed with the FERC regarding the MVP Project should not be refiled under the EEP docket.
This notice is being sent to the Commission's current environmental mailing list for this Project. State and local government representatives should notify their constituents of this planned Project and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a representative of Equitrans may contact you about the acquisition of an easement to construct, operate, and maintain the planned facilities. The company would seek to negotiate a mutually acceptable agreement. However, if the Commission approves the Project, that approval conveys with it the right of eminent domain. Therefore, if easement negotiations fail to produce an agreement, the pipeline company could initiate condemnation proceedings where compensation would be determined in accordance with state law.
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” is available for viewing on the FERC Web site (
For your convenience, there are three methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-8258 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (PF15-22-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
According to Equitrans, the EEP is designed to allow shippers the flexibility of transporting up to 600,000 dekatherms per day of natural gas produced in the Appalachian Basin to potential markets in the Northeast, Mid-Atlantic, and Southeastern United States. The EEP would consist of the following facilities:
• A new 3.0-mile-long, 30-inch-diameter pipeline and a new 4.2-mile-long, 20-inch-diameter pipeline in Allegheny and Washington Counties Pennsylvania (H-316 Pipeline and H-318 Pipeline);
• a new Redhook Compressor Station, to replace the existing Pratt Compressor Station in Green County, Pennsylvania;
• an interconnect with the planned MVP Project and a tap on Equitrans' existing H-302 pipeline in Wetzel County, West Virginia (Webster Interconnection and Mobley Tap);
• a new extension of an existing 6-inch-diameter pipeline and an existing 12-inch-diameter pipeline extending for 0.2-mile in Green County, Pennsylvania (M-80 Pipeline and H-158 Pipeline);
• a new approximately 200-foot-long, 16-inch-diameter pipeline in Wetzel County, West Virginia (H-319 Pipeline);
• a new approximately 55-foot-long extension of an existing 12-inch pipeline in Green County, Pennsylvania (H-305 Pipeline);
• pig launchers and receivers;
• four meter and regulation stations.
The general location of the Project facilities is shown in appendix 1.
Construction of the planned facilities would disturb approximately 207 acres of land for the aboveground facilities and the pipelines. Following construction, Equitrans would maintain approximately 64 acres for permanent operation of the Project's facilities; the remaining acreage would be restored and revert to former uses. The actual acreage affected will be determined more precisely as Project design proceeds and likely will increase above these preliminary estimates.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. The NEPA also requires us
In the EIS we will discuss impacts that could occur as a result of the construction and operation of the planned project under these general headings:
• Geology and soils;
• water resources and wetlands;
• cultural resources;
• vegetation and wildlife;
• cultural resources;
• land use, recreation, and visual resources;
• air quality and noise;
• public safety; and
• cumulative impacts.
The EIS will present our independent analysis of the issues. We will evaluate possible alternatives to the planned Project or portions of the Project. For specific resources, we would make recommendations on how to avoid, minimize, or mitigate impacts, in addition to the measures proposed by Equitrans.
Although no formal application has been filed, we have already initiated our environmental review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the FERC receives an application. As part of our pre-filing review, we have begun to contact some federal and state agencies to discuss their involvement in the scoping process and the preparation of the EIS.
We will publish and distribute the draft EIS for public comment. After the comment period, we will consider all timely comments and revise the document, as necessary, before issuing a final EIS. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section of this notice.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this project to formally cooperate with us in the preparation of the EIS.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the
We have already identified several issues that we think deserve attention based on a preliminary review of the planned facilities and the environmental information provided by Equitrans. This preliminary list of issues may change based on your comments and our analysis:
• Steep slopes;
• erosion control;
• alternatives and their potential impacts on a range of resources; and
• cumulative impacts.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Indian Tribes; other interested parties; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for Project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the Project. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the planned Project.
Copies of the completed draft EIS will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the compact disc version or would like to remove your name from the mailing list, please return the attached Information Request (appendix 2).
Once Equitrans files its application with the Commission, you may want to become an “intervenor,” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Motions to intervene are more fully described at
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits, if scheduled, will be posted on the Commission's calendar located at
This is a supplemental notice in the above-referenced proceeding of Oildale Energy LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is August 31, 2015.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by
Take notice that on July 29, 2015, Columbia Gulf Transmission, LLC (Columbia Gulf), 5151 San Felipe, Suite 2500, Houston, Texas 77056, filed an application under section 7(c) of the Natural Gas Act and Part 157 of the Commission's regulations requesting authorization to construct, own and operate 51,800 horsepower at two greenfield compressor stations in Carter, Menifee and Montgomery Counties, Kentucky, to enable up to 621,000 Dekatherms per day (Rayne XPress Project) of firm transportation on its system, all as more fully described in the application.
The filing may also be viewed on the web at
Any questions regarding the proposed project should be directed to William A. Sala, Jr., Senior Counsel, Columbia Gulf Transmission, LLC, 5151 San Felipe, Suite 2500, Houston, Texas 77056; telephone: 713-386-3743.
On June 22, 2015 in Docket No. CP15-514-000, the Commission issued a Notice of Application (June 22 Notice) for Columbia Gulf's affiliate, Columbia Gas Transmission, LLC's (Columbia Gas) Leach XPress Project. The June 22 Notice stated that the Rayne Express Project may have some connection to Columbia Gas' Leach Xpress Project, and further, that “Until the details of the Rayne Xpress project are filed and more fully understood, the Commission cannot begin preparation of the Environmental Impact Statement (EIS) to comply with the NEPA of 1969.” Columbia Gulf's Rayne XPress application filing confirms the connection between the Leach XPress and Rayne XPress Projects and thus, we can begin our analysis.
Within 90 days after the date of this Notice of Application for the Rayne Xpress project, the Commission staff will issue a Notice of Schedule for Environmental Review that will indicate the anticipated date for the Commission's staff issuance of the final EIS analyzing both the Leach XPress and Rayne XPress proposals. The issuance of a Notice of Schedule for Environmental Review will also serve to notify federal and state agencies of the timing for the completion of all necessary reviews, and the subsequent need to complete all federal authorizations within 90 days of the date of issuance of the Commission staff's final EIS.
There are two ways to become involved in the Commission's review of this project. First, any person wishing to obtain legal status by becoming a party to the proceedings for this project should, on or before the comment date stated below, file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, a motion to intervene in accordance with the requirements of the Commission's Rules of Practice and Procedure (18 CFR 385.214 or 385.211) and the Regulations under the NGA (18 CFR 157.10). A person obtaining party status will be placed on the service list maintained by the Secretary of the Commission and will receive copies of all documents filed by the applicant and by all other parties. A party must submit 7 copies of filings made with the Commission and must mail a copy to the applicant and to every other party in the proceeding. Only parties to the proceeding can ask for court review of Commission orders in the proceeding.
However, a person does not have to intervene in order to have comments considered. The second way to participate is by filing with the Secretary of the Commission, as soon as possible, an original and two copies of comments in support of or in opposition to this project. The Commission will consider these comments in determining the appropriate action to be taken, but the filing of a comment alone will not serve to make the filer a party to the proceeding. The Commission's rules require that persons filing comments in opposition to the project provide copies of their protests only to the party or parties directly involved in the protest.
Persons who wish to comment only on the environmental review of this project should submit an original and two copies of their comments to the Secretary of the Commission. Environmental commenters will be placed on the Commission's environmental mailing list, will receive copies of the environmental documents, and will be notified of meetings associated with the Commission's environmental review process. Environmental commenters will not be required to serve copies of filed documents on all other parties. However, the non-party commenters will not receive copies of all documents filed by other parties or issued by the Commission (except for the mailing of environmental documents issued by the Commission) and will not have the right to seek court review of the Commission's final order.
The Commission strongly encourages electronic filings of comments, protests and interventions in lieu of paper using the “eFiling” link at
Take notice that on August 7, 2015, pursuant to Rule 204 of the Commission's Rules of Practices and Procedure, 18 CFR 385.204 (2014), Saddle Butte Rockies Midstream, LLC filed a petition requesting temporary waiver of the tariff filing and reporting requirements of sections 6 and 20 of the Interstate Commerce Act and parts 341 and 357 of the Commission's regulations, all as more fully explained in the petition.
Any person desiring to intervene or to protest this filing must file in
The Commission encourages electronic submission of protests and interventions in lieu of paper using the “eFiling” link at
This filing is accessible on-line at
This is a supplemental notice in the above-referenced proceeding of Silver State Solar Power South, LLC's application for market-based rate authority, with an accompanying rate tariff, noting that such application includes a request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability.
Any person desiring to intervene or to protest should file with the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426, in accordance with Rules 211 and 214 of the Commission's Rules of Practice and Procedure (18 CFR 385.211 and 385.214). Anyone filing a motion to intervene or protest must serve a copy of that document on the Applicant.
Notice is hereby given that the deadline for filing protests with regard to the applicant's request for blanket authorization, under 18 CFR part 34, of future issuances of securities and assumptions of liability, is August 31, 2015.
The Commission encourages electronic submission of protests and interventions in lieu of paper, using the FERC Online links at
Persons unable to file electronically should submit an original and 5 copies of the intervention or protest to the Federal Energy Regulatory Commission, 888 First Street NE., Washington, DC 20426.
The filings in the above-referenced proceeding are accessible in the Commission's eLibrary system by clicking on the appropriate link in the above list. They are also available for electronic review in the Commission's Public Reference Room in Washington, DC. There is an eSubscription link on the Web site that enables subscribers to receive email notification when a document is added to a subscribed docket(s). For assistance with any FERC Online service, please email
The staff of the Federal Energy Regulatory Commission (FERC or Commission) will prepare an environmental assessment (EA) that will discuss the environmental impacts of the Access South, Adair Southwest, and Lebanon Extension Projects (Projects) in Docket No. PF15-17-000. The projects involve construction, abandonment, and operation of facilities by Texas Eastern Transmission, LP (Texas Eastern) that would provide incremental pipeline transportation service from the Appalachia area natural gas supply basins to markets in the Midwest and Southeast. The Commission will use this EA in its decision-making process to determine whether the project is in the public convenience and necessity.
This notice announces the opening of the scoping process the Commission will use to gather input from the public and interested agencies on the Projects. You can make a difference by providing us with your specific comments or concerns about the Projects. Your comments should focus on the potential environmental effects, reasonable alternatives, and measures to avoid or lessen environmental impacts. Your input will help the Commission staff determine what issues they need to evaluate in the EA. To ensure that your comments are timely and properly recorded, please send your comments so that the Commission receives them in Washington, DC on or before September 10, 2015.
If you sent comments on the Projects to the Commission before the opening of this docket on March 13, 2015, you will need to file those comments in Docket No. PF15-17-000 to ensure they are considered as part of this proceeding.
This notice is being sent to the Commission's current environmental mailing list for this project. State and local government representatives should notify their constituents of this planned Projects and encourage them to comment on their areas of concern.
If you are a landowner receiving this notice, a pipeline company representative may contact you about the acquisition of an easement to
A fact sheet prepared by the FERC entitled “An Interstate Natural Gas Facility On My Land? What Do I Need To Know?” is available for viewing on the FERC Web site (
For your convenience, there are three methods you can use to submit your comments to the Commission. The Commission encourages electronic filing of comments and has expert staff available to assist you at (202) 502-8258 or
(1) You can file your comments electronically using the
(2) You can file your comments electronically by using the
(3) You can file a paper copy of your comments by mailing them to the following address. Be sure to reference the project docket number (PF15-17-000) with your submission: Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street NE., Room 1A, Washington, DC 20426.
The planned pipeline facilities for the Projects include 19.9 miles of 36-inch diameter pipeline loop
At the Five Points Compressor Station in Pickaway County, Ohio, Texas Eastern would install a new 10,000 horsepower (hp) electric compressor and would abandon in-place three 2,000 hp electric compressor units. A new 16,875 hp electric compressor would be added at the Tompkinsville Compressor Station in Monroe County, Kentucky.
Planned modifications at thirteen existing compressor station sites would include piping modifications to accommodate bi-directional flow capability along Texas Eastern's existing mainline. These modifications are proposed at the following compressor stations:
• Holbrook Compressor Station in Greene County, Pennsylvania;
• Lebanon Compressor Station in Warren County, Ohio;
• Five Points Compressor Station in Pickaway County, Ohio;
• Somerset Compressor Station in Perry County, Ohio;
• Berne Compressor Station in Monroe County, Ohio;
• Athens Compressor Station in Athens County, Ohio;
• Owingsville Compressor Station in Bath County, Kentucky;
• Danville Compressor Station in Lincoln County, Kentucky;
• Tompkinsville Compressor Station in Monroe County, Kentucky;
• Gladeville Compressor Station in Wilson County, Tennessee;
• Barton Compressor Station in Colbert County, Alabama;
• Egypt Compressor Station in Monroe County, Mississippi; and
• Kosciusko Compressor Station in Attala County, Mississippi.
In addition two pig
The general location of the Projects facilities is shown in appendix 1.
Construction of the planned facilities would disturb about 631.9 acres of land for the aboveground facilities and the pipeline, including access roads. Following construction, Texas Eastern would maintain about 70.7 acres for permanent operation of the Projects' facilities; the remaining acreage would be restored and revert to former uses. The planned loops would be mostly adjacent to Texas Eastern's existing pipeline rights-of-way and construction at the compressor stations would occur at existing facilities where no permanent expansion of the facilities would occur.
The National Environmental Policy Act (NEPA) requires the Commission to take into account the environmental impacts that could result from an action whenever it considers the issuance of a Certificate of Public Convenience and Necessity. NEPA also requires us
In the EA we will discuss impacts that could occur as a result of the construction and operation of the planned Projects under these general headings:
• Geology and soils;
• land use;
• water resources, fisheries, and wetlands;
• cultural resources;
• vegetation and wildlife;
• air quality and noise;
• endangered and threatened species;
• public safety; and
• cumulative impacts.
We will also evaluate possible alternatives to the planned Projects or portions of the Projects, and make
Although no formal application has been filed, we have already initiated our NEPA review under the Commission's pre-filing process. The purpose of the pre-filing process is to encourage early involvement of interested stakeholders and to identify and resolve issues before the FERC receives an application. As part of our pre-filing review, we have begun to contact some federal and state agencies to discuss their involvement in the scoping process and the preparation of the EA.
The EA will present our independent analysis of the issues. The EA will be available in the public record through eLibrary. Depending on the comments received during the scoping process, we may also publish and distribute the EA to the public for an allotted comment period. We will consider all comments on the EA before we make our recommendations to the Commission. To ensure we have the opportunity to consider and address your comments, please carefully follow the instructions in the Public Participation section, beginning on page 2.
With this notice, we are asking agencies with jurisdiction by law and/or special expertise with respect to the environmental issues related to this project to formally cooperate with us in the preparation of the EA.
In accordance with the Advisory Council on Historic Preservation's implementing regulations for section 106 of the National Historic Preservation Act, we are using this notice to initiate consultation with the applicable State Historic Preservation Office(s), and to solicit their views and those of other government agencies, interested Indian tribes, and the public on the Projects' potential effects on historic properties.
The environmental mailing list includes federal, state, and local government representatives and agencies; elected officials; environmental and public interest groups; Native American Tribes; and local libraries and newspapers. This list also includes all affected landowners (as defined in the Commission's regulations) who are potential right-of-way grantors, whose property may be used temporarily for project purposes, or who own homes within certain distances of aboveground facilities, and anyone who submits comments on the Projects. We will update the environmental mailing list as the analysis proceeds to ensure that we send the information related to this environmental review to all individuals, organizations, and government entities interested in and/or potentially affected by the planned Projects.
If we publish and distribute the EA, copies of the EA will be sent to the environmental mailing list for public review and comment. If you would prefer to receive a paper copy of the document instead of the CD version or would like to remove your name from the mailing list, please return the attached Information Request (appendix 2).
Once Texas Eastern files its application with the Commission, you may want to become an “intervenor” which is an official party to the Commission's proceeding. Intervenors play a more formal role in the process and are able to file briefs, appear at hearings, and be heard by the courts if they choose to appeal the Commission's final ruling. An intervenor formally participates in the proceeding by filing a request to intervene. Motions to intervene are more fully described at
Additional information about the project is available from the Commission's Office of External Affairs, at (866) 208-FERC, or on the FERC Web site (
In addition, the Commission offers a free service called eSubscription which allows you to keep track of all formal issuances and submittals in specific dockets. This can reduce the amount of time you spend researching proceedings by automatically providing you with notification of these filings, document summaries, and direct links to the documents. Go to
Finally, public meetings or site visits will be posted on the Commission's calendar located at
Environmental Protection Agency (EPA).
Notice.
Since 1988, the Environmental Protection Agency (EPA) has maintained a Federal Agency Hazardous Waste Compliance Docket (“Docket”) under Section 120(c) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). Section 120(c) requires EPA to establish a Docket that contains
This notice identifies the Federal facilities not previously listed on the Docket and reported to EPA since the last update of the Docket on December 31, 2014. In addition to the list of additions to the Docket, this notice includes a section with revisions of the previous Docket list. Thus, the revisions in this update include 21 additions and 90 deletions to the Docket since the previous update. At the time of publication of this notice, the new total number of Federal facilities listed on the Docket is 2,323.
This list is current as of July 13, 2015.
Electronic versions of the Docket and more information on its implementation can be obtained at
Section 120(c) of CERCLA, 42 United States Code (U.S.C.) 9620(c), as amended by the Superfund Amendments and Reauthorization Act of 1986 (SARA), requires EPA to establish the Federal Agency Hazardous Waste Compliance Docket. The Docket contains information on Federal facilities that manage hazardous waste and such information is submitted by Federal agencies to EPA under Sections 3005, 3010, and 3016 of the Resource Conservation and Recovery Act (RCRA), 42 U.S.C. 6925, 6930, and 6937. Additionally, the Docket contains information on Federal facilities with a reportable quantity of hazardous substances that has been released and such information is submitted by Federal agencies to EPA under Section 103 of CERCLA, 42 U.S.C. 9603. Specifically, RCRA Section 3005 establishes a permitting system for certain hazardous waste treatment, storage, and disposal (TSD) facilities; RCRA Section 3010 requires waste generators, transporters and TSD facilities to notify EPA of their hazardous waste activities; and RCRA Section 3016 requires Federal agencies to submit biennially to EPA an inventory of their Federal hazardous waste facilities. CERCLA Section 103(a) requires the owner or operator of a vessel or onshore or offshore facility to notify the National Response Center (NRC) of any spill or other release of a hazardous substance that equals or exceeds a reportable quantity (RQ), as defined by CERCLA Section 101. Additionally, CERCLA Section 103(c) requires facilities that have “stored, treated, or disposed of” hazardous wastes and where there is “known, suspected, or likely releases” of hazardous substances to report their activities to EPA.
CERCLA Section 120(d) requires EPA to take steps to assure that a Preliminary Assessment (PA) be completed for those sites identified in the Docket and that the evaluation and listing of sites with a PA be completed within a reasonable time frame. The PA is designed to provide information for EPA to consider when evaluating the site for potential response action or inclusion on the National Priorities List (NPL).
The Docket serves three major purposes: (1) To identify all Federal facilities that must be evaluated to determine whether they pose a threat to human health and the environment sufficient to warrant inclusion on the National Priorities List (NPL); (2) to compile and maintain the information submitted to EPA on such facilities under the provisions listed in Section 120(c) of CERCLA; and (3) to provide a mechanism to make the information available to the public.
The initial list of Federal facilities to be included on the Docket was published in the
This notice provides some background information on the Docket. Additional information on the Docket requirements and implementation are found in the Docket Reference Manual, Federal Agency Hazardous Waste Compliance Docket found at
In prior updates, information was also provided regarding No Further Remedial Action Planned (NFRAP) status changes. However, information on NFRAP and NPL status is no longer being provided separately in the Docket update as it is now available at:
Contact the following Docket Coordinators for information on Regional Docket repositories:
Martha Bosworth (HBS), US EPA Region 1, 5 Post Office Square, Suite 100, Mail Code: OSRR07-2, Boston MA 02109-3912, (617) 918-1407.
Helen Shannon (ERRD), US EPA Region 2, 290 Broadway, New York, NY 10007-1866, (212) 637- 4260.
Joseph Vitello (3HS12), US EPA Region 3, 1650 Arch Street, Philadelphia, PA 19107, (215) 814-3354.
Dawn Taylor (4SF-SRSEB), US EPA Region 4, 61 Forsyth St., SW., Atlanta, GA 30303, (404) 562-8575.
Michael Chrystof (SR-6J), US EPA Region 5, 77 W. Jackson Blvd., Chicago, IL 60604, (312) 353-3705.
Philip Ofosu (6SF-RA), US EPA Region 6, 1445 Ross Avenue, Dallas, TX 75202-2733, (214) 665-3178.
Paul Roemerman (SUPRERSP), US EPA Region 7, 11201 Renner Blvd., Lenexa, KS 66219, (913) 551-7694.
Ryan Dunham (EPR-F), US EPA Region 8, 1595 Wynkoop Street, Denver, CO 80202, (303) 312-6627.
Leslie Ramirez (SFD-6-1), US EPA Region 9, 75 Hawthorne Street, San Francisco, CA 94105, (415) 972-3978.
Monica Lindeman (ECL, ABU), US EPA Region 10, 1200 Sixth Avenue, Suite 900, ECL-112, Seattle, WA 98101, (206) 553-5113.
This section includes a discussion of the additions and deletions to the list of Docket facilities since the previous Docket update.
In this notice, 21 Federal facilities are being added to the Docket, primarily because of new information obtained by EPA (for example, recent reporting of a facility pursuant to RCRA Sections 3005, 3010, or 3016 or CERCLA Section 103). CERCLA Section 120, as amended by the Defense Authorization Act of 1997, specifies that EPA take steps to assure that a Preliminary Assessment (PA) be completed within a reasonable time frame for those Federal facilities that are included on the Docket. Among other things, the PA is designed to provide information for EPA to consider when evaluating the site for potential response action or listing on the NPL.
In this notice, 90 Federal facilities are being deleted from the Docket. There are no statutory or regulatory provisions that address deletion of a facility from the Docket. However, if a facility is incorrectly included on the Docket, it may be deleted from the Docket. The criteria EPA uses in deleting sites from the Docket include: A facility for which there was an incorrect report submitted for hazardous waste activity under RCRA (
Changes necessary to correct the previous Docket are identified by both EPA and Federal agencies. The corrections section may include changes in addresses or spelling, and corrections of the recorded name and ownership of a Federal facility. In addition, changes in the names of Federal facilities may be made to establish consistency in the Docket or between the Superfund Enterprise Management System (SEMS) and the Docket. For the Federal facility for which a correction is entered, the original entry is as it appeared in previous Docket updates. The corrected update is shown directly below, for easy comparison. This notice includes 68 corrections.
In compiling the newly reported Federal facilities for the update being published in this notice, EPA extracted the names, addresses, and identification numbers of facilities from four EPA databases—the Emergency Response Notification System (ERNS), the Biennial Inventory of Federal Agency Hazardous Waste Activities, the Resource Conservation and Recovery Act Information System (RCRAInfo), and CERCLIS—that contain information about Federal facilities submitted under the four provisions listed in CERCLA Section 120(c).
EPA assures the quality of the information on the Docket by conducting extensive evaluation of the current Docket list with the information obtained from the databases identified above to determine which Federal facilities were, in fact, newly reported and qualified for inclusion on the update. EPA is also striving to correct errors for Federal facilities that were previously reported. For example, state-owned or privately-owned facilities that are not operated by the Federal government may have been included. Such problems are sometimes caused by procedures historically used to report and track Federal facilities data. Representatives of Federal agencies are asked to write to the EPA HQ Docket Coordinator at the address provided in the
Certain categories of facilities may not be included on the Docket, such as: (1) Federal facilities formerly owned by a Federal agency that at the time of consideration was not Federally-owned or operated; (2) Federal facilities that are small quantity generators (SQGs) that have never generated more than 1,000 kg of hazardous waste in any month; (3) Federal facilities that are solely hazardous waste transportation facilities, as reported under RCRA Section 3010; and (4) Federal facilities that have mixed mine or mill site ownership.
An EPA policy issued in June 2003 provided guidance for a site-by-site evaluation as to whether “mixed ownership” mine or mill sites, typically created as a result of activities conducted pursuant to the General Mining Law of 1872 and never reported under Section 103(a), should be included on the Docket. For purposes of that policy, mixed ownership mine or mill sites are those located partially on private land and partially on public land. This policy is found at
EPA typically tracks the NPL status of Federal facilities listed on the Docket. An updated list of the NPL status of all Docket facilities, as well as their NFRAP status, is available at
The updated information is provided in three tables. The first table is a list of new Federal facilities that are being added to the Docket, the second table is a list of Federal facilities that are being deleted from the Docket, and the third table is for corrections.
The Federal facilities listed in each table are organized by the date reported. Under each heading is listed the name and address of the facility, the Federal agency responsible for the facility, the statutory provision(s) under which the facility was reported to EPA, and a code.
The statutory provisions under which a Federal facility is reported are listed in a column titled “Reporting Mechanism.” Applicable mechanisms are listed for each Federal facility: for example, Sections 3005, 3010, 3016, 103(c), or Other. “Other” has been added as a reporting mechanism to indicate those Federal facilities that otherwise have been identified to have releases or threat of releases of hazardous substances. The National Contingency Plan 40 CFR 300.405 addresses discovery or notification, outlines what constitutes discovery of a hazardous substance release, and states that a release may be discovered in several ways, including: (1) A report submitted in accordance with Section 103(a) of CERCLA,
The complete list of Federal facilities that now make up the Docket and the NPL and NFRAP status are available to interested parties and can be obtained at
(1) Small-Quantity Generator.Show citation box.
(2) Never Federally Owned and/or Operated.
(3) Formerly Federally Owned and/or Operated but not at time of listing.
(4) No Hazardous Waste Generated.
(5) (This code is no longer used.)
(6) Redundant Listing/Site on Facility.
(7) Combining Sites Into One Facility/Entries Combined.
(8) Does Not Fit Facility Definition.
(15) Small-Quantity Generator with either a RCRA 3016 or CERCLA 103 Reporting Mechanism.
(16) One Entry Being Split Into Two (or more)/Federal Agency Responsibility Being Split.
(17) New Information Obtained Showing That Facility Should Be Included.
(18) Facility Was a Site on a Facility That Was Disbanded; Now a Separate Facility.
(19) Sites Were Combined Into One Facility.
(19A) New Currently Federally Owned and/or Operated Facility Site.
(20) Reporting Provisions Change.
(20A) Typo Correction/Name Change/Address Change.
(21) Changing Responsible Federal Agency. (If applicable, new responsible Federal agency submits proof of previously performed PA, which is subject to approval by EPA.)
(22) Changing Responsible Federal Agency and Facility Name. (If applicable, new responsible Federal Agency submits proof of previously performed PA, which is subject to approval by EPA.)
(24) Reporting Mechanism Determined To Be Not Applicable After Review of Regional Files.
This notice corrects a notice (FR Doc. 2015-19667) published on pages 48103 and 48104 of the issue for Tuesday, August 11, 2015.
Under the Federal Reserve Bank of Minneapolis heading, the entry for
A. Federal Reserve Bank of Minneapolis (Jacquelyn K. Brunmeier, Assistant Vice President) 90 Hennepin Avenue, Minneapolis, Minnesota 55480-0291:
1.
Comments on this application must be received by August 25, 2015.
The notificants listed below have applied under the Change in Bank Control Act (12 U.S.C. 1817(j)) and § 225.41 of the Board's Regulation Y (12 CFR 225.41) to acquire shares of a bank or bank holding company. The factors that are considered in acting on the notices are set forth in paragraph 7 of the Act (12 U.S.C. 1817(j)(7)).
The notices are available for immediate inspection at the Federal Reserve Bank indicated. The notices also will be available for inspection at the offices of the Board of Governors. Interested persons may express their views in writing to the Reserve Bank indicated for that notice or to the offices of the Board of Governors. Comments must be received not later than August 31, 2015.
A. Federal Reserve Bank of Cleveland (Nadine Wallman, Vice President) 1455 East Sixth Street, Cleveland, Ohio 44101-2566:
1.
B. Federal Reserve Bank of Kansas City (Dennis Denney, Assistant Vice President) 1 Memorial Drive, Kansas City, Missouri 64198-0001:
1.
Board of Governors of the Federal Reserve System, August 11, 2015.
10:00 a.m. (Eastern Time) August 24, 2015 (Telephonic).
10th Floor Board Meeting Room, 77 K Street NE., Washington, DC 20002.
Open to the public.
Kimberly Weaver, Director, Office of External Affairs, (202) 942-1640.
The Centers for Disease Control and Prevention (CDC) has submitted the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The notice for the proposed information collection is published to obtain comments from the public and affected agencies.
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address any of the following: (a) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) Evaluate the accuracy of the agencies estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used; (c) Enhance the quality, utility, and clarity of the information to be collected; (d) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
To request additional information on the proposed project or to obtain a copy of the information collection plan and instruments, call (404) 639-7570 or send an email to
The Green Housing Pilot Study (New Orleans)—New—National Center for Environmental Health (NCEH), Centers for Disease Control and Prevention (CDC).
The Centers for Disease Control and Prevention (CDC) seeks a new three-year OMB approval for the Green Housing Pilot Study (New Orleans) or “Pilot” of additional components to be tested at the New Orleans site for the main Green Housing Study (OMB No. 0920-0906, Expiration 10/31/2017). The goal of the Pilot is to apply novel approaches to study exposures to various indoor pollutants in children ranging in age from newborn-12 years. The information collected will help scientists better understand time-activity patterns of children that affect exposures to chemical and biological agents in their residential environments, and improve estimates of exposure for children.
Results from this Pilot will inform future Green Housing Study sites and will potentially reduce participant time burden by collecting some questionnaires electronically. This study directly supports the Healthy People 2020 Healthy Homes' health protection goal of the CDC. This investigation is consistent with CDC's Health Protection Research Agenda, which calls for research to identify the major environmental causes of disease and disability and related risk factors.
In 2011, CDC funded the first two study sites for the Green Housing Study, Boston and Cincinnati. In these two cities, renovations sponsored by the Department of Housing and Urban Development (HUD) had already been scheduled. By selecting sites in which renovations were already scheduled to occur, CDC has leveraged the opportunity to collect survey and biomarker data from residents, and to collect environmental measurements in homes to evaluate associations between green housing and health.
Several objectives will be evaluated during the Pilot:
(1) Identify and characterize factors affecting children's exposures to chemical ingredients from consumer products found in their everyday environment to support the data and modeling needs of the exposure components of EPA's national research programs;
(2) Evaluate the Pilot data metrics for incorporation in and enhancement of CDC's ability to understand the relationship between environmental exposures and asthma;
(3) Compare multimedia measurements and survey data between pre- and post-renovation time points in green and non-green low-income housing to assess exposure related changes in the residence and participants due to renovation activities.
Like the other Green Housing Study sites, data will be collected from 64 households. Study participants are children with asthma and their mothers/primary caregivers living in HUD-subsidized housing that has either received a green renovation or is a non-green home. This Pilot will also enroll younger children with a focus on newborns-3 years. Having a larger age range of children in the study will improve the estimates of how environmental exposures inside and outside of their homes can occur during different life stages of childhood, a critical period of life when the immune system and other organ systems are still developing.
The Pilot will be implemented by incorporating it into the Green Housing study schedule. Data collection methods include: (1) Time-activity pattern questionnaire of children, administered to mothers/primary caregivers; (2) collection of air, soil, dust samples from the respondent's home; and (3) collection of blood, urine, toenails clippings, and feces from the respondent's eligible children.
We hypothesize that a better estimation of exposure pathways will improve exposure modeling for the current and the future Green Housing Study sites, and influence future research in environmental health. Although children are considered participants, the respondents to all questionnaires are the mothers/primary caregivers; no children will fill out questionnaires.
The respondents are 64 mothers/primary caregivers of enrolled children; or approximately 21 respondents each year. There is no cost to the respondents other than their time to participate in the study.
The total estimated annual burden hours for the Pilot is 56 hours.
Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS)
Notice of New System of Records (SOR).
In accordance with the requirements of the Privacy Act of 1974, we are proposing to establish a new SOR titled, “CMS Risk Adjustment Suite of Systems (RASS),” System No. 09-70-0508. Payments to Medicare Advantage (MA) organizations, Part D sponsors, and Program of All Inclusive Care for the Elderly (PACE) organizations (collectively referred to as “MA organizations and other entities”) are adjusted based on the health status of enrolled Medicare beneficiaries (“enrollees”). RASS is established to receive, process, and store the data used
Each MA organization and other entity must submit data to CMS in accordance with CMS regulations and instructions. “Risk adjustment data” refers to data submitted in two separate formats: comprehensive data equivalent to Medicare fee-for-service data (often referred to as encounter data); and data in abbreviated formats (often referred to as RAPS data). The MA risk adjustment data addressed by this SOR includes RAPS data submitted by a MA organization in an abbreviated format, as referenced at § 422.310(d)(1), and similar abbreviated risk adjustment data submitted by other MA organizations and other entities. Encounter data has a separate SOR (System No. 09-70-0506).
Effective 30 days after publication. Written comments should be submitted on or before the effective date. HHS/CMS/CM may publish an amended system of records notice (SORN) in light of any comments received.
The public should address comments to: CMS Privacy Officer, Division of Security, Privacy Policy & Governance, Information Security & Privacy Group, Office of Enterprise Information, CMS, 7500 Security Boulevard, Baltimore, MD 21244-1870, Mailstop: N1-24-08, Office: (410) 786-5357, email:
Risk Adjustment Mailbox Coordinator, Division of Encounter Data and Risk Adjustment Operations, Medicare Plan Payment Group, Center for Medicare, CMS, Mail Stop C1-13-07, 7500 Security Boulevard, Baltimore, Maryland 21244-1850. The email is
The new RASS system of records is being established to cover data used to create risk adjustment scores needed to risk-adjust payments to Medicare and Medicaid provider entities, based on beneficiary demographics and health status. Risk-adjusted payments will implement reformatory provisions of the Social Security Act at sections 1853(a), 1860D-15(c), and 1894(d)(2) (42 U.S.C. 1395w-23, 1395w-115, and 1395eee), intended to collect and accurately calculate scores based on a beneficiary's demographics and health status. RASS will cover data housed in two existing information systems: The Risk Adjustment Processing System (RAPS), and the Risk Adjustment System (RAS). RAS will contain data extracted from RAPS and from two other IT systems (CME and NMUD), as more fully explained below:
○
○
○ RAS will transmit the Risk Adjustment Factor (RAF) file created in RAS to CMS' payment processing system for purposes of calculating and adjusting payments to payee entities, as follows:
CMS pays MA organizations on a monthly prospective amount for each beneficiary enrolled (enrollee) in a Part C plan.
CMS pays Part D sponsors a monthly prospective amount that reflects the plan sponsor's estimate of the revenue needed to cover a plan's costs for the risk portion of basic prescription drug coverage. The direct subsidy is adjusted based on the beneficiary's risk score, which reflects expected prescription drug expenditures for the coverage year (relative to a national average of 1.0), based on demographic and health status information for that person.
CMS pays PACE organizations a monthly capitation amount based on the Part A and Part B payment rates established for purposes of payment to Medicare Advantage organizations pursuant to 1894(d)(2). CMS will ensure that payments take into account the comparative frailty of PACE enrollees relative to the general Medicare population.
In addition to providing the file used to calculate risk adjustment payments, the RASS also provides reports for CMS based on the analysis of RAF files and other criteria; these reports include MA plan file submission transactions (acceptance rates, rejection rates, error rates, etc.) on a daily, weekly, monthly, and quarterly basis.
The Privacy Act governs the collection, maintenance, use, and dissemination of certain information about individuals by agencies of the Federal Government.
A “SOR” is a group of any records under the control of a Federal agency from which information about individuals is retrieved by name or other personal identifier. The Privacy Act requires each agency to publish in the
09-70-0508
CMS Risk Adjustment Suite of Systems (RASS), HHS/CMS/CM.
Unclassified.
RASS (RAS/RAPS) Location: CMS Data Center, 7500 Security Boulevard, North Building, First Floor, Baltimore, Maryland 21244-1850.
Information collected and maintained in this system pertains to: (1) Medicare beneficiaries enrolled in a Part C MA plan, MA-PD plan, PDP or PACE organization (“enrollees”) and (2) the health care provider(s), supplier(s), physician(s), or other practitioner(s) (“Providers”) who provide health care items and services to these enrollees.
The MA plans, MA-PDs, PDPs and PACE organizations (“MA organizations and other entities”) receive the data from the providers which is then submitted to RAPS via FERAS. The data received from the MA organizations and other entities are primarily diagnosis data extracted from claims information. Additional FFS and utilization data regarding those submissions are received from the CME and NCH data systems to complete the enrollee data requirements.
Records will consist of the risk score for each enrollee and the data used to calculate the score, contained in Risk Adjustment Factor (RAF) files created in CMS' Risk Adjustment System (RAS), using data extracted from three other CMS IT systems:
•
○ Health Insurance Claim Number (HICN)
○ Provider Type
○ Service From Date
○ Service Through Date
○ Plan Number (MAO contract number)
○ Diagnosis Code
○ Diagnosis Delete Date
○ RAS Diagnosis Indicator
○ NCH Category Equitable BIC
○ Accrete Data
○ Delete Plan Number
○ Submitter ID
○ Daily File Code, and
○ Delete File Code
•
○ Beneficiary Link Key Partition number
○ Beneficiary Link Identifier
○ Health Insurance Claim Number (HICN)
○ Beneficiary Social Security Number
○ Beneficiary Birth Date
○ Beneficiary Death Date
○ Beneficiary Sex Code
○ Beneficiary Race Code
○ Beneficiary First Name
○ Beneficiary Middle Name
○ Beneficiary Last Name
•
○ Health Insurance Claim Number (HICN)
○ NCH Category Equitable BIC
○ Diagnosis code
○ Service Through Date
○ Service From Date
○ Beneficiary Link Identifier
○ Provider Number
This system was established pursuant to sections 1853(a), 1860D-15(c), and 1894(d)(2)of the Social Security Act (42 U.S.C. 1395w-23, 1395w-115, 1395eee).
Records will be used within the agency to develop risk adjustment models and to calculate the risk score for each Medicare beneficiary enrolled in the Medicare health plan. The risk score will be reported to the system that CMS uses to process payments, and ultimately will be used to adjust payments to MA organizations, Part D sponsors, and PACE organizations, based on beneficiary health status. (Note that payment records are not covered under this system of records.)
Information retrieved from this SOR will be used for the following purposes:
Records may be disclosed to parties outside HHS, without the individual record subject's prior, written consent, for the following purposes:
1. To determine the risk adjustment factors used to adjust payments, as required under §§ 422.304(a) and (c), 423.329, and 460.180, to update risk adjustment models, to calculate Medicare DSH percentages, to conduct quality review and improvement activities, for Medicare coverage purposes, to conduct evaluations and other analysis to support the Medicare program (including demonstrations) and to support public health initiatives, for activities conducted to support program integrity, and for purposes authorized by applicable law.
2. To support CMS contractors, consultants, or grantees that have been contracted by the Agency when necessary to assist in accomplishment of a CMS function relating to the purposes for this system or a purpose listed in paragraph 1.
3. To support an individual or organization for research to support the Medicare program and public health initiatives, and otherwise related to health care, such as evaluation or epidemiological projects related to the prevention of disease or disability, the restoration or maintenance of health, or for understanding and improving payment projects.
4. To provide information to the U.S. Department of Justice (DOJ), a court, or an adjudicatory body when (a) the Agency or any component thereof, or (b) any employee of the Agency in his or her official capacity, or (c) any employee of the Agency in his or her individual capacity where the DOJ has agreed to represent the employee, or (d) the United State Government, is a party to litigation or has an interest in such litigation, and by careful review, CMS determines that the records are both relevant and necessary to the litigation and that the use of such records by the DOJ, court, or adjudicatory body is compatible with the purpose for which the agency collected the records.
5. To assist a CMS contractor (including, but not limited to Medicare Administrative Contractors, fiscal intermediaries, and carriers) that assists in the administration of a CMS-administered health benefits program, or to a grantee of a CMS-administered grant program, when disclosure is deemed reasonably necessary by CMS to prevent, deter, discover, detect, investigate, examine, prosecute, sue with respect to, defend against, correct, remedy, or otherwise combat fraud, waste or abuse in such program.
6. To assist another Federal agency or an instrumentality of any governmental jurisdiction within or under the control of the United States (including any state or local governmental agency), that
7. To assist Medicare Advantage organizations, Part D Sponsors and PACE organizations with improving the quality of required risk adjustment data obtained from the provider that furnished the item or service. CMS will be analyzing the data received and advising MA organizations, Part D Sponsors and PACE organizations of trends and data analysis results to help improve the accuracy and completeness of data received from the provider.
8. To assist appropriate Federal agencies and CMS contractors and consultants that have a need to know the information for the purpose of assisting CMS' efforts to respond to a suspected or confirmed breach of the security or confidentiality of information maintained in this system of records, provided that the information disclosed is relevant and necessary for that assistance.
CMS may disclose information from this system of records, without the individual record subject's consent, for any of the following purposes referenced directly in the Privacy Act: 5 U.S.C. 552a(b)(1), (3)-(8), and (12). CMS must also disclose information from this system of records, without the individual record subject's consent, for any of the following purposes referenced directly in the Privacy Act: 5 U.S.C. 552a(b)(2), and (b)(9)-(11).
This system contains Protected Health Information (PHI) as defined by HHS regulation “Standards for Privacy of Individually Identifiable Health Information” (45 CFR parts 160 and 164, 65 FR 82462 (12-28-00), subparts A and E). Disclosures of PHI authorized by these routine uses may only be made if, and as, permitted or required by the “Standards for Privacy of Individually Identifiable Health Information.”
In addition, our policy will be to prohibit release even of data that is not directly identifiable, except if required by law, if we determine there is a possibility that an individual can be identified through implicit deduction based on small cell sizes (instances where the patient population is so small that individuals could, because of the small size, use this information to deduce the identity of the beneficiary).
Information collected or obtained under § 1860D-15 (
Archived records will be stored on magnetic tapes. Data that is currently in use is stored in the RAPS database.
Records will be retrieved by National Provider Identifier (NPI), beneficiary provider name, or beneficiary Health Insurance Claim Number.
Personnel having access to the system have been trained in the Privacy Act and information security requirements. Employees who maintain records in this system are instructed not to release data until the intended recipient agrees to implement appropriate management, operational, and technical safeguards sufficient to protect the confidentiality, integrity and availability of the information and information systems; and to prevent unauthorized access. Access to records in the RASS will be limited to CMS personnel and contractors through password security, encryption, firewalls, and secured operating system(s).
Records (
Director, Division of Encounter Data and Risk Adjustment Operations, Medicare Plan Payment Group, Center for Medicare, CMS, 7500 Security Boulevard, Baltimore, Maryland 21244-1850.
Individuals (
Individuals seeking access to records about them in this system should follow the same instructions indicated under “Notification Procedure” and reasonably specify the record content being sought. (These procedures are in accordance with Department regulation 45 CFR 5b.5(a)(2)).
Individuals seeking to contest the content of information about them in this system should follow the same instructions indicated under “Notification Procedure.” The request should: reasonably identify the record and specify the information being contested; state the corrective action sought; and provide the reasons for the correction, with supporting justification. (These procedures are in accordance with Department regulation 45 CFR 5b.7.)
RASS processes data extracted from RAPS and RAS IT systems to calculate the risk scores used to adjust payments to Medicare Advantage organizations, Part D plan sponsors and PACE plans. RAS receives the most current data for each Medicare Part C and Part D beneficiary from the following sources: RAPS, Common Medicare Environment (CME) also known as Medicare Beneficiary Database (MBD/CME), and National Medicare Utilization Database (NMUD). RAPS receives risk adjustment data from MA organizations and other entities defined above.
None.
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a draft guidance for industry entitled “Botanical Drug Development.” This guidance describes FDA's current thinking on appropriate development plans for botanical drugs to be submitted in new drug applications (NDAs) and specific recommendations on submitting investigational new drug applications (INDs) in support of future NDA submissions for botanical drugs. In addition, this guidance provides general information on the over-the-counter (OTC) drug monograph system for botanical drugs. Although this guidance does not intend to provide recommendations specific to botanical drugs to be marketed under biologics license applications (BLAs), many scientific principles described in this guidance may also apply to these products. This draft guidance revises the guidance for industry entitled “Botanical Drug Products” issued in June 2004.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by October 16, 2015.
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Submit electronic comments on the draft guidance to
Sau L. Lee, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 4144, Silver Spring, MD 20993-0002, 301-796-2905,
FDA is announcing the availability of a draft guidance for industry entitled “Botanical Drug Development.” This guidance describes the Center for Drug Evaluation and Research's current thinking on appropriate development plans for botanical drugs to be submitted in NDAs and specific recommendations on submitting INDs in support of future NDA submissions for botanical drugs. In addition, this guidance provides general information on the OTC drug monograph system for botanical drugs. Although this guidance does not intend to provide recommendations specific to botanical drugs to be marketed under BLAs, many scientific principles described in this guidance may also apply to these products.
This guidance specifically discusses several areas in which, due to the unique nature of botanical drugs, the Agency finds it appropriate to apply regulatory policies that differ from those applied to nonbotanical drugs, such as synthetic, semi-synthetic, or otherwise highly purified or chemically modified drugs, including antibiotics derived from microorganisms. Because this guidance focuses on considerations unique to botanical drugs, policies and recommendations applicable to both botanical and nonbotanical drugs are generally not covered in this document.
This guidance revises the final guidance for industry entitled “Botanical Drug Products” issued in June 2004. The general approach to botanical drug development has remained unchanged since that time; however, based on improved understanding of botanical drugs and experience acquired in the reviews of NDAs and INDs for these drugs, specific recommendations have been modified and new sections have been added to better address late-phase development and NDA submission for botanical drugs.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the Agency's current thinking on botanical drug development. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Interested persons may submit either electronic comments regarding this document to
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The guidance explains the circumstances under which FDA regulations require approval of an NDA for marketing a botanical drug product and when such a product may be marketed under an OTC drug monograph. The regulations governing the preparation and submission of an NDA are in part 314 (21 CFR part 314), and the guidance does not contain any recommendations that exceed the requirements of these regulations. FDA has estimated the information collection requirements resulting from the preparation and submission of an NDA, and OMB has approved the burden under OMB control number 0910-0001. FDA anticipates that any NDAs submitted for botanical drug products would be included under the burden estimates approved by OMB for part 314.
The regulations on the procedures for classifying OTC drugs as generally recognized as safe and effective and not misbranded, and for establishing OTC drug monographs, are set forth in § 330.10 (21 CFR 330.10). FDA believes that any botanical drug products that may be eligible for inclusion in an OTC drug monograph under current § 330.10 have already been or presently are being considered for such inclusion.
The guidance also provides scientific and regulatory guidance to sponsors on conducting clinical investigations of botanical drugs. The regulations governing the preparation and submission of INDs are in part 312 (21 CFR part 312). The guidance does not contain any recommendations that exceed the requirements in those regulations. FDA has estimated the information collection requirements resulting from the preparation and submission of an IND under part 312, and OMB has approved the reporting and recordkeeping burden under OMB control number 0910-0014.
Persons with access to the Internet may obtain the document at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of grant funds for the support of Natural History Database Development. The National Organization for Rare Disorders (NORD) is developing an Internet-based data collection tool with promise to further the accumulation of natural history data for many rare diseases. The goal of this grant is to enable NORD to further develop, refine, and disseminate the database tool.
Important dates are as follows:
1. The application due date is September 4, 2015.
2. The anticipated start date is September 2015.
3. The opening date is July 2015.
4. The expiration date is September 5, 2015.
Submit electronic applications to:
James Kaiser, Office of Translational Sciences, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Silver Spring, MD 20993, 301-796-1237,
Vieda Hubbard, Office of Acquisition and Grants Services, Food and Drug Administration, 5630 Fishers Lane, Rockville, MD 20857, 240-402-7588,
For more information on this funding opportunity announcement (FOA) and to obtain detailed requirements, please refer to the full FOA located at
There are an estimated 7,000 rare diseases, in total affecting approximately 30 million Americans. Most of these are serious conditions with no approved therapies. Rare diseases constitute an enormous unmet medical need.
Drug development for rare diseases, as well as for common diseases, relies on an indepth knowledge of the diseases' natural histories. Natural history is the course of the disease in the absence of a clinical intervention (that is, treatment under clinical care or study). Natural history knowledge makes possible the design of successful and efficient drug development programs. This knowledge has wide-ranging applications at every stage of drug development, for example, insight into the mechanism of disease, which can inform proof-of-concept studies; development of biomarkers that can expedite clinical studies at every stage of drug development; recognition and understanding of phenotypes of disease that may respond more (or less) to a therapy; and knowledge of the aspects of disease that matter to patients, with an impact on developing drugs that have a meaningful impact on how a patient feels, functions, or survives. The lack of natural history knowledge can result in the failure of drug programs, even for drugs with great promise. Unfortunately, the natural history of rare diseases is often poorly understood.
Impediments to the understanding of the natural history of a rare disease include the small numbers of patients and the sparse dispersal of clinical experience even among the chief clinical referral centers. The rare disease community is largely composed of small, diverse groups including patient and patient-family support, nonprofit disease groups (including umbrella groups), academic researchers, and small- to medium-sized biotechnology and pharmaceutical companies. For most rare diseases there has been no mechanism to systematically collect rare disease knowledge. In addition, it has become increasingly clear that it is vitally important to collect more knowledge from living patients over time, not simply to collect currently available information. This “longitudinal” information about individual patients is invaluable to the design of a drug development program. The rare disease community is in need of a means of collecting and analyzing this knowledge: A natural history database tool.
The development of natural history databases will directly further FDA's public health mission. We anticipate that the successful implementation of a natural history database will have profound and far-reaching effects on development of therapies for rare diseases. As a basis for solid natural history knowledge of a disease it may help to make a clinical development program for a candidate therapy appear feasible, and thus a more attractive area to pharmaceutical companies for devoting a portion of their drug discovery resources. This too will lead to greater numbers of therapies for rare diseases.
Only the following organization is eligible to apply: The National Organization for Rare Disorders. NORD is uniquely qualified to apply for this grant as the only applicant. Natural history studies is an area of unmet need and there are very few efforts towards building these studies. Those efforts that exist are very limited to specific diseases (
FDA/Center for Drug Evaluation and Research intends to fund up to $250,000, for fiscal year 2015 in support of this grant program. It is anticipated that one award will be made, not to
The maximum project period is 1 year.
Only electronic applications will be accepted. To submit an electronic application in response to this FOA, applicants should first review the full announcement located at
• Step 1: Obtain a Dun and Bradstreet (DUNS) Number
• Step 2: Register With System for Award Management (SAM)
• Step 3: Obtain Username & Password
• Step 4: Authorized Organization Representative (AOR) Authorization
• Step 5: Track AOR Status
• Step 6: Register With Electronic Research Administration (eRA) Commons
Steps 1 through 5, in detail, can be found at
Food and Drug Administration, HHS.
Notice of public workshop; request for comments.
The Food and Drug Administration (FDA), in collaboration with the University of Maryland's Center of Excellence in Regulatory Science and Innovation (M-CERSI) is announcing a public workshop entitled “Scientific Inquiry Into How Mobile Health and Social Data Sources May Inform Medical Product Safety and Efficacy.” The purpose of the public workshop is to discuss important scientific questions about using two of the most ubiquitous and fastest growing data sources, mobile health data and social computing data, focusing especially on the implications for product safety.
The public workshop will be held on September 11, 2015, from 12:30 p.m. to 5:30 p.m.
The public workshop will be held at the Adele H. Stamp Student Union, University of Maryland, 1021A Adele H. Stamp Student Union, College Park, MD. For additional travel and hotel information, please refer to:
Submit electronic comments to
Mobile health and social computing data sources create unique and hitherto unavailable opportunities, but there are important questions that need to be answered. This workshop will bring together thought leaders from industry, academia, and the regulatory communities to reflect on the opportunities and challenges that these new data sources create.
There is a registration fee to attend this public workshop. The registration fee is charged to help defray the costs for facilities, materials, and food. Seats are limited, and registration will be on a first-come, first-served basis. The costs of registration for the different categories of attendees are as follows:
Persons interested in attending this public workshop must register online at
Attendees are responsible for their own hotel accommodations. If you need special accommodations due to a disability, please contact Ann Anonsen, at 301-405-0285 or email:
Regardless of attendance at the public workshop, interested persons may submit either electronic comments to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of the guidance entitled “Endotoxin Testing Recommendations for Single-Use Intraocular Ophthalmic Devices.” National outbreaks of Toxic Anterior Segment Syndrome (TASS) have been associated with single-use intraocular ophthalmic devices (IODs) and single-use intraocular ophthalmic surgical instruments/accessories that are contaminated with endotoxins. These devices can become contaminated as part of the manufacturing, sterilization, or packaging processes. This guidance document provides recommendations for endotoxin limits as well as endotoxin testing to manufacturers and other entities involved in submitting premarket applications (PMAs) or premarket notification submissions (510(k)s) for different categories of IODs to mitigate future outbreaks of TASS.
Submit either electronic or written comments on this guidance at any time. General comments on Agency guidance documents are welcome at any time.
An electronic copy of the guidance document is available for download from the Internet. See the
Submit electronic comments on the guidance to
Michelle Tarver, Center for Devices and Radiological Health, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 66, Rm. 2504, Silver Spring, MD 20993-0002, 301-796-5620.
TASS has been increasing in frequency over the past decade from approximately 1 in 1,000 to about 2 in 100. Some cases of TASS are severe enough to require secondary surgical interventions including glaucoma surgery and corneal transplantation. The use of inadequately or improperly processed ophthalmic surgical instruments is one of many factors suggested as a potential cause of TASS. In many TASS cases, bacterial endotoxin from medical devices is believed to cause the inflammation.
This guidance document was developed to notify manufacturers and other entities involved in submitting PMAs or 510(k)s for different categories of IODs of the recommended endotoxin limit for the release of IODs and single-use intraocular ophthalmic surgical instruments/accessories in an effort to mitigate future TASS outbreaks.
The draft of this guidance was made available in the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the current thinking of FDA on endotoxin testing and limits for single-use IODs. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
Persons interested in obtaining a copy of the guidance may do so by downloading an electronic copy from the Internet. A search capability for all Center for Devices and Radiological Health guidance documents is available at
This guidance refers to previously approved collections of information found in FDA regulations. These collections of information are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 814 have been approved under OMB control number 0910-0231.
Interested persons may submit either electronic comments regarding this document to
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Qualification of Biomarker—Total Kidney Volume in Studies for Treatment of Autosomal Dominant Polycystic Kidney Disease.” This draft guidance provides a qualified context of use (COU) for total kidney volume (TKV), measured at baseline, to be used as a prognostic enrichment biomarker to select patients with autosomal dominant polycystic kidney disease (ADPKD) at high risk for a “progressive decline” in renal function, defined as a confirmed 30 percent decline in the patient's estimated glomerular filtration rate (eGFR), for inclusion in interventional clinical trials. This draft guidance also describes the experimental conditions and constraints for which this biomarker is qualified through the Center for Drug Evaluation and Research (CDER) Biomarker Qualification Program. This biomarker can be used by drug developers for the qualified COU in submissions of investigational new drug applications, new drug applications, and biologics license applications without the relevant CDER review group reconsidering and reconfirming the suitability of the biomarker.
In the
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by October 16, 2015.
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Submit electronic comments on the draft guidance to
Marianne Noone, Center for Drug Evaluation and Research (Office of Translational Sciences, Immediate Office), Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 21, Rm. 4528, Silver Spring, MD 20993-0002, 301-796-2600.
FDA is announcing the availability of a draft guidance for industry entitled “Qualification of Biomarker—Total Kidney Volume in Studies for Treatment of Autosomal Dominant Polycystic Kidney Disease.” This draft guidance provides qualification recommendations for the use of TKV, measured at baseline, as a prognostic enrichment biomarker to select patients with ADPKD at high risk for a “progressive decline” in renal function, defined as a confirmed 30 percent decline in the patient's eGFR, for inclusion in interventional clinical trials. This biomarker may be used in combination with the patient's age and baseline eGFR as an enrichment factor in these interventional clinical trials. Specifically, this draft guidance provides the COU for which this biomarker is qualified through the CDER Biomarker Qualification Program. Qualification of this biomarker for this specific COU represents the conclusion that analytically valid measurements of the biomarker can be relied on to have a specific use and interpretable meaning. This biomarker can be used by drug developers for the qualified COU in submission of investigational new drug applications, new drug applications, and biologics license applications without the relevant CDER review group reconsidering and reconfirming the suitability of the biomarker. “Qualification” means that the use of this biomarker in the specific COU is not limited to a single, specific drug development program. Making the qualification recommendations widely known and available for use by drug developers will contribute to drug innovation, thus supporting public health.
In the
CDER has initiated this formal qualification process to work with developers of these biomarker DDTs to guide them as they refine and evaluate DDTs for use in the regulatory context. Once qualified, biomarker DDTs will be publicly available for use in any drug development program for the qualified COU. As described in the January 2014 guidance, biomarker DDTs should be developed and reviewed using this process. For more information on FDA's DDTs Qualification Programs, refer to the following Web page:
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the Agency's current thinking on the use of TKV, measured at baseline, as a prognostic enrichment biomarker to select patients with ADPKD at high risk for a progressive decline in renal function, defined as a confirmed 30 percent decline in eGFR, for inclusion in interventional clinical trials. This biomarker may be used in combination with patient age and baseline eGFR, as an enrichment factor in these interventional clinical trials. It does not establish any rights for any person and not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This guidance contains an information collection that is subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The information collection has been approved under the OMB control numbers 0910-0001 and 0910-0014. The information requested in this guidance is currently submitted to FDA to support medical product effectiveness (see 21 CFR 312.30, 21 CFR 314.50(d)(5), and 21 CFR 314.126(b)(6)).
Interested persons may submit either electronic comments regarding this document to
Persons with access to the Internet may obtain the document at either
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or Agency) is announcing the availability of a draft guidance for industry entitled “Rare Diseases: Common Issues in Drug Development.” The purpose of this draft guidance is to advance and facilitate the development of drugs and biologics to treat rare diseases. Drug development for rare diseases has many challenges related to the nature of these diseases. This draft guidance is intended to assist sponsors of drug and biological products for treating rare diseases in conducting more efficient and successful development programs.
Although you can comment on any guidance at any time (see 21 CFR 10.115(g)(5)), to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by October 16, 2015.
Submit written requests for single copies of the draft guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10001 New Hampshire Ave., Hillandale Building, 4th Floor, Silver Spring, MD 20993-0002; or Office of Communication, Outreach, and Development, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 3128, Silver Spring, MD 20993-0002. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Submit electronic comments on the draft guidance to
Jonathan Goldsmith, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 22, Rm. 6480, Silver Spring, MD 20903-0002, 240-402-9959; or Stephen Ripley, Center for Biologics Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 71, Rm. 7301, Silver Spring, MD 20993-0002, 240-402-7911.
FDA is announcing the availability of a draft guidance for industry entitled “Rare Diseases: Common Issues in Drug Development.” This guidance is intended to assist sponsors of drug and biological products for treating rare diseases in conducting more efficient and successful development programs through a discussion of selected issues commonly encountered in rare disease drug development. Although these issues are encountered in other drug development programs, they are frequently more difficult to address in the context of a rare disease than a common disease for which there is greater and more widespread medical experience. These issues are also more acute with increasing rarity of the disorder. A rare disease is defined by the Orphan Drug Act as a disorder or condition that affects less than 200,000 persons in the United States; however, most rare diseases affect far fewer persons.
Most rare disorders are serious conditions with no approved treatments, and rare disease patients have considerable unmet medical needs. Collectively, rare diseases are highly diverse. FDA is committed to helping sponsors of drugs for rare diseases create successful programs that address the particular challenges posed by each disease.
This guidance addresses the following important components of drug development:
• Adequate description and understanding of the disease's natural history
• Adequate understanding of the pathophysiology of the disease and the drug's proposed mechanism of action
• Nonclinical pharmacotoxicology considerations to support the proposed clinical investigation(s)
• Standard of evidence to establish safety and effectiveness
• Drug manufacturing considerations during drug development
Early consideration of these issues allows sponsors to efficiently and adequately address them during the course of drug development, from drug discovery to confirmatory efficacy and safety studies, and to have productive meetings with FDA.
This draft guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The draft guidance, when finalized, will represent the current thinking of FDA on common issues in drug development for rare diseases. It does not establish any rights for any person and is not binding on FDA or the public. You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations.
This guidance refers to previously approved collections of information that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520). The collections of information in 21 CFR part 312 have been approved under OMB control number 0910-0014, and the collections of information in 21 CFR part 314 have been approved under OMB control number 0910-0001.
Interested persons may submit either electronic comments regarding this document to
Persons with access to the Internet may obtain the document at
Food and Drug Administration, HHS.
Notice; extension of comment period.
The Food and Drug Administration (FDA) is extending the comment period for the document that appeared in the
FDA is extending the comment period on the document published May 19, 2015 (80 FR 28624). Submit either electronic or written comments on the draft guidance by November 16, 2015.
You may submit comments by any of the following methods.
Submit electronic comments in the following way:
•
Submit written comments in the following ways:
•
Division of Compliance, Center for Veterinary Medicine, Food and Drug Administration (HFV-230), 7519 Standish Pl., Rockville, MD 20855, 240-402-7001,
In the
FDA has received a request for a 90-day extension of the comment period. The request conveyed concern that the current 90-day comment period does not allow sufficient time to respond. FDA has considered the request and is extending the comment period for 90 days, until November 16, 2015. FDA believes that a 90-day extension allows adequate time for interested persons to submit comments without significantly delaying further FDA action on this guidance document.
In addition to comments on the draft guidance as written, we are specifically requesting comments on the following issues:
• Should the final guidance address the issue of FDA-approved animal and human drugs that are in shortage or are otherwise unavailable (
○ How should these situations be addressed in the final guidance?
○ How should the final guidance define the terms “shortage” and “unavailable”?
○ What criteria should FDA use to determine if an approved animal or human drug is in shortage or otherwise unavailable?
• Do United States Pharmacopeia and National Formulary (USP-NF)
• Should licensed veterinarians be able to sell or transfer an animal drug compounded from bulk drug substances by a State-licensed pharmacy or an outsourcing facility to owners or caretakers of animals under the veterinarian's care?
• Should the final guidance include a condition on the amount or percentage of compounded animal drugs that a pharmacy or outsourcing facility can ship in interstate commerce? If so, what would a reasonable amount be?
• Is additional guidance needed to address the repackaging of drugs for animal use?
○ How widespread is the practice of repackaging drugs for animal use?
○ What types of drugs are repackaged for animal use, and why are they repackaged?
○ Have problems been identified with repackaged drugs for animal use?
• Is additional guidance needed to address the compounding of animal drugs from approved animal or human drugs under section 512(a)(4) or (a)(5) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 360b(a)(4) and (a)(5)) and 21 CFR part 530?
• Is additional guidance needed to address the compounding of animal drugs from bulk drug substances for food-producing animals?
• As one condition under which FDA does not generally intend to take action for certain violations of the FD&C Act if this and the other conditions are followed, FDA is proposing that State-licensed pharmacies and veterinarians report any product defect or serious adverse event associated with animal drugs they compound from bulk drug substances to FDA within 15 days of becoming aware of the product defect or serious adverse event. Outsourcing facilities are required to report adverse events associated with the drugs they compound. FDA believes it is important to receive this information from State-licensed pharmacies and veterinarians because there are no other State Departments of Health or Federal Agencies (
○ How many State-licensed pharmacies and veterinarians compound animal drugs from bulk drug substances and would potentially be reporting product defects and serious adverse events to FDA?
○ Are State-licensed pharmacies and veterinarians reporting the same or similar information to any State regulatory agency (
○ For purposes of the guidance, how should FDA define the terms “product defect” and “serious adverse event?”
○ Can FDA achieve the same objective of identifying and tracing the source of injuries or disease associated with an animal drug compounded from a bulk drug substance through means other than product defect and serious adverse event reporting, and if so, what other means? For example, would reports of product defects alone achieve the same objective?
Interested persons may submit either electronic comments regarding this document to
Persons with access to the Internet may obtain the draft guidance at either
Food and Drug Administration, HHS.
Notice of public workshop; request for comments.
The Food and Drug Administration (FDA) is announcing the following public workshop entitled “Physiological Closed-Loop Controlled (PCLC) Devices.” The topic to be discussed is challenges related to the design, development, and evaluation of critical care PCLC devices. FDA considers PCLC devices an emerging technology and aims to hold a workshop focusing on design, development and performance evaluation of PCLC systems intended for use in critical care environments. Such devices include closed-loop anesthetic delivery, closed-loop vasoactive drug and fluid delivery, and closed-loop mechanical ventilation.
Entrance for the public meeting participants (non-FDA employees) is through Building 1 where routine security check procedures will be performed. For parking and security information, please refer to
If you need special accommodations due to a disability, please contact Susan Monahan, Office of Communication and Education (OCE), Center for Devices and Radiological Health, Food and Drug Administration, 301-796-5661, email:
To register for the public workshop, please visit FDA's Medical Devices News & Events—Workshops & Conferences calendar at
Regardless of attendance at the public workshop, interested persons may submit either electronic comments regarding this document to
PCLC medical devices are an emerging technology in the intensive care and emergency medicine settings that provides autonomous therapy adjustments to manipulate a physiological variable. For example, a closed-loop oxygen delivery device may automatically adjust the fraction of inspired oxygen when an individual's oxygen saturation level drifts too high or too low. PCLCs could benefit patients and practitioners by automating a number of tasks including adjustments to mechanical ventilation, anesthetic delivery, and fluid resuscitation. These devices may provide practitioners more resources to consider the course of treatment for an individual patient and improve resource allocation during times of medical surge (
Recent advances in medical device technology and control systems science have increased the development of PCLC medical devices. PCLCs shift specific assignments of data interpretation and therapy manipulation from a practitioner to a medical device. This may or may not introduce new risks to patients, but could introduce new medical device hazards that, considered during design and development, can be mitigated throughout the device life-cycle. Addressing technical and clinical challenges for a PCLC medical device to be robust, stable, and effective in its environment of use will ensure patient safety and promote innovation and development of PCLC medical devices.
This workshop seeks to involve industry, academia, medical societies, patient groups, standard bodies, and other relevant stakeholders in addressing the challenges in the development and implementation of PCLC medical devices in critical care environments. Participants in the workshop will include scientists and engineers developing PCLC medical devices, as well as end users including physicians, nurses, and patients. The intent of the workshop is to discuss benefit-risk considerations, design strategies, pre-clinical testing, and clinical evaluation for specific product areas of PCLC medical devices. Ideas generated during this workshop may facilitate development of new draft guidances and/or standards for PCLC medical devices.
This workshop is aimed to address the scientific, clinical and regulatory considerations associated with these devices, including, but not limited to, the following topic areas:
1. Benefit-risk considerations at varying levels of closed-loop medical device autonomy
2. Challenges related to the design and development of critical care PCLC devices
a. System performance analysis for different controller types (
b. Fault detection and fallback modes
c. User interfaces and operational transparency
3. Knowledge gap between clinicians and system engineers
a. Clinician involvement in system design
b. Control system terminology
4. Pre-clinical evaluation
a. Evidence needed to demonstrate a stable and robust controller
b. Use of computer simulations including verification, validation and uncertainty quantification of physiological models used for design and evaluation of PCLC systems.
c. Real time bench testing
5. Clinical evaluation (
a. Clinical validity of sensors
b. Patient populations
c. Environments of use
d. User related level of expertise.
6. Human factors of autonomous medical devices (
Health Resources and Services Administration, HHS.
Notice.
In compliance with the requirement for opportunity for public comment on proposed data collection projects (Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995), the Health Resources and Services Administration (HRSA) announces plans to submit an Information Collection Request (ICR), described below, to the Office of Management and Budget (OMB). Prior to submitting the ICR to OMB, HRSA seeks comments from the public regarding the burden estimate, below, or any other aspect of the ICR.
Comments on this Information Collection Request must be received no later than October 16, 2015.
Submit your comments to
To request more information on the proposed project or to obtain a copy of the data collection plans and draft instruments, email
When submitting comments or requesting information, please include the information request collection title for reference.
OMB No. 0915-0278—Extension.
The travel approval process is initiated when a NHSC scholar or S2S participant notifies the NHSC of an impending interview at one or more NHSC-approved practice sites. The Travel Request Worksheet is also used to initiate the relocation process after an NHSC scholar or S2S participant has successfully been matched to an approved practice site in accordance with the PHSA, section 331(c)(3). Upon receipt of the Travel Request Worksheet, the NHSC will review and approve or disapprove the request and promptly notify the scholar or S2S participant, and the NHSC logistics contractor regarding travel arrangements and authorization of the funding for the site visit or relocation.
Need and Proposed Use of the Information: This information will facilitate NHSC scholar and S2S clinicians' receipt of federal travel funds that are used to visit high-need NHSC sites. The Travel Request Worksheet is also used to initiate the relocation process after a NHSC scholar or S2S participant has successfully been matched to an approved practice site. This information will be used by the NHSC in order to make travel arrangements for NHSC scholar and S2S clinicians to potential practice sites and to assist them in relocation arrangements once clinicians have secured employment at one of these sites.
HRSA specifically requests comments on (1) the necessity and utility of the proposed information collection for the proper performance of the agency's functions, (2) the accuracy of the estimated burden, (3) ways to enhance the quality, utility, and clarity of the information to be collected, and (4) the use of automated collection techniques or other forms of information technology to minimize the information collection burden.
Section 30.18 of the Department of Health and Human Services' claims collection regulations (45 CFR part 30)
The current rate of 9
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory General Medical Sciences Council.
The meeting will be open to the public as indicated below, with a short public comment period at the end. Attendance is limited by the space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting. The open session will also be videocast and can be accessed from the NIH Videocasting and Podcasting Web site (
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property, such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and, when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxis, hotel, and airport shuttles, will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit. Information is also available on the Institute's home page (
Pursuant to section 10(a) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the Center for Scientific Review Advisory Council.
The meeting will be open to the public, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
Any interested person may file written comments with the committee by forwarding the statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
Information is also available on the Institute's/Center's home page:
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
The Kidney Interagency Coordinating Committee (KICC) will hold a meeting on September 25, 2015, on the pharmacist's role in chronic kidney disease care. The meeting is open to the public.
The meeting will be held on September 25, 2015, 9 a.m. to 12 p.m. Individuals wanting to present oral comments must notify the contact person at least 10 days before the meeting date.
The meeting will be held in the Natcher Conference Center on the NIH Campus at 9000 Rockville Pike, Bethesda, MD 20894.
For further information concerning this meeting, contact Dr. Andrew S. Narva, Executive Secretary of the Kidney Interagency Coordinating Committee, National Institute of Diabetes and Digestive and Kidney Diseases, 31 Center Drive, Building 31A, Room 9A27, MSC 2560, Bethesda, MD 20892-2560, telephone: 301-594-8864; FAX: 301-480-0243; email:
The KICC, chaired by the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK), comprises members of the Department of Health and Human Services and other federal agencies that support kidney-related activities, facilitates cooperation, communication, and collaboration on kidney disease among government entities. KICC meetings, held twice a year, provide an opportunity for Committee members to learn about and discuss current and future kidney programs in KICC member organizations and to identify opportunities for collaboration. The September 25, 2015 KICC meeting will focus on the pharmacist's role in chronic kidney disease care.
Any member of the public interested in presenting oral comments to the Committee should notify the contact person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives or organizations should submit a letter of intent, a brief description of the organization represented, and a written copy of their oral presentation in advance of the meeting. Only one representative of an organization will be allowed to present; oral comments and presentations will be limited to a maximum of 5 minutes. Printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the Committee by forwarding their statement to the contact person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person. Because of time constraints for the meeting, oral comments will be allowed on a first-come, first-serve basis.
Members of the public who would like to receive email notification about future KICC meetings should send a request to
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of the following meetings.
The meetings will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Pursuant to section 10(d) of the Federal Advisory Committee Act, as amended (5 U.S.C. App.), notice is hereby given of a meeting of the National Advisory Council on Minority Health and Health Disparities.
The meeting will be open to the public as indicated below, with attendance limited to space available. Individuals who plan to attend and need special assistance, such as sign language interpretation or other reasonable accommodations, should notify the Contact Person listed below in advance of the meeting.
The meeting will be closed to the public in accordance with the provisions set forth in sections 552b(c)(4) and 552b(c)(6), Title 5 U.S.C., as amended. The grant applications and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the grant applications and/or contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
Open: 8:30 a.m. to 2:30 p.m.
Closed: 2:30 p.m. to Adjournment.
Any member of the public interested in presenting oral comments to the committee may notify the Contact Person listed on this notice at least 10 days in advance of the meeting. Interested individuals and representatives of organizations may submit a letter of intent, a brief description of the organization represented, and a short description of the oral presentation. Only one representative of an organization may be allowed to present oral comments and if accepted by the committee, presentations may be limited to five minutes. Both printed and electronic copies are requested for the record. In addition, any interested person may file written comments with the committee by forwarding their statement to the Contact Person listed on this notice. The statement should include the name, address, telephone number and when applicable, the business or professional affiliation of the interested person.
In the interest of security, NIH has instituted stringent procedures for entrance onto the NIH campus. All visitor vehicles, including taxis, hotel, and airport shuttles, will be inspected before being allowed on campus. Visitors will be asked to show one form of identification (for example, a government-issued photo ID, driver's license, or passport) and to state the purpose of their visit).
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of approval of Freeboard International as a commercial gauger.
Notice is hereby given, pursuant to CBP regulations, that Freeboard International has been approved to gauge petroleum and certain petroleum products for customs purposes for the next three years as of April 1, 2015.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Suite 1500N, Washington, DC 20229, tel. 202-344-1060.
Notice is hereby given pursuant to 19 CFR 151.13, that Freeboard International, 2500 Brunswick Ave., Linden, NJ 07036, has been approved to gauge petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.13. Freeboard International is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):
Anyone wishing to employ this entity to conduct gauger services should request and receive written assurances from the entity that it is approved by the
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of Saybolt LP as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that Saybolt LP has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of April 15, 2015.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Suite 1500N, Washington, DC 20229, tel. 202-344-1060.
Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that Saybolt LP, 21730 S. Wilmington Ave., Suite 201, Carson, CA 90810, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. Saybolt LP is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):
Saybolt LP is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):
Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344-1060. The inquiry may also be sent to
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of AmSpec Services, LLC, as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that AmSpec Services, LLC, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes for the next three years as of April 30, 2015.
Approved Gauger and Accredited Laboratories Manager, Laboratories and Scientific Services Directorate, U.S. Customs and Border Protection, 1300 Pennsylvania Avenue NW., Suite
Notice is hereby given pursuant to 19 CFR 151.12 and 19 CFR 151.13, that AmSpec Services, LLC, 4370 Oakes Rd., Unit 732, Davie FL 33314, has been approved to gauge petroleum and certain petroleum products and accredited to test petroleum and certain petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. AmSpec Services, LLC is approved for the following gauging procedures for petroleum and certain petroleum products from the American Petroleum Institute (API):
AmSpec Services, LLC is accredited for the following laboratory analysis procedures and methods for petroleum and certain petroleum products set forth by the U.S. Customs and Border Protection Laboratory Methods (CBPL) and American Society for Testing and Materials (ASTM):
Anyone wishing to employ this entity to conduct laboratory analyses and gauger services should request and receive written assurances from the entity that it is accredited or approved by the U.S. Customs and Border Protection to conduct the specific test or gauger service requested. Alternatively, inquiries regarding the specific test or gauger service this entity is accredited or approved to perform may be directed to the U.S. Customs and Border Protection by calling (202) 344-1060. The inquiry may also be sent to
Federal Emergency Management Agency, DHS.
Notice.
FEMA gives notice of an increase of the legitimate amount in dispute for the Dispute Resolution Pilot Program for Public Assistance Appeals for disasters declared on or after October 30, 2012.
William Roche, Public Assistance Division Director, Recovery Directorate, Federal Emergency Management Agency, 500 C Street SW., Washington, DC 20472-3100, Phone: (202) 646-3834 or Email:
The Sandy Recovery Improvement Act of 2013, Public Law 113-2, 127 Stat. 43 (Jan. 29, 2013), 42 U.S.C. 5189a note, prescribes that the Administrator shall annually adjust the legitimate amount in dispute under the Dispute Resolution Pilot Program to reflect changes in the Consumer Price Index for all Urban Consumers published by the Department of Labor. See 44 CFR 206.210(c)(1).
FEMA gives notice of an increase in the legitimate amount in dispute under the Dispute Resolution Pilot Program for Public Assistance Appeals to $1,031,000 for all disasters declared on or after October 30, 2012.
FEMA bases the adjustment on an increase in the Consumer Price Index for All Urban Consumers provided by The Bureau of Labor Statistics of the U.S. Department of Labor. The sum of the annual average percent change from the two previous years (2013 and 2014) used in the adjustment is 3.1 percent.
Privacy Office, Department of Homeland Security.
Notice of Privacy Act system of records.
In accordance with the Privacy Act of 1974, the Department of Homeland Security proposes to consolidate, update, and rename two current Department of Homeland Security systems of records titled, “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-001 Automated Commercial Environment/International Trade Data System System of Records” (7 FR 3109, January 19, 2006) and “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-015 Automated Commercial System System of Records” (73 FR 77759, December 19, 2008) as one new system of records. The consolidated system of records notice will be titled, “Department of Homeland Security/U.S. Customs and Border Protection, DHS/CBP-001 Import Information System System of Records.” This system of records will continue to collect and maintain records on all commercial goods imported into the United States, as well as information pertaining to the carrier, broker, importer, and other persons associated with the manifest, import, or commercial entry transactions for the goods.
As a result of a review of these two systems, the Department of Homeland Security/U.S. Customs and Border Protection is combining the system of records notices for these systems into one updated system of records notice that includes changes to the categories of individuals and to the categories of records regarding information maintained about persons who have account access to trade data in the system. The Department of Homeland Security/U.S. Customs and Border Protection is also including an additional routine use for disclosing vessel manifest information as required by statute, in addition to the new compilation of routine uses reconciled from the prior systems of records notices. Data from this system of records may be shared with law enforcement and/or intelligence agencies pursuant to the routine uses identified below. Additionally, the Department of Homeland Security is issuing a Notice of Proposed Rulemaking to exempt this system of records from certain provisions of the Privacy Act elsewhere in the
Submit comments on or before September 16, 2015. This updated system will be effective September 16, 2015.
You may submit comments, identified by docket number DHS-2015-0047 by one of the following methods:
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For general questions, please contact: John Connors (202) 344-1610, CBP Privacy Officer, Office of the Commissioner, U.S. Customs and Border Protection, Washington, DC 20229. For privacy questions, please contact: Karen L. Neuman, (202) 343-1717, Chief Privacy Officer, Privacy Office, Department of Homeland Security, Washington, DC 20528-0655.
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security (DHS), U.S. Customs and Border Protection (CBP) proposes to consolidate, update, and rename as one system of records notice (SORN) the information currently contained in two DHS SORNs titled, “DHS/CBP-001 Automated Commercial Environment/International Trade Data System (ACE/ITDS) System of Records” (7 FR 3109, January 19, 2006) and “DHS/CBP-015 Automated Commercial System (ACS) System of Records” (73 FR 77759, December 19, 2008) . This new SORN, entitled “DHS/CBP-001 Import Information System (IIS),” will inform the public about changes to the categories of individuals, categories of records, and routine uses contained in the consolidation of the former ACS and ACE/ITDS SORNs.
ACS, a decades old trade information database and information technology (IT) system, was deployed to track, control, and process all commercial goods imported into the United States. ACE, part of a multi-year modernization effort since 2001 to replace ACS, continues to be designed to manage CBP's import trade data and related transaction information. ACE/ITDS serves three sets of core stakeholders: The internal DHS/CBP users, Partner Government Agencies (PGA), and the trade community. ACE is the IT backbone for the ITDS, an interagency initiative formalized under the SAFE Port Act of 2006 to create a single window for the trade community and PGAs involved in importing and exporting. DHS/CBP has provided notice to the public and trade community that in the future, the ACS IT system will be fully phased out and replaced by ACE. As such, and to simplify the trade community's and the public's understanding of how trade information will be handled after ACE implementation, DHS/CBP is publishing this Import Information System (IIS) SORN to identify a single repository for import trade information. DHS/CBP is also publishing an updated ACE Privacy Impact Assessment on its Web site (
As part of this consolidation and issuance of IIS, the category of individuals and category of records sections in the former ACS and ACE-ITDS have been merged to account for the data in both IT systems, as well as paper records related to the information in these systems. The category of individuals section is amended to remove reference to DHS/CBP employees and employees of other federal agencies for purposes of maintaining their user access accounts to the ACE-ITDS Portal, because these
The authorities sections from the previous SORNs have been combined, reconciled to address duplication, and updated to account for expanded information collected about business associations as part of the ACE-ITDS Portal user account. The purpose section for IIS reflects an update to the combined purposes for ACS and ACE-ITDS and addresses DHS/CBP's broad use of its import trade transaction IT systems (ACS and ACE) to collect and manage records to track, control, and process all commercial goods imported into the United States.
Consistent with DHS's information-sharing mission, information stored in the DHS/CBP-001 Import Information System (IIS) may be shared with other DHS Components that have a need to know the information to carry out their national security, law enforcement, immigration, or other homeland security functions. In addition, information may be shared with appropriate federal, state, local, tribal, territorial, foreign, or international government agencies consistent with the routine uses set forth in this SORN and as otherwise authorized under the Privacy Act.
Information in IIS may be shared for the same routine uses as were previously published in ACS and ACE-ITDS, and are now updated in this document:
• ACS's former Routine Use K is now reclassified as Routine Use G.
○ Routine Use G permits sharing of data under the following circumstances: “To appropriate federal, state, local, tribal, or foreign governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, license, or treaty when DHS determines that the information would assist in the enforcement of civil or criminal laws.”
• ACE-ITDS's former Routine Use 3 is now reclassified as Routine Use K.
○ Routine Use K permits sharing of data under the following circumstances: “To a federal, state, local, tribal, territorial, foreign, or international agency, maintaining civil, criminal, or other relevant enforcement information or other pertinent information, which has requested information relevant to or necessary to the requesting agency's or the bureau's hiring or retention of an individual, or issuance of a security clearance, license, contract, grant, or other benefit.”
Additionally, DHS/CBP is adding another routine use to IIS, Routine Use R, to provide explicit coverage for the mandated release of Manifest Information as set forth in section 1431 of title 19, United States Code and implemented through title 19, Code of Federal Regulations, part 103:
• Routine Use R permits sharing of data under the following circumstances: “To paid subscribers, in accordance with applicable regulations, for the purpose of providing access to manifest information as set forth in 19 U.S.C. 1431.”
DHS/CBP will not assert any exemptions with regard to information provided by or on behalf of an individual. However, this data may be shared with law enforcement and/or intelligence agencies pursuant to the routine uses identified in the IIS SORN and as otherwise authorized under the Privacy Act. The Privacy Act requires that DHS maintain an accounting of such disclosures. Disclosing the fact that a law enforcement and/or intelligence agency has sought particular records may interfere with or disclose techniques and procedures related to ongoing law enforcement investigations. As such, DHS is issuing a Notice of Proposed Rulemaking to exempt this system of records from certain provisions of the Privacy Act elsewhere in the
The Privacy Act embodies fair information practice principles in a statutory framework governing the means by which federal government agencies collect, maintain, use, and disseminate individuals' records. The Privacy Act applies to information that is maintained in a “system of records.” A “system of records” is a group of any records under the control of an agency from which information is retrieved by the name of an individual or by some identifying number, symbol, or other identifying particular assigned to the individual. In the Privacy Act, an individual is defined to encompass U.S. citizens and lawful permanent residents. As a matter of policy, DHS extends administrative Privacy Act protections to all persons when systems of records maintain information on U.S. citizens, lawful permanent residents, and non-immigrant aliens.
Below is the description of the DHS/CBP-001 Import Information System (IIS) System of Records.
In accordance with 5 U.S.C. 552a(r), DHS has provided a report of these systems of records to the Office of Management and Budget and to Congress.
Department of Homeland Security (DHS)/U.S. Customs and Border Protection (CBP)-001.
DHS/CBP-001 Import Information System (IIS).
Unclassified.
Records are maintained at the DHS/CBP Headquarters in Washington, DC and field offices.
Categories of individuals in this system include members of the public involved in the importation of merchandise and international trade, such as importers, brokers, carriers, manufacturers, shippers, consignees, cartmen/lightermen, filers, sureties, facility operators, foreign trade zone operators, drivers/crew, attorneys/consultants, and agents, in addition to persons required to file Customs Declarations for international mail transactions (including sender and recipient).
Information maintained by ACE as part of the
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Information maintained by ACE as part of the
• Filer Information
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• Supply Chain Information
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Manufacturer (or supplier) name;
Manufacturer (or supplier) address;
Foreign manufacturer identification code and/or shipper identification code;
Foreign manufacturer name and/or shipper name; and
Foreign manufacturer address and/or shipper address.
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• Vessel Identifier Code;
• Vessel Name;
• Carrier Name;
• Carrier Address;
• Carrier codes (non-SSN) (Standard Carrier Agent Code (SCAC) for vessel carriers, International Air Transport Association (IATA) for air carriers);
• Department of Transportation (DOT) number,
• Tax Identification Number;
• DUNS;
• Organizational structure; and
• Insurance information including name of insurer, policy number, date of issuance, and amount.
• The carrier can create users and points of contact, and may also choose to store details associated with the driver and crew, conveyance, and equipment for purposes of expediting the creation of manifests.
○ Liquidator identification (non-SSN);
○ Seller (full name and address or a widely accepted industry number such as a DUNS number);
○ Buyer (full name and address or a widely accepted industry number such as a DUNS number);
○ Ship to party name;
○ Consolidator (stuffer);
○ Foreign trade zone applicant identification number;
○ Country of origin;
○ Commodity Harmonized Tariff Schedule of the United States (HTSUS) number;
○ Booking party; and
○ Other identification information regarding the party to the transaction.
• Crewmember/Passenger Information
○ Carrier Information—Including vessel flag and vessel name, date of arrival, and port of arrival (CBP Form 5129);
○ Person on arriving conveyance who is in charge;
○ Names of all crew members and passengers;
○ Date of birth of each crew member and passenger;
○ Commercial driver license (CDL)/driver license number for each crew member;
○ CDL state or province of issuance for each crew member;
○ CDL country of issuance for each crew member;
○ Travel document number for each crew member and passenger;
○ Travel document country of issuance for each crew member and passenger;
○ Travel document for state/province of issuance for each crew member and passenger;
○ Travel document type for each crew member and passenger;
○ Address for each crew member and passenger;
○ Gender of each crew member and passenger;
○ Nationality/citizenship of each crew member and passenger; and
○ HAZMAT endorsement for each crew member.
• Federal Employee Information (including CBP and PGA employees)
○ CBP employee names;
○ CBP employee hash identification, SSN, or other employee identification number; and
○ Federal Government employee names, work addresses, work phone numbers, and ACE identification if already an ACE-ITDS user.
• Manifest Information
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• CBP Generated Records
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○ Trade violation statistics.
○ Protest and appeal decision case information.
• Surety and Bond Information
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• Merchandise-Specific Information
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IIS derives its authority from 19 U.S.C. 66, 1431, 1448, 1481, 1484, 1505, 1514, 1624, and 2071; 26 U.S.C. 6109(d); 31 U.S.C. 7701(c); section 203 of the Security and Accountability for Every (SAFE) Port Act of 2006 and section 343(a) of the Trade Act of 2002, as amended by the Maritime Transportation Security Act of 2002; Title 19 of the Code of Federal Regulations, including 19 CFR 24.5, 149.3, 101.9, and 103.31(e).
This system of records allows DHS/CBP to collect and maintain records on all commercial goods imported into the United States, along with carrier, broker, importer, and other ACE-ITDS Portal user account and manifest information. The purpose of this system of records is to track, control, and process all commercial goods imported into the United States. This facilitates the flow of legitimate shipments, and assists DHS/CBP in securing U.S. borders and targeting illicit goods. IIS covers two principle information technology systems: The Automated Commercial System (ACS) and ACE-ITDS. ACS employs multiple modules to receive data transmissions from a variety of parties involved in international commercial transactions and provides DHS/CBP with the capability to track both the transport transactions and the financial transactions associated with the movement of merchandise through international commerce. ACE-ITDS modernizes and enhances trade processing with features that will consolidate and automate border processing. ACE-ITDS serves three sets of core stakeholders: The internal DHS/CBP users, PGAs, and the trade community in the movement of merchandise through international commerce.
In addition to those disclosures generally permitted under 5 U.S.C. 552a(b) of the Privacy Act, all or a portion of the records or information contained in this system may be disclosed outside DHS as a routine use pursuant to 5 U.S.C. 552a(b)(3) as follows:
A. To the Department of Justice (DOJ), including Offices of the United States Attorneys, or other federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, when it is relevant or necessary to the litigation and one of the following is a party to the litigation or has an interest in such litigation:
1. DHS or any Component thereof;
2. Any employee or former employee of DHS in his or her official capacity;
3. Any employee or former employee of DHS in his or her individual capacity when DOJ or DHS has agreed to represent the employee; or
4. The United States or any agency thereof.
B. To a congressional office from the record of an individual in response to an inquiry from that congressional office made at the request of the individual to whom the record pertains.
C. To the National Archives and Records Administration (NARA) or General Services Administration pursuant to records management inspections being conducted under the authority of 44 U.S.C. 2904 and 2906.
D. To an agency or organization for the purpose of performing audit or oversight operations as authorized by law, but only such information as is necessary and relevant to such audit or oversight function.
E. To appropriate agencies, entities, and persons when:
1. DHS suspects or has confirmed that the security or confidentiality of information in the system of records has been compromised;
2. DHS has determined that as a result of the suspected or confirmed compromise, there is a risk of identity theft or fraud, harm to economic or property interests, harm to an individual, or harm to the security or integrity of this system or other systems or programs (whether maintained by DHS or another agency or entity) that rely upon the compromised information; and
3. The disclosure made to such agencies, entities, and persons is reasonably necessary to assist in connection with DHS's efforts to respond to the suspected or confirmed compromise and prevent, minimize, or remedy such harm.
F. To contractors and their agents, grantees, experts, consultants, and others performing or working on a contract, service, grant, cooperative agreement, or other assignment for DHS, when necessary to accomplish an agency function related to this system of records. Individuals provided information under this routine use are subject to the same Privacy Act requirements and limitations on disclosure as are applicable to DHS officers and employees.
G. To appropriate federal, state, local, tribal, or foreign governmental agencies or multilateral governmental organizations responsible for investigating or prosecuting the violations of, or for enforcing or implementing, a statute, rule, regulation, order, license, or treaty when DHS determines that the information would assist in the enforcement of civil or criminal laws.
H. To a federal, state, or local agency, or other appropriate entity or individual, or through established liaison channels to selected foreign governments, in order to provide intelligence, counterintelligence, or other information for the purposes of intelligence, counterintelligence, or antiterrorism activities authorized by U.S. law, Executive Order, or other applicable national security directive.
I. To the Department of Commerce, United States Census Bureau for statistical analysis of foreign trade data.
J. To a federal agency, pursuant to an International Trade Data System Memorandum of Understanding, consistent with the receiving agency's legal authority to collect information pertaining to and/or regulate transactions in international trade.
K. To a federal, state, local, tribal, territorial, foreign, or international agency, maintaining civil, criminal, or other relevant enforcement information
L. To a court, magistrate, or administrative tribunal in the course of presenting evidence, including disclosures to opposing counsel or witnesses in the course of civil discovery, litigation, or settlement negotiations, in response to a subpoena, or in connection with criminal law proceedings;
M. To third parties during the course of an investigation to the extent necessary to obtain information pertinent to the investigation;
N. To the Department of Justice, Offices of the United States Attorneys or a consumer reporting agency as defined by the Fair Credit Reporting Act, address or physical location information concerning the debtor, for further collection action on any delinquent debt when circumstances warrant;
O. To appropriate federal, state, local, tribal, or foreign governmental agencies or multilateral governmental organizations when DHS is aware of a need to use relevant data for purposes of testing new technology and systems designed to enhance national security or identify other violations of law;
P. To a former employee of DHS, in accordance with applicable regulations, for purposes of responding to an official inquiry by a federal, state, or local government entity or professional licensing authority; or facilitating communications with a former employee that may be necessary for personnel-related or other official purposes when the Department requires information or consultation assistance from the former employee regarding a matter within that person's former area of responsibility;
Q. To an organization or individual in either the public or private sector, either foreign or domestic, when there is a reason to believe that the recipient is or could become the target of a particular terrorist activity or conspiracy, to the extent the information is relevant to the protection of life or property;
R. To paid subscribers, in accordance with applicable regulations, for the purpose of providing access to manifest information as set forth in 19 U.S.C. 1431;
S. To the news media and the public, with the approval of the Chief Privacy Officer in consultation with counsel, when there exists a legitimate public interest in the disclosure of the information or when disclosure is necessary to preserve confidence in the integrity of DHS or is necessary to demonstrate the accountability of DHS's officers, employees, or individuals covered by the system, except to the extent it is determined that release of the specific information in the context of a particular case would constitute an unwarranted invasion of personal privacy.
Yes, CBP may disclose, pursuant to 5 U.S.C. 552a(b)(12), to consumer reporting agencies in accordance with the provision of 15 U.S.C. 1681,
Disclosure of records is limited to the individual's name, address, EIN/SSN, and other information necessary to establish the individual's identity; the amount, status, and history of the claim; and the agency or program under which the claim arose. The disclosure will be made only after the procedural requirements of 31 U.S.C. 3711(e) have been followed.
CBP stores records in this system electronically or on paper in secure facilities in a locked drawer behind a locked door. The records may be stored on magnetic disc, tape, digital media, and CD-ROM.
CBP retrieves records by file identification codes, name or other personal identifier.
CBP safeguards records in this system in accordance with applicable rules and policies, including all applicable DHS automated systems security and access policies. CBP imposes strict controls to minimize the risk of compromising the information that is being stored. Access to the computer system containing the records in this system is limited to those individuals who have a need to know the information for the performance of their official duties and who have appropriate clearances or permissions. The systems maintain a real-time auditing function of individuals who access them. Additional safeguards may vary by Component and program.
The Importer Security Filing form is retained for fifteen years from date of submission unless it becomes linked to law enforcement action. All other import records contained within IIS are maintained for a period of six years from the date of entry.
Some records are retained online in a system database, while others may be retained in hard copy in ports of entry, as appropriate. Personally identifiable information collected in IIS as part of the regulation of incoming cargo will be retained in accordance with the U.S. Customs Records Schedules approved by the National Archive and Records Administration for the forms on which the data is submitted. This means that cargo, crew, driver, and passenger information collected from a manifest presented in connection with the arrival of a vessel, vehicle, or aircraft will be retained for six years.
Information collected in connection with the submission of a Postal Declaration for a mail importation will be retained for a maximum of six years and three months (as set forth pursuant to NARA Authority N1-36-86-1, U.S. Customs Records Schedule, Schedule 9 Entry Processing, Items 4 and 5).
Director, Integrated Logistic Support, Cargo Systems Program Office, Office of Information Technology, U.S. Customs and Border Protection, who is located at 1801 North Beauregard Street, Alexandria, Virginia 22311.
ACE-ITDS portal users may log in to ACE-ITDS to change their profile information and make permissible amendments or corrections to their records. Individuals seeking notification of and access to any record contained in this system of records, or seeking to contest its content, may submit a request in writing to the DHS/CBP Freedom of Information Act (FOIA) Officer, whose contact information can be found at
When seeking records about yourself from this system of records or any other Departmental system of records, your request must conform with the Privacy Act regulations set forth in 6 CFR part 5. You must first verify your identity,
• Explain why you believe the Department would have information on you;
• Identify which Component(s) of the Department you believe may have the information about you;
• Specify when you believe the records would have been created; and
• Provide any other information that will help the FOIA staff determine which DHS Component agency may have responsive records; and
If your request is seeking records pertaining to another living individual, you must include a statement from that individual certifying his or her agreement for you to access his or her records.
Without the above information, the Component(s) may not be able to conduct an effective search, and your request may be denied due to lack of specificity or lack of compliance with applicable regulations.
See “Notification procedure” above.
See “Notification procedure” above.
Records are obtained through authorized DHS/CBP or other federal agency forms, related documents, or electronic submissions from individuals and/or companies incidental to the conduct of foreign trade and required to administer the transportation and trade laws and regulations of the United States.
DHS/CBP will not assert any exemptions with regard to information provided by or on behalf of an individual, when requested by the data subject. However, this data may be shared with law enforcement and/or intelligence agencies pursuant to the routine uses identified in the IIS SORN. The Privacy Act requires DHS to maintain an accounting of such disclosures made pursuant to all routine uses. Disclosing the fact that a law enforcement and/or intelligence agency has sought particular records may affect ongoing law enforcement activity. As such, DHS will claim exemption pursuant to 5 U.S.C. 552a(j)(2) from sections (c)(3), (e)(8), and (g)(1) of the Privacy Act, and pursuant to 5 U.S.C. 552a(k)(2) from section (c)(3) of the Privacy Act, from providing an individual the accounting of disclosures, as necessary and appropriate to protect this information.
U.S. Citizenship and Immigration Services, Department of Homeland Security.
60-Day Notice.
The Department of Homeland Security (DHS), U.S. Citizenship and Immigration
(USCIS) invites the general public and other Federal agencies to comment upon this proposed extension of a currently approved collection of information. In accordance with the Paperwork Reduction Act (PRA) of 1995, the information collection notice is published in the
Comments are encouraged and will be accepted for 60 days until October 16, 2015.
All submissions received must include the OMB Control Number 1615-0015 in the subject box, the agency name and Docket ID USCIS-2007-0018. To avoid duplicate submissions, please use only
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USCIS, Office of Policy and Strategy, Regulatory Coordination Division, Laura Dawkins, Chief, 20 Massachusetts Avenue NW., Washington, DC 20529-2140, telephone number 202-272-8377 (This is not a toll-free number. Comments are not accepted via telephone message). Please note contact information provided here is solely for questions regarding this notice. It is not for individual case status inquiries. Applicants seeking information about the status of their individual cases can check Case Status Online, available at the USCIS Web site at
You may access the information collection instrument with instructions, or additional information by visiting the Federal eRulemaking Portal site at:
Written comments and suggestions from the public and affected agencies should address one or more of the following four points:
(1) Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to be collected; and
(4) Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
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Office of Community Planning and Development, HUD.
Notice.
HUD is seeking approval from the Office of Management and Budget (OMB) for the information collection described below. In accordance with the Paperwork Reduction Act, HUD is requesting comment from all interested parties on the proposed collection of information. The purpose of this notice is to allow for 60 days of public comment.
Interested persons are invited to submit comments regarding this proposal. Comments should refer to the proposal by name and/or OMB Control Number and should be sent to: Colette Pollard, Reports Management Officer, QDAM, Department of Housing and Urban Development, 451 7th Street SW., Room 4176, Washington, DC 20410-5000; telephone 202-402-3400 (this is not a toll-free number) or email at
Bryan Herdliska, Presidential Management Fellow—Promise Zones Initiative Department of Housing and Urban Development, 451 7th Street SW., Washington, DC 20410; email Bryan Herdliska at
Copies of available documents submitted to OMB may be obtained from Ms. Pollard.
This notice informs the public that HUD is seeking approval from OMB for the information collection described in Section A.
This notice is soliciting comments from members of the public and affected parties concerning the collection of information described in Section A on the following:
(1) Whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
(2) The accuracy of the agency's estimate of the burden of the proposed collection of information;
(3) Ways to enhance the quality, utility, and clarity of the information to be collected; and
(4) Ways to minimize the burden of the collection of information on those who are to respond; including through the use of appropriate automated collection techniques or other forms of information technology,
HUD encourages interested parties to submit comments in response to these questions.
Section 3507 of the Paperwork Reduction Act of 1995, 44 U.S.C. Chapter 35.
Bureau of Indian Affairs, Interior.
Notice of meeting.
The Bureau of Indian Education (BIE) is announcing that the Advisory Board for Exceptional Children (Advisory Board) will hold its next meeting in Washington, DC. The purpose of the meeting is to meet the mandates of the Individuals with Disabilities Education Act of 2004 (IDEA) for Indian children with disabilities.
The Advisory Board will meet on Thursday, September 17, 2015, from 8:30 a.m. to 4:30 p.m. and Friday, September 18, 2015, from 8:30 a.m. to 4:30 p.m. Eastern Time. Orientation for new members will be held Wednesday, September 16, 2015, from 9:00 a.m. to 4:00 p.m. Eastern Time.
The meetings on Wednesday, September 16, 2015, Thursday, September 17, 2015, and Friday, September 18, 2015, will be held at 1951 Constitution Avenue NW., Room 303-304, Washington, DC 20240; telephone number (202) 208-6123.
Ms. Sue Bement, Designated Federal Officer, Bureau of Indian Education, Albuquerque Service Center, Division of Performance and Accountability, 1011 Indian School Road NW., Suite 332, Albuquerque, NM 87104; telephone number (505) 563-5274.
In accordance with the Federal Advisory Committee Act (5 U.S.C. app.), the BIE is announcing that the Advisory Board will hold its next meeting in Washington, DC. The Advisory Board was established under the Individuals with Disabilities Education Act of 2004 (20 U.S.C. 1400
The following items will be on the agenda:
• Introduction of Advisory Board members
• Announcement of Chair Person
• Report from Gloria Yepa, Supervisory Education Specialist, BIE, Division of Performance and Accountability
• Report from BIE Director's Office
• Advisory Board work on Priorities for 2015
• Public Comment (via conference call, September 18, 2015 meeting only *)
• BIE Advisory Board-Advice and Recommendations
* During the September 18, 2015 meeting, time has been set aside for public comment via conference call from 1:30-2:00 p.m. Eastern Time. The call-in information is: Conference Number 1 (888) 417-0376, Passcode 1509140.
Bureau of Indian Affairs, Interior.
Notice of request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Bureau of Indian Affairs (BIA) is seeking comments on the renewal of Office of Management and Budget (OMB) approval for the collection of information for the Tribal Reassumption of Jurisdiction over Child Custody Proceedings, authorized by OMB Control Number 1076-0112. This information collection expires November 30, 2015.
Submit comments on or before October 16, 2015.
You may submit comments on the information collection to Evangeline Campbell, Chief, Division of Human Services, Office of Indian Services, Bureau of Indian Affairs, 1849 C Street NW., MS-4513-MIB, Washington, DC 20240; facsimile: (202) 208-5113; email:
Evangeline Campbell, (202) 513-7621.
The BIA is seeking to renew the information collection conducted under 25 CFR 13, which prescribed procedures by which an Indian tribe that occupies a reservation over which a state asserts any jurisdiction pursuant to federal law may reassume jurisdiction over Indian child proceedings as authorized by the Indian Child Welfare Act, Public Law 95-608, 92 Stat. 3069, 25 U.S.C. 1918.
The BIA requests your comments on this collection concerning: (a) The necessity of this information collection for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) The accuracy of the agency's estimate of the burden (hours and cost) of the collection of information, including the validity of the methodology and assumptions used; (c) Ways we could enhance the quality, utility, and clarity of the information to be collected; and (d) Ways we could minimize the burden of the collection of the information on the respondents.
Please note that an agency may not conduct or sponsor, and an individual need not respond to, a collection of information unless it has a valid OMB Control Number.
It is our policy to make all comments available to the public for review at the location listed in the
Bureau of Ocean Energy Management (BOEM), Interior.
Notice of Intent to Prepare a Supplemental Environmental Impact Statement and an Announcement of Scoping Meetings and Comment Period for Proposed Gulf of Mexico Outer Continental Shelf Oil and Gas Central Planning Area Lease Sale 247.
Consistent with the regulations implementing the National Environmental Policy Act (NEPA), as amended (42 U.S.C. 4321
The CPA 247 Supplemental EIS will supplement the NEPA documents cited above in order to consider new circumstances and information arising from, among other things, the
Comments on the scope of the CPA 247 Supplemental EIS should be submitted by September 16, 2015.
For information on the CPA 247 Supplemental EIS or the submission of comments, please contact Mr. Gary D. Goeke, Chief, Environmental Assessment Section, Office of Environment (GM 623E), BOEM, Gulf of Mexico OCS Region, 1201 Elmwood
On August 27, 2012, the Secretary of the Interior approved the OCS Oil and Gas Leasing Program: 2012-2017 (2012-2017 Five Year Program). This Supplemental EIS will consider the last CPA sale for this 2012-2017 Five Year Program. Proposed CPA Lease Sale 247 is tentatively scheduled to be held in 2017.
• Mobile, Alabama: Tuesday, September 1, 2015, Hilton Garden Inn Mobile West, 828 West I-65 Service Road South, Mobile, Alabama 36609, one meeting beginning at 4:00 p.m. CDT;
• Gulfport, Mississippi: Wednesday, September 2, 2015, Courtyard by Marriott, Gulfport Beachfront MS Hotel, 1600 East Beach Boulevard, Gulfport, Mississippi 39501, one meeting beginning at 6:00 p.m. CDT; and
• New Orleans, Louisiana: Thursday, September 3, 2015, Bureau of Ocean Energy Management, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123, one meeting beginning at 1:00 p.m. CDT.
BOEM, as the lead agency, will not provide financial assistance to cooperating agencies. Even if an organization is not a cooperating agency, opportunities will exist to provide information and comments to BOEM during the normal public input stages of the EIS process. For further information about cooperating agencies, please contact Mr. Gary D. Goeke at (504) 736-3233.
1. Federal eRulemaking Portal:
2. U.S. mail in an envelope labeled “Scoping Comments for the CPA 247 Supplemental EIS” and mailed (or hand delivered) to Mr. Gary D. Goeke, Chief, Environmental Assessment Section, Office of Environment (GM 623E), BOEM, Gulf of Mexico OCS Region, 1201 Elmwood Park Boulevard, New Orleans, Louisiana 70123-2394. Comments must be postmarked by the last day of the comment period to be considered. As noted in the “Dates” section above, the comment period ends on
3. Via electronic mail to email address:
Petitions, although accepted, do not generally provide useful information to assist in the development of alternatives, resources, and issues to be analyzed, or impacting factors. BOEM does not consider anonymous comments; please include your name and address as part of your submittal. BOEM makes all comments, including the names and addresses of respondents, available for public review during regular business hours. Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
This NOI to prepare a Supplemental EIS is published pursuant to the regulations (40 CFR 1501.7 and 43 CFR 46.435) implementing the provisions of NEPA.
Office of Surface Mining Reclamation and Enforcement, Interior.
Notice and request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Office of Surface Mining Reclamation and Enforcement (OSM) is announcing its intention to seek approval to continue the collection of information for the contractor eligibility, and the Abandoned Mine Land (AML) Contractor Information form. This information collection activity was previously approved by the Office of Management and Budget (OMB), and assigned clearance number 1029-0119.
Comments on the proposed information collection must be received by October 16, 2015, to be assured of consideration.
Comments may be mailed to John A. Trelease, Office of Surface Mining Reclamation and Enforcement, 1951 Constitution Ave. NW., Room 203—SIB, Washington, DC 20240. Comments may also be submitted electronically to
To receive a copy of the information collection request contact John Trelease, at (202) 208-2783 or by email at
OMB regulations at 5 CFR 1320, which implementing provisions of the Paperwork Reduction Act of 1995 (Pub. L. 104-13), require that interested members of the public and affected agencies have an opportunity to comment on information collection and recordkeeping activities [see 5 CFR 1320.8(d)]. This notice identifies information collection that OSM will be submitting to OMB for approval. This collection is contained in 30 CFR 874.16 and the Abandoned Mine Land Contractor Information form. OSM will request a 3-year term of approval for each information collection activity. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. The OMB control number for this collection is 1029-0119. Responses are required to obtain a benefit.
Comments are invited on: (1) The need for the collection of information for the performance of the functions of the agency; (2) the accuracy of the agency's burden estimates; (3) ways to enhance the quality, utility and clarity of the information collection; and (4) ways to minimize the information collection burden on respondents, such as use of automated means of collection of the information. A summary of the public comments will accompany OSM's submission of the information collection request to OMB.
Before including your address, phone number, email address, or other personal identifying information in your comment, you should be aware that your entire comment—including your personal identifying information—may be made publicly available at any time. While you can ask us in your comment to withhold your personal identifying information from public review, we cannot guarantee that we will be able to do so.
United States International Trade Commission.
Notice.
In a notice published in the
Mary Messer (202-205-3193), Office of Investigations, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436. Hearing-impaired persons can obtain information on this matter by contacting the Commission's TDD terminal on 202-205-1810. Persons with mobility impairments who will need special assistance in gaining access to the Commission should contact the Office of the Secretary at 202-205-2000. General information concerning the Commission may also be obtained by accessing its Internet server (
This proceeding is being conducted under authority of Title VII of the Tariff Act of 1930; this notice is published pursuant to section 207.61 of the Commission's rules.
By order of the Commission.
Federal Bureau of Investigation, Department of Justice.
30-day notice.
The Department of Justice (DOJ), Federal Bureau of Investigation (FBI), Criminal Justice Information Services (CJIS) Division, will be submitting the following information collection request to the Office of Management and Budget (OMB) for review and approval in accordance with the Paperwork Reduction Act of 1995. The proposed information collection was previously published in the 80 FR 33290, on June 11, 2015, allowing for a 60-day comment period.
Comments are encouraged and will be accepted for an additional days until September 16, 2015:
If you have additional comments especially on the estimated public burden or associated response time, suggestions, or need a copy of the proposed information collection instrument with instructions or additional information, please contact Gerry Lynn Brovey, Supervisory Information Liaison Specialist, FBI, CJIS, Resources Management Section, Administrative Unit, Module C-2, 1000 Custer Hollow Road, Clarksburg, West Virginia 26306 (facsimile: 304-625-5093). Written comments and/or suggestions can also be directed to the Office of Management and Budget, Office of Information and Regulatory Affairs, Attention Department of Justice Desk Officer, Washington, DC 20503 or sent to
Written comments and suggestions from the public and affected agencies concerning the proposed collection of information are encouraged. Your comments should address one or more of the following four points:
1.
2.
3.
4.
5.
6.
If additional information is required contact: Jerri Murray, Department Clearance Officer, United States Department of Justice, Justice Management Division, Policy and Planning Staff, Two Constitution Square, 145 N Street NE., 3E.405B, Washington, DC 20530.
On August 11, 2015, the Department of Justice lodged a proposed Consent Decree with the United States District Court for the Western District of Texas in the lawsuit entitled
In this action, the United States and the State of Texas, pursuant to Section 1002 of the Oil Pollution Act of 1990, seek natural resource damages, including past and future administrative and assessment costs, arising out of the unauthorized discharge of crude oil into Marcelinas Creek, a navigable water of the United States and the State of Texas, from Defendant's former crude oil receiving station in Karnes County, Texas, on October 18, 1998.
The proposed Consent Decree requires Defendant to pay the sum of $770,000, an amount which will: (1) Fund the restoration option selected by the federal and state trustees, (2) reimburse the trustees for their past assessment costs, and (3) provide for future administrative and assessment costs associated with implementation of the restoration plan. The United States and the State of Texas provide covenants not to sue Defendant pursuant to the Oil Pollution Act, 33 U.S.C. 2701
The publication of this notice opens a period for public comment on the Consent Decree. Comments should be addressed to the Assistant Attorney General, Environment and Natural Resources Division, and should refer to
During the public comment period, the Consent Decree may be examined
Please enclose a check or money order for $5.00 (25 cents per page reproduction cost) payable to the United States Treasury.
Employment and Training Administration, Labor.
Notice.
On June 29, 2015, President Obama signed into law the Trade Adjustment Assistance Reauthorization Act of 2015 (TAARA 2015), title IV of the Trade Preferences Extension Act of 2015, Public Law 114-27. In accordance with Section 405(a) of TAARA 2015, which amended the Trade Act of 1974, Public Law 93-618 (“the Trade Act”), the Director of the Office of Trade Adjustment Assistance, Employment and Training Administration (OTAA) has taken the following action for petitions that were filed with the Secretary of Labor under section 221(a) of the Trade Act on or after January 1, 2014, and before June 29, 2015, and are identified in the Appendices to this notice.
OTAA has reopened investigations of petitions identified in Appendix A to reconsider all negative determinations on petitions filed on or after January 1, 2014, and before June 29, 2015, and will further investigate those petitions to determine whether the workers are eligible to apply for adjustment assistance under the provisions of section 222 of the Trade Act in effect on June 29, 2015, which were in effect before January 1, 2014. If eligible under these requirements, OTAA will certify the group of workers as eligible to apply for adjustment assistance under title II of the Trade Act, as amended by TAARA 2015.
OTAA also is continuing to investigate those petitions identified in Appendix B for which no determination was issued before June 29, 2015, to determine whether the workers are eligible to apply for adjustment assistance under the provisions of section 222 of the Trade Act in effect on June 29, 2015, which were in effect before January 1, 2014. If eligible under these requirements, OTAA will certify the group of workers as eligible to apply for adjustment assistance under title II of the Trade Act.
Further, worker groups that did not submit petitions between January 1, 2014 and June 29, 2015, but wish to be considered under the group eligibility for workers based on the 2015 Program may file a new petition within 90 days of enactment of the new 2015 law which was signed by President Barak Obama on June 29, 2015. This would include service sector workers as well as worker groups whose jobs are adversely affected by trade from countries that are not parties to Free Trade Agreements (FTAs) with the United States, including China and India. While all petitions filed on and after June 29, 2015, will be investigated under the 2015 Program worker group eligibility criteria, the TAARA 2015 provides that for petitions filed by MIDNIGHT (12:00 AM EASTERN TIME), SUNDAY, SEPTEMBER 27, 2015, that are certified, the certification will cover all members of the worker group who are separated or threatened with separations during the period beginning January 1, 2014, instead of a beginning date of no more than one year before the date of the petition, and generally ending two years after the date of certification. Each of those certifications will describe the worker group and specify the January 1, 2014, beginning date and the ending dates of the certification period.
This Notice is effective immediately/June 29, 2015.
Please contact the 1-877-US2-JOBS (TTY) 1-877-889-5627 (both lines are Toll free) or via the Internet at
Notice.
The Department of Labor (DOL) is submitting the Occupational Safety and Health Administration (OSHA) sponsored information collection request (ICR) titled, “Cadmium in Construction Standard,” to the Office of Management and Budget (OMB) for review and approval for continued use, without change, in accordance with the Paperwork Reduction Act of 1995 (PRA), 44 U.S.C. 3501
The OMB will consider all written comments that agency receives on or before September 16, 2015.
A copy of this ICR with applicable supporting documentation; including a description of the likely respondents, proposed frequency of response, and estimated total burden may be obtained free of charge from the RegInfo.gov Web site at
Submit comments about this request by mail or courier to the Office of Information and Regulatory Affairs, Attn: OMB Desk Officer for DOL-OSHA, Office of Management and Budget, Room 10235, 725 17th Street NW., Washington, DC 20503; by Fax: 202-395-5806 (this is not a toll-free number); or by email:
Contact Michel Smyth by telephone at 202-693-4129, TTY 202-693-8064, (these are not toll-free numbers) or by email at
44 U.S.C. 3507(a)(1)(D).
This ICR seeks to extend PRA authority for the Cadmium in Construction Standard information collection requirements codified in regulations 29 CFR 1926.1127. The major information collection requirements in the Standard include: Conducting worker exposure monitoring; notifying workers of their cadmium exposures; implementing a written compliance program; implementing medical surveillance of workers; providing examining physicians with specific information; ensuring workers receive a copy of their medical surveillance results; maintaining workers' exposure monitoring and medical surveillance records for specific periods; and providing access to these records by the worker who is the subject of the records, the worker's representative, and other designated parties. Occupational Safety and Health Act sections 2(b)(9), 6, and 8(c) authorize this information collection.
This information collection is subject to the PRA. A Federal agency generally cannot conduct or sponsor a collection of information, and the public is generally not required to respond to an information collection, unless it is approved by the OMB under the PRA and displays a currently valid OMB Control Number. In addition, notwithstanding any other provisions of law, no person shall generally be subject to penalty for failing to comply with a collection of information that does not display a valid Control Number.
OMB authorization for an ICR cannot be for more than three (3) years without renewal, and the current approval for this collection is scheduled to expire on August 31, 2015. The DOL seeks to extend PRA authorization for this
Interested parties are encouraged to send comments to the OMB, Office of Information and Regulatory Affairs at the address shown in the
• Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
• Evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
• Enhance the quality, utility, and clarity of the information to be collected; and
• Minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
Notice.
The Department of Labor, as part of its continuing effort to reduce paperwork and respondent burden, conducts a preclearance consultation program to provide the general public and Federal agencies with an opportunity to comment on proposed and/or continuing collections of information in accordance with the Paperwork Reduction Act of 1995 (PRA95) [44 U.S.C. 3506(c)(2)(A)]. This program helps to ensure that requested data can be provided in the desired format, reporting burden (time and financial resources) is minimized, collection instruments are clearly understood, and the impact of collection requirements on respondents can be properly assessed. Currently, the Office of Workers' Compensation Programs is soliciting comments concerning the proposed collection: Claim for Medical Reimbursement (OWCP-915). A copy of the proposed information collection request can be obtained by contacting the office listed below in the addresses section of this Notice.
Written comments must be submitted to the office listed in the addresses section below on or before October 16, 2015.
Ms. Yoon Ferguson, U.S. Department of Labor, 200 Constitution Ave. NW., Room S-3323, Washington, DC 20210, telephone/FAX (202) 354-9647, Email
The Office of Workers' Compensation Programs (OWCP) is the agency responsible for administration of the Federal Employees' Compensation Act (FECA), 5 U.S.C. 8101
The Department of Labor is particularly interested in comments which:
* Evaluate whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
* evaluate the accuracy of the agency's estimate of the burden of the proposed collection of information, including the validity of the methodology and assumptions used;
* enhance the quality, utility and clarity of the information to be collected; and
* minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
The Department of Labor seeks the approval of the extension of this currently approved information collection in order to carry out its responsibility to provide payment for certain covered medical services to injured employees who are covered under the Acts.
Comments submitted in response to this notice will be summarized and/or
The ACRS Subcommittee on Radiation Protection and Nuclear Materials will hold a meeting on August 19, 2015, Room T-2B1, 11545 Rockville Pike, Rockville, Maryland 20852.
The meeting will be open to public attendance with the exception of portions that may be closed to protect information that is propriety pursuant to 5 U.S.C. 552b(c)(4). The agenda for the subject meeting shall be as follows:
The Subcommittee will review and discuss the SHINE Medical Technologies (SHINE) construction permit application for Mo99 medical radioisotope production facility under 10 CFR part 50 and the staff's Safety Evaluation Report, Chapters 1, 2, 4, 5, 6a, 7, 8. The Subcommittee will hear presentations by and hold discussions with SHINE, the NRC staff and other interested persons regarding this matter. The Subcommittee will gather information, analyze relevant issues and facts, and formulate proposed positions and actions, as appropriate, for deliberation by the Full Committee.
Members of the public desiring to provide oral statements and/or written comments should notify the Designated Federal Official (DFO), Maitri Banerjee (Telephone: 301-415-6973 or Email:
Detailed meeting agendas and meeting transcripts are available on the NRC Web site at
If attending this meeting, please enter through the One White Flint North Building, 11555 Rockville Pike, Rockville, Maryland 20152. After registering with Security, please contact Mr. Theron Brown (Telephone: 240-888-9835) to be escorted to the meeting room.
August 17, 24, 31, September 7, 14, 21, 2015.
Commissioners' Conference Room, 11555 Rockville Pike, Rockville, Maryland.
Public and Closed.
There are no meetings scheduled for the week of August 17, 2015.
There are no meetings scheduled for the week of August 24, 2015.
There are no meetings scheduled for the week of August 31, 2015.
This meeting will be webcast live at the Web address—
There are no meetings scheduled for the week of September 14, 2015.
The schedule for Commission meetings is subject to change on short notice. For more information or to verify the status of meetings, contact Glenn Ellmers at 301-415-0442 or via email at
The NRC Commission Meeting Schedule can be found on the Internet at:
The NRC provides reasonable accommodation to individuals with disabilities where appropriate. If you need a reasonable accommodation to participate in these public meetings, or need this meeting notice or the transcript or other information from the public meetings in another format (
Members of the public may request to receive this information electronically. If you would like to be added to the distribution, please contact the Nuclear Regulatory Commission, Office of the Secretary, Washington, DC 20555 (301-415-1969), or email
Pursuant to section 19(b)(1)
The Exchange proposes to reflect a change to the holdings to be implemented by the iShares Interest Rate Hedged Corporate Bond ETF and iShares Interest Rate Hedged High Yield Bond ETF relating to the use of interest rate futures contracts, and interest rate swaps. The text of the proposed rule change is available on the Exchange's Web site at
In its filing with the Commission, the self-regulatory organization included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
The Commission has approved a proposal to list and trade on the Exchange shares (“Shares”) of the iShares Interest Rate Hedged Corporate Bond ETF and iShares Interest Rate Hedged High Yield Bond ETF (each a “Fund” and, together, the “Funds”) under NYSE Arca Equities Rule 8.600,
The Shares of the Funds are offered by iShares U.S. ETF Trust (the “Trust”).
The Exchange proposes to revise the representations made in the Prior Release regarding the Funds' investments to accommodate use of interest rate futures contracts
As described in the Prior Release, according to the Corporate Bond Registration Statement, the Fund seeks to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, investment grade corporate bonds. The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated investment grade bonds, in one or more investment companies (exchange-traded and non-exchange-traded funds) that principally invest in investment-grade bonds, in U.S. Treasury securities (or cash equivalents), and by taking short positions in U.S. Treasury futures and other interest rate futures contracts.
The Exchange proposes to amend this statement to provide that, going forward, the Fund will seek to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated investment grade bonds, in one or more investment companies (exchange-traded and non-exchange-traded funds) that principally invest in investment-grade bonds, in U.S. Treasury securities (or cash
The Prior Release also stated that, according to the Corporate Bond Registration Statement, the Fund initially intends to invest a substantial portion of its assets in the iShares iBoxx $ Investment Grade Corporate Bond ETF (the “Underlying Corporate Bond Fund”). The Fund attempts to mitigate interest rate risk primarily through the use of U.S. Treasury futures contracts.
The Exchange proposes to amend the statement in the last sentence of the preceding paragraph to state that, going forward, the Fund will attempt to mitigate interest rate risk primarily through the use of U.S. Treasury futures contracts, interest rate futures, and interest rate swaps.
The Prior Release stated that BFA will utilize a model-based proprietary investment process to assemble an investment portfolio comprised of (i) long positions in the Underlying Corporate Bond Fund, (ii) long positions in U.S. dollar-denominated investment-grade corporate bonds, (iii) long positions in U.S. Treasury securities and (iv) short positions in U.S. Treasury futures and other interest rate futures contracts.
The Exchange proposes to amend the statement in item (iv) of the preceding paragraph to provide that, going forward, the investment portfolio referred to in the preceding paragraph may be comprised of short positions in U.S. Treasury futures, other interest rate futures contracts, and interest rate swaps.
According to the High Yield Registration Statement, the Fund seeks to mitigate the interest rate risk of a portfolio composed of U.S. dollar-denominated, high yield corporate bonds. The Fund seeks to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated high yield corporate bonds, in one or more investment companies (exchange-traded and non-exchange-traded funds) that principally invest in high yield bonds, in U.S. Treasury securities (or cash equivalents), and by taking short positions in U.S. Treasury futures and other interest rate futures contracts.
The Exchange proposes to amend this statement to provide that, going forward, the Fund will seek to achieve its investment objective by investing, under normal circumstances, at least 80% of its net assets in U.S. dollar-denominated high yield corporate bonds, in one or more investment companies (exchange-traded and non-exchange-traded funds) that principally invest in high yield bonds, in U.S. Treasury securities (or cash equivalents), and by taking short positions in U.S. Treasury futures, other interest rate futures contracts, and interest rate swaps.
The Prior Release also stated that, according to the High Yield Registration Statement, the Fund initially intends to invest a substantial portion of its assets in the iShares iBoxx $ High Yield Corporate Bond ETF. The Fund will attempt to mitigate interest rate risk primarily through the use of U.S. Treasury futures contracts.
The Exchange proposes to amend the last sentence of the preceding paragraph to provide that, going forward, the Fund will attempt to mitigate interest rate risk primarily through the use of U.S. Treasury futures contracts, other interest rate futures contracts, and interest rate swaps.
The Prior Release stated that BFA will utilize a model-based proprietary investment process to assemble an investment portfolio comprised of (i) long positions in the Underlying High Yield Bond Fund, (ii) long positions in U.S. dollar-denominated high yield corporate bonds, (iii) long positions in U.S. Treasury securities and (iv) short positions in U.S. Treasury futures and other interest rate futures contracts.
The Exchange proposes to amend the statement in item (iv) of the preceding paragraph to provide that, going forward, the investment portfolio referred to in the preceding paragraph may be comprised of short positions in U.S. Treasury futures, other interest rate futures contracts, and interest rate swaps.
The section “Determination of Net Asset Value” in the Prior Release did not include reference to swaps. The Exchange proposes to state that swaps and other derivatives will generally be valued based upon quotations from market makers or by a pricing service in accordance with valuation procedures approved by Trust's Board of Directors.
On a daily basis, each of the Funds will disclose for each portfolio security or other financial instrument the following information on the Funds' Web site: Ticker symbol, if any; CUSIP number or other identifier, if any; a description of the holding (including the type of holding, such as the type of swap); the identity of the security or other asset or instrument underlying the holding, if any; for options, the option strike price; quantity held (as measured by, for example, par value, notional value or number of shares, contracts or units); maturity date, if any; coupon rate, if any; market value of the holding; and the percentage weighting of the holding in the portfolio. The Web site information will be publicly available at no charge.
The Adviser represents that the proposed changes relating to the Funds' holdings in interest rate swaps, as described above, are consistent with the Fund's investment objective, and will further assist the Adviser to achieve such investment objective. In addition, such proposed changes are consistent with the use of swaps permitted for shares of other funds of the Trust previously approved by the Commission for Exchange listing and trading.
Except for the changes noted above, all other representations made in the Prior Release remain unchanged. The Funds will continue to comply with all initial and continued listing requirements under NYSE Arca Equities Rule 8.600.
The basis under the Act for this proposed rule change is the requirement under section 6(b)(5)
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in NYSE Arca Equities Rule 8.600. The Funds will invest only in futures contracts that are traded on an exchange that is a member of the ISG or with which the Exchange has in place a comprehensive surveillance sharing agreement. Swaps will be centrally cleared. All derivatives held by the Funds will be collateralized.
The proposed rule change is designed to promote just and equitable principles
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest. The Adviser represents that the proposed changes relating to the Funds' holdings in U.S. Treasury futures, other interest rate futures contracts, and interest rate swaps, as described above, are consistent with each Fund's investment objective, and will further assist the Adviser to achieve each such investment objective. In addition, such proposed changes are consistent with the use of U.S. Treasury futures, other interest rate futures contracts, and interest rate swaps permitted for shares of other funds of the Trust previously approved by the Commission for Exchange listing and trading.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange believes the proposed rule change, in permitting each Fund to utilize other interest rate futures and interest rate swaps as part of its portfolio to achieve its investment objective, will enhance competition among issues of Managed Fund Shares that invest principally in fixed income securities.
No written comments were solicited or received with respect to the proposed rule change.
The Exchange has filed the proposed rule change pursuant to section 19(b)(3)(A)(iii) of the Act
At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act.
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Securities and Exchange Commission (“Commission”).
Notice of an application for an order under section 6(c) of the Investment Company Act of 1940 (“Act”) for an exemption from sections
Victory NextShares Trust (the “Trust”), Victory Capital Management Inc. (the “Adviser”) and Victory Capital Advisers, Inc. (the “Distributor”).
An order granting the requested relief will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission's Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on September 8, 2015, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Pursuant to rule 0-5 under the Act, hearing requests should state the nature of the writer's interest, any facts bearing upon the desirability of a hearing on the matter, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission's Secretary.
The Commission: Brent J. Fields, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. Applicants: Victory NextShares Trust, Victory Capital Management Inc., and Victory Capital Advisers, Inc., 4900 Tiedeman Rd., Brooklyn, OH 44144.
Diane L. Titus, Paralegal Specialist, or Dalia Osman Blass, Assistant Chief Counsel, at (202) 551-6821 (Division of Investment Management, Chief Counsel's Office).
The following is a summary of the application. The complete application may be obtained via the Commission's Web site by searching for the file number, or for an applicant using the Company name box, at
1. The Trust will be registered as an open-end management investment company under the Act and is a statutory business trust organized under the laws of Delaware. Applicants seek relief with respect to nine Funds (as defined below, and those Funds, the “Initial Funds”). The portfolio positions of each Fund will consist of securities and other assets selected and managed by its Adviser or Subadviser (as defined below) to pursue the Fund's investment objective.
2. The Adviser, a New York corporation, will be the investment adviser to the Initial Funds. An Adviser (as defined below) will serve as investment adviser to each Fund. The Adviser is, and any other Adviser will be, registered as an investment adviser under the Investment Advisers Act of 1940 (“Advisers Act”). The Adviser and the Trust may retain one or more subadvisers (each a “Subadviser”) to manage the portfolios of the Funds. Any Subadviser will be registered, or not subject to registration, under the Advisers Act.
3. The Distributor is a Delaware corporation and a broker-dealer registered under the Securities Exchange Act of 1934 and will act as the principal underwriter of Shares of the Funds. Applicants request that the requested relief apply to any distributor of Shares, whether affiliated or unaffiliated with the Adviser (included in the term “Distributor”). Any Distributor will comply with the terms and conditions of the Order.
4. Applicants seek the requested Order under section 6(c) of the Act for an exemption from sections 2(a)(32), 5(a)(1), 22(d) and 22(e) of the Act and rule 22c-1 under the Act, under sections 6(c) and 17(b) of the Act for an exemption from sections 17(a)(1) and 17(a)(2) of the Act, and under section 12(d)(1)(J) of the Act for an exemption from sections 12(d)(1)(A) and (B) of the Act. The requested Order would permit applicants to offer exchange-traded managed funds. Because the relief requested is the same as the relief granted by the Commission under the Reference Order and because the Adviser has entered into, or anticipates entering into, a licensing agreement with Eaton Vance Management, or an affiliate thereof in order to offer exchange-traded managed funds,
5. Applicants request that the Order apply to the Initial Funds and to any other existing or future open-end management investment company or series thereof that: (a) Is advised by the Adviser or any entity controlling, controlled by, or under common control with the Adviser (any such entity included in the term “Adviser”); and (b) operates as an exchange-traded managed fund as described in the Reference Order; and (c) complies with the terms and conditions of the Order and of the Reference Order, which is incorporated by reference herein (each such company or series and Initial Fund, a “Fund”).
6. Section 6(c) of the Act provides that the Commission may exempt any person, security or transaction, or any class of persons, securities or transactions, from any provisions of the Act, if and to the extent that such exemption is necessary or appropriate in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act. Section 17(b) of the Act authorizes the Commission to exempt a proposed transaction from section 17(a) of the Act if evidence establishes that the terms of the
7. Applicants submit that for the reasons stated in the Reference Order: (1) With respect to the relief requested pursuant to section 6(c) of the Act, the relief is appropriate, in the public interest and consistent with the protection of investors and the purposes fairly intended by the policy and provisions of the Act; (2) with respect to the relief request pursuant to section 17(b) of the Act, the proposed transactions are reasonable and fair and do not involve overreaching on the part of any person concerned, are consistent with the policies of each registered investment company concerned and consistent with the general purposes of the Act; and (3) with respect to the relief requested pursuant to section 12(d)(1)(J) of the Act, the relief is consistent with the public interest and the protection of investors.
By the Division of Investment Management, pursuant to delegated authority.
On June 12, 2015, New York Stock Exchange LLC (“NYSE” or the “Exchange”) filed with the Securities and Exchange Commission (the “Commission”), pursuant to Section 19(b)(1)
Section 19(b)(2) of the Act
Accordingly, the Commission, pursuant to Section 19(b)(2) of the Act,
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Notice is hereby given that, pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Form 11-K (17 CFR 249.311) is the annual report designed for use by employee stock purchase, savings and similar plans to comply with the reporting requirements under Section 15(d) of the Securities and Exchange Act of 1934 (the “Exchange Act”) (15 U.S.C. 78o(d)). Section 15(d) establishes a periodic reporting obligation for every issuer of a class of securities registered under the Securities Act of 1933 (the “Securities Act”) (15 U.S.C. 77a
Written comments are invited on: (a) Whether this proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden imposed by the collection of information; (c) ways to enhance the quality, utility, and clarity of the information collected; and (d) ways to minimize the burden of the collections of information on respondents, including through the use of automated collection techniques or other forms of information technology. Consideration will be given to comments and suggestions submitted in writing within 60 days of this publication.
Please direct your written comments to Pamela Dyson, Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon,
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”),
NASDAQ is proposing to amend Rule 7051 to extend the waiver of installation fees assessed for Direct Circuit Connection to NASDAQ, and to waive ongoing monthly fees for direct connectivity to the Chicago, IL data center, for a limited time.
The text of the proposed rule change is available at
In its filing with the Commission, NASDAQ included statements concerning the purpose of, and basis for, the proposed rule change and discussed any comments it received on the proposed rule change. The text of those statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant parts of such statements.
NASDAQ is proposing to amend Rule 7051 entitled “Direct Connectivity to Nasdaq” to extend the waiver of installation fees for Direct Circuit Connection to Nasdaq (10Gb), Direct Circuit Connection to Nasdaq (supports up to 1Gb), and Direct Circuit Connection to Nasdaq (1Gb Ultra). The Exchange is also proposing to waive the related ongoing monthly fees assessed for these direct connectivity options to the Exchange's new Chicago, IL data center.
The Exchange assesses separate installation and ongoing monthly fees for subscription to each option. For 1Gb connectivity, the Exchange assesses an installation fee of $1,500 and ongoing monthly fees of $2,500. For 10Gb connectivity, the Exchange charges an installation fee of $1,500 and ongoing monthly fees of $7,500. For 1Gb Ultra, the Exchange charges an installation fee of $1,500 and ongoing monthly fees of $2,500.
NASDAQ is relocating its Disaster Recovery (“DR”) location for the U.S. equities and options markets from Ashburn, VA to its new Chicago, IL data center beginning in August 2015 with completion of the move expected on November 9, 2015. NASDAQ has invested and installed new equipment in this data center for client connectivity and for the infrastructure of Exchange systems. NASDAQ has chosen Chicago as the location of its new DR data center as many other exchanges are using this same location for a DR or primary location and, as a result, many of our market participants have a presence or connection at this location, thus making it easier and less expensive for many market participants to connect to NASDAQ's DR location. In anticipation of the move and to facilitate transfer of connectivity from Ashburn, VA to Chicago, IL, the Exchange waived the installation fees for the months of April through July, 2015, for all three connectivity options so that both new subscriptions and customers transferring from one connectivity option to another during that time would not be assessed the installation fee.
NASDAQ believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that extending the waiver of Direct Circuit Connectivity installation fees is reasonable because it will continue to enable market participants to move from one direct connectivity offering to another, or to move the location of their connectivity from one direct connectivity access point to another, with no penalty in the form of an installation fee. Similarly, the Exchange believes that the time-limited waiver of ongoing monthly fees for connectivity to the Chicago, IL data center is reasonable because the Exchange is moving its DR location from Ashburn, VA to Chicago, IL, which is expected to be completed on November 9, 2015. As such, to continue DR connectivity, market participants must subscribe to new Direct Circuit Connectivity to the Chicago, IL data center and test such connectivity prior to cancellation of their existing Ashburn, VA direct connectivity subscription. The Exchange believes that the proposed fee waivers are equitable and do not unfairly discriminate because they are of limited duration and designed to apply to market participants that wish to utilize the new direct connectivity location and/or are affected by the Exchange's determination to move trading and DR functionality from the Ashburn, VA data center. Moreover, the Exchange notes that the installation fee waiver applies to all three Direct Circuit Connectivity options, and therefore it believes that extension of the waiver is equitable and does not unfairly discriminate. Waiver of the installation fee will allow any market participant that wishes to move from their [sic] existing Direct Circuit Connectivity data center to the new Chicago, IL data center with no penalty. Waiver of the ongoing monthly fees for connectivity to Chicago, IL enables market participants to test the DR functionality in Chicago while still being connected to the Ashburn, VA location with no penalty in the form of overlapping monthly direct connectivity fees.
The Exchange does not believe that the proposed rule change will result in any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Act, as amended.
Written comments were neither solicited nor received.
The foregoing change has become effective pursuant to Section 19(b)(3)(A) of the Act
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to Section 19(b)(1)
The Exchange is proposing to list and trade shares of the ProShares Managed Futures Strategy ETF (the “Fund”) of the ProShares Trust (the “Trust”) under BATS Rule 14.11(i) (“Managed Fund Shares”). The shares of the Fund are referred to herein as the “Shares.”
The text of the proposed rule change is available at the Exchange's Web site at
In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant parts of such statements.
The Exchange proposes to list and trade the Shares under BATS Rule 14.11(i), which governs the listing and trading of Managed Fund Shares on the Exchange.
The Shares will be offered by the Trust, which was established as a Delaware statutory trust on May 29, 2002. The Trust is registered with the Commission as an open-end investment company and has filed a registration statement on behalf of the Fund on Form N-1A (“Registration Statement”) with the Commission.
ProShare Advisors LLC is the investment adviser (“PSA” or “Adviser”) to the Fund. JPMorgan Chase Bank, National Association is the administrator, custodian, fund account agent, index receipt agent and transfer agent for the Trust. SEI Investments Distribution Co. (“Distributor”) serves as the distributor for the Trust.
BATS Rule 14.11(i)(7) provides that, if the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio.
According to the Registration Statement, the Fund seeks to achieve positive returns that are not directly correlated to broad equity or fixed income markets. The Fund uses the S&P® Strategic Futures Index as a performance benchmark (the “Benchmark”). The Benchmark seeks to reflect trends (in either direction) in the commodity, foreign currency and fixed income markets by taking long or short positions in the related futures contracts. While the Fund generally will seek exposure to the commodity and financial markets included in the Benchmark, the Fund is not an index tracking ETF and will generally seek to enhance its performance by actively selecting investments for the Fund with varying maturities from the underlying components of the Benchmark.
There can be no assurance that the Fund's performance will exceed the performance of the Benchmark at any time. The Fund is not sponsored, endorsed, sold or promoted by S&P®. S&P's® only relationship to the Fund is the licensing of certain service marks and service names of S&P® and of the Benchmark, which is determined, composed and calculated by S&P® without regard to the Fund's investment advisor or the Fund. S&P® has no obligation to take the needs of the Fund's investment advisor or the Fund into consideration in determining, composing or calculating the Benchmark.
Under normal market conditions,
The Fund, in part through the Subsidiary, attempts to capture the economic benefit derived from rising and declining trends based on the price changes of these Futures Contracts. Each month, the Fund's investments will generally be positioned long or short based on a comparison of the recent returns of each Futures Contract with its own seven-month weighted moving average return. To be “long” means to hold or have long exposure to an asset with the expectation that its value will increase over time. To be “short” means to sell or have short exposure to an asset with the expectation that it will fall in value. The Fund will benefit if it is long an asset that increases in value or is short an asset that decreases in value. Conversely, the Fund will be adversely impacted if it is long an asset that decreases in value or short an asset that increases in value.
The following table describes each of the commodities, currencies and U.S. Treasuries underlying the futures contracts included in the Benchmark as of June 30, 2015. The table also provides each instrument's trading hours, exchange and ticker symbol. This table is subject to change:
In
The Adviser does not expect that the Fund will invest directly in any commodity or currency. In the event position accountability rules or position limits with respect to a Futures Contract are reached with respect to a Fund, the Adviser may, in its commercially reasonable judgment, obtain exposure through swaps whose value is derived from the level of the Benchmark, other Indexes, one or more Futures Contracts or their underlying reference assets, or invest in other futures contracts or swaps if such instruments tend to exhibit trading prices or returns that will further the investment objective of the Fund.
According to the Registration Statement, the Fund will invest a substantial portion of its assets in fixed income securities that include U.S. government and agency securities, money market instruments,
The Fund expects to gain exposure to certain of these investments by investing a portion of its assets in the Subsidiary. The Subsidiary will be advised by the Adviser.
The Fund intends to qualify each year as a regulated investment company (a “RIC”) under Subchapter M of the Internal Revenue Code of 1986, as amended.
Developed by S&P® and launched on August 14, 2014, the Benchmark is a long/short rules-based investable index that seeks to capture the economic benefit derived from both rising and declining trends in futures prices. The Benchmark is typically composed of futures contracts representing unleveraged long or short positions in the commodity and financial markets.
The weight assigned to each futures contract in the Benchmark is determined on a monthly basis, and implemented each month in an index rebalancing. Weights are determined using a proprietary risk-weighting methodology that measures the risk exposure of the futures contracts included in the Benchmark and then weights each futures contract so that it
The Benchmark's exposure to futures contracts are not long-only, but are either short or long based on a comparison of the price change in the contract during the most recent month to a seven-month exponential weighted moving average price change of that contact. During the monthly rebalancing, the Benchmark also “rolls” certain of its positions in futures contracts from the current contract to a contract further from settlement.
Each month, S&P® will determine whether a futures contract that is a part of the Benchmark should be either a long or short position by comparing the price change of the most recent month (the “First Month Price Change”) of the futures contract to the seven-month exponential weighted moving average price change (the “Seven Month Price Change”). Long positions are tracked when a futures contract's First Month Price Change is greater than or equal to the Seven Month Price Change. Short positions are tracked when a futures contract's First Month Price Change is less than the Seven Month Price Change. The First Month Price Change of each futures contract is calculated by calculating the percentage difference of each futures contract's price on the last PDD (as defined below) relative to the current PDD.
When calculating the Seven Month Price Change, each month's price input is represented as the monthly percentage change of a futures contract price which is calculated in the same manner as the First Month Price Change. Monthly positions are determined on the second to last Benchmark business day of the month (defined as the position determination date, or “PDD”) when the monthly percentage change of a futures contract's price is compared to past monthly price changes, exponentially weighted to give greatest weight to the most recent return and least weight to the return seven months prior. The weighted sum of the percentage changes of all futures contract prices in the Benchmark equals the daily movement of the Benchmark. To create an exponential average for comparison, price inputs (percentage change from current and previous PDDs) are weighted per the schedule below. Due to this weighting methodology, current price movements are more important than those of the more distant past.
During this monthly rebalancing, the Benchmark will also “roll” certain of its positions from the current contract to a contract further from settlement. In order to maintain consistent exposure to the futures contracts that compose the Benchmark, each futures contract must be sold prior to its expiration date and replaced by a contract maturing at a specified date in the future. This process is known as “rolling.” The futures contracts that are a part of the Benchmark are rolled periodically. The rolls are implemented pursuant to a roll schedule over a five-day period from the first (1st) through the fifth (5th) index business days of the month. An index business day is any day on which the majority of the futures contracts included in the Benchmark are open for official trading and official settlement prices are provided, excluding holidays and weekends.
In order to mitigate the potential negative impact of contango on long commodity positions, certain futures contracts in commodities will be rolled according to an “enhanced” rolling methodology. This methodology seeks to modify the normal roll methodology for futures contracts in the energy sector when such long position would be materially and negatively impacted by contango. In addition, the methodology identifies seasonal factors applicable to both the energy and agricultural futures markets and implements a modified roll to mitigate potential costs of such seasonal impacts.
In addition to the instruments described above, the Fund will invest in money market instruments
The Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment) deemed illiquid by the Adviser
The Fund's investments will be consistent with the Fund's investment objective and will not be used to achieve leveraged or inverse leveraged returns (
According to the Registration Statement, the net asset value (“NAV”) of the Shares of the Fund will be calculated by dividing the value of the net assets of the Fund (
Securities and other assets are generally valued at their market price using information provided by a pricing service or market quotations. Certain short-term securities are valued on the basis of amortized cost. Futures
When the Adviser determines that the price of a security or derivative is not readily available or deems the price unreliable, it may, in good faith, establish a fair value for that security or derivative in accordance with procedures established by and under the general supervision and responsibility of the Board. The use of a fair valuation method may be appropriate if, for example, market quotations do not accurately reflect fair value for an investment, a trading halt closes an exchange or market early, or other events result in an exchange or market delaying its normal close. The Adviser may consider applying appropriate valuation methodologies, which may include discounts of market value of similar freely traded securities, yields to maturity, or any other appropriate method. In determining the appropriate methodology, the Adviser may consider all relevant factors, including, among other things: Fundamental analytical data; the types of securities affected; pricing history of the security; whether dealer quotations are available; liquidity of the market; news or other events; and other factors the Adviser deems relevant.
For more information regarding the valuation of Fund investments in calculating the Fund's NAV, see the Registration Statement.
The Fund will issue and redeem Shares on a continuous basis at the NAV per Share only in large blocks of a specified number of Shares or multiples thereof (“Creation Units”) in transactions with authorized participants who have entered into agreements with the Distributor. The Adviser currently anticipates that a Creation Unit will consist of 25,000 Shares, though this number may change from time to time, including prior to listing of the Shares. The exact number of Shares that will constitute a Creation Unit will be disclosed in the Registration Statement. Once created, Shares of the Fund trade on the secondary market in amounts less than a Creation Unit.
Although the Adviser anticipates that purchases and redemptions for Creation Units will generally be executed on an all-cash basis, the consideration for purchase of Creation Units of the Fund may consist of an in-kind deposit of a designated portfolio of securities (including any portion of such assets for which cash may be substituted) (
The Deposit Assets and Fund Securities (as defined below), as the case may be, in connection with a purchase or redemption of a Creation Unit, generally will correspond pro rata, to the extent practicable, to the assets held by the Fund.
The Cash Component will be an amount equal to the difference between the NAV of the Shares (per Creation Unit) and the “Deposit Amount,” which will be an amount equal to the market value of the Deposit Assets, and serve to compensate for any differences between the NAV per Creation Unit and the Deposit Amount. The Fund generally offers Creation Units partially or entirely for cash. PSA will make available through the National Securities Clearing Corporation (“NSCC”) on each business day, prior to the opening of business on the Exchange, the list of names and the required number or par value of each Deposit Security and the amount of the Cash Component to be included in the current Fund Deposit (based on information as of the end of the previous business day) for the Fund.
The identity and number or par value of the Deposit Assets may change pursuant to changes in the composition of the Fund's portfolio as rebalancing adjustments and corporate action events occur from time to time. The composition of the Deposit Assets may also change in response to adjustments to the weighting or composition of the holdings of the Fund.
The Fund reserves the right to permit or require the substitution of a “cash in lieu” amount to be added to the Cash Component to replace any Deposit Security that may not be available in sufficient quantity for delivery or that may not be eligible for transfer through the Depository Trust Company (“DTC”) or the clearing process through the NSCC.
Except as noted below, all creation orders must be placed for one or more Creation Units and must be received by the Distributor at a time specified by the Adviser. Currently, such orders must be received in proper form no later than 2:30 p.m. Eastern Time on the date such order is placed in order for creation of Creation Units to be effected based on the NAV of Shares of the Fund as next determined on such date after receipt of the order in proper form. The “Settlement Date” is generally the third business day after the transmittal date. On days when the Exchange or the bond markets close earlier than normal, the Fund may require orders to create or to redeem Creation Units to be placed earlier in the day.
Fund Deposits must be delivered through either the Continuous Net Settlement facility of the NSCC, the Federal Reserve System (for cash and government securities), through DTC (for corporate and municipal securities), or through a central depository account, such as with Euroclear or DTC, maintained by State Street or a sub-custodian (a “Central Depository Account”), in any case at the discretion of the Adviser, by an authorized participant. Any portion of a Fund Deposit that may not be delivered through the NSCC, Federal Reserve System or DTC must be delivered through a Central Depository Account.
A standard creation transaction fee may be imposed to offset the transfer and other transaction costs associated with the issuance of Creation Units.
Shares of the Fund may be redeemed only in Creation Units at their NAV next determined after receipt of a redemption request in proper form by the Distributor and only on a business day. PSA will make available through the NSCC, prior to the opening of business on the Exchange on each business day, the designated portfolio of securities (including any portion of such securities for which cash may be substituted) that will be applicable (subject to possible amendment or correction) to redemption requests received in proper form on that day (“Fund Securities”). The redemption proceeds for a Creation Unit generally will consist of a specified amount of cash less a redemption transaction fee. The Fund generally will redeem Creation Units entirely for cash.
A standard redemption transaction fee may be imposed to offset transfer and other transaction costs that may be incurred by the Fund.
Redemption requests for Creation Units of the Fund must be submitted to the Distributor by or through an authorized participant by a time specified by the Adviser. Currently, such requests must be received no later than 10:45 a.m. Eastern Time on any business day, in order to receive that day's NAV. The authorized participant must transmit the request for redemption in the form required by the Fund to the Distributor in accordance with procedures set forth in the authorized participant agreement.
Additional information regarding the Shares and the Fund, including investment strategies, risks, creation and redemption procedures, fees and expenses, portfolio holdings disclosure policies, distributions, taxes and reports to be distributed to beneficial owners of the Shares can be found in the Registration Statement or on the Web site for the Fund (
The Fund's Web site, which will be publicly available prior to the public offering of Shares, will include a form of the prospectus for the Fund that may be downloaded. The Web sites will include additional quantitative information updated on a daily basis, including, for the Fund: (1) The prior business day's reported NAV, the closing market price or the midpoint of the bid/ask spread at the time of calculation of such NAV (the “Bid/Ask price”),
In addition, for the Fund, an estimated value, defined in BATS Rule 14.11(i)(3)(C) as the “Intraday Indicative Value,” that reflects an estimated intraday value of the Fund's portfolio, will be disseminated. Moreover, the Intraday Indicative Value will be based upon the current value for the components of the Disclosed Portfolio and will be updated and widely disseminated by one or more major market data vendors at least every 15 seconds during the Exchange's Regular Trading Hours.
The dissemination of the Intraday Indicative Value, together with the Disclosed Portfolio, will allow investors to determine the value of the underlying portfolio of the Fund on a daily basis and provide an estimate of that value throughout the trading day.
Intraday price quotations on repurchase agreements and U.S. Government securities of the type held by the Fund are available from major broker-dealer firms and from third-parties, which may provide prices free with a time delay, or “live” with a paid fee. For Futures Contracts, such intraday information is available directly from the applicable listing exchange. Intraday price information is also available through subscription services, such as Bloomberg and Thomson Reuters, which can be accessed by authorized participants and other investors. Money market fund shares are not generally priced or quoted on an intraday basis.
Information regarding market price and volume of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services. The previous day's closing price and trading volume information for the Shares will be generally available daily in the print and online financial press. Quotation and last sale information for the Shares will be available on the facilities of the CTA.
The Shares will be subject to BATS Rule 14.11(i), which sets forth the initial and continued listing criteria applicable to Managed Fund Shares. The Exchange represents that, for initial and/or continued listing, the Fund must be in compliance with Rule 10A-3 under the Act.
With respect to trading halts, the Exchange may consider all relevant factors in exercising its discretion to halt or suspend trading in the Shares the Fund. The Exchange will halt trading in the Shares under the conditions specified in BATS Rule 11.18. Trading may be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. These may include: (1) The extent to which trading is not occurring in the Futures Contracts and other assets composing the Disclosed Portfolio of the Fund; or (2) whether other unusual conditions or circumstances detrimental to the maintenance of a fair and orderly market are present. Trading in the Shares also will be subject to Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares of the Fund may be halted.
The Exchange deems the Shares to be equity securities, thus rendering trading in the Shares subject to the Exchange's existing rules governing the trading of
The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. Trading of the Shares through the Exchange will be subject to the Exchange's surveillance procedures for derivative products, including Managed Fund Shares. The Exchange may obtain information regarding trading in the Shares and the underlying futures via the Intermarket Surveillance Group (“ISG”) from other exchanges who are members or affiliates of the ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
Prior to the commencement of trading, the Exchange will inform its members in an Information Circular of the special characteristics and risks associated with trading the Shares. Specifically, the Information Circular will discuss the following: (1) The procedures for purchases and redemptions of Shares in Creation Units (and that Shares are not individually redeemable); (2) BATS Rule 3.7, which imposes suitability obligations on Exchange members with respect to recommending transactions in the Shares to customers; (3) how information regarding the Intraday Indicative Value is disseminated; (4) the risks involved in trading the Shares during the Pre-Opening
In addition, the Information Circular will advise members, prior to the commencement of trading, of the prospectus delivery requirements applicable to the Fund. Members purchasing Shares from the Fund for resale to investors will deliver a prospectus to such investors. The Information Circular will also discuss any exemptive, no-action, and interpretive relief granted by the Commission from any rules under the Act.
In addition, the Information Circular will reference that the Fund is subject to various fees and expenses described in the Registration Statement. The Information Circular will also disclose the trading hours of the Shares of the Fund and the applicable NAV calculation time for the Shares. The Information Circular will disclose that information about the Shares of the Fund will be publicly available on the Fund's Web site. In addition, the Information Circular will reference that the Trust is subject to various fees and expenses described in the Registration Statement.
The Exchange believes that the proposal is consistent with Section 6(b) of the Act
The Exchange believes that the proposed rule change is designed to prevent fraudulent and manipulative acts and practices in that the Shares will be listed and traded on the Exchange pursuant to the initial and continued listing criteria in BATS Rule 14.11(i). The Exchange believes that its surveillance procedures are adequate to properly monitor the trading of the Shares on the Exchange during all trading sessions and to deter and detect violations of Exchange rules and the applicable federal securities laws. If the investment adviser to the investment company issuing Managed Fund Shares is affiliated with a broker-dealer, such investment adviser to the investment company shall erect a “fire wall” between the investment adviser and the broker-dealer with respect to access to information concerning the composition and/or changes to such investment company portfolio. The Adviser is not a registered broker-dealer, but is affiliated with a broker-dealer and has implemented a “fire wall” with respect to such broker-dealer regarding access to information concerning the composition and/or changes to the Fund's portfolio. The Exchange may obtain information regarding trading in the Shares and the underlying futures via the ISG from other exchanges who are members or affiliates of the ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement.
According to the Registration Statement, the Fund expects that, under normal circumstances, it will have at least 80% of its assets invested, either directly or indirectly via the Subsidiary, in Futures Contracts. The Fund also may invest its net assets in money market instruments as collateral for the Futures Contracts and in order to help manage cash flows in and out of the Fund.
Additionally, the Fund may hold up to an aggregate amount of 15% of its net assets in illiquid assets (calculated at the time of investment). The Fund will monitor its portfolio liquidity on an ongoing basis to determine whether, in light of current circumstances, an adequate level of liquidity is being maintained, and will consider taking appropriate steps in order to maintain adequate liquidity if, through a change in values, net assets, or other circumstances, more than 15% of the Fund's net assets are held in illiquid assets. Illiquid assets include assets subject to contractual or other
The proposed rule change is designed to promote just and equitable principles of trade and to protect investors and the public interest in that the Exchange will obtain a representation from the issuer of the Shares that the NAV will be calculated daily and that the NAV and the Disclosed Portfolio will be made available to all market participants at the same time. In addition, a large amount of information is publicly available regarding the Fund and the Shares, thereby promoting market transparency. Moreover, the Intraday Indicative Value will be disseminated by one or more major market data vendors at least every 15 seconds during Regular Trading Hours. On each business day, before commencement of trading in Shares during Regular Trading Hours, the Fund will disclose on its Web site the Disclosed Portfolio that will form the basis for the Fund's calculation of NAV at the end of the business day. Pricing information will be available on the Fund's Web site including: (1) The prior business day's reported NAV, the Bid/Ask Price of the Fund, and a calculation of the premium and discount of the Bid/Ask Price against the NAV; and (2) data in chart format displaying the frequency distribution of discounts and premiums of the daily Bid/Ask Price against the NAV, within appropriate ranges, for each of the four previous calendar quarters. Additionally, information regarding market price and trading of the Shares will be continually available on a real-time basis throughout the day on brokers' computer screens and other electronic services, and quotation and last sale information for the Shares will be available on the facilities of the CTA. The Web site for the Fund will include a form of the prospectus for the Fund and additional data relating to NAV and other applicable quantitative information. Trading in Shares of the Fund will be halted under the conditions specified in BATS Rule 11.18. Trading may also be halted because of market conditions or for reasons that, in the view of the Exchange, make trading in the Shares inadvisable. Finally, trading in the Shares will be subject to BATS Rule 14.11(i)(4)(B)(iv), which sets forth circumstances under which Shares of the Fund may be halted. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
Intraday price quotations on repurchase agreements and U.S. Government securities of the type held by the Fund are available from major broker-dealer firms and from third-parties, which may provide prices free with a time delay, or “live” with a paid fee. For Futures Contracts, such intraday information is available directly from the applicable listing exchange. Intraday price information is also available through subscription services, such as Bloomberg and Thomson Reuters, which can be accessed by authorized participants and other investors. Money market fund shares are not generally priced or quoted on an intraday basis.
The proposed rule change is designed to perfect the mechanism of a free and open market and, in general, to protect investors and the public interest in that it will facilitate the listing and trading of additional types of actively-managed exchange-traded product that will enhance competition among market participants, to the benefit of investors and the marketplace. As noted above, the Exchange has in place surveillance procedures relating to trading in the Shares and may obtain information via ISG from other exchanges that are members of ISG or with which the Exchange has entered into a comprehensive surveillance sharing agreement as well as trade information for certain fixed income instruments as reported to FINRA's TRACE. In addition, as noted above, investors will have ready access to information regarding the Fund's holdings, the Intraday Indicative Value, the Disclosed Portfolio, and quotation and last sale information for the Shares.
For the above reasons, the Exchange believes that the proposed rule change is consistent with the requirements of Section 6(b)(5) of the Act.
The Exchange does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of the purpose of the Act. The Exchange notes that the proposed rule change, rather will facilitate the listing and trading of additional actively-managed exchange-traded products that will enhance competition among both market participants and listing venues, to the benefit of investors and the marketplace.
The Exchange has neither solicited nor received written comments on the proposed rule change.
Within 45 days of the date of publication of this notice in the
Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods:
• Use the Commission's Internet comment form (
• Send an email to
• Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
U.S. Small Business Administration (SBA).
Notice of open hearing of Region IX Small Business Owners and Business Leaders in Springerville, Arizona.
The SBA, Office of the National Ombudsman is issuing this notice to announce the location, date and time of the Springerville, AZ Regulatory Fairness Hearing. This hearing is open to the public.
The hearing will be held on Wednesday, September 9, 2015, from 8:30 a.m. to 5:00 p.m. (MST).
The hearing will be at The American Legion, Post 30, 825 E. Main Street, Springerville, AZ 85938-5535.
Pursuant to the Small Business Regulatory Enforcement Fairness Act (Pub. L. 104-121), Sec. 222, SBA announces the hearing for Small Business Owners, Business Leaders, Business Organizations, Trade Associations, Chambers of Commerce and related organizations serving small business concerns to report experiences regarding unfair or excessive Federal regulatory enforcement issues affecting their members.
The hearing is open to the public; however, advance notice of attendance is requested. Anyone wishing to attend and/or make a presentation at the Springerville, AZ hearing must contact Doyel Shamley at
For more information on the Office of the National Ombudsman, see our Web site at
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E. O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
Notice is hereby given of the following determinations: Pursuant to the authority vested in me by the Act of October 19, 1965 (79 Stat. 985; 22 U.S.C. 2459), E. O. 12047 of March 27, 1978, the Foreign Affairs Reform and Restructuring Act of 1998 (112 Stat. 2681,
For further information, including a list of the imported objects, contact the Office of Public Diplomacy and Public Affairs in the Office of the Legal Adviser, U.S. Department of State (telephone: 202-632-6471; email:
Notice of request for public comment.
The Department of State is seeking Office of Management and Budget (OMB) approval for the information collection described below. In accordance with the Paperwork Reduction Act of 1995, we are requesting comments on this collection from all interested individuals and organizations. The purpose of this notice is to allow 60 days for public comment preceding submission of the collection to OMB.
The Department will accept comments from the public up to
You may submit comments by any of the following methods:
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You must include the DS form number (if applicable), information collection title, and the OMB control number in any correspondence.
Direct requests for additional information regarding the collection listed in this notice, including requests for copies of the proposed collection instrument and supporting documents, to Derek Rivers, Bureau of Consular Affairs, Overseas Citizens Services (CA/OCS/PMO), U.S. Department of State, SA-17, 10th Floor, Washington, DC 20036 or at
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We are soliciting public comments to permit the Department to:
• Evaluate whether the proposed information collection is necessary for the proper functions of the Department.
• Evaluate the accuracy of our estimate of the time and cost burden for this proposed collection, including the validity of the methodology and assumptions used.
• Enhance the quality, utility, and clarity of the requests for information to be collected.
• Minimize the reporting burden on those who are to respond, including the use of automated collection techniques or other forms of information technology.
Please note that comments submitted in response to this Notice are public record. Before including any detailed personal information, you should be aware that your comments as submitted, including your personal information, will be available for public review.
Federal Aviation Administration (FAA), DOT.
Notice of public meeting.
This notice announces the bi-annual meeting of the Federal Aviation Administration (FAA) Aeronautical Charting Forum (ACF) to discuss informational content and design of aeronautical charts and related products, as well as instrument flight procedures development policy and design criteria.
The ACF is separated into two distinct groups. The Instrument Procedures Group (IPG) will meet October 27, 2015 from 8:30 a.m. to 5:00 p.m. The Charting Group will meet October 28 and 29, 2015 from 8:30 a.m. to 5:00 p.m.
The meeting will be held at the United States Geological Survey (USGS) Headquarters at 12201 Sunrise Valley Drive, Reston, VA 20192.
For information relating to the Instrument Procedures Group, contact Thomas E. Schneider, FAA, Flight Procedures Standards Branch, AFS-420, 6500 South MacArthur Blvd., P.O. Box 25082, Oklahoma City, OK 73125; telephone: (405) 954-5852.
For information relating to the Charting Group, contact Valerie S.
Pursuant to § 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463; 5 U.S.C. App. II), notice is hereby given of a meeting of the FAA Aeronautical Charting Forum to be held from October 27 through October 29, 2015, from 8:30 a.m. to 5:00 p.m. at USGS Headquarters at 12201 Sunrise Valley Drive, Reston, VA 20192, in the Auditorium (Room 1C111).
The Instrument Procedures Group agenda will include briefings and discussions on recommendations regarding pilot procedures for instrument flight, as well as criteria, design, and developmental policy for instrument approach and departure procedures.
The Charting Group agenda will include briefings and discussions on recommendations regarding aeronautical charting specifications, flight information products, and new aeronautical charting and air traffic control initiatives. Attendance is open to the interested public, but will be limited to the space available.
Please note the following special security requirements for access to the USGS Headquarters. All visitors must enter at the Visitors Entrance and pass through security screening process. All packages, briefcases, handbags, etc. will be scanned. Visitors must sign in and present a picture I.D., such as a State's driver's license. The guard will then issue a visitor's badge which must be worn at all times.
All foreign national participants are required to have a passport. Additionally, not later than October 15, 2015, foreign national attendees must provide their name, country of citizenship, company/organization representing, passport number, passport expiration date, issuing country of passport, and country of the company/organization. Send the information to: Lance Christian via Email to:
Attendees bringing laptop computers for use at during the conference are required to register their laptop when registering to enter the USGS facility. Attendees are to write the word “laptop” and the serial number on the sign-in beneath their printed name.
The public must make arrangements by October 8, 2015, to present oral statements at the meeting. The public may present written statements and/or new agenda items to the forum by providing a copy to the person listed in the
Federal Aviation Administration (FAA), U.S. Department of Transportation (DOT).
First Meeting Notice of RTCA Special Committee 235.
The FAA is issuing this notice to advise the public of the first meeting of the RTCA Special Committee 235.
The meeting will be held October 21st-22nd from 9:00 a.m.-5:00 p.m.
The meeting will be held at RTCA Headquarters, 1150 18th Street NW., Suite 450, Washington, DC 20036, Tel: (202) 330-0680.
The RTCA Secretariat, 1150 18th Street NW., Suite 910, Washington, DC, 20036, or by telephone at (202) 833-9339, fax at (202) 833-9434, or Web site at
Pursuant to section 10(a)(2) of the Federal Advisory Committee Act (Pub. L. 92-463, 5 U.S.C., App.), notice is hereby given for a meeting of the RTCA Special Committee 235. The agenda will include the following:
Attendance is open to the interested public but limited to space availability. With the approval of the chairman, members of the public may present oral statements at the meeting. Persons wishing to present statements or obtain information should contact the person listed in the
Federal Aviation Administration (FAA), DOT.
Request for public comments.
Under the provisions of Title 49, U.S.C. Section 47153(c), notice is being given that the FAA is considering a request from the City of Madras, OR, to waive the surplus property requirements for approximately 1.07 acres of airport property located at Madras Municipal Airport, in Madras, OR.
The subject property is located away from the aeronautical area and currently vacant. The property will remain vacant of any structures, as it will be utilized for public road improvements and right of way purposes only. This release will allow the City to sell parcels of the airport property to businesses interested in the airport industrial park. There will be no actual proceeds generated from the proposed release of this property as it will be used for public road improvements and right-of-way purposes. It has been determined through study that the subject parcels will not be needed for aeronautical purposes.
Comments must be received on or before September 30, 2015.
Send comments on this document to Ms. Cayla Morgan at the Federal Aviation Administration, 1601 Lind Avenue SW., Renton, Washington, 98057-3356, Telephone 425-227-2653.
Documents are available for review by appointment by contacting Ms. Cayla Morgan, Telephone 425-227-2653, Federal Aviation Administration, 1601 Lind Avenue SW., Renton, Washington.
Federal Highway Administration (FHWA), DOT.
Notice.
This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for the use of non-domestic steel products contained in (1) Helical Bevel gearbox Rebuild kits for trail lock machinery, (2) Trail lock brake motors, (3) R1 and R2 Reducer Subcomponents, (4) Spherical Roller Bearings for bridge operating machinery, (5) Diesel Engine for Hydraulic Power Unit for emergency drive system, and (6) Hydraulic Vane Motor for emergency Hydraulic drive system in the State of New York.
The effective date of the waiver is August 18, 2015.
For questions about this notice, please contact Mr. Gerald Yakowenko, FHWA Office of Program Administration, (202) 366-1562, or via email at
An electronic copy of this document may be downloaded from the Federal Register's home page at:
The FHWA's Buy America policy in 23 CFR 635.410 requires a domestic manufacturing process for any steel or iron products (including protective coatings) that are permanently incorporated in a Federal-aid construction project. The regulation also provides for a waiver of the Buy America requirements when the application would be inconsistent with the public interest or when satisfactory quality domestic steel and iron products are not sufficiently available. This notice provides information regarding FHWA's finding that a Buy America waiver is appropriate for use of non-domestic steel product contained in (1) Helical Bevel gearbox Rebuild kits for trail lock machinery, (2) Trail lock brake motors, (3) R1 and R2 Reducer Subcomponents, (4) Spherical Roller Bearings for bridge operating machinery, (5) Diesel Engine for Hydraulic Power Unit for emergency drive system, and (6) Hydraulic Vane Motor for emergency Hydraulic drive system in the State of New York.
In accordance with Division K, section 122 of the “Consolidated and Further Continuing Appropriations Act, 2015” (Pub. L. 113-235), FHWA published a notice of intent to issue a waiver on its Web site for non-domestic steel cable nets (
In accordance with the provisions of section 117 of the SAFETEA-LU Technical Corrections Act of 2008 (Pub. L. 110-244, 122 Stat. 1572), FHWA is providing this notice as its finding that a waiver of Buy America requirements is appropriate. The FHWA invites public comment on this finding for an additional 15 days following the effective date of the finding. Comments may be submitted to FHWA's Web site via the link provided to the New York waiver page noted above.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of final disposition.
FMCSA confirms its decision to exempt 49 individuals from its rule prohibiting persons with insulin-treated diabetes mellitus (ITDM) from operating commercial motor vehicles (CMVs) in interstate commerce. The exemptions enable these individuals to operate CMVs in interstate commerce.
The exemptions were effective on July 7, 2015. The exemptions expire on July 7, 2017.
Charles A. Horan, III, Director, Carrier, Driver and Vehicle Safety Standards, (202) 366-4001,
You may see all the comments online through the Federal Document Management System (FDMS) at:
On June 4, 2015, FMCSA published a notice of receipt of Federal diabetes exemption applications from 49 individuals and requested comments from the public (80 FR 31949). The public comment period closed on July 6, 2015, and no comments were received.
FMCSA has evaluated the eligibility of the 49 applicants and determined that granting the exemptions to these individuals would achieve a level of safety equivalent to or greater than the level that would be achieved by complying with the current regulation 49 CFR 391.41(b)(3).
The Agency established the current requirement for diabetes in 1970 because several risk studies indicated that drivers with diabetes had a higher rate of crash involvement than the general population. The diabetes rule provides that “A person is physically qualified to drive a commercial motor vehicle if that person has no established medical history or clinical diagnosis of diabetes mellitus currently requiring insulin for control” (49 CFR 391.41(b)(3)).
FMCSA established its diabetes exemption program, based on the Agency's July 2000 study entitled “A Report to Congress on the Feasibility of a Program to Qualify Individuals with Insulin-Treated Diabetes Mellitus to Operate in Interstate Commerce as Directed by the Transportation Act for the 21st Century.” The report concluded that a safe and practicable protocol to allow some drivers with ITDM to operate CMVs is feasible. The September 3, 2003 (68 FR 52441),
These 49 applicants have had ITDM over a range of one to 43 years. These applicants report no severe hypoglycemic reactions resulting in loss of consciousness or seizure, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning symptoms, in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the past 5 years. In each case, an endocrinologist verified that the driver has demonstrated a willingness to properly monitor and manage his/her diabetes mellitus, received education related to diabetes management, and is on a stable insulin regimen. These drivers report no other disqualifying conditions, including diabetes-related complications. Each meets the vision requirement at 49 CFR 391.41(b)(10).
The qualifications and medical condition of each applicant were stated and discussed in detail in the June 4, 2015,
FMCSA received no comments in this proceeding.
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the diabetes requirement in 49 CFR 391.41(b)(3) if the exemption is likely to achieve an equivalent or greater level of safety than would be achieved without the exemption. The exemption allows the applicants to operate CMVs in interstate commerce.
To evaluate the effect of these exemptions on safety, FMCSA considered medical reports about the applicants' ITDM and vision, and reviewed the treating endocrinologists' medical opinion related to the ability of the driver to safely operate a CMV while using insulin.
Consequently, FMCSA finds that in each case exempting these applicants from the diabetes requirement in 49 CFR 391.41(b)(3) is likely to achieve a level of safety equal to that existing without the exemption.
The terms and conditions of the exemption will be provided to the applicants in the exemption document and they include the following: (1) That each individual submit a quarterly monitoring checklist completed by the treating endocrinologist as well as an annual checklist with a comprehensive medical evaluation; (2) that each individual reports within 2 business days of occurrence, all episodes of severe hypoglycemia, significant complications, or inability to manage diabetes; also, any involvement in an accident or any other adverse event in a CMV or personal vehicle, whether or not it is related to an episode of hypoglycemia; (3) that each individual provide a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (4) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file, or keep a copy in his/her driver's qualification file if he/she is self-employed. The driver must also have a copy of the certification when driving, for presentation to a duly authorized Federal, State, or local enforcement official.
Based upon its evaluation of the 49 exemption applications, FMCSA exempts the following drivers from the diabetes requirement in 49 CFR 391.41(b)(10), subject to the requirements cited above 949 CFR 391.64(b)):
In accordance with 49 U.S.C. 31136(e) and 31315 each exemption is valid for two years unless revoked earlier by FMCSA. The exemption will be revoked if the following occurs: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315. If the exemption is still effective at the end of the 2-year period, the person may apply to FMCSA for a renewal under procedures in effect at that time.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of denial of exemption applications.
FMCSA announces its decision to deny applications from three individuals seeking exemptions from the prohibitions against operating a commercial motor vehicle (CMV) in interstate commerce by persons with: (1) Either a clinical diagnosis of epilepsy or any other condition that is likely to cause a loss of consciousness or any loss of ability to operate a CMV safely, or (2) a mental, nervous, organic, or functional disease or psychiatric disorder likely to interfere with his/her ability to drive a commercial motor vehicle safely. FMCSA has statutory authority to exempt individuals from certain parts of the Federal Motor Carrier Safety Regulations, if the exemptions granted will not compromise safety. The Agency must conclude that granting these exemptions provides a level of safety that will be equivalent to or greater than the level of safety maintained without the exemptions for these CMV drivers. Based on a review of the applications and following an opportunity for public comment, FMCSA has concluded that the individuals did not demonstrate that they could achieve a level of safety that is equivalent to, or greater than, the level of safety that would be obtained by complying with the regulation.
This decision is effective July 24, 2015.
Charles A. Horan III, Director, Office of Carrier, Driver and Vehicle Safety Standards, (202) 366-4001, or via email at
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the Federal Motor Carrier Safety Regulations for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” FMCSA can renew exemptions at the end of each 2-year period. The three individuals listed in this notice have each requested such an exemption from the physical qualification requirements in 49 CFR 391.41(b)(8) and (b)(9), which applies to drivers of CMVs in interstate commerce. Accordingly, the Agency evaluates the qualifications of each applicant to determine whether granting an exemption will achieve the required level of safety mandated by statute.
Narcolepsy is a chronic neurological disorder caused by autoimmune destruction of hypocretin-producing neurons inhibiting the brain's ability to regulate sleep-wake cycles normally. Persons with narcolepsy experience frequent excessive daytime sleepiness, comparable to how non-narcoleptics feel after 24 to 48 hours of sleep deprivation, as well as disturbed nocturnal sleep, which often is confused with insomnia. See NIH Narcolepsy Fact Sheet at
The Agency considered the topic of narcolepsy and the potential impact on commercial drivers in a 2009 Evidence Report. The Evidence Report “Narcolepsy (with and without cataplexy) and Commercial Motor Vehicle Driver Safety” addressed several key questions.
Key Question 1: Are individuals with narcolepsy (with and without cataplexy) at an increased risk for a motor vehicle crash when compared to comparable individuals without the disorder?
Key Question 2: Do currently recommended treatments for narcolepsy reduce the risk for a motor vehicle crash?
Key question 2 was further divided into several questions concerning the impact of various medication therapies for narcolepsy on driver safety. The complete report is included in the docket FMCSA 2014-0373.
The evidence report reviewed studies from the available literature and evaluated outcomes on measures of Excessive Daytime Sleepiness (EDS), cataplexy, event rate, measures of cognitive and psychomotor function, and driving performance. For key question 1, the currently available evidence (both direct and indirect) supports the contention that drivers with narcolepsy are at an increased risk for a motor vehicle crash when compared to otherwise similar individuals who do not have the disorder. The strength of the evidence was rated as strong. The direct evidence (from three crash studies) (study quality rating of “Low”) conducted with non-CMV drivers showed that individuals with narcolepsy are at an increased risk for a crash compared to individuals who do not have narcolepsy. The indirect evidence (studies of driving tests and driving simulation, quality rating “moderate”), examined factors associated with simulated driving outcomes, (driving performance, tracking error, fewer correct responses and more instances of going out of bounds compared to healthy controls). In summary, while there are limitations in the quality of the studies that examined direct crash risk in the evidence base, all study results showed a strong effect size and statistical significance. Indirect evidence of crash provides strong support for the direct crash study findings. Based upon available information, there is strong evidence that non-commercial drivers with narcolepsy are at an increased risk of crash.
Concerning key question 2 and its sub-questions, the American Academy of Sleep Medicine (AASM) and the European Federation of Neurological Societies recommend modafinil as the first-line of treatment and
Currently available evidence suggests that amphetamines and/or methylphenidate are effective in improving symptoms of EDS in individuals with narcolepsy (quality of studies range from “moderate to low”). However, these improvements do not result in levels of daytime sleepiness that can be considered to be normal in the vast majority of individuals. Evidence-based conclusions pertaining to the impact of treatment with amphetamines, methylphenidate, or other related stimulant drugs on cognitive and psychomotor function among individuals with narcolepsy cannot be drawn at this time.
In January 2010, the FMCSA's Medical Review Board (MRB) recommended that individuals with narcolepsy be ineligible for a commercial driver's license, even with treatment.
The FMCSA published the names of three individuals seeking exemption in a
To evaluate the effects of these exemption requests on safety, FMCSA reviewed and considered the content of each request individually and all comments received.
FMCSA acknowledges comments received attesting that individual applicants are responsible drivers currently on a stable therapeutic regimen which includes medication therapy. The Agency considered available medical and scientific data concerning medication therapy for narcolepsy. As discussed in the background section of this notice, evidence-based conclusions pertaining to treatment with medications on crash risk and driving performance could not be drawn.
Concerning ATAs comments recommending granting fewer exemptions and revising the current medical standards, FMCSA acknowledges ATA's concerns. The FMCSA has statutory authority (49 U.S.C. 31136(e) and 31315), to consider granting exemptions from the Federal Motor Carrier Safety Regulations for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The FMCSA reviews its medical standards through the use of evidence reports, various medical expert panels and the Agency's Medical Review Board and proposes evidence-based revisions to the medical standards through the rulemaking process which takes a considerable length of time.
The exemption process is the Agency's most viable alternative in the short term to consider whether drivers with disqualifying medical conditions and who are found to meet an equivalent level of safety, should be permitted to operate in interstate commerce.
FMCSA evaluated the three individual exemption requests on their merits and available data from FMCSA's Evidence Reports, the Medical Review Board recommendations and public comments received. The Agency has determined that the available medical and scientific literature and research provides insufficient data to enable the Agency to conclude that granting the exemptions would achieve a level of safety equivalent to or greater than the level of safety maintained without the exemption. Each applicant has, prior to this notice, received a letter of final disposition on his/her exemption request. Those decision letters outlined fully the basis for the denial and constitute final Agency action. The list published today summarizes the Agency's recent denials as required under 49 U.S.C. 31315(b)(4).
The following three applicants are denied exemptions from the physical qualification standards in [49 CFR 391.41(b)(8)] and [49 CFR 391.41(b)(9)]: Thomas Skagen, Charles Larry Peterson, and Stanley Jandreau.
Federal Motor Carrier Safety Administration (FMCSA), DOT.
Notice of renewal of exemptions; request for comments.
FMCSA announces its decision to renew the exemptions from the vision requirement in the Federal Motor Carrier Safety Regulations for 22 individuals. FMCSA has statutory authority to exempt individuals from the vision requirement if the exemptions granted will not compromise safety. The Agency has concluded that granting these exemption renewals will provide a level of safety that is equivalent to or greater than the level of safety maintained without the exemptions for these commercial motor vehicle (CMV) drivers.
This decision is effective September 22, 2015. Comments must be received on or before September 16, 2015.
You may submit comments bearing the Federal Docket Management System (FDMS) numbers: Docket No. [Docket No. FMCSA-2000-8398; FMCSA-2003-14504; FMCSA-2005-20560; FMCSA-2009-0154; FMCSA-
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Charles A. Horan, III, Director, Carrier, Driver and Vehicle Safety Standards, 202-366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may renew an exemption from the vision requirements in 49 CFR 391.41(b)(10), which applies to drivers of CMVs in interstate commerce, for a two-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The procedures for requesting an exemption (including renewals) are set out in 49 CFR part 381.
This notice addresses 22 individuals who have requested renewal of their exemptions in accordance with FMCSA procedures. FMCSA has evaluated these 22 applications for renewal on their merits and decided to extend each exemption for a renewable two-year period. They are:
The exemptions are extended subject to the following conditions: (1) That each individual has a physical examination every year (a) by an ophthalmologist or optometrist who attests that the vision in the better eye continues to meet the requirements in 49 CFR 391.41(b)(10), and (b) by a medical examiner who attests that the individual is otherwise physically qualified under 49 CFR 391.41; (2) that each individual provides a copy of the ophthalmologist's or optometrist's report to the medical examiner at the time of the annual medical examination; and (3) that each individual provide a copy of the annual medical certification to the employer for retention in the driver's qualification file and retains a copy of the certification on his/her person while driving for presentation to a duly authorized Federal, State, or local enforcement official. Each exemption will be valid for two years unless rescinded earlier by FMCSA. The exemption will be rescinded if: (1) The person fails to comply with the terms and conditions of the exemption; (2) the exemption has resulted in a lower level of safety than was maintained before it was granted; or (3) continuation of the exemption would not be consistent with the goals and objectives of 49 U.S.C. 31136(e) and 31315.
Under 49 U.S.C. 31315(b)(1), an exemption may be granted for no longer than two years from its approval date and may be renewed upon application for additional two year periods. In accordance with 49 U.S.C. 31136(e) and 31315, each of the 22 applicants has satisfied the entry conditions for obtaining an exemption from the vision requirements (65 FR 78256; 66 FR 16311; 68 FR 13360; 68 FR 19598; 68 FR 33570; 70 FR 12265; 70 FR 17504; 70 FR 25878; 70 FR 30997; 72 FR 11426; 72 FR 28093; 72 FR 40362; 74 FR 19270; 74 FR 20523; 74 FR 34394; 74 FR 37295; 74 FR 48343; 74 FR 60022; 75 FR 4623; 76 FR 34136; 76 FR 37173; 76 FR 53708; 76 FR 54530; 76 FR 55463; 78 FR 78477; 79 FR 53708). Each of these 22 applicants has requested renewal of the exemption and has submitted evidence showing that the vision in the better eye continues to meet the requirement specified at 49 CFR 391.41(b)(10) and that the vision impairment is stable. In addition, a review of each record of safety while driving with the respective vision deficiencies over the past two years indicates each applicant continues to meet the vision exemption requirements.
These factors provide an adequate basis for predicting each driver's ability to continue to drive safely in interstate commerce. Therefore, FMCSA concludes that extending the exemption for each renewal applicant for a period of two years is likely to achieve a level of safety equal to that existing without the exemption.
FMCSA encourages you to participate by submitting comments and related materials.
If you submit a comment, please include the docket number for this notice (FMCSA-2000-8398; FMCSA-2003-14504; FMCSA-2005-20560; FMCSA-2009-0154; FMCSA-2009-0303; FMCSA-2011-0124), indicate the specific section of this document to
To submit your comment online, got to
To view comments, as well as any documents mentioned in this preamble as being available in the docket, go to
Federal Motor Carrier Safety Administration (FMCSA).
Notice of applications for exemptions; request for comments.
FMCSA announces receipt of applications from 54 individuals for exemption from the prohibition against persons with insulin-treated diabetes mellitus (ITDM) operating commercial motor vehicles (CMVs) in interstate commerce. If granted, the exemptions would enable these individuals with ITDM to operate CMVs in interstate commerce.
Comments must be received on or before September 16, 2015.
You may submit comments bearing the Federal Docket Management System (FDMS) Docket No. FMCSA-2015-0066 using any of the following methods:
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Charles A. Horan, III, Director, Carrier, Driver and Vehicle Safety Standards, (202) 366-4001,
Under 49 U.S.C. 31136(e) and 31315, FMCSA may grant an exemption from the Federal Motor Carrier Safety Regulations for a 2-year period if it finds “such exemption would likely achieve a level of safety that is equivalent to or greater than the level that would be achieved absent such exemption.” The statute also allows the Agency to renew exemptions at the end of the 2-year period. The 54 individuals listed in this notice have recently requested such an exemption from the diabetes prohibition in 49 CFR 391.41(b) (3), which applies to drivers of CMVs in interstate commerce. Accordingly, the Agency will evaluate the qualifications of each applicant to determine whether granting the exemption will achieve the required level of safety mandated by statute.
Mr. Adkins, 65, has had ITDM since 2013. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Adkins understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Adkins meets the
Mr. Amador, 61, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Amador understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Amador meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Texas.
Mr. Ardoin, 52, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Ardoin understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Ardoin meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Louisiana.
Mr. Arsenault, 59, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Arsenault understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Arsenault meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Texas.
Mr. Bonney, 58, has had ITDM since 2005. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Bonney understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Bonney meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from New Hampshire.
Mr. Boucher, 46, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Boucher understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Boucher meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class E CDL from Michigan.
Ms. Carvalho, 44, has had ITDM since 2014. Her endocrinologist examined her in 2015 and certified that she has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. Her endocrinologist certifies that Ms. Carvalho understands diabetes management and monitoring has stable control of her diabetes using insulin, and is able to drive a CMV safely. Ms. Carvalho meets the requirements of the vision standard at 49 CFR 391.41(b)(10). Her optometrist examined her in 2015 and certified that she does not have diabetic retinopathy. She holds an operator's license from Minnesota.
Mr. Christiansen, 67, has had ITDM since 2010. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Christiansen understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Christiansen meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Minnesota.
Ms. Claunch, 57, has had ITDM since 2013. Her endocrinologist examined her in 2015 and certified that she has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. Her endocrinologist certifies that Ms. Claunch understands diabetes management and monitoring has stable control of her diabetes using insulin, and is able to drive a CMV safely. Ms. Claunch meets the requirements of the vision standard at 49 CFR 391.41(b)(10). Her ophthalmologist examined her in 2015 and certified that she does not have diabetic retinopathy. She holds a Class A CDL from New Mexico.
Mr. Crescentini, 46, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12
Mr. D'Agostino, 71, has had ITDM since 2010. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. D'Agostino understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. D'Agostino meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from New Jersey.
Mr. Ditman, 43, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Ditman understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Ditman meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Indiana.
Mr. Egan, 29, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Egan understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Egan meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class B CDL from Illinois.
Mr. Eldridge, 69, has had ITDM since 2011. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Eldridge understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Eldridge meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Illinois.
Mr. Elser, 65, has had ITDM since 2006. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Elser understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Elser meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable nonproliferative diabetic retinopathy. He holds a Class A CDL from Vermont.
Mr. Exum, 21, has had ITDM since 2008. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Exum understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Exum meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Georgia.
Mr. Farrell, 27, has had ITDM since 1992. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Farrell understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Farrell meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable nonproliferative diabetic retinopathy. He holds an operator's license from Massachusetts.
Mr. Felix, 57, has had ITDM since 2013. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Felix understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Felix meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Wisconsin.
Mr. Fosnaught, 55, has had ITDM since 1995. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Fosnaught understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Fosnaught meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Pennsylvania.
Mr. Galle, 43, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Galle understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Galle meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Georgia.
Mr. Gross, 66, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Gross understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Gross meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from South Dakota.
Mr. Guynes, 58, has had ITDM since 2007. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Guynes understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Guynes meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Missouri.
Mr. Hale, 22, has had ITDM since 2006. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Hale understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Hale meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from New York.
Mr. Hill, 68, has had ITDM since 2010. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Hill understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Hill meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from New York.
Mr. Hughes, 42, has had ITDM since 2012. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Hughes understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Hughes meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Georgia.
Mr. Lennon, 59, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Lennon understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Lennon meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class B CDL from Illinois.
Mr. Lewis, 36, has had ITDM since 1980. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Lewis understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Lewis meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His
Mr. Mingo, 47, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Mingo understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Mingo meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Minnesota.
Mr. Moberly, 74, has had ITDM since 2010. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Moberly understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Moberly meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Oregon.
Mr. Montgomery, 39, has had ITDM since 1979. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Montgomery understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Montgomery meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable proliferative diabetic retinopathy. He holds a Class A CDL from Washington.
Mr. Mortieau, 65, has had ITDM since 2007. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Mortieau understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Mortieau meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable nonproliferative diabetic retinopathy. He holds a Class A CDL from Montana.
Mr. Musalin, 43, has had ITDM since 1994. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Musalin understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Musalin meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Washington.
Mr. Najac, 59, has had ITDM since 2008. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Najac understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Najac meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class B CDL from New York.
Mr. Ness, 25, has had ITDM since 2011. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Ness understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Ness meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Wisconsin.
Mr. Oezer, 21, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Oezer understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Oezer meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class C CDL from Michigan.
Mr. Pazin, 44, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or
Mr. Pearl, 57, has had ITDM since 2000. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Pearl understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Pearl meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable nonproliferative diabetic retinopathy. He holds a Class A CDL from Washington.
Mr. Pecenka, 30, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Pecenka understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Pecenka meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class B CDL from Iowa.
Mr. Radford, 67, has had ITDM since 2012. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Radford understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Radford meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he has stable nonproliferative diabetic retinopathy. He holds a Class B CDL from Indiana.
Mr. Rava, 77, has had ITDM since 2013. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Rava understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Rava meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from California.
Mr. Ridenour, 59, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Ridenour understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Ridenour meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from New Mexico.
Mr. Rixon, 63, has had ITDM since 2011. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Rixon understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Rixon meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from New Jersey.
Mr. Rodriguez, 57, has had ITDM since 2001. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Rodriguez understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Rodriguez meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Connecticut.
Mr. Schrade, 62, has had ITDM since 2012. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Schrade understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Schrade meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class B CDL from Connecticut.
Mr. Schwirian, 57, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that
Mr. Simpson, 47, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Simpson understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Simpson meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His ophthalmologist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Utah.
Mr. Smith, 27, has had ITDM since 2000. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Smith understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Smith meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Kansas.
Mr. Sobczynski, 50, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Sobczynski understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Sobczynski meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Ohio.
Mr. Starnes, 26, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Starnes understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Starnes meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Alabama.
Mr. Stieb, 22, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Stieb understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Stieb meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Colorado.
Mr. Strand, 74, has had ITDM since 2015. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Strand understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Strand meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from Montana.
Mr. Vosburg, 61, has had ITDM since 2009. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Vosburg understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Vosburg meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds a Class A CDL from California.
Mr. Wressell, 69, has had ITDM since 2014. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Wressell understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Wressell meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that
Mr. Young, 49, has had ITDM since 2005. His endocrinologist examined him in 2015 and certified that he has had no severe hypoglycemic reactions resulting in loss of consciousness, requiring the assistance of another person, or resulting in impaired cognitive function that occurred without warning in the past 12 months and no recurrent (2 or more) severe hypoglycemic episodes in the last 5 years. His endocrinologist certifies that Mr. Young understands diabetes management and monitoring, has stable control of his diabetes using insulin, and is able to drive a CMV safely. Mr. Young meets the requirements of the vision standard at 49 CFR 391.41(b)(10). His optometrist examined him in 2015 and certified that he does not have diabetic retinopathy. He holds an operator's license from Indiana.
In accordance with 49 U.S.C. 31136(e) and 31315, FMCSA requests public comment from all interested persons on the exemption petitions described in this notice. We will consider all comments received before the close of business on the closing date indicated in the date section of the notice.
FMCSA notes that section 4129 of the Safe, Accountable, Flexible and Efficient Transportation Equity Act: A Legacy for Users requires the Secretary to revise its diabetes exemption program established on September 3, 2003 (68 FR 52441).
Section 4129 requires: (1) Elimination of the requirement for 3 years of experience operating CMVs while being treated with insulin; and (2) establishment of a specified minimum period of insulin use to demonstrate stable control of diabetes before being allowed to operate a CMV.
In response to section 4129, FMCSA made immediate revisions to the diabetes exemption program established by the September 3, 2003 notice. FMCSA discontinued use of the 3-year driving experience and fulfilled the requirements of section 4129 while continuing to ensure that operation of CMVs by drivers with ITDM will achieve the requisite level of safety required of all exemptions granted under 49 U.S.C. 31136(e).
Section 4129(d) also directed FMCSA to ensure that drivers of CMVs with ITDM are not held to a higher standard than other drivers, with the exception of limited operating, monitoring and medical requirements that are deemed medically necessary.
The FMCSA concluded that all of the operating, monitoring and medical requirements set out in the September 3, 2003 notice, except as modified, were in compliance with section 4129(d). Therefore, all of the requirements set out in the September 3, 2003 notice, except as modified by the notice in the
You may submit your comments and material online or by fax, mail, or hand delivery, but please use only one of these means. FMCSA recommends that you include your name and a mailing address, an email address, or a phone number in the body of your document so that FMCSA can contact you if there are questions regarding your submission.
To submit your comment online, go to
We will consider all comments and material received during the comment period and may change this proposed rule based on your comments. FMCSA may issue a final rule at any time after the close of the comment period.
To view comments, as well as any documents mentioned in this preamble, To submit your comment online, go to
On July 28, 2015, MCM Rail Services LLC, d/b/a Baltimore Industrial Railroad (MCM Rail) filed with the Surface Transportation Board (Board) a petition under 49 U.S.C. 10502 for exemption from the provisions of 49 U.S.C. 10903 to discontinue rail service over an approximately 12-mile line of railroad in Sparrows Point, Baltimore County, Md. (the Line). MCM Rail states that there are no mileposts on the Line. The Line is the entire system operated by MCM Rail. The Line traverses through United States Postal Service Zip Code 21219, and there are no stations on the Line.
MCM Rail states that the Line is stub-ended and therefore not capable of handling overhead traffic. Upon discontinuance of service by MCM Rail, rail service over the Line will be provided by the owner of the Line, Sparrows Point Rail, LLC (formerly known as Hilco SP Rail LLC). To MCM Rail's knowledge, the Line does not contain federally granted rights-of-way.
Because this is the discontinuance of the entire system operated by MCM Rail, no labor conditions will be imposed. Additionally, because this is a discontinuance proceeding and not an abandonment proceeding, trail use/rail banking and public use conditions are not appropriate.
By issuance of this notice, the Board is instituting an exemption proceeding pursuant to 49 U.S.C. 10502(b). A final decision will be issued by November 13, 2015.
Any offer of financial assistance (OFA) under 49 CFR 1152.27(b)(2) to subsidize continued rail service will be due no later than November 23, 2015, or 10 days after the service of a decision granting the petition for exemption, whichever occurs sooner. Each offer must be accompanied by a $1,600 filing fee.
All filings in response to this notice must refer to Docket AB 1235X and must be sent to: (1) Surface Transportation Board, 395 E Street SW., Washington, DC 20423-0001; and (2) John K. Fiorilla, Esq., Capehart Scatchard, 8000 Midlantic Drive, Suite 300, Mt. Laurel, NJ 08054. Replies to the petition are due on or before September 8, 2015.
Persons seeking further information concerning discontinuance procedures may contact the Board's Office of Public Assistance, Governmental Affairs, and Compliance at (202) 245-0238 or refer to the full abandonment and discontinuance regulations at 49 CFR pt. 1152. Questions concerning environmental issues may be directed to the Board's Office of Environmental Analysis (OEA) at (202) 245-0305.
Assistance for the hearing impaired is available through the Federal Information Relay Service (FIRS) at 1-800-877-8339.
Board decisions and notices are available on our Web site at
By the Board, Rachel D. Campbell, Director, Office of Proceedings
Office of the Secretary (OST), Department of Transportation (DOT).
Notice of ninth meeting of advisory committee.
This notice announces the ninth meeting of the Advisory Committee for Aviation Consumer Protection.
The ninth meeting of the advisory committee is scheduled for September 1, 2015, from 10:00 a.m. to 12:00 p.m., Eastern Time.
The meeting will be held in the Media Center (located on the lobby level of the West Building) at the U.S. Department of Transportation (DOT) headquarters, 1200 New Jersey Avenue SE., Washington, DC. Attendance is open to the public up to the room's capacity of 100 attendees. Since space is limited and access to the DOT headquarters building is controlled for security purposes, any member of the general public who plans to attend this meeting must notify the registration contact identified below no later than August 25, 2015.
To register to attend the meeting, please contact Amy Przybyla, Research Analyst, CENTRA Technology, Inc.,
On May 24, 2012, the Secretary, as mandated by Section 411 of the FAA Modernization and Reform Act of 2012 (Pub. L. 112-95, 126 Stat. 11 (2012)), established the Advisory Committee for Aviation Consumer Protection. The committee's charter, drafted in accordance with the Federal Advisory Committee Act, as amended, 5 U.S.C. App. 2, sets forth policies for the operation of the advisory committee and is available on the Department's Web site at
The ninth meeting of the committee is scheduled to take place from 10:00 a.m. to 12:00 p.m. Eastern Time on September 1, 2015, in the Media Center at the DOT headquarters, 1200 New Jersey Avenue SE., Washington, DC 20590. The committee will discuss the recommendations submitted to it during the past three public meetings on the following subjects: Voice calls, government-imposed taxes and fees, airline mergers and consolidations, space allocated per passenger on aircraft, airline frequent flyer programs, airline change/cancellation fees, mandatory hotel resort fees, and baggage allowances, fees and interlining. The committee will also provide its preliminary recommendations to the Department which will form the basis for a report to the Secretary on improvements to existing aviation consumer protection programs. This meeting will be open to the public and comments by members of the public are invited. Attendance will necessarily be limited by the size of the meeting room (maximum 100 attendees). We ask that any member of the general public who plans to attend the ninth meeting notify the registration contact noted above no later than August 25, 2015. Additionally, DOT will stream the event live on the Internet and provide a link to the recorded webcast for future viewing at
Members of the public may present written comments at any time. The docket number referenced above (DOT-OST-2012-0087, available at
Persons with a disability who plan to attend the meeting and require special accommodations, such as an interpreter for the hearing impaired, should notify the registration contact noted above no later than August 25, 2015.
Notice of this meeting is being provided in accordance with the Federal Advisory Committee Act and the General Services Administration regulations covering management of Federal advisory committees. (41 CFR part 102-3.)
United States Sentencing Commission.
Notice of final action regarding technical and conforming amendments to federal sentencing guidelines effective November 1, 2015.
On April 30, 2015, the Commission submitted to the Congress amendments to the sentencing guidelines and official commentary, which become effective on November 1, 2015, unless Congress acts to the contrary. Such amendments and the reasons for amendment subsequently were published in the
The Commission has specified an effective date of November 1, 2015, for the amendments set forth in this notice.
Jeanne Doherty, Public Affairs Officer, (202) 502-4502,
The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for federal sentencing courts pursuant to 28 U.S.C. 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. 994(o) and generally submits guideline amendments to Congress pursuant to 28 U.S.C. 994(p) not later than the first day of May each year. Absent action of Congress to the contrary, submitted amendments become effective by operation of law on the date specified by the Commission (generally November 1 of the year in which the amendments are submitted to Congress).
Unlike amendments made to sentencing guidelines, amendments to commentary and policy statements may be made at any time and are not subject to congressional review. To the extent practicable, the Commission endeavors to include amendments to commentary and policy statements in any submission of guideline amendments to Congress. Occasionally, however, the Commission determines that technical and conforming changes to commentary and policy statements are necessary. This notice sets forth technical and conforming amendments to commentary and policy statements that will become effective on November 1, 2015.
USSC Rules of Practice and Procedure 4.1.
1. Amendment:
The Commentary to § 1B1.3 captioned “Application Notes”, as amended by Amendment 1 of the amendments submitted to Congress on April 30, 2015, is further amended in Note 1 by inserting as the heading the following: “
The Commentary to § 1B1.3 captioned “Application Notes”, as amended by Amendment 1 of the amendments submitted to Congress on April 30, 2015, is further amended by renumbering Notes 5 through 12 according to the following table:
The Commentary to § 1B1.3 captioned “Application Notes”, as so renumbered and rearranged, is further amended by inserting headings at the beginning of certain notes, as follows (with Notes referred to by their new numbers):
The Commentary to § 2D1.1 captioned “Application Notes”, is amended in Note 8(D), in the heading relating to Date Rape Drugs (except flunitrazipam, GHB, or ketamine), by striking “flunitrazipam” and inserting “flunitrazepam”.
The Commentary to § 2K2.1 captioned “Application Notes”, as amended by Amendment 1 of the amendments submitted to Congress on April 30, 2015, is further amended in Note 14(E) by striking “Application Note 11” both places such term appears and inserting “Application Note 5(B)”.
The Commentary to § 2X3.1 captioned “Application Notes”, as amended by Amendment 1 of the amendments submitted to Congress on April 30, 2015, is further amended in Note 1 by striking “Application Note 12” and inserting “Application Note 9”.
The Commentary to § 2X4.1 captioned “Application Notes”, as amended by Amendment 1 of the amendments submitted to Congress on April 30, 2015, is further amended in Note 1 by striking “Application Note 12” and inserting “Application Note 9”.
The Commentary to § 8C2.8 captioned “Application Notes” is amended in Note 7 by striking the period at the end and inserting “).”.
First, the amendment reorganizes the commentary to § 1B1.3 (Relevant Conduct (Factors that Determine the Guideline Range)), so that the order of the application notes better reflects the order of the guideline provisions to which they relate. The Commission had previously reorganized notes 1 and 2 into notes 1 through 4, also redesignating notes 3 through 10 as notes 5 through 12, in a recently promulgated amendment.
The amendment also makes stylistic changes to the commentary to § 1B1.3, such as adding headings to certain application notes. To reflect the renumbering of application notes in § 1B1.3, conforming changes are also made to the commentary to §§ 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition), 2X3.1 (Accessory After the Fact), and 2X4.1 (Misprision of Felony).
Second, the amendment makes clerical changes to correct typographical errors in Application Note 8(D) to § 2D1.1 (Unlawful Manufacturing, Importing, Exporting, or Trafficking (Including Possession with Intent to Commit These Offenses); Attempt or Conspiracy) and Application Note 7 to § 8C2.8 (Determining the Fine Within the Range (Policy Statement)).
United States Sentencing Commission.
Notice of proposed amendment to the sentencing guidelines and commentary. Request for public comment, including public comment regarding retroactive application of the proposed amendment. Notice of public hearing.
Pursuant to section 994(a), (o), and (p) of title 28, United States Code, the United States Sentencing Commission is considering promulgating an amendment to the sentencing guidelines and commentary. This notice sets forth the proposed amendment and a synopsis of the issues addressed by the amendment. This notice also sets forth a number of issues for comment, most of which are set forth together with the proposed amendment and one of which (regarding retroactive application of the proposed amendment) is set forth in the
The proposed amendment and issues for comment in this notice are as follows: A proposed amendment to revise the “crime of violence” and “drug trafficking offense” definitions in the career offender guideline and the illegal reentry guideline, including (A) a proposed amendment to § 4B1.2 (Definitions of Terms Used in Section 4B1.1) to delete the residual clause and revise the list of enumerated offenses in the “crime of violence” definition, (B) a proposed amendment to § 4B1.2 to implement an additional requirement related to the state felony classification in determining whether an offense qualifies as a felony under § 4B1.2, and (C) corresponding changes to the “crime of violence” and “drug trafficking offense” definitions in § 2L1.2 (Unlawfully Entering or Remaining in the United States) to bring them more into parallel with the definitions at § 4B1.2, and related issues for comment.
(1) Written Public Comment.—Written public comment regarding the proposed amendment and issues for comment set forth in this notice, including public comment regarding retroactive application of the proposed amendment, should be received by the Commission not later than November 12, 2015.
(2) Public Hearing.—The Commission plans to hold a public hearing regarding the proposed amendment and issues for comment set forth in this notice. Further information regarding the public hearing, including requirements for testifying and providing written testimony, as well as the location, time, and scope of the hearing, will be provided by the Commission on its Web site at
Public comment should be sent to the Commission by electronic mail or regular mail. The email address for public comment is
Jeanne Doherty, Public Affairs Officer, (202) 502-4502,
The United States Sentencing Commission is an independent agency in the judicial branch of the United States Government. The Commission promulgates sentencing guidelines and policy statements for federal courts pursuant to 28 U.S.C. 994(a). The Commission also periodically reviews and revises previously promulgated guidelines pursuant to 28 U.S.C. 994(o) and submits guideline amendments to the Congress not later than the first day of May each year pursuant to 28 U.S.C. 994(p).
The proposed amendment as presented in this notice contains bracketed text to indicate a heightened interest on the Commission's part in comment and suggestions regarding alternative policy choices and on whether the proposed provision is appropriate. The Commission has also highlighted certain issues for comment and invites suggestions on how the Commission should respond to those issues.
The Commission requests public comment regarding whether, pursuant to 18 U.S.C. 3582(c)(2) and 28 U.S.C. 994(u), the proposed amendment published in this notice should be included in subsection (d) of § 1B1.10 (Reduction in Term of Imprisonment as a Result of Amended Guideline Range (Policy Statement)) as an amendment that may be applied retroactively to previously sentenced defendants. The Commission lists in § 1B1.10(d) the specific guideline amendments that the court may apply retroactively under 18 U.S.C. 3582(c)(2). The background commentary to § 1B1.10 lists the purpose of the amendment, the magnitude of the change in the guideline range made by the amendment, and the difficulty of applying the amendment retroactively to determine an amended guideline range under § 1B1.10(b) as among the factors the Commission considers in selecting the amendments included in § 1B1.10(d). To the extent practicable, public comment should address each of these factors.
Publication of a proposed amendment requires the affirmative vote of at least three voting members and is deemed to be a request for public comment on the proposed amendment.
Additional information pertaining to the proposed amendment described in this notice may be accessed through the Commission's Web site at
28 U.S.C. 994(a), (o), (p), (x); USSC Rules of Practice and Procedure, Rule 4.4.
Synopsis of Proposed Amendment: This proposed amendment is a result of the Commission's multi-year study of statutory and guideline definitions relating to the nature of a defendant's prior conviction (
The proposed amendment is also informed by the Supreme Court's recent decision in
The Commission's ordinary practice with amendments to the sentencing guidelines is to publish proposals for comment in January, hold hearings in February or March, promulgate amendments in April, and submit final amendments to Congress on or shortly before May 1, to take effect on November 1. However, the Commission's organic statute authorizes the Commission to promulgate and submit amendments at any point after the beginning of a session of Congress and to specify an effective date sooner than November 1.
Accordingly, the Commission anticipates that in Fall 2015 it will hold a hearing on the proposed amendment and that in January 2016 it may, if appropriate, promulgate a final amendment and submit it to Congress (to take effect earlier than November 1) or publish a revised version of this proposed amendment for an additional period of comment.
The proposed amendment contains several parts. The Commission is considering whether to promulgate any one or more of these parts, as they are not necessarily mutually exclusive. Issues for comment are also included.
The guidelines definition of “crime of violence” in § 4B1.2(a) was modeled after the statutory definition of “violent felony.” This guidelines definition is used in determining whether a defendant is a career offender under § 4B1.1 (Career Offender), and is also used in certain other guidelines.
While the statutory definition of “violent felony” in section 924(e) and the guidelines definition of “crime of violence” in § 4B1.2 are not identical in all respects — for example, they have different “enumerated” clauses — their residual clauses are identical. The proposed amendment amends § 4B1.2 to delete the residual clause.
In addition, the proposed amendment amends § 4B1.2 to clarify and revise the list of “enumerated” offenses. While some offenses covered by the definition are listed in the guideline (such as burglary of a dwelling, arson, and extortion), many other offenses covered by the definition are listed in the commentary instead (
Under the career offender guideline, the court must analyze both the instant offense of conviction and the defendant's prior offenses of conviction. To be a career offender, the court must find (1) that the instant offense is a felony that is a crime of violence or a controlled substance offense, and (2) that the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense.
To implement the requirement that the offense be a “felony,” the definitions in § 4B1.2(a) and (b) specify that the instant offense (whether a “crime of violence” or a “controlled substance offense”) must have been an offense under federal or state law, punishable by imprisonment for a term exceeding one year. The proposed amendment adds an additional requirement: the offense must also have been classified [at the time defendant was initially sentenced] as a felony (or comparable classification) under the laws of the jurisdiction in which the defendant was convicted. If the jurisdiction does not have a “felony” classification, the offense must have been given a classification comparable to a felony classification.
The definition of “crime of violence” in § 4B1.2 is not the only definition of “crime of violence” in the guidelines. In particular, § 2L1.2 (Unlawfully Entering or Remaining in the United States) sets forth a definition of “crime of violence” that contains a somewhat different list of “enumerated” offenses and does not contain a “residual” clause. It also sets forth a definition of “drug trafficking offense” that is somewhat different from the definition of “controlled substance offense” in § 4B1.2.
The proposed amendment would revise the definitions of “crime of violence” and “drug trafficking offense” in § 2L1.2 to bring them more into parallel with the definitions in § 4B1.2. Under the proposed amendment, the definitions in § 2L1.2 would generally follow the definitions in § 4B1.2, as revised by Parts A and B of the proposed amendment.
Section § 4B1.2(a) is amended by striking paragraph (2) as follows:
“ (2) is burglary of a dwelling, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another.”;
“ (2) is murder, voluntary manslaughter, kidnapping, aggravated assault, a forcible sex offense, robbery, [burglary of a dwelling][burglary], arson, or extortion, or involves use of explosives.”.
The Commentary to § 4B1.2 captioned “Application Notes” is amended in Note 1 by striking the second and third undesignated paragraphs as follows:
“ `Crime of violence' includes murder, manslaughter, kidnapping, aggravated assault, forcible sex offenses, robbery, arson, extortion, extortionate extension of credit, and burglary of a dwelling. Other offenses are included as `crimes of violence' if (A) that offense has as an element the use, attempted use, or threatened use of physical force against the person of another, or (B) the conduct set forth (
`Crime of violence' does not include the offense of unlawful possession of a firearm by a felon, unless the possession was of a firearm described in 26 U.S.C. 5845(a). Where the instant offense of conviction is the unlawful possession of a firearm by a felon, § 2K2.1 (Unlawful Receipt, Possession, or Transportation of Firearms or Ammunition; Prohibited Transactions Involving Firearms or Ammunition) provides an increase in offense level if the defendant had one or more prior felony convictions for a crime of violence or controlled substance offense; and, if the defendant is sentenced under the provisions of 18 U.S.C. 924(e), § 4B1.4 (Armed Career Criminal) will apply.”,
“ Unlawfully possessing a firearm described in 26 U.S.C. 5845(a) (
“2.
(A) `Murder' is (i) the unlawful killing of a human being with malice aforethought (including killing a human being purposefully, knowingly, or recklessly under circumstances manifesting extreme indifference to the value of human life); or (ii) causing the death of a human being in the course of committing another felony offense.
(B) `Voluntary manslaughter' is (i) the unlawful killing of a human being without malice, upon a sudden quarrel or heat of passion; or (ii) causing the death of a human being through actions intended to cause serious physical injury to another human being.
(C) `Kidnapping' is an offense that includes at least (i) an act of restraining, removing, or confining another; (ii) an unlawful means of accomplishing that act; and (iii) at least one or more of the following aggravating factors: (I) the offense was committed for a nefarious purpose; (II) the offense substantially interfered with the victim's liberty; or (III) the offense exposed the victim to a substantial risk of bodily injury, sexual assault, or involuntary servitude.
(D) `Aggravated assault' is (i) attempting to cause serious or substantial bodily injury to another, or causing such injury purposefully, knowingly, or recklessly; or (ii) attempting to cause, or purposefully, knowingly, or recklessly causing, bodily injury to another through use of a deadly weapon.
(E) A `forcible sex offense' is any offense requiring a sexual act or sexual contact to which consent to the actor's conduct (i) is not given, or (ii) is not legally valid, such as where consent to the conduct is involuntary, incompetent, or coerced. The terms `sexual act' and `sexual contact' have the meaning given in 18 U.S.C. 2246.
(F) `Robbery' is the misappropriation of property under circumstances involving immediate danger to the person of another.
(G) [`Burglary of a dwelling' is an unlawful or unprivileged entry into or remaining in a dwelling with intent to commit a [crime][felony].] [`Burglary' is an unlawful or unprivileged entry into or remaining in a building or other structure with intent to commit a [crime][felony].]
(H) `Arson' is the intentional damaging, by fire or the use of explosives, of any building, vehicle, or other real property.
(I) `Extortion' is obtaining something of value from another by the wrongful use of (i) force, (ii) fear of physical injury, or (iii) threat of physical injury.”.
Section 4B1.2 is amended in each of subsections (a) and (b) by inserting after “a term exceeding one year” both places such term appears the following: “and classified [at the time the defendant was initially sentenced] as a felony (or comparable classification) under the laws of the jurisdiction in which the defendant was convicted”.
The Commentary to § 4B1.2 is amended in Note 1 in the paragraph that begins “ `Prior felony conviction' means” by inserting after “a term exceeding one year” the following: “and classified [at the time the defendant was initially sentenced] as a felony (or comparable classification) under the laws of the jurisdiction in which the defendant was convicted”; and by striking “regardless of whether such offense is specifically designated as a felony and”.
The Commentary to § 2L1.2 captioned “Application Notes” is amended in Note 1 by striking subparagraph (B)(iii) as follows:
“ (iii) `Crime of violence' means any of the following offenses under federal, state, or local law: murder, manslaughter, kidnapping, aggravated assault, forcible sex offenses (including where consent to the conduct is not given or is not legally valid, such as where consent to the conduct is involuntary, incompetent, or coerced), statutory rape, sexual abuse of a minor, robbery, arson, extortion, extortionate extension of credit, burglary of a dwelling, or any other offense under federal, state, or local law that has as an element the use, attempted use, or threatened use of physical force against the person of another.”,
“(iii) `Crime of violence' has the meaning given that term in § 4B1.2(a). However, for purposes of subsection (b)(1)(E), which applies to misdemeanor crimes of violence, the requirements in § 4B1.2(a) that the offense be a felony (
in Note 2 by adding at the end as the last sentence the following: “In addition, a crime of violence or a drug trafficking offense is a `felony' only if it was classified [at the time the defendant was initially sentenced] as a felony (or comparable classification) under the laws of the jurisdiction in which the defendant was convicted.”;
and in Note 4(A) by striking “any federal, state, or local offense punishable by a term of imprisonment of one year or less” and inserting “a federal or state offense, punishable by a term of imprisonment, that is not a `felony' as defined in Application Note 2”.
1. The Commission invites broad comment on the “residual clause” in the definition of “crime of violence” in § 4B1.2. Should the residual clause be eliminated, as proposed by the proposed amendment? If so, what other changes, if any, should be made to the guidelines definition of “crime of violence”?
In the alternative, should the residual clause be revised? If so, how should it be revised? Should the Commission consider a different type of residual clause, such as the residual clause in 18 U.S.C. 16?
2. The Commission similarly invites broad comment on the list of “enumerated” offenses in the definition of “crime of violence” in § 4B1.2. Should the list of enumerated offenses be clarified and revised, as proposed by the proposed amendment? What offenses should be enumerated, and how (if at all) should they be defined?
For example, should the list of enumerated offenses be limited to common law offenses against the person? Should the list also include any
Should the list of enumerated offenses include offenses where harm did not result, but could have resulted because of the risk involved? If so, what offenses should be included on the list, and how (if at all) should they be defined?
3. The Commission seeks comment on offenses against property and the extent to which they should be included in the guidelines definition of “crime of violence.” Statutory definitions relating to “violent” offenses account for property offenses in various ways. For example, the statutory definition of “crime of violence” in 18 U.S.C. 16 does not enumerate any specific property offenses, but its elements clause extends to offenses that have as an element the use, attempted use, or threatened use of physical force against the property of another, and its residual clause extends to offenses that involve a substantial risk of physical force against the property of another. In contrast, the statutory definition of “violent felony” in 18 U.S.C. 924(e) enumerates arson and burglary, but its elements clause and residual clause do not extend to property offenses. How, if at all, should the guidelines definition of “crime of violence” apply to property offenses?
4. The proposed amendment seeks comment on the enumerated offense definitions, as set forth in Part A of the proposed amendment. The definitions were derived from broad contemporary, generic definitions of the elements for the listed offenses. The Commission seeks comment generally on whether providing definitions for enumerated offenses is appropriate and specifically on whether the definitions provided are appropriate. Are there offenses that are covered by the proposed definitions but should not be? Are there offenses that are not covered by the proposed definitions but should be?
In addition, the Commission seeks specific comment on the following:
(A) The proposed definition of “murder” would include offenses in which the defendant causes the death of another in the course of committing any felony. This definition is worded more broadly than felony murder statutes in some states to minimize complexity and avoid difficulties with differing state law definition. The Commission seeks comment on whether such a definition is appropriate.
(B) The proposed definition of “kidnapping” attempts to capture the kinds of aggravating factors that some courts have held are present in state statutes. The Commission seeks comment on whether there are other factors that should be included as possible elements of kidnapping.
(C) The proposed definition of “aggravated assault” does not include as an aggravating factor that the victim has a special status, such as law enforcement, elderly, or minor. Should those type of assaults qualify as “aggravated assault”? In particular, the Commission seeks comment on whether the definition of “aggravated assault” should include, as a possible alternative element, attempting to cause, or purposefully, knowingly, or recklessly causing, bodily injury to a person classified as a special victim under the statute of conviction (including public servants, minors, the elderly, pregnant women, and any other similar group).
(D) The proposed definition of “forcible sex offense” incorporates the definitions of “sexual act” and “sexual contact” in 18 U.S.C. 2246. Are there types of sex offenses that would be included in the definition of “forcible sex offense” set forth in the proposed amendment that should not be considered “crimes of violence”? Are there types of sex offenses that would not be included under this definition, but should be? Should statutory rape be expressly included? Should it be expressly excluded?
(E) The proposed amendment defines “robbery” as the misappropriation of property under circumstances involving immediate danger to the person of another. The Commission seeks comment on whether this definition is adequately clear and on whether it is appropriate in scope. Are there types of offenses that would be included in the definition set forth in the proposed amendment that should not be considered “crimes of violence”? Are there types of offenses that would not be included under this definition, but should be? For example, in some jurisdictions the elements of robbery may be established by a taking of property from a person or person's presence by fear (rather than, for example, by force or by injury). If the defendant was convicted of such a taking by fear, would it qualify as “robbery” as defined by the proposed amendment? In the alternative, would it qualify as “extortion” as defined by the proposed amendment? Should such a robbery (
(F) The Supreme Court has determined that burglary under section 924(e) includes structures other than dwellings, but the Commission has included only burglaries of dwellings under the current definition of “crime of violence” at § 4B1.2. The Commission seeks comment on whether burglaries of buildings and other structures that are not dwellings should be included as “crimes of violence.”
(G) Many states define “arson” to include burning of personal property. The proposed amendment does not include that type of arson in its definition of arson. The Commission seeks comment on whether the exclusion of such type of arson is appropriate. In those states that punish burning of personal property under arson statutes, what type of conduct is covered? Is it conduct that should be considered a crime of violence? Does it typically pose a risk of injury to a person?
(H) Extortion has been defined in case law as including non-violent threats, such as a threat to reveal embarrassing personal information. The definition of “extortion” in the proposed amendment requires the threat to be a “threat of physical injury” against the person. Similarly, extortion has been defined in case law as including fear, and the definition of “extortion” in the proposed amendment requires the fear to be a “fear of physical injury.” The Commission seeks comment on whether including these limitations in the “extortion” definition is appropriate.
5. Some commentators have suggested that the definition of “crime of violence” should not provide a list of enumerated offenses (
6. The Commentary to § 4B1.2 states that “crime of violence” and “controlled substance offense” include the offenses of aiding and abetting, conspiring, and attempting to commit such offenses. The Commission seeks comment on whether the definitions of “crime of violence” and “controlled substance offense” should include attempts, conspiracies, and aiding and abetting. If so, should any limitations apply?
7. Part B of the proposed amendment would amend § 4B1.2 to revise the definition of “felony.” The Commission seeks comment on the advantages and disadvantages of using different definitions of “felony” in the guidelines. Should the Commission adopt a single definition of “felony” throughout the guidelines?
8. The revisions made by Part B would add a requirement that the offense have been classified as a felony under the laws of the jurisdiction in which the defendant was convicted. The Commission seeks comment on how this principle should apply to states that do not classify offenses as felonies, and to states (such as California) in which some offenses may be classified as either a felony or a misdemeanor at initial sentencing and the classification may change based on later events (such as a revocation of probation). The proposed amendment includes the parenthetical phrase “(or comparable classification)” and the bracketed phrase “[at the time the defendant was initially sentenced]” to address these situations. Do these phrases adequately address these situations? If not, how, if at all, should the Commission address these situations?
9. Part C of the proposed amendment would adopt for the illegal reentry guideline the same definition of “crime of violence” used in the career offender guideline. The Commission seeks comment on the advantages and disadvantages of using different definitions for these guidelines. Should the Commission have separate definitions for “crime of violence” in these guidelines?
10. The Commission seeks comment on whether any other guidelines that involve terms such as “crime of violence,” “controlled substance offense,” and “drug trafficking offense” should be revised to conform to the definitions used in the career offender guideline or the illegal reentry guideline (as revised by the proposed amendment). For example, what changes, if any, should be made to the firearms and explosives guidelines, §§ 2K2.1 and 2K1.3, to conform to the revisions made by the proposed amendment? What changes, if any, should be made to guidelines that use the term “crime of violence” but do not define it by reference to § 4B1.2 (such as guidelines that define it by reference to 18 U.S.C. 16)? Should the Commission revise those guidelines to promote a single definition of “crime of violence” (and terms such as “controlled substance offense”) throughout the guidelines?
Veterans Health Administration, Department of Veterans Affairs (VA).
Notice of funding availability (NOFA).
VA is announcing the availability of funds for supportive services grants under the SSVF Program. This NOFA contains information concerning the SSVF Program, initial supportive services grant application processes, and the amount of funding available.
VA is announcing the availability of funds for supportive services grants under the SSVF Program. This NOFA contains information concerning the SSVF Program, initial supportive services grant application processes, and the amount of funding available. Awards made for supportive services grants will fund operations beginning October 1, 2015.
Applications for supportive services grants under the SSVF Program must be received by the SSVF Program Office by 4:00 p.m. Eastern Time on September 1, 2015. In the interest of fairness to all competing applicants, this deadline is firm as to date and hour, and VA will treat as ineligible for consideration any application that is received after the deadline. Applicants should take this practice into account and make early submission of their materials to avoid any risk of loss of eligibility brought about by unanticipated delays, computer service outages, or other delivery-related problems.
Mr. John Kuhn, SSVF Program Office, National Center on Homelessness Among Veterans, 4100 Chester Avenue, Suite 201, Philadelphia, PA 19104; via email at
A.
B.
C.
D.
Assistance in obtaining or retaining permanent housing is a fundamental goal of the SSVF Program. Grantees must provide case management services in accordance with 38 CFR 62.31. Such case management should include tenant counseling, mediation with landlords and outreach to landlords.
E.
F.
1. Grantees may use a maximum of 10 percent of supportive services grant funds for administrative costs identified in 38 CFR 62.70.
2. Grantees must use a minimum of 60 percent of the temporary financial assistance portion of their supportive services grant funds to serve very low-income Veteran families who qualify under 38 CFR 62.11. (NOTE: Grantees may request a waiver to decrease this minimum, as discussed in section V.B.3.a.)
3. Grantees may use a maximum of 50 percent of supportive services grant funds to provide the supportive service of temporary financial assistance paid directly to a third party on behalf of a participant for child care, emergency housing assistance, transportation, rental assistance, utility-fee payment assistance, security deposits, utility deposits, moving costs, and general housing stability assistance (which includes emergency supplies) in accordance with 38 CFR 62.33 and 38 CFR 62.34.
G.
Grantees must develop plans that will ensure that Veteran participants have the level of income and economic stability needed to remain in permanent housing after the conclusion of the SSVF intervention. Both employment and benefits assistance from VA and non-VA sources represent a significant underutilized source of income stability for homeless Veterans. The complexity of program rules and the stigma some associate with entitlement programs contributes to their lack of use. To this effect, grantees are encouraged to consider strategies that can lead to prompt and successful access to employment and benefits that are essential to retaining housing.
1. Consistent with the Housing First model supported by VA, grantees are expected to offer the following supportive services: Housing counseling; assisting participants in understanding leases; securing utilities; making moving arrangements; provide representative payee services concerning rent and utilities when needed; and mediation and outreach to property owners related to locating or retaining housing. Grantees may also assist participants by providing rental assistance, security or utility deposits, moving costs or emergency supplies; or using other Federal resources, such as the HUD's ESG, or supportive services grant funds subject to the limitations described in this NOFA and 38 CFR 62.34.
2. As SSVF is a short-term crisis intervention, grantees must develop plans that will produce sufficient income to sustain Veteran participants in permanent housing after the conclusion of the SSVF intervention. Grantees must ensure the availability of employment and vocational services either through the direct provision of these services or their availability through formal or informal service agreements. Agreements with Homeless Veteran Reintegration Programs funded by the U.S. Department of Labor are strongly encouraged. For participants unable to work due to disability, income must be established through available benefits programs.
3. Per 38 CFR 62.33, grantees must assist participants in obtaining public benefits. Grantees must screen all participants for eligibility for a broad range of entitlements such as TANF, Social Security, the Supplemental Nutrition Assistance Program, the Low Income Home Energy Assistance Program, the Earned Income Tax Credit, and local General Assistance programs. Grantees are expected to access the Substance Abuse and Mental Health Services Administration's SSI/SSDI Outreach, Access, and Recovery (SOAR) program either though community linkages or by training staff to deliver SOAR services. In addition, where available, grantees should access information technology tools to support case managers in their efforts to link participants to benefits.
4. Grantees are encouraged to provide, or assist participants in obtaining, legal services relevant to issues that interfere with the participants' ability to obtain or retain permanent housing. (NOTE: Legal services provided may be protected from release by the grantee or VA under attorney-client privilege; however, documentation demonstrating the provision of legal services are subject to audit and mandatory program monitoring.) Support for legal services can include paying for court filing fees to assist a participant with issues that interfere with the participant's ability to obtain or retain permanent housing or supportive services, including issues that affect the participant's employability and financial security. Grantees (in addition to employees and members of grantees) may represent participants before VA with respect to a claim for VA benefits, but only if they are recognized for that purpose pursuant to 38 U.S.C. Chapter 59. Further, the individual providing such representation must be accredited pursuant to 38 U.S.C. Chapter 59.
5. Access to mental health and addiction services are required by SSVF; however, grantees cannot fund these services directly through the SSVF grant. Therefore, applicants must demonstrate, through either formal or informal agreements, their ability to promote rapid access and engagement to mental health and addiction services for the Veteran and family members.
6. VA recognizes that extremely low-income Veterans, with incomes below 30 percent of the area median income, face greater barriers to permanent housing placement. Grantees should consider how they can support these participants.
7. When serving participants who are residing in permanent housing, it is required that the defining question to ask is: “Would this individual or family be homeless but for this assistance?” The grantee must use a VA approved screening tool with criteria that targets those most at-risk of homelessness. To qualify for SSVF services, a Veteran who is served under Category 1 (homeless prevention), the participants must not have sufficient resources or support networks (
(a) Has moved because of economic reasons two or more times during the 60 days immediately preceding the application for homelessness prevention assistance;
(b) Is living in the home of another because of economic hardship;
(c) Has been notified in writing that their right to occupy their current housing or living situation will be terminated within 21 days after the date of application for assistance;
(d) Lives in a hotel or motel and the cost of the hotel or motel stay is not paid by charitable organizations or by Federal, state, or local Government programs for low-income individuals;
(e) Is exiting a publicly funded institution or system of care (such as a health care facility, a mental health facility, or correctional institution) without a stable housing plan; or
(f) Otherwise lives in housing that has characteristics associated with instability and an increased risk of homelessness, as identified in the recipient's approved screening tool.
8. Where other funds from community resources are not readily available, grantees may choose to utilize supportive services grants, subject to the limitations described in this NOFA and in 38 CFR 62.33 and 62.34, to provide temporary financial assistance. Such assistance may, subject to the limitations in this NOFA and 38 CFR part 62, be paid directly to a third party on behalf of a participant for child care, transportation, emergency housing assistance, rental assistance, utility-fee payment assistance, security or utility deposits, moving costs and general housing stability assistance as necessary.
A.
B.
C.
1. In response to this NOFA, applicants can only submit one application.
2. A single application may be submitted to serve the contiguous area of Wyoming and western Nebraska targeted in this NOFA. Should a single application be submitted, the requested amount cannot exceed $3.5 million.
3. Applicants must be existing SSVF grantees.
4. To facilitate the rapid launch of services, applicants must currently provide SSVF services to areas adjacent to one of the identified target communities specific to the award being sought.
D.
A.
B.
A.
B.
C.
D.
E.
F.
1. Applicants shall apply as new applicant using the application designed for new grants.
2. Additional supportive services grant application requirements are specified in the initial application package. Submission of an incorrect or incomplete application package will result in the application being rejected during threshold review. The application packages must contain all required forms and certifications. Selections will be made based on criteria described in 38 CFR part 62 and this NOFA. Applicants and grantees will be notified of any additional information needed to confirm or clarify information provided in the application and the deadline by which to submit such information. Applicants are strongly encouraged to submit applications electronically. If mailed, applications and CDs must be submitted to the following address: SSVF Program Office, National Center on Homelessness Among Veterans, 4100 Chester Avenue, Suite 201, Philadelphia, PA 19104. Applicants must submit two hard copies and two CDs. Applications may not be sent by FAX.
A.
1. VA will only score applicants that meet the following threshold requirements:
(a) The application is filed within the time period established in the NOFA, and any additional information or documentation requested by VA under 38 CFR 62.20(c) is provided within the time frame established by VA;
(b) The application is completed in all parts;
(c) The applicant is an eligible entity;
(d) The activities for which the supportive services grant is requested are eligible for funding under this part;
(e) The applicant's proposed participants are eligible to receive supportive services under this part;
(f) The applicant agrees to comply with the requirements of this part;
(g) The applicant does not have an outstanding obligation to the Federal Government that is in arrears and does not have an overdue or unsatisfactory response to an audit; and
(h) The applicant is not in default by failing to meet the requirements for any previous Federal assistance.
2. VA will use the criteria described in 38 CFR 62 to score grantees applying for new supportive services grant:
3. VA will use the following process to select applicants to receive supportive services grants: VA will score all applicants that meet the threshold requirements set forth in 38 CFR 62.21 using the scoring criteria set forth in 38 CFR 62.22.
B.
1. Score all applications that meet the threshold requirements described in 38 CFR 62.21.
2. Rank those applications who score at least 75 cumulative points and receive at least one point under each of the categories identified for new applicants in 38 CFR 62.22, paragraphs (a), (b), (c), (d), and (e). The applications will be ranked in order from highest to lowest scores.
3. Applicants are required to spend no less than 60 percent of all budgeted temporary financial assistance on homeless participants defined in 38 CFR 62.11(a)(2) and (a)(3). Waivers to this 60 percent requirement may be requested when grantees can demonstrate significant local progress towards eliminating homelessness in the target service area. Waiver requests must include data from authoritative sources such as HUD's Annual Homeless Assessment Report, annual Point-In-Time Counts and evidence of decreased demand for emergency shelter and transitional housing. Waivers for the 60 percent requirement may also be requested for services provided to rural Indian tribal areas and other rural areas where shelter capacity is insufficient to meet local need.
A.
B.
Consistent with the Housing First model supported by VA, grantees are expected to offer the following supportive services: Housing counseling; assisting participants in understanding leases; securing utilities; making moving arrangements; provide representative payee services concerning rent and utilities when needed; and mediation and outreach to property owners related to locating or retaining housing. Grantees may also assist participants by providing rental assistance, security or utility deposits, moving costs or emergency supplies, using other Federal resources, such as the ESG, or supportive services grant funds subject to the limitations described in this NOFA and 38 CFR 62.34.
As SSVF grants cannot be used to fund treatment for mental health or substance use disorders, applicants must provide evidence that they can provide access to such services to all program participants through formal and informal agreements with community providers.
C.
1. Upon execution of a supportive services grant agreement with VA, grantees will have a VA regional coordinator assigned by the SSVF Program Office who will provide oversight and monitor supportive services provided to participants.
2. Grantees will be required to enter data into a Homeless Management Information System Web-based software application. This data will consist of information on the participants served and types of supportive services provided by grantees. Grantees must treat the data for activities funded by the SSVF Program separate from that of activities funded by other programs. Grantees will be required to work with their HMIS Administrators to export client-level data for activities funded by the SSVF Program to VA on at least a monthly basis.
3. VA shall complete annual monitoring evaluations of each grantee. Monitoring will also include the submittal of quarterly and annual financial and performance reports by the grantee. The grantee will be expected to demonstrate adherence to the grantee's proposed program concept, as described in the grantee's application. All grantees are subject to audits conducted by the VA Financial Services Center.
4. Grantees will be required to provide each participant with a satisfaction survey which can be submitted by the participant directly to VA, within 45 to 60 days of the participant's entry into the grantee's program and again within 30 days of such participant's pending exit from the grantee's program. In all cases there should be a minimum of 30 days between administration of the two surveys. In cases when a brief SSVF intervention results in the first survey being administered 30 days after exit, only one survey shall be provided.
5. Grantees will be assessed based on their ability to meet critical performance measures. In addition to meeting program requirements defined by the regulations and NOFA, grantees will be assessed on their ability to place participants into housing and the housing retention rates of participants served. Higher placement for homeless participants and higher housing retention rates for at-risk participants are expected for very-low income Veteran families when compared to extremely low-income Veteran families with incomes below 30 percent of the area median income.
John Kuhn, Supportive SSVF Program Office, National Center on Homelessness Among Veterans, 4100 Chester Avenue, Suite 201, Philadelphia, PA 19104; email:
A.
1. Veteran families earning less than 30 percent of area median income as most recently published by HUD for programs under section 8 of the United States Housing Act of 1937 (42 U.S.C. 1437f) (
2. Veterans with at least one dependent family member.
3. Veterans returning from Operation Enduring Freedom, Operation Iraqi Freedom, or Operation New Dawn.
B.
1. During the first quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 35 percent of the total supportive services grant award without written approval by VA.
2. By the end of the second quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 60 percent of the total supportive services grant award without written approval by VA.
3. By the end of the third quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 80 percent of the total supportive services grant award without written approval by VA.
4. By the end of the fourth quarter of the grantee's supportive services annualized grant award period, the grantee's cumulative requests for supportive services grant funds may not exceed 100 percent of the total supportive services grant award.
The Secretary of Veterans Affairs, or designee, approved this document and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. Robert L. Nabors II, Chief of Staff, Department of Veterans Affairs, approved this document on August 12, 2015, for publication.
Centers for Medicare and Medicaid Services (CMS), HHS.
Final rule; interim final rule with comment period.
We are revising the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals to implement changes arising from our continuing experience with these systems for FY 2016. Some of these changes implement certain statutory provisions contained in the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively known as the Affordable Care Act), the Pathway for Sustainable Growth Reform (SGR) Act of 2013, the Protecting Access to Medicare Act of 2014, the Improving Medicare Post-Acute Care Transformation Act of 2014, the Medicare Access and CHIP Reauthorization Act of 2015, and other legislation. We also are addressing the update of the rate-of-increase limits for certain hospitals excluded from the IPPS that are paid on a reasonable cost basis subject to these limits for FY 2016. As an interim final rule with comment period, we are implementing the statutory extensions of the Medicare-dependent, small rural hospital (MDH) Program and changes to the payment adjustment for low-volume hospitals under the IPPS.
We also are updating the payment policies and the annual payment rates for the Medicare prospective payment system (PPS) for inpatient hospital services provided by long-term care hospitals (LTCHs) for FY 2016 and implementing certain statutory changes to the LTCH PPS under the Affordable Care Act and the Pathway for Sustainable Growth Rate (SGR) Reform Act of 2013 and the Protecting Access to Medicare Act of 2014.
In addition, we are establishing new requirements or revising existing requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are participating in Medicare, including related provisions for eligible hospitals and critical access hospitals participating in the Medicare Electronic Health Record (EHR) Incentive Program. We also are updating policies relating to the Hospital Value-Based Purchasing (VBP) Program, the Hospital Readmissions Reduction Program, and the Hospital-Acquired Condition (HAC) Reduction Program.
In commenting, please refer to file code CMS-1632-IFC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (no duplicates, please):
1.
2.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
4.
a. For delivery in Washington, DC—Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201.
(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)
b. For delivery in Baltimore, MD— Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244-1850.
If you intend to deliver your comments to the Baltimore address, please call the telephone number (410) 786-7195 in advance to schedule your arrival with one of our staff members.
Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.
For information on viewing public comments, we refer readers to the beginning of the
Ing-Jye Cheng, (410) 786-4548 and Donald Thompson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, Deficit Reduction Act Hospital-Acquired Acquired Conditions—Present on Admission (DRA HAC-POA) Program, Hospital-Acquired Conditions Reduction Program, Hospital Readmission Reductions Program, Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, Graduate Medical Education, Capital Prospective Payment, Excluded Hospitals, Medicare Disproportionate Share Hospital (DSH), Medicare-dependent, small rural hospital (MDH), and Low Volume Hospital Payment Adjustment Issues.
Michele Hudson, (410) 786-4487, Long-Term Care Hospital Prospective
Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues.
Cindy Tourison, (410) 786-1093, Hospital Inpatient Quality Reporting and Hospital Value-Based Purchasing—Program Administration, Validation, and Reconsideration Issues.
Pierre Yong, (410) 786-8896, Hospital Inpatient Quality Reporting—Measures Issues Except Hospital Consumer Assessment of Healthcare Providers and Systems Issues.
Elizabeth Goldstein, (410) 786-6665, Hospital Inpatient Quality Reporting—Hospital Consumer Assessment of Healthcare Providers and Systems Measures Issues.
Mary Pratt, (410) 786-6867, LTCH Quality Data Reporting Issues.
Kim Spalding Bush, (410) 786-3232, Hospital Value-Based Purchasing Efficiency Measures Issues.
James Poyer, (410) 786-2261, PPS-Exempt Cancer Hospital Quality Reporting Issues.
Deborah Krauss, (410) 786-5264, and Alexandra Mugge, (410) 786-4457, EHR Incentive Program Clinical Quality Measure Related Issues.
Elizabeth Myers, (410) 786-4751, EHR Incentive Program Nonclinical Quality Measure Related Issues.
Lauren Wu, (202) 690-7151, Certified EHR Technology Related Issues.
Kellie Shannon, (410) 786-0416, Simplified Cost Allocation Methodology Issues
This
In the past, a majority of the tables referred to throughout this preamble and in the Addendum to the proposed rule and the final rule were published in the
Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified above should contact Michael Treitel at (410) 786-4552.
This final rule makes payment and policy changes under the Medicare inpatient prospective payment systems (IPPS) for operating and capital-related costs of acute care hospitals as well as for certain hospitals and hospital units excluded from the IPPS. In addition, it makes payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment system (LTCH PPS). It also makes policy changes to programs associated with Medicare IPPS hospitals, IPPS-excluded hospitals, and LTCHs.
This interim final rule with comment period implements the provisions of the Medicare Access and CHIP Reauthorization Act of 2015 which extended the MDH Program and changes to the low-volume payment adjustment for hospitals through FY 2017.
Under various statutory authorities, we are making changes to the Medicare IPPS, to the LTCH PPS, and to other related payment methodologies and programs for FY 2016 and subsequent fiscal years. These statutory authorities include, but are not limited to, the following:
• Section 1886(d) of the Social Security Act (the Act), which sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires that, instead of paying for capital-related costs of inpatient hospital services on a reasonable cost basis, the Secretary use a prospective payment system (PPS).
• Section 1886(d)(1)(B) of the Act, which specifies that certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; LTCHs; psychiatric hospitals and units; children's hospitals; cancer hospitals; and short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS.
• Sections 123(a) and (c) of Public Law 106-113 and section 307(b)(1) of Public Law 106-554 (as codified under section 1886(m)(1) of the Act), which provide for the development and implementation of a prospective payment system for payment for inpatient hospital services of long-term care hospitals (LTCHs) described in section 1886(d)(1)(B)(iv) of the Act.
• Sections 1814(l), 1820, and 1834(g) of the Act, which specify that payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services and that these payments are generally based on 101 percent of reasonable cost.
• Section 1866(k) of the Act, as added by section 3005 of the Affordable Care Act, which establishes a quality reporting program for hospitals described in section 1886(d)(1)(B)(v) of the Act, referred to as “PPS-Exempt Cancer Hospitals.”
• Section 1886(d)(4)(D) of the Act, which addresses certain hospital-acquired conditions (HACs), including infections. Section 1886(d)(4)(D) of the Act specifies that, by October 1, 2007, the Secretary was required to select, in consultation with the Centers for Disease Control and Prevention (CDC), at least two conditions that: (a) Are high cost, high volume, or both; (b) are assigned to a higher paying MS-DRG when present as a secondary diagnosis (that is, conditions under the MS-DRG system that are complications or comorbidities (CCs) or major complications or comorbidities (MCCs); and (c) could reasonably have been prevented through the application of evidence-based guidelines. Section 1886(d)(4)(D) of the Act also specifies that the list of conditions may be revised, again in consultation with CDC, from time to time as long as the list contains at least two conditions. Section 1886(d)(4)(D)(iii) of the Act requires that hospitals, effective with discharges occurring on or after October 1, 2007, submit information on Medicare claims specifying whether diagnoses were present on admission (POA). Section 1886(d)(4)(D)(i) of the Act specifies that effective for discharges occurring on or after October 1, 2008, Medicare no longer assigns an inpatient hospital discharge to a higher paying MS-DRG if a selected condition is not POA.
• Section 1886(a)(4) of the Act, which specifies that costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. A payment for indirect medical education (IME) is made under section 1886(d)(5)(B) of the Act.
• Section 1886(b)(3)(B)(viii) of the Act, which requires the Secretary to reduce the applicable percentage increase in payments to a subsection (d) hospital for a fiscal year if the hospital does not submit data on measures in a form and manner, and at a time, specified by the Secretary.
• Section 1886(o) of the Act, which requires the Secretary to establish a Hospital Value-Based Purchasing (VBP) Program under which value-based incentive payments are made in a fiscal year to hospitals meeting performance standards established for a performance period for such fiscal year.
• Section 1886(p) of the Act, as added by section 3008 of the Affordable Care Act, which establishes an adjustment to hospital payments for hospital-acquired conditions (HACs), or a Hospital-Acquired Condition (HAC) Reduction Program, under which payments to applicable hospitals are adjusted to provide an incentive to reduce hospital-acquired conditions.
• Section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act and amended by section 10309 of the Affordable Care Act, which establishes the “Hospital Readmissions Reduction Program” effective for discharges from an “applicable hospital” beginning on or after October 1, 2012, under which payments to those hospitals under section 1886(d) of the Act will be reduced to account for certain excess readmissions.
• Section 1886(r) of the Act, as added by section 3133 of the Affordable Care Act, which provides for a reduction to disproportionate share hospital payments under section 1886(d)(5)(F) of the Act and for a new uncompensated care payment to eligible hospitals. Specifically, section 1886(r) of the Act requires that, for fiscal year 2014 and each subsequent fiscal year, subsection (d) hospitals that would otherwise receive a disproportionate share hospital payment made under section 1886(d)(5)(F) of the Act will receive two separate payments: (1) 25 percent of the amount they previously would have received under section 1886(d)(5)(F) of the Act for DSH (“the empirically justified amount”), and (2) an additional payment for the DSH hospital's proportion of uncompensated care, determined as the product of three factors. These three factors are: (1) 75 percent of the payments that would otherwise be made under section 1886(d)(5)(F) of the Act; (2) 1 minus the percent change in the percent of individuals under the age of 65 who are uninsured (minus 0.1 percentage points for FY 2014, and minus 0.2 percentage points for FY 2015 through FY 2017);
• Section 1886(m)(6) of the Act, as added by section 1206(a)(1) of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), which provided for the establishment of site neutral payment rate criteria under the LTCH PPS with implementation beginning in FY 2016.
• Section 1206(b)(1) of the Pathway for SGR Reform Act of 2013, which further amended section 114(c) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act, by retroactively reestablishing and extending the statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy under the LTCH PPS so that the policy will be in effect for 9 years (except for “grandfathered” hospital-within-hospitals (HwHs), which are permanently exempt from this policy); and section 1206(b)(2) (as amended by section 112(b) of Pub. L. 113-93), which together further amended section 114(d) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act to establish a new moratoria (subject to certain defined exceptions) on the development of new LTCHs and LTCH satellite facilities and a new moratorium on increases in the number of beds in existing LTCHs and LTCH satellite facilities beginning January 1, 2015 and ending on September 30, 2017; and section 1206(d), which instructs the Secretary to evaluate payments to LTCHs classified under section 1886(b)(1)(C)(iv)(II) of the Act and to adjust payment rates in FY 2015 or FY 2016 under the LTCH PPS, as appropriate, based upon the evaluation findings.
• Section 1886(m)(5)(D)(iv) of the Act, as added by section 1206(c) of the Pathway for SGR Reform Act of 2013, which provides for the establishment, no later than October 1, 2015, of a functional status quality measure under the LTCH QRP for change in mobility among inpatients requiring ventilator support.
• Section 1899B of the Act, as added by the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act of 2014), which imposes new data reporting requirements for certain postacute care providers, including LTCHs.
• Section 1886(d)(12) of the Act, as amended by section 204 of the Medicare Access and CHIP Reauthorization Act of 2015, which extended, through FY 2017, changes to the inpatient hospital payment adjustment for certain low-volume hospitals; and section 1886(d)(5)(G) of the Act, as amended by section 205 of the Medicare Access and CHIP Reauthorization Act of 2015, which extended, through FY 2017, the Medicare-dependent, small rural hospital (MDH) program.
Section 631 of the American Taxpayer Relief Act (ATRA, Pub. L. 112-240) amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment to the standardized amount of Medicare payments to acute care hospitals to account for changes in MS-DRG documentation and coding that do not reflect real changes in case-mix, totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. This adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110-90.
While our actuaries estimated that a −9.3 percent adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in one year, it is often our practice to delay or phase in rate adjustments over more than one year, in order to moderate the effects on rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, we made a −0.8 percent recoupment adjustment to the standardized amount in FY 2014 and FY 2015. For FY 2016, we are making an additional −0.8 percent recoupment adjustment to the standardized amount.
We are making changes in policies to the Hospital Readmissions Reduction Program, which is established under section 1886(q) of the Act, as added by section 3025 of the Affordable Care Act. The Hospital Readmissions Reduction Program requires a reduction to a hospital's base operating DRG payment to account for excess readmissions of selected applicable conditions. For FYs 2013 and 2014, these conditions are acute myocardial infarction, heart failure, and pneumonia. For FY 2014, we established additional exclusions to the three existing readmission measures (that is, the excess readmission ratio) to account for additional planned readmissions. We also established additional readmissions measures, chronic obstructive pulmonary disease (COPD), and total hip arthroplasty and total knee arthroplasty (THA/TKA), to be used in the Hospital Readmissions Reduction Program for FY 2015 and future years. We expanded the readmissions measures for FY 2017 and future years by adding a measure of patients readmitted following coronary artery bypass graft (CABG) surgery.
In this final rule, we are making a refinement to the pneumonia readmissions measure, which expands the measure cohort for the FY 2017 payment determination and subsequent years. Specifically, we are finalizing a modified version of the expanded pneumonia cohort from what we had specified in the FY 2016 IPPS/LTCH PPS proposed rule such that the modified version includes patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia, and patients with a principal discharge diagnosis of sepsis with a secondary diagnosis of pneumonia coded as present on admission. However, we are not including patients with a principal discharge diagnosis of respiratory failure or patients with a principal discharge diagnosis of sepsis if they are coded as having severe sepsis as we had previously proposed. In addition, we are adopting an extraordinary circumstance exception policy that will align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and will allow hospitals that experience an extraordinary circumstance (such as a hurricane or flood) to request a waiver for use of data from the affected time period.
Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which value-based incentive payments are made in a fiscal year to hospitals based on their performance on measures established for a performance period for such fiscal year.
For FY 2016, we are adopting one additional measure beginning with the FY 2018 program year and one measure beginning with the FY 2021 program year. We also are removing two measures beginning with the FY 2018 program year. In addition, we are moving one measure to the Safety domain and removing the Clinical Care—Process subdomain and renaming the Clinical Care—Outcomes subdomain
Section 1886(p) of the Act, as added under section 3008(a) of the Affordable Care Act, establishes an incentive to hospitals to reduce the incidence of hospital-acquired conditions by requiring the Secretary to make an adjustment to payments to applicable hospitals effective for discharges beginning on October 1, 2014 and for subsequent program years. This 1-percent payment reduction applies to a hospital whose ranking is in the top quartile (25 percent) of all applicable hospitals, relative to the national average, of conditions acquired during the applicable period and on all of the hospital's discharges for the specified fiscal year. The amount of payment shall be equal to 99 percent of the amount of payment that would otherwise apply to such discharges under section 1886(d) or 1814(b)(3) of the Act, as applicable.
In this final rule, we are making three changes to existing Hospital-Acquired Condition Reduction Program policies: (1) An expansion to the population covered by the central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures to include patients in select nonintensive care unit sites within a hospital; (2) an adjustment to the relative contribution of each domain to the Total HAC Score which is used to determine if a hospital will receive the payment adjustment; and (3) a policy that will align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and will allow hospitals to request a waiver for use of data from the affected time period.
Section 3133 of the Affordable Care Act modified the Medicare disproportionate share hospital (DSH) payment methodology beginning in FY 2014. Under section 1886(r) of the Act, which was added by section 3133 of the Affordable Care Act, starting in FY 2014, DSHs will receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remaining amount, equal to 75 percent of what otherwise would have been paid as Medicare DSH payments, will be paid as additional payments after the amount is reduced for changes in the percentage of individuals that are uninsured. Each Medicare DSH hospital will receive an additional payment based on its share of the total amount of uncompensated care for all Medicare DSH hospitals for a given time period.
In this final rule, we are updating our estimates of the three factors used to determine uncompensated care payments for FY 2016. We are continuing to use the methodology we established in FY 2015 to calculate the uncompensated care payment amounts for merged hospitals such that we combine uncompensated care data for the hospitals that have undergone a merger in order to calculate their relative share of uncompensated care. We also are changing the time period of the data used to calculate the uncompensated care payment amounts to be distributed.
Under the current LTCH PPS, all discharges are paid under the LTCH PPS standard Federal payment rate. In this final rule, we are implementing section 1206 of the Pathway for SGR Reform Act, which requires the establishment of an alternative site neutral payment rate for Medicare discharges from an LTCH that fail to meet certain statutory defined criteria, beginning with LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. We include provisions regarding the application of the site neutral payment rate and the criteria for exclusion from the site neutral payment rate, as well as provisions on a number of methodological and implementation issues, such as the criterion for a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation, the intensive care unit (ICU) criterion, the ventilator criterion, the definition of “immediately preceded” by a subsection (d) hospital discharge, limitation on beneficiary charges in the context of the new site neutral payment rate, and the transitional blended payment rate methodology for FY 2016 and FY 2017.
In addition, we are making changes to address certain statutory requirements related to an LTCH's average length of stay criterion and discharge payment percentage. We also are providing technical clarifications relating to our FY 2015 implementation of the new statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities (subject to certain defined exceptions) and on bed increases in existing LTCHs and LTCH satellite facilities as well as making a technical revision to the regulations to more clearly reflect our established policies.
Under section 1886(b)(3)(B)(viii) of the Act, hospitals are required to report data on measures selected by the Secretary for the Hospital IQR Program in order to receive the full annual percentage increase in payments. In past years, we have established measures for reporting data and the process for submittal and validation of the data.
In this final rule, we are updating considerations for measure removal and retention. In addition, we are removing nine chart-abstracted measures for the FY 2018 payment determination and subsequent years: Six of these measures are “topped-out” (STK-01, STK-06, STK-08, VTE-1, VTE-2, and VTE-3) and two of the measures are suspended (IMM-1 and SCIP-Inf-4). However, we are retaining the electronic versions of five of the chart-abstracted measures finalized for removal.
We are refining two previously adopted measures for the FY 2018 payment determination and subsequent years. We are also adding seven new measures: Three new claims-based measures and one structural measure for the FY 2018 payment determination and subsequent years; and three new claims-based measures for the FY 2019 payment determination and subsequent years.
Further, for the FY 2018 payment determination, we are requiring hospitals to report a minimum of 4 electronic clinical quality measures. Under this modification to our proposal, no NQS domain distribution will be required. We are requiring that hospitals submit one quarter of electronic clinical quality measure data from either Q3 or Q4 of CY 2016 with a submission deadline of February 28, 2017. For the reporting of electronic clinical quality measures, hospitals may be certified either to the CEHRT 2014 or 2015 Edition, but must submit using the QRDA I format. We plan to finalize public reporting of electronic data in next year's rulemaking after the conclusion and assessment of the validation pilot. Six previously adopted measures (ED-1, ED-2, PC-01, STK-04, VTE-5, and VTE-6) must still be submitted via chart-abstraction regardless of whether they are also submitted as electronic clinical quality measures. We are also continuing our policy regarding STK-01 to clarify that
Finally, we are modifying the existing processes for validation of chart-abstracted Hospital IQR Program data to remove one stratum.
Section 3004(a) of the Affordable Care Act amended section 1886(m)(5) of the Act to require the Secretary to establish the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). This program applies to all hospitals certified by Medicare as LTCHs. Beginning with the FY 2014 payment determination and subsequent years, the Secretary is required to reduce any annual update to the standard Federal rate for discharges occurring during such fiscal year by 2 percentage points for any LTCH that does not comply with the requirements established by the Secretary.
The IMPACT Act of 2014 amended the Act in ways that affect the LTCH QRP. Specifically, section 2(a) of the IMPACT Act of 2014 added section 1899B of the Act, and section 2(c)(3) of the IMPACT Act of 2014 amended section 1886(m)(5) of the Act. Under section 1899B(a)(1) of the Act, the Secretary must require post-acute care (PAC) providers (defined in section 1899B(a)(2)(A) of the Act to include HHAs, SNFs, IRFs, and LTCHs) to submit standardized patient assessment data in accordance with section 1899B(b) of the Act, data on quality measures required under section 1899B(c)(1) of the Act, and data on resource use and other measures required under section 1899B(d)(1) of the Act. The Act also sets out specified application dates for each of the measures. The Secretary must specify the quality, resource use, and other measures not later than the applicable specified application date defined in section 1899B(a)(2)(E) of the Act.
In this final rule, we are establishing three previously finalized quality measures: One measure establishes the newly NQF-endorsed status of that quality measure; two other measures are for the purpose of establishing the cross-setting use of the previously finalized quality measures, in order to satisfy the IMPACT Act of 2014 requirement of adopting quality measures under the domains of skin integrity and falls with major injury. We are adopting an application of a fourth previously finalized LTCH functional status measure in order to meet the requirement of the IMPACT Act of 2014 to adopt a cross-setting measure under the domain of functional status, such as self-care or mobility. All four measures effect the FY 2018 annual payment update determination and beyond.
In addition, we will publicly report LTCH quality data beginning in fall 2016, on a CMS Web site, such as
Finally, we are lengthening our quarterly data submission deadlines from 45 days to 135 days beyond the end of each calendar year quarter beginning with quarter four (4) 2015 quality data. We are making this change in order to align with other quality reporting programs, and to allow an appropriate amount of time for LTCHs to review and correct quality data prior to the public posting of that data.
• Adjustment for MS-DRG Documentation and Coding Changes. We are making a −0.8 percent recoupment adjustment to the standardized amount for FY 2016 to implement, in part, the requirement of section 631 of the ATRA that the Secretary make an adjustment totaling $11 billion over a 4-year period of FYs 2014, 2015, 2016, and 2017. This recoupment adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. Prior to the ATRA, this amount could not have been recovered under Public Law 110-90.
While our actuaries estimated that a −9.3 percent recoupment adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in FY 2014, it is often our practice to delay or phase in rate adjustments over more than one year, in order to moderate the effects on rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases and the adjustment we made for FY 2014, we are making a −0.8 percent recoupment adjustment to the standardized amount in FY 2016. Taking into account the cumulative effects of this adjustment and the adjustments made in FYs 2014 and 2015, we currently estimate that approximately $5 to $6 billion would be left to recover under section 631 of the ATRA by the end of FY 2016. We have not yet addressed the specific amount of the final adjustment required under section 631 of the ATRA for FY 2017. We intend to address this adjustment in the FY 2017 IPPS rulemaking. However, we note that section 414 of the MACRA (Pub. L. 114-10), enacted on April 16, 2015, replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 through 2023. The provision under section 414 of the MACRA does not impact our FY 2016 recoupment adjustment, and we will address this MACRA provision in future rulemaking.
• Changes to the Hospital Readmissions Reduction Program. We are making a refinement to the pneumonia readmissions measure, which will expand the measure cohort for the FY 2017 payment determination and subsequent years. In addition, we are adopting an extraordinary circumstance exception policy that will align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and will allow hospitals that experience an extraordinary circumstance (such as a hurricane or flood) to request a waiver for use of data from the affected time period. These changes will not significantly impact the program in FY 2016, but could impact future years, depending on actual experience.
Overall, in this final rule, we estimate that 2,666 hospitals will have their base operating DRG payments reduced by their proxy FY 2016 hospital-specific readmissions adjustment. As a result, we estimate that the Hospital Readmissions Reduction Program will save approximately $420 million in FY 2016, an increase of $6 million over the estimated FY 2015 savings.
• Value-Based Incentive Payments under the Hospital VBP Program. We estimate that there will be no net financial impact to the Hospital VBP Program for the FY 2016 program year in the aggregate because, by law, the amount available for value-based incentive payments under the program in a given year must be equal to the total amount of base operating MS-DRG payment amount reductions for that year, as estimated by the Secretary. The estimated amount of base operating MS-DRG payment amount reductions for the FY 2016 program year and, therefore, the estimated amount available for value-based incentive payments for FY
• Changes to the HAC Reduction Program for FY 2016. We are making three changes to existing HAC Reduction Program policies: (1) An expansion to the population covered by the central line-associated bloodstream infection (CLABSI) and catheter-associated urinary tract infection (CAUTI) measures to include patients in select nonintensive care unit sites within a hospital; (2) an adjustment to the relative contribution of each domain to the Total HAC Score that is used to determine if a hospital will receive the payment adjustment; and (3) a policy that will align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and will allow hospitals to request a waiver for use of data from the affected period. Hospitals in the top quartile of HAC scores will continue to have their HAC Reduction Program payment adjustment applied, as required by law. However, because a hospital's Total HAC score and its ranking in comparison to other hospitals in any given year depend on several different factors, any significant impact due to the HAC Reduction Program changes for FY 2016, including which hospitals receive the adjustment, will depend on actual experience.
• Medicare DSH Payment Adjustment and Additional Payment for Uncompensated Care. Under section 1886(r) of the Act (as added by section 3313 of the Affordable Care Act), disproportionate share hospital payments to hospitals under section 1886(d)(5)(F) of the Act are reduced and an additional payment for uncompensated care is made to eligible hospitals beginning in FY 2014. Hospitals that receive Medicare DSH payments will receive 25 percent of the amount they previously would have received under the current statutory formula for Medicare DSH payments in section 1886(d)(5)(F) of the Act. The remainder, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, will be the basis for determining the additional payments for uncompensated care after the amount is reduced for changes in the percentage of individuals that are uninsured and additional statutory adjustments. Each hospital that receives Medicare DSH payments will receive an additional payment for uncompensated care based on its share of the total uncompensated care amount reported by Medicare DSHs. The reduction to Medicare DSH payments is not budget neutral.
For FY 2016, we are providing that the 75 percent of what otherwise would have been paid for Medicare DSH is adjusted to approximately 63.69 percent of the amount to reflect changes in the percentage of individuals that are uninsured and additional statutory adjustments. In other words, approximately 47.76 percent (the product of 75 percent and 63.69 percent) of our estimate of Medicare DSH payments prior to the application of section 3133 of the Affordable Care Act is available to make additional payments to hospitals for their relative share of the total amount of uncompensated care. We project that Medicare DSH payments and additional payments for uncompensated care made for FY 2016 will reduce payments overall by approximately 1 percent as compared to the Medicare DSH payments and uncompensated care payments distributed in FY 2015. The additional payments have redistributive effects based on a hospital's uncompensated care amount relative to the uncompensated care amount for all hospitals that are estimated to receive Medicare DSH payments, and the payment amount is not directly tied to a hospital's number of discharges.
• Implementation of Legislative Extensions Relating to the Payment Adjustment for Low-Volume Hospitals and the Medicare-Dependent, Small Rural Hospital Program. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10) extended certain provisions relating to the payment adjustment for low-volume hospitals under section 1886(d)(12) of the Act and extended the Medicare-dependent, small rural hospital (MDH) Program. Section 204 of the MACRA extended the temporary changes to the low-volume hospital qualifying criteria and payment adjustment for IPPS hospital discharges occurring on or after April 1, 2015 through September 30, 2017. Section 205 of the MACRA extended the MDH program for IPPS hospital discharges occurring on or after April 1, 2015 through September 30, 2017. We project that IPPS payments for FY 2016 will increase by approximately $322 million as a result of the statutory extensions of certain provisions of the low-volume hospital payment adjustment and approximately $96 million for the MDH program compared to such payments in absence of these extensions.
• Update to the LTCH PPS Payment Rates and Other Payment Factors. Based on the best available data for the 419 LTCHs in our data base, we estimate that the changes to the payment rates and factors that we are presenting in the preamble and Addendum of this final rule, including the application of the new site neutral payment rate required by section 1886(m)(6)(A) of the Act, the update to the LTCH PPS standard Federal payment rate for FY 2016, and the changes to short-stay outlier and high-cost outlier payments will result in an estimated decrease in payments from FY 2015 of approximately $250 million.
• Hospital Inpatient Quality Reporting (IQR) Program. In this final rule, we are removing nine measures for the FY 2018 payment determination and subsequent years. We are adding seven measures to the Hospital IQR Program for the payment determination; four for the FY 2018 payment determination and subsequent years and three for FY 2019 payment determination and subsequent years. We also are requiring hospitals to report 4 of the 28 Hospital IQR Program electronic clinical quality measures that align with the Medicare EHR Incentive Program. We estimate that our policies for the adoption and removal of measures will result in total hospital costs of $169 million across 3,300 IPPS hospitals.
• Changes in LTCH Payments Related to the LTCH QRP Proposals. We believe that the increase in costs to LTCHs related to our LTCH QRP policies in this final rule is zero. We refer readers to sections VIII.C. of the preamble of this final rule for detailed discussion of the policies.
Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to use a prospective payment system (PPS) to pay for the capital-related costs of inpatient hospital services for these “subsection (d) hospitals.” Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis-related groups (DRGs).
The base payment rate is comprised of a standardized amount that is divided into a labor-related share and a nonlabor-related share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located. If the hospital is located in Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-living adjustment factor. This
If the hospital treats a high percentage of certain low-income patients, it receives a percentage add-on payment applied to the DRG-adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment varies based on the outcome of the statutory calculations. The Affordable Care Act revised the Medicare DSH payment methodology and provided for a new additional Medicare payment that considers the amount of uncompensated care provided by the hospital. Payment under this methodology began in FY 2014.
If the hospital is an approved teaching hospital, it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds.
Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-on payment, it would be inadequately paid under the regular DRG payment.
The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any eligible outlier payment is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments.
Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate, which is determined from their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS Federal rate based on the standardized amount. SCHs are the sole source of care in their areas. Specifically, section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more than 35 road miles from another hospital or that, by reason of factors such as isolated location, weather conditions, travel conditions, or absence of other like hospitals (as determined by the Secretary), is the sole source of hospital inpatient services reasonably available to Medicare beneficiaries. In addition, certain rural hospitals previously designated by the Secretary as essential access community hospitals are considered SCHs.
We note that the Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10), enacted on April 16, 2015, extended the Medicare-dependent, small rural hospital (MDH) program through FY 2017. Through and including FY 2006, an MDH received the higher of the Federal rate or the Federal rate plus 50 percent of the amount by which the Federal rate was exceeded by the higher of its FY 1982 or FY 1987 hospital-specific rate. For discharges occurring on or after October 1, 2007, through FY 2017, an MDH receives the higher of the Federal rate or the Federal rate plus 75 percent of the amount by which the Federal rate is exceeded by the highest of its FY 1982, FY 1987, or FY 2002 hospital-specific rate. MDHs are a major source of care for Medicare beneficiaries in their areas. Section 1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is located in a rural area, has no more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent of its inpatient days or discharges in its cost reporting year beginning in FY 1987 or in two of its three most recently settled Medicare cost reporting years).
Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services “in accordance with a prospective payment system established by the Secretary.” The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. In addition, hospitals may receive outlier payments for those cases that have unusually high costs.
The existing regulations governing payments to hospitals under the IPPS are located in 42 CFR part 412, subparts A through M.
Under section 1886(d)(1)(B) of the Act, as amended, certain hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; certain cancer hospitals; and short-term acute care hospitals located in Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA, Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs for rehabilitation hospitals and units (referred to as inpatient rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)). (We note that the annual updates to the LTCH PPS are now included as part of the IPPS annual update document. Updates to the IRF PPS and IPF PPS are issued as separate documents.) Children's hospitals, certain cancer hospitals, short-term acute care hospitals located in Guam, the U.S. Virgin Islands, the Northern Mariana Islands, and American Samoa, and RNHCIs continue to be paid solely under a reasonable cost-based system subject to a rate-of-increase ceiling on inpatient operating costs, as updated annually by the percentage increase in the IPPS operating market basket.
The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR parts 412 and 413.
The Medicare prospective payment system (PPS) for LTCHs applies to hospitals described in section 1886(d)(1)(B)(iv) of the Act effective for cost reporting periods beginning on or after October 1, 2002. The LTCH PPS was established under the authority of section 123 of the BBRA and section 307(b) of the BIPA (as codified under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a LTCH's payment under the PPS was based on an increasing proportion of the LTCH Federal rate with a corresponding
Under sections 1814(l), 1820, and 1834(g) of the Act, payments made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are generally based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v)(1)(A) of the Act and existing regulations under 42 CFR part 413.
Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR part 413.
The American Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240), enacted on January 2, 2013, made a number of changes that affect the IPPS. We announced changes related to certain IPPS provisions for FY 2013 in accordance with sections 605 and 606 of Public Law 112-240 in a notice that appeared in the
The Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), enacted on December 26, 2013, also made a number of changes that affect the IPPS and the LTCH PPS. We implemented changes related to the low-volume hospital payment adjustment and MDH provisions for FY 2014 in accordance with sections 1105 and 1106 of Public Law 113-67 in an interim final rule with comment period that appeared in the
The Protecting Access to Medicare Act of 2014 (Pub. L. 113-93), enacted on April 1, 2014, also made a number of changes that affect the IPPS and LTCH PPS.
The Improving Medicare Post-Acute Care Transformation Act of 2014 (IMPACT Act of 2014) (Pub. L. 113-185), enacted on October 6, 2014, made a number of changes that affect the Long-Term Care Quality Reporting Program (LTCH QRP).
The Medicare Access and CHIP Reauthorization Act of 2015 (Pub. L. 114-10) enacted on April 16, 2015, extended the MDH program and changes to the payment adjustment for low-volume hospitals through FY 2017.
In this final rule, we are making policy changes to implement section 631 of the American Taxpayer Relief Act of 2012, which amended section 7(b)(1)(B) of Public Law 110-90 and requires a recoupment adjustment to the standardized amounts under section 1886(d) of the Act based upon the Secretary's estimates for discharges occurring in FY 2014 through FY 2017 to fully offset $11 billion (which represents the amount of the increase in aggregate payments from FYs 2008 through 2013 for which an adjustment was not previously applied).
In this final rule, we are providing clarifications to prior policy changes, making new policy changes, and discussing the need for future policy changes to implement provisions under section 1206 of the Pathway for SGR Reform Act of 2013. These include:
• Section 1206(a), which provides for the establishment of patient criteria for exclusion from the new site neutral payment rate under the LTCH PPS, beginning in FY 2016.
• Section 1206(a)(3), which requires changes to the LTCH average length of stay criterion.
• Section 1206(b)(1), which further amended section 114(c) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act by retroactively reestablishing, and extending, the statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy under the LTCH PPS so that the policy will be in effect for 9 years (except for grandfathered hospitals-within-hospitals (HwHs), which it permanently exempted from this policy).
• Section 1206(b)(2), which amended section 114(d) of the MMSEA, as amended by section 4302(a) of the ARRA and sections 3106(c) and 10312(a) of the Affordable Care Act to establish new moratoria (subject to certain defined exceptions) on the development of new LTCHs and LTCH satellite facilities and a new moratorium on increases in the number of beds in existing LTCHs and LTCH satellite facilities.
In this final rule, we are clarifying or discussing our prior policy changes that implemented the following provisions (or portions of the following provisions) of the Protecting Access to Medicare Act of 2014 that are applicable to the IPPS and the LTCH PPS for FY 2016:
• Section 112, which makes certain changes to Medicare LTCH provisions, including modifications to the statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities.
• Section 212, which prohibits the Secretary from requiring implementation of ICD-10 code sets before October 1, 2015.
In this final rule, we are implementing portions of section 2 of the IMPACT Act of 2014, which, in part, requires LTCHs, among other postacute care providers, to report standardized patient assessment data, data on quality measures, and data on resource use and other measures.
In this document, as an interim final rule with comment period, we are implementing sections 204 and 205 of the Medicare Access and CHIP Reauthorization Act of 2015, which extended the MDH program and changes to the low-volume payment adjustment for hospitals through FY 2017.
Earlier this year, we published a proposed rule that set forth proposed changes for the Medicare IPPS for operating costs and for capital-related costs of acute care hospitals for FY 2016. The proposed rule appeared in the
Below is a summary of the major changes that we proposed to make.
In section II. of the preamble of the proposed rule, we included—
• Proposed changes to MS-DRG classifications based on our yearly review, including a discussion of the conversion of MS-DRGs to ICD-10 and the implementation of the ICD-10-CM and ICD-10-PCS systems.
• Proposed application of the documentation and coding adjustment for FY 2016 resulting from implementation of the MS-DRG system.
• Proposed recalibrations of the MS-DRG relative weights.
• Proposed changes to hospital-acquired conditions (HACs) and a discussion of HACs, including infections, that would be subject to the statutorily required adjustment in MS-DRG payments for FY 2016.
• A discussion of the FY 2016 status of new technologies approved for add-on payments for FY 2015 and a presentation of our evaluation and analysis of the FY 2016 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting).
In section III. of the preamble to the proposed rule, we proposed revisions to the wage index for acute care hospitals and the annual update of the wage data. Specific issues addressed included the following:
• The proposed FY 2016 wage index update using wage data from cost reporting periods beginning in FY 2012.
• Calculation of the proposed occupational mix adjustment for FY 2016 based on the 2013 Occupational Mix Survey.
• Analysis and implementation of the proposed FY 2016 occupational mix adjustment to the wage index for acute care hospitals.
• Application of the rural floor, the proposed imputed rural floor, and the frontier State floor.
• Transitional wage indexes relating to the continued use of the revised OMB labor market area delineations based on 2010 Decennial Census data.
• Proposed revisions to the wage index for acute care hospitals based on hospital redesignations and reclassifications.
• The proposed out-migration adjustment to the wage index for acute care hospitals for FY 2016 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index. Beginning in FY 2016, we proposed new out-migration adjustments based on commuting patterns obtained from 2010 Decennial Census data.
• The timetable for reviewing and verifying the wage data used to compute the proposed FY 2016 hospital wage index.
• Determination of the labor-related share for the proposed FY 2016 wage index.
• Proposed changes to the 3-year average pension policy and proposed changes to the wage index timetable regarding pension cost for FY 2017 and subsequent years.
• Clarification of the allocation of pension costs for the wage index.
In section IV. of the preamble of the proposed rule, we discussed proposed changes or clarifications of a number of the provisions of the regulations in 42 CFR parts 412 and 413, including the following:
• Proposed changes to the inpatient hospital updates for FY 2016, including the adjustment for hospitals that are not meaningful EHR users under section 1886(b)(3)(B)(ix) of the Act.
• The proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
• The statutorily required IME adjustment factor for FY 2016.
• Proposal for determining Medicare DSH payments and the additional payments for uncompensated care for FY 2016.
• Proposed changes to the measures and payment adjustments under the Hospital Readmissions Reduction Program.
• Proposed changes to the requirements and provision of value-based incentive payments under the Hospital Value-Based Purchasing Program.
• Proposed requirements for payment adjustments to hospitals under the HAC Reduction Program for FY 2016.
• Proposed elimination of the election by hospitals to use the simplified cost allocation methodology for Medicare cost reports.
• Discussion of the Rural Community Hospital Demonstration Program and a proposal for making a budget neutrality adjustment for the demonstration program.
• Proposed changes in postacute care transfer policies as a result of proposed new MS-DRGs.
• A statement of our intent to discuss issues related to short inpatient hospital stays, long outpatient stays with observation services, and the related −0.2 percent IPPS payment adjustment in the CY 2016 hospital outpatient prospective payment system proposed rule.
In section V. of the preamble to the proposed rule, we discussed the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2016.
In section VI. of the preamble of the proposed rule, we discussed proposed changes to payments to certain excluded hospitals for FY 2016.
In section VII. of the preamble of the proposed rule, we set forth—
• Proposed changes to the LTCH PPS Federal payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2016.
• Proposals to implement section 1206(a)(1) of the Pathway for SGR Reform Act, which established the site neutral payment rate as the default means of paying for discharges in LTCH cost reporting periods beginning on or after October 1, 2015.
• Provisions to make technical clarifications regarding the moratoria on the establishment of new LTCHs and LTCH satellite facilities and on bed increases in existing LTCHs and LTCH satellite facilities that were established by section 1206(b)(2) of the Pathway for SGR Reform, as amended, as well as a
• Proposal to revise the average length of stay criterion for LTCHs to implement section 1206(a)(3) of the Pathway for SGR Reform Act.
In section VIII. of the preamble of the proposed rule, we addressed—
• Proposed requirements for the Hospital Inpatient Quality Reporting (IQR) Program as a condition for receiving the full applicable percentage increase.
• Proposed changes to the requirements for the quality reporting program for PPS-exempt cancer hospitals (PCHQR Program).
• Proposed changes to the requirements under the LTCH Quality Reporting Program (LTCH QRP).
• Proposed changes to align the reporting and submission timelines for the electronic submission of clinical quality measures for the Medicare Electronic Health Record (EHR) Incentive Program for eligible hospitals and CAHs with the reporting and submission of timelines for the Hospital IQR Program. (We note that the proposal included in the proposed rule to establish in regulations an EHR technology certification criterion for reporting clinical quality measures is not being finalized in this final rule but will be addressed in a future rulemaking.)
In the Addendum to the proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2016 prospective payment rates for operating costs and capital-related costs for acute care hospitals. We also proposed to establish the threshold amounts for outlier cases. In addition, we addressed the update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2016 for certain hospitals excluded from the IPPS.
In the Addendum to the proposed rule, we set forth proposed changes to the amounts and factors for determining the proposed FY 2016 LTCH PPS standard Federal payment rate. We proposed to establish the adjustments for wage levels, the labor-related share, the cost-of-living adjustment, and high-cost outliers, including the fixed-loss amount, and the LTCH cost-to-charge ratios (CCRs) under the LTCH PPS.
In Appendix A of the proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected acute care hospitals, LTCHs, and PCHs.
In Appendix B of the proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provided our recommendations of the appropriate percentage changes for FY 2016 for the following:
• A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs of acute care hospitals (and hospital-specific rates applicable to SCHs).
• Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by certain hospitals excluded from the IPPS.
• The standard Federal payment rate for hospital inpatient services furnished by LTCHs.
Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 15 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2015 recommendations concerning hospital inpatient payment policies address the update factor for hospital inpatient operating costs and capital-related costs for hospitals under the IPPS. We addressed these recommendations in Appendix B of the proposed rule. For further information relating specifically to the MedPAC March 2015 report or to obtain a copy of the report, contact MedPAC at (202) 220-3700 or visit MedPAC's Web site at:
We received approximately 361 timely pieces of correspondence containing multiple comments on the FY 2016 IPPS/LTCH PPS proposed rule. We note that some of these public comments were outside of the scope of the proposed rule. These out-of-scope public comments are mentioned but not addressed with the policy responses in this final rule. Summaries of the public comments that are within the scope of the proposed rule and our responses to those public comments are set forth in the various sections of this final rule under the appropriate heading.
Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as diagnosis-related groups (DRGs)) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, Medicare pays for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs.
Congress recognized that it would be necessary to recalculate the DRG relative weights periodically to account for changes in resource consumption. Accordingly, section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights at least annually. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources.
For general information about the MS-DRG system, including yearly reviews and changes to the MS-DRGs, we refer readers to the previous discussions in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43764 through 43766), the FY 2011 IPPS/LTCH PPS final rule (75 FR 50053 through 50055), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51485 through 51487), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53273), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50512), and the FY 2015 IPPS/LTCH PPS final rule (79 FR 49871).
For information on the adoption of the MS-DRGs in FY 2008, we refer readers to the FY 2008 IPPS final rule
In the FY 2008 IPPS final rule with comment period (72 FR 47140 through 47189), we adopted the MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates for acute care hospitals. The adoption of the MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number of MS-DRGs and more fully taking into account patient severity of illness in Medicare payment rates for acute care hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses.
In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for additional documentation and coding. In that final rule with comment period, we exercised our authority under section 1886(d)(3)(A)(vi) of the Act, which authorizes us to maintain budget neutrality by adjusting the national standardized amount, to eliminate the estimated effect of changes in coding or classification that do not reflect real changes in case-mix. Our actuaries estimated that maintaining budget neutrality required an adjustment of −4.8 percent to the national standardized amount. We provided for phasing in this −4.8 percent adjustment over 3 years. Specifically, we established prospective documentation and coding adjustments of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010.
On September 29, 2007, Congress enacted the TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-90). Section 7(a) of Public Law 110-90 reduced the documentation and coding adjustment made as a result of the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to −0.6 percent for FY 2008 and −0.9 percent for FY 2009, and we finalized the FY 2008 adjustment through rulemaking, effective October 1, 2007 (72 FR 66886).
For FY 2009, section 7(a) of Public Law 110-90 required a documentation and coding adjustment of −0.9 percent, and we finalized that adjustment through rulemaking effective October 1, 2008 (73 FR 48447). The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period, which reflected the amendments made by section 7(a) of Public Law 110-90, are cumulative. As a result, the −0.9 percent documentation and coding adjustment for FY 2009 was in addition to the −0.6 percent adjustment for FY 2008, yielding a combined effect of −1.5 percent.
Section 7(b)(1)(A) of Public Law 110-90 requires that, if the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 or FY 2009 that are different than the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, the Secretary shall make an appropriate adjustment under section 1886(d)(3)(A)(vi) of the Act. Section 1886(d)(3)(A)(vi) of the Act authorizes adjustments to the average standardized amounts for subsequent fiscal years in order to eliminate the effect of such coding or classification changes. These adjustments are intended to ensure that future annual aggregate IPPS payments are the same as the payments that otherwise would have been made had the prospective adjustments for documentation and coding applied in FY 2008 and FY 2009 reflected the change that occurred in those years.
If, based on a retroactive evaluation of claims data, the Secretary determines that implementation of the MS-DRG system resulted in changes in documentation and coding that did not reflect real changes in case-mix for discharges occurring during FY 2008 or FY 2009 that are different from the prospective documentation and coding adjustments applied under section 7(a) of Public Law 110-90, section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an additional adjustment to the standardized amounts under section 1886(d) of the Act. This adjustment must offset the estimated increase or decrease in aggregate payments for FYs 2008 and 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustment applied under section 7(a) of Public Law 110-90. This adjustment is in addition to making an appropriate adjustment to the standardized amounts under section 1886(d)(3)(A)(vi) of the Act as required by section 7(b)(1)(A) of Public Law 110-90. That is, these adjustments are intended to recoup (or repay, in the case of underpayments) spending in excess of (or less than) spending that would have occurred had the prospective adjustments for changes in documentation and coding applied in FY 2008 and FY 2009 matched the changes that occurred in those years. Public Law 110-90 requires that the Secretary only make these recoupment or repayment adjustments for discharges occurring during FYs 2010, 2011, and 2012.
In order to implement the requirements of section 7 of Public Law 110-90, we performed a retrospective evaluation of the FY 2008 data for claims paid through December 2008 using the methodology first described in the FY 2009 IPPS/LTCH PPS final rule (73 FR 43768 and 43775) and later discussed in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43768 through 43772). We performed the same analysis for FY 2009 claims data using the same methodology as we did for FY 2008 claims (75 FR 50057 through 50068). The results of the analysis for the FY 2011 IPPS/LTCH PPS proposed and final rules, and subsequent evaluations in FY 2012, supported that the 5.4 percent estimate accurately reflected the FY 2009 increases in documentation and coding under the MS-DRG system. We were persuaded by both MedPAC's analysis (as discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50064 through 50065)) and our own review of the methodologies recommended by various commenters that the methodology we employed to determine the required documentation and coding adjustments was sound.
As in prior years, the FY 2008, FY 2009, and FY 2010 MedPAR files are available to the public to allow independent analysis of the FY 2008 and FY 2009 documentation and coding
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In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43767 through 43777), we opted to delay the implementation of any documentation and coding adjustment until a full analysis of case-mix changes based on FY 2009 claims data could be completed. We refer readers to the FY 2010 IPPS/RY LTCH PPS final rule for a detailed description of our proposal, responses to comments, and finalized policy. After analysis of the FY 2009 claims data for the FY 2011 IPPS/LTCH PPS final rule (75 FR 50057 through 50073), we found a total prospective documentation and coding effect of 5.4 percent. After accounting for the −0.6 percent and the −0.9 percent documentation and coding adjustments in FYs 2008 and 2009, we found a remaining documentation and coding effect of 3.9 percent. As we have discussed, an additional cumulative adjustment of −3.9 percent would be necessary to meet the requirements of section 7(b)(1)(A) of Public Law 110-90 to make an adjustment to the average standardized amounts in order to eliminate the full effect of the documentation and coding changes that do not reflect real changes in case-mix on future payments. Unlike section 7(b)(1)(B) of Public Law 110-90, section 7(b)(1)(A) does not specify when we must apply the prospective adjustment, but merely requires us to make an “appropriate” adjustment. Therefore, as we stated in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50061), we believed the law provided some discretion as to the manner in which we applied the prospective adjustment of −3.9 percent. As we discussed extensively in the FY 2011 IPPS/LTCH PPS final rule, it has been our practice to moderate payment adjustments when necessary to mitigate the effects of significant downward adjustments on hospitals, to avoid what could be widespread, disruptive effects of such adjustments on hospitals. Therefore, we stated that we believed it was appropriate to not implement the −3.9 percent prospective adjustment in FY 2011 because we finalized a −2.9 percent recoupment adjustment for that fiscal year. Accordingly, we did not propose a prospective adjustment under section 7(b)(1)(A) of Public Law 110-90 for FY 2011 (75 FR 23868 through 23870). We noted that, as a result, payments in FY 2011 (and in each future fiscal year until we implemented the requisite adjustment) would be higher than they would have been if we had implemented an adjustment under section 7(b)(1)(A) of Public Law 110-90.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51489 and 51497), we indicated that, because further delay of this prospective adjustment would result in a continued accrual of unrecoverable overpayments, it was imperative that we implement a prospective adjustment for FY 2012, while recognizing CMS' continued desire to mitigate the effects of any significant downward adjustments to hospitals. Therefore, we implemented a −2.0 percent prospective adjustment to the standardized amount instead of the full −3.9 percent.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53274 through 53276), we completed the prospective portion of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 by finalizing a −1.9 percent adjustment to the standardized amount for FY 2013. We stated that this adjustment would remove the remaining effect of the documentation and coding changes that do not reflect real changes in case-mix that occurred in FY 2008 and FY 2009. We believed that it was imperative to implement the full remaining adjustment, as any further delay would result in an overstated standardized amount in FY 2013 and any future fiscal years until a full adjustment was made.
We noted again that delaying full implementation of the prospective portion of the adjustment required under section 7(b)(1)(A) of Public Law 110-90 until FY 2013 resulted in payments in FY 2010 through FY 2012 being overstated. These overpayments could not be recovered by CMS because section 7(b)(1)(B) of Public Law 110-90 limited recoupments to overpayments made in FY 2008 and FY 2009.
Section 7(b)(1)(B) of Public Law 110-90 requires the Secretary to make an adjustment to the standardized amounts under section 1886(d) of the Act to offset the estimated increase or decrease in aggregate payments for FY 2008 and FY 2009 (including interest) resulting from the difference between the estimated actual documentation and coding effect and the documentation and coding adjustments applied under section 7(a) of Public Law 110-90. This determination must be based on a retrospective evaluation of claims data. Our actuaries estimated that there was a 5.8 percentage point difference resulting in an increase in aggregate payments of approximately $6.9 billion. Therefore, as discussed in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50062 through 50067), we determined that an aggregate adjustment of −5.8 percent in FYs 2011 and 2012 would be necessary in order to meet the requirements of section 7(b)(1)(B) of Public Law 110-90 to adjust the standardized amounts for discharges occurring in FYs 2010, 2011, and/or 2012 to offset the estimated amount of the increase in aggregate payments (including interest) in FYs 2008 and 2009.
It is often our practice to phase in payment rate adjustments over more than one year in order to moderate the effect on payment rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, in the FY 2011 IPPS/LTCH PPS final rule, we made an adjustment to the standardized amount of −2.9 percent, representing approximately one-half of the aggregate adjustment required under section 7(b)(1)(B) of Public Law 110-90, for FY 2011. An adjustment of this magnitude allowed us to moderate the effects on hospitals in one year while simultaneously making it possible to implement the entire adjustment within the timeframe required under section 7(b)(1)(B) of Public Law 110-90 (that is, no later than FY 2012). For FY 2012, in accordance with the timeframes set forth by section 7(b)(1)(B) of Public Law 110-90, and consistent with the discussion in the FY 2011 IPPS/LTCH PPS final rule, we completed the recoupment adjustment by implementing the remaining −2.9 percent adjustment, in addition to removing the effect of the −2.9 percent
Section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment or adjustments totaling $11 billion by FY 2017. This adjustment represents the amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. As discussed earlier, this delay in implementation resulted in overstated payment rates in FYs 2010, 2011, and 2012. The resulting overpayments could not have been recovered under Public Law 110-90.
Similar to the adjustments authorized under section 7(b)(1)(B) of Public Law 110-90, the adjustment required under section 631 of the ATRA is a one-time recoupment of a prior overpayment, not a permanent reduction to payment rates. Therefore, we anticipated that any adjustment made to reduce payment rates in one year would eventually be offset by a single positive adjustment in FY 2018, once the necessary amount of overpayment was recovered. However, we note that section 414 of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, Public Law 114-10, enacted on April 16, 2015, replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 through 2023. The provision under section 414 of the MACRA does not impact our FY 2016 adjustment, and we will address this MACRA provision in future rulemaking.
As we stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), our actuaries estimate that a −9.3 percent adjustment to the standardized amount would be necessary if CMS were to fully recover the $11 billion recoupment required by section 631 of the ATRA in FY 2014. It is often our practice to phase in payment rate adjustments over more than one year, in order to moderate the effect on payment rates in any one year. Therefore, consistent with the policies that we have adopted in many similar cases, and after consideration of the public comments we received, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50515 through 50517), we implemented a −0.8 percent recoupment adjustment to the standardized amount in FY 2014. We stated that if adjustments of approximately −0.8 percent are implemented in FYs 2014, 2015, 2016, and 2017, using standard inflation factors, we estimate that the entire $11 billion will be accounted for by the end of the statutory 4-year timeline. As estimates of any future adjustments are subject to slight variations in total savings, we did not provide for specific adjustments for FYs 2015, 2016, or 2017 at that time. We stated that we believed that this level of adjustment for FY 2014 was a reasonable and fair approach that satisfies the requirements of the statute while mitigating extreme annual fluctuations in payment rates.
Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS final rule for recouping the $11 billion required by section 631 of the ATRA, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49873 through 49874), we implemented an additional −0.8 percent recoupment adjustment to the standardized amount for FY 2015. We estimated that this level of adjustment, combined with leaving the −0.8 percent adjustment made for FY 2014 in place, would recover up to $2 billion in FY 2015. When combined with the approximately $1 billion adjustment made in FY 2014, we estimated that approximately $8 billion would be left to recover under section 631 of the ATRA.
Consistent with the approach discussed in the FY 2014 IPPS/LTCH PPS final rule for recouping the $11 billion required by section 631 of the ATRA, we proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24342) to implement a −0.8 percent recoupment adjustment to the standardized amount for FY 2016. We estimated that this level of adjustment, combined with leaving the −0.8 percent adjustments made for FY 2014 and FY 2015 in place, would recover up to $3 billion in FY 2016.
After consideration of the public comments we received, we are finalizing the proposal to make an additional −0.8 percent recoupment adjustment to the standardized amount for FY 2016. Taking into account the cumulative effects of this adjustment and the adjustments made in FYs 2014 and 2015, we currently estimate that approximately $5 to $6 billion would be left to recover under section 631 of the ATRA by the end of FY 2016. As we explained in the FY 2014 and FY 2015 IPPS/LTCH PPS final rules, estimates of any future adjustments are subject to variations in total estimated savings. Therefore, we have not yet addressed the specific amount of the final adjustment required under section 631 of the ATRA for FY 2017. We intend to address this adjustment in the FY 2017 IPPS rulemaking. As stated earlier, we also note that section 414 of the MACRA (Pub. L. 114-10), enacted on April 16, 2015, replaced the single positive adjustment we intended to make in FY 2018 with a 0.5 percent positive adjustment for each of FYs 2018 through 2023. The provision under section 414 of the MACRA does not impact our FY 2016 recoupment adjustment, and we will address this MACRA provision in future rulemaking.
Beginning in FY 2007, we implemented relative weights for DRGs based on cost report data instead of charge information. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a detailed discussion of our final policy for calculating the cost-based DRG relative weights and to the
As we implemented cost-based relative weights, some public commenters raised concerns about potential bias in the weights due to “charge compression,” which is the practice of applying a higher percentage charge markup over costs to lower cost items and services, and a lower percentage charge markup over costs to higher cost items and services. As a result, the cost-based weights would undervalue high-cost items and overvalue low-cost items if a single cost-to-charge ratio (CCR) is applied to items of widely varying costs in the same cost center. To address this concern, in August 2006, we awarded a contract to the Research Triangle Institute, International (RTI) to study the effects of charge compression in calculating the relative weights and to consider methods to reduce the variation in the CCRs across services within cost centers. For a detailed summary of RTI's findings, recommendations, and public comments that we received on the report, we refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 48452 through 48453). In addition, we refer readers to RTI's July 2008 final report titled “Refining Cost to Charge Ratios for Calculating APC and MS-DRG Relative Payment Weights” (
In the FY 2009 IPPS final rule (73 FR 48458 through 48467), in response to the RTI's recommendations concerning cost report refinements, we discussed our decision to pursue changes to the cost report to split the cost center for Medical Supplies Charged to Patients into one line for “Medical Supplies Charged to Patients” and another line for “Implantable Devices Charged to Patients.” We acknowledged, as RTI had found, that charge compression occurs in several cost centers that exist on the Medicare cost report. However, as we stated in the FY 2009 IPPS final rule, we focused on the CCR for Medical Supplies and Equipment because RTI found that the largest impact on the MS-DRG relative weights could result from correcting charge compression for devices and implants. In determining the items that should be reported in these respective cost centers, we adopted the commenters' recommendations that hospitals should use revenue codes established by the AHA's National Uniform Billing Committee to determine the items that should be reported in the “Medical Supplies Charged to Patients” and the “Implantable Devices Charged to Patients” cost centers. Accordingly, a new subscripted line for “Implantable Devices Charged to Patients” was created in July 2009. This new subscripted cost center has been available for use for cost reporting periods beginning on or after May 1, 2009.
As we discussed in the FY 2009 IPPS final rule (73 FR 48458) and in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68519 through 68527), in addition to the findings regarding implantable devices, RTI also found that the costs and charges of computed tomography (CT) scans, magnetic resonance imaging (MRI), and cardiac catheterization differ significantly from the costs and charges of other services included in the standard associated cost center. RTI also concluded that both the IPPS and the OPPS relative weights would better estimate the costs of those services if CMS were to add standard cost centers for CT scans, MRIs, and cardiac catheterization in order for hospitals to report separately the costs and charges for those services and in order for CMS to calculate unique CCRs to estimate the costs from charges on claims data. In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080), we finalized our proposal to create standard cost centers for CT scans, MRIs, and cardiac catheterization, and to require that hospitals report the costs and charges for these services under new cost centers on the revised Medicare cost report Form CMS-2552-10. (We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080) for a detailed discussion of the reasons for the creation of standard cost centers for CT scans, MRIs, and cardiac catheterization.) The new standard cost centers for CT scans, MRIs, and cardiac catheterization are effective for cost reporting periods beginning on or after May 1, 2010, on the revised cost report Form CMS-2552-10.
In the FY 2009 IPPS final rule (73 FR 48468), we stated that, due to what is typically a 3-year lag between the reporting of cost report data and the availability for use in ratesetting, we anticipated that we might be able to use data from the new “Implantable Devices Charged to Patients” cost center to develop a CCR for “Implantable Devices Charged to Patients” in the FY 2012 or FY 2013 IPPS rulemaking cycle. However, as noted in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43782), due to delays in the issuance of the revised cost report Form CMS 2552-10, we determined that a new CCR for “Implantable Devices Charged to Patients” might not be available before FY 2013. Similarly, when we finalized the decision in the FY 2011 IPPS/LTCH PPS final rule to add new cost centers for CT scans, MRIs, and cardiac catheterization, we explained that data from any new cost centers that may be created will not be available until at least 3 years after they are first used (75 FR 50077). In preparation for the FY 2012 IPPS/LTCH PPS rulemaking, we checked the availability of data in the “Implantable Devices Charged to Patients” cost center on the FY 2009 cost reports, but we did not believe that there was a sufficient amount of data from which to generate a meaningful analysis in this particular situation. Therefore, we did not propose to use data from the “Implantable Devices Charged to Patients” cost center to create a distinct CCR for “Implantable Devices Charged to Patients” for use in calculating the MS-DRG relative weights for FY 2012. We indicated that we would reassess the availability of data for the “Implantable Devices Charged to Patients” cost center for the FY 2013 IPPS/LTCH PPS rulemaking cycle and, if appropriate, we would propose to create a distinct CCR at that time.
During the development of the FY 2013 IPPS/LTCH PPS proposed and final rules, hospitals were still in the process of transitioning from the previous cost report Form CMS-2552-96 to the new cost report Form CMS-2552-10. Therefore, we were able to access only those cost reports in the FY 2010 HCRIS with fiscal year begin dates on or after October 1, 2009, and before May 1, 2010; that is, those cost reports on Form CMS-2552-96. Data from the Form CMS-2552-10 cost reports were not available because cost reports filed on the Form CMS-2552-10 were not accessible in the HCRIS. Further complicating matters was that, due to additional unforeseen technical difficulties, the corresponding information regarding charges for implantable devices on hospital claims was not yet available to us in the MedPAR file. Without the breakout in the MedPAR file of charges associated with implantable devices to correspond to the costs of implantable devices on the cost report, we believed that we had no choice but to continue computing the relative weights with the current CCR that combines the costs and charges for supplies and implantable devices. We stated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53281 through 53283) that when we do have the necessary data for supplies and implantable
At the time of the development of the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27506 through 27507), we had a substantial number of hospitals completing all, or some, of these new cost centers on the FY 2011 Medicare cost reports, compared to prior years. We stated that we believed that the analytic findings described using the FY 2011 cost report data and FY 2012 claims data supported our original decision to break out and create new cost centers for implantable devices, MRIs, CT scans, and cardiac catheterization, and we saw no reason to further delay proposing to implement the CCRs of each of these cost centers. Therefore, beginning in FY 2014, we proposed a policy to calculate the MS-DRG relative weights using 19 CCRs, creating distinct CCRs from cost report data for implantable devices, MRIs, CT scans, and cardiac catheterization.
We refer readers to the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27507 through 27509) and final rule (78 FR 50518 through 50523) in which we presented data analyses using distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. The FY 2014 IPPS/LTCH PPS final rule also set forth our responses to public comments we received on our proposal to implement these CCRs. As explained in more detail in the FY 2014 IPPS/LTCH PPS final rule, we finalized our proposal to use 19 CCRs to calculate MS-DRG relative weights beginning in FY 2014—the then existing 15 cost centers and the 4 new CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization. Therefore, beginning in FY 2014, we calculate the IPPS MS-DRG relative weights using 19 CCRs, creating distinct CCRs for implantable devices, MRIs, CT scans, and cardiac catheterization.
Consistent with the policy established beginning for FY 2014, we calculated the MS-DRG relative weights for FY 2016 using two data sources: The MedPAR file as the claims data source and the HCRIS as the cost report data source. We adjusted the charges from the claims to costs by applying the 19 national average CCRs developed from the cost reports. The description of the calculation of the 19 CCRs and the MS-DRG relative weights for FY 2016 is included in section II.H.3. of the preamble of this final rule.
In preparing to calculate the 19 national average CCRs developed from the cost reports, we reviewed the HCRIS data and noticed inconsistencies in hospitals' cost reporting and use of nonstandard cost center codes. In addition, we discovered that hospitals typically report the nonstandard codes with standard cost centers that are different from the standard cost centers to which CMS maps and “rolls up” each nonstandard code in compiling the HCRIS. As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24344), we are concerned that inconsistencies in hospitals' use of nonstandard codes, coupled with differences in the way hospitals and CMS map these nonstandard codes to standard lines, may have implications for the calculation of the 19 CCRs and the aspects of the IPPS that rely on the CCRs (for example, the calculation of the MS-DRG relative weights).
The Medicare cost report Form CMS-2552-10, Worksheet A, includes preprinted cost center codes that reflect the standard cost center descriptions by category (General Service, Routine, and Ancillary) used in most hospitals. Each preprinted standard cost center is assigned a unique 5-digit code. The preprinted 5-digit codes provide standardized meaning for data analysis, and are automatically coded by CMS-approved cost report software. To accommodate hospitals that have additional cost centers that are sufficiently different from the preprinted standard cost centers, CMS identified additional cost centers known as “nonstandard” cost centers. Each nonstandard cost center must be labeled appropriately and reported under a specific standard cost center. For example, under the standard cost center “Electrocardiology” with its 5-digit code of 06900, there are six nonstandard cost centers (for EKG and EEG, Electromyography, Cardiopulmonary, Stress Test, Cardiology, and Holter Monitor), each with a unique 5-digit code.
The instructions for the Medicare cost report Form CMS-2552-10 explain the purpose and requirements related to the standard and nonstandard cost centers. Specifically, in CMS Pub. 15-2, Chapter 40, Section 4013, the instructions for Worksheet A of Form CMS-2552-10 state:
“Cost center coding is a methodology for standardizing the meaning of cost center labels as used by health care providers on the Medicare cost report. Form CMS-2552-10 provides for preprinted cost center descriptions on Worksheet A. In addition, a space is provided for a cost center code. The preprinted cost center labels are automatically coded by CMS approved cost reporting software. These cost center descriptions are hereafter referred to as the standard cost centers. Additionally, nonstandard cost center descriptions have been identified through analysis of frequently used labels.
The use of this coding methodology allows providers to continue to use labels for cost centers that have meaning within the individual institution. The five digit cost center codes that are associated with each provider label in their electronic file provide standardized meaning for data analysis. You are required to compare any added or changed label to the descriptions offered on the standard or nonstandard cost center tables. A description of cost center coding and the table of cost center codes are in § 4095, Table 5.”
Section 4095 of CMS Pub. 15-2 (pages 40-805 and 40-806) further provides that: “Both the standard and nonstandard cost center descriptions along with their cost center codes are shown on Table 5 . . . . Cost center codes may only be used in designated lines in accordance with the classification of the cost center(s),
Table 5 of Section 4095, Chapter 40, of CMS Pub. 15-2 (pages 40-807 through 40-810) lists the electronic reporting specifications for each
As noted above, the Ancillary Service standard cost center for “Anesthesiology”, line 53 of Worksheet A and subsequent worksheets of the Medicare cost report Form CMS-2552-10 (and its associated nonstandard cost center code 03020 “Acupuncture”) is an example of a cost center that is subject to inconsistent reporting. Our review of the FY 2013 HCRIS as-submitted cost reports from which the proposed 19 CCRs for FY 2016 were calculated revealed that, regardless of the actual name hospitals assigned to nonstandard code 03020 (for example, “Acupuncture” or otherwise), hospitals reported this code almost 100 percent of the time on standard line 76, “Other Ancillary,” and never on standard line 53, “Anesthesiology.” Yet, as noted above, CMS (and previously HCFA, under earlier versions of the Medicare cost report), in creating the HCRIS database, has had the longstanding practice of mapping and rolling up all instances of nonstandard code 03020 to standard line 53, “Anesthesiology,” not to standard line 76, “Other Ancillary. Therefore, the version of the HCRIS SAS files created by CMS, which CMS uses for ratesetting purposes, may differ somewhat from the as-submitted cost reports of hospitals because CMS moves various nonstandard cost centers based on cost center codes, not cost center descriptions, from the standard cost centers in which hospitals report them and places them in different standard cost centers based on CMS' roll-up specifications.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24345), we highlighted the discrepancy in the reporting of nonstandard code 03020 “Acupuncture” because the placement of nonstandard code 03020 and its related costs and charges seem to have the most significant implications for the calculation of one of the 19 CCRs, the Anesthesia CCR. As stated in section II.H.3. of the preamble of the proposed rule (80 FR 24413), the proposed FY 2016 CCR for Anesthesia was 0.108. We calculated this proposed CCR based on the December 31, 2014 update of the FY 2013 HCRIS, with the nonstandard cost center codes of 03020 through 03029 rolled up to standard line 53, “Anesthesiology.” That is, under the CMS' HCRIS specifications, we rolled up the following 5-digit codes to standard line 53, “Anesthesiology”:
The differences in these CCRs computed from the HCRIS that was compiled by applying CMS' current rollup procedures of assigning nonstandard codes to specific standard cost centers, as compared to following hospitals' general practice of reporting nonstandard codes “en masse” on line 76, “Other Ancillary,” have implications for the aspects of the IPPS that rely on the CCRs (for example, the calculation of the MS-DRG relative weights). In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24345), we discussed that some questions arise: whether CMS' procedures for mapping and rolling up nonstandard cost centers to specific standard cost centers should be updated; whether hospital reporting practices are imprecise; or whether there is a combination of both of these
In summary, we stated in the FY 2016 IPPS/LTCH PPS proposed rule that we believe that the differences between the standard cost centers to which CMS assigns nonstandard codes when CMS rolls up cost report data to create the HCRIS SAS database, and the standard cost centers to which hospitals tend to assign and use nonstandard codes, coupled with the inconsistencies found in hospitals' use and naming of the nonstandard codes, have implications for the aspects of the IPPS that rely on the CCRs. For example, we have explained above and provided examples of how the CCRs used to calculate the MS-DRG relative weights could change, based on where certain nonstandard codes are reported and rolled up in the cost reports. However, before considering changes to our longstanding practices, in the proposed rule, we solicited public comments from stakeholders as to how to improve the use of nonstandard cost center codes. We indicated that one option might be for CMS to allow only certain nonstandard codes to be used with certain standard cost centers, meaning that CMS might require that the CMS-approved cost reporting software “lock in” those nonstandard codes with their assigned standard cost centers. For example, if a hospital wishes to subscript a standard cost center, the cost reporting software might allow the hospital to choose only from a predetermined set of nonstandard codes. Therefore, for example, if a hospital wished to report Cardiopulmonary costs and charges on its cost report, the only place that the hospital could do that under this approach would be from a drop down list of cardiology-related services on standard line 69, “Electrocardiology,” and not on another line (not even line 76, “Other Ancillary”). We stated that some flexibility could be maintained, but within certain limits, in consideration of unique services that hospitals might provide.
Below we summarize the public comments that we received in response to our solicitation of comments on nonstandard cost center codes.
Commenters requested that CMS work with stakeholders through methods such as additional engagement with the provider community and convening a technical workgroup to receive stakeholder input. Several commenters requested that CMS provide sufficient advance notice when cost reporting process changes are made, noting that it would take time for hospitals to implement changes to their internal cost reporting processes. The commenters were generally supportive of efforts to improve the cost reporting process and cost estimation accuracy. One commenter stated that inconsistencies in reporting of nonstandard cost centers compound the problems the commenter raised in earlier public comments regarding allocation of capital costs and the new CCRs for MRIs and CT scans. Other commenters stated generally that the use of distinct CCRs for MRI and CT scans produces “payment rates that lack face validity” and recommended that CMS not finalize the use of the MRI and CT scan CCRs.
We appreciate the request that CMS provide more detailed instructions regarding appropriate cost reporting methodologies. We believe that the desire for more specific direction in how to report should be balanced by the need for flexibility in cost reporting based on each hospital's own internal charge structure. That balance also applies to cost allocation methodologies. As discussed in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50523) and in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50077 through 50079), we encouraged hospitals over the past several years to use the most precise cost reporting methods in response to the new cost report lines such as the MRI and CT scan standard
We appreciate the comments that stakeholders submitted and will continue to explore ways in which we can improve the accuracy of the cost report data and calculated CCRs used in the cost estimation process. To the extent possible, we will continue to seek stakeholder input in efforts to limit the impact on providers. In the interim, while we are considering these public comments, as we proposed, we are using the 19 CCRs for FY 2016 (listed in section II.H.3. of the preamble of this final rule) that were calculated from the March 2015 update of the FY 2013 HCRIS, created in accordance with CMS' current longstanding procedures for mapping and rolling up nonstandard cost center codes. As we did with the FY 2015 IPPS/LTCH PPS final rule, we are providing the version of the HCRIS from which we calculated these 19 CCRs on the FY 2016 IPPS Final Rule Home Page at:
Section 1886(d)(4)(D) of the Act addresses certain hospital-acquired conditions (HACs), including infections. This provision is part of an array of Medicare tools that we are using to promote increased quality and efficiency of care. Under the IPPS, hospitals are encouraged to treat patients efficiently because they receive the same DRG payment for stays that vary in length and in the services provided, which gives hospitals an incentive to avoid unnecessary costs in the delivery of care. In some cases, conditions acquired in the hospital do not generate higher payments than the hospital would otherwise receive for cases without these conditions. To this extent, the IPPS encourages hospitals to avoid complications.
However, the treatment of these conditions can generate higher Medicare payments in two ways. First, if a hospital incurs exceptionally high costs treating a patient, the hospital stay may generate an outlier payment. However, because the outlier payment methodology requires that hospitals experience large losses on outlier cases before outlier payments are made, hospitals have an incentive to prevent outliers. Second, under the MS-DRG system that took effect in FY 2008 and that has been refined through rulemaking in subsequent years, certain conditions can generate higher payments even if the outlier payment requirements are not met. Under the MS-DRG system, there are currently 261 sets of MS-DRGs that are split into 2 or 3 subgroups based on the presence or absence of a complication or comorbidity (CC) or a major complication or comorbidity (MCC). The presence of a CC or an MCC generally results in a higher payment.
Section 1886(d)(4)(D) of the Act specifies that, by October 1, 2007, the Secretary was required to select, in consultation with the Centers for Disease Control and Prevention (CDC), at least two conditions that: (a) Are high cost, high volume, or both; (b) are assigned to a higher paying MS-DRG when present as a secondary diagnosis (that is, conditions under the MS-DRG system that are CCs or MCCs); and (c) could reasonably have been prevented through the application of evidence-based guidelines. Section 1886(d)(4)(D) of the Act also specifies that the list of conditions may be revised, again in consultation with the CDC, from time to time as long as the list contains at least two conditions.
Effective for discharges occurring on or after October 1, 2008, under the authority of section 1886(d)(4)(D) of the Act, Medicare no longer assigns an inpatient hospital discharge to a higher paying MS-DRG if a selected condition is not present on admission (POA). Thus, if a selected condition that was not POA manifests during the hospital stay, it is considered a HAC and the case is paid as though the secondary diagnosis was not present. However, even if a HAC manifests during the hospital stay, if any nonselected CC or MCC appears on the claim, the claim will be paid at the higher MS-DRG rate. In addition, Medicare continues to assign a discharge to a higher paying MS-DRG if a selected condition is POA. When a HAC is not POA, payment can be affected in a manner shown in the diagram below.
Beginning in FY 2007, we have set forth proposals, and solicited and responded to public comments, to implement section 1886(d)(4)(D) of the Act through the IPPS annual rulemaking process. For specific policies addressed in each rulemaking cycle, including a detailed discussion of the collaborative interdepartmental process and public input regarding selected and potential candidate HACs, we refer readers to the following rules: The FY 2007 IPPS proposed rule (71 FR 24100) and final rule (71 FR 48051 through 48053); the FY 2008 IPPS proposed rule (72 FR 24716 through 24726) and final rule with comment period (72 FR 47200 through 47218); the FY 2009 IPPS proposed rule (73 FR 23547) and final rule (73 FR 48471); the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106) and final rule (74 FR 43782); the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23880) and final rule (75 FR 50080); the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25810 through 25816) and final rule (76 FR 51504 through 51522); the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53283 through 53303); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27509 through 27512) and final rule (78 FR 50523 through 50527), and the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28000 through 28003) and final rule (79 FR 49876 through 49880). A complete list of the 14 current categories of HACs is included on the CMS Web site at:
Collection of POA indicator data is necessary to identify which conditions were acquired during hospitalization for the HAC payment provision as well as for broader public health uses of Medicare data. In previous rulemaking, we provided both CMS and CDC Web site resources that are available to hospitals for assistance in this reporting effort. For detailed information regarding these sites and materials, including the application and use of POA indicators, we refer the reader to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 through 51507).
Currently, as we have discussed in the prior rulemaking cited under section II.I.2. of the preamble of this final rule, the POA indicator reporting requirement only applies to IPPS hospitals and Maryland hospitals because they are subject to this HAC provision. Non-IPPS hospitals, including CAHs, LTCHs, IRFs, IPFs, cancer hospitals, children's hospitals, RNHCIs, and the Department of Veterans Affairs/Department of Defense hospitals, are exempt from POA reporting.
There are currently four POA indicator reporting options, “Y”, “W”, “N”, and “U”, as defined by the
Under the HAC payment policy, we treat HACs coded with “Y” and “W” indicators as POA and allow the condition on its own to cause an increased payment at the CC and MCC level. We treat HACs coded with “N” and “U” indicators as Not Present on Admission (NPOA) and do not allow the condition on its own to cause an increased payment at the CC and MCC level. We refer readers to the following rules for a detailed discussion of POA indicator reporting: The FY 2009 IPPS proposed rule (73 FR 23559) and final rule (73 FR 48486 through 48487); the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106) and final rule (74 FR 43784 through 43785); the FY 2011 IPPS/LTCH PPS proposed rule (75 FR 23881 through 23882) and final rule (75 FR 50081 through 50082); the FY 2012 IPPS/LTCH PPS proposed rule (76 FR 25812 through 25813) and final rule (76 FR 51506 through 51507); the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27893 through 27894) and final rule (77 FR 53284 through 53285); the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27510 through 27511) and final rule (78 FR 50524 through 50525), and the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28001 through 28002) and final rule (79 FR 49877 through 49878).
In addition, as discussed previously in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53324), the 5010 format allows the reporting and, effective January 1, 2011, the processing of up to 25 diagnoses and 25 procedure codes. As such, it is necessary to report a valid POA indicator for each diagnosis code, including the principal diagnosis and all secondary diagnoses up to 25.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51506 and 51507), in preparation for the transition to the ICD-10-CM and ICD-10-PCS code sets, we indicated that further information regarding the use of the POA indicator with the ICD-10-CM/ICD-10-PCS classifications as they pertain to the HAC policy would be discussed in future rulemaking.
At the March 5, 2012 and the September 19, 2012 meetings of the ICD-9-CM Coordination and Maintenance Committee, an announcement was made with regard to the availability of the ICD-9-CM HAC list translation to ICD-10-CM and ICD-10-PCS code sets. Participants were informed that the list of the ICD-9-CM selected HACs had been translated into codes using the ICD-10-CM and ICD-10-PCS classification system. It was recommended that the public review this list of ICD-10-CM/ICD-10-PCS code translations of the selected HACs available on the CMS Web site at:
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50525), we stated that the final HAC list translation from ICD-9-CM to ICD-10-CM/ICD-10-PCS would be subject to formal rulemaking. We again encouraged readers to review the educational materials and updated draft code sets available for ICD-10-CM/ICD-10-PCS on the CMS Web site at:
However, prior to engaging in rulemaking for the FY 2015 DRA HAC program, on April 1, 2014, the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93) was enacted, which specified that the Secretary may not adopt ICD-10 prior to October 1, 2015. Accordingly, the U.S. Department of Health and Human Services released a final rule in the
As described in section II.F.5. of the preamble of this final rule, we are implementing the HAC list translations from ICD-9-CM to ICD-10-CM/ICD-10-PCS in this FY 2016 IPPS/LTCH PPS final rule.
As discussed in section II.G. 1. a. of the preamble of this final rule, for FY 2016, we are implementing the ICD-10 MS-DRGs Version 33 as the replacement logic for the ICD-9-CM MS-DRGs Version 32. As part of our DRA HAC update for FY 2016, we proposed to implement the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list.
CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we posted a Definitions Manual of the ICD-10 MS-DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24348 through 24349), we solicited public comments on how well the ICD-10-CM/PCS Version 32 HAC list replicates the ICD-9-CM Version 32 HAC list. We did not receive any public comments on our list of ICD-10 translations for the HAC list. Therefore, we are finalizing our proposal to implement the ICD-10-CM/PCS Version 33 HAC list to replace the ICD-9-CM Version 32 HAC list.
With respect to the current categories of the HACs, in the FY 2016 IPPS/LTCH PPS proposed rule, we did not propose to add or remove any categories for FY 2016.
We were unable to fully evaluate each of these two recommended conditions against all the established criteria, as well as review the references the commenters submitted, or perform detailed analysis of the ICD-10 codes that the commenters listed in time for discussion in this FY 2016 IPPS/LTCH PPS final rule. However, we intend to consider these public comments as we develop proposed changes to the HAC-POA program for FY 2017.
In response to the commenter's recommendation that CMS establish quality measures and incentive payments for hospitals, we point out that currently, under various CMS quality reporting programs, there are measures specifically related to falls. On October 6, 2014, the Improving Medicare Post-Acute Care Transformation Act of 2014 (the IMPACT Act) (Pub. L. 113-185) was enacted, which specified under section 1899B(c)(1) of the Act that the Secretary shall require postacute care providers to report data on quality measures relating to functional status, skin integrity, medication reconciliation and incidence of major falls. Prior to the IMPACT Act, the NQF #0674 measure, Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay), was finalized in the LTCHQR Program and the IRF QR Program. As such, we believe these measures specified in the IMPACT Act align with the CMS Quality Strategy,
• Better Care: Improve the overall quality of care by making healthcare more patient-centered, reliable, accessible and safe;
• Healthy People, Healthy Communities: Improve the health of the U.S. population by supporting proven interventions to address behavioral, social and environmental determinants of health in addition to delivering higher-quality care; and
• Affordable Care: Reduce the cost of quality healthcare for individuals, families, employers, and government.
The commenter suggested that CMS also advocate for the creation of quality measures that encourage nutrition screening, assessment, and intervention to be included in various quality
With regard to the commenter's recommendation to develop quality measures related to malnutrition in other quality reporting programs, we note that the quality reporting programs that involve measures are separate and distinct from the Deficit Reduction Act (DRA) HAC program. We refer the reader to section VII. of this FY 2016 IPPS/LTCH PPS final rule for information related to those programs.
We also refer readers to section II.F.6. of the FY 2008 IPPS final rule with comment period (72 FR 47202 through 47218) and to section II.F.7. of the FY 2009 IPPS final rule (73 FR 48774 through 48491) for detailed discussion supporting our determination regarding each of the current conditions. We refer readers to the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27892 through 27898) and final rule (77 FR 53285 through 53292) for the HAC policy for FY 2013, the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27509 through 27512) and final rule (78 FR 50523 through 50527) for the HAC policy for FY 2014, and the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28000 through 28003) and final rule (79 FR 49876 through 49880) for the HAC policy for FY 2015.
After consideration of the public comments we received, as we proposed, we are not adding or removing any HAC categories for FY 2016. However, as described more fully in section III.F.7. of the preamble of this final rule, we will continue to monitor contemporary evidence-based guidelines for selected, candidate, and previously considered HACs that provide specific recommendations for the prevention of the corresponding conditions in the acute hospital setting and may use this information to inform future rulemaking. In addition, we continue to encourage public dialogue about refinements to the HAC list through written stakeholder comments.
On September 30, 2009, a contract was awarded to RTI to evaluate the impact of the Hospital-Acquired Condition-Present on Admission (HAC-POA) provisions on the changes in the incidence of selected conditions, effects on Medicare payments, impacts on coding accuracy, unintended consequences, and infection and event rates. This was an intra-agency project with funding and technical support from CMS, OPHS, AHRQ, and CDC. The evaluation also examined the implementation of the program and evaluated additional conditions for future selection. The contract with RTI ended on November 30, 2012. Summary reports of RTI's analysis of the FYs 2009, 2010, and 2011 Med PAR data files for the HAC-POA program evaluation were included in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50085 through 50101), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51512 through 51522), and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53292 through 53302). Summary and detailed data also were made publicly available on the CMS Web site at:
In addition to the evaluation of HAC and POA Med PAR claims data, RTI also conducted analyses on readmissions due to HACs, the incremental costs of HACs to the health care system, a study of spillover effects and unintended consequences, as well as an updated analysis of the evidence-based guidelines for selected and previously considered HACs. Reports on these analyses have been made publicly available on the CMS Web site at:
The RTI program evaluation included a report that provided references for all evidence-based guidelines available for each of the selected, candidate, and previously considered HACs that provided specific recommendations for the prevention of the corresponding conditions. Guidelines were primarily identified using the AHRQ National Guidelines Clearing House (NGCH) and the CDC, along with relevant professional societies. Guidelines published in the United States were used, if available. In the absence of U.S. guidelines for a specific condition, international guidelines were included.
RTI prepared a final report to summarize its findings regarding these guidelines. This report is titled “Evidence-Based Guidelines for Selected, Candidate, and Previously Considered Hospital-Acquired Conditions” and can be found on the CMS Web site at:
Subsequent to this final report, RTI was awarded a new Evidence-Based Guidelines Monitoring contract. Under this monitoring contract, RTI annually provides a summary report of the contemporary evidence-based guidelines for selected, candidate, and previously considered HACs that provide specific recommendations for the prevention of the corresponding conditions in the acute care hospital setting. We received RTI's 2015 report and are making it available to the public on the CMS Hospital-Acquired Conditions Web page in the “Downloads” section at:
Providers use the code sets under the ICD-9-CM coding system to report diagnoses and procedures for Medicare hospital inpatient services under the MS-DRG system. A later coding edition, the ICD-10 coding system, includes the International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for diagnosis coding and the International Classification of Diseases, 10th Revision, Procedure Coding System (ICD-10-PCS) for inpatient hospital procedure coding, as well as the Official ICD-10-CM and ICD-10-PCS Guidelines for Coding and Reporting. The ICD-10 coding system was initially adopted for transactions conducted on or after October 1, 2013, as described in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) Administrative Simplification: Modifications to Medical Data Code Set Standards to Adopt ICD-10-CM and ICD-10-PCS Final Rule published in the
The anticipated move to ICD-10 necessitated the development of an ICD-10-CM/ICD-10-PCS version of the MS-DRGs. CMS began a project to convert the ICD-9-CM-based MS-DRGs to ICD-10 MS-DRGs. In response to the FY 2011 IPPS/LTCH PPS proposed rule, we received public comments on the creation of the ICD-10 version of the MS-DRGs, which will be implemented at the same time as ICD-10 (75 FR 50127 and 50128). While we did not propose an ICD-10 version of the MS-DRGs in the FY 2011 IPPS/LTCH PPS proposed rule, we noted that we have been actively involved in converting current MS-DRGs from ICD-9-CM codes to ICD-10 codes and sharing this information through the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee. We undertook this early conversion project to assist other payers and providers in understanding how to implement their own conversion projects. We posted ICD-10 MS-DRGs based on Version 26.0 (FY 2009) of the MS-DRGs. We also posted a paper that describes how CMS went about completing this project and suggestions for other payers and providers to follow. Information on the ICD-10 MS-DRG conversion project can be found on the ICD-10 MS-DRG Conversion Project Web site at:
During FY 2011, we developed and posted Version 28 of the ICD-10 MS-DRGs based on the FY 2011 MS-DRGs (Version 28) that we finalized in the FY 2011 IPPS/LTCH PPS final rule on the CMS Web site. This ICD-10 MS-DRGs Version 28 also included the CC Exclusion List and the ICD-10 version of the hospital-acquired conditions (HACs), which was not posted with Version 26. We also discussed this update at the September 15-16, 2010 and the March 9-10, 2011 meetings of the ICD-9-CM Coordination and Maintenance Committee. The minutes of these two meetings are posted on the CMS Web site at:
We reviewed public comments on the ICD-10 MS-DRGs Version 28 and made updates as a result of these comments. We called the updated version the ICD-10 MS-DRGs Version 28-R1. We posted a Definitions Manual of ICD-10 MS-DRGs Version 28-R1 on our ICD-10 MS-DRG Conversion Project Web site. To make the review of Version 28-R1 updates easier for the public, we also made available pilot software on a CD ROM that could be ordered through the National Technical Information Service (NTIS). A link to the NTIS ordering page was provided on the CMS ICD-10 MS-DRGs Web page. We stated that we believed that, by providing the ICD-10 MS-DRGs Version 28-R1 Pilot Software (distributed on CD ROM), the public would be able to more easily review and provide feedback on updates to the ICD-10 MS-DRGs. We discussed the updated ICD-10 MS-DRGs Version 28-R1 at the September 14, 2011 ICD-9-CM Coordination and Maintenance Committee meeting. We encouraged the public to continue to review and provide comments on the ICD-10 MS-DRGs so that CMS could continue to update the system.
In FY 2012, we prepared the ICD-10 MS-DRGs Version 29, based on the FY 2012 MS-DRGs (Version 29) that we finalized in the FY 2012 IPPS/LTCH PPS final rule. We posted a Definitions Manual of ICD-10 MS-DRGs Version 29 on our ICD-10 MS-DRG Conversion Project Web site. We also prepared a document that describes changes made from Version 28 to Version 29 to facilitate a review. The ICD-10 MS-DRGs Version 29 was discussed at the ICD-9-CM Coordination and Maintenance Committee meeting on March 5, 2012. Information was provided on the types of updates made. Once again, the public was encouraged to review and comment on the most recent update to the ICD-10 MS-DRGs.
CMS prepared the ICD-10 MS-DRGs Version 30 based on the FY 2013 MS-DRGs (Version 30) that we finalized in the FY 2013 IPPS/LTCH PPS final rule. We posted a Definitions Manual of the ICD-10 MS-DRGs Version 30 on our ICD-10 MS-DRG Conversion Project Web site. We also prepared a document that describes changes made from Version 29 to Version 30 to facilitate a review. We produced mainframe and computer software for Version 30, which was made available to the public in February 2013. Information on ordering the mainframe and computer software through NTIS was posted on the ICD-10 MS-DRG Conversion Project Web site. The ICD-10 MS-DRGs Version 30 computer software facilitated additional review of the ICD-10 MS-DRGs conversion.
We provided information on a study conducted on the impact of converting MS-DRGs to ICD-10. Information on this study is summarized in a paper entitled “Impact of the Transition to ICD-10 on Medicare Inpatient Hospital Payments.” This paper was posted on the CMS ICD-10 MS-DRGs Conversion Project Web site and was distributed and discussed at the September 15, 2010 ICD-9-CM Coordination and Maintenance Committee meeting. The paper described CMS' approach to the conversion of the MS-DRGs from ICD-9-CM codes to ICD-10 codes. The study was undertaken using the ICD-9-CM MS-DRGs Version 27 (FY 2010), which was converted to the ICD-10 MS-DRGs Version 27. The study estimated the impact on aggregate payment to hospitals and the distribution of payments across hospitals. The impact of the conversion from ICD-9-CM to ICD-10 on Medicare MS-DRG hospital payments was estimated using FY 2009 Medicare claims data. The study found a hospital payment increase of 0.05 percent using the ICD-10 MS-DRGs Version 27.
CMS provided an overview of this hospital payment impact study at the March 5, 2012 ICD-9-CM Coordination and Maintenance Committee meeting.
CMS prepared the ICD-10 MS-DRGs Version 31.0 based on the FY 2014 MS-DRGs (Version 31) that we finalized in the FY 2014 IPPS/LTCH PPS final rule. In November 2013, we posted a Definitions Manual of the ICD-10 MS-DRGs Version 31 on the ICD-10 MS-DRG Conversion Project Web site at:
We reviewed public comments received and developed an update of ICD-10 MS-DRGs Version 31, which we called ICD-10 MS-DRGs Version 31.0-R. We made available a Definitions Manual of the ICD-10 MS-DRGs Version 31.0-R on the ICD-10 MS-DRG Conversion Project Web site at:
CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we made available a Definitions Manual of the ICD-10 MS DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at:
After consideration of the public comments we received, as final policy for the FY 2016 ICD-10 MS-DRGs Version 33, we are designating the following ICD-10-PCS codes as O.R. procedures and assigning them to ICD-10 MS-DRG 264:
• 02HQ00Z (Insertion of pressure sensor monitoring device into right pulmonary artery, open approach);
• 02HQ30Z (Insertion of pressure sensor monitoring device into right pulmonary artery, percutaneous approach);
• 02HQ40Z (Insertion of pressure sensor monitoring device into right pulmonary artery, percutaneous endoscopic approach);
• 02HR00Z (Insertion of pressure sensor monitoring device into left pulmonary artery, open approach);
• 02HR30Z (Insertion of pressure sensor monitoring device into left pulmonary artery, percutaneous approach); and
• 02HR40Z (Insertion of pressure sensor monitoring device into left pulmonary artery, percutaneous endoscopic approach).
After consideration of the public comments received, we are assigning ICD-10-PCS procedure codes 0LBT0ZZ (Excision of left ankle tendon, open approach) and 0LBS0ZZ (Excision of right ankle tendon, open approach) to ICD-10 MS-DRGs 579, 580, and 581 (Other Skin, Subcutaneous Tissue and Breast Procedures with MCC, with CC, and without CC/MCC, respectively).
• 0HBJXZZ (Excision of left upper leg skin, external approach);
• 0DQR0ZZ (Repair anal sphincter, open approach (3rd degree obstetrical laceration repair);
• OUQJXZZ (Repair clitoris, external approach); and
• 0UBMXZZ (Excision of vulva, external approach).
The following table shows the equivalent ICD-9-CM codes provided by the requestor.
After consideration of the public comments received, we are assigning ICD-10-PCS code 0UBMXZZ (Excision of vulva, external approach) to ICD-10 MS-DRGs 774 and 775 (Vaginal Delivery with and without Complicating Diagnoses, respectively) under the “Only Operating Room Procedures” section.
CMS encourages input from our stakeholders concerning the annual IPPS updates when that input is made available to us by December 7 of the year prior to the next annual proposed rule update. For example, to be considered for any updates or changes in FY 2016, comments and suggestions should have been submitted by December 7, 2014. The comments that were submitted in a timely manner for
Following are the changes we proposed to the MS-DRGs and our finalized policies for FY 2016. We invited public comments on each of the MS-DRG classification proposed changes described below, as well as our proposals to maintain certain existing MS-DRG classifications, which also are discussed below. In some cases, we proposed changes to the MS-DRG classifications based on our analysis of claims data. In other cases, we proposed to maintain the existing MS-DRG classification based on our analysis of claims data. For the FY 2016 proposed rule, our MS-DRG analysis was based on claims data from the December 2014 update of the FY 2014 MedPAR file, which contains hospital bills received through September 30, 2014, for discharges occurring through September 30, 2014. In our discussion of the MS-DRG reclassification changes that follows, we refer to our analysis of claims data from the “December 2014 update of the FY 2014 MedPAR file.”
As explained in previous rulemaking (76 FR 51487), in deciding whether to propose and to make further modification to the MS-DRGs for particular circumstances brought to our attention, we consider whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients in the MS-DRG. We evaluate patient care costs using average costs and lengths of stay and rely on the judgment of our clinical advisors to decide whether patients are clinically distinct or similar to other patients in the MS-DRG. In evaluating resource costs, we consider both the absolute and percentage differences in average costs between the cases we select for review and the remainder of cases in the MS-DRG. We also consider variation in costs within these groups; that is, whether observed average differences are consistent across patients or attributable to cases that are extreme in terms of costs or length of stay, or both. Furthermore, we consider the number of patients who will have a given set of characteristics and generally prefer not to create a new MS-DRG unless it would include a substantial number of cases.
In our examination of the claims data, we apply the following criteria established in FY 2008 (72 FR 47169) to determine if the creation of a new complication or comorbidity (CC) or major complication or comorbidity (MCC) subgroup within a base MS-DRG is warranted:
• A reduction in variance of costs of at least 3 percent.
• At least 5 percent of the patients in the MS-DRG fall within the CC or MCC subgroup.
• At least 500 cases are in the CC or MCC subgroup.
• There is at least a 20-percent difference in average costs between subgroups.
• There is a $2,000 difference in average costs between subgroups.
In order to warrant creation of a CC or MCC subgroup within a base MS-DRG, the subgroup must meet all five of the criteria.
We received a request again this year to change the MS-DRG assignment for endovascular embolization (coiling) procedures. This topic was discussed previously in the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28005 through 28006) and in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49883 through 49886). For FY 2015, we did not change the MS-DRG assignment for endovascular embolization (coiling) procedures.
After issuance of the FY 2015 IPPS/LTCH PPS final rule, we received a modified request from the commenter asking that CMS consider establishing four new MS-DRGs:
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures with Principal Diagnosis of Hemorrhage);
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with MCC);
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with CC); and
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage without CC/MCC).
The requestor stated that establishing these new suggested MS-DRGs will promote clinical cohesiveness and resource comparability. The requestor stated that endovascular intracranial and endovascular embolization procedures are not similar to the open craniotomy procedures with which they are currently grouped. The requestor asserted that the differences in costs between endovascular intracranial procedures and open craniotomy procedures are significant, reflecting, for instance, the use of an operating suite versus an interventional vascular catheterization laboratory suite, intensive care and other costs.
In conjunction with the recommended new MS-DRGs, the requestor recommended that the following ICD-9-CM codes, which include endovascular embolization procedures and additional intracranial procedures, be removed from MS-DRG 020 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with MCC); MS-DRG 021 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage with CC); MS-DRG 022 (Intracranial Vascular Procedures with Principal Diagnosis of Hemorrhage without CC/MCC); MS-DRG 023 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis with MCC or Chemo Implant); MS-DRG 024 (Craniotomy with Major Device Implant/Acute Complex CNS Principal Diagnosis without MCC); MS-DRG 025 (Craniotomy & Endovascular Intracranial Procedures with MCC); MS-DRG 026 (Craniotomy & Endovascular Intracranial Procedures with CC); and MS-DRG 027 (Craniotomy & Endovascular Intracranial Procedures without CC/MCC):
• 00.62 (Percutaneous angioplasty of intracranial vessel);
• 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);
• 39.74 (Endovascular removal of obstruction from head and neck vessel(s));
• 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);
• 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and
• 39.79 (Other endovascular procedures on other vessels).
The requestor asked that the four new requested MS-DRGs be created using these procedure codes. The requestor suggested that the first requested new MS-DRG would be MS-DRG XXX (Endovascular Intracranial Embolization Procedures with Principal Diagnosis of Hemorrhage). The principal diagnoses for hemorrhage would include the same hemorrhage codes in the current MS-DRGs 020, 021, and 022, which are as follows:
• 094.87 (Syphilitic ruptured cerebral aneurysm);
• 430 (Subarachnoid hemorrhage);
• 431 (Intracerebral hemorrhage);
• 432.0 (Nontraumatic extradural hemorrhage);
• 432.1 (Subdural hemorrhage); and
• 432.9 (Unspecified intracranial hemorrhage).
For this first new requested MS-DRG, the requestor suggested that only the
• 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);
• 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils); and
• 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils).
The requestor recommended that the three additional new MS-DRGs would consist of a new base MS-DRG subdivided into three severity levels as follows:
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with MCC);
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage with CC); and
• Recommended MS-DRG XXX (Endovascular Intracranial Embolization Procedures without Principal Diagnosis of Hemorrhage without CC/MCC).
The requestor suggested that these three new recommended MS-DRGs would have endovascular embolization procedures as well as additional percutaneous and endovascular procedures as listed below:
• 00.62 (Percutaneous angioplasty of intracranial vessel);
• 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);
• 39.74 (Endovascular removal of obstruction from head and neck vessel(s));
• 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);
• 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and
• 39.79 (Other endovascular procedures on other vessels).
ICD-10-PCS provides the following more detailed codes for endovascular embolization, which are assigned to MS-DRGs 020, 021, 022, 023, 024, 025, 026, and 027 in the ICD-10 MS-DRGs Version 32:
For this request, as discussed in the FY 2016 IPPS/LTCH PPS proposed rule, we first examined claims data for all intracranial vascular procedure cases with a principal diagnosis of hemorrhage reported in MS-DRGs 020, 021, and 022 in the December 2014 update of the FY 2014 MedPAR file. The table below shows our findings. We found a total of 1,755 cases with an average length of stay ranging from 8.28 days to 16.84 days and average costs ranging from $36,998 to $71,665 in MS-DRGs 020, 021, and 022.
Next, we examined claims data on the first part of the request, which was to create a new MS-DRG for endovascular intracranial embolization procedure cases with a principal diagnosis of hemorrhage that are currently assigned to MS-DRGs 020, 021, and 022. Our findings for the first part of this multi-part request are shown in the table below.
The requestor suggested that this new requested base MS-DRG would not be subdivided by severity levels. Using the requested code logic, cases with a principal diagnosis of hemorrhage and procedure codes 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels), 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils), and 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils) would be moved out of MS-DRGs 020, 021, and 022 and into a single new MS-DRG with no severity levels.
As can be seen in the table above, the average costs for the new requested combined MS-DRG would be $67,831. The average costs for current MS-DRGs 020, 021, and 022 were $71,655, $52,143, and $36,998, respectively. Based on these findings, if we established this requested new MS-DRG, payments for those cases at the highest severity level (MS-DRG 020, which had average costs of $71,655) would be reduced.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24351 through 24356), we stated that we believe that maintaining the current MS-DRG assignment for these types of procedures is appropriate. Our clinical advisors stated that the current grouping of procedures within MS-DRGs 020, 021, and 022 reflects patients who are unique in terms of utilization and complexity based on the three severity levels, which are specifically designed to capture clinical differences in these patients, and these factors support maintaining the current structure. Therefore, we did not propose to move cases with a principal diagnosis of hemorrhage and procedure codes 39.72, 39.75, and 39.76 out of MS-DRGs 020, 021, and 022 and create a new base MS-DRG. We invited public comments on this proposal.
As discussed earlier in this section, the requestor also recommended the creation of a new set of MS-DRGs for endovascular intracranial embolization procedures without a principal diagnosis of hemorrhage with MCC, with CC, and without CC/MCC. For these requested new MS-DRGs, the requestor suggested assignment of endovascular embolization procedures as well as certain other percutaneous and endovascular procedures. The complete list of endovascular intracranial embolization procedures developed by the requestor is as follows:
• 00.62 (Percutaneous angioplasty of intracranial vessel);
• 39.72 (Endovascular (total) embolization or occlusion of head and neck vessels);
• 39.74 (Endovascular removal of obstruction from head and neck vessel(s));
• 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils);
• 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils); and
• 39.79 (Other endovascular procedures on other vessels)
The following table shows our findings from examination of claims data on endovascular intracranial procedures without a principal diagnosis of hemorrhage reported in MS-DRGs 023 through 027 from the December 2014 update of the FY 2014 MedPAR file.
As can be seen from this table, if we created a new set of MS-DRGs recommended by the requester, most of the cases would have to be moved out of MS-DRGs 023 and 027. The 1,510 cases that would have to be moved out of MS-DRG 023 have average costs of $39,666 compared to average costs of $37,784 for all cases in MS-DRG 023. The average costs for these cases are not significantly different from the average costs for all cases in MS-DRG 023. The average length of stay for the cases with endovascular intracranial procedure without a diagnosis of hemorrhage in MS-DRG 023 is 8.88 compared to 10.96 days for all cases in MS-DRG 023. In the proposed rule, we stated that we believe that these data support the current MS-DRG assignment for MS-DRG 023. The 1,793 cases that would have to be moved out of MS-DRG 027 have average costs of $22,244 compared to the average costs of $16,613 for all cases in MS-DRG 027. While the average costs for these cases are higher than for all cases in MS-DRG 027, one would
The 867 cases that would have to be moved out of MS-DRG 024 have average costs of $27,975 compared to average costs for all cases in MS-DRG 024 of $26,195. The average costs for these cases are not significantly different than the average costs for all cases in MS-DRG 024. The average length of stay for the 867 cases that would have to be moved out of MS-DRG 024 is 5.80 compared to 5.93 for all cases in MS-DRG 024. Therefore, the lengths of stay for the cases also are quite similar in MS-DRG 024. In the FY 2016 IPPS/LTCH PPS proposed rule, we stated that we determined that these data findings support maintaining the current MS-DRG assignment of these procedures in MS-DRG 024.
MS-DRGs 025 and 026 show the smallest number of cases that would have to be moved to the requested new MS-DRGs, but these cases have larger differences in average costs. The average costs of cases that would have to be moved out of MS-DRG 025 are $44,082 compared to $29,970 for all cases in MS-DRG 025. The average length of stay for the MS-DRG 025 cases with endovascular intracranial procedure without a diagnosis of hemorrhage is 8.52 days as compared to 9.35 days for all cases in MS-DRG 025. Therefore, the lengths of stay are similar for cases in MS-DRG 025. The average costs of cases that would have to be moved out of MS-DRG 026 are $26,594 compared to $21,414 for all cases. The average length of stay for cases that would have to be moved out of MS-DRG 026 is 3.07 days compared to 6.09 days for all cases in MS-DRG 026, or almost half as long as for all cases in MS-DRG 026. As stated earlier, the average costs for cases that would be moved out of MS-DRGs 023, 024, 025, 026, and 027 under this request are higher than the average costs for all cases in these MS-DRGs, with most of the cases coming out of MS-DRGs 023 and 027. The average costs for these particular cases in MS-DRG 023 are not significantly different from the average costs for all cases in MS-DRG 023. In addition, while the average costs are higher for the cases with an endovascular intracranial procedure without a diagnosis of hemorrhage than for all cases in MS-DRG 027, the length of stay is shorter. We determined that the overall data do not support making the requested MS-DRG updates to MS-DRGs 023, 024, 025, 026, and 027 and creating three new MS-DRGs. Therefore, we did not propose to make changes to the current structure for MS-DRGs 023 through 027.
In summary, our clinical advisors reviewed each aspect of this multi-part request and advised us that the endovascular embolization procedures are appropriately assigned to MS-DRGs 020 through 027. They did not support removing the procedures (procedure codes 39.72, 39.75, and 39.76) from MS-DRGs 020, 021, and 022 and creating a single MS-DRG for endovascular intracranial embolization procedures with a principal diagnosis of hemorrhage with no severity levels. Our clinical advisors stated that the current MS-DRG grouping of three severity levels captures differences in clinical severity, average costs, and length of stay for these patients appropriately. Our clinical advisors also recommended maintaining the current MS-DRG assignments for endovascular embolization and other percutaneous and endovascular procedures within MS-DRGs 023 through 027. They stated that these procedures are all clinically similar to others in these MS-DRGs. In addition, they stated that the surgical techniques are all designed to correct the same clinical problem, and they advised against moving a select number of those procedures out of MS-DRGs 023 through 027.
Based on the findings from our data analysis and the recommendations from our clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24356), we did not propose to create the four new MS-DRGs for endovascular intracranial embolization and other endovascular procedures recommended by the requestor. We proposed to maintain the current MS-DRG structure for MS-DRGs 020 through 027.
We invited public comments on these two proposals.
One commenter disagreed with the proposal. The commenter stated that the data demonstrate that the cost of endovascular coil cases consistently exceeds the overall average cost of all cases within each of the MS-DRGs to which these procedures are currently assigned. Moreover, the commenter believed that it was inappropriate to minimize the clinical complexity of these procedures compared to other procedures in the current MS-DRGs.
After consideration of the public comments we received, we are finalizing our proposal to maintain the
a. Adding Severity Levels to MS-DRGs 245 Through 251
During the comment period for the FY 2015 IPPS/LTCH PPS proposed rule, we received a comment that recommended establishing severity levels for MS-DRG 245 (AICD Generator Procedures) and including additional severity levels for MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC); MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC); MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC); and MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC).
We considered this public comment to be outside of the scope of the FY 2015 IPPS/LTCH PPS proposed rule. Therefore, we did not address this comment in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated that we would consider the public comment for possible proposals in future rulemaking as part of our annual review process.
For the FY 2016 IPPS/LTCH PPS proposed rule, we received a separate, but related, request involving most of these same MS-DRGs. Therefore, for the FY 2016 IPPS/LTCH PPS proposed rule, we conducted a simultaneous analysis of claims data to address both the FY 2015 public comment request and the related FY 2016 request. We discuss both of these requests below.
We received a request to remove the cardiac ablation and other specified cardiovascular procedures from the following MS-DRGs, and to create new MS-DRGs to classify these procedures:
• MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
• MS-DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC);
• MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
• MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC);
• MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC); and
• MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC).
The commenter stated that, historically, the MS-DRGs listed above appropriately reflected the differential cost of percutaneous transluminal coronary angioplasty (PTCA) procedures with and without stents. The commenter noted that PTCA procedures with drug eluting stents were previously paid the highest, followed by PTCA procedures with bare metal stents and PTCA procedures with no stents, respectively. However, the commenter believed that, in recent years, the opposite has begun to occur and cases reporting a PTCA procedure without a stent are being paid more than cases reporting a PTCA procedure with a stent. The commenter further noted that cardiac ablation procedures and PTCA procedures without stents are currently assigned to the same MS-DRGs, notwithstanding that the procedures have different clinical objectives and patient diagnoses. The commenter indicated that cardiac ablation procedures are performed on patients with multiple distinct cardiac arrhythmias to alter electrical conduction systems of the heart, and PTCA procedures are performed on patients with coronary atherosclerosis to open blocked coronary arteries. The commenter also noted that cardiac ablation procedures are performed in the heart chambers by cardiac electrophysiologists, require significantly more resources, and require longer periods of time to complete. Conversely, PTCA procedures are performed in the coronary vessels by interventional cardiologists, require the use of less equipment, and require a shorter period of time to complete. Therefore, the commenter suggested that CMS create new MS-DRGs for percutaneous intracardiac procedures to help improve clinical homogeneity by differentiating percutaneous intracardiac procedures (performed within the heart chambers) from percutaneous intracoronary procedures (performed within the coronary vessels). The commenter further believed that creating new MS-DRGs for these procedures would also better reflect the resource cost of specialized equipment used for more complex structures of electrical conduction systems when performing cardiac ablation procedures.
The following ICD-9-CM procedure codes identify and describe the cardiac ablation procedures and the other percutaneous intracardiac procedures that are currently classified under MS-DRGs 246 through 251 and that the commenter recommended that CMS assign to the newly created MS-DRGs:
• 35.52 (Repair of atrial septal defect with prosthesis, closed technique);
• 35.96 (Percutaneous balloon valvuloplasty);
• 35.97 (Percutaneous mitral valve repair with implant);
• 37.26 (Catheter based invasive electrophysiologic testing);
• 37.27 (Cardiac mapping);
• 37.34 (Excision or destruction of other lesion or tissue of heart, endovascular approach);
• 37.36 (Excision, destruction, or exclusion of left atrial appendage (LAA)); and
• 37.90 (Insertion of left atrial appendage device).
There are a number of ICD-10-PCS code translations that provide more detailed and specific information for each of the ICD-9-CM procedure codes listed above that also are currently classified under MS-DRGs 246 through 251 based on the GROUPER Version 32 ICD-10 MS-DRGs. The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 35.52 are shown in the following table.
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 35.96 are shown in the following table.
The ICD-10-PCS code translation for ICD-9-CM procedure code 35.97 is 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach).
The ICD-10-PCS code translation for ICD-9-CM procedure code 37.26 is 4A023FZ (Measurement of cardiac rhythm, percutaneous approach).
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.27 are shown in the following table.
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.34 are shown in the following table:
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.36 are shown in the following table:
The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 37.90 are shown in the following table:
The ICD-10-PCS code translations listed above, along with their respective MS-DRG assignments, can be found in the ICD-10 MS-DRGs Version 32 Definitions Manual posted on the CMS Web site at:
As mentioned earlier, we received a separate, but related, request to add severity levels to MS-DRGs 246 through 251. We address this request at the end of this section.
To address the first of these separate, but related, requests, we reviewed claims data for MS-DRGs 246 through 251 from the December 2014 update of the FY 2014 MedPAR file. Our findings are shown in the following table:
As shown in the table above, there were a total of 30,617 cases in MS-DRG 246, with an average length of stay of 5.52 days and average costs of $23,855. For cases reporting a percutaneous intracardiac procedure in MS-DRG 246 (ICD-9-CM procedure codes 35.52, 35.96, 35.97, 37.26, 37.27, 37.34, 37.36, and 37.90), there were a total of 244 cases, with an average length of stay of 9.69 days and average costs of $34,099. For MS-DRGs 247 through 251, a similar pattern was identified; the data reflected that the average costs are higher and the average length of stay is greater for cases reporting a percutaneous intracardiac procedure in comparison to the average costs and average length of stay for all of the cases in their respective MS-DRGs.
As reflected in the following table, a further analysis of the data showed that percutaneous intracardiac procedures represent a total of 20,972 cases in MS-DRGs 246 through 251, with a greater average length of stay (4.79 days versus 3.62 days) and higher average costs ($19,810 versus $17,532) in comparison to all of the remaining cases in MS-DRGs 246 through 251.
We stated in the FY 2016 IPPS/LTCH PPS proposed rule that the results of these data analyses support removing procedures performed within the heart chambers using intracardiac techniques from MS-DRGs 246 through 251, and assigning these procedures to separate MS-DRGs. The results of these data analyses also supported subdividing these MS-DRGs using the “with MCC” and “without MCC” severity levels based on the application of the criteria established in the FY 2008 IPPS final rule (72 FR 47169), and described in section II.G.1.b. of the preamble of the proposed rule, that must be met to warrant the creation of a CC or an MCC subgroup within a base MS-DRG. Our clinical advisors also agreed that this differentiation would improve the clinical homogeneity of these MS-DRGs by separating percutaneous intracardiac procedures (performed within the heart chambers) from percutaneous intracoronary procedures (performed within the coronary vessels). In addition, we believe that creating these new MS-DRGs would better reflect the resource cost of specialized equipment used to perform more complex structures of electrical conduction systems during cardiac ablation procedures. Therefore, for FY 2016, we proposed to create two new MS-DRGs to classify percutaneous intracardiac procedures (80 FR24359). Specifically, we proposed to create MS-DRG 273, entitled “Percutaneous Intracardiac Procedures with MCC,” and MS-DRG 274, entitled “Percutaneous Intracardiac Procedures without MCC,” and to assign the procedures performed within the heart chambers using intracardiac techniques to the two proposed new MS-DRGs. We proposed that existing percutaneous intracoronary procedures with and without stents continue to be assigned to the other MS-DRGs to reflect that those procedures are performed within the coronary vessels and require fewer resources.
The table below represents the distribution of cases, average length of stay, and average costs for these proposed two new MS-DRGs.
We invited public comments on our proposal to create the two new MS-DRGs for percutaneous intracardiac procedures for FY 2016. In addition, we invited public comments on the ICD-10-PCS code translations that were presented earlier in this section and our proposal to assign these procedure codes to the proposed new MS-DRGs 273 and 274.
Several commenters commended CMS for conducting the analysis and continuing to make further refinements to the MS-DRGs. One commenter specifically expressed appreciation for CMS' display of cost and length of stay data in the analysis, in addition to the clinical factors that support
After consideration of the public comments we received, we are finalizing our proposal to create MS-DRGs 273 (Percutaneous Intracardiac Procedures with MCC) and MS-DRG 274 (Percutaneous Intracardiac Procedures without MCC) for the FY 2016 ICD-10 MS-DRGs Version 33.
As mentioned earlier in this section, we received a similar request in response to the FY 2015 IPPS/LTCH PPS proposed rule to add severity levels to MS-DRGs 246 through 251. We considered this public comment to be outside of the scope of the FY 2015 IPPS/LTCH PPS proposed rule. Therefore, we did not address this comment in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated that we would consider the public comment for possible proposals in future rulemaking as part of our annual review process. Specifically, the commenter recommended including additional severity levels for MS-DRGs 246 through 251 and establishing severity levels for MS-DRG 245 (AICD Generator Procedures).
For our data analysis for this recommendation, we examined claims data from the December 2014 update of the FY 2014 MedPAR file to determine if including additional severity levels in MS-DRGs 246 through 251 was warranted. During our analysis, we applied the criteria established in the FY 2008 IPPS final rule (72 FR 47169), as described in section II.G.1.b. of the preamble of the proposed rule. As shown in the table below, we collapsed MS-DRGs 246 through 251 into base MS-DRGs (MS-DRGs 246, 248, and 250) by suggested severity level and applied the criteria.
We found that the criterion that there be a $2,000 difference in average costs between subgroups was not met. Specifically, between the “with CC” and “without CC/MCC” subgroups for base MS-DRG 246, the difference in average costs was only $1,305; for base MS-DRG 248, the difference in average costs was only $1,761; and for base MS-DRG 250, the difference in average costs was only $803. The results of the data analysis of MS-DRGs 246 through 251 confirmed, and our clinical advisors agreed, that the existing 2-way severity level splits for these MS-DRGs (with MCC and without MCC) are appropriate, as displayed in the table below.
Therefore, we did not propose to further subdivide the severity levels for MS-DRGs 246 through 251. We invited public comments on our proposal not to create additional severity levels for MS-DRGs 246 through 251.
Using the same MedPAR claims data for FY 2014, we separately examined cases in MS-DRG 245 to determine whether to subdivide this MS-DRG into severity levels. As displayed in the table below, the results of the FY 2014 data analysis showed there were a total of 1,699 cases, with an average length of stay of 5.49 days and average costs of $34,287, in MS-DRG 245.
We applied the five criteria established in the FY 2008 IPPS final rule (72 FR 47169), as described in section II.G.1.b. of the preamble of the proposed rule, to determine if it was appropriate to subdivide MS-DRG 245 into severity levels. The table below illustrates our findings.
Based on the analysis of the FY 2014 claims data for MS-DRG 245, the results supported creating a “with MCC” and a “without MCC” severity level split. However, our clinical advisors indicated that it would not be clinically appropriate to add severity levels based on an isolated year's data fluctuation because this could lead to a lack of stability in MS-DRG payments. We agreed with our clinical advisors and noted that we annually conduct an analysis of base MS-DRGs to evaluate if additional severity levels are warranted. This analysis includes 2 years of MedPAR claims data to specifically compare data results from 1 year to the next to avoid making determinations about whether additional severity levels are warranted based on an isolated year's data fluctuation. Generally, in past years, for our review of requests to add or establish severity levels, in our analysis of the most recent claims data, there was at least one criterion that was not met. Therefore, it was not necessary to further analyze data beyond 1 year. However, the results of our analysis of claims data in the December 2014 update of the FY 2014 MedPAR file for this particular request involving MS-DRG 245 demonstrate that all five criteria to establish subgroups were met, and, therefore, it was necessary to also examine the FY 2013 MedPAR claims data file.
The results of our analysis from the December 2013 update of the FY 2013 claims data for MS-DRG 245 are shown in the table below.
The FY 2013 claims data for MS-DRG 245 did not support creating any severity levels because the data did not meet one or more of the five required criteria for creating new severity levels. The data did not meet the requirement for a 3-way severity level split (with MCC, with CC, and without CC/MCC) or a 2-way severity level split (with MCC and without MCC) because there were not at least 500 cases in the MCC subgroup. While the data did meet this particular criterion for the 2-way severity level split of “with CC/MCC” and “without CC/MCC” because there were at least 500 cases in the CC subgroup, the data did not meet the criterion that there be at least a 20-percent difference in average costs between subgroups, as shown in the table below.
As stated previously, we believe that 2 years of data showing that the requested CC or MCC subgroup meets all five of the established criteria for creating severity levels are needed in order to support a proposal to add
After consideration of the public comments we received, we are finalizing our proposal not to create severity levels for MS-DRG 245 in FY 2016.
The Zilver® PTX Drug-Eluting Peripheral Stent (Zilver® PTX®) was approved for new technology add-on payments in FY 2014 (78 FR 50583 through 50585). Cases involving the Zilver® PTX® that are eligible for new technology add-on payments are identified by ICD-9-CM procedure code 00.60 (Insertion of drug-eluting stent(s) of superficial femoral artery).
We received a request from the manufacturer for an extension of new technology add-on payments for Zilver® PTX® in FY 2016. In the request, the manufacturer asked CMS to consider three options for procedure code 00.60 for FY 2016. The first option was to extend the new technology add-on payment through FY 2016. The request to extend the new technology add-on payment is addressed in section II.I.3.e. of the preamble of the proposed rule and this final rule. The second option was to establish a new family of MS-DRGs for procedures involving drug-eluting stents used in the peripheral (noncoronary) vasculature. The third option was to assign all Zilver® PTX® cases to MS-DRG 252 even if there is no MCC (which would necessitate revising the MS-DRG title to “Other Vascular Procedures).
ICD-10-PCS provides the following more detailed procedure codes for the insertion of drug-eluting stents of superficial femoral artery:
• 047K04Z (Dilation of right femoral artery with drug-eluting intraluminal device, open approach);
• 047K34Z (Dilation of right femoral artery with drug-eluting intraluminal device, percutaneous approach);
• 047K44Z (Dilation of right femoral artery with drug-eluting intraluminal device, percutaneous endoscopic approach);
• 047L04Z (Dilation of left femoral artery with drug-eluting intraluminal device, open approach);
• 047L34Z (Dilation of left femoral artery with drug-eluting intraluminal device, percutaneous approach); and
• 047L44Z (Dilation of left femoral artery with drug-eluting intraluminal device, percutaneous endoscopic approach).
We examined claims data for cases involving the drug-eluting peripheral stent procedures reported in the December 2014 update of the FY 2014 MedPAR file for MS-DRGs 252, 253, and 254 (Other Vascular Procedures with MCC, with CC and without CC/MCC, respectively). The following table illustrates our findings.
Our findings showed that there were only 601 peripheral angioplasty cases with a drug-eluting stent reported. Of the 601 peripheral angioplasty cases with a drug-eluting stent, 133 cases were in MS-DRG 252, 353 cases were in MS-DRG 253, and 115 cases were in MS-DRG 254. The average costs for the drug-eluting stent cases in MS-DRGs 252, 253, and 254 were $32,623, $25,396, and $21,461, respectively. The average costs for all cases in MS-DRGs 252, 253, and 254 were $23,935, $19,030, and $12,629, respectively. The average costs for the drug-eluting stent cases in MS-DRG 253 ($25,396) were higher than the average costs for all cases in MS-DRG 252 ($23,935). However, the average costs for the drug-eluting stent cases in MS-DRG 254 ($21,461) were lower than the average costs for all cases in MS-DRG 252 ($23,935).
We determined that the small number of cases (601) did not provide justification to create a new set of MS-DRGs specifically for angioplasty of peripheral arteries using drug-eluting stents. In addition, the data did not support assigning all the drug-eluting stent cases to the highest severity level (MS-DRG 252), even when there is not an MCC, because the average costs for the drug-eluting stent cases in MS-DRG 254 ($21,461) were lower than the average costs for all cases in MS-DRG 252 ($23,935). The average length of stay for drug-eluting stent cases in MS-DRG 254 was 2.62 days compared to 7.89 days for all cases in MS-DRG 252. Cases are grouped together based on similar clinical and resource criteria.
Our clinical advisors recommended making no MS-DRG updates for peripheral angioplasty cases with a drug-eluting stent and considered the current MS-DRG assignment appropriate. Our clinical advisors agreed that the small number of peripheral angioplasty cases with a drug-eluting stent does not support creating a new MS-DRG for this specific type of treatment. They stated that the cases are clinically similar to other cases within MS-DRGs 252, 253, and 254. Considering the data for peripheral angioplasty cases with a drug-eluting stent found reported in MS-DRGs 252, 253, and 254 and the input from our clinical advisors, in the FY 2016 IPPS/
One commenter, the manufacturer, expressed concern with the proposal and asked CMS to reconsider its recommendation for denying the request that all Zilver® PTX® cases be assigned to MS-DRG 252 even if there were no MCC. The commenter stated that it is true that assignment of all drug-eluting cases to MS-DRG 252 would result in an overpayment for cases with a drug-eluting stent that currently are assigned to MS-DRG 254. However, the commenter stated that these cases represent only 19 percent of the drug-eluting stent cases, and that the overpayment of these cases would be modest because the average cost of drug-eluting stent cases in MS-DRG 254 is only $2,500 less than the average cost of all cases in MS-DRG 252. The commenter stated that there would be an underpayment for all the drug-eluting stent cases if the cases continue to be assigned to MS-DRGs 252, 253, and 254. The commenter stated that implementing its original request would allow more adequate payment to hospitals using the Zilver® PTX® technology and thus remove a potential financial barrier to Medicare providers desiring to provide access of this technology to their patients.
Another commenter asserted that it understood CMS' concern that the agency could be overpaying for uncomplicated cases by assigning all drug-eluting stent cases to MS-DRG 252, even if they did not have a MCC. However, the commenter stated that CMS is underpaying all drug-eluting stent cases by maintaining the current MS-DRG assignments for these procedures. The commenter expressed concern regarding patient access to this technology.
In regard to the commenters who disagreed with our proposal, as stated earlier, the data do not support assigning all the drug-eluting stent cases to the highest severity level (MS-DRG 252), even when there is not an MCC. We note that while the average costs for MS-DRG 254 (lowest severity level) may only represent 19 percent of the drug-eluting stent cases as shown in the table above, the MS-DRGs are comprised of a distinct structure with respect to the types of patients within each severity level. This structure is based on an organizing principle that patients at the MCC level, the highest severity level, are those patients who are generally sicker, consume an increased utilization of resources, and require more complex services. Disregarding this structure solely for the purpose of increasing payment for patients who are not similar in terms of their severity of illness and resource utilization would be inconsistent with how the MS-DRGs are otherwise defined within the classification system.
In addition, as the requester pointed out in its own comments, “it is the nature of a MS-DRG system that there will be variations in cost between different hospitalizations that fall into the same MS-DRG or MS-DRGs—each MS-DRG will have some cases that are higher and some cases that are lower than the average costs for the entire MS-DRG.” We believe that the higher average costs for the drug-eluting stent cases can be attributed to the cost of the device and not necessarily because the patients receiving these stents are more severely ill.
With regard to the commenters' concerns regarding patient access to the technology with the expiration of the new technology add-on payment, we would expect that hospitals that now have experience with the technology and have observed favorable clinical outcomes for their patients would nonetheless consider the technology to be worth the investment. Accordingly, we will continue to monitor cases with the Zilver® PTX® technology to determine if modifications are warranted to the MS-DRG structure in future rulemaking.
After consideration of the public comments we received, we are finalizing our proposal to maintain the current structure for MS-DRG assignments for procedures involving drug-eluting stents in MS-DRG 252, 253, or 254 for FY 2016.
d. Percutaneous Mitral Valve Repair System—Proposed Revision of ICD-10-PCS Version 32 Logic
We received a comment which brought to our attention that the ICD-10 MS-DRGs Version 32 assignment for ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach) does not accurately replicate the ICD-9-CM MS-DRGs Version 32, which assigns this procedure code to the following MS-DRGs:
• MS-DRG 231 (Coronary Bypass with PTCA with MCC);
• MS-DRG 232 (Coronary Bypass with PTCA without MCC);
• MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
• MS DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC);
• MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents);
• MS DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC);
• MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC); and
• MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC).
We agree with the commenter that the ICD-10 MS-DRGs logic should be consistent with the ICD-9 MS-DRGs logic; that is, the ICD-10 MS-DRGs Version 32 should replicate the ICD-9-CM MS-DRGs Version 32. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule, for the proposed FY 2016 ICD-10 MS-DRGs Version 33, we proposed to assign ICD-10-PCS procedure code 02UG3JZ to MS-DRGs 231 and 232 and MS-DRGs 246 through 251 (80 FR 24362). We invited public comments on this proposal.
New technology add-on payments for the Zenith® Fenestrated Abdominal Aortic Aneurysm (AAA) Graft (Zenith® F. Graft) will end on September 30, 2015. Cases involving the Zenith® F. Graft are identified by ICD-9-CM procedure code 39.78 (Endovascular implantation of branching or fenestrated graft(s) in aorta) in MS-DRGs 237 and 238 (Major Cardiovascular Procedures with and without MCC, respectively). For additional information on the Zenith® F. Graft, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49921 through 49922).
We received a request to reassign procedures described by ICD-9-CM procedure code 39.78 to the highest severity level in MS-DRGs 237 and 238, including in instances when there is not an MCC present, or to create a new MS-DRG that would contain all endovascular aneurysm repair procedures. We note that, in addition to ICD-9-CM procedure code 39.78, ICD-9-CM procedure code 39.71 (Endovascular implantation of other graft in abdominal aorta) also describes endovascular aneurysm repair procedures.
There are a number of ICD-10-PCS code translations that provide more detailed and specific information for each of ICD-9-CM codes 39.71 and 39.78 that also currently group to MS-DRGs 237 and 238 in the ICD-10 MS-DRGs Version 32. The comparable ICD-10-PCS code translations for ICD-9-CM procedure code 39.71 and 39.78 are shown in the following tables:
We analyzed claims data reporting ICD-9-CM procedure code 39.78 for cases assigned to MS-DRGs 237 and 238 in the December 2014 update of the FY 2014 MedPAR file. We found a total of 18,340 cases, with an average length of stay of 9.46 days and average costs of $36,355 in MS-DRG 237. We found 332 cases reporting ICD-9-CM procedure code 39.78, with an average length of stay of 8.46 days and average costs of $51,397 in MS-DRG 237. For MS-DRG 238, we found a total of 32,227 cases, with an average length of stay of 3.72 days and average costs of $25,087. We found 1,927 cases reporting ICD-9-CM procedure code 39.78, with an average length of stay of 2.52 days and average costs of $31,739 in MS-DRG 238.
As illustrated in the table above, the results of the data analysis indicate that the average costs for cases reporting procedure code 39.78 assigned to MS-DRG 238 were higher than the average costs for all cases in MS-DRG 238 ($31,739 compared to $25,087). In addition, the average costs for the 1,927 cases reporting procedure code 39.78 assigned to MS-DRG 238 were $4,616 less than the costs of all cases assigned to MS-DRG 237. We determined that moving cases reporting procedure code 39.78 from MS-DRG 238 to MS-DRG 237 would result in overpayments. We
We believe that the higher average costs could be attributed to the cost of the device. The Zenith® F. Graft is the only fenestrated graft device currently approved by the FDA. Therefore, this manufacturer is able to set its own costs in the market. We pointed out that the IPPS is not designed to pay solely for the cost of devices. More importantly, moving cases that greatly differ in their severity of illness and complexity of resources into a higher severity level MS-DRG, in the absence of an MCC, would conflict with the objective of the MS-DRGs, which is to maintain homogeneous subgroups that are different from one another in terms of utilization of resources, that have enough volume to be meaningful, and that improve our ability to explain variance in resource use (72 FR 47169). Therefore, we did not propose to reassign all cases reporting procedure code 39.78 from MS-DRG 238 to MS-DRG 237, as the commenter requested.
However, we recognized that the results of the data analysis also demonstrated that the average costs for cases reporting ICD-9-CM procedure code 39.78 are higher in both MS-DRG 237 and MS-DRG 238 in comparison to all cases in each respective MS-DRG. As these higher average costs could be attributable to the cost of the device, we noted the commenter's concern that the end of the new technology add-on payment for Zenith® F. Graft, effective September 30, 2015, may result in reduced payment to hospitals and potentially lead to issues involving access to care for the subset of beneficiaries who would benefit from treatment with the Zenith® F. Graft. We continued to review the data to explore other alternatives as we analyzed additional claims data in response to the second part of the request from the commenter; that is, to create a new MS-DRG that would contain all endovascular aneurysm repair procedures.
In our evaluation of the claims data in response to the request to create a new MS-DRG, we again reviewed claims data from the December 2014 update of the FY 2014 MedPAR file. We began our analysis by examining claims data for cases reporting ICD-9-CM procedure codes 39.71 and 39.78 assigned to MS-DRGs 237 and 238. Our findings are shown in the table below.
As shown in the table above, the average costs for cases involving endovascular abdominal aorta aneurysm repair procedures assigned to MS-DRG 237 were higher than the average costs of all cases assigned to MS-DRGs 237. The average costs for cases reporting ICD-9-CM procedure codes 39.71 and 39.78 assigned to MS-DRG 237 were $47,363 compared to the average costs of $36,355 for all cases assigned to MS-DRG 237 and $25,087 for all cases assigned to MS-DRG 238. Similarly, the average costs for cases reporting ICD-9-CM procedure codes 39.71 and 39.78 assigned to MS-DRG 238 were higher than the average costs of all cases assigned to MS-DRG 238 ($28,998 compared to $25,087). The average length of stay for cases reporting ICD-9-CM procedure codes 39.71 and 39.78 in MS-DRGs 237 and 238 were also shorter than the average length of stay for all cases in the respective MS-DRG.
Our clinical advisors did not support creating a new MS-DRG specifically for endovascular abdominal aortic aneurysm repair procedures only. Therefore, we reviewed other procedure codes currently assigned to MS-DRGs 237 and 238 and found that there were a number of procedures with varying resource requirements and clinical indications that could be analyzed further. We agreed with our clinical advisors that further analysis was warranted to determine how we could better recognize resource utilization, clinical complexity, and average costs by separating the more complex, more invasive, and more expensive procedures used to treat more severely ill individuals from the less complex, less invasive, and less expensive procedures currently grouped to these MS-DRGs.
Therefore, we evaluated all of the procedures currently assigned to MS-DRGs 237 and 238. In our evaluation, we found that MS-DRGs 237 and 238 contained two distinct groups of procedures. We found a high volume of less invasive procedures, such as pericardiotomies and pulsation balloon implants, that had substantially lower costs than the more invasive procedures, such as open and endovascular repairs of the aorta with replacement grafts. We found that the more invasive procedures were primarily associated with procedures on the aorta and heart assist procedures.
For this next phase of our analysis, the following procedure codes were designated as the more complex, more invasive procedures:
• 37.41 (Implantation of prosthetic cardiac support device around the heart);
• 37.49 (Other repair of heart and pericardium);
• 37.55 (Removal of internal biventricular heart replacement system);
• 37.64 (Removal of external heart assist system(s) or device(s));
• 38.04 (Incision of vessel, aorta);
• 38.14 (Endarterectomy, aorta);
• 38.34 (Resection of vessel with anastomosis, aorta);
• 38.44 (Resection of vessel with replacement, aorta, abdominal);
• 38.64 (Other excision of vessels, aorta, abdominal);
• 38.84 (Other surgical occlusion of vessels, aorta, abdominal);
• 39.24 (Aorta-renal bypass);
• 39.71 (Endovascular implantation of other graft in abdominal aorta); and
• 39.78 (Endovascular implantation of branching or fenestrated graft(s) in aorta).
There are a number of ICD-10-PCS code translations that provide more detailed and specific information for each of the ICD-9-CM codes listed above that also currently group to MS-DRGs 237 and 238 in the ICD-10 MS-DRGs Version 32. The comparable ICD-10-PCS code translations for these ICD-
For the ICD-9-CM codes that result in greater than 50 ICD-10-PCS comparable code translations, we refer readers to Table 6P (ICD-10-PCS Code Translations for MS-DRG Changes) for this FY 2016 final rule (which is available via the Internet on the CMS Web site at:
For the next phase of our analysis, the procedure codes shown in the following table were designated as the less complex, less invasive procedures.
There are a number of ICD-10-PCS code translations that provide more detailed and specific information for each of the ICD-9-CM codes listed in the table immediately above that also currently group to MS-DRGs 237 and 238 in the ICD-10 MS-DRGs Version 32. The comparable ICD-10-PCS code translations for these ICD-9-CM procedure codes are shown in the following tables:
There is not an equivalent ICD-10-PCS code translation for ICD-9-CM procedure code 38.55.
As previously stated, we separated the more complex, more invasive procedures from the less complex, less invasive procedures to continue our evaluation of the procedures assigned to MS-DRGs 237 and 238. Our data analysis showed that the distribution of cases, the average length of stay, and average costs of the more complex, more invasive aortic and heart assist procedures and the less complex, less invasive other cardiovascular procedures would be more appropriately reflected if we classified these distinguishing types of procedures under newly created MS-DRGs, as reflected in the table below.
Our clinical advisors reviewed the results of the analysis and agreed that distinguishing the more complex, more invasive procedures from the less complex, less invasive procedures would result in improved clinical coherence for the various cardiovascular procedures currently assigned to MS-DRGs 237 and 238, as listed previously. Therefore, for FY 2016, we proposed to delete MS-DRGs 237 and 238. When we applied our established criteria to determine if the creation of a new CC or MCC subgroup within a base MS-DRG is warranted, we determined that a 2-way severity level split (with MCC and without MCC) was justified. Therefore, we proposed to create two new MS-DRGs that would contain the more complex, more invasive aortic and heart assist procedures currently assigned to MS-DRGs 237 and 238, as listed previously. We proposed to create MS-DRG 268, entitled “Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC,” and MS-DRG 269, entitled “Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC.” The table below shows the distribution of cases and the average length of stay and average costs of the more complex, more invasive procedures for aortic and heart assistance for the proposed new MS-DRGs 268 and 269.
We invited public comments on this proposal and the ICD-10-PCS code translations for these procedures shown earlier in this section, which we also proposed to assign to proposed new MS-DRGs 268 and 269.
In addition, when we further applied our established criteria to determine if the creation of a new CC or MCC subgroup for the remaining procedures was warranted, we determined that a 3-way severity level split (with MCC, with CC, and without CC/MCC) was justified. Therefore, we proposed to create three new MS-DRGs that would contain the remaining cardiovascular procedures that were designated as the less complex, less invasive procedures, as listed previously. For FY 2016, we proposed to create MS-DRG 270, entitled “Other Major Cardiovascular Procedures with MCC”; MS-DRG 271, entitled “Other Major Cardiovascular Procedures with CC”; and MS-DRG 272, entitled “Other Major Cardiovascular Procedures without CC/MCC,” and to assign the less complex, less invasive cardiovascular procedures shown earlier in this section to these proposed new MS-DRGs. We believed that, as shown in the table below, the distribution of cases and average length of stay and average costs of these procedures would be more appropriately reflected when these types of procedures are classified under these proposed new MS-DRGs.
We invited public comments on this proposal and the ICD-10-PCS code translations for the less complex, less invasive cardiovascular procedures shown earlier in this section, which we also proposed to assign to proposed new MS-DRGs 270, 271, and 272.
In summary, for FY 2016, we proposed to delete MS-DRGs 237 and 238, and to create the following five new MS-DRGs:
• Proposed new MS-DRG 268 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC);
• Proposed new MS-DRG 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC);
• Proposed new MS-DRG 270 (Other Major Cardiovascular Procedures with MCC);
• Proposed new MS-DRG 271 (Other Major Cardiovascular Procedures with CC); and
• Proposed new MS-DRG 272 (Other Major Cardiovascular Procedures without CC/MCC).
We also proposed to assign the more complex, more invasive cardiovascular procedures identified in our analysis and the ICD-10-PCS code translations to proposed new MS-DRGs 268 and 269. In addition, we proposed to assign the less complex, less invasive cardiovascular procedures identified in our analysis and the ICD-10-PCS code translations to proposed new MS-DRGs 270, 271, and 272. We encouraged public comments on our proposal to create these proposed new MS-DRGs, as well as the ICD-10-PCS code translations that we proposed to assign to the corresponding proposed new MS-DRGs.
One commenter who supported the creation of proposed new MS-DRGs 268 and 269 expressed additional support with regard to how these proposed new MS-DRGs would incorporate selected high resource surgical aortic and visceral vessel procedures, as well as selected high resource extra-cardiac procedures. The commenter agreed that, in terms of resource utilization and clinical coherency, the procedures included would be classified appropriately to the proposed new MS-DRGs. However, this commenter requested clarification on some of the ICD-10-PCS code translations that were listed for ICD-9-CM procedure code 39.78 (Endovascular implantation of branching or fenestrated graft(s) in aorta). The commenter stated that, as displayed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24363), the dilation of right and left renal arteries and the superior mesenteric artery (procedures described by ICD-10-PCS codes 04793DZ through 04754DZ) also appear to be proposed for grouping to proposed MS-DRGs 268 and 269. The commenter believed that CMS did not intend to classify those dilation codes as “stand alone” procedures that would be assigned to proposed new MS-DRGs 268 and 269. The commenter stated that the ICD-10-PCS dilation codes should not be necessary as translations for ICD-9-CM procedure code 39.78.
Another commenter commended CMS on the timing of the proposal to establish proposed new MS-DRGs 268 and 269. The commenter stated that this proposal will allow patients requiring fenestrated grafts continued access to care in FY 2016, as the new-technology add-on payment for the Zenith Fenestrated Graft device is expiring September 30, 2015. The commenter also stated that, currently, there is not an appropriate mechanism to ensure access to these procedures, especially in rural hospitals, and that this proposal would change that.
Other commenters stated that the proposed new MS-DRGs would better recognize clinical homogeneity and
In response to the comment requesting clarification on some of the ICD-10-PCS code translations that were listed for ICD-9-CM procedure code 39.78, the commenter is correct. It was not our intent to classify those dilation codes (ICD-10-PCS codes 04793DZ through 04754DZ) as “stand alone” procedures that would be assigned to proposed new MS-DRGs 268 and 269. Rather, we proposed those codes for consideration as supplemental codes to more fully describe the procedure performed. We agree with the commenter that these dilation codes are not necessary translations for ICD-9-CM procedure code 39.78 and as “stand alone” procedures they would be assigned to their own separate and clinically appropriate ICD-10 MS-DRG.
As we reviewed the translations for ICD-9-CM procedure code 39.78 in response to the commenter's request, we reviewed all the comparable ICD-10-PCS code translations that we proposed to assign to proposed new MS-DRGs 268 through 272. Specifically, we reviewed the list of the more complex, more invasive procedures that we proposed to assign to proposed MS-DRGs 268 and 269 and the list of the less complex, less invasive procedures that we proposed to assign to proposed MS-DRGs 270 through 272. We determined that the ICD-10-PCS translations for ICD-9-CM procedure code 37.49 (Other repair of heart and pericardium) as displayed in Table 6P.1a of the proposed rule were not complete. There was an inadvertent omission of an additional 78 ICD-10-PCS comparable code translations. Therefore, we are providing an updated Table 6P for this final rule, which is available via the Internet on the CMS Web site at:
In conducting this review, our clinical advisors also determined that ICD-9-CM procedure code 37.49 and the corresponding ICD-10-PCS comparable code translations would be more appropriately classified under proposed new MS-DRGs 270 through 272 versus proposed new MS-DRGs 268 and 269. This decision is consistent with our proposal to assign less invasive procedures, such as pericardiotomies and pulsation balloon implants, to proposed new MS-DRGs 270 through 272. This procedure code captures procedures that are similar to the other procedures included in the proposal for MS-DRGs 270 through 272 involving the pericardium such as ICD-9-CM procedure codes 37.12 (Pericardiotomy), 37.24 (Biopsy of pericardium) and 37.61 (Pericardiectomy) and does not relate to the more complex, more invasive aortic and heart assist procedures that we proposed to assign to proposed MS-DRGs 268 and 269. According to our clinical advisors, the ICD-10-PCS code translations for ICD-9-CM procedure code 37.49 also do not constitute the level of complexity or resources similar to the other procedures that we proposed to assign to proposed new MS-DRGs 268 and 269. In addition, our clinical advisors determined that ICD-9-CM procedure code 39.54 (Re-entry operation (aorta)) and the corresponding ICD-10-PCS comparable code translations would be more appropriately classified under proposed new MS-DRGs 268 through 269 versus proposed new MS-DRGs 270 through 272. This decision is consistent with our proposal to assign more invasive procedures, such as open and endovascular repairs of the aorta with replacement grafts, to proposed new MS-DRGs 268 and 269. According to our clinical advisors, the procedure described by ICD-9-CM procedure code 39.54 and the comparable ICD-10-PCS code translations are precisely indicated for the aorta, and, as such, the procedure code belongs under proposed new MS-DRGs 268 and 269 along with the other aorta and heart assist procedures.
• Indicate that MS-DRGs 268 and 269 are aortic procedures, not aortic heart assist devices;
• Indicate that MS-DRGs 268 and 269 are assigned to heart assist removal or repair, and not the multitude of other heart assist insertion procedures not addressed in the proposed rule; and
• Remove the reference to pulsation balloon insertion, or add the reference to proposed new MS-DRGs 270 through 272 (Other Major Cardiovascular Procedures with MCC, with CC and without CC/MCC, respectively).
The commenter noted that the titles for proposed new MS-DRGs 268 and 269 contain the phrase “Heart Assist Procedures”. However, the commenter stated that not
The commenter also stated that the reference to “Except Pulsation Balloon” in the titles for proposed new MS-DRGs 268 and 269 indicates that
The commenter provided suggestions for the revision to the titles that CMS should take into consideration for proposed new MS-DRGs 268 through 272 as follows:
• Suggested retitle of proposed new MS-DRG 268: “Aortic Procedures and Heart Assist Removal or Repair with MCC”;
• Suggested retitle of proposed new MS-DRG 269: “Aortic Procedures and Heart Assist Removal or Repair without MCC”;
• Suggested retitle of proposed new MS-DRG 270: “Pulsation Balloon and Other Major Cardiovascular Procedures with MCC”;
• Suggested retitle of proposed new MS-DRG 271: “Pulsation Balloon and Other Major Cardiovascular Procedures with CC”; and
• Suggested retitle of proposed new MS-DRG 272: “Pulsation Balloon and Other Major Cardiovascular Procedures without CC/MCC”.
The commenter is correct that not
For this same reason, we also do not believe that including the reference to “
After consideration of the public comments received, we are adopting as final our proposal to delete ICD-9-CM MS-DRGs 237 and 238 and add the following five new MS-DRGs to ICD-10 MS-DRGs Version 33:
• MS-DRG 268 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC);
• MS-DRG 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC);
• MS-DRG 270 (Other Major Cardiovascular Procedures with MCC);
• MS-DRG 271 (Other Major Cardiovascular Procedures with CC); and
• MS-DRG 272 (Other Major Cardiovascular Procedures without CC/MCC)
We agree that these modifications will more appropriately reflect payment while recognizing differences in complexity, resources and severity of illness for the various cardiovascular
We received two comments that the logic for ICD-10 MS-DRGs Version 32 does not work the same as it does for the ICD-9-CM based MS-DRGs Version 32 for procedures involving joint revisions. One of the commenters requested that CMS change the MS-DRG structure for procedures involving joint revisions within the ICD-10 MS-DRGs 466, 467, and 468 (Revision of Hip or Knee Replacement with MCC, with CC, and without CC/MCC, respectively) so that cases that have a spacer removed prior to the insertion of a new joint prosthesis are assigned to MS-DRG 466, 467, and 468, as is the case with the ICD-9-CM MS-DRGs. The other commenter asked that joint revision cases that involve knee revisions with cemented and uncemented qualifiers be assigned to these MS-DRGs. This commenter provided an example of a patient admitted for a knee revision and reported under ICD-10-PCS codes 0SPD0JZ (Removal of synthetic substitute from left knee joint, open approach) and 0SRU0JA (Replacement of left knee joint, femoral surface with synthetic substitute, uncemented, open approach), which should be assigned to MS-DRGs 466, 467, and 468. The requestor stated that joint revision cases reported with ICD-9-CM codes are assigned to MS-DRGs 466, 467, and 468, but similar cases reported with the corresponding ICD-10-PCS codes are not assigned to MS-DRGs 466, 467, and 468 in ICD-10-PCS MS-DRGs Version 32.
We agree that joint revision cases involving the removal of a spacer and subsequent insertion of a new joint prosthesis should be assigned to ICD-10 MS-DRGs 466, 467, and 468 as is the case currently with the ICD-9-CM based MS-DRGs Version 32. We also agree that knee revision cases that involve cemented and uncemented qualifiers should be assigned to ICD-10 MS-DRGs 466, 467, and 468. Knee revision cases currently reported with ICD-9-CM codes are assigned to MS-DRGs 466, 467, and 468 in the ICD-9-CM based MS-DRGs. We examined joint revision combination codes that are not currently assigned to MS-DRGs 466, 467, and 468 in ICD-10 MS-DRGs Version 32 and identified additional combinations that also should be included so that the joint revision ICD-10 MS-DRGs would have the same logic as the ICD-9-CM MS-DRGs. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24379 through 24395), we proposed to add code combinations listed in a table in the proposed rule that would capture the joint revisions to the Version 33 MS-DRG structure for ICD-10 MS-DRGs 466, 467, and 468 that we proposed to implement effective October 1, 2015. We invited public comments on our proposal to add the joint revision code combinations to MS-DRGs 466, 467, and 468 that were listed in the table in the proposed rule (80 FR 24379 through 24395).
After consideration of the public comments we received, we are finalizing our proposal to add code combinations which capture the joint revision procedures set forth in the table below to the Version 33 MS-DRG structure for ICD-10 MS-DRGs 466, 467, and 468 that will be implemented effective October 1, 2015. We note that joint revision procedures are also included in the ICD-9-CM version of MS-DRGs 628, 629, and 630 (Other Endocrine, Nutritional, and Metabolic Operating Room Procedures with MCC, with CC, and without CC/MCC, respectively). Therefore, to ensure that the joint revision ICD-10 MS-DRGs would have the same logic as the ICD-9-CM MS-DRGs, any updates to the joint revision combinations would apply to MS-DRGs 466, 467, and 468 as well as MS-DRGs 628, 629, and 630 because both sets of MS-DRGs contain the same joint revision codes. These comparable joint revisions combinations updates also will be made to MS-DRGs 628, 629, and 630 in the Version 33 MS-DRG structure for ICD-10 to maintain consistency with the logic for the ICD-9-CM MS-DRGs, effective October 1, 2015. Therefore, the joint revision combination codes that we are finalizing in this final rule are the same for MS-DRGs 466, 467, 468, 628, 629, and 630 and are reflected in the updated table below.
We received a request to revise the titles of MS-DRGs 456, 457, and 458 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or 9+ Fusion with MCC, with CC, and without CC/MCC, respectively) for the ICD-10 MS-DRGs so that they more closely correspond to the terminology used to describe the ICD-10-PCS procedure codes without changing the ICD-10 MS-DRG logic. We agree with the requestor that revising the titles of these MS-DRGs would more appropriately identify the procedures classified under these groupings. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24395), we proposed new titles for these three MS-DRGs that would change the reference of “9+ Fusions” to “Extensive Fusions.”
We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing our proposal to modify the titles for ICD-10 MS-DRGs 456 through 458. The final title revisions to MS-DRGs 456, 457, and 458 for the FY 2016 ICD-10 MS-DRGs Version 33 are as follows:
• MS-DRG 456 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with MCC);
• MS-DRG 457 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion with CC); and
• MS-DRG 458 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC).
We received a request to modify the logic for ICD-10 MS-DRG 775 (Vaginal Delivery without Complicating Diagnosis) so that the procedure code for the induction of labor with a cervical ripening gel would not group to the incorrect MS-DRG when a normal delivery has occurred. ICD-10-PCS procedure code 3E0P7GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening) describes this procedure.
We reviewed how this procedure code is currently classified under the ICD-10 MS-DRGs Version 32 and noted that it is currently designated as an operating room (O.R.) procedure code that affects MS-DRG assignment. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24395), we agreed with the requestor that the current logic for ICD-10-PCS procedure code 3E0P7GC did not result in the appropriate MS-DRG assignment. The result of our analysis suggested that this code should not be designated as an O.R. code. Our clinical advisors agreed that this procedure did not require the intensity or complexity of service and resource utilization to merit an O.R. designation under ICD-10. Therefore, in the proposed rule, we proposed to make ICD-10-PCS procedure code 3E0P7GC a non-O.R. code so that cases reporting this procedure code will group to the appropriate MS-DRG assignment. We invited public comments on our proposal.
After consideration of the public comments received, we are finalizing our proposal to modify the logic for ICD-10 MS-DRG 775 so that ICD-10-PCS procedure code 3E0P7GC will not group to the incorrect MS-DRG when a normal delivery has occurred.
Our analysis of ICD-10-PCS procedure code 3E0P7GC also prompted the review of additional, similar codes that describe the introduction of a substance. We evaluated the following ICD-10-PCS procedure codes:
• 3E0P76Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening);
• 3E0P77Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening);
• 3E0P7SF (Introduction of other gas into female reproductive, via natural or artificial opening);
• 3E0P83Z (Introduction of anti-inflammatory into female reproductive, via natural or artificial opening endoscopic);
• 3E0P86Z (Introduction of nutritional substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P87Z (Introduction of electrolytic and water balance substance into female reproductive, via natural or artificial opening endoscopic);
• 3E0P8GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening endoscopic); and
• 3E0P8SF (Introduction of other gas into female reproductive, via natural or artificial opening endoscopic).
From our analysis, we determined that these codes also are currently designated as O.R. codes which affect MS-DRG assignment. Our clinical advisors recommended that these codes should also be designated as non-O.R. because they do not require the intensity or complexity of service and resource utilization to merit an O.R. designation under the ICD-10 MS-DRGs. As a result of our analysis and based on our clinical advisors' recommendation, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24395), we proposed to designate the above listed ICD-10-PCS procedure codes as non-O.R. procedure codes to ensure that these codes will group to the appropriate MS-DRG assignment.
We invited public comments on our proposal.
After consideration of the public comments received, we are finalizing our proposal to designate the following ICD-10-PCS procedure codes as non-O.R. for the FY 2016 ICD-10 MS-DRGs Version 33: 3E0P76Z; 3E0P77Z; 3E0P7SF; 3E0P83Z; 3E0P86Z; 3E0P87Z; 3E0P8GC; and 3E0P8SF.
We received a request that CMS change the MS-DRG assignment for antivenom cases from MS-DRG 917 and 918 (Poisoning & Toxic Effects of Drugs with and without MCC, respectively). For the FY 2016 IPPS/LTCH PPS proposed rule, for these MS-DRGs, we examined claims data from the December 2014 update of the FY 2014 MedPAR file for cases reporting ICD-9-CM diagnosis codes of a principal diagnosis 989.5 (Toxic effect of venom), a secondary diagnosis ICD-9-CM E code of E905.0 (Venomous snakes and lizards), and the ICD-9-CM procedure code of 99.16 (Injection of antidote), which is a non-O.R. code and does not impact the MS-DRG assignment.
For the ICD-9-CM diagnosis code 989.5 (Toxic effect of venom), the ICD-10-CM provides more detailed diagnosis codes for these toxic effects of venom cases as shown in the following table:
For the ICD-9-CM Supplementary Classification of External Causes of Injury and Poisoning code E905.0 (Venomous snakes and lizards), ICD-10-CM provides more detailed diagnosis codes for these cases as shown in the following table:
We examined claims data for reported cases involving injections for snake bites in MS-DRGs 917 and 918 from the December 2014 update of the FY 2014 MedPAR file. Our findings are displayed in the table below.
As shown in the table above, we identified 19 cases involving injections for snake bites reported in MS-DRG 918 only. In the FY 2016 IPPS/LTCH PPS proposed rule, we pointed out that this small number of cases (19) does not provide justification to create a new MS-DRG. The cases are assigned to the same MS-DRG as are other types of poisonings and toxic effects. We were unable to identify another MS-DRG that would be a more appropriate MS-DRG assignment for these cases based on the clinical nature of this condition. The MS-DRGs are a classification system intended to group together diagnoses and procedures with similar clinical characteristics and utilization of resources. Basing a new MS-DRG on such a small number of cases (19) could lead to distortions in the relative payment weights for the MS-DRG because several expensive cases could impact the overall relative payment weight. Having larger clinical cohesive groups within an MS-DRG provides greater stability for annual updates to the relative payment weights.
Our clinical advisors reviewed the data, evaluated these conditions, and recommended that we not change the MS-DRG assignment for procedures involving the injection of the CroFab antivenom drug for snake bites because these cases are clinically similar to other poisoning cases currently assigned to MS-DRGs 917 and 918. Based on the findings in our data analysis and the recommendations of our clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24397), we did not propose to create a new MS-DRG for cases of CroFab antivenom drugs for snake bites. We proposed to maintain the current assignment of diagnosis codes in MS-DRGs 917 and 918. We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing our proposal to maintain the current MS-DRG assignment for procedures involving the CroFab antivenom drug for snakebites to MS-DRGs 917 and 918.
We received a request to add an additional severity level to MS-DRG 927 (Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours with Skin Graft). The requestor was concerned about payment for severe burn cases that used dermal regenerative grafts. These grafts are captured by ICD-9-CM procedure code 86.67 (Dermal regenerative graft). The requestor stated that the total cost of these graft cases is significantly greater than the average total costs for all cases in MS-DRG 927. The requestor stated that the dermal regenerative grafts are used to cover large burns where donor skin is not available. The requestor stated that the grafts provide permanent covering of the wound and thus immediate closure of the wound. The requestor asserted that the grafts offer benefits such as the avoidance of infections. The requestor pointed out that MS-DRG 927 is not subdivided into severity of illness levels and recommended an additional severity level be added to address any payment issues for dermal regenerative grafts within MS-DRG 927.
ICD-10-PCS provides more detailed and specific codes for skin grafts. The ICD-10-PCS codes for skin grafts provide specific information on the part of the body receiving the skin graft, the type of graft, and the approach used to apply the graft. These codes can be found in the table labeled “OHR (Replacement of Skin)” in the ICD-10 MS-DRG Version 32 Definitions Manual available on the Internet at:
We examined claims data for cases reported in MS-DRG 927 from the December 2014 update of the FY 2014
As shown in the table above, we found a total of 171 cases in MS-DRG 927. Of these 171 cases, there were 131 cases with an MCC, 38 cases with a CC, and 2 cases without a CC or an MCC. We determined that the requested new severity level did not meet all of the criteria established in the FY 2008 IPPS final rule (72 FR 47169), and described in section II.G.1.b. of the preamble of the proposed rule, that must be met to warrant the creation of a CC or an MCC subgroup within a base MS-DRG. Specifically, the requested new severity level did not meet the criterion that there are at least 500 cases in the CC or MCC subgroup.
We also pointed out that the long-term mechanical ventilation cases are driving the costs to a greater extent than the graft cases. We found that the 22 cases that received a graft had average costs of $146,903. The 14 cases that had both 96+ hours of mechanical ventilation and a graft had average costs of $174,372. The 8 cases that had a graft but did not receive 96+ hours of mechanical ventilation had average costs of $98,482.
Our clinical advisors reviewed this issue and recommended making no MS-DRG updates for MS-DRG 927. They advised us that the dermal regenerative graft cases are appropriately assigned to the MS-DRG 927 because they are clinically similar to other cases within MS-DRG 927. Our clinical advisors also agreed that the cases in MS-DRG 927 do not meet the established criterion for creating a new severity level.
Based on the findings of our data analysis, the fact that MS-DRG 927 did not meet the criterion for the creation of an additional severity level, and the recommendations of our clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24397), we did not propose to create a new severity level for MS-DRG 927. We proposed to maintain the current MS-DRG 927 structure without additional severity levels. We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing our proposal to maintain the current MS-DRG 927 structure without creating additional severity levels.
The Medicare Code Editor (MCE) is a software program that detects and reports errors in the coding of Medicare claims data. Patient diagnoses, procedure(s), and demographic information are entered into the Medicare claims processing systems and are subjected to a series of automated screens. The MCE screens are designed to identify cases that require further review before classification into an MS-DRG.
As discussed in section II.G.1.a. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule and this final rule, CMS prepared the ICD-10 MS-DRGs Version 32 based on the FY 2015 MS-DRGs (Version 32) that we finalized in the FY 2015 IPPS/LTCH PPS final rule. In November 2014, we made available a Definitions Manual of the ICD-10 MS-DRGs Version 32 and the MCE Version 32 on the ICD-10 MS-DRG Conversion Project Web site at:
For FY 2016, in order to be consistent with the ICD-9-CM MS-DRG GROUPER and MCE Version 32, we proposed to add the ICD-10-CM codes listed in the table below to the ICD-10 MCE Version 33 of the “Manifestation codes not allowed as principal diagnosis” edit. Under the MCE, manifestation codes describe the “manifestation” of an underlying disease, not the disease itself. Because these codes do not describe the disease itself, they should not be used as principal diagnoses.
We invited public comment on our proposal to add the above list of ICD-10-CM diagnosis codes to the “Manifestation codes not allowed as principal diagnosis” edit in the FY 2016 ICD-10 MCE Version 33.
The commenter also noted it recently participated in proposals related to expanding coverage indications for hematopoietic stem cell transplant to include patients with a principal diagnosis of myelofibrosis. The commenter stated that primary or idiopathic myelofibrosis is coded with ICD-9-CM code 238.76 (Myelofibrosis with myeloid metaplasia) and will be reported with ICD-10-PCS code D47.1 (Chronic myeloproliferative disease). The commenter expressed a desire for coding of this condition to not create confusion as implementation of ICD-10 approaches and pledged to work with its members to confirm understanding.
The commenter is correct that primary or idiopathic myelofibrosis is coded with ICD-9-CM code 238.76 (Myelofibrosis with myeloid metaplasia) and the comparable ICD-10-PCS procedure code translation is D47.1 (Chronic myeloproliferative disease). We also acknowledge and appreciate that the commenter stated its intent to work with its members to confirm understanding of coding as it relates to myelofibrosis as the transition to ICD-10 approaches. We encourage the commenter to review the ICD-10-CM Official Guidelines for Coding and Reporting to assist in that effort.
After consideration of the public comments we received, for FY 2016, we are finalizing our proposal to add the ICD-10-PCS codes listed earlier in this section to the ICD-10 MCE Version 33 “Manifestation codes not allowed as principal diagnosis” edit, which will ensure consistency with the ICD-9-CM MS-DRG GROUPER and MCE Version 32.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24398 through 24399), we also proposed to revise the language describing the “Procedure inconsistent with LOS (Length of stay)” edit which lists ICD-10-PCS code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours), effective for the FY 2016 ICD-10 MCE Version 33. Currently, in Version 32 of the ICD-10 MCE, the language describing this “Procedure inconsistent with LOS (Length of stay)” edit states: “The following procedure should only be coded on claims with a length of stay of four days or greater.” Because the code description of the ICD-10-PCS code is for ventilation that occurs
Consistent with the proposal to revise the language for the “Procedure inconsistent with LOS (Length of stay)” edit because the code description for ICD-10-PCS code 5A1955Z is for ventilation that occurs
• MS-DRG 003 (ECMO or Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except, Face Mouth and Neck with Major Operating Room Procedure);
• MS-DRG 004 (Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except, Face Mouth and Neck without Major Operating Room Procedure);
• MS-DRG 207 (Respiratory System Diagnosis with Ventilator Support 96+Hours);
• MS-DRG 870 (Septicemia or Severe Sepsis with Mechanical Ventilation 96+ Hours);
• MS-DRG 927 (Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours with Skin Graft); and
• MS-DRG 933 (Extensive Burns or Full Thickness Burns with Mechanical Ventilation 96+ Hours without Skin Graft).
The following two MS-DRGs do not include GROUPER and MCE logic based on procedure code 96.72. However, the titles currently include the terminology for without mechanical ventilation of “96 + hours”.
• MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with MCC); and
• MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with CC).
Therefore, we are revising the titles for the corresponding ICD-10 MS-DRGs as the GROUPER and MCE logic include ICD-10-PCS code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours) or the language in the title of the MS-DRG includes without mechanical ventilation of “96 + hours”. The revision to the titles is to add a “greater than” sign (>) before the 96 to reflect “> 96 consecutive hours” and to remove the “plus sign” (+) after the 96.
After consideration of the public comments received, we are finalizing our proposal to revise the language describing the “Procedure inconsistent with LOS (Length of stay)” edit which lists ICD-10-PCS code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours). Consistent with that proposal, we also are revising the ICD-
• MS-DRG 003: “(ECMO or Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except, Face Mouth and Neck with Major Operating Room Procedure”;
• MS-DRG 004: “Tracheostomy with Mechanical Ventilation >96 Hours or Principal Diagnosis Except, Face Mouth and Neck without Major Operating Room Procedure”;
• MS-DRG 007: “Respiratory System Diagnosis with Ventilator Support >96 Hours”;
• MS-DRG 870: “Septicemia or Severe Sepsis with Mechanical Ventilation >96 Hours”;
• MS-DRG 871: “Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours with MCC”;
• MS-DRG 872: “Septicemia or Severe Sepsis without Mechanical Ventilation >96 Hours with CC”;
• MS-DRG 927: “Extensive Burns or Full Thickness Burns with Mechanical Ventilation >96 Hours with Skin Graft”; and
• MS-DRG 933: “Extensive Burns or Full Thickness Burns with Mechanical Ventilation >96 Hours without Skin Graft”.
Some inpatient stays entail multiple surgical procedures, each one of which, occurring by itself, could result in assignment of the case to a different MS-DRG within the MDC to which the principal diagnosis is assigned. Therefore, it is necessary to have a decision rule within the GROUPER by which these cases are assigned to a single MS-DRG. The surgical hierarchy, an ordering of surgical classes from most resource-intensive to least resource-intensive, performs that function. Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource-intensive surgical class.
Because the relative resource intensity of surgical classes can shift as a function of MS-DRG reclassification and recalibrations, for FY 2016, we reviewed the surgical hierarchy of each MDC, as we have for previous reclassifications and recalibrations, to determine if the ordering of classes coincides with the intensity of resource utilization.
A surgical class can be composed of one or more MS-DRGs. For example, in MDC 11, the surgical class “kidney transplant” consists of a single MS-DRG (MS-DRG 652) and the class “major bladder procedures” consists of three MS-DRGs (MS-DRGs 653, 654, and 655). Consequently, in many cases, the surgical hierarchy has an impact on more than one MS-DRG. The methodology for determining the most resource-intensive surgical class involves weighting the average resources for each MS-DRG by frequency to determine the weighted average resources for each surgical class. For example, assume surgical class A includes MS-DRGs 001 and 002 and surgical class B includes MS-DRGs 003, 004, and 005. Assume also that the average costs of MS-DRG 001 are higher than that of MS-DRG 003, but the average costs of MS-DRGs 004 and 005 are higher than the average costs of MS-DRG 002. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weigh the average costs of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG) to determine average resource consumption for the surgical class. The surgical classes would then be ordered from the class with the highest average resource utilization to that with the lowest, with the exception of “other O.R. procedures” as discussed below.
This methodology may occasionally result in assignment of a case involving multiple procedures to the lower-weighted MS-DRG (in the highest, most resource-intensive surgical class) of the available alternatives. However, given that the logic underlying the surgical hierarchy provides that the GROUPER search for the procedure in the most resource-intensive surgical class, in cases involving multiple procedures, this result is sometimes unavoidable.
We note that, notwithstanding the foregoing discussion, there are a few instances when a surgical class with a lower average cost is ordered above a surgical class with a higher average cost. For example, the “other O.R. procedures” surgical class is uniformly ordered last in the surgical hierarchy of each MDC in which it occurs, regardless of the fact that the average costs for the MS-DRG or MS-DRGs in that surgical class may be higher than those for other surgical classes in the MDC. The “other O.R. procedures” class is a group of procedures that are only infrequently related to the diagnoses in the MDC, but are still occasionally performed on patients with cases assigned to the MDC with these diagnoses. Therefore, assignment to these surgical classes should only occur if no other surgical class more closely related to the diagnoses in the MDC is appropriate.
A second example occurs when the difference between the average costs for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy because, as a result of reassigning cases on the basis of the hierarchy change, the average costs are likely to shift such that the higher-ordered surgical class has lower average costs than the class ordered below it.
Based on the changes that we proposed to make for FY 2016, as discussed in section II.G.3.e. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to revise the surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) (80 FR 24399). Specifically, we proposed to delete MS-DRG 237 (Major Cardiovascular Procedures with MCC) and MS-DRG 238 (Major Cardiovascular Procedures without MCC) from the surgical hierarchy. We proposed to sequence proposed new MS-DRG 268 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC) and proposed new MS-DRG 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon without MCC) above proposed new MS-DRG 270 (Other Major Cardiovascular Procedures with MCC), proposed new MS-DRG 271 (Other Major Cardiovascular Procedures with CC), and proposed new MS-DRG 272 (Other Major Cardiovascular Procedures without CC/MCC). We proposed to sequence proposed new MS-DRGs 270, 271, and 272 above MS-DRG 239 (Amputation for Circulatory System Disorders Except Upper Limb & Toe with MCC). In addition, we proposed to sequence proposed new MS-DRG 273 (Percutaneous Intracardiac Procedures with MCC) and proposed new MS-DRG 274 (Percutaneous Intracardiac Procedures without MCC) above MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-eluting Stent with MCC or 4+ Vessels/Stents).
We invited public comments on our proposals.
We did not receive any public comments on our proposals for the surgical hierarchy within MDC 5. Therefore, we are finalizing our proposals to delete ICD-9-CM MS-DRG 237 and ICD-9-CM MS-DRG 238 from the surgical hierarchy. We are adopting as final the sequencing of new ICD-10 MS-DRG 268 and new ICD-10 MS-DRG 269 above new ICD-10 MS-DRG 270, new ICD-10MS-DRG 271, and new ICD-10 MS-DRG 272. We also are finalizing our proposal to sequence new ICD-10 MS-DRGs 270, 271, and 272 above ICD-10 MS-DRG 239. Lastly, we are finalizing the sequencing of new ICD-10 MS-DRG 273 and new ICD-10 MS-DRG 274 above ICD-10 MS-DRG 246.
A complete updated MCC, CC, and Non-CC Exclusion List is available via the Internet on the CMS Web site at:
• Table 6I (Complete MCC list);
• Table 6J (Complete CC list); and
• Table 6K (Complete list of CC Exclusions).
We received a request that we change the severity levels for ICD-9-CM diagnosis codes 414.2 (Chronic total occlusion of coronary artery) and 414.4 (Coronary atherosclerosis due to calcified coronary lesion) from non-CCs to MCCs. The ICD-10-CM codes for these diagnoses are I25.82 (Chronic total occlusion of coronary artery) and I25.84 (Coronary atherosclerosis due to calcified coronary lesion), respectively, and both of these codes are currently classified as non-CCs.
This issue was previously discussed in the FY 2014 IPPS/LTCH PPS proposed rule and final rule (78 FR 27522 and 78 FR 50541 through 50542, respectively), and the FY 2015 IPPS/LTCH PPS proposed rule and final rule (79 FR 28018 and 28019 and 79 FR 49903 and 49904, respectively).
We examined claims data from the December 2014 update of the FY 2014 MedPAR file for ICD-9-CM diagnosis codes 414.2 and 414.4. The following table shows our findings.
We ran the data using the criteria described in the FY 2008 IPPS final rule with comment period (72 FR 47169) to determine severity levels for procedures in MS-DRGs. The C1 value reflects a patient with no other secondary diagnosis or with all other secondary diagnoses that are non-CCs. The C2 value reflects a patient with at least one other secondary diagnosis that is a CC, but none that is an MCC. The C3 value reflects a patient with at least one other secondary diagnosis that is an MCC.
The table above shows that the C1 finding is 1.393 for ICD-9-CM diagnosis code 414.2 and the C1 finding is 1.412 for ICD-9-CM diagnosis code 414.4. A value close to 1.0 in the C1 field suggests that the diagnosis produces the same expected value as a non-CC. A value close to 2.0 suggests the condition is more like a CC than a non-CC, but not as significant in resource usage as an MCC. A value close to 3.0 suggests that the condition is expected to consume resources more similar to an MCC than a CC or a non-CC. The C2 finding was 2.098 for ICD-9-CM diagnosis code 414.2, and the C2 finding was 2.148 for ICD-9-CM diagnosis code 414.4. A C2 value close to 2.0 suggests the condition is more like a CC than a non-CC, but not as significant in resource usage as an MCC when there is at least one other secondary diagnosis that is a CC but none that is an MCC. While the C1 value of 1.393 for ICD-9-CM diagnosis code 414.2 and the C1 value of 1.412 for ICD-9-CM diagnosis code 414.4 are above the 1.0 value for a non-CC, these values do not support the reclassification of diagnosis codes 414.2 and 414.4 to MCCs. As stated earlier, a value close to 3.0 suggests the condition is expected to consume resources more similar to an MCC than a CC or a non-CC. The C2 finding of 2.098 for ICD-9-CM diagnosis code 414.2 and the C2 finding of 2.148 for ICD-9-CM diagnosis code 414.4 also do not support reclassifying these diagnosis codes to MCCs.
Our clinical advisors reviewed the data and evaluated these conditions. They recommended that we not change the severity level of diagnosis codes 414.2 and 414.4 from a non-CC to an MCC. Our clinical advisors did not believe that these diagnoses would increase the severity of illness level of patients. Considering the C1 and C2 ratings of both diagnosis codes 414.2 and 414.4 and the input from our clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24399 through 24400), we did not propose to reclassify conditions represented by diagnosis codes 414.2 and 414.4 to MCCs. We proposed to maintain both of these conditions as non-CCs. As stated earlier, the equivalent ICD-10-CM codes for these conditions are codes I25.82 and I25.84, respectively. Therefore, based on the data and clinical analysis, we proposed to maintain ICD-10-CM diagnosis codes I25.82 and I25.84 as non-CCs. We invited public comments on our proposals.
One commenter disagreed with the proposal to maintain code I25.84 as a non-CC. The commenter indicated that it was not able to duplicate the results of C1 and C2 described in the narrative and the table presented in the proposed rule, despite contacting CMS for assistance in running the data. The commenter disagreed with the CMS' clinical advisors that the ICD-9-CM code 414.4 and ICD-10-CM code I25.84 represent conditions that are not at the MCC level. The commenter stated that patients with severe calcified lesions are more difficult to treat and, therefore, require greater resources. The commenter also expressed concerns that hospitals were underreporting cases of patients with calcified lesions.
Each diagnosis for which Medicare data were available was evaluated to determine its impact on resource use and to determine the most appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to make this determination, the average cost for each subset of cases was compared to the expected cost of cases in that subset. An expected average cost is computed across all cases in the data analysis for each base MS-DRG and severity level (1=MCC, 2=CC, and 3=Non-CC). Then, for each case in a subset, the average expected cost is computed based on the base MS-DRG and severity level to which the cases are assigned. The following format was used to evaluate each diagnosis:
Where count (Cnt) is the number of patients in each subset and C1, C2, and C3 are a measure of the impact on resource use of patients in each of the subsets. A C1 value of 1.412 for a secondary diagnosis code 414.4 (Coronary atherosclerosis due to calcified coronary lesion) means that, for the subset of patients who have the secondary diagnosis and have either no other secondary diagnosis present, or all the other secondary diagnoses present are non-CCs, the impact on resource use of the secondary diagnoses is greater than the expected value for a non-CC by an amount equal to 41.2 percent of the difference between the expected value of a CC and a non-CC (that is, the impact on resource use of the secondary diagnosis is closer to a CC than a non-CC).
After consideration of the public comments we received, the findings from our claims data, and the input from our clinical advisors noted above, we are finalizing our proposal to maintain ICD-10-CM diagnosis codes I25.82 and I25.84 as non-CCs.
Some ICD-10-CM diagnosis codes express conditions that are normally coded in ICD-9-CM using two or more ICD-9-CM diagnosis codes. CMS' goal in developing the ICD-10 MS-DRGs was to ensure that a patient case is assigned to the same MS-DRG, regardless of whether the patient record were to be coded in ICD-9-CM or ICD-10-CM/PCS. When one of the ICD-10-CM combination codes is used as a principal diagnosis, the cluster of ICD-9-CM codes that would be coded on an ICD-9-CM record was evaluated. If one of the ICD-9-CM codes in the cluster is a CC or an MCC, the single ICD-10-CM combination code used as a principal diagnosis also must imply that the CC or MCC is present. Appendix J of the ICD-10 MS-DRG Definitions Manual Version 32 includes two lists. Part 1 is the list of principal diagnosis codes where the ICD-10-CM code is its own MCC. Part 2 is the list of principal diagnosis codes where the ICD-10-CM code is its own CC. Appendix J of the ICD-10 MS-DRG Definitions Manual Version 32 is available via the CMS Web site at:
We received a request that the ICD-10-CM combination codes for hydronephrosis due to ureteral stricture and urinary stone (N13.1 and N13.2) be flagged as principal diagnoses that can act as their own CC for MS-DRG grouping purposes.
In ICD-9-CM, code 591 (Hydronephrosis) is classified as a CC. In ICD-10-CM, hydronephrosis is reported with a combination code if the hydronephrosis is due to a ureteral stricture or urinary stone obstruction of N13.1 (Hydronephrosis with ureteral stricture, not elsewhere classified) and N13.2 (Hydronephrosis with renal and ureteral calculous obstruction). In ICD-10-CM, these two codes (N13.1 and N 13.2) are classified as CCs, but these codes are not recognized as principal diagnoses that act as their own CC (they are not included in the Appendix J of the ICD-10 MS-DRG Definitions Manual Version 32).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24400), we stated that we agreed with the requestor that ICD-10-CM diagnosis codes N13.1 and N13.2 should be flagged as principal diagnosis codes that can act as their own CC for MS-DRG grouping purposes. Therefore, we proposed that diagnosis codes N13.1 and N13.2 be added to the list of principal diagnoses that act as their own CC in Appendix J of the ICD-10 MS-DRG Definitions Manual Version 33. We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing our proposal to add diagnosis codes N13.1 and N13.2 to the list of principal diagnoses that can act as their own CC in Appendix J of the ICD-10 MS-DRG Definitions Manual Version 33.
Under the IPPS MS-DRG classification system, we have developed a standard list of diagnoses that are considered CCs. Historically, we developed this list using physician panels that classified each diagnosis code based on whether the diagnosis, when present as a secondary condition, would be considered a substantial complication or comorbidity. A substantial complication or comorbidity was defined as a condition that, because of its presence with a specific principal diagnosis, would cause an increase in the length of stay by at least 1 day in at least 75 percent of the patients. However, depending on the principal diagnosis of the patient, some diagnoses on the basic list of complications and comorbidities may be excluded if they are closely related to the principal diagnosis. In FY 2008, we evaluated each diagnosis code to determine its impact on resource use and to determine the most appropriate CC subclassification (non-CC, CC, or MCC) assignment. We refer readers to sections II.D.2. and 3. of the preamble of the FY 2008 IPPS final rule with comment period for a discussion of the refinement of CCs in relation to the MS-DRGs we adopted for FY 2008 (72 FR 47152 through 47171).
In the September 1, 1987 final notice (52 FR 33143) concerning changes to the DRG classification system, we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered valid CCs in combination with a particular principal diagnosis. We created the CC Exclusions List for the following reasons: (1) To preclude coding of CCs for closely related conditions; (2) to preclude duplicative or inconsistent coding from being treated as CCs; and (3) to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. As we indicated above, we developed a list of diagnoses, using physician panels, to include those diagnoses that, when present as a secondary condition, would be considered a substantial complication or comorbidity. In previous years, we have made changes to the list of CCs, either by adding new CCs or deleting CCs already on the list.
In the May 19, 1987 proposed notice (52 FR 18877) and the September 1, 1987 final notice (52 FR 33154), we explained that the excluded secondary diagnoses were established using the following five principles:
• Chronic and acute manifestations of the same condition should not be considered CCs for one another;
• Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for the same condition should not be considered CCs for one another;
• Codes for the same condition that cannot coexist, such as partial/total, unilateral/bilateral, obstructed/unobstructed, and benign/malignant, should not be considered CCs for one another;
• Codes for the same condition in anatomically proximal sites should not be considered CCs for one another; and
• Closely related conditions should not be considered CCs for one another.
The creation of the CC Exclusions List was a major project involving hundreds of codes. We have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC.
The ICD-10 MS-DRGs Version 32 CC Exclusion List is included as Appendix C in the Definitions Manual available via the Internet on the CMS Web site at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24401), we did not propose any changes to the CC Exclusion List for FY 2016. Because we did not propose any changes to the ICD-10 MS-DRGs CC Exclusion List for FY 2016, we did not publish Table 6G (Additions to the CC Exclusion List) or Table 6H (Deletions from the CC Exclusion List). We developed Table 6K (Complete List of CC Exclusions), which is available only via the Internet on the CMS Web site at:
As we did for the proposed rule, because we are not making any changes to the ICD-10 MS-DRGs CC Exclusion List for FY 2016, we are not publishing Table 6G (Additions to the CC Exclusion List) or Table 6H (Deletions from the CC Exclusion List). We developed Table 6K (Complete List of CC Exclusions), which is available only via the Internet on the CMS Web site at:
A complete updated MCC, CC, and Non-CC Exclusions List is available via the Internet on the CMS Web site at:
Because there are no new, revised, or deleted ICD-10-CM diagnosis codes for FY 2016, we have not developed Table 6A (New Diagnosis Codes), Table 6C (Invalid Diagnosis Codes), or Table 6E (Revised Diagnosis Code Titles), for this final rule and they are not published as part of this final rule. We have developed Table 6B (New Procedure Codes) for new ICD-10-PCS codes which will be implemented on October 1, 2015. Because there are no revised or
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24401), we did not propose any additions or deletions to the MS-DRG MCC List for FY 2016 nor any additions or deletions to the MS-DRG CC List for FY 2016. As we did for the proposed rule, for this final rule, we have not developed Tables 6I.1 (Additions to the MCC List), 6I.2 (Deletions to the MCC List), 6J.1 (Additions to the CC List), and 6J.2 (Deletions to the CC List), and they are not published as part of this final rule. We have developed Tables 6L (Principal Diagnosis Is Its Own MCC List) and 6M (Principal Diagnosis Is Its Own CC List). As stated in the Definitions Manual of the ICD-10 MS DRGs Version 32 on the ICD-10 MS-DRG Conversion Project Web site at:
The complete documentation of the ICD-10 MS-DRG Version 32 GROUPER logic, including the current CC Exclusions List, is available via the Internet on the CMS Web site at:
Each year, we review cases assigned to former CMS DRG 468 (Extensive O.R. Procedure Unrelated to Principal Diagnosis), CMS DRG 476 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis), and CMS DRG 477 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis) to determine whether it would be appropriate to change the procedures assigned among these CMS DRGs. Under the MS-DRGs that we adopted for FY 2008, CMS DRG 468 was split three ways and became MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). CMS DRG 476 became MS-DRGs 984, 985, and 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively). CMS DRG 477 became MS-DRGs 987, 988, and 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC, respectively).
MS-DRGs 981 through 983, 984 through 986, and 987 through 989 (formerly CMS DRGs 468, 476, and 477, respectively) are reserved for those cases in which none of the O.R. procedures performed are related to the principal diagnosis. These MS-DRGs are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group. MS-DRGs 984 through 986 (previously CMS DRG 476) are assigned to those discharges in which one or more of the following prostatic procedures are performed and are unrelated to the principal diagnosis:
• 60.0 (Incision of prostate);
• 60.12 (Open biopsy of prostate);
• 60.15 (Biopsy of periprostatic tissue);
• 60.18 (Other diagnostic procedures on prostate and periprostatic tissue);
• 60.21 (Transurethral prostatectomy);
• 60.29 (Other transurethral prostatectomy);
• 60.61 (Local excision of lesion of prostate);
• 60.69 (Prostatectomy, not elsewhere classified);
• 60.81 (Incision of periprostatic tissue);
• 60.82 (Excision of periprostatic tissue);
• 60.93 (Repair of prostate);
• 60.94 (Control of (postoperative) hemorrhage of prostate);
• 60.95 (Transurethral balloon dilation of the prostatic urethra);
• 60.96 (Transurethral destruction of prostate tissue by microwave thermotherapy);
• 60.97 (Other transurethral destruction of prostate tissue by other thermotherapy); and
• 60.99 (Other operations on prostate).
All remaining O.R. procedures are assigned to MS-DRGs 981 through 983 and 987 through 989, with MS-DRGs 987 through 989 assigned to those discharges in which the only procedures performed are nonextensive procedures that are unrelated to the principal diagnosis.
Our review of MedPAR claims data showed that there are no cases that merited movement or should logically be assigned to any of the other MDCs. Therefore, for FY 2016, we did not propose to change the procedures assigned among these MS-DRGs. We invited public comments on our proposal.
We did not receive any public comments on our proposal and, therefore, are adopting it as final.
We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (Extensive
We identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical MS-DRGs for the MDC in which the diagnosis falls. As noted above, there are no cases that merited movement or that should logically be assigned to any of the other MDCs. Therefore, for FY 2016, we did not propose to remove any procedures from MS-DRGs 981 through 983 or MS-DRGs 987 through 989 into one of the surgical MS-DRGs for the MDC into which the principal diagnosis is assigned. We invited public comments on our proposal.
We did not receive any public comments on our proposal and, therefore, are adopting it as final.
We also annually review the list of ICD-9-CM procedures that, when in combination with their principal diagnosis code, result in assignment to MS-DRGs 981 through 983, 984 through 986 (Prostatic O.R. procedure unrelated to principal diagnosis with MCC, with CC, or without CC/MCC, respectively), and 987 through 989, to ascertain whether any of those procedures should be reassigned from one of these three MS DRGs to another of the three MS-DRGs based on average costs and the length of stay. We look at the data for trends such as shifts in treatment practice or reporting practice that would make the resulting MS-DRG assignment illogical. If we find these shifts, we would propose to move cases to keep the MS-DRGs clinically similar or to provide payment for the cases in a similar manner. Generally, we move only those procedures for which we have an adequate number of discharges to analyze the data.
There are no cases representing shifts in treatment practice or reporting practice that would make the resulting MS-DRG assignment illogical, or that merited movement so that cases should logically be assigned to any of the other MDCs. Therefore, for FY 2016, we did not propose to move any procedure codes among these MS-DRGs.
We did not receive any public comments on our proposal and, therefore, are adopting it as final.
During the comment period for the FY 2015 IPPS/LTCH PPS proposed rule, we received a public comment expressing concern regarding specific procedure codes that are assigned to MS-DRGs 981 through 983; 984 through 986; and 987 through 989 in relation to our discussion of the annual review of these MS-DRGs in section II.G.12. of that proposed rule (79 FR 28020). The commenter noted that the endovascular embolization of the arteries of the branches of the internal maxillary artery is frequently performed for intractable posterior epistaxis (nosebleed). The commenter stated that, currently, diagnosis code 784.7 (Epistaxis) reported with procedure codes 39.75 (Endovascular embolization or occlusion of vessel(s) of head or neck using bare coils) and 39.76 (Endovascular embolization or occlusion of vessel(s) of head or neck using bioactive coils) groups to MS-DRGs 981, 982, and 983. The commenter indicated that it also found this grouping with the ICD-10 MS-DRGs Version 31 using ICD-10-CM diagnosis code R04.0 (Epistaxis) reported with artery occlusion procedure codes. The commenter requested that CMS review these groupings and consider the possibility of reassigning these epistaxis cases with endovascular embolization procedure codes into a more specific MS-DRG.
We considered this public comment to be outside of the scope of the FY 2015 IPPS/LTCH PPS proposed rule and, therefore, did not address it in the FY 2015 IPPS/LTCH PPS final rule. However, we indicated that we would consider this public comment for possible proposals in future rulemaking as part of our annual review process.
ICD-10-PCS provides more detailed codes for endovascular embolization or occlusion of vessel(s) of head or neck using bare coils and bioactive coils which are listed in the following table:
We examined claims data from the December 2014 update of the FY 2014 MedPAR file for cases with diagnosis code 784.7 reported with procedure codes 39.75 and 39.76 in MS-DRGs 981, 982, and 983. The following table shows our findings.
We found only 35 epistaxis cases with procedure code 39.75 reported and 8 cases with procedure code 39.76 reported among MS-DRGs 981, 982, and 983. The use of endovascular embolizations for epistaxis appears to be rare. The average costs for the cases with procedure code 39.75 in MS-DRGs 981, 982, and 983 are similar to the average costs for all cases in MS-DRGs 981, 982, and 983, respectively. The average costs for the cases with procedure code 39.75 in MS-DRGs 981, 982, and 983 were $34,655, $17,725, and $10,532, respectively, compared to $33,080, $19,392, and $12,760 for all cases in MS-DRGs 981, 982, and 983. The average costs for cases with procedure code 39.76 in MS-DRGs 981, 982, and 983 were $50,081, $11,010, and $16,658, respectively, and were significantly greater than all cases in MS-DRGs 981 and 983. However, as stated earlier, there were only 8 cases reported with procedure code 39.76. As explained previously, MS-DRGs 981, 982, and 983 were created for operating
Our clinical advisors reviewed this issue and did not identify any new MS-DRG assignment that would be more appropriate for these rare cases. They advised us to maintain the current MS-DRG structure within MS-DRGs 981, 982, and 983.
Based on the results of the examination of the claims data and the recommendations from our clinical advisors, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24403 through 24405), we did not propose to create new MS-DRG assignments for epistaxis cases receiving endovascular embolization procedures. We proposed to maintain the current MS-DRG structure for epistaxis cases receiving endovascular embolization procedures and did not propose any updates to MS-DRGs 981, 982, and 983. We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing our proposal to maintain the current MS-DRG structure for epistaxis cases receiving endovascular embolization procedures and not make any updates to MS-DRGs 981, 982, and 983.
Based on the review of cases in the MDCs, as described above in sections II.G.2. through 7. of the preamble of this final rule, we did not propose to add any diagnosis or procedure codes to MDCs for FY 2016. We invited public comments on our proposal.
We did not receive any public comments on our proposal and, therefore, are adopting it as final.
In September 1985, the ICD-9-CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee, co-chaired by the National Center for Health Statistics (NCHS), the Centers for Disease Control and Prevention, and CMS, charged with maintaining and updating the ICD-9-CM system. The final update to ICD-9-CM codes was to be made on October 1, 2013. Thereafter, the name of the Committee was changed to the ICD-10 Coordination and Maintenance Committee, effective with the March 19-20, 2014 meeting. The ICD-10 Coordination and Maintenance Committee addresses updates to the ICD-10-CM, ICD-10-PCS, and ICD-9-CM coding systems. The Committee is jointly responsible for approving coding changes, and developing errata, addenda, and other modifications to the coding systems to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non-Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system.
The official list of ICD-9-CM diagnosis and procedure codes by fiscal year can be found on the CMS Web site at:
The NCHS has lead responsibility for the ICD-10-CM and ICD-9-CM diagnosis codes included in the Tabular List and Alphabetic Index for Diseases, while CMS has lead responsibility for the ICD-10-PCS and ICD-9-CM procedure codes included in the Tabular List and Alphabetic Index for Procedures.
The Committee encourages participation in the above process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding field, such as the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), and various physician specialty groups, as well as individual physicians, health information management professionals, and other members of the public, to contribute ideas on coding matters. After considering the opinions expressed at the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies.
The Committee presented proposals for coding changes for implementation in FY 2016 at a public meeting held on September 23-24, 2014, and finalized the coding changes after consideration of comments received at the meetings and in writing by November 15, 2014.
The Committee held its 2015 meeting on March 18-19, 2015. It was announced at this meeting that any new ICD-10-CM/PCS codes for which there was consensus of public support and for which complete tabular and indexing changes would be made by May 2015 would be included in the October 1, 2015 update to ICD-10-CM/ICD-10-PCS. For FY 2016, there are no new, revised, or deleted ICD-10-CM diagnosis codes. For FY 2016, there are new ICD-10-PCS procedure codes that are included in Table 6B (New Procedure Codes). However, there are no revised or deleted ICD-10-PCS procedure codes. There also are no new ICD-9-CM diagnosis or procedure codes because ICD-9-CM will be replaced by ICD-10-CM/ICD-10-PCS for services provided on or after October 1, 2015.
Copies of the agenda, handouts, and access to the live stream videos for the procedure codes discussions at the Committee's September 23-24, 2014 meeting and March 18-19, 2015 meeting can be obtained from the CMS Web site at:
We encourage commenters to address suggestions on coding issues involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-10 Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo Road, Hyattsville, MD 20782. Comments may be sent by Email to:
Questions and comments concerning the procedure codes should be addressed to: Patricia Brooks, Co-Chairperson, ICD-10 Coordination and Maintenance Committee, CMS, Center for Medicare, Hospital and Ambulatory Policy Group, Division of Acute Care, C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Comments may be sent by Email to:
In the September 7, 2001 final rule implementing the IPPS new technology add-on payments (66 FR 46906), we
Section 503(a) of Public Law 108-173 included a requirement for updating ICD-9-CM codes twice a year instead of a single update on October 1 of each year. This requirement was included as part of the amendments to the Act relating to recognition of new technology under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act by adding a clause (vii) which states that the Secretary shall provide for the addition of new diagnosis and procedure codes on April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) until the fiscal year that begins after such date. This requirement improves the recognition of new technologies under the IPPS system by providing information on these new technologies at an earlier date. Data will be available 6 months earlier than would be possible with updates occurring only once a year on October 1.
While section 1886(d)(5)(K)(vii) of the Act states that the addition of new diagnosis and procedure codes on April 1 of each year shall not require the Secretary to adjust the payment, or DRG classification, under section 1886(d) of the Act until the fiscal year that begins after such date, we have to update the DRG software and other systems in order to recognize and accept the new codes. We also publicize the code changes and the need for a mid-year systems update by providers to identify the new codes. Hospitals also have to obtain the new code books and encoder updates, and make other system changes in order to identify and report the new codes.
The ICD-10 (previously the ICD-9-CM) Coordination and Maintenance Committee holds its meetings in the spring and fall in order to update the codes and the applicable payment and reporting systems by October 1 of each year. Items are placed on the agenda for the Committee meeting if the request is received at least 2 months prior to the meeting. This requirement allows time for staff to review and research the coding issues and prepare material for discussion at the meeting. It also allows time for the topic to be publicized in meeting announcements in the
A discussion of this timeline and the need for changes are included in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee Meeting minutes. The public agreed that there was a need to hold the fall meetings earlier, in September or October, in order to meet the new implementation dates. The public provided comment that additional time would be needed to update hospital systems and obtain new code books and coding software. There was considerable concern expressed about the impact this new April update would have on providers.
In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Public Law 108-173, by developing a mechanism for approving, in time for the April update, diagnosis and procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add-on payment process. We also established the following process for making these determinations. Topics considered during the Fall ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requestor at the Committee's public meeting. The request must identify the reason why a new code is needed in April for purposes of the new technology process. The participants at the meeting and those reviewing the Committee meeting summary report are provided the opportunity to comment on this expedited request. All other topics are considered for the October 1 update. Participants at the Committee meeting are encouraged to comment on all such requests. There were no requests approved for an expedited April l, 2015 implementation of a code at the September 23-24, 2014 Committee meeting. Therefore, there were no new codes implemented on April 1, 2015.
ICD-9-CM addendum and code title information is published on the CMS Web site at:
CMS also sends copies of all ICD-10-CM and ICD-10-PCS coding changes to its Medicare contractors for use in updating their systems and providing education to providers.
The code titles are adopted as part of the ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee process. Therefore, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules.
In the January 16, 2009 ICD-10-CM and ICD-10-PCS final rule (74 FR 3340), there was a discussion of the need for a partial or total freeze in the annual updates to both ICD-9-CM and ICD-10-CM and ICD-10-PCS codes. The public comment addressed in that final rule stated that the annual code set updates should cease l year prior to the implementation of ICD-10. The commenters stated that this freeze of code updates would allow for instructional and/or coding software programs to be designed and purchased early, without concern that an upgrade would take place immediately before the compliance date, necessitating additional updates and purchases.
HHS responded to comments in the ICD-10 final rule that the ICD-9-CM Coordination and Maintenance Committee has jurisdiction over any action impacting the ICD-9-CM and ICD-10 code sets. Therefore, HHS indicated that the issue of consideration of a moratorium on updates to the ICD-9-CM, ICD-10-CM, and ICD-10-PCS code sets in anticipation of the adoption of ICD-10-CM and ICD-10-PCS would be addressed through the Committee at a future public meeting.
The code freeze was discussed at multiple meetings of the ICD-9-CM Coordination and Maintenance
• The last regular annual update to both ICD-9-CM and ICD-10 code sets was made on October 1, 2011.
• On October 1, 2012 and October 1, 2013, there were to be only limited code updates to both ICD-9-CM and ICD-10 code sets to capture new technology and new diseases.
• On October 1, 2014, there were to be only limited code updates to ICD-10 code sets to capture new technology and diagnoses as required by section 503(a) of Public Law 108-173. There were to be no updates to ICD-9-CM on October 1, 2014.
• On October 1, 2015, one year after the originally scheduled implementation of ICD-10, regular updates to ICD-10 were to begin.
On May 15, 2014, CMS posted an updated Partial Code Freeze schedule on the CMS Web site at:
• The last regular annual updates to both ICD-9-CM and ICD-10 code sets were made on October 1, 2011.
• On October 1, 2012, October 1, 2013, and October 1, 2014, there were only limited code updates to both the ICD-9-CM and ICD-10 code sets to capture new technologies and diseases as required by section 1886(d)(5)(K) of the Act.
• On October 1, 2015, there will be only limited code updates to ICD-10 code sets to capture new technologies and diagnoses as required by section 1886(d)(5)(K) of the Act. There will be no updates to ICD-9-CM, as it will no longer be used for reporting.
• On October 1, 2016 (1 year after implementation of ICD-10), regular updates to ICD-10 will begin.
The ICD-10 (previously ICD-9-CM) Coordination and Maintenance Committee announced that it would continue to meet twice a year during the freeze. At these meetings, the public will be encouraged to comment on whether or not requests for new diagnosis and procedure codes should be created based on the need to capture new technology and new diseases. Any code requests that do not meet the criteria will be evaluated for implementation within ICD-10 one year after the implementation of ICD-10, once the partial freeze is ended.
Complete information on the partial code freeze and discussions of the issues at the Committee meetings can be found on the ICD-10 Coordination and Maintenance Committee Web site at:
This partial code freeze has dramatically decreased the number of codes created each year as shown by the following information.
As mentioned earlier, the public is provided the opportunity to comment on any requests for new diagnosis or procedure codes discussed at the ICD-10 Coordination and Maintenance Committee meeting. The public has supported only a limited number of new codes during the partial code freeze, as can be seen by data shown above. We have gone from creating several hundred new codes each year to creating only a limited number of new ICD-9-CM and ICD-10 codes.
At the September 23-24, 2014 and March 18-19, 2015 Committee meetings, we discussed any requests we had received for new ICD-10-CM diagnosis and ICD-10-PCS procedure codes that were to be implemented on October 1, 2015. We did not discuss ICD-9-CM codes. The public was given the opportunity to comment on whether or not new ICD-10-CM and ICD-10-PCS codes should be created, based on the partial code freeze criteria. The public was to use the criteria as to whether codes were needed to capture new diagnoses or new technologies. If the codes do not meet those criteria for implementation during the partial code freeze, consideration was to be given as to whether the codes should be created after the partial code freeze ends 1 year after the implementation of ICD-10-CM/PCS. We invited public comments on any code requests discussed at the September 23-24, 2014 and March 18-19, 2015 Committee meetings for implementation as part of the October 1, 2015 update. The deadline for commenting on code proposals discussed at the September 23-24, 2014 Committee meeting was November 21, 2014. The deadline for commenting on code proposals discussed at the March 18-19, 2015 Committee meeting was April 17, 2015.
In the FY 2008 IPPS final rule with comment period (72 FR 47246 through 47251), we discussed the topic of Medicare payment for devices that are replaced without cost or where credit for a replaced device is furnished to the hospital. We implemented a policy to reduce a hospital's IPPS payment for certain MS-DRGs where the implantation of a device that has been recalled determined the base MS-DRG assignment. We specified that if a hospital received a credit for a recalled device equal to 50 percent or more of the cost of the device, we would reduce a hospital's IPPS payment for those MS-DRGs.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51556 and 51557), we clarified this policy to state that the policy applies if the hospital received a credit equal to 50 percent or more of the cost of the replacement device and issued instructions to hospitals accordingly.
After publication of the FY 2015 IPPS/LTCH PPS final rule, we received a request to clarify the list of “device-dependent” MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit. Specifically, a requestor noted that ICD-9-CM procedure codes that previously grouped to MS-DRGs 216 through 221 (Cardiac Valve & Other Major Cardiothoracic Procedure with and without Cardiac Catheterization, with MCC, with CC, without CC/MCC, respectively) and were subject to the policy for payment under the IPPS as “device-dependent” MS-DRGs had been reassigned to new MS-DRGs 266 and 267 (Endovascular Cardiac Valve Replacement with MCC and without MCC, respectively). The requestor suggested that MS-DRGs 266 and 267 also should be considered “device-dependent” MS-DRGs and added to the list of MS-DRGs subject to the IPPS payment policy for replaced devices offered without cost or with a credit.
As noted by the requestor, as final policy for FY 2015, certain ICD-9-CM procedure codes that previously grouped to MS-DRGs 216 through 221, which are on the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit, were reassigned to MS-DRGs 266 and 267. We agree that MS-DRGs 266 and 267 should be included in the list of “device-dependent” MS-DRGs subject to the IPPS policy. We generally map new MS-DRGs onto the list when they are formed from procedures previously assigned to MS-DRGs that are already on the list. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24409), we proposed to add MS-DRGs 266 and 267 to the list of “device dependent” MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit.
In addition, as discussed in section II.G.4.e. of the preamble of the proposed rule, for FY 2016, we proposed to delete MS-DRGs 237 and 238 (Major Cardiovascular Procedures with MCC and without MCC, respectively) and create new MS-DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC and without MCC, respectively), as well as new MS-DRGs 270, 271, and 272 (Other Major Cardiovascular Procedures with MCC, with CC, and without CC/MCC, respectively). Currently, MS-DRGs 237 and 238 are on the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit. As stated previously, we generally map new MS-DRGs onto the list when they are formed from procedures previously assigned to MS-DRGs that are already on the list. Therefore, we indicated that if we finalized these proposed MS-DRG changes, we also would add proposed new MS-DRGs 268 through 272 to the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit. We invited public comments on our proposed list of MS-DRGs to be subject to the IPPS policy for replaced devices offered without cost or with a credit for FY 2016 (80 FR 24409 through 24410).
After consideration of the public comments we received, we are adding MS-DRGs 266 and 267 to the list of MS-DRGs subject to the policy for payment under the IPPS for replaced devices offered without cost or with a credit, and consistent with the applicable finalized MS-DRG changes, also removing existing MS-DRGs 237 and 238 and adding new MS-DRGs 268 through 272. The list of MS-DRGs that are subject to the IPPS policy for replaced devices offered without cost or with a credit for FY 2016 is displayed below. We also intend to issue this list to providers in the form of a Change Request (CR).
We received public comments regarding two MS-DRG issues that were outside of the scope of the proposals included in the FY 2016 IPPS/LTCH proposed rule. These comments were as follows:
• Several commenters requested the creation of a new MS-DRG for primary total ankle replacements and revisions of total ankle replacement procedures.
• Several commenters requested the creation of a new MS-DRG for hip fractures for individuals who receive total hip replacements.
However, because we consider these public comments to be outside of the scope of the proposed rule, we are not addressing them in this final rule. As stated in section II.G.1.b. of the preamble of this final rule, we encourage individuals with comments about MS-DRG classification to submit these comments no later than December 7 of each year so that they can be considered for possible inclusion in the annual proposed rule and, if included, may be subjected to public review and comment. We will consider these public comments for possible proposals in future rulemaking as part of our annual review process.
In developing the FY 2016 system of weights, we used two data sources: claims data and cost report data. As in previous years, the claims data source is the MedPAR file. This file is based on fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2014 MedPAR data used in this final rule include discharges occurring on October 1, 2013, through September 30, 2014, based on bills received by CMS through March 31,
The second data source used in the cost-based relative weighting methodology is the Medicare cost report data files from the HCRIS. Normally, we use the HCRIS dataset that is 3 years prior to the IPPS fiscal year. Specifically, we used cost report data from the March 31, 2015 update of the FY 2013 HCRIS for calculating the FY 2016 cost-based relative weights.
As we explain in section II.E.2. of the preamble of this final rule, we calculated the FY 2016 relative weights based on 19 CCRs, as we did for FY 2015. The methodology we used to calculate the FY 2016 MS-DRG cost-based relative weights based on claims data in the FY 2014 MedPAR file and data from the FY 2013 Medicare cost reports is as follows:
• To the extent possible, all the claims were regrouped using the FY 2016 MS-DRG classifications discussed in sections II.B. and II.G. of the preamble of this final rule.
• The transplant cases that were used to establish the relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2014 MedPAR file. (Medicare coverage for heart, heart-lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.)
• Organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis. Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each MS-DRG and before eliminating statistical outliers.
• Claims with total charges or total lengths of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $10.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, special equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood charges, and anesthesia charges were also deleted.
• At least 92.1 percent of the providers in the MedPAR file had charges for 14 of the 19 cost centers. All claims of providers that did not have charges greater than zero for at least 14 of the 19 cost centers were deleted. In other words, a provider must have no more than five blank cost centers. If a provider did not have charges greater than zero in more than five cost centers, the claims for the provider were deleted.
• Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the geometric mean of the log distribution of both the total charges per case and the total charges per day for each MS-DRG.
• Effective October 1, 2008, because hospital inpatient claims include a POA indicator field for each diagnosis present on the claim, only for purposes of relative weight-setting, the POA indicator field was reset to “Y” for “Yes” for all claims that otherwise have an “N” (No) or a “U” (documentation insufficient to determine if the condition was present at the time of inpatient admission) in the POA field.
Under current payment policy, the presence of specific HAC codes, as indicated by the POA field values, can generate a lower payment for the claim. Specifically, if the particular condition is present on admission (that is, a “Y” indicator is associated with the diagnosis on the claim), it is not a HAC, and the hospital is paid for the higher severity (and, therefore, the higher weighted MS-DRG). If the particular condition is not present on admission (that is, an “N” indicator is associated with the diagnosis on the claim) and there are no other complicating conditions, the DRG GROUPER assigns the claim to a lower severity (and, therefore, the lower weighted MS-DRG) as a penalty for allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy goals of encouraging quality care and generates program savings, it presents an issue for the relative weight-setting process. Because cases identified as HACs are likely to be more complex than similar cases that are not identified as HACs, the charges associated with HAC cases are likely to be higher as well. Therefore, if the higher charges of these HAC claims are grouped into lower severity MS-DRGs prior to the relative weight-setting process, the relative weights of these particular MS-DRGs would become artificially inflated, potentially skewing the relative weights. In addition, we want to protect the integrity of the budget neutrality process by ensuring that, in estimating payments, no increase to the standardized amount occurs as a result of lower overall payments in a previous year that stem from using weights and case-mix that are based on lower severity MS-DRG assignments. If this would occur, the anticipated cost savings from the HAC policy would be lost.
To avoid these problems, we reset the POA indicator field to “Y” only for relative weight-setting purposes for all claims that otherwise have an “N” or a “U” in the POA field. This resetting “forced” the more costly HAC claims into the higher severity MS-DRGs as appropriate, and the relative weights calculated for each MS-DRG more closely reflect the true costs of those cases.
In addition, in the FY 2013 IPPS/LTCH PPS final rule, for FY 2013 and subsequent fiscal years, we finalized a policy to treat hospitals that participate in the Bundled Payments for Care Improvement (BPCI) initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process without regard to hospitals' participation within these bundled payment models (that is, as if hospitals were not participating in those models under the BPCI initiative). The BPCI initiative, developed under the authority of section 3021 of the Affordable Care Act (codified at section 1115A of the Act), is comprised of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care. Under the BPCI initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. For FY 2016, as we proposed, we are continuing to include all applicable data from subsection (d) hospitals participating in BPCI Models 1, 2, and 4 in our IPPS payment modeling and ratesetting calculations. We refer readers to the FY 2013 IPPS/LTCH PPS final rule for a complete discussion on our final policy for the treatment of hospitals participating in the BPCI initiative in our ratesetting process. For additional information on the BPCI initiative, we refer readers to the CMS' Center for Medicare and Medicaid Innovation's Web site at:
Once the MedPAR data were trimmed and the statistical outliers were removed, the charges for each of the 19 cost groups for each claim were standardized to remove the effects of differences in area wage levels, IME and DSH payments, and for hospitals located in Alaska and Hawaii, the applicable cost-of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in geographic adjustment factors, cost-of-living adjustments, and DSH payments under the capital IPPS as well. Charges were then summed by MS-DRG for each of the 19 cost groups so that each MS-DRG had 19 standardized charge totals. These charges were then adjusted to cost by applying the national average CCRs developed from the FY 2013 cost report data.
The 19 cost centers that we used in the relative weight calculation are shown in the following table. The table shows the lines on the cost report and the corresponding revenue codes that we used to create the 19 national cost center CCRs.
We refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 48462) for a discussion on the revenue codes included in the Supplies and Equipment and Implantable Devices CCRs, respectively.
We developed the national average CCRs as follows:
Using the FY 2013 cost report data, we removed CAHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland because we include their charges in our claims database. We then created CCRs for each provider for each cost center (see prior table for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. We then took the logs of the normalized cost center CCRs and removed any cost center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-3 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-3. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs.
After we multiplied the total charges for each MS-DRG in each of the 19 cost centers by the corresponding national average CCR, we summed the 19 “costs” across each MS-DRG to produce a total standardized cost for the MS-DRG. The average standardized cost for each MS-DRG was then computed as the total standardized cost for the MS-DRG divided by the transfer-adjusted case count for the MS-DRG. The average cost for each MS-DRG was then divided by the national average standardized cost per case to determine the relative weight.
The FY 2016 cost-based relative weights were then normalized by an adjustment factor of 1.678947 so that the average case weight after recalibration was equal to the average case weight before recalibration. The normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.
The 19 national average CCRs for FY 2016 are as follows:
Since FY 2009, the relative weights have been based on 100 percent cost weights based on our MS-DRG grouping system.
When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. In the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to use that same case threshold in recalibrating the MS-DRG relative weights for FY 2016. In the FY 2016 IPPS/LTCH PPS proposed rule, we stated that, using data from the FY 2014 MedPAR file, there were 8 MS-DRGs that contain fewer than 10 cases (80 FR 24414). However, we mistakenly included MS-DRG 768 (Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C) as a low-volume MS-DRG, which, using data from the December 2014 update of the FY 2014 MedPAR file, had more than 10 cases. For this final rule, using data from the March 2015 update of the FY 2014 MedPAR file, there continue to be 7 MS-DRGs that contain fewer than 10 cases, as reflected in the table below. Under the MS-DRGs, we have fewer low-volume DRGs than under the CMS DRGs because we no longer have separate MS-DRGs for patients aged 0 to 17 years. With the exception of newborns, we previously separated some MS-DRGs based on whether the patient was age 0 to 17 years or age 17 years and older. Other than the age split, cases grouping to these MS-DRGs are identical. The MS-DRGs for patients aged 0 to 17 years generally have very low volumes because children are typically ineligible for Medicare. In the past, we have found that the low volume of cases for the pediatric MS-DRGs could lead to significant year-to-year instability in their relative weights. Although we have always encouraged non-Medicare payers to develop weights applicable to their own patient populations, we have received frequent complaints from providers about the use of the Medicare relative weights in the pediatric population. We believe that eliminating this age split in the MS-DRGs will provide more stable payment for pediatric cases by determining their payment using adult cases that are much higher in total volume. Newborns are unique and require separate MS-DRGs that are not mirrored in the adult population. Therefore, it remains necessary to retain separate MS-DRGs for newborns. All of the low-volume MS-DRGs listed below are for newborns. For FY 2016, because we do not have sufficient MedPAR data to set accurate and stable cost relative weights for the following low-volume MS-DRGs, as we proposed, we computed relative weights for the low-volume MS-DRGs by adjusting their final FY 2015 relative weights by the percentage change in the average weight of the cases in other MS-DRGs. The crosswalk table is shown below:
Accordingly, charges for allogeneic bone marrow transplants are, in fact, included in the MS-DRG relative weights calculation, in the “Blood and Blood Products” CCR. That is, for claims that group into MS-DRG 014, CMS includes the acquisition charges in the blood charges and uses the Blood and Blood Products CCR to adjust those charges to cost. Therefore, contrary to the concern expressed by the first commenter, the relative weight for MS-DRG 014 does reflect costs and charges associated with revenue code 0819, and claims containing revenue code 0819 are not systematically deleted from the dataset. In this final rule and for subsequent rules, we are modifying the crosswalk table for the entry of the Blood and Blood Products cost center group to include revenue code 0819, but we are specifying that only the charges associated with MS-DRG 014 are mapped to the Blood and Blood Products cost center. We are continuing to exclude other 081x revenue codes from the crosswalk table, as these codes are associated with Organ Acquisition, which are otherwise
Regarding the comment which stated that some hospitals report costs and charges related to stem cell transplantation on lines 62 or 63 of the Medicare cost report Form CMS-2552-10, while other hospitals report these costs and charges on line 112, “Other Organ Acquisition,” we note that because the charges associated with revenue code 0819 are being mapped by CMS to the Blood and Blood Products cost centers from line 62 (Whole Blood and Packed Red Blood Cells) and line 63 (Blood Storing, Processing, and Transfusions), the appropriate cost centers for hospitals to report the attending costs of allogeneic bone marrow/stem cell transplants are lines 62 and 63 of CMS Form-2552-10. (The cost report instructions for Worksheet A in the Provider Reimbursement Manual (PRM), Part II (Pub. 15-2, Chapter 40, Section 4013, state that hospitals are to include on line 62 “the direct expenses incurred in obtaining blood directly from donors as well as obtaining whole blood, packed red blood cells, and blood derivatives,” and “the processing fee charged by suppliers.” We also note that line 112, along with the other organ transplant lines 105 through 111, are excluded from the calculation of the CCRs and the IPPS relative weights (and therefore are not listed on the crosswalk table). Consequently, any costs related to charges billed under revenue code 0819 that are reported on line 112 would not be captured in the MS-DRG relative weight calculations.
Regarding the commenter's concern that donor related costs are not being properly reported on the Medicare cost report, and that CMS should undertake a review of where and how donor related services reported through revenue code 0819 are being accounted for by hospitals on the cost reports, we believe this is related to overall inconsistencies in cost reporting, particularly with nonstandard cost centers, which we discuss in section II.E.2. of this final rule. As we state in response to comments received in that section, we appreciate the comments that stakeholders have submitted and will continue to explore ways in which CMS can improve the accuracy of the cost report data and the calculation of CCRs used in the cost estimation process. To the extent possible, we will continue to seek stakeholder input in an effort to limit the impact on hospitals.
Regarding the commenter's concerns that there are no donor source codes under ICD-10-PCS, we note that the donor source is an integral part of all transplant and transfusion codes within ICD-10-PCS. Donor source information is captured in the seventh character qualifiers. For example, the root term “Transplantation” provides the following seventh character qualifier values as options to describe donor source: Syngeneic (live related); Allogeneic (live non-related); and Zooplastic (animal). We note that bone marrow transplant procedures are coded to the root operation “Transfusion” as stated in the ICD-10-PCS Reference Manual (which is available on the CMS Web site at:
We are finalizing the methodology for recalibration of the MS-DRG relative weights specified in this final rule for FY 2016 as proposed.
Since 2011, CMS has been working to develop and test models of bundling Medicare payments under the authority of section 1115A of the Act. Through these models, CMS plans to evaluate whether bundled payments result in higher quality and more coordinated care at a lower cost to Medicare. CMS is currently testing the Bundled Payments for Care Improvement (BPCI) initiative. Under this initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care.
The BPCI initiative is comprised of four related payment models, which link payments for multiple services that Medicare beneficiaries receive during an episode of care into a bundled payment. Episodes of care under the BPCI initiative begin with either (1) an inpatient hospital stay or (2) postacute care services following a qualifying inpatient hospital stay. More information on the four models under the BPCI initiative can be found on the CMS Center for Medicare and Medicaid Innovation's Web site at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24414 through 24418), we presented a discussion of the models in the BPCI initiative and solicited public comments regarding policy and operational issues related to a potential expansion of the BPCI initiative in the future. Section 1115A(c) of the Act, as added by section 3021 of the Affordable Care Act, provides the Secretary with the authority to expand through rulemaking the duration and scope of a model that is being tested under section 1115A(b) of the Act, such as the BPCI initiative (including implementation on a nationwide basis), if the following findings are made, taking into account the evaluation of the model under section 1115A(b)(4) of the Act: (1) The Secretary determines that the expansion is expected to either reduce Medicare spending without reducing the quality of care or improve the quality of patient care without increasing spending; (2) the CMS Chief Actuary certifies that the expansion would reduce (or would not result in any increase in) net Medicare program spending; and (3) the Secretary determines that the expansion would not deny or limit the coverage or provision of Medicare benefits. The decision of whether or not to expand will be made by the Secretary in coordination with CMS and the Office of the Chief Actuary based on whether findings about the initiative meet the statutory criteria for expansion under section 1115A(c) of the Act. Given that further evaluation of the BPCI initiative is needed to determine its impact on both Medicare cost and quality of care, we did not propose an expansion of any models within the initiative or any policy changes associated with it in the FY 2016 IPPS/LTCH PPS proposed rule.
Consistent with our continuing commitment to engaging stakeholders in CMS' work, we sought public comments on a variety of issues to broaden and deepen our understanding of the important issues and challenges regarding bundled payments in the current health care marketplace. Among other subject-matter areas, we sought public comments on the scope of any expansion, episode definitions, bundled payment amounts, data needs, and the use of health information technology. In response to our solicitation, we received over 75 timely and informative public comments suggesting matters to consider in a potential future expansion of the BPCI initiative, including the evaluation of the BPCI models, further testing of the BPCI initiative, target pricing methodologies, data collection and reporting, quality measures, episode definitions, payment methodologies, and precedence rules. We appreciate the commenters' views and recommendations. We will consider the public comments we received if the BPCI initiative is expanded in the future through rulemaking.
Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that a new medical service or technology may be considered for new technology add-on payment if, based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate. We note that, beginning with discharges occurring in FY 2008, CMS transitioned from CMS-DRGs to MS-DRGs.
The regulations at 42 CFR 412.87 implement these provisions and specify three criteria for a new medical service or technology to receive the additional payment: (1) The medical service or
Under the first criterion, as reflected in § 412.87(b)(2), a specific medical service or technology will be considered “new” for purposes of new medical service or technology add-on payments until such time as Medicare data are available to fully reflect the cost of the technology in the MS-DRG weights through recalibration. We note that we do not consider a service or technology to be new if it is substantially similar to one or more existing technologies. That is, even if a technology receives a new FDA approval, it may not necessarily be considered “new” for purposes of new technology add-on payments if it is “substantially similar” to a technology that was approved by FDA and has been on the market for more than 2 to 3 years. In the FY 2006 IPPS final rule (70 FR 47351) and the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 and 43814), we explained our policy regarding substantial similarity in detail.
Under the second criterion, § 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the MS-DRG prospective payment rate otherwise applicable to the discharge involving the new medical services or technologies must be assessed for adequacy. Under the cost criterion, consistent with the formula specified in section 1886(d)(5)(K)(ii)(I) of the Act, to assess the adequacy of payment for a new technology paid under the applicable MS-DRG prospective payment rate, we evaluate whether the charges for cases involving the new technology exceed certain threshold amounts. We update the thresholds in Table 10 of each final rule that apply for the upcoming fiscal year. Table 10 that was released with the FY 2015 IPPS/LTCH PPS final rule contains the final thresholds that we used to evaluate applications for new medical service and new technology add-on payments for FY 2016. We refer readers to the CMS Web site at:
In the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917), we discussed the issue of whether the Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule at 45 CFR parts 160 and 164 applies to claims information that providers submit with applications for new medical service and new technology add-on payments. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51573) for complete information on this issue.
Under the third criterion, § 412.87(b)(1) of our existing regulations provides that a new technology is an appropriate candidate for an additional payment when it represents an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. For example, a new technology represents a substantial clinical improvement when it reduces mortality, decreases the number of hospitalizations or physician visits, or reduces recovery time compared to the technologies previously available. (We refer readers to the September 7, 2001 final rule for a more detailed discussion of this criterion (66 FR 46902).)
The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Under § 412.88, if the costs of the discharge (determined by applying cost-to-charge ratios (CCRs) as described in § 412.84(h)) exceed the full DRG payment (including payments for IME and DSH, but excluding outlier payments), Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology or medical service (if the estimated costs for the case including the new technology or medical service exceed Medicare's payment); or (2) 50 percent of the difference between the full DRG payment and the hospital's estimated cost for the case. Unless the discharge qualifies for an outlier payment, the additional Medicare payment is limited to the full MS-DRG payment plus 50 percent of the estimated costs of the new technology or new medical service.
Section 503(d)(2) of Public Law 108-173 provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, in accordance with section 503(d)(2) of Public Law 108-173, add-on payments for new medical services or technologies for FY 2005 and later years have not been subjected to budget neutrality.
In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our regulations at § 412.87 to codify our longstanding practice of how CMS evaluates the eligibility criteria for new medical service or technology add-on payment applications. That is, we first determine whether a medical service or technology meets the newness criterion, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. We amended § 412.87(c) to specify that all applicants for new technology add-on payments must have FDA approval or clearance for their new medical service or technology by July 1 of each year prior to the beginning of the fiscal year that the application is being considered.
The Council on Technology and Innovation (CTI) at CMS oversees the agency's cross-cutting priority on coordinating coverage, coding and payment processes for Medicare with respect to new technologies and procedures, including new drug therapies, as well as promoting the exchange of information on new technologies and medical services between CMS and other entities. The CTI, composed of senior CMS staff and clinicians, was established under section 942(a) of Public Law 108-173. The Council is co-chaired by the Director of the Center for Clinical Standards and Quality (CCSQ) and the Director of the Center for Medicare (CM), who is also designated as the CTI's Executive Coordinator.
The specific processes for coverage, coding, and payment are implemented by CM, CCSQ, and the local claims-payment contractors (in the case of local coverage and payment decisions). The CTI supplements, rather than replaces, these processes by working to assure that all of these activities reflect the agency-wide priority to promote high-quality, innovative care. At the same time, the CTI also works to streamline, accelerate, and improve coordination of these processes to ensure that they remain up to date as new issues arise.
To improve the understanding of CMS' processes for coverage, coding, and payment and how to access them, the CTI has developed an “Innovator's Guide” to these processes. The intent is to consolidate this information, much of which is already available in a variety of CMS documents and in various places on the CMS Web site, in a user-friendly format. This guide was published in 2010 and is available on the CMS Web site at:
As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we invite any product developers or manufacturers of new medical services or technologies to contact the agency early in the process of product development if they have questions or concerns about the evidence that would be needed later in the development process for the agency's coverage decisions for Medicare.
The CTI aims to provide useful information on its activities and initiatives to stakeholders, including Medicare beneficiaries, advocates, medical product manufacturers, providers, and health policy experts. Stakeholders with further questions about Medicare's coverage, coding, and payment processes, or who want further guidance about how they can navigate these processes, can contact the CTI at
We note that applicants for add-on payments for new medical services or technologies for FY 2017 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement, along with a significant sample of data to demonstrate that the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be posted as it becomes available on the CMS Web site at:
Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of Public Law 108-173, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. The process for evaluating new medical service and technology applications requires the Secretary to—
• Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries;
• Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending;
• Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement; and
• Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS.
In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies for FY 2016 prior to publication of the FY 2016 IPPS/LTCH PPS proposed rule, we published a notice in the
Approximately 95 individuals registered to attend the town hall meeting in person, while additional individuals listened over an open telephone line. We also live-streamed the town hall meeting and posted the town hall on the CMS YouTube Web page at:
In response to the published notice and the New Technology Town Hall meeting, we received written comments regarding the applications for FY 2016 new technology add-on payments. We summarized these comments in the preamble of the proposed rule or, if applicable, indicated that there were no comments received, at the end of each discussion of the individual applications in the proposed rule. We are not reprinting those summations in this final rule and refer readers to the FY 2016 IPPS/LTCH PPS proposed rule for this discussion.
We also received public comments in response to the proposed rule relating to topics such as marginal cost factors for new technology add-on payments, mapping new technologies to the appropriate MS-DRG, additional criteria for substantial clinical improvement, and changing the newness criterion. Because we did not request public comments nor propose to make any changes to any of the issues above, we are not summarizing these public comments nor responding to them in this final rule.
As discussed in section II.G.1.a. of the preamble of this final rule, HIPAA covered entities are required, as of October 1, 2015, to use the ICD-10 coding system (ICD-10-PCS codes for procedures and ICD-10-CM codes for diagnosis), instead of the ICD-9-CM coding system, to report diagnoses and procedures for Medicare hospital inpatient services provided to Medicare beneficiaries as classified under the MS-DRG system and paid for under the IPPS. HIPAA covered entities must continue to use ICD-9-CM codes and coding guidelines through September 30, 2015. We refer readers to section II.G.1.a. of the preamble of this final rule for a complete discussion of the adoption of the ICD-10 coding system.
As part of the transition to the ICD-10-CM/PCS coding system, at the September 23-24, 2014 ICD-10 Coordination and Maintenance Committee meeting, CMS received a request to create a new section within the ICD-10-PCS to capture new medical services and technologies that might not appropriately align with the current structure of the ICD-10-PCS codes. Examples of these types of new medical services and technologies included drugs, biologicals, and newer medical devices being tested in clinical trials that are not currently captured within the ICD-9-CM or the ICD-10-PCS. The requestor indicated that there may be a need to identify and report these technologies and inpatient services for purposes of approving new technology add-on payment applications and initiating subsequent new technology add-on payments based on approval or tracking and analyzing the use of these new technologies and services. Although several commenters have opposed including these types of technologies and services within the current structure of the ICD-10-PCS codes during past ICD-10 Coordination and Maintenance Committee meetings, as well as in public comments, CMS has evaluated these suggestions and considered them to be valid. As a result, CMS has created a new component within the ICD-10-PCS codes, labeled Section “X” codes, to identify and describe these new technologies and services. The new Section “X” codes identify new medical services and technologies that are not usually captured by coders, or that do not usually have the desired specificity within the current ICD-10-PCS structure required to capture the use of these new services and technologies. As mentioned earlier, examples of these types of services and technologies include specific drugs, biologicals, and newer medical devices being tested in clinical trials. The new Section “X” codes within the ICD-10-PCS structure will be implemented on October 1, 2015, and will be used to identify new technologies and medical services approved under the new technology add-on payment policy for payment purposes beginning October 1, 2015. The Section “X” codes also will be used to identify procedures or services that are not commonly captured within the definitions and descriptions included in most coding systems or procedures or services that require definitions and descriptions that contain greater detail or specificity, which may be needed for a variety of health care data needs. An overview of Section “X” codes was provided at the March 18-19, 2015 ICD-10 Coordination and Maintenance Committee meeting. We also have posted an article on the CMS Web site that explains the creation and use of ICD-10-PCS Section “X” codes. This article can be found on the CMS 2016 ICD-10-PCS and GEMs Web site at
In addition, on June 18, 2015, CMS held a National ICD-10 Teleconference (Preparing for Implementation and New ICD-10-PCS Section “X” MLN Connects National Provider Call) to explain the Section “X” codes under the ICD-10. The agenda, slides, and audio from this teleconference are posted on the CMS Web site at:
As stated earlier, the ICD-10-PCS includes a new section containing the new Section “X” codes, which will be used beginning with discharges occurring on or after October 1, 2015. Decisions regarding changes to ICD-10-PCS Section “X” codes will be handled in the same manner as the decisions for all of the other ICD-10-PCS code changes. That is, proposals to create, delete, or revise Section “X” codes under the ICD-10-PCS structure will be referred to the ICD-10 Coordination and Maintenance Committee. In addition, several of the new medical services and technologies that have been, or may be, approved for new technology add-on payments may now, and in the future, be assigned a Section “X” code within the structure of the ICD-10-PCS. The FY 2016 ICD-10-PCS, which includes the new Section “X” codes, was posted in June 2015 via the Internet on the CMS Web site at:
Another commenter recognized the need to conserve code values within the regular ICD-10-PCS sections, as well as the exponential effect that adding a new value has on the large number of codes, and noted the importance of using Section “X” codes specifically for certain types of new technologies. The commenter stated that Section “X” codes are especially important to identify drugs and intraoperative supplies related to MS-DRG new technology add-on payments.
BTG International, Inc. submitted an application for new technology add-on payments for Glucarpidase (Voraxaze®) for FY 2013. Glucarpidase is used in the treatment of patients who have been diagnosed with toxic methotrexate (MTX) concentrations as of result of renal impairment. The administration of Glucarpidase causes a rapid and sustained reduction of toxic MTX concentrations.
Voraxaze® was approved by the FDA on January 17, 2012. Beginning in 1993, certain patients could obtain expanded access for treatment use to Voraxaze® as an investigational drug. Since 2007, the applicant has been authorized to recover the costs of making Voraxaze® available through its expanded access program. We describe expanded access for treatment use of investigational drugs and authorization to recover certain costs of investigational drugs in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53346 through 53350). Voraxaze® was available on the market in the United States as a commercial product to the larger population as of April 30, 2012. In the FY 2013 IPPS/LTCH PPS proposed rule (77 FR 27936 through 27939), we expressed concerns about whether Voraxaze® could be considered new for FY 2013. After consideration of all of the public comments received, in the FY 2013 IPPS/LTCH PPS final rule, we stated that we considered Voraxaze® to be “new” as of April 30, 2012, which is the date of U.S. market availability.
After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology payments for Voraxaze® and consideration of the public comments we received in response to the FY 2013 IPPS/LTCH PPS proposed rule, we approved Voraxaze® for new technology add-on payments for FY 2013. Cases of Voraxaze® are identified with ICD-9-CM procedure code 00.95 (Injection or infusion of glucarpidase). As stated in the FY 2015 IPPS/LTCH PPS final rule correction notice (79 FR 59679), the cost of Voraxaze® is $23,625 per vial. The applicant stated that an average of four vials is used per Medicare beneficiary. Therefore, the average cost per case for Voraxaze® is $94,500 ($23,625 × 4). Under § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the technology or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for Voraxaze® is $47,250 per case.
As stated above, the new technology add-on payment regulations provide that a medical service or technology may be considered new within 2 or 3 years after the point at which data begin to become available reflecting the ICD-9-CM code assigned to the new service or technology (§ 412.87(b)(2)). Our practice has been to begin and end new technology add-on payments on the basis of a fiscal year, and we have generally followed a guideline that uses a 6-month window before and after the start of the fiscal year to determine whether to extend the new technology add-on payment for an additional fiscal year. In general, we extend add-on payments for an additional year only if the 3-year anniversary date of the product's entry on the market occurs in the latter half of the fiscal year (70 FR 47362).
With regard to the newness criterion for Voraxaze®, we considered the beginning of the newness period to commence when Voraxaze® was first made available on the U.S. market on April 30, 2012. Because the 3-year anniversary date for Voraxaze® occurred in the latter half of FY 2015 (April 30, 2015), in the FY 2015 IPPS/LTCH PPS final rule, we continued new technology add-on payments for this technology for FY 2015 (79 FR 49918). However, for FY 2016, the 3-year anniversary date of the product's entry on the U.S. market (April 30, 2015) occurred prior to the beginning of FY 2016. Therefore, we proposed to discontinue new technology add-on payments for Voraxaze® for FY 2016. We invited public comments on this proposal.
After consideration of the public comments we received, we are discontinuing new technology add-on payments for Voraxaze® for FY 2016. The 3-year anniversary date of the
Cook® Medical submitted an application for new technology add-on payments for the Zenith® Fenestrated Abdominal Aortic Aneurysm (AAA) Endovascular Graft (Zenith® F. Graft) for FY 2013. The applicant stated that the current treatment for patients who have had an AAA is an endovascular graft. The applicant explained that the Zenith® F. Graft is an implantable device designed to treat patients who have an AAA and who are anatomically unsuitable for treatment with currently approved AAA endovascular grafts because of the length of the infrarenal aortic neck. The applicant noted that, currently, an AAA is treated through an open surgical repair or medical management for those patients not eligible for currently approved AAA endovascular grafts.
With respect to newness, the applicant stated that FDA approval for the use of the Zenith® F. Graft was granted on April 4, 2012. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53360 through 53365), we stated that because the Zenith® F. Graft was approved by the FDA on April 4, 2012, we believed that the Zenith® F. Graft met the newness criterion as of that date.
After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology add-on payments for the Zenith® F. Graft and consideration of the public comments we received in response to the FY 2013 IPPS/LTCH PPS proposed rule, we approved the Zenith® F. Graft for new technology add-on payments for FY 2013. Cases involving the Zenith® F. Graft that are eligible for new technology add-on payments currently are identified by ICD-9-CM procedure code 39.78 (Endovascular implantation of branching or fenestrated graft(s) in aorta). In the application, the applicant provided a breakdown of the costs of the Zenith® F. Graft. The total cost of the Zenith® F. Graft utilizing bare metal (renal) alignment stents was $17,264. Of the $17,264 in costs for the Zenith® F. Graft, $921 is for components that are used in a standard Zenith AAA Endovascular Graft procedure. Because the costs for these components are already reflected within the MS-DRGs (and are no longer “new”), in the FY 2013 IPPS/LTCH PPS final rule, we stated that we did not believe it is appropriate to include these costs in our calculation of the maximum cost to determine the maximum add-on payment for the Zenith® F. Graft. Therefore, the total maximum cost for the Zenith® F. Graft is $16,343 ($17,264−$921). Under § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum add-on payment for a case involving the Zenith® F. Graft is $8,171.50.
With regard to the newness criterion for the Zenith® F. Graft, we considered the beginning of the newness period to commence when the Zenith® F. Graft was approved by the FDA on April 4, 2012. Because the 3-year anniversary date of the entry of the Zenith® F. Graft on the U.S. market occurred in the second half of FY 2015 (April 4, 2015), in the FY 2015 IPPS/LTCH PPS final rule, we continued new technology add-on payments for this technology for FY 2015 (79 FR 49922). However, for FY 2016, the 3-year anniversary date of the product's entry on the U.S. market (April 4, 2015) occurred prior to the beginning of FY 2016. Therefore, we proposed to discontinue new technology add-on payments for the Zenith® F. Graft for FY 2016. We invited public comments on this proposal.
We did not receive any public comments on our proposal. Therefore, as we proposed, we are discontinuing new technology add-on payments for the Zenith® F. Graft technology for FY 2016. The 3-year anniversary of the product's entry onto the U.S. market occurred prior to the beginning of FY 2016 and, therefore, the technology is not eligible for new technology add-on payments for FY 2016 because the technology will no longer meet “newness” criterion.
CSL Behring submitted an application for new technology add-on payments for Kcentra
Kcentra
In the FY 2014 IPPS/LTCH PPS proposed rule (78 FR 27538), we noted that we were concerned that Kcentra
After evaluation of the newness, cost, and substantial clinical improvement criteria for new technology add-on payments for Kcentra
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50579), we stated that new technology add-on payments for Kcentra
Section 1886(d)(5)(K)(i) of the Act requires the Secretary to establish a mechanism to recognize the costs of new medical services and technologies under the payment system established under this subsection beginning with discharges on or after October 1, 2001. We believe that it is reasonable to interpret this requirement to mean that the payment mechanism established by the Secretary recognizes only costs for those items that would otherwise be paid based on the prospective payment system (that is, “the payment system established under this subsection”). As noted above, under section 1886(d)(1)(A)(iii) of the Act, the national adjusted DRG prospective payment rate is the amount of payment for the operating costs of inpatient hospital services, as defined in section 1886(a)(4) of the Act, for discharges on or after April 1, 1988. We understand this to mean that a new medical service or technology must be an operating cost of inpatient hospital services paid based on the prospective payment system, and not excluded from such costs, in order to be eligible for the new technology add-on payment. We pointed out that new technology add-on payments are based on the operating costs per case relative to the prospective payment rate as described in § 412.88. Therefore, we believe that new technology add-on payments are appropriate only when the new technology is an operating cost of inpatient hospital services and are not appropriate when the new technology is excluded from such costs.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50579), we stated that we believe that hospitals may only receive new technology add-on payments for discharges where Kcentra
With regard to the newness criterion for Kcentra
Because we are adopting the ICD-10 coding system effective October 1, 2015, for FY 2016, we proposed to identify and make new technology add-on payments for cases involving Kcentra
We invited public comments on these proposals.
We did not receive any public comments on the coding and payment for Kcentra
After consideration of the public comments we received, we are finalizing our proposal to continue new technology add-on payments for the Kcentra
Second Sight Medical Products, Inc. submitted an application for new technology add-on payments for the Argus® II Retinal Prosthesis System (Argus® II System) for FY 2014. The Argus® II System is an active implantable medical device that is intended to provide electrical stimulation of the retina to induce visual perception in patients who are profoundly blind due to retinitis pigmentosa (RP). These patients have bare or no light perception in both eyes. The system employs electrical signals to bypass dead photo-receptor cells and stimulate the overlying neurons according to a real-time video signal that is wirelessly transmitted from an externally worn video camera. The Argus® II implant is intended to be implanted in a single eye, typically the worse-seeing eye. Currently, bilateral implants are not intended for this technology. According to the applicant, the surgical implant procedure takes approximately 4 hours and is performed under general anesthesia.
The Argus® II System consists of three primary components: (1) An implant which is an epiretinal prosthesis that is fully implanted on and in the eye (that is, there are no percutaneous leads); (2) external components worn by the user; and (3) a “fitting” system for the clinician that is periodically used to perform diagnostic tests with the system and to custom-program the external unit for use by the patient. We describe these components more fully below.
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These three components work together to stimulate the retina and allow a patient to perceive phosphenes (spots of light), which they then need to learn to interpret. While using the Argus® II System, the video camera on the patient-worn glasses captures a video image. The video camera signal is sent to the VPU, which processes the video camera image and transforms it into electrical stimulation patterns. The electrical stimulation data are then sent to a transmitter coil mounted on the glasses. The transmitter coil sends both data and power via radio-frequency (RF) telemetry to the implanted retinal prosthesis. The implant receives the RF commands and delivers stimulation to the retina via an array of electrodes that is secured to the retina with a retinal tack.
In patients with RP, the photoreceptor cells in the retina, which normally transduce incoming light into an electro-chemical signal, have lost most of their function. The stimulation pulses delivered to the retina via the electrode array of the Argus® II System are intended to mimic the function of these degenerated photoreceptors cells. These pulses induce cellular responses in the remaining, viable retinal nerve cells that travel through the optic nerve to the visual cortex where they are perceived as phosphenes (spots of light). Patients learn to interpret the visual patterns produced by these phosphenes.
With respect to the newness criterion, according to the applicant, the FDA designated the Argus® II System a Humanitarian Use Device in May 2009 (HUD designation #09-0216). The applicant submitted a Humanitarian Device Exemption (HDE) application (#H110002) to the FDA in May 2011 to obtain market approval for the Argus® II System. The HDE was referred to the Ophthalmic Devices Panel of the FDA's Medical Devices Advisory Committee for review and recommendation. At the Panel's meeting held on September 28, 2012, the Panel voted 19 to 0 that the probable benefits of the Argus® II System outweigh the risks of the system for the proposed indication for use. The applicant received the HDE approval from the FDA on February 14, 2013. However, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49924 through 49925), we discussed comments we had received informing CMS that the Argus® II System was not available on the U.S. market until December 20, 2013. The applicant explained that, as part of the lengthy approval process, it was required to submit a request to the Federal Communications Commission (FCC) for a waiver of section 15.209(a) of the FCC rules that would allow the applicant to apply for FCC authorization to utilize this specific RF band. The FCC approved the applicant's waiver request on November 30, 2011. After receiving the FCC waiver of the section 15.209(a) rules, the applicant requested and obtained a required Grant of Equipment Authorization to utilize the specific RF band, which the FCC issued on December 20, 2013. Therefore, the applicant stated that the date the Argus® II System first became available for commercial sale in the United States
Currently there are no other approved treatments for patients diagnosed with severe to profound RP. The Argus® II System has an IDE number of G050001 and is a Class III device. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50580 through 50583), we finalized new ICD-9-CM procedure code 14.81 (Implantation of epiretinal visual prosthesis), which uniquely identifies the Argus® II System. The other two codes finalized by CMS are for removal, revision, or replacement of the device.
After evaluation of the new technology add-on payment application and consideration of public comments received, we concluded that the Argus® II System met all of the new technology add-on payment policy criteria. Therefore, we approved the Argus® II System for new technology add-on payments in FY 2014 (78 FR 50580 through 50583). Cases involving the Argus® II System that are eligible for new technology add-on payments currently are identified by ICD-9-CM procedure code 14.81. We note that section 1886(d)(5)(K)(i) of the Act requires that the Secretary establish a mechanism to recognize the costs of new medical services or technologies under the payment system established under that subsection, which establishes the system for paying for the operating costs of inpatient hospital services. The system of payment for capital costs is established under section 1886(g) of the Act, which makes no mention of any add-on payments for a new medical service or technology. Therefore, it is not appropriate to include capital costs in the add-on payments for a new medical service or technology. In the application, the applicant provided a breakdown of the costs of the Argus® II System. The total operating cost of the Argus® II System is $144,057.50. Under § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum add-on payment for a case involving the Argus® II System for FY 2014 was $72,028.75.
With regard to the newness criterion for the Argus® II System, we considered the beginning of the newness period to commence when the Argus® II System became available on the U.S. market on December 20, 2013. Because the 3-year anniversary date of the entry of the Argus® II System on the U.S. market will occur in the first half of FY 2017 (December 23, 2016), we proposed to continue new technology add-on payments for this technology for FY 2016.
Because we are adopting the ICD-10 coding system beginning October 1, 2015, we proposed to identify and make new technology add-on payments for cases involving the Argus® II System when one of the following ICD-10-PCS procedure codes is reported: 08H005Z (Insertion of epiretinal visual prosthesis into right eye, open approach); or 08H105Z (Insertion of epiretinal visual prosthesis into left eye, open approach). We stated that the maximum new technology add-on payment for a case involving the Argus® II System would remain at $72,028.75 for FY 2016.
We invited public comments on our proposals.
We did not receive any public comments on our proposal to continue new technology add-on payments for the Argus® II System for FY 2016 or on the coding and payment of this technology. Therefore, we are finalizing our proposal to continue new technology add-on payments for the Argus® II System for FY 2016. Because we are adopting the ICD-10 coding system beginning October 1, 2015, we will identify and make new technology add-on payments for cases involving the Argus® II System when ICD-10-PCS procedure code 08H005Z or 08H105Z is reported. The maximum new technology add-on payment for a case involving the Argus® II System remains at $72,028.75 for FY 2016.
Cook® Medical submitted an application for new technology add-on payments for the Zilver® PTX® Drug Eluting Peripheral Stent (Zilver® PTX®) for FY 2014. The Zilver® PTX® is intended for use in the treatment of peripheral artery disease (PAD) of the above-the-knee femoropopliteal arteries (superficial femoral arteries). According to the applicant, the stent is percutaneously inserted into the artery(s), usually by accessing the common femoral artery in the groin. The applicant stated that an introducer catheter is inserted over the wire guide and into the target vessel where the lesion will first be treated with an angioplasty balloon to prepare the vessel for stenting. The applicant indicated that the stent is self-expanding, made of nitinol (nickel titanium), and is coated with the drug Paclitaxel. Paclitaxel is a drug approved for use as an anticancer agent and for use with coronary stents to reduce the risk of renarrowing of the coronary arteries after stenting procedures.
The applicant received FDA approval on November 15, 2012, for the Zilver® PTX®. The applicant maintains that the Zilver® PTX® is the first drug-eluting stent used for superficial femoral arteries. The technology is currently described by ICD-9-CM procedure code 00.60 (Insertion of drug-eluting stent(s) of the superficial femoral artery).
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50583 through 50585), after evaluation of the new technology add-on payment application and consideration of the public comments received, we approved the Zilver® PTX® for new technology add-on payments in FY 2014. Cases involving the Zilver® PTX® that are eligible for new technology add-on payments are identified by ICD-9-CM procedure code 00.60. As explained in the FY 2014 IPPS/LTCH PPS final rule, to determine the amount of Zilver® PTX® stents per case, instead of using the amount of stents used per case based on the ICD-9-CM codes, the applicant used an average of 1.9 stents per case based on the Zilver® PTX® Global Registry Clinical Study. The applicant stated in its application that the anticipated cost per stent is approximately $1,795. Therefore, cases of the Zilver® PTX® would incur an average cost per case of $3,410.50 ($1,795 × 1.9). Under § 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum add-on payment for a case of the Zilver® PTX® was $1,705.25 for FY 2014.
With regard to the newness criterion for the Zilver® PTX®, we considered the beginning of the newness period to commence when the Zilver® PTX® was approved by the FDA on November 15, 2012. Because the 3-year anniversary date of the entry of the Zilver® PTX® on the U.S. market occurred after FY 2015 (November 15, 2015), in the FY 2015 IPPS/LTCH PPS final rule, we continued new technology add-on payments for this technology for FY 2015 (79 FR 49925). However, for FY 2016, the 3-year anniversary date of the product's entry on the U.S. market (November 15, 2015) occurs in the first half of FY 2016. Therefore, we proposed to discontinue new technology add-on payments for the Zilver® PTX® for FY 2016. We invited public comments on this proposal.
After consideration of the public comment we received, we are finalizing our proposal to discontinue new technology add-on payments for the Zilver® PTX® for FY 2016 because the technology will no longer be considered new.
CardioMEMS, Inc. submitted an application for new technology add-on payment for FY 2015 for the CardioMEMS
The CardioMEMS
The hemodynamic data, including a detailed waveform, are transmitted to a secure Web site that serves as the Pulmonary Artery Pressure Database, so that information regarding PA pressure is available to the physician or nurse at any time via the Internet. Interpretation of trend data allows the clinician to make adjustments to therapy and can be used along with heart failure signs and symptoms to adjust medications.
The applicant believed that a large majority of patients receiving the sensor would be admitted as an inpatient to a hospital with a diagnosis of acute or chronic heart failure, which is typically described by ICD-9-CM diagnosis code 428.43 (Acute on chronic combined systolic and diastolic heart failure) and the sensor would be implanted during the inpatient stay. The applicant stated that for safety considerations, a small portion of these patients may be discharged and the sensor would be implanted at a future date in the hospital outpatient setting. In addition, there would likely be a group of patients diagnosed with chronic heart failure who are not currently hospitalized, but who have been hospitalized in the past few months for which the treating physician believes that regular pulmonary artery pressure readings are necessary to optimize patient management. Depending on the patient's status, the applicant stated that these patients may have the sensor implanted in the hospital inpatient or outpatient setting.
The applicant received FDA approval on May 28, 2014. The CardioMEMS
After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology payments for the CardioMEMS
With regard to the newness criterion for the CardioMEMS
Because we are adopting the ICD-10 coding system beginning October 1, 2015, for FY 2016, we proposed to identify and make new technology add-on payments for cases involving the CardioMEMS
We invited public comments on our proposals.
After consideration of the public comments we received, we are finalizing our proposal to continue new technology add-on payments for the
Abbott Vascular submitted an application for new technology add-on payments for the MitraClip® System for FY 2015. The MitraClip® System is a transcatheter mitral valve repair system that includes a MitraClip® device implant, a Steerable Guide Catheter, and a Clip Delivery System. It is designed to perform reconstruction of the insufficient mitral valve for high-risk patients who are not candidates for conventional open mitral valve repair surgery.
Mitral regurgitation (MR), also referred to as mitral insufficiency or mitral incompetence, occurs when the mitral valve fails to close completely causing the blood to leak or flow backwards (regurgitate) into the left ventricle. If the amount of blood that leaks backwards into the left ventricle is minimal, then intervention is usually not necessary. However, if the amount of blood that is regurgitated becomes significant, this can cause the left ventricle to work harder to meet the body's need for oxygenated blood. Severity levels of MR can range from grade 1+ through grade 4+. If left untreated, severe MR can lead to heart failure and death. The American College of Cardiology (ACC) and the American Heart Association (AHA) issued practice guidelines in 2006 that recommended intervention for moderate/severe or severe MR (grade 3+ to 4+). The applicant stated that the MitraClip® System is “indicated for percutaneous reduction of significant mitral regurgitation . . . in patients who have been determined to be at prohibitive risk for mitral value surgery by a heart team, which includes a cardiac surgeon experienced in mitral valve surgery and a cardiologist experienced in mitral valve disease and in whom existing comorbidities would not preclude the expected benefit from correction of the mitral regurgitation.”
The MitraClip® System mitral valve repair procedure is based on the double-orifice surgical repair technique that has been used as a surgical technique in open chest, arrested-heart surgery for the treatment of MR since the early 1990s. According to the applicant, in utilizing “the double-orifice technique, a portion of the anterior leaflet is sutured to the corresponding portion of the posterior leaflet using standard techniques and forceps and suture, creating a point of permanent cooptation (“approximation”) of the two leaflets. When the suture is placed in the middle of the valve, the valve will have a functional double orifice during diastole.”
With regard to the newness criterion, the MitraClip® System received a premarket approval from the FDA on October 24, 2013. The MitraClip® System is indicated “for the percutaneous reduction of significant symptomatic mitral regurgitation (MR >= 3+) due to primary abnormality of the mitral apparatus (degenerative MR) in patients who have been determined to be at prohibitive risk for mitral valve surgery by a heart team, which includes a cardiac surgeon experienced in mitral valve surgery and a cardiologist experienced in mitral valve disease, and in whom existing comorbidities would not preclude the expected benefit from reduction of the mitral regurgitation.” The MitraClip® System became immediately available on the U.S. market following FDA approval. The MitraClip® System is a Class III device, and has an investigational device exemption (IDE) for the EVEREST study (Endovascular Valve Edge-to-Edge Repair Study)—IDE G030061, and for the COAPT study (Cardiovascular Outcomes Assessment of the MitraClip Percutaneous Therapy for Health Failure Patients with Functional Mitral Regurgitation)—IDE G120024. Effective October 1, 2010, ICD-9-CM procedure code 35.97 (Percutaneous mitral valve repair with implant) was created to identify and describe the MitraClip® System technology.
On August 7, 2014, CMS issued a National Coverage Decision (NCD) concerning Transcatheter Mitral Valve Repair procedures. We refer readers to the CMS Web site at:
After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology payments for the MitraClip® System and consideration of the public comments we received in response to the FY 2015 IPPS/LTCH PPS proposed rule, we approved the MitraClip® System for new technology add-on payments for FY 2015 (79 FR 49946). As discussed in the FY 2015 IPPS/LTCH PPS final rule, this approval is on the basis of using the MitraClip® consistent with the NCD. Cases involving the MitraClip® System that are eligible for the new technology add-on payments are currently identified by ICD-9-CM procedure code 35.97. The average cost of the MitraClip® System is reported as $30,000. Under section 412.88(a)(2), we limit new technology add-on payments to the lesser of 50 percent of the average cost of the device or 50 percent of the costs in excess of the MS-DRG payment for the case. As a result, the maximum new technology add-on payment for a case involving the MitraClip® System is $15,000 for FY 2015.
With regard to the newness criterion for the MitraClip® System, we considered the beginning of the newness period to commence when the MitraClip® System was approved by the FDA on October 24, 2013. Because the 3-year anniversary date of the entry of the MitraClip® System on the U.S. market will occur in FY 2017 (October 24, 2016), we proposed to continue new technology add-on payments for this technology for FY 2016.
Because we are adopting the ICD-10 coding system beginning October 1, 2015, we proposed to identify and make new technology add-on payments for cases involving the MitraClip® System using ICD-10-PCS procedure code 02UG3JZ (Supplement mitral valve with synthetic substitute, percutaneous approach). We stated that the maximum
We invited public comments on our proposals.
We did not receive any public comments on the coding and payment of the MitraClip® System for FY 2016.
After consideration of the public comments we received, we are finalizing our proposal to continue new technology add-on payments for the MitraClip® System for FY 2016. Because we are adopting the ICD-10 coding system beginning October 1, 2015, we will identify and make new technology add-on payments for cases involving the MitraClip® System using ICD-10-PCS procedure code 02UG3JZ. The maximum payment for a case involving the MitraClip® System will remain at $15,000 for FY 2016.
NeuroPace, Inc. submitted an application for new technology add-on payments for FY 2015 for the use of the RNS® System. (We note that the applicant submitted an application for new technology add-on payments for FY 2014, but failed to receive FDA approval prior to the July 1 deadline.) Seizures occur when brain function is disrupted by abnormal electrical activity. Epilepsy is a brain disorder characterized by recurrent, unprovoked seizures. According to the applicant, the RNS® System is the first implantable medical device (developed by NeuroPace, Inc.) for treating persons diagnosed with epilepsy whose partial onset seizures have not been adequately controlled with antiepileptic medications. The applicant further stated that, the RNS® System is the first closed-loop, responsive system to treat partial onset seizures. Responsive electrical stimulation is delivered directly to the seizure focus in the brain when abnormal brain activity is detected. A cranially implanted programmable neurostimulator senses and records brain activity through one or two electrode-containing leads that are placed at the patient's seizure focus/foci. The neurostimulator detects electrographic patterns previously identified by the physician as abnormal, and then provides brief pulses of electrical stimulation through the leads to interrupt those patterns. Stimulation is delivered only when abnormal electrocorticographic activity is detected. The typical patient is treated with a total of 5 minutes of stimulation a day. The RNS® System incorporates remote monitoring, which allows patients to share information with their physicians remotely.
With respect to the newness criterion, the applicant stated that some patients diagnosed with partial onset seizures that cannot be controlled with antiepileptic medications may be candidates for the vagus nerve stimulator (VNS) or for surgical removal of the seizure focus. According to the applicant, these treatments are not appropriate for, or helpful to, all patients. Therefore, the applicant believed that there is an unmet clinical need for additional therapies for partial onset seizures. The applicant further stated that the RNS® System addresses this unmet clinical need by providing a novel treatment option for treating persons diagnosed with medically intractable partial onset seizures. The applicant received FDA premarket approval on November 14, 2013.
After evaluation of the newness, costs, and substantial clinical improvement criteria for new technology payments for the RNS® System and consideration of the public comments we received in response to the FY 2015 IPPS/LTCH PPS proposed rule, we approved the RNS® System for new technology add-on payments for FY 2015 (79 FR 49950). Cases involving the RNS® System that are eligible for new technology add-on payments are currently identified using the following ICD-9-CM procedure codes: 01.20 (Cranial implantation or replacement of neurostimulator pulse generator) in combination with 02.93 (Implantation or replacement of intracranial neurostimulator lead(s)). According to the applicant, cases using the RNS® System would incur an anticipated cost per case of $36,950. Under § 412.88(a)(2) of the regulations, we limit new technology add-on payments to the lesser of 50 percent of the average costs of the device or 50 percent of the costs in excess of the MS-DRG payment rate for the case. As a result, the maximum new technology add-on payment for cases involving the RNS® System is $18,475.
With regard to the newness criterion for the RNS® System, we considered the beginning of the newness period to commence when the RNS® System was approved by the FDA on November 14, 2013. Because the 3-year anniversary date of the entry of the RNS® System on the U.S. market will occur in FY 2017 (November 14, 2016), we proposed to continue new technology add-on payments for this technology for FY 2016.
Because we are adopting the ICD-10 coding system beginning October 1, 2015, we proposed to identify and make new technology add-on payments for cases involving the RNS® System using the following ICD-10-PCS procedure code combination: 0NH00NZ (Insertion of neurostimulator generator into skull, open approach) in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach). We stated that the maximum payment for a case involving the RNS® System would remain at $18,475 for FY 2016.
We invited public comments on our proposals.
In addition, the commenter noted a recently published review and opinion in
We did not receive any public comments on the proposed coding and payment of the RNS® System for FY 2016.
After consideration of the public comments we received, we are finalizing our proposal to continue new technology add-on payments for the RNS® System for FY 2016. Because we are adopting the ICD-10 coding system beginning October 1, 2015, we will identify and make new technology add-on payments for cases involving the RNS® System using the following ICD-10-PCS procedure code combination: 0NH00NZ (Insertion of neurostimulator generator into skull, open approach) in combination with 00H00MZ (Insertion of neurostimulator lead into brain, open approach). The maximum payment for a case involving the RNS® System will remain at $18,475 for FY 2016.
We received nine applications for new technology add-on payments for FY 2016. However, two applications, the Angel Medical Guardian® Ischemia Monitoring Device and Ceftazidime Avibactam (AVYCAZ), were withdrawn from consideration for new technology add-on payments for FY 2016 prior to the publication of this final rule. In addition, in accordance with the regulations under § 412.87(c), applicants for new technology add-on payments must have FDA approval of the technology by July 1 of each year prior to the beginning of the fiscal year that the application is being considered. One applicant did not receive FDA approval for its technology, Idarucizumab, by July 1, 2015, and, therefore, is ineligible for consideration for new technology add-on payments for FY 2016. We are not including the descriptions and discussions of these three applications that were included in the FY 2016 proposed rule in this final rule. We note that we did receive public comments on all three of these applications. However, because the applicant either withdrew its application or the technology is ineligible for new technology add-on payments for FY 2016 because the technology did not receive FDA approval by July 1, 2015, we also are not summarizing or responding to these public comments in this final rule. A discussion of the six remaining applications is presented below.
Amgen, Inc. submitted an application for new technology add-on payments for Blinatumomab (BLINCYTO
BLINCYTO
With respect to the newness criterion, the BLINCYTO
In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814), we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments. For a detailed discussion of the criteria for substantial similarity, we refer readers to the FY 2006 IPPS final rule (70 FR 47351 through 47352), and the FY 2010 IPPS/LTCH PPS final rule (74 FR 43813 through 43814).
With regard to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, we stated in the proposed rule our concern that the mechanism of action of the BLINCYTO
With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant maintained that ICD-9-CM diagnosis codes 204.00 (Acute lymphoid leukemia, without mention of having achieved remission) and 204.02 (Acute lymphoid leukemia in relapse) are used to identify patients who may potentially be eligible for treatment using the BLINCYTO
With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant maintained in its application that the standard treatment for patients diagnosed with Ph- R/R B-cell precursor ALL currently requires the use of multiple, intensive chemotherapy treatment drugs in combination to induce remission in order to allow the patient the opportunity to proceed to allogenic hematopoietic stem cell transplant (alloHSCT), which is the next stage in the course of treatment and the only known curative option. The applicant asserted that the BLINCYTO
In summary, we stated in the proposed rule that the BLINCYTO
With regard to CMS' concern that potentially eligible cases involving the BLINCYTO
With regard to CMS' concern that the specific population of patients identified by the applicant that may be eligible for treatment using the BLINCYTO
As we discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24432), with respect to the cost criterion, the applicant researched claims data in the FY 2013 MedPAR file, which contained inpatient hospital discharges from October 1, 2012, to September 30, 2013, and identified cases reporting ICD-9-CM diagnosis codes 204.00 (Acute lymphoid leukemia, without mention of having achieved remission) and 204.02 (Acute lymphoid leukemia in relapse), which represent patients who may potentially be eligible for treatment using the BLINCYTO
Because the applicant was unable to provide a single estimate of the charges that would be avoided by using the BLINCYTO
Under the analysis' first scenario, 50 percent of the charges for drugs incurred by using other technologies were removed in order to exclude the charges associated with the use of these technologies. The applicant determined an average case-weighted threshold amount of $60,278 for the 2,649 Ph- R/R B-cell precursor ALL cases in the 246 MS-DRGs identified using the thresholds in Table 10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant also determined an average case-weighted standardized charge per case of $245,006, or $184,728 above the average case-weighted threshold amount. For the subset of 1,533 cases that mapped to the top 8 MS-DRGs, the applicant determined an average case-weighted threshold amount of $65,478 using the threshold in Table 10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant also determined an average case-weighted standardized charge per case of $249,354, or $183,876 above the average case-weighted threshold amount. Based on the applicant's analyses, we believe that the BLINCYTO
Under the second scenario, the applicant removed 75 percent of charges for drugs incurred by using other technologies in order to exclude the charges associated with the use of these technologies. The applicant determined an average case-weighted threshold amount of $60,278 for the 246 MS-DRGs identified using the thresholds from Table 10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant determined an average case-weighted standardized charge per case of $239,321, or $179,043 above the average case-weighted threshold amount. For the subset of 1,533 cases that mapped to the top 8 MS-DRGs, the applicant determined an average case-weighted threshold amount of $65,478 using the thresholds from Table 10 in the FY 2015 IPPS/LTCH PPS final rule. The applicant determined an average case-weighted standardized charge per case of $242,423, or $176,945 above the average case-weighted threshold amount. Based on the applicant's analyses, we believe that the BLINCYTO
In conducting the above analyses, the applicant summarized the charges from the claims it identified and standardized the charges using an unspecified data source. The applicant then inflated all charges from FY 2013 to FY 2015 using the 10.4427 percent inflation factor used by CMS to update the FY 2015 outlier threshold. In determining the costs for the technology per case, the applicant also assumed that the BLINCYTO
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24432 through 24433), we presented three concerns regarding the applicant's methodology and assumptions used in its cost analyses. We stated that the applicant did not specify whether it used the FY 2015 IPPS final rule impact file or another data source to standardize the charges per case for this technology. We also stated our concern that the applicant did not provide a basis for the hospital markup assumed when conducting its cost analyses. Unless the applicant provided this information, we stated that we are unable to determine whether the cost of the technology per case has been calculated appropriately. Moreover, we stated our concern that including charges representative of a full 28-day treatment cycle is not appropriate for the purpose of calculating the charges associated with the BLINCYTO
We invited public comments on if, and how, the BLINCYTO
Furthermore, the applicant maintained that including charges representative of a full 28-day treatment cycle is appropriate for the purpose of calculating the charges associated with the BLINCYTO
As discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24433 and 24434), with respect to the substantial clinical improvement criterion, the applicant asserted that the BLINCYTO
• The historical literature search revealed that superior regimens among currently used chemotherapeutic options result in a complete remission rate ranging from 18.0 percent to 38.6 percent, a median overall survival rate for patients experiencing early first relapse (<12 months) at 4.7 months, and a median overall survival rate for patients experiencing second or later relapse at 3 months. However, there are several limitations to using recent literature as a historical comparison for studies relating to patients diagnosed with Ph- R/R B-cell precursor ALL, including differences in patient populations or study design characteristics across published studies, which make it difficult to formulate absolute comparisons with regard to data obtained from the BLINCYTO
• In the model-based meta analysis (MBMA), the endpoints of complete remission (CR), duration of complete remission (DCR), and overall survival (OS) rate models were used to predict the efficacy of the BLINCYTO
• A historical comparator study was also conducted to obtain patient-level data for standard of care treatment options for patients experiencing early first relapse, refractory relapse after HSCT, and second or greater relapse in the same patient population as targeted in the BLINCYTO
• BLINCYTO
We stated in the proposed rule our concern that the data provided from the clinical studies are not sufficient to demonstrate that the BLINCYTO
With regard to the applicant's assertion that the BLINCYTO
The applicant also asserted that the BLINCYTO
With regard to the applicant's assertion that the BLINCYTO
We invited public comments on if, and how, the BLINCYTO
According to the applicant, the design of the pooled analysis of historic data provides a viable measure to determine that the BLINCYTO
After consideration of the public comments we received, we have determined that the BLINCYTO
According to the applicant, if the maximum new technology add-on payment for cases involving the BLINCYTO
The applicant stated that it recognized that CMS may be concerned that it may not be able to differentiate which charges on claims should trigger eligibility for the new technology add-on payment. In addition, the applicant referenced section 1886(d)(5)(K)(ii)(III) of the Act, which refers to an additional payment in an amount that adequately reflects the estimated average cost of such service or technology, and CMS's policy of limiting payment to 50 percent of the cost of the technology, as codified under § 412.88(a)(2)(i) of our regulations. However, the applicant believed that limiting new technology add-on payments for cases involving the BLINCYTO
In order to establish the maximum new technology add-on payment amount for a case involving the BLINCYTO
In the application, the applicant estimated that the average Medicare beneficiary would require a dosage of 9mcg/day for the first 7 days under the first treatment cycle, followed by a dosage of 28mcg/day for the duration of the treatment cycle, as well as all days included in subsequent cycles. All vials contain 35mcg at a cost of $3,178.57 per vial. The applicant noted that all vials are single-use. Therefore, we have determined that cases involving the use of the BLINCYTO
Cardiovascular Systems, Inc. submitted an application for new technology add-on payments for the DIAMONDBACK 360® Coronary Orbital Atherectomy System (OAS) (DIAMONDBACK® Coronary OAS) for FY 2016. The DIAMONDBACK® Coronary OAS is a percutaneous orbital atherectomy system used to facilitate stent delivery in patients who have been diagnosed with coronary artery disease and severely calcified coronary artery lesions. The system uses an electrically driven, diamond-coated crown to reduce calcified lesions in coronary blood vessels. The components of the DIAMONDBACK® Coronary OAS are: (1) The DIAMONBACK 360® Coronary Orbital Atherectomy Device (OAD); (2) the VIPERWIRE Advance Coronary Guide Wire; (3) the VIPERSLIDE Lubricant; and (4) the Orbital Atherectomy System Pump. The DIAMONBACK 360® OAD is designed to track exclusively over the VIPERWIRE, which, in turn, uses the VIPERSLIDE Lubricant to reduce the friction between the drive shaft of the DIAMONBACK 360® OAD and the VIPERWIRE. The Orbital Atherectomy System Pump provides the saline pumping mechanism and power to the DIAMONBACK 360® OAD. All DIAMONDBACK® Coronary OAS devices are single use and provide sterile application, except for the pump.
With respect to the newness criterion, the DIAMONDBACK® Coronary OAS received FDA pre-market approval as a Class III device on October 21, 2013. As stated in section II.G.1.a. of the preamble of the proposed rule and this final rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. In the proposed rule, we indicated that the applicant had applied for a new ICD-10-PCS procedure code for consideration at the March 18-19, 2015 ICD-10-CM/PCS Coordination and Maintenance Committee Meeting. In this final rule, we note that the following new ICD-10-PCS procedure codes have been established to uniquely identify the procedures involving the DIAMONDBACK® Coronary OAS, effective October 1, 2015: X2C1361 (Extirpation of matter from coronary artery, one site using orbital atherectomy technology, percutaneous approach, new technology group 1); X2C1361 (Extirpation of matter from coronary artery, two sites using orbital atherectomy technology, percutaneous approach, new technology group 1); X2C2361 (Extirpation of matter from coronary artery, three sites using orbital atherectomy technology, percutaneous approach, new technology group 1); and X2C3361 (Extirpation of matter from coronary artery, four or more sites using orbital atherectomy technology, percutaneous approach, new technology group 1). More information on this request and our approval can be found on the CMS Web site at:
According to the applicant, the DIAMONDBACK® Coronary OAS is the only atherectomy device that uses centrifugal force and orbital motion and, therefore, is not represented by the rotational, directional, or laser atherectomy device categories (as exemplified by Boston Scientific's Rotablator system, the SilverHawk/Covidient devices, and the Spectranetics ELCA Coronary Laser, respectively). In addition, the applicant asserted that the DIAMONDBACK® Coronary OAS is the first and only device approved for use in the United States as a treatment for patients who have been diagnosed with severely calcified coronary artery lesions to facilitate stent delivery and optimal deployment. Therefore, the applicant believed that the DIAMONDBACK® Coronary OAS meets the newness criterion.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24439), we presented our concern that, in addition to patients who have been diagnosed with severely calcified coronary artery lesions, the applicant also indicated that the DIAMONDBACK® Coronary OAS may be used in the treatment of patients who
With respect to the first criterion, whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome, the applicant maintained that the technology uses a differential sanding mechanism of action to remove plaque while potentially minimizing damage to the medial layer of the vessel. According to the applicant, this mechanism of action is the only one among atherectomy devices to use centrifugal force and orbital motion and, therefore, is not represented by the rotational, directional, or laser atherectomy device categories. We stated in the proposed rule that the applicant did not include with its application data to show the effectiveness of the orbital mechanism of the DIAMONDBACK® Coronary OAS compared to the effectiveness of the rotational, directional, and laser mechanisms of similar devices used in treating patients with calcified coronary artery lesions. Therefore, we stated that we could not determine if the device's mechanism of action is unique among atherectomy devices as the applicant claimed.
With respect to the second criterion, whether a product is assigned to the same or a different MS-DRG, the applicant determined that coronary atherectomy cases for which the DIAMONDBACK® Coronary OAS technology would be appropriate are assigned to MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-DRG 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC); MS-DRG 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4+ Vessels/Stents); MS-DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC); MS-DRG 250 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent with MCC), and MS-DRG 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent without MCC). In the proposed rule, we stated our concern that potential cases involving the DIAMONDBACK® Coronary OAS would be assigned to the same MS-DRGs as other cases that use atherectomy devices currently available on the U.S. market.
With respect to the third criterion, whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population, the applicant maintained in its application that the DIAMONDBACK® Coronary OAS is the first and only device approved for use in the United States as a treatment for severely calcified coronary lesions. According to the applicant, advances in current stent technology have allowed most patients with coronary lesions to be treated effectively with relatively favorable long-term outcomes. However, there remain subsets of the patient population that are still challenging to treat, including patients with severe coronary calcification. According to the applicant, the DIAMONDBACK® Coronary OAS is the only atherectomy device currently available to treat this patient population because it is the first and only device approved for use in the United States for severely calcified coronary lesions. However, in the proposed rule, we stated our concern that other devices currently available on the U.S. market may not necessarily be contraindicated for use in treating patients with severe coronary calcification. Specifically, we were not sure if patients with less than severe coronary calcification could be appropriately treated using the DIAMONDBACK® Coronary OAS or other atherectomy devices currently available on the U.S. market in order to determine if the DIAMONDBACK® Coronary OAS treats a different patient population as the applicant claimed.
We invited public comments on if, and how, the DIAMONDBACK® Coronary OAS meets the newness criterion.
The applicant also believed the CMS has set a precedent, in the past, by approving devices for new technology add-on payments that treated conditions that were assigned to the same MS-DRGs as other devices, which were reported using the same ICD-9-CM procedure codes. The applicant noted as an example the recent approval of the Zilver® PTX Drug-Eluting Peripheral Stent, a drug-eluting stent used for the treatment of patients diagnosed with superficial femoral arteries, procedures that are assigned to MS-DRGs 252, 253, and 254, all of which contain other drug-eluting stents (78 FR 50583). As a result, the applicant believed that CMS' concern and position in regard to contraindication would have precluded the Zilver® PTX technology from being approved for new technology add-on payments because there were other stents available on the U.S. market that also were not contraindicated to treat patients diagnosed with superficial femoral arteries, as well as other devices approved and available to treat patients diagnosed with superficial femoral arteries. The applicant noted that the current application for new technology add-on payments is for use of the DIAMONDBACK® Coronary OAS in the treatment of patients diagnosed with severely calcified lesions, which the applicant believed would be appropriately identified using the new ICD-10 codes it requested. Therefore, the applicant believed that isolating this patient population by using the ICD-10 codes to identify procedures involving the DIAMONDBACK® Coronary OAS also may prevent diffusion of the use of the device into inappropriate patient populations.
With respect to the cost criterion, the applicant determined that cases representing patients who have been treated with transluminal coronary
The applicant reported that it conducted 16 sensitivity analyses based on four areas of uncertainty: whether to include all coronary atherectomy cases in the analysis or only those cases that reported calcified coronary artery lesions; whether to consider a lower value or higher value as the acquisition cost of a typical atherectomy catheter; whether to use the full cost of the DIAMONDBACK® Coronary OAS catheter and materials or only the cost of the catheter alone; and whether to include or exclude a factor to inflate costs to FY 2015 costs. Based on the result of the sensitivity analyses with all 16 combinations of the values that the applicant performed, the applicant reported that it determined that the average case-weighted standardized charge per case for the DIAMONDBACK® Coronary OAS would exceed the average case-weighted threshold amounts for MS-DRGs 246 through 251 in Table 10 of the FY 2015 IPPS/LTCH PPS final rule. According to the applicant, the average case-weighted standardized charge per case using the DIAMONDBACK® Coronary OAS device exceeds the average case-weighted threshold amounts for MS-DRGs 246 through 251 in Table 10 by approximately $6,000 to $15,000, depending on the results determined by using the combination of values of the four areas of uncertainty. As described below, the applicant believed that using the scenario that produced the lowest difference between the average case-weighted standardized charge per case determined by the applicant's analyses and the average case-weighted threshold amounts for MS-DRGs 246 through 251 from Table 10 in the FY 2015 IPPS/LTCH PPS final rule still exceeded the Table 10 threshold amounts by $5,803.
Using the scenario that produced the lowest difference between the average case-weighted standardized charge per case determined by the applicant and the average case-weighted threshold amount in the FY 2015 IPPS/LTCH PPS final rule Table 10, the applicant included all cases reporting coronary atherectomy (specifically, the 5,443 cases reported with ICD-9-CM procedure code 17.55) in this analysis. The applicant removed the costs of the other specific technologies used during these procedures; that is, the applicant removed the higher of the two standard catheter costs, and added the full cost of the DIAMONDBACK® Coronary OAS catheter alone. To estimate the cost for the new technology, the applicant divided the projected cost per patient by the national average CCR for supplies (0.292) included in the FY 2015 IPPS/LTCH PPS final rule. This resulted in an average case-weighted average standardized charge per case of $86,080. The applicant stated that it did not apply an inflation factor to convert the FY 2013 costs to FY 2015 costs for this analysis. However, in other analyses, the applicant used the 2-year inflation factor of 10.44 percent taken from the FY 2015 IPPS/LTCH PPS final rule (79 FR 50379), which was the final inflation factor used in the CMS outlier threshold calculation for the applicable fiscal year. The applicant then determined that its average case-weighted standardized charge per case exceeded the average case-weighted threshold amounts for MS-DRGs 246 through 251 in Table 10 of the FY 2015 IPPS/LTCH PPS final rule by $5,803. The applicant maintained that all of the results of the analyses using this methodology that were included in its application likewise exceeded the Table 10 threshold amounts for these MS-DRGs and, therefore, demonstrated that the DIAMONDBACK® Coronary OAS meets the cost criterion.
Using the scenario that produced the lowest difference between its average case-weighted standardized charge per case and the average case-weighted threshold amounts for MS-DRGs 246 through 251 from the FY 2015 Table 10 for the analysis of the subgroup of cases representing patients who have severely calcified coronary artery lesions, the applicant reported that it included all of the cases that report coronary atherectomy that also reported diagnosis of calcified coronary lesions (250 cases reporting ICD-9-CM procedure code 414.4). As in the previous scenario, the applicant removed costs of the other specific technologies used during these other procedures; that is, the applicant removed the higher of the two standard catheter costs, and added the full cost of the DIAMONDBACK® Coronary OAS catheter alone. To estimate the costs for the new technology, the applicant divided the projected cost per patient by the national average CCR for supplies (0.292) in the FY 2015 IPPS/LTCH PPS final rule. This resulted in an average case-weighted standardized charge per case of $86,779. The applicant did not apply an inflation factor to convert the FY 2013 costs to FY 2015 costs for this analysis. The applicant then determined that the average case-weighted standardized charge per case exceeded the FY 2015 Table 10 threshold amount of $80,807 by $5,972. The applicant maintained that all of the results of the analyses using this methodology that were included in its application likewise exceeded the Table 10 threshold amounts for these MS-DRGs and, therefore, demonstrated that the DIAMONDBACK® Coronary OAS meets the cost criterion.
In the proposed rule, we questioned some of the assumptions underlying the four areas of uncertainty that were the basis for the applicant's sensitivity analyses. We stated that we would like to know the basis of the higher value that the applicant considered to be a possible acquisition cost of a typical atherectomy catheter. We also stated our concern that the applicant did not provide a basis for determining the two values it used to remove the costs associated with the other specific technologies that may have been used during the cases included in the analysis. We invited public comments on if, and how, the DIAMONDBACK® Coronary OAS meets the cost criterion.
After consideration of the applicant's response, we have determined that the DIAMONDBACK® Coronary OAS meets the cost criterion.
As discussed in the proposed rule, in regard to substantial clinical improvement, the applicant maintained that the DIAMONDBACK® Coronary OAS offers a treatment option for a patient population that has been diagnosed with severely calcified coronary arteries that are ineligible for currently available treatments and results in improved clinical outcomes for patients who have been diagnosed with complex coronary artery disease related to severely calcified coronary arteries. The applicant also stated that the DIAMONDBACK® Coronary OAS device significantly improves clinical outcomes for this patient population when compared to currently available treatment options, including reduced mortality, a reduced rate of device-related complications, a decreased rate of subsequent diagnostic or therapeutic interventions (for example, due to reduced rate of recurrence of the disease process), a decreased number of future hospitalizations or physician visits, more rapid beneficial resolution of the disease process treatment because of the use of the device, decreased pain, bleeding, or other quantifiable symptoms, and reduced recovery time.
The applicant included data from its ORBIT II study to demonstrate that the technology represents substantial clinical improvement over currently available treatment options, including improvement in mortality rates, major adverse cardiac event (MACE) rates, revascularization rates, and cost savings. According to the applicant, its ORBIT II study was a pivotal clinical study to evaluate the safety and effectiveness of the DIAMONDBACK® Coronary OAS in treating a subset of patients who have severely calcified coronary artery lesions. The applicant explained that the ORBIT II study was a prospective, multicenter, non-blinded clinical trial that enrolled 443 consecutive patients who have been diagnosed with severely calcified coronary lesions at 49 U.S. sites from May 25, 2010 to November 26, 2012, in which the DIAMONDBACK® Coronary OAS was used to prepare patients who had severely calcified coronary lesions for stent placement. According to the applicant, the DIAMONDBACK® Coronary OAS produced clinical outcomes that exceeded its ORBIT II study's two primary safety and efficacy endpoints within a patient population. The primary safety endpoint was 89.6 percent freedom from 30-day MACE, compared with the performance goal of 83 percent. The primary efficacy endpoint (residual stenosis <50 percent post-stent without in-hospital MACE) was 88.9 percent, compared with the performance goal of 82 percent. The applicant stated that, during the trial, stent delivery after use of the DIAMONDBACK® Coronary OAS occurred successfully in 97.7 percent of cases with <50 percent residual stenosis in 98.6 percent of the patients in the study. The applicant further stated that low rates of in-hospital Q-wave MI, cardiac death, and target vessel revascularization also were reported. The applicant believed that the results of its ORBIT II study met both the primary safety and efficacy endpoints by significant margins and not only helped to facilitate stent delivery, but also improved both acute care and 30-day clinical outcomes compared to historical controls.
The applicant also compared the results of its ORBIT II study with historical study data that measured the performance of other coronary atherectomy devices used in the treatment of patients who have moderate to severely calcified coronary lesions. According to the applicant, the death and revascularization rates reported in the ORBIT II study were much lower than those rates reported in the literature for patients who had severely calcified coronary lesions. For example, inpatient cardiac death rates were reported on one reported study in the literature (Mosseri, et al.) as 1.6 percent and in another reported study (Abdel-Wahab, et al.) as 1.7 percent, while another study report (Clavijo, et al.) reported death at 30 days as 2.6 percent and 1.5 percent for RA + DES and DES, respectively.
In the proposed rule, we stated our concern that the ORBIT II study conducted by the applicant lacked a control arm. The applicant asserted in its original application that, although other FDA-approved coronary atherectomy products are available, none of them are indicated for the treatment of patients who have severely calcified coronary arteries and, therefore, could not be used as a control. The applicant believed that it accounted for this study limitation by comparing the results of the ORBIT II study to historical control subjects documented in published reports. However, we stated that we continue to be concerned that meaningful conclusions cannot be drawn from a study that did not include a comparator group. Moreover, we questioned the reliability of comparing data from the ORBIT II study to historical study data because different definitions of severe calcification used in each study can make absolute comparisons difficult and/or invalid.
We invited public comments on if, and how, DIAMONDBACK® Coronary OAS meets the substantial clinical improvement criterion.
After consideration of the public comments we received, we have determined that the DIAMONDBACK® Coronary OAS does not meet the criteria for approval of a new technology add-on payment. We remain concerned as to whether the DIAMONDBACK® Coronary OAS meets the newness criteria. Furthermore, we do not believe that the device represents a substantial clinical improvement over existing and currently available treatment options. Therefore, we are not approving new technology add-on payments for this technology for FY 2016.
Astellas Pharma US, Inc. (Astellas) submitted an application for new technology add-on payments for CRESEMBA® (isavuconazonium) for FY 2016. CRESEMBA® is an intravenous and oral broad-spectrum antifungal used for the treatment of adults who have severe invasive and life-threatening fungal infections, including invasive aspergillosis and mucormycosis (zygomycosis).
CRESEMBA® received FDA approval on March 6, 2015. The FDA indication for the use of this product is for the treatment of adults who have been diagnosed with invasive aspergillosis and mucormycosis. Isavuconazonium has two formulations: an intravenous (IV) solution and an oral capsule. The IV formulation of CRESEMBA® is administered at 200 mg while the oral formulation is administered at 100 mg. Dosing is not weight-based. According to the applicant, treatment of patients who have been diagnosed with these types of infection starts with up to 3 days of IV therapy in the inpatient hospital setting followed by daily oral therapy administered for the remainder of the inpatient stay and also the duration of treatment period, which is approximately 13.4 days.
As stated in section II.G.1.a. of the preamble of the proposed rule and this final rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. In the proposed rule, we noted that the applicant had applied for a new ICD-10-PCS procedure code for consideration at the March 18-19, 2015 ICD10-CM/PCS Coordination and Maintenance Committee Meeting. In this final rule, we note that the following two new ICD-10-PCS procedure codes have been established to uniquely identify procedures involving CRESEMBA®: XW03341 (Introduction of isavuconazole anti-infective into peripheral vein, percutaneous approach, new technology group 1); and XW04331 (Introduction of isavuconazole anti-infective into central vein, percutaneous approach, new technology group 1). More information on this request and the approval can be found on the CMS Web site at:
The applicant maintained that CRESEMBA® meets the newness criterion based on the March 6, 2015 FDA approval of the technology.
CRESEMBA® is part of the category of drugs known as azole antifungal drugs that inhibit the enzyme lanosterol 14 α-demethylase. Inhibiting this enzyme disrupts the process of converting lanosterol to ergosterol and, therefore, depletes the level of ergosterol in the fungal membrane and inhibits fungal growth. Azole antifungal drugs are used to treat patients with fungal infections such as aspergillosis, and other azole
According to the applicant, echinocandins are effective against aspergillosis. Voriconazole is the recommended treatment for patients diagnosed with invasive aspergillosis. However, amphotericin B and other antifungal drugs may also be used if voriconazole cannot be administered because a patient is suffering from porphyria (a rare inherited blood disorder) or has had an allergic reaction to the drug or the infection is not responding to treatment using voriconazole. In addition, according to the applicant, the efficacy of azole antifungal drugs, such as posaconazole, in treating mucurmycosis is uncertain but has been described in certain situations.
The applicant stated that it is challenging to clinically distinguish the type of antifungal infection a patient may be experiencing. Therefore, the typical treatment of patients exhibiting symptoms of an invasive fungal infection includes both amphotericin B and voriconazole. According to the applicant, for the Medicare population, both drugs are usually administered in combination because it is difficult and time-consuming to delineate the specific type of fungal infections. The applicant noted that these patients are often severely ill and immediate treatment of these symptoms is essential to the effective management of their condition.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24442), we stated we were concerned that CRESEMBA® may not meet the newness criterion because it may be substantially similar to other currently approved antifungal drugs. We refer readers to the FY 2010 LTCH PPS final rule (74 FR 43813 through 43814) for a discussion of our established criteria for evaluating whether a new technology is substantial similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a product is assigned to the same or a different MS-DRG; and (3) whether the new use of the technology involves the treatment of the same or similar type of disease and the same or similar patient population. If a technology meets all three of these criteria, it would be considered substantially similar to an existing technology and would not be considered “new” for purposes of new technology add-on payments.
In evaluating this technology for substantial similarity, in the proposed rule, we stated that we believe that CRESEMBA® has a similar mechanism of action as the other groups of antifungal drugs available for the treatment of patients diagnosed with serious fungal infections, such as invasive aspergillosis and mucormycosis. As previously noted, voraconazole and itroconazole also are commonly used azole antifungals used to treat patients diagnosed with aspergillosis. The applicant maintained that the availability of the drug in an oral formulation constitutes a different mechanism of action from the current azoles. In the proposed rule, we stated that we disagreed with the applicant's assertion because we believe a different method of administration does not necessarily equate to a different mechanism of action. Although the applicant maintained that this technology is not substantially similar because it is administered orally, the applicant did not describe why it believed a different method of administration constitutes a different mechanism of action. Because CRESEMBA® is part of the category of drugs currently available known as azole antifungal drugs that inhibit the enzyme lanosterol 14 α-demethylase, it appears that the mechanism of action is not different, but that merely the method of administration differs.
With respect to the second criterion for determining substantial similarity, we stated in the proposed rule that we believe that the use of CRESEMBA® is inclusive of the current treatment options available to Medicare beneficiaries and is also currently described (although not specifically) by established procedure codes that identify similar technologies, specifically other antifungal drugs that also are used in the treatment of patients diagnosed with similar fungal infections. The use of antifungal drugs is considered a nonoperating room procedure, which does not impact the MS-DRG assignment of a patient case. Therefore, the use of CRESEMBA® would not impact the MS-DRG assignment of a particular case. Furthermore, the FDA approval for the technology is indicated for use in the treatment of the same or similar type of disease and the same or similar patient population. According to the applicant, CRESEMBA® is used in conjugation with other treatments, and this is reflected in its analysis for the new technology cost criterion. In the proposed rule, we stated our concern that this technology is administered with the other currently available treatments and, therefore, cannot be considered an alternative treatment option. Therefore, we stated that we believe that CRESEMBA® may be considered substantially similar to other available treatments and could not be considered to be “new” for purposes of new technology add-on payments.
We invited public comments on if, and how, CRESEMBA® meets the newness criterion and our concerns regarding how it is similar to other treatments for serious fungal infections.
The applicant further stated that other existing treatments for invasive mold infections have limitations due either to the potential for toxicity, or restrictions on its use in the treatment of certain at-risk patient populations. The commenter noted that, although the liposomal preparation of amphotericin B has reduced the potential for nephrotoxicity, it does not eliminate it completely. According to the applicant, amphotericin B is nephrotoxic when administered with calcineurin inhibitors and also requires intravenous administration, which may complicate long-term administration. The applicant reiterated that cyclodextrins used in the intravenous preparation of posaconazole, itraconazole and voriconazole exhibit additional nephrotoxicity and, therefore, its uses in the treatment of patients diagnosed with renal impairment are restricted.
The applicant also clarified that CRESEMBA® does not need to be administered in conjugation with other currently available treatments. The applicant stated that the results of its phase III studies demonstrated the efficacy of the CRESEMBA® technology as a singular treatment for invasive mold infections. In addition, the applicant stated that it recognized that CRESEMBA® has some attributes that are similar to other azoles antifungals. However, it believed that CRESEMBA® offers a needed alternative therapy for the treatment of patients diagnosed with invasive aspergillosis (IA) and mucuromycosis (IM), given that currently approved therapies for the treatment of IA and IM are limited by: (1) Pharmacokinetic challenges and toxicity, as noted with voriconazole; and (2) sub‐optimal efficacy in high‐risk patients, as noted with amphotericin B. The applicant stated that these two characteristics make these therapies often unusable in the treatment of patients most likely to later suffer from a diagnosis of IA and IM (for example, immunocompromised patients), and mortality rates remain high for both diseases. The applicant further stated that patients diagnosed with progressive IA or who are intolerant of voriconazole have few viable options, and there are currently no other approved primary treatments for patients diagnosed with IM except amphotericin B. The applicant believed that CRESEMBA® is an alternative treatment option because patients who cannot tolerate other existing therapies can be treated with CRESEMBA®; otherwise, no other treatment option would be available.
The applicant asserted that data from studies of both the oral and IV formulations have shown that CRESEMBA® has a more predictable pharmacokinetic/pharmacodynamic profile compared to voriconazole. The applicant further indicated that CRESEMBA® has moderate pharmacokinetic variability, which limits the risk of sub‐therapeutic or supra‐therapeutic exposure, while the variability of voriconazole pharmacokinetics is high. According to the applicant, the pharmacokinetics of CRESEMBA® include: Linear and dose‐proportional effects following both oral and IV administration; a long half‐life enabling once daily maintenance dosing; oral bioavailability of 98 percent; the absence of food orgastric pH effects; and the option to be administered via both routes of administration under fed or fasting conditions irrespective of the use of drugs that increase gastric pH. Therefore, the applicant believed that a more manageable drug‐drug interaction profile was observed with respect to the CRESEMBA® technology compared to other mold‐active azoles antifungals.
In addition, we continue to believe that the CRESEMBA® technology is substantially similar to the current treatment options available to Medicare beneficiaries that are also currently described (although not specifically) by established procedure codes that identify the use of these similar technologies, specifically other antifungal drugs that also are used in the treatment of patients diagnosed with similar fungal infections. As the applicant stated, while the use of amphotericin B may not be an ideal treatment option for some patients because it has many adverse side effects, we disagree with the applicant that CRESEMBA® offers an alternative treatment option instead of amphotericin B for patients who cannot tolerate other existing therapies and would otherwise have no other treatment option because amphotericin B and other antifungal drugs can also be effective and used as an option to treat patients diagnosed with IM. Therefore, we believe that, although CRESEMBA® can be effectively administered without other antifungal drugs, the technology would be used to treat the same or similar type of disease and the same or similar patient population as other antifungal drugs.
After consideration of the public comment we received, we believe that the CRESEMBA® technology is substantially similar to other azole antifungal drugs because it meets all three of the criteria identified above and, therefore, does not meet the newness criterion.
As we discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24442 and 24443), to demonstrate that the technology meets the cost criterion, the applicant performed two analyses. The applicant searched claims in the FY 2013 MedPAR file (across all MS-DRGs) for any case reporting a principal or secondary diagnosis of aspergillosis (ICD-9-CM diagnosis code 117.3), zygomycosis [phycomycosis or mucormycosis] (ICD-9-CM diagnosis code 117.7), or pneumonia in aspergillosis (ICD-9-CM diagnosis code 484.6). The applicant excluded any case that was treated at a hospital that is not paid under the IPPS, as well as any case where Medicare fee-for-service was not the primary payer. The applicant calculated the standardized charge for each eligible case and then inflated the standardized charge by 10.4427 percent using the same inflation factor used by CMS to update the FY 2015 outlier threshold (79 FR 50379). The applicant assumed that the average length of stay for all eligible cases was 13.4 days based on its analysis. To determine the charges for the drug, the applicant assumed 13.4 days of therapy. According to the applicant, dosages of isavuconazole for a patient vary based on the day of therapy, but do not vary based on the patient's weight. For the first and second day of therapy, the patient would be administered a loading dose of 200 milligrams (mg) every 8 hours. For each subsequent day of therapy, the patient would be
For the first analysis, which was based on 100 percent of all MS-DRGs, the applicant identified a total of 5,984 cases with at least one of the three ICD-9-CM codes (aspergillosis (ICD-9-CM diagnosis code 117.3), zygomycosis [phycomycosis or mucormycosis] (ICD-9-CM diagnosis code 117.7), or pneumonia in aspergillosis (ICD-9-CM diagnosis code 484.6)) across a total of 333 MS-DRGs. The applicant's rationale for using all the MS-DRGs was that it believed any patient diagnosed with either invasive aspergillosis or invasive mucormycosis (zygomycosis) could be eligible for treatment using isavuconazonium, regardless of the MS-DRG assignment. The applicant identified the average case-weighted threshold amounts for these 333 MS-DRGs as $72,186 using Table 10 from the FY 2015 IPPS/LTCH PPS final rule. The applicant did not remove charges for the other specific technologies from the average case-weighted standardized charge per case. The applicant's rationale for not removing these charges was that the patients would be administrated isavuconazonium in combination with the other currently approved antifungal drugs as an effective treatment plan. The applicant computed a final inflated average case-weighted standardized charge per case of $151,450. Because this average case-weighted standardized charge per case exceeded the average case-weighted threshold amount from the FY 2015 Table 10, the applicant maintained that CRESEMBA® meets the cost criterion using this first analysis.
For its second analysis, the applicant analyzed 39 MS-DRGs that accounted for the top 75 cases of patients eligible for treatment using isavuconazonium; this was a subset of 4,510 cases. Using a methodology similar to the one used in its first analysis, the applicant computed the final inflated average case-weighted standardized charge per case of $159,622. The applicant identified an average case-weighted threshold amount for the 39 MS-DRGs of $74,366 using Table 10 from the FY2015 IPPS/LTCH PPS final rule. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount in the FY 2015 Table 10, the applicant maintained that CRESEMBA® meets the cost criterion using this second analysis.
In the proposed rule, we stated we were concerned that the applicant did not remove any charges for the other antifungal drugs used during treatments (that is, the other component of the combination) because the applicant maintained that it would most likely be necessary for patients who are treated using CRESEMBA® to also continue treatment using the other antifungal drugs or medications in order to achieve successful treatment due to the severity of their symptoms. We believe that the applicant should have removed the charges for the other antifungal drugs used for treatments. We also noted that the applicant did not provide information to substantiate its assertion that the charges for these cases would not be reduced because of the severity of illness among the patients. The applicant inferred that patients treated using CRESEMBA® would be dependent upon the simultaneous and combined use of the other existing therapies to achieve successful treatment. Therefore, we stated our concern about the possibility of drug toxicity, poly pharmacy, and drug-to-drug interactions, especially among the Medicare population.
We invited public comment on whether CRESEMBA® meets the cost criterion, specifically with regard to our concerns regarding the applicant's analyses and methodology.
As we discussed in the proposed rule, with regard to substantial clinical improvement, the applicant stated that CRESEMBA® represents a substantial clinical improvement over existing therapies for patients diagnosed with invasive aspergillosis and mucormycosis based on its potentially improved efficacy profile, potentially improved safety profile, more favorable pharmacokinetic profile, and improved method of administration. The applicant discussed the unmet medical need for alternative treatment options for patients diagnosed with invasive aspergillosis and mucormycosis. Current treatments have limitations related to safety, side effects, and efficacy.
In the proposed rule, we also stated that we were concerned that the applicant did not conduct the clinical trials evaluating head-to-head comparisons to alternative therapies such as amphotericin B. Currently, amphotericin B is the only FDA‐approved drug for the treatment of mucormycosis, which also can be used to treat aspergillosis. The applicant's description of the technology was based on peer reviewed literature, which may be considered historical data.
With regard to improved efficacy, the applicant made several assertions in its application that we discussed in the proposed rule (80 FR 24443 through 24444). The applicant maintained that the use of CRESEMBA® can potentially decrease the rate of subsequent diagnostic or therapeutic interventions. According to the applicant, the technology lacks the adverse side effects of nephrotoxicity associated with amphotericin B.
Specifically, the applicant believed that CRESEMBA® has positive activity against a broad range of fungi, including those resistant to other agents, thereby potentially decreasing subsequent therapeutic interventions.
With regard to improved safety and a more favorable pharmacokinetic profile, the applicant made several assertions which we discussed in the proposed rule (80 FR 24444). The applicant asserted that CRESEMBA® has the potential for simpler and more predictable dosing based on improved pharmacokinetics compared with other azole antifungal drugs, but the applicant did not provide data to substantiate this assertion.
As we discussed in the proposed rule, the applicant also asserted that CRESEMBA® has a lower drug-drug interaction potential than voriconazole or itraconazole, but did not provide data to substantiate this assertion. Furthermore, the applicant maintained that CRESEMBA® can be safely used in treating patients with renal impairment, whereas currently available treatments can harm the kidneys.
The applicant presented the results from an analysis of a pooled subgroup from its previously stated studies (SECURE and VITAL), which evaluated the effectiveness of CRESEMBA® in patients diagnosed with and without renal impairment, as defined as eGFR < 60 mL/min/1.73 m
In the proposed rule, we also stated that we were concerned that the applicant did not provide a rationale for its assertion that the use of CRESEMBA® represents a substantial clinical improvement for Medicare beneficiaries because of “simpler and more predictable dosing” nor did the applicant provide additional information and data regarding drug-to-drug interactions and nephrotoxicity (80 FR 24444).
In addition, the applicant maintained that the technology has an improved method of administration compared to current treatment alternatives. Specifically, the applicant asserted that the availability of this technology as an oral formulation is an improvement compared to other existing treatments, which are solely administered intravenously. In the proposed rule, we stated that we were concerned about the applicant's assertion because other currently approved and available antifungal drugs, such as voriconazole (tablets, oral suspension, or intravenous administration), itraconazole (capsules, oral solution, or parenteral solution), and posaconazole (oral suspension or parenteral solution), also can be administered orally as well as parenteral for patients diagnosed with these types of fungal infections. In addition, we are aware that intravenous administration of antifungal drugs may be necessary because patients diagnosed with invasive aspergillosis and mucuromycosis and treated as inpatients are often severely ill and may
The applicant further stated that the Pharmacokinetics (PK) study in patients diagnosed with renal impairment demonstrated exposures that support the label that no dose adjustments are recommended in patients who are elderly or renally impaired and no dose adjustment is needed in patients diagnosed with mild, moderate, or severe renal impairment, including those patients with ESRD. The applicant noted that outcomes in the renal impaired patients were comparable to the non-renal impaired.
According to the applicant, a more manageable drug-drug interaction profile was observed with CRESEMBA® than with other mold-active azoles. The applicant explained the following with regard to CRESEMBA®: It is a sensitive substrate of CYP3A (5-fold increase in isavuconazole AUC with concomitant ketoconazole) and a mild-to-moderate inhibitor of CYP3A4 (2-fold increase in midazolam AUC), while voriconazole is a strong inhibitor of CYP3A4 (10-fold increase in midazolam AUC); it is a mild inducer of CYP2B6 (42 percent decrease in bupropion); it does not inhibit or induce CYP1A2, CYP2C9, or CYP2C19 and does not inhibit CYP2A6 or CYP2D6; it is a mild inhibitor of P-gp, OCT1/OCT2 and MATE1; it has no inhibitory effects on sensitive substrates of BCRP, OAT1/OAT2, OATP1B1/OATP1B3, or MATE2-K, but does have mild indirect inhibitory effects on substrates of UGT.
The applicant also stated that CRESEMBA® demonstrated efficacy in the studies of patients diagnosed with IA and IM. The applicant asserted that CRESEMBA® demonstrated the following: Noninferior efficacy compared to voriconazole for the primary endpoint of all-cause mortality through day 42 in IA; comparable results for all-cause mortality were observed across sensitivity analyses, populations, time points and subgroups, further supporting the effectiveness of CRESEMBA®; and activity against several species of Mucorales, which are known to mimic
The applicant noted that CRESEMBA® had a similar treatment effect to that of amphotericin B compared to untreated controls from the literature for all-cause mortality. The applicant cited a matched-case analysis from a contemporary registry in which similar mortality rates were noted in patients treated with CRESEMBA® and matched control patients treated with amphotericin-based formulations. The applicant also noted that CRESEMBA® activity is supported by data from validated animal models of mucormycosis.
According to the applicant, CRESEMBA® demonstrated the following: A favorable safety profile compared to voriconazole; and fewer CRESEMBA® TEAEs compared to voriconazole such as skin, eye and hepatic adverse events. Finally, the applicant stated that CRESEMBA® is orally bioavailable and has no signal of nephrotoxic effects as associated with amphotericin B.
While amphotericin B has severe side effects, CRESEMBA® is associated with serious hepatic reactions, which requires the evaluation of liver related laboratory tests at the start and during the course of treatment using the CRESEMBA® therapy. In addition, in the Fungiscope Registry referenced by the applicant, we note that the crude mortality rates for CRESEMBA® and amphotericin B were similar.
While we acknowledge that CRESEMBA® reduces some side effects associated with the treatment of invasive antifungal infections, we believe that its outcomes are markedly similar to those accomplished using other azole antifungal drugs currently available to Medicare beneficiaries and proven to be effective in the treatment of these types of diagnoses. Therefore, we do not believe that the CRESEMBA® represents a substantial clinical improvement over existing technologies.
After consideration of the public comments we received, for the reasons discussed earlier, we believe that the CRESEMBA® technology is substantially similar to other antifungal drugs used in the effective treatment of patients diagnosed with similar types of conditions that are currently available to Medicare beneficiaries and, therefore, does not meet the newness criterion. Moreover, we do not believe that the technology represents a substantial clinical improvement over existing technologies. Therefore, we are not approving the CRESEMBA® for new technology add-on payments for FY 2016.
Two manufacturers, CR Bard Inc. and Medtronic, submitted applications for new technology add-on payments for FY
The applicants for LUTONIX® and IN.PACT
The applicants stated that the drug-coated balloon catheter is a device-drug combination product comprised of a device component (an over-the-wire balloon catheter) and a drug component (a paclitaxel-urea coating in the case of IN.PACT
According to both applicants, LUTONIX® and IN.PACT
• Creating manufacturer-specific codes for substantially similar products;
• Requiring different manufacturers of substantially similar products from having to submit separate new technology applications.
• Having to compare the merits of competing technologies on the basis of substantial clinical improvement; and
• Bestowing an advantage to the first applicant representing a particular new technology to receive approval (70 FR 47351).
If these substantially similar technologies had been submitted for review in different (and subsequent) years, rather than the same year, we would evaluate and make a determination on the first application and apply that same determination to the second application. However, because the technologies have been submitted for review in the same year, we believe it is appropriate to consider both sets of cost data and clinical data in making a determination because we do not believe that it is possible to choose one set of data over another set of data in an objective manner.
CR Bard, Inc. received FDA approval for LUTONIX® on October 9, 2014. Commercial sales in the U.S. market began on October 10, 2014. Medtronic received FDA approval for IN.PACT
As stated in section II.G.1.a. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule and this final rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. In the proposed rule, we stated that the applicants applied for a
More information on the request for and the approval of these codes can be found on the CMS Web site at:
As we discussed in the proposed rule, the approval of new technology add-on payments extends to all technologies that are substantially similar. Moreover, as discussed, we believe that applications for substantially similar technologies should be evaluated in a manner that avoids, among other things, having to compare the merits of competing technologies on the basis of substantial clinical improvement. If we receive applications for substantially similar technologies in different years, we would apply the first determination to any subsequent applications for substantially similar technologies. Because, in this case, two substantially similar technologies have applied for a new technology add-on payment for the same Federal fiscal year, we believe it is consistent with our policy to make one determination using all of the information submitted for the technologies rather than choosing one set of information to consider and not considering the other set of information.
In accordance with our policy, we stated in the proposed rule that we believe it is appropriate to use the earliest market availability date submitted as the beginning of the newness period. Accordingly, for both devices, we stated in the proposed rule that if approved for new technology add-on payments, we believe that the beginning of the newness period would be October 10, 2014.
In the proposed rule we did not articulate any concerns regarding whether this technology meets the newness criterion, but we invited public comments on whether these two technologies meet the newness criterion. We did not receive any public comments concerning whether the technologies meet the newness criterion. Therefore, based on the information provided by the applicants, we believe that both LUTONIX® and IN.PACT
As we stated above, each applicant submitted separate analyses regarding the cost criterion for each of their devices and both applicants maintained
With regard to the LUTONIX®, to demonstrate that the technology meets the cost criterion, the applicant performed three different analyses. The applicant first searched the FY 2013 MedPAR data file that was used for the recalibration of the FY 2015 MS-DRG relative payment weights in the FY 2015 IPPS/LTCH PPS final rule. The applicant applied the standard trims that CMS used when selecting cases for IPPS rate recalibration as described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49911). In other words, the applicant included cases from IPPS hospitals and Maryland hospitals and excluded cases paid by Medicare Advantage plans, cases from hospitals that did not submit charges in a sufficiently broad range of revenue centers, and statistical outlier cases as described in the FY 2015 IPPS/LTCH PPS final rule. The applicant then searched for all claims reporting ICD-9-CM procedure code 39.50 (Angioplasty of other non-coronary vessel(s)) and also reporting at least one of the following seven ICD-9-CM diagnosis codes (440.20 (Atherosclerosis of native arteries of the extremities, unspecified), 440.21 (Atherosclerosis of native arteries of the extremities with intermittent claudication), 440.22 (Atherosclerosis of native arteries of the extremities with rest pain), 440.23 (Atherosclerosis of native arteries of the extremities with ulceration), 440.24 (Atherosclerosis of native arteries of the extremities with gangrene), 440.29 (Other atherosclerosis of native arteries of the extremities), and 443.9 (Peripheral vascular disease, unspecified indicating peripheral artery disease). The applicant excluded all claims that reported any ICD-9-CM procedure codes involving a stent. A total of 23,157 cases reporting peripheral angioplasty were identified. Of these 23,157 cases, MS-DRGs 252, 253, and 254 (Other Vascular Procedures with MCC, with CC and without CC/MCC, respectively) accounted for 65 percent of cases; MS-DRGs 237 and 238 (Major Cardiovascular Procedures with MCC and without MCC, respectively), MS-DRGs 239 and 240 (Amputation for Circulatory System Disorders Except Upper Limb and Toe with MCC and with CC, respectively), and MS-DRG 853 (Infectious and Parasitic Diseases with Operating Room Procedure with MCC) accounted for 17 percent of cases (among these, peripheral angioplasty was secondary to some other circulation-related procedure: A major cardiovascular procedure (MS-DRGs 237 and 238), amputation due to poor circulation (MS-DRGs 239 and 240), or (typically) amputation with sepsis (MS-DRG 853)). The remaining 18 percent of cases were spread across a large number of other MS-DRGs. Next, the applicant obtained the average case-weighted charge per case based on the distribution of cases by MS-DRG and then identified the average case-weighted threshold for the three MS-DRG groupings from the threshold amounts in Table 10 of the FY 2015 IPPS/LTCH PPS final rule. The applicant then calculated the unadjusted (unstandardized) average case-weighted charge per case for all MS-DRGs. According to the applicant, charges were not removed for any prior technology. To estimate the charge for the new technology, the applicant divided the projected cost per patient by the national average CCR for supplies (0.292) in the FY 2015 IPPS/LTCH PPS final rule, to arrive at the average case-weighted standardized charges per case. The average case-weighted standardized charges per case for the three primary MS-DRGs 252-254 group (65 percent), the five additional MS-DRGs 237-240 and MS-DRG 853 group (17 percent), and the other MS-DRGs (18 percent) were $69,243, $81,156, and $95,138, respectively. The applicant then inflated the average standardized case-weighted charges per case from FY 2013 to FY 2015 using the 2-year inflation factor of 10.44 percent specified in the FY 2015 IPPS/LTCH PPS final rule and added charges related to the new technology to the average case-weighted standardized charges per case, although the applicant indicated that it was not clear on the need to include an inflation factor. The final inflated average case-weighted standardized charges per case for the three primary MS-DRG groups (65 percent), the five additional MS-DRG groups (17 percent), and across other MS-DRGs (18 percent) were $85,386, $98,543, and $104,052, respectively. Because the final inflated average case-weighted standardized charge amounts exceed the corresponding average case-weighted threshold amounts of $69,594, $74,449, and $75,215, respectively, using the FY 2015 IPPS Table 10, the applicant stated that LUTONIX® meets the cost criterion for new technology add-on payments.
With regard to the IN.PACT
In the proposed rule, we stated that we were concerned that both applicants excluded cases of patients that received stent implantations from their analysis because the applicants believed that the technologies can be used instead of stenting procedures. We invited public comments on whether the LUTONIX® and the IN.PACT
In their original cost analysis, both applicants included cases with diagnoses of PTA (identified by ICD-9-CM code 39.50) and cases with diagnoses of PAD (identified by diagnosis codes: 440.2x (Atherosclerosis of arteries of the extremities) or 443.9 (Peripheral vascular disease, unspecified)), but excluded cases with stent implantation. The applicants for the LUTONIX® and the IN.PACT
In its public comment specifically in response to CMS' concern, to demonstrate that the IN.PACT
Based on the results of the subsequent analysis, the applicant stated that its assumptions about real-world use of DCBs, based on approximate estimates from internal market models, concluded that: The IN.PACT
To address CMS' concern regarding the exclusion of cases involving stent procedures, the applicant for the LUTONIX® technology conducted an additional costs analysis that accounted for cases involving angioplasty and stent procedures by simply adding the charges for both angioplasty and stent procedures to the charges determined in its original analysis. The applicant determined average case-weighted standardized charges per case for the three primary MS-DRGs (MS-DRGs 252, 253, and 254), the five additional MS-DRGs (MS-DRGs 237, 238, 239, 240 and MS-DRG 853) and the other MS-DRGs were $74,039, $83,650, and $90,170, respectively. The applicant determined that the final average case-weighted standardized charges per case for the three primary MS-DRG groups, the five additional MS-DRG groups and across other MS-DRGs were $90,683, $101,298, and $108,498, respectively. Because the final average case-weighted standardized charges per case for all three scenarios exceed the corresponding average case-weighted threshold amounts for the respective MS-DRGs of $68,712, $73,775, and $74,836, respectively, the applicant maintained that the LUTONIX® meets
With regard to substantial clinical improvement for LUTONIX®, the applicant stated that LUTONIX® represents a substantial clinical improvement because it meets an unmet clinical need by providing access to “no stent zones” and because it can achieve greater patency; preserve the flexibility of future interventions; and address stent fractures and re-stenosis.
The applicant shared the findings from its LEVANT 1 and LEVANT 2 trials.
The study was conducted to show that drug-coated balloon angioplasty improves clinical outcomes for a patient population as compared to currently available treatments. All endpoints were adjudicated by a blinded Clinical Events Committee (CEC) and duplex ultrasound and angiographic core laboratories.
The applicant specified two primary endpoints that must both be met in order for the study to be successful. The first endpoint was primary patency at 12 months, defined as freedom from target lesion restenosis and target lesion revascularization (TLR). The results were the following: Primary patency for LUTONIX® was 65.2 percent compared to primary patency of 52.6 percent for PTA. Kaplan-Meier analysis was 73.5 percent for LUTONIX® compared to 56.8 percent for PTA (p<0.001). The second primary efficacy endpoints were composite safety endpoints at 12 months, which included freedom from index-limb amputation; reintervention and related death. The results were 83.9 percent for LUTONIX® compared to 79.0 percent for PTA.
The secondary efficacy endpoints at 12 months for this trial were freedom from Target lesion revascularization (TLR), and the results were 89.7 percent for the LUTONIX® treatment group compared to 84.8 percent for the PTA control group, with p=0.17. Another end point was freedom from target vessel revascularization (TVR), where the result for the LUTONIX® treatment group was 76.2 percent compared to 66.6 percent in the control group with a p-value of 0.041. Clinical indicators, such as ankle brachial index (ABI), Rutherford scores (categorization of symptomology), quality of life (QOL), walking distance, and walking impairment WIQ, were significantly improved with a p-value of <0.001. The applicant assessed the primary safety endpoint using Kaplan-Meier survival analysis and stated that there was no evidence of statistical difference.
Regarding the LEVANT 1 trial, in the proposed rule, we stated our concern that the results of the LEVANT 1 trial were not statistically significant with regard to the p-value documented. In addition, adverse events were similar for both groups and through 24 months; the percentage of patients with any death, amputation, or target vessel thrombosis was 8 percent in the treatment group compared to 12 percent in the control group.
Regarding the LEVANT 2 study, in the proposed rule we stated our concern that the patient population included in the study may not reflect the Medicare population. We also noted that only 37 percent of the studied patients were female. We stated that it could be beneficial to see additional subgroup analyses to test for statistical interaction between treatment and subgroups to ascertain that there is no imbalance in response to different subpopulations, such as males versus females.
We invited public comments on whether LUTONIX® (and IN.PACT
With regard to substantial clinical improvement for the IN.PACT
The applicant noted that, during the SFA Trial, both the study subjects and trial sponsor were blinded to the treatment assignments through completion of the 12-month primary endpoint evaluations. The applicant also stated that the independent Clinical Events Committee and the Core Laboratories were blinded to the treatment assignment and the duration of the follow-up of study participants. In addition, operators (implanting physicians and catheterization laboratory staff, including research coordinators) were not blinded to the treatment delivered due to macroscopic visual differences between IN.PACT
The applicant reported the following: The primary endpoints were: improved primary patency rates in the IN.PACT
Other secondary endpoints were conducted and the patients were followed at 1, 6, and 12 months to assess the following claudication symptoms: EQ-5D; Walking Impairment Questionnaire (WIQ); 6-minute walk test in a subset. Claudication symptoms were 7.3 percent in the IN.PACT
The applicant also conducted extensive subgroup analyses of the primary safety end point, efficacy endpoint, and TLR rates to assess the response to IN.PACT
After reviewing the clinical data described above, in the proposed rule we raised a number of concerns related to the substantial clinical improvement criterion. Similar to the LUTONIX® LEVANT studies, in the proposed rule we stated that we were concerned that the IN.PACT
We invited public comments on whether IN.PACT
The applicant further asserted that with respect to outcomes of women treated with IN.PACT
Another commenter referenced an article that states that there remains a significant unmet clinical need in patients diagnosed with PAD, as well as a significant progress in the use of vascular procedures (both diagnostic and therapeutic) and preventive care.
After consideration of the comments we received, we are approving the LUTONIX® and IN.PACT
Each of the applicants submitted operating costs for its DCB. The manufacturer of the LUTONIX® stated that a mean of 1.37 drug-coated balloons was used during the LEVANT 2 clinical trial. The acquisition price for the hospital will be $1,900 per drug-coated balloon, or $2,603 per case (1.37 × $1,900). The applicant projects that approximately 8,875 cases will involve use of the LUTONIX® for FY 2016. The manufacturer for the IN.PACT
New technology add-on payments for cases involving these technologies will be based on the weighted average cost of the two DCBs described by the ICD-10-PCS procedure codes listed above (which are not manufacturer specific). Because ICD-10 codes are not manufacturer specific, we cannot set one new technology add-on payment amount for IN.PACT
OrthoSensor submitted an application for new technology add-on payments for the VERASENSE
According to the applicant, the VKS device combines dual sensor elements, coupled with micro-processing technology, to accurately depict intra-articular kinetics and contact point locations within the knee. The tibial trial insert is placed in the knee capsule. Proper placement of the insert does not require any force or infiltration of the bone or soft tissue in the knee. The applicant stated that the VKS device uses wireless communication protocols that overcome line-of-sight or other interference issues, therefore eliminating the need for line-of-sight or direct antenna-based tracking during the TKA surgery.
The first version of the VKS received FDA approval in 2009 for the OrthoRex Intra-Operative Load Sensor. The device was indicated for use as a tool to adjust the femoral knee implant to reduce instability from flexion gap asymmetry using a single patient use sterile force sensor. The applicant noted that the first version of the VKS was not available on the U.S. market at the time of FDA approval in 2009. The applicant stated that the 510K approval from the FDA allowed permission to continue to test the device and improve upon the specificity of the sensors. The applicant stated that the first version of the VKS did not enter on the U.S. market until late 2011. Further advancements were made to the VKS to more accurately refine the sensor specificity, which provides more accurate balance data unique to the contours of specific knee implant components. The applicant further explained that the tibial trial sensor was redesigned to respond quantitatively and specifically to the variations of the contours of specifically manufactured knee implants. The advanced sensor specificity, developed in conjunction with data gained from clinical trials, provides information regarding force and balance metrics that aid the surgeon's understanding and measurement of knee balance. The applicant noted that without the advancements to the sensor specificity, which were perfected based on knowledge gained from the clinical trials, the sensor would not be as clinically useful as it is currently. According to the applicant, these advancements resulted in additional FDA clearances on June 13, 2013, and October 14, 2013, and the product's description was updated on January 28, 2014.
The applicant maintained that the VKS meets the newness criterion for new technology add-on payments. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24453), we stated that we believe that the beginning of the newness period for the VKS commenced when the product was first made available on the U.S. market in late 2011, and the 3-year anniversary date of the product's availability on the U.S. market occurred in late 2014, which is prior to the beginning of FY 2016. We also stated that the advancements made to the VKS that resulted in the additional FDA approval clearances in 2013 may not be significant enough to distinguish the advanced technology from the first version of the VKS, which received FDA approval in 2009. Therefore, we did not believe that the VKS technology could be considered “new” for purposes of new technology add-on payments.
As discussed in the FY 2005 IPPS final rule (69 FR 49003), once data become available to reflect the cost of the technology in the relative weights, a technology can no longer be considered “new” and eligible to receive new technology add-on payments. Section 412.87(b)(2) states that a medical service or technology may be considered new within 2 or 3 years after the point at which data begin to become available reflecting the ICD-9-CM code assigned to the new service or technology (depending on when a new code is assigned and data on the new service or technology become available for DRG recalibration). After CMS has recalibrated the DRGs based on available data that reflects the costs of an otherwise new medical service or technology, the medical service or technology will no longer be considered “new” under this criterion. The applicant analyzed the relative weights from 2010 to 2014 for the MS-DRGs that may contain cases that would be eligible for treatment using the advanced VKS technology (MS-DRGs 461 through 470). As a result of its analysis, the applicant noted that there was no increase in the calculation of the FY 2014 or FY 2015 relative weights for these MS-DRGs that would represent and include the additional cost of cases involving the advanced VKS technology. To the contrary, in the FY 2016 IPPS/LTCH PPS proposed rule, we stated that we believe that the costs of this technology are included in the charge data and the MS-DRGs have been recalibrated using that data. Therefore, we believe that the technology can no longer be considered “new” for the purposes of this provision, regardless of whether or not there was an increase in the MS-DRG relative weights during FYs 2014 and 2015, specifically because of the inclusion of the cost of the technology.
Specifically, as discussed in the proposed rule, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 through 43814) as part of the newness criterion, we established criteria for evaluating whether a new technology is substantially similar to an existing technology, specifically: (1) Whether a product uses the same or a similar mechanism of action to achieve a therapeutic outcome; (2) whether a
In evaluating the VKS new technology add-on payment application under the substantial similarity criteria, in the FY 2016 IPPS/LTCH PPS proposed rule, we stated that we believe that the first version of the VKS and the advance version of the VKS use the same mechanism of action to achieve the desired outcome by using a sterile device that is equipped with sensors used to adjust the femoral knee implant to reduce instability from flexion gap asymmetry. In addition, we believe that cases involving the first version of the VKS would be assigned to the same MS-DRG as the cases involving the advanced VKS. Moreover, it appeared that both the first version of the VKS and the advanced version of the VKS would treat the same or similar disease and the same or similar patient population. We concluded that, because the technology appeared to meet all three elements of the substantial similarity criteria, we believe that the beginning of the newness period for this technology would commence when it became available on the U.S. market in late 2011, and therefore the VKS may not be considered “new” for purposes of new technology add-on payments.
We invited public comments regarding whether or not the VKS technology is substantially similar to existing technologies, and whether or not the VKS technology meets the newness criterion.
The applicant further noted that, when comparing this advanced device to its predecessor, its use produces patient outcomes that are similar because both devices measured load relative to ligament balance, and outcomes were measured as a function of load. The applicant stated that the advanced device approved by the FDA in 2013 has the ability to uniquely report relative femoro-tibial rotation and has changed the variables regarding how the surgeon can use the device relative to the soft tissue (ligament) dissection and implant positioning, which allows the surgeon to better measure varus/valgus angles relative to load and balance, and allows for empirically-based decisions used in making angular cuts for both primary and revision TKA procedures. The applicant believed that the introduction of new engineering principles used in the 2013 FDA-cleared advanced version of the VKS device captures, measures, and reports more accurately intercompartmental load,
As stated in section II.G.1.a. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule and this final rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. In the proposed rule, we noted that the applicant had applied for a new ICD-10-PCS procedure code at the March 18-19, 2015 ICD-10-CM/PCS Coordination and Maintenance Committee Meeting. In this final rule, we note that the new ICD-10-PCS procedure codes XR2G021 (Monitoring of Right Knee Joint using Intraoperative Knee Replacement Sensor, Open Approach, New Technology Group 1) and XR2H021 (Monitoring of Left Knee Joint using Intraoperative Knee Replacement Sensor, Open Approach, New Technology Group 1), were established as shown in Table 6B (New Procedure Codes), which will uniquely identify procedures involving the VKS technology. More information on this request and the approval can be found on the CMS Web site at:
With regard to the cost criterion, the applicant supplied three analyses to demonstrate that it meets the cost criterion. The applicant believed that cases that are eligible for the VKS technology map to MS-DRGs 461 and 462 (Bilateral or Multiple Major Joint Procedures of Lower Extremity with MCC and without MCC, respectively), MS-DRGs 466 through 468 (Revision of Hip or Knee replacement with MCC, with CC, and without CC/MCC, respectively), and MS-DRGs 469 and 470 (Major Joint Replacement or Reattachment of Lower Extremity with MCC and without MCC, respectively). The first analysis used data from the 2012 National Inpatient Sample (NIS) from the Agency for Research and Quality (AHRQ). We note that the NIS includes Medicare, Medicaid, and commercial and uninsured claims data. However, the applicant limited its search to Medicare cases only.
The applicant searched for all Medicare cases assigned to MS-DRGs 461 and 462 and found 812 and 14,200 cases respectively (for a total of 15,012 cases). The applicant noted that the 15,012 cases assigned to MS-DRGs 461 and 462 also include cases representing hip revision procedures. Therefore, to determine the number of eligible cases reporting bilateral knee revisions assigned to MS-DRGs 461 and 462, based on clinical information,
According to the applicant, eligible cases for the VKS technology include cases representing knee revision procedures that also map to MS-DRGs 466 through 468 (which represent
According to the applicant, eligible cases for the VKS technology also include TKA procedures that map to MS-DRGs 469 and 470. To determine the number of eligible cases reporting TKA procedures assigned to MS-DRGs 469 and 470, the applicant first searched the NIS database for the total number of Medicare cases assigned to these MS-DRGs. This resulted in 35,740 cases in MS-DRG 469 and 547,955 cases in MS-DRG 470. The applicant noted that MS-DRGs 469 and 470 also include cases representing hip replacement and other joint replacement procedures. Therefore, in order to determine the number of TKA procedures within these MS-DRGs, the applicant searched the NIS database for cases reporting ICD-9-CM procedure codes that typically map to these MS-DRGs. The applicant first searched for cases representing TKA across all MS-DRGs that reported ICD-9-CM procedure code 81.54 (Total knee replacement) and found 336,050 cases. The applicant then searched the NIS database for cases representing hip and other joint replacement procedures across all MS-DRGs that reported ICD-9-CM procedure codes 81.51 (Total hip replacement), 81.52 (Partial hip replacement), 81.56 (Total ankle replacement), 81.57 (Replacement of joint of foot and toe), and 81.59 (Revision of joint replacement of lower extremity, not elsewhere classified) and found 238,050 cases. This resulted in a total of 574,100 cases representing knee, hip, and other joint replacement procedures.
The applicant then divided the number of cases representing TKA procedures by the total number of cases (336,050/574,100) and determined that 58.5 percent of all cases assigned to MS-DRGs 469 and 470 are related to TKA procedures. The applicant then multiplied the percent of cases representing TKA procedures (58.5 percent) by the number of cases assigned to MS-DRGs 469 and 470, which resulted in 20,920 cases in MS-DRG 469 (35,740 * .585) and 320,746 cases in MS-DRG 470 (547,955 * .585). In the proposed rule we stated we were concerned that the methodology the applicant used to determine the percentage of cases representing TKA procedures still includes cases representing hip and other joint replacement procedures. Specifically, the applicant did not uniquely identify cases representing TKA procedures and only produced a percentage of all cases, which still includes cases representing hip and other joint replacement procedures.
Based on the analysis above, the applicant asserted that the total number of cases across MS-DRGs 461 and 462 and MS-DRGs 466 through 470 was 374,071. The applicant determined an average case-weighted charge per case of $57,341. The applicant then determined that it was necessary to remove charges related to the other computer-assisted devices/technologies used during these procedures and charges for operating room time because procedures involving the VKS do not require operating room time, and the charges for the VKS technology would inevitably be different. Therefore, the applicant removed approximately $146 from the average case-weighted charge per case for cases assigned to MS-DRGs 461 and 462, and $73 from the average case-weighted charge per case for cases assigned to MS-DRGs 466 through 470. The applicant noted that the $146 in charges removed from the average case-weighted charges per case for cases assigned to MS-DRGs 461 and 462 was slightly higher than the charges removed from cases assigned to MS-DRGs 466 through 470 because these charges were for bilateral procedures which require additional operating room time.
Data from the NIS database is only available on a national level and not on a hospital-specific level. Therefore, in order to standardize the charges per case, the applicant used the FY 2012 IPPS Impact File and the mean value of all relevant standardization factors to standardize the charges per case. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24455), we stated that the analysis provided by the applicant did not use hospital-specific data and, therefore, the standardization process may be inaccurate because of the use of mean factors rather than hospital-specific factors. By using mean factors rather than hospital-specific factors, we stated that we believe that the standardization performed by the applicant does not sufficiently take into account hospital variations.
The applicant then inflated the charges using an inflation factor of 10.4227 percent based on the inflation factor in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50379), and added the charges related to the VKS technology to the adjusted average case-weighted standardized charge per case. This resulted in a final inflated average case-weighted standardized charge per case of $68,121. Using the FY 2015 IPPS Table 10 thresholds, the applicant determined that average case-weighted threshold amount for MS-DRGs 461 and 462 and MS-DRGs 466 through 470 is $57,341. Because the final inflated average case-weighted standardized charge per case for the applicable MS-DRGs exceeds the average case-weighted threshold amount, the applicant asserted that the technology meets the cost criterion.
The applicant's second analysis used data from the 2013 American Hospital Discharge Data (AHD) based on 57 randomly selected hospitals. The applicant searched the data and did not find any cases assigned to MS-DRG 461. The applicant noted that it used a value of 10 cases for its analysis of cases assigned to MS-DRG 461 because data
To determine the number of eligible cases reporting knee revision procedures assigned to MS-DRGs 466 through 468, the applicant first searched the AHD database for the total number of cases assigned to these MS-DRGs. This resulted in a total of 2,969 cases. Because these MS-DRGs include cases representing hip and knee revision procedures, to determine the number of cases representing knee revision procedures in each of these three MS-DRGs, the applicant first divided the number of cases for each MS-DRG (122 for MS-DRG 466; 1,746 for MS-DRG 467; and 1,101 for MS-DRG 468) by the total number of cases in MS-DRGs 466 through 468 (2,969). The applicant then multiplied the percentage for each MS-DRG (4.1 percent for MS-DRG 466; 58.8 percent for MS-DRG 467; and 37.1 percent for MS-DRG 468) by the total number of cases in each MS-DRG. Based on this calculation, the applicant approximated the following number of cases representing knee revision procedures in each of these three MS-DRGs: 1,307 cases in MS-DRG 466; 18,704 in MS-DRG 467; and 11,794 in MS-DRG 468. Similar to our concerns about the first analysis, in the proposed rule (80 FR 24455), we stated we were concerned that the methodology the applicant used to determine the percentage of cases of knee revision procedures still includes cases representing hip revision procedures. Specifically, in its methodology, the applicant did not use any source of statistical relevance to isolate cases representing knee revision procedures. The applicant simply used the percentage of Medicare cases for each MS-DRG of the overall total cases for the three MS-DRGs, which include knee and hip revision procedures, and multiplied by this percentage to further reduce the number of cases. We stated that we do not believe that this further reduction to the total number of Medicare cases has isolated cases representing knee revision procedures.
The applicant used the same methodology from the first analysis to determine the number of eligible cases representing TKA procedures assigned to MS-DRGs 469 and 470. The applicant searched the AHD database and found 1,217 cases assigned to MS-DRG 469 and 24,620 cases assigned to MS-DRG 470. To determine the number of cases representing TKA procedures within these MS-DRGs, the applicant multiplied the total number of cases within these MS-DRGs by the percentage of 58.5 percent from the NIS database, which represents the percentage of knee replacement procedure cases among the total number of cases representing knee, hip and joint replacement procedures. This resulted in 712 cases in MS-DRG 469 (1,217 * .585) and 14,411 cases in MS-DRG 470 (24,620 * .585). Similar to our concerns expressed earlier (and in the proposed rule), the methodology that the applicant used to determine the percentage of cases representing TKA procedures still includes cases representing hip replacement and other joint replacement procedures. Specifically, the applicant did not uniquely identify cases representing TKA procedures and only produced a percentage of all cases, which still includes cases representing hip and other joint replacement procedures.
Based on this analysis, the applicant asserted that the total number of cases across MS-DRGs 461 and 462 and MS-DRGs 466 and 470 was 46,960. The applicant determined an average case-weighted charge per case of $80,702. For the rest of the analysis, the applicant followed the same methodology as the first analysis. The applicant removed $146 from the average case-weighed charge per case for cases assigned to MS-DRGs 461 and 462 and $73 from the average case-weighted charge per case for cases assigned to MS-DRGs 466 through 470 for charges related to other computer-assisted devices/technologies used during these procedures and additional charges for the use of the operating room.
Similar to the first analysis, the applicant used the FY 2012 IPPS impact file and the mean value of all relevant standardization factors from all hospitals to standardize the charges per case. Similar to our concerns expressed earlier (and in the proposed rule), the analysis provided by the applicant did not use hospital-specific data and, therefore, the standardization process may be inaccurate because of the use of mean factors rather than hospital-specific factors. By using mean factors rather than hospital-specific factors, the standardization performed by the applicant does not sufficiently take into account hospital variations.
The applicant then inflated the charges using an inflation factor of 10.4227 percent based on the inflation factor in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50379), and added the charges related to the VKS technology to the adjusted average case-weighted standardized charge per case. This resulted in a final inflated average case-weighted standardized charge per case of $90,515. Using the FY 2015 IPPS Table 10 thresholds, the applicant determined that the average case-weighted threshold amount for MS-DRGs 461 and 462 and MS-DRGs 466 through 470 is $80,699. Because the final inflated average case-weighted standardized charge per case exceeded the average case-weighted threshold amount for the applicable MS-DRGs, the applicant asserted that the VKS technology meets the cost criterion.
The applicant's third analysis used data from the FY 2015 CMS Before Outliers Removed (BOR) file. The BOR file contained 469 cases in MS-DRG 461 and 9,396 cases in MS-DRG 462. To determine the number of cases representing bilateral knee revision procedures assigned to MS-DRGs 461 and 462, similar to the first analysis, the applicant used an assumption of 4 percent, which resulted in 19 cases in MS-DRG 461 and 376 cases in MS-DRG 462. Similar to our concerns stated earlier (and in the proposed rule (80 FR 24456)), the applicant did not uniquely identify cases representing bilateral knee revision procedures and only produced a percentage of all cases, which still includes cases representing hip revision procedures.
To determine the number of eligible cases reporting knee revision procedures assigned to MS-DRGs 466 through 468, the applicant again analyzed the BOR file which contained a total of 44,420 cases. Similar to first two analyses, because these MS-DRGs include cases representing hip and knee revision procedures, to determine the number of cases representing knee revision procedures in each of these three MS-DRGs, the applicant first divided the number of cases for each MS-DRG (4,202 for MS-DRG 466; 23,390 for MS-DRG 467; and 16,828 for MS-DRG 468) by the total number of cases in MS-DRGs 466 through 468 (44,420). The applicant then multiplied the percentage for each MS-DRG (9.5 percent for MS-DRG 466; 52.7 percent for MS-DRG 467; and 37.9 percent for MS-DRG 468) by the total number of
The applicant used the same methodology from the first analysis to determine the number of eligible cases reporting TKA procedures assigned to MS-DRGs 469 and 470. The BOR file contained 27,737 cases in MS-DRG 469 and 437,649 cases in MS-DRG 470. To determine the number of cases representing TKA procedures within these MS-DRGs, the applicant multiplied the total number of cases within these MS-DRGs by the percentage of 58.5 percent obtained from the NIS database, which represents the percentage of knee replacement cases among the total number of cases representing knee, hip, and joint replacement procedures. This resulted in 16,236 cases in MS-DRG 469 (27,737 * .585) and 256,178 cases in MS-DRG 470 (437,649 * .585). Similar to our concerns stated earlier (and in the proposed rule), the methodology that the applicant used to determine the percentage of cases representing TKA procedures still includes cases representing hip and other joint replacement procedures. Specifically, the applicant did not uniquely identify cases representing TKA procedures and only produced a percentage of all cases, which still includes cases representing hip and other joint revision procedures.
Based on this analysis, the applicant asserted that the total number of cases across MS-DRGs 461 and 462 and MS-DRGs 466 through 470 was 304,614. The applicant determined an average case-weighted charge per case of $56,282. For the rest of the analysis, the applicant followed the same methodology as the first analysis. The applicant then removed $146 from the average case-weighted charge per case for cases assigned to MS-DRGs 461 and 462 and $73 from the average case-weighted charge per case for cases assigned to MS-DRGs 466-470 for charges related to other computer-assisted devices/technologies used during these procedures and additional charges for the use of the operating room.
Similar to the first analysis, the applicant used the FY 2012 IPPS Impact File and the mean value of all relevant standardization factors from all hospitals to standardize the charges per case. Similar to our concerns stated earlier (and in the proposed rule), the analysis provided by the applicant did not use hospital-specific data and, therefore, the standardization process may be inaccurate because of the use of mean factors rather than hospital-specific factors. By using mean factors rather than hospital-specific factors, we stated that we believe that the standardization performed by the applicant did not sufficiently take into account hospital variations.
The applicant then inflated the charges using an inflation factor of 10.4227 percent based on the inflation factor in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50379), and added the charges related to the VKS technology to the adjusted average case-weighted standardized charge per case. This resulted in a final inflated average case-weighted standardized charge per case of $66,382. Using the FY 2015 IPPS Table 10 thresholds, the applicant determined that the average case-weighted threshold amount for MS-DRGs 461 and 462 and MS-DRGs 466 through 470 is $64,280. Because the final inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount for the applicable MS-DRGs, the applicant asserted that the VKS technology meets the cost criterion.
Based on the information provided by the applicant, combined with the weight of our concerns, in the proposed rule we stated that we were unable to determine if and how the VKS technology meets the cost criterion. We invited public comments on whether or not the VKS technology meets the cost criterion, specifically with regard to the concerns raised.
With regard to the substantial clinical improvement criterion, the applicant asserted that the VKS technology represents a substantial clinical
The applicant also believed that the device offers the ability to diagnose a medical condition for a patient population experiencing medical conditions that are currently undetectable, or offers the ability to diagnose a medical condition earlier than that which is capable using currently available technologies. The applicant explained that the VKS technology provides an improved evaluation/diagnosis compared to an unbalanced TKA implant. Specifically, the applicant stated that the device enables the surgeon to obtain intraoperative measures enabling the surgeon to improve upon the placement of the TKA tibial and femoral components. In addition, the applicant stated that, intraoperatively, the device leads to an immediate diagnosis of an implant that can now be accurately positioned due to informed fine tissue dissection. The applicant further stated that the intraoperative technique has been demonstrated to result in increased implant stability and functional congruence. The applicant cited the following examples of outcomes that have been frequently documented and evaluated within clinical studies of medical devices:
• Intended to address the leading causes of early implant failure in TKA: instability, malrotation and malalignment;
• Dynamic intercompartmental load data and Kinetic Tracking enables evidence based soft tissue releases to improve stability through full ROM;
• Provides intraoperative feedback on tibial-femoral component rotation, position of femoral Contact Points and femoral roll-back to facilitate optimal component position;
• Enables reproducible, teachable surgical technique through quantifying surgeon “feel”; and
• Captures intraoperative data for inclusion in patient EMR, registries or comparative effectiveness studies.
The applicant stated that use of the device significantly improves clinical outcomes for a patient population experiencing these types of medical procedures when compared to currently available treatments. The applicant explained that extensive research and development has resulted in the VKS technology demonstrating improved patient outcomes in multi-center studies. The applicant further explained that the VKS technology has intraoperatively provided a unique opportunity to observe the short-term clinical outcomes of patients with a quantifiably balanced knee versus those who have quantifiably unbalanced knees. According to the applicant, in a multi-center study, the use of the VKS technology has been shown to reduce post-operative pain and improve activity and patient satisfaction scores with statistical significance. Additionally, the applicant stated that 97 percent of patients whose knees were balanced using the VKS technology reported that they were “satisfied” to “very satisfied” at 1-year post-operative compared to 81 percent patient satisfaction after a TKA procedure without the use of the VKS technology. The applicant stated that the VKS technology provided a 16-percent improvement in patient satisfaction for VKS-balanced knees; the first significantly notable increase of patient-reported satisfaction in over 30 years.
According to the applicant, the use of the VKS technology avoided early implant failure. The applicant explained that considering the objective to ameliorate the present risks of revision in TKA procedures, the VKS technology has been advanced to address the need for improved knee balance through fine tissue dissection using information from the VKS technology intelligent tibial trial. While not disturbing the surgical flow of TKA procedures, the applicant stated that the VKS technology provides the surgeon with data on the dynamic intercompartmental load, and kinetic tracking enables evidence-based soft tissue releases to improve stability through full ROM.
The applicant further stated that the VKS technology provides intraoperative information on tibial-femoral component rotation, position of femoral contact points and femoral roll-back to facilitate optimal component position. One clinical study
The applicant stated that the VKS technology has demonstrated and resulted in a “balanced knee” after TKA procedures with 6 month and 1 year outcome scores showing a significant improvement over conventional or computer-assisted TKA procedures. According to the applicant, by not
The applicant provided patient outcomes at 6 months and believed that this demonstrated a significant improvement for the “balanced knee” TKA procedures using the VKS technology. According to the applicant, multivariate binary logistic regression analyses were performed for both Knee Society Scores (KSS) and Western Ontario and McMaster Universities Arthritis Index (WOMAC) scores at 6 months. Variables run in these analyses included: Age at surgery, body mass index (BMI), gender, preoperative ROM, preoperative alignment, change in activity level (preoperative to 6 months), and joint state (balanced versus unbalanced). For KSS and WOMAC, both step-wise and backward multivariate logistic regression analyses were calculated to be best fit models with similar significance (P=0.001). Ultimately, the step-wise model was used. The applicant stated that the binary model revealed that the variable exhibiting the most significant effect of improvement on KSS and WOMAC scores was balanced joint state (P=0.001; P=0.004). The applicant noted that joint state was the most highly significant variable; this demonstrated similar levels of significance throughout all possible combinations of variables included in the model (P=0.001). The applicant added that joint state was also observed to be the sole significant factor in patient-reported outcome score improvement (P b 0.001).
The applicant added that analysis of the data revealed there was also a concurrent significance observed with activity level (P=0.005). However, the applicant noted that activity level was not significant on its own. The applicant concluded that a balanced joint state results in a higher activity level,
The applicant further stated that 1 year clinical trial evidence supports the VKS technology protocol for TKA procedures. According to the applicant, of the 135 patients undergoing sensor-guided surgery, 13 percent remained unbalanced (by surgeon discretion). The applicant stated that “surgeon discretion,” in this analysis, indicates that the surgeon recognized and accepted the “unbalanced” intercompartmental load difference as presented by the VKS technology, but believed that the knee was in a clinically acceptable state. Pre-operatively, there was no statistical difference in any outcomes measures between the two cohorts, the averages of which were: Total KSS = 105 ±24.6; total WOMAC = 47 ±14.8.
Additionally, according to the applicant, at 1 year, the average total KSS score of balanced patients exceeded that of unbalanced patients by 23.3 points (P<0.001); 179±17.2 and 156±23.4 for the balanced and unbalanced cohort, respectively. The balanced cohort average score for KSS pain and function, separately, were 96.4 and 82.4 respectively; the unbalanced cohort scored 87.8 and 68.3 points for pain and function. The applicant stated that the disparities between the balanced and unbalanced patients' pain and function scores were also highly statistically significant (P<0.001, P=0.022).
For WOMAC, the applicant noted that that the balanced cohort improved their score by 8 points; 10±11.8 and 18±17 for balanced and unbalanced patients, respectively (WOMAC is scored with an inverse scale; lower scores indicate more improvement). The applicant further stated that while this difference did not prove to be statistically significant by the standards set forth for this analysis (P=0.085), the authors believed that this is due, in part, to the large standard deviations associated with both cohorts.
According to the applicant, the balanced cohort's average activity level score was 48.6, which corresponds with the light to moderate labor categories (tennis, light jogging, heavy yard work) and the unbalanced patient's average activity level score was 26.7, which corresponds to the upper limits of the semi-sedentary range (light housework, walking for limited distances). The applicant believed that the difference between the average scores was statistically significant (P=0.015). The applicant noted that the most notable aspect of every outcome measure collected is that the unbalanced patient scores at 1 year still failed to achieve the level of improvement of the balanced patient scores at 6 months.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24458 and 24459), we presented a number of concerns regarding the applicant's assertions regarding substantial clinical improvement. First, we stated that during the trials, after using the device, surgeons continued to make manual adjustments to the spacers to set the knee replacement. The applicant asserted that the VKS technology presents better accuracy for the surgeon when making adjustments to the spacers when implanting a knee replacement. However, we stated that the evidence does not delineate the degree of any improved outcomes or patient satisfaction associated with use of the VKS technology versus additional manual adjustments made by the surgeon. We also stated that most of the clinical evidence is based on patient satisfaction surveys. While the survey data appeared to demonstrate that
We invited public comments on whether the VKS technology meets the substantial clinical improvement criterion, specifically with regard to our concerns.
Another commenter questioned whether a knee defined as balanced by use of the VKS produced a significantly more favorable outcome than a knee defined as unbalanced by use of the VKS. The commenter stated that improved outcomes have not been demonstrated by the VKS that are significantly increased when compared to improved outcomes achieved with additional manual adjustments made by surgeons.
According to the applicant, the devices FDA-cleared in June 2013 differ from those used in the early stages (2012) of the study. The applicant stated that engineering changes maintain the prior device measurements of balance as a function of load but the new approval added alignment within these measurements and improves upon the surgical flow, all features which are important to achieve a more stable TKA procedure result. The applicant noted that the device's expanded functionality (from June 2013 clearance) of the addition of alignment has spurred use in revision cases and is a new indication for use in the 510k currently under review.
The applicant also stated that outcome studies represent a series of patients enrolled and operated on by surgeons trained on the technique, using an early device and transitioning to the 2013 engineering changes. The applicant noted that participating surgeons adhered to the study design and surgical protocol and did not make additional manipulations of the knee after the surgeon captured the VKS metrics. The applicant further noted that, early on, some surgeons did not change their tissue dissection based upon the data from the VKS (the device was used merely to collect intercompartmental load data in these cases), as the data assessed from these earlier stage surgical cases were seen to have results indicating unbalanced knees. The applicant stated that early recognition of these “unbalanced” knees gave rise to the surgeon now modifying their tissue dissection based on the VKS information and provided an “unbalanced” set of patients to compare outcomes.
The applicant also stated that highly statistically significant P-values of 0.0001 were reported using the KSS and WOMAC score. The applicant noted that KSS and WOMAC are validated scoring tools specifically designed to capture patient functional outcomes, including pain scores. The applicant also noted patient satisfaction measures were also collected which demonstrated that the VKS KSS and WOMAC scores were statistically higher than traditional scores for primary TKA or navigated TKA.
The applicant stated that BMI of the VKS balanced cohort was compared to historical TKA controls. The applicant noted that historically patients tend to gain weight after TKA which contributes to poorer outcomes.
The commenter further stated that published findings provide evidence that the device significantly reduces the incidence of TKA failure due to stiffness and instability. The commenter added that the VKS technology should reduce the need for revision knee surgery and the morbidity patients learn to live with when their implant is not stable or incorrectly placed.
The commenter stated that estimates find Medicare spends over $1 billion annually just on facility and physician payment related to revision knee surgeries. The commenter noted that preventing complications and keeping patients out of acute and long term care facilities saves money and avoids added complications that can result in unintended consequences leading to excessive costs to the healthcare system and the patient. The commenter stated that hospitals have tight margins and recommended that CMS grant the VKS a new technology add-on payment for FY 2016.
The commenter also asserted that engineering advances of the 2013 FDA-cleared advanced device uses data gained from prior research and development consistent with the newness criterion and the demonstration of substantial clinical improvement. The commenter believed that payment for MS-DRGs 469 and 470 is inadequate, and with consideration of the 2013 FDA approval, payment for MS-DRGs 466, 467 and 468 payment would also be inadequate.
The commenter believed that the VKS technology meets all three criteria for new technology add-on payments. The commenter also believed that, in the absence of added payment, surgeons would be denied the opportunity to quantitatively correct fine tissue dissection leading to a correctly “balanced” primary TKA and patients would be inappropriately served.
With regard to our first concern on substantial clinical improvement, the commenter stated that surgeons responded to the device metrics early on in the trial for collection only of “balance” information in order to establish a baseline for objectively defining what intraoperative balance meant (a definition that, prior to availability of the VKS technology, was not possible). The commenter further stated that upon establishment of a differential “window” between medial and lateral compartments of 15 pounds the sensor was then used as a tool to direct soft tissue dissection to achieve an intraoperative balance (within 15 pounds) result. The commenter explained that this cohort of patient results comprised the “balanced” population within the trial and, when compared with the “unbalanced” cohort (which were predominantly patients who received “manual adjustments”), showed improved outcomes and patient satisfaction associated with the use of VKS technology.
With regard to our second concern on substantial clinical improvement, the commenter stated that KSS and WOMAC scores are the most reported outcome tools for TKA procedures. The commenter asserted that patient satisfaction scores are equally validated outcome metrics. The commenter noted that the clinical outcomes at 6 months, and 2 years were recently published and reported that the VKS used by a trained surgeon delivers clinical outcomes much better than traditional primary TKA patients compared with the KSS and WOMAC scores. The commenter cited studies that showed patients with balanced knees at 6 months had higher functional outcome scores than
Boston Scientific Corporation submitted an application for new technology add-on payments for FY 2016 for the WATCHMAN® Left Atrial Appendage (LAA) Closure Technology (WATCHMAN® System). (We note that, as discussed in detail later in this section, the applicant submitted an application for new technology add-on payments for FY 2015 for the WATCHMAN® System, but withdrew its application after we issued the FY 2015 IPPS/LTCH PPS proposed rule.) According to the applicant, when a patient has been diagnosed with atrial fibrillation (AF), the left atrium does not expand and contract normally. As a result, the left atrium is not capable of completely emptying itself of blood. Blood may pool, particularly in the part of the left atrium called the left atrial appendage. This pooled blood is prone to clotting, causing formation of a thrombus. If a thrombus breaks off, it is called an embolism (or thromboembolism). An embolism can cause a stroke or other peripheral arterial blockage.
The applicant asserted that the WATCHMAN® System device is an implant that acts as a physical barrier, sealing the LAA to prevent thromboemboli from entering into the arterial circulation from the LAA, thereby reducing the risk of stroke and potentially eliminating the need for Warfarin therapy for patients diagnosed with nonvalvular AF who are eligible for Warfarin therapy but for whom the risks of long-term oral anticoagulation outweigh the benefits.
With regard to newness criterion, the applicant received FDA approval on March 15, 2015. According to the applicant, the WATCHMAN® System is the first LAA closure device approved by the FDA. Therefore, the applicant believes that the technology meets the newness criterion. Effective October 1, 2004 (FY 2005), ICD-9-CM procedure code 37.90 (Insertion of left atrial appendage device) was created to identify and describe procedures using the WATCHMAN® Left Atrial Appendage (LAA) Closure Technology. As stated in section II.G.1.a. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule and this final rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. Under the ICD-10-PCS, procedure code 02L73DK (Occlusion of left atrial appendage with intraluminal device, percutaneous approach) is the comparable translation for ICD-9-CM procedure code 37.90.
In the FY 2016 IPPS/LTCH proposed rule (80 FR 24459), we did not state any concerns regarding whether the WATCHMAN® System meets the newness criterion. We invited public comments on if, and how, the WATCHMAN® System meets the newness criterion.
As discussed in the proposed rule (80 FR 24459), with regard to the cost criterion, the applicant used the FY 2013 MedPAR file (which contained inpatient hospital claims data for discharges from October 1, 2012 to September 30, 2013) to search for cases reporting ICD-9-CM procedure code 37.90. The applicant provided two analyses. The first analysis includes all claims that reported ICD-9-CM procedure code 37.90, regardless of whether the code indicated a principal procedure that determined the MS-DRG assignment of the case. This analysis identified 507 cases across 29 MS-DRGs. The applicant noted that the MedPAR file contained claims that were returned to the provider that reported charges for actual cases from clinical trials that used the WATCHMAN® System that were well below post-FDA approval pricing. Therefore, the applicant removed the premarket device related charges. The applicant then standardized the charges, applied an inflation factor of 1.10443 based on the 2-year charge inflation factor listed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50379) and then added post-FDA approval charges for the WATCHMAN® System. Using the anticipated cost of the device after FDA approval and the National Average Implantable Device cost center CCR, the applicant estimated device charges post-FDA approval, combined those with the inflated average case-weighted standardized charges per case, and determined a final inflated average case-weighted standardized charge per case of $150,213. The average case-weighted threshold amount in the FY 2015 IPPS Table 10 for these MS-DRGs was $97,505. Because the final inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount of $97,505, the applicant maintained that the WATCHMAN® System meets the cost criterion using this analysis.
In the applicant's second analysis, cases eligible for the WATCHMAN® System were identified by claims reporting ICD-9-CM procedure code 37.90 assigned to MS-DRGs 250 and 251 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with MCC and without MCC, respectively). The applicant believed that these are the MS-DRGs to which cases are typically assigned if the WATCHMAN® System is used in the principal procedure performed during the inpatient stay. The applicant applied the trims in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49910
As with its first analysis, the applicant determined standardized nondevice charges for the applicable cases using claims data from the FY 2013 MedPAR file and applied an inflation factor. The applicant calculated average nondevice charges by subtracting what the applicant believed was the average total implantable device charges (calculated as the sum of the five individual device charge fields in the MedPAR file that constitute the Implantable Device cost center). Similar to its first analysis, the applicant then standardized the charges, applied an inflation factor of 1.10443, subtracted the device charges reported on the MedPAR claims (reflecting costs during the IDE study) and replaced them with the anticipated charges following FDA approval (converting the costs of the device to charges with a CCR of 0.349 based on the national average implantable device CCR from the FY 2015 IPPS/LTCH PPS final rule (79 FR 49914)), combined those with the inflated average case-weighted standardized charges per case, and determined a final inflated average case-weighted standardized charge per case of $117,663. The average case-weighted threshold amount for these MS-DRGs in the FY 2015 IPPS Table 10 was $72,804. Because the final inflated average case-weighted standardized charge per case exceeds the average case-weighted MS-DRG threshold amount of $72,804, the applicant maintained that the WATCHMAN® System meets the cost criterion using this analysis. We note that the applicant searched for cases reporting ICD-9-CM procedure code 37.90. In section II.G.3.b. of the preamble of this final rule, we are finalizing a proposal regarding cardiac ablation and other specified cardiovascular procedures. Specifically, we proposed to assign the procedures performed within the heart chambers using intracardiac techniques, including those identified by ICD-9-CM procedure code 37.90, to two new MS-DRGs: MS-DRG 273 (Percutaneous Intracardiac Procedures with MCC) and MS-DRG 274 (Percutaneous Intracardiac Procedures without MCC). In the proposed rule, we stated that we believe that this could have implications for determining whether the applicant meets the cost criterion. There have been instances in the past where the coding associated with a new technology application is included in a finalized policy to change one or more MS-DRGs. For example, in the FY 2013 IPPS/LTCH PPS final rule, we describe the cost analysis for the Zenith® Fenestrated Abdominal Aortic Aneurysm Endovascular Graft which was identified by ICD-9-CM procedure code 39.78. In that same rule, we finalized a change to the assignment of that procedure code, reassigning it from MS-DRGs 252, 253, and 254 to MS-DRGs 237 and 238. Because of that change, we determined that, for FY 2013, in order for the Zenith® Fenestrated Abdominal Aortic Aneurysm Endovascular Graft to meet the cost criteria, it must demonstrate that the average case-weighted standardized charge per case exceeds the thresholds for MS-DRGs 237 and 238 (77 FR 53360). We note that, in that example, MS-DRGs 237 and 238 existed previously; therefore, thresholds that were 75 percent of one standard deviation beyond the geometric mean standardized charge for these DRGs were available to the public in Table 10 at the time the application was submitted. In the FY 2016 IPPS/LTCH proposed rule, we stated that in this case, if MS-DRGs 273 and 274 were to be finalized for FY 2016, we recognize that thresholds that are 75 percent of one standard deviation beyond the geometric mean standardized charge would not have been available at the time the application was submitted. We stated that we believe that it could be appropriate for the applicant to demonstrate that the average case-weighted standardized charge per case exceeds these thresholds for MS-DRGs 273 and 274. Accordingly, we made available supplemental threshold values on the CMS Web site at
In the FY 2016 IPPS/LTCH proposed rule, we invited public comments on whether considering these supplemental threshold values as part of the cost criterion evaluation for this application is appropriate and also on how to address similar future situations in a broader policy context should they occur. We also invited public comments on the whether the WATCHMAN® System meets the cost criterion based on the applicant's analysis.
Commenters urged CMS to consider using the following sequence for new technology add-on payment applications that are associated with procedures that CMS proposes be reassigned to newly created MS-DRGs: First, CMS should evaluate the cost threshold in effect at the time the new technology add-on payment application is submitted to determine if an applicant exceeds the cost threshold. Second, CMS should determine if the application meets the new technology add-on payment criteria, including the cost threshold, in place at the time the new technology add-on payment was submitted. Third, CMS should reassign procedures associated with new technology add-on payments to a different MS-DRG after the new technology add-on payment decision is made. One commenter stated that such a sequence would be identical to the current policy CMS uses when reassigning procedures already associated with a new technology add-on payment to new DRGs. The commenter further stated that in cases when CMS reassigns procedures already associated with a new technology add-on payment to a different set of DRGs than were originally used to determine if the applicant met the cost criterion, CMS does not require the new technology add-on payment to be reassessed using cost thresholds for the newly assigned MS-DRGs. The commenter noted that CMS did not
Regarding the substantial clinical improvement criterion, we note that the applicant applied for new technology add-on payments for FY 2015 (as discussed in the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28043 through 28045)). However, prior to the publication of the FY 2015 IPPS/LTCH PPS final rule, the applicant withdrew the application. Before the withdrawal of the application, CMS stated its concerns with the application in the FY 2015 IPPS/LTCH PPS proposed rule. The applicant included responses to CMS' previous concerns with the FY 2015 application in its FY 2016 application. Therefore, we addressed the applicant's responses to the previous concerns specified in the FY 2015 IPPS/LTCH PPS proposed rule as well as our observations on the current FY 2016 application in the FY 2016 IPPS/LTCH PPS proposed rule, as we set forth below.
The applicant asserted that the WATCHMAN® System, a system that reduces the risk of thromboembolic stroke in patients diagnosed with high-risk nonvalvular AF who are eligible for Warfarin therapy, but in whom the potential risks of Warfarin therapy outweigh the potential benefits, meets the substantial clinical improvement criterion because the WATCHMAN® System is superior to currently available treatments. The applicant claimed that the WATCHMAN® System is ideal for patients diagnosed with a prior hemorrhagic stroke while on Warfarin therapy, patients not adherent to Warfarin therapy, patients with difficulty achieving a therapeutic international normalized ratio (INR), and patients with an increased risk or history of falls. The applicant acknowledged that anticoagulation using Warfarin therapy or one of the novel oral anticoagulation agents (NOACs), such as dabigatran, rivaroxaban, or apixaban, is effective for preventing thromboembolism in patients who can tolerate such medication over the long term. However, these medications are associated with certain risks. The applicant stated that the most used and studied agent, Warfarin, requires dietary restrictions, has a high-risk of drug interactions, genetic variability in dose-response, and the need for frequent monitoring. According to the applicant, the average patient diagnosed with AF and treated with Warfarin therapy achieves a therapeutic INR for approximately one-half of the treatment time. The applicant further stated that these NOACs also have nonadherence risks, high discontinuation rates (up to 20 percent within 2 years), are difficult to monitor effectiveness, and in some cases have no readily available reversal strategy.
As discussed in the proposed rule (80 FR 24460), in support of its assertion that the WATCHMAN® System is a substantial improvement, the applicant submitted data from two pivotal studies (PROTECT AF and the WATCHMAN® Left Atrial Appendage Closure Device in Patients With Atrial Fibrillation Versus Long-Term Warfarin Therapy (PREVAIL)). The data included results of a meta-analysis of the PROTECT AF and PREVAIL studies, an imputed placebo analysis, and a post hoc analysis of the bleeding risks associated with the WATCHMAN® System. According to the applicant, the clinical evidence from these trials and analyses establish the following: implantation of the WATCHMAN® System is safe; the WATCHMAN® System is superior to Warfarin when evaluated against a composite endpoint of all stroke, systemic embolism, and cardiovascular unexplained death in long-term follow-up; the WATCHMAN® System provides a greater reduction in major bleeding events after the conclusion of post procedure anti-thrombotic medication; and the WATCHMAN® System reduces the incidence of ischemic stroke when compared to patients diagnosed with AF who are not treated with Warfarin or other anticoagulation medication.
We note that, unlike in the FY 2015 application, the applicant did not include data from the ASAP study. In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28043 through 28045), we expressed concerns that data from the ASAP study suggested that the device did not prevent strokes and was insufficient to demonstrate efficacy in the secondary patient population (patients diagnosed with AF who were ineligible for oral anticoagulation). We specifically stated that the ASAP Registry (5) enrolled 150 patients, at one of four centers, that had a contraindication to even short-term anticoagulation, mostly a history of prior bleeding, and there was no control group. Device implantation led to a serious adverse event in 13 patients (8.7 percent), including one case of device thrombus leading to ischemic stroke. Five other patients had a device-related thrombus that did not lead to stroke (4 of these patients were treated with low molecular weight heparin), resulting in an overall 4.0 percent incidence (6 out of 150) of device-associated thrombus. In the PROTECT AF trial study, 20 of the 473 patients (4.2 percent) had device-associated thrombus, 3 of which led to an ischemic stroke. The rates of device-related thrombus are similar in the two studies (4.0 percent versus 4.2 percent), but the number of patients studied is smaller in the ASAP Registry (5) study compared to the PROTECT AF clinical trial study. In the 14-month follow-up data for the ASAP Registry (5) study, the rate of stroke or systemic embolism was 2.3 percent per year, which was said to be “lower than expected” based on prior data for patients diagnosed with AF who were not treated with warfarin (there was no concurrent control group). The data provided suggested efficacy in this patient population. However, we stated that we were concerned that there was not strong evidence that the device prevents stroke.
In the FY 2016 application, the applicant responded that, because the
According to the applicant, in the PROTECT AF trial, 463 patients were randomized to the WATCHMAN® System device and 244 patients to Warfarin therapy. Most patients randomized to the WATCHMAN® System device had it implanted (408=88 percent). Over the average 3.8 years of follow-up, more patients in the Warfarin therapy group withdrew (45 versus 15) or were lost to follow-up (11 versus 13) than in the WATCHMAN® System device group, leading to shorter mean follow-up (3.7 versus 3.9 years) in the Warfarin therapy group.
The applicant presented data shown in the following table and maintained that the results of the PROTECT study demonstrate primary efficacy and support that the WATCHMAN® System is noninferior and superior at 4 years.
In the FY 2015 IPPS/LTCH PPS proposed rule, we expressed concern that the evidence presented by the applicant demonstrating superiority compared to Warfarin therapy was insufficient. We expressed concern that the PROTECT AF trial was not designed to demonstrate superiority, and instead was designed to demonstrate noninferiority. We also expressed concern that the PREVAIL trial endpoint was not significantly improved in the conventional hypothesis testing statistical analysis at any time point. We stated that the longer term data showed improved efficacy and safety, but still remain sparse. In the FY 2016 application, the applicant stated that, under a Bayesian analysis, the distributions of the posterior probabilities are not symmetrical. According to the applicant, posterior probabilities represent the appropriate way to determine statistical significance in Bayesian methodology. As predefined in the PROTECT AF trial, a posterior probability for noninferiority of equal to or more than 97.5 percent, and a prespecified level of at least 95 percent to support superiority were the criteria for statistical testing. According to the applicant, in both cases (noninferiority and superiority), the criteria were met for long-term follow-up as demonstrated in the results of the PROTECT AF trial. In the proposed rule, we stated that we agreed that the Bayesian methodology is a valid method of analysis. However, we were referencing the overall efficacy noninferiority in the PREVAIL trial.
In the FY 2016 proposed rule (80 FR 24461), we again presented our continued concern that the data results from the PROTECT AF study are insufficient to show superiority of the WATCHMAN® System over Warfarin therapy. We noted that the study was unblinded with a noninferiority design. We stated that we believe that the reduction in cardiovascular mortality shown in the results from the PROTECT AF study was unexpected and not well explained. Among the 57 patients in the WATCHMAN® System group who died, only 53 patient cases were assigned a cause of death and only 5 of the 9 “unexplained/other deaths” were included in the primary endpoint, although the protocol established that unexplained deaths were to be considered as cardiovascular mortalities. The total number of “cardiovascular or unexplained deaths” would have been 21, not 17. In the Warfarin therapy group, there was 1 “unexplained/other” death that should have been included in the primary endpoint, resulting in a total of 23, not 22. We acknowledged that it may be difficult to calculate the impact of these additional events as the intention-to-treat analysis of the primary endpoint. However, we stated our concern that the inclusion of the additional deaths could have made the posterior probabilities for the device less favorable. Based on the data at face value, we stated that it appears that the WATCHMAN® System does not demonstrate statistically significant superiority over treatment with Warfarin therapy until 3.8 years has elapsed and the patient has been administered 6 months of oral anticoagulation and been exposed to the risk of the device-related complications. We stated that we were concerned that the applicant has not demonstrated
In the prospective randomized evaluation of the PREVAIL study, the goal was to assess the safety and efficacy of LAA occlusion for stroke prevention in patients diagnosed with NVAF compared to long-term Warfarin therapy. The PREVAIL study was a confirmatory randomized trial designed to further assess the efficacy and safety of the WATCHMAN® System device. Patient selection and study design were similar to the PROTECT AF study. Two efficacy and 1 safety coprimary endpoints were assessed at 18 months. The rate of the first coprimary efficacy endpoint overall efficacy (composite of stroke, systemic embolism [SE], and cardiovascular/unexplained death) was 0.064 in the WATCHMAN® System device group versus 0.063 in the control group (rate ratio 1.07 [95 percent credible interval (CrI) 0.57 to 1.89]) and did not achieve the prespecified criteria of noninferiority (upper boundary of 95 percent CrI 1.75). The rate for the second coprimary efficacy endpoint (stroke or SE >7 days' post-randomization) was 0.0253 versus 0.0200 (risk difference 0.0053 [95 percent CrI -0.0190 to 0.0273]), which achieved noninferiority. Early safety events were significantly lower than the results of the PROTECT AF study, which satisfies the prespecified safety performance goal. The PREVAIL study was designed to demonstrate noninferiority with wide efficacy margins. However, as previously stated, our concern was that the results of the study did not show the overall efficacy of the technology to be noninferior.
The applicant acknowledged that when the efficacy data are considered on their own, the WATCHMAN® arm in PREVAIL missed both co-primary efficacy endpoints (the 18-month rates of the composite of stroke (including hemorrhagic or ischemic), systemic embolism, and cardiovascular or unexplained death and the 18-month rates of ischemic stroke or systemic embolism excluding the first 7 days post-randomization) in the October 2014 updated post hoc analyses. The applicant stated the reason why the stand-alone data in PREVAIL missed overall efficacy was due in large part to the over-performance of the Warfarin arm in PREVAIL. The applicant noted that when evaluating the Warfarin arm in PREVAIL, with respect to ischemic strokes, it outperformed historical Warfarin trials (and real-world experience) and the assumptions used for the design of the PREVAIL trial. Specifically, the applicant noted that the rate of ischemic strokes was three times less than any Warfarin control trial in the last decade, with an annual rate of 0.3 percent for ischemic stroke
The applicant further noted that although the PREVAIL efficacy endpoints were missed, the data was consistent with demonstrating non-inferiority (93 percent posterior probability of non-inferiority) of WATCHMAN® compared to Warfarin and came close to achieving statistical proof of non-inferiority (that is, posterior probability of 95.69 percent) with respect to the primary efficacy endpoint of composite stroke, systemic embolism and cardiovascular death.
The applicant also noted that in the primary December 2013 analysis specified by the protocol (using data locked in January 2013), the Bayesian estimate for the 18-month rate ratio was 1.07 with a 95 percent credible interval of 0.57 to 1.89. The applicant stated that the upper bound of 1.89 was not lower than the non-inferiority margin of 1.75 defined in the statistical analysis plan, the non-inferiority criterion was not met in the pre-specified analysis (the posterior probability of non-inferiority was 95.69 percent). In the ad hoc October 2014 Bayesian analysis (using data locked in June 2014), the applicant noted that the 18-month rate was 0.065 for the Device group and 0.057 for the Control group. Also, the Bayesian estimate for the 18-month rate ratio was 1.21 with a 95 percent credible interval of 0.69 to 2.05. The applicant stated that because the upper bound of 2.05 was not lower than the non-inferiority margin of 1.75 defined in the statistical analysis plan, the non-inferiority criterion was still not met (the posterior probability of non-inferiority was 92.6 percent).
The applicant stated that the second primary endpoint evaluated the post-procedure difference between the WATCHMAN® System and Warfarin in terms of ischemic stroke and systemic embolism. The applicant noted the following: In the December 2013 data (using the January 2013 data lock), the pre-specified primary analysis time point, the 18 month rate difference was 0.0053, with a posterior probability of non-inferiority of 97.6 percent with the device meeting its endpoint; in October 2014, an updated analysis was performed on a data set locked in June 2014 where the rate difference increased to 0.0163 due to additional ischemic
The applicant noted that the PROTECT AF trial provided the informative prior for PREVAIL under the Bayesian analysis. The applicant stated that the total number of patients and duration of follow-up in PROTECT far exceeds that of PREVAIL as PROTECT AF represents over 75 percent of the randomized patient follow-up data, while PREVAIL accounts for less than a quarter.
For long-term performance of WATCHMAN®, the applicant stated that CMS should evaluate the primary efficacy data from PROTECT AF where patients have completed 2,717 patient years of follow up (compared to PREVAIL at 860 patient years) and have consistently demonstrated non-inferiority to Warfarin and shown superiority at 2,621 patient years. The applicant noted that, although PROTECT AF was not designed to show superiority of WATCHMAN® to Warfarin, as it was designed to be a non-inferiority trial, it was also designed to have the potential to demonstrate superiority. The applicant noted that while the protocol allowed for testing of superiority provided that non-inferiority was shown, the lack of power to show superiority means that the study was not likely to demonstrate superiority given the sample size and expected performance of WATCHMAN® vs. Warfarin.
The applicant also noted the following: Although the 95 percent posterior probability of superiority does not cross the boundary until the 3.8 year time point, the data are consistent with superiority as early as the 1.3 year (900 patient year) analysis; the rate ratio is relatively constant thereafter, reflecting consistency of the benefit of WATCHMAN® versus Warfarin from that point onward.
The applicant also provided data from a patient level meta-analysis that combined the PROTECT AF and PREVAIL data to support the efficacy of the WATCHMAN® System and show the device was performing as expected when compared to the Warfarin control arm. The applicant stated the following major results from the meta-analysis of the PROTECT AF and PREVAIL randomized studies:
• Primary Efficacy Endpoint: The WATCHMAN® System was associated with a 21 percent reduction in the risk of a primary efficacy endpoint event, though not statistically significant (p=0.23).
• Stroke and Systemic Embolism: The WATCHMAN® System is similar to Warfarin in preventing all-cause stroke and systemic embolism (HR=1.02, p=0.93). It is associated with a decrease in the relative risk of hemorrhagic stroke (88 percent, p=0.004); however, the device is not as effective as Warfarin in reducing the risk of ischemic stroke (HR=1.96, p=0.049). The applicant stated that in considering the total risks and benefits of the WATCHMAN® System, it is important to take into account more than the ischemic stroke event such as comparison of stroke severity (hemorrhagic versus ischemic), major bleeds, and mortality.
• Stroke Severity: Using the mRS instrument, those strokes occurring in the WATCHMAN® device arms were significantly less likely to be disabling (49 percent relative reduction in disabling strokes, p=0.044) than those occurring in the Warfarin groups.
• Major Bleeds: Warfarin can cause bleeding in anatomic locations other than the brain, such as the eye or spine. When considering all major bleeds unrelated to the implant procedure, Warfarin was associated with an approximately two-fold relative increase in the risk of a major bleed (p=0.002).
• Mortality: Use of the WATCHMAN® System is associated with a 27 percent relative reduction in the risk of all-cause mortality, though not statistically significant (p=0.074) and a 52 percent relative reduction in the risk of cardiovascular (CV)/unexplained mortality (p=0.006).
The applicant stated that the primary efficacy endpoint for each of the trials included cardiovascular (or unexplained) death, all strokes (both ischemic and hemorrhagic) and systemic embolism. Of the components of this endpoint, the commenter stated that death is the most devastating, followed in importance by hemorrhagic strokes (which are generally catastrophic and typically result in greater disability than ischemic strokes). Therefore, when interpreting the patient-level meta-analyses, the applicant asserted that the overall conclusion is that the WATCHMAN® System is a reasonable alternative to Warfarin. The applicant noted that use of the WATCHMAN® System did not change the overall rate of all-cause stroke, but it did alter the proportion of stroke subtypes: There was a reduction in hemorrhagic stroke which was offset by less effective prevention of ischemic stroke. The applicant also noted the following: Although the overall rate of all-cause stroke was unchanged, patients with the WATCHMAN® System were significantly less likely to have a disabling stroke; when compared to Warfarin, the WATCHMAN® System yielded a significant relative reduction in the risk of major bleeding by 51 percent as well as a significant relative reduction in the risk of mortality due to CV or unknown causes by 52 percent;
The applicant stated the following conclusions: While PREVAIL was never intended nor powered to stand-alone for demonstrating overall efficacy, the primary purpose was to demonstrate procedural safety; although the PREVAIL primary efficacy endpoint was missed, CMS should not judge overall efficacy of the WATCHMAN® System in the absence of the long-term follow-up data from PROTECT AF and the meta-analysis which provides a more complete picture of the data showing that WATCHMAN® efficacy outcomes are similar to those of Warfarin in patients who do not take oral anticoagulants; the WATCHMAN® System performance was consistent across trials and the additional ischemic strokes seen over time in PREVAIL align appropriately with the higher stroke risk scores in this trial (that is, patients with mean CHADS
As discussed in the proposed rule (80 FR 24462), the applicant submitted data from a patient-level meta-analysis that combined the data from the PROTECT AF study with the data from the PREVAIL study. According to the applicant, this analysis supports the efficacy of the WATCHMAN® System and shows that the device was performing as expected compared to the Warfarin therapy control arm. The datasets were combined and weighted. According to the applicant, multiple outcomes of interest were examined, starting with the primary efficacy endpoint and then looking at individual outcomes: All stroke (ischemic and hemorrhagic) and associated disability; systemic embolism; cardiovascular/unexplained death; and major bleeding. The overall incidence of all strokes (ischemic and hemorrhagic) was not statistically different between the WATCHMAN® System arm and the Warfarin therapy arm. However, the applicant stated that there were statistical differences identified when it analyzed the stroke subtypes. The applicant indicated that, initially, there were more ischemic strokes in the WATCHMAN® System arm. However, after accounting for early procedural complications, including strokes (within 7 days post procedure) in the PROTECT AF study, the difference for ischemic stroke between the two arms fell below statistical significance (p=0.21). According to the applicant, there were significantly more hemorrhagic strokes and cardiovascular deaths in the Warfarin therapy arm compared to the WATCHMAN® System arm, showing a 78 percent and 52 percent reduction in those events respectively (p=0.004 and p=0.006). To better assess the clinical impact of the different subtypes of strokes on patients, the applicant also performed statistical tests on disabilities resulting from stroke. The applicant indicated that, using a validated stroke severity assessment tool (Modified Rankin score), analyses show that there were significantly less disabling strokes with the WATCHMAN® System than Warfarin therapy. The applicant believed that this represents a substantial clinical improvement for the WATCHMAN® System device.
The applicant conducted an imputed placebo analysis to assess the benefit that untreated patients may expect with the WATCHMAN® System device. The applicant contended that many patients who are eligible for Warfarin therapy are not receiving any treatment and, therefore, are left unprotected from stroke. With annual ischemic stroke rates ranging from 5.6 percent to 7.1 percent, the applicant maintained that the WATCHMAN® System device provides a substantive clinical benefit. In order to assess the benefit that untreated patients may be able to expect with the WATCHMAN® System, the sponsor performed the following exploratory analysis. The observed device ischemic strokes rates were compared against the estimated stroke risk of untreated nonvalvular AF patients. A placebo arm was then constructed using “well-established, validated literature” models based on both the CHADS
In the proposed rule, we noted that we previously expressed concern that there was a lack of strong evidence demonstrating that the WATCHMAN® System prevents stroke at all. The applicant responded that the imputed placebo analysis cited above addresses this concern. The applicant provided the table below as part of its FY 2016 application to show the relative risk reduction in Ischemic stroke rates using the WATCHMAN® System versus no therapy.
While the results of this analysis appear to suggest a large reduction in ischemic stroke rates in patients who did not receive any treatment, we continued to have some concerns regarding whether the WATCHMAN®
As discussed in the proposed rule (80 FR 24463), the applicant asserted that one of the primary goals of mechanical LAA closure is to provide an alternative treatment for patients other than long-term Warfarin therapy and exposure to the associated risk for bleeding. Although the primary efficacy endpoint of the PROTECT AF and PREVAIL studies considered hemorrhagic stroke, it did not encompass other types of major bleeding that may be associated with the use of Warfarin. The applicant indicated that it performed a supplemental analysis to determine the relative risks of all types of bleeding. The applicant divided the follow-up interval into four subsections (7 days, 45 days, 6 months, and 54 months). The applicant compared bleeding events in the WATCHMAN® System arm with the Warfarin therapy arm and concluded that, after 6 months (and discontinued use of Clopidogrel in the WATCHMAN® System group), the continued use of Warfarin was associated with a 3.4 fold increase in the risk of major bleeding. According to the applicant, the significant reduction in bleeding after the procedural and concomitant medication therapy (6 months) with the cessation of long-term anticoagulants illustrates the substantial clinical benefit of the WATCHMAN® System. However, given the high burden endured (most notably, the higher risk of bleeding occurring in the first 7 days of an inpatient hospital stay) to achieve a reduction in bleeding in the long term, we stated in the proposed rule that we do not believe the WATCHMAN® System meets the criteria for substantially improved clinical outcomes. In the proposed rule, we invited public comments on whether this technology meets the substantial clinical improvement criterion, particularly in light of the applicant's response to our previous concerns and our current concern that there remains insufficient evidence that the WATCHMAN® System substantially improves clinical outcomes in patients diagnosed with nonvalvular AF and who are eligible for Warfarin therapy.
The applicant also noted the following: The one-time 7-day peri-procedural WATCHMAN® complication rate of 3.8 to 4.1 percent is similar to the yearly frequency of major bleeding or intracranial hemorrhage for patients on long-term Warfarin, which is 3.1 to 3.6 percent;
The applicant also stated that CMS' analysis does not consider that the bleeding rate with oral anticoagulation therapy is compounded yearly (that is, the risk goes up with longer exposure to Warfarin), dramatically increasing the likelihood of hemorrhagic stroke. The applicant asserted that, in contrast, WATCHMAN® patients are free of the burden of life-long treatment with Warfarin (99 percent Warfarin cessation at 12 months in PREVAIL and CAP2) and the bleeding risk is constant and reduced in years 1-9 post implant. The applicant stated that the reduced bleeding benefits associated with the WATCHMAN® System continue to diverge from Warfarin outcomes and the magnitude of benefit increases over time.
Also, the clinical trials compared the WATCHMAN® System to Warfarin. Other anti-coagulants may be an effective treatment for this small population not eligible for Warfarin. Without additional clinical data, we are unable to determine if patients who respond to other anti-coagulants would require the WATCHMAN® System. Therefore, based on the reasons stated above, we do not believe that the WATCHMAN® System meets the substantial clinical improvement criteria at this time and are not approving the WATCHMAN® System for new technology add on payment for FY 2016. We welcome the applicant to reapply next year as additional long-term data becomes available.
Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary adjust the standardized amounts for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level. We currently define hospital labor market areas based on the delineations of statistical areas established by the Office of Management and Budget (OMB). A discussion of the FY 2016 hospital wage index based on the statistical areas appears under sections III.A.2. and G. of the preamble of this final rule.
Section 1886(d)(3)(E) of the Act requires the Secretary to update the wage index annually and to base the update on a survey of wages and wage-related costs of short-term, acute care hospitals. This provision also requires that any updates or adjustments to the wage index be made in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. The adjustment for FY 2016 is discussed in section II.B. of the Addendum to this final rule.
As discussed in section III.J. of the preamble of this final rule, we also take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act when calculating IPPS payment amounts. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B), 1886(d)(8)(C), and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. The budget neutrality adjustment for FY 2016 is discussed in section II.A.4.b. of the Addendum to this final rule.
Section 1886(d)(3)(E) of the Act also provides for the collection of data every 3 years on the occupational mix of employees for short-term, acute care hospitals participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index. A discussion of the occupational mix adjustment that we are applying, beginning October 1, 2015 (to the FY 2016 wage index), appears under sections III.E.3. and F. of the preamble of this final rule.
The wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located. Under section 1886(d)(3)(E) of the Act, beginning with FY 2005, we delineate hospital labor market areas based on OMB-established Core-Based Statistical Areas (CBSAs). The current statistical areas (which were implemented beginning with FY 2015) are based on revised OMB delineations issued on February 28, 2013, in OMB Bulletin No. 13-01. OMB Bulletin No. 13-01 established revised delineations for Metropolitan Statistical Areas, Micropolitan Statistical Areas, and Combined Statistical Areas in the United States and Puerto Rico, and provided guidance on the use of the delineations of these statistical areas based on new standards published on June 28, 2010 in the
The FY 2016 wage index values are based on the data collected from the Medicare cost reports submitted by hospitals for cost reporting periods beginning in FY 2012 (the FY 2015 wage indexes were based on data from cost reporting periods beginning during FY 2011).
The FY 2016 wage index includes the following categories of data associated with costs paid under the IPPS (as well as outpatient costs):
• Salaries and hours from short-term, acute care hospitals (including paid lunch hours and hours associated with military leave and jury duty);
• Home office costs and hours;
• Certain contract labor costs and hours (which includes direct patient care, certain top management, pharmacy, laboratory, and nonteaching physician Part A services, and certain contract indirect patient care services (as discussed in the FY 2008 final rule with comment period (72 FR 47315 through 47318)); and
• Wage-related costs, including pension costs (based on policies adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586 through 51590)) and other deferred compensation costs.
Consistent with the wage index methodology for FY 2015, the wage index for FY 2016 also excludes the direct and overhead salaries and hours for services not subject to IPPS payment, such as skilled nursing facility (SNF) services, home health services, costs related to GME (teaching physicians and residents) and certified registered nurse anesthetists (CRNAs), and other subprovider components that are not paid under the IPPS. The FY 2016 wage index also excludes the salaries, hours, and wage-related costs of hospital-based rural health clinics (RHCs), and Federally qualified health centers (FQHCs) because Medicare pays for these costs outside of the IPPS (68 FR 45395). In addition, salaries, hours, and wage-related costs of CAHs are excluded from the wage index for the reasons explained in the FY 2004 IPPS final rule (68 FR 45397 through 45398).
Data collected for the IPPS wage index also are currently used to calculate wage indexes applicable to suppliers and other providers, such as SNFs, home health agencies (HHAs), ambulatory surgical centers (ASCs), and hospices. In addition, they are used for prospective payments to IRFs, IPFs, and LTCHs, and for hospital outpatient services. We note that, in the IPPS rules, we do not address comments pertaining to the wage indexes of any supplier or provider except IPPS providers and LTCHs. Such comments should be made in response to separate proposed rules for those suppliers and providers.
The wage data for the FY 2016 wage index were obtained from Worksheet S-3, Parts II and III of the Medicare cost report (Form CMS-2552-10) for cost reporting periods beginning on or after October 1, 2011, and before October 1, 2012. For wage index purposes, we refer to cost reports during this period as the “FY 2012 cost report,” the “FY 2012 wage data,” or the “FY 2012 data.” Instructions for completing the wage index sections of Worksheet S-3 are included in the Provider Reimbursement Manual (PRM), Part 2 (Pub. No. 15-2), Chapter 40, Sections 4005.2 through 4005.4. The data file used to construct the FY 2016 wage index includes FY 2012 data submitted to us as of June 29, 2015. As in past years, we performed an extensive review of the wage data, mostly through the use of edits designed to identify aberrant data.
We asked our MACs to revise or verify data elements that result in specific edit failures. For the proposed FY 2016 wage index, we identified and excluded 93 providers with aberrant data that should not be included in the wage index. We stated in the FY 2016 IPPS/LTCH PPS proposed rule that if data elements for some of these providers with aberrant data are corrected, we intended to include data from those providers in the final FY 2016 wage index (80 FR 24464). We also adjusted certain aberrant data elements within a provider's data and included these data in the proposed wage index. For example, in situations where a hospital did not have documentable salaries, wages, and hours for contract housekeeping and dietary services, we imputed estimates, in accordance with established policies as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49965 through 49967). We stated that we intended to resolve all unresolved data elements by the date the FY 2016 IPPS/LTCH PPS final rule is issued. The revised data are reflected in this FY 2016 IPPS/LTCH PPS final rule.
As a result of further review by the MACs and the April and June appeals processes, we received corrected data or improved documentation for 34 hospitals, and therefore, we are including these 34 hospitals in the final FY 2016 wage index. The hospitals that are excluded from the wage index remain excluded for a variety of reasons, such as, but not limited to, unresponsiveness to requests for documentation or insufficiently documented data, terminated hospitals' failed edits for reasonableness, or low Medicare utilization.
In constructing the proposed FY 2016 wage index, we included the wage data for facilities that were IPPS hospitals in FY 2012, inclusive of those facilities that have since terminated their participation in the program as hospitals, as long as those data did not fail any of our edits for reasonableness. We believe that including the wage data for these hospitals is, in general, appropriate to reflect the economic conditions in the various labor market areas during the relevant past period and to ensure that the current wage index represents the labor market area's current wages as compared to the national average of wages. However, we excluded the wage data for CAHs as discussed in the FY 2004 IPPS final rule (68 FR 45397 through 45398). For the FY 2016 IPPS/LTCH PPS proposed rule, we removed 12 hospitals that converted to CAH status on or after February 13, 2014, the cut-off date for CAH exclusion from the FY 2015 wage index, and through and including February 5, 2015, the cut-off date for CAH exclusion from the FY 2016 wage index. After issuance of the proposed rule, we learned of one more hospital that converted to CAH status on or after February 13, 2014, and through and including February 5, 2015. Therefore, for this FY 2016 IPPS/LTCH PPS final rule, we removed a total of 13 CAHs that converted to CAH status on or after February 13, 2014, and through and including February 5, 2015. After removing hospitals with aberrant data and hospitals that converted to CAH status, we calculated the final FY 2016 wage index based on 3,362 hospitals.
For the final FY 2016 wage index, we allotted the wages and hours data for a multicampus hospital among the different labor market areas where its
One commenter representing hospitals located in CBSA 46140, where a hospital was excluded due to having a very high average hourly wage relative to the CBSA, disagreed with the removal of the wage data of that hospital from the FY 2015 and FY 2016 wage indexes, and argued that “if CMS were to adopt a policy of excluding the hospital with the highest wage data from each CBSA, fairness would require that CMS also exclude the hospital with the lowest wage data from each CBSA.” The commenter stated that hospitals are aware of no such CMS policy.
Commenters asked for improved CMS communication with hospitals, including enlisting the MACs to notify hospitals in writing if the hospitals are excluded from the PUF, the criteria used to determine whether a hospital was excluded, and the procedures that a hospital may use to ask for reconsideration. The commenters also suggested that MACs be directed to notify State hospital associations not only when hospitals do not respond during the desk review, but also when there are efforts underway to correct hospitals' aberrant data.
Since the origin of the IPPS, the wage index has been subject to its own annual review process, first by the MACs, and then by CMS. Hospitals are aware that both the MACs (via instructions issued by CMS) and CMS evaluate the accuracy and reasonableness of hospitals' wage index data, and hospitals may appeal to CMS as part of the April and June appeals processes. As a standard practice, after each annual desk review, CMS reviews the results of the MACs' desk reviews and focuses on items flagged during the desk review, requiring that the MACs and, if necessary, hospitals provide additional documentation, adjustments, or corrections to the data. Each year, in the IPPS proposed rules, we discuss the process wherein CMS asks the MACs to “revise or verify data elements that result in specific edit failures” (80 FR 24464). In the FY 2016 IPPS/LTCH PPS proposed rule, similar to the proposed rules of prior years, we stated that we included the wage data for facilities that were IPPS hospitals in FY 2012, inclusive of those facilities that have since terminated their participation in the program as hospitals, as long as those data did not fail any of our edits for reasonableness. We believe that including the wage data for these hospitals is appropriate, in general, to reflect the various labor market areas during the relevant past period and to ensure that the current wage index represents the labor market area's current wages as compared to the national average of wages (80 FR 24464). That is, a hospital is included in the wage index if its data are reasonable, regardless of whether the hospital is open or whether it has terminated after the relevant past period, because the wage index is constructed to represent the relative average hourly wage for each labor market area in that past period. Thus, reasonableness and relativity to each area's average hourly wages have been longstanding tenets of the wage index development process that CMS has articulated in rulemaking.
We disagree with the commenters that removing hospitals from the FY 2016 wage index PUFs was arbitrary and undermined the MAC desk review process because, as discussed above, as a standard part of the refinement of the annual wage index, CMS evaluates the wage data for both accuracy and reasonableness to ensure that the wage index is a relative measure of the labor value provided to a typical hospital in a particular labor market area. As part of this evaluation process, it is CMS, not the MACs, that makes the decisions to include or exclude a hospital's data from the wage index, and it would not be appropriate for CMS to make such decisions prior to a desk review being performed. The commenters seem to indicate that only hospitals with high average hourly wages were removed from the PUFs, noting that 93 hospitals were deleted from the FY 2016 proposed wage index, as compared to only 49 hospitals that were deleted from the FY 2015 proposed wage index. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24464), we stated that “For the proposed FY 2016 wage index, we identified and excluded 93 providers with aberrant data that should not be included in the proposed wage index. If data elements for
Regarding the particular hospital in CBSA 46140 to which one commenter referred, while the hospital's wage data were properly documented, the hospital does not merely have the highest average hourly wage in the CBSA; its average hourly wage is extremely and unusually high, significantly higher than the next highest average hourly wage in that CBSA and in the surrounding areas. We do not believe that the average hourly wage of this particular hospital accurately reflects the economic conditions in its labor market area during the FY 2012 cost reporting period. Therefore, its inclusion in the wage index would
Furthermore, just as CMS has excluded certain hospitals from the wage index with extraordinarily high average hourly wages relative to their labor market areas, CMS also has excluded hospitals with extraordinarily low average hourly wages relative to their labor market areas. An objective comparison of the hospitals included in the FY 2016 preliminary PUF to the hospitals included in the February and May 2015 PUFs demonstrates CMS' “fairness” in evaluating the appropriateness and relativity of the wage data of hospitals with both extraordinarily low and extraordinarily high average hourly wages. While 5 hospitals with high extraordinarily high average hourly wages remain excluded from the FY 2016 final wage index, 14 hospitals with extraordinarily low average hourly wages also remain excluded from the FY 2016 final wage index. Therefore, we disagree with commenters' assertions that we have been “arbitrary and capricious” and have “abused” our discretion in excluding hospitals from the wage index.
Regarding the commenters' requests for notification of exclusion from the PUFs, such a notification process already exists. Each time a PUF is posted, CMS instructs the MACs to send letters to each of their hospitals notifying and instructing them to review their wage index data that were just posted. Hospitals that review each PUF and observe that they are excluded may then submit an April appeal to CMS, and/or contact CMS and the MAC to discuss possible ways to revise or verify their data for inclusion in the wage index. We believe the established annual wage index timetable grants sufficient time for hospitals to review, appeal, and/or correct their data. We also welcome State hospital associations to be more proactive in the process of urging their constituents to be responsive to the MACs' and CMS' requests for documentation and to become more involved in resolving issues related to aberrant data. We acknowledge the commenters' suggestions for increased transparency, disclosure of criteria for hospitals' exclusion, and improving awareness both at the State hospital association level and the hospital level. We note that it has never been CMS' policy to disclose audit protocol. However, in the future, we may consider a limited proposal regarding criteria for excluding a hospital's data from the wage index due to its overall average hourly wage being either too high or too low, as well as utilizing additional methods of communicating with stakeholders regarding the adequacy of their wage data.
The method used to compute the FY 2016 wage index without an occupational mix adjustment follows the same methodology that we used to compute the FY 2012, FY 2013, FY 2014, and FY 2015 final wage indexes without an occupational mix adjustment (76 FR 51591 through 51593, 77 FR 53366 through 53367, 78 FR 50587 through 50588, and 79 FR 49967, respectively).
As discussed in the FY 2012 IPPS/LTCH PPS final rule, in “Step 5,” for each hospital, we adjust the total salaries plus wage-related costs to a common period to determine total adjusted salaries plus wage-related costs. To make the wage adjustment, we estimate the percentage change in the employment cost index (ECI) for compensation for each 30-day increment from October 14, 2011,
For example, the midpoint of a cost reporting period beginning January 1, 2012, and ending December 31, 2012, is June 30, 2012. An adjustment factor of 1.01080 would be applied to the wages of a hospital with such a cost reporting period.
Using the data as described above, the FY 2016 national average hourly wage (unadjusted for occupational mix) is $40.2911. The FY 2016 Puerto Rico overall average hourly wage (unadjusted for occupational mix) is $16.9153.
As stated earlier, section 1886(d)(3)(E) of the Act provides for the collection of data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index, for application beginning October 1, 2004 (the FY 2005 wage index). The purpose of the occupational mix adjustment is to control for the effect of hospitals' employment choices on the wage index. For example, hospitals may choose to employ different combinations of registered nurses, licensed practical nurses, nursing aides, and medical assistants for the purpose of providing nursing care to their patients. The varying labor costs associated with these choices reflect hospital management decisions rather than geographic differences in the costs of labor.
As provided for under section 1886(d)(3)(E) of the Act, we collect data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49967 through 49968), the occupational mix adjustment to the FY 2015 wage index was based on data collected on the 2010 Occupational Mix Survey Hospital Reporting Form (CMS-10079 (2010)). For the FY 2016 wage index, we proposed to use the occupational mix data collected on the most recent 2013 occupational mix survey to compute the occupational mix adjustment for FY 2016, as discussed in section II.B.2. of the preamble of this final rule.
We did not receive any public comments on this proposal. Therefore, we are finalizing our policy to use the occupational mix data collected on the 2013 survey to compute the occupational mix adjustment for FY 2016. We are including data for 3,135 hospitals that also have wage data included in the FY 2016 wage index.
Section 304(c) of Public Law 106-554 amended section 1886(d)(3)(E) of the Act to require CMS to collect data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program. We collected data in 2010 to compute the occupational mix adjustment for the FY 2013, FY 2014, and FY 2015 wage index. Therefore, we were required to collect data in 2013 and are using these data to compute the occupational mix adjustment for the FY 2016 wage index. We also plan to use the 2013 survey data for the FY 2017 and FY 2018 wage indexes. A new measurement of occupational mix will be required for FY 2019.
On December 7, 2012, we published in the
The 2013 Occupational Mix Survey Hospital Reporting Form CMS-10079 for the Wage Index Beginning FY 2016 (in Excel format) is available on the CMS Web site at:
As with the Worksheet S-3, Parts II and III cost report wage data, we asked our MACs to revise or verify data elements in hospitals' occupational mix surveys that result in certain edit failures. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24465), we stated that certain surveys with aberrant data elements were excluded from the proposed FY 2016 wage index, but any data elements resolved and revised in time to be included in the final wage index would be reflected in the FY 2016 IPPS/LTCH PPS final rule.
For FY 2016, we proposed to calculate the occupational mix adjustment factor using the same methodology that we used for the FY 2012, FY 2013, FY 2014, and FY 2015 wage indexes (76 FR 51582 through 51586, 77 FR 53367 through 53368, 78 FR 50588 through 50589, and 79 FR 49968, respectively). Because the statute requires that the Secretary measure the earnings and paid hours of employment by occupational category not less than once every 3 years, all
In the FY 2011 IPPS/LTCH PPS proposed rule and final rule (75 FR 23943 and 75 FR 50167, respectively), we stated that, in order to gain a better understanding of why some hospitals are not submitting the occupational mix data, we will require hospitals that do not submit occupational mix data to provide an explanation for not complying. This requirement was effective for the 2013 occupational mix survey as well as the 2010 occupational mix survey. We instructed MACs to continue gathering this information as part of the FY 2016 wage index desk review process. We stated that we would review these data for future analysis and consideration of potential penalties for noncompliant hospitals.
After consideration of public comments we received, we are calculating the occupational mix adjustment factor using the same methodology that we used for the FY 2012, FY 2013, FY 2014, and FY 2015 wage indexes. As a result of applying this methodology, the FY 2016 occupational mix adjusted national average hourly wage is $40.2555. The FY 2016 occupational mix adjusted Puerto Rico-specific average hourly wage is $16.8711.
As discussed in section III.E. of the preamble of this final rule, for FY 2016, we apply the occupational mix adjustment to 100 percent of the FY 2016 wage index. We calculated the occupational mix adjustment using data from the 2013 occupational mix survey data, using the methodology described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51582 through 51586).
Using the occupational mix survey data and applying the occupational mix adjustment to 100 percent of the FY 2016 wage index results in a national average hourly wage of $40.2555 and a Puerto-Rico specific average hourly wage of $16.8711. After excluding data of hospitals that either submitted aberrant data that failed critical edits or that did not have FY 2012 Worksheet S-3, Parts II and III, cost report data for use in calculating the FY 2016 wage index, we calculated the FY 2016 wage index using the occupational mix survey data from 3,135 hospitals. For the FY 2016 wage index, we are using the Worksheet S-3, Parts II and III wage data of 3,362 hospitals, and we are using the occupational mix survey data of 3,135 hospitals for which we also have Worksheet S-3 wage data. The FY 2016 national average hourly wages for each occupational mix nursing subcategory as calculated in Step 2 of the occupational mix calculation are as follows:
The national average hourly wage for the entire nurse category as computed in Step 5 of the occupational mix calculation is $32.875956041. Hospitals with a nurse category average hourly wage (as calculated in Step 4 of the occupational mix calculation) of greater than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6 of the occupational mix calculation) of less than 1.0. Hospitals with a nurse category average hourly wage (as calculated in Step 4 of the occupational mix calculation) of less than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6 of the occupational mix calculation) of greater than 1.0.
Based on the 2013 occupational mix survey data, we determined (in Step 7 of the occupational mix calculation) that the national percentage of hospital employees in the nurse category is 42.62 percent, and the national percentage of hospital employees in the all other occupations category is 57.38 percent. At the CBSA level, the percentage of hospital employees in the nurse category ranged from a low of 25.65 percent in one CBSA to a high of 73.52 percent in another CBSA.
The FY 2016 Puerto Rico-specific average hourly wages for each occupational mix nursing subcategory as calculated in Step 2 of the occupational mix calculation are as follows:
Based on the 2013 occupational mix survey data, we determined (in Step 7 of the occupational mix calculation) that the Puerto Rico percentage of hospital employees in the nurse category is 50.97 percent, and the Puerto Rico percentage of hospital employees in the all other occupations category is 49.03 percent.
We also compared the FY 2016 wage data adjusted for occupational mix from the 2013 survey to the FY 2016 wage data adjusted for occupational mix from the 2010 survey. This analysis illustrates the effect on area wage indexes of using the 2013 survey data compared to the 2010 survey data; that is, it shows whether hospitals' wage indexes will increase or decrease under the 2013 survey data as compared to the prior 2010 survey data. Of the 407 urban CBSAs and 47 rural CBSAs, our analysis shows that the FY 2016 wage index values for 185 (45.5 percent) urban areas and 19 (40.4 percent) rural areas will increase. Forty-eight (11.8 percent) urban areas will increase by greater than or equal to 1 percent but less than 5 percent, and 5 (1.2 percent) urban areas will increase by 5 percent or more. Five (10.6 percent) rural areas will increase by greater than or equal to 1 percent but less than 5 percent, and no rural areas will increase by 5 percent or more. However, the wage index values for 218 (53.6 percent) urban areas and 27 (57.4 percent) rural areas will decrease using the 2013 survey data. Seventy-four (18.2 percent) urban areas will decrease by greater than or equal to 1 percent but less than 5 percent, and one (0.2 percent) urban area will decrease by 5 percent or more. Eight (17.0 percent) rural areas will decrease by greater than or equal to 1 percent but less than 5 percent, and no rural areas will decrease by 5 percent or more. The largest positive impacts using the 2013 survey data compared to the 2010 survey data are 15.1 percent for an urban area and 3.8 percent for a rural area. The largest negative impacts are 5.0 percent for an urban area and 1.95 percent for two rural areas. Four urban areas and one rural area will be unaffected. These results indicate that the wage indexes of more CBSAs overall (54.0 percent) will decrease due to application of the 2013 occupational mix survey data as compared to the 2010 occupational mix survey data to the wage index. Further, a larger percentage of urban areas (45.5 percent) will benefit from the use of the 2013 occupational mix survey data as compared to the 2010 occupational mix survey data than will rural areas (40.4 percent).
We compared the FY 2016 occupational mix adjusted wage indexes for each CBSA to the unadjusted wage indexes for each CBSA. As a result of applying the occupational mix adjustment to the wage data, the wage index values for 219 (53.8 percent) urban areas and 24 (51.1 percent) rural areas will increase. One hundred three (25.3 percent) urban areas will increase by greater than or equal to 1 percent but less than 5 percent, and 6 (1.5 percent) urban areas will increase by 5 percent or more. Nine (19.1 percent) rural areas will increase by greater than or equal to 1 percent but less than 5 percent, and no rural areas will increase by 5 percent or more. However, the wage index values for 187 (45.9 percent) urban areas and 23 (48.9 percent) rural areas will decrease. Ninety-one (22.4 percent) urban areas will decrease by greater than or equal to 1percent but less than 5 percent, and no urban areas will decrease by 5 percent or more. Seven (14.9 percent) rural areas will decrease by greater than or equal to 1 percent but less than 5 percent, and no rural areas will decrease by 5 percent or more. The largest positive impacts will be 17.4 percent for an urban area and 2.7 percent for one rural area. The largest negative impacts will be 4.7 percent for an urban area and 2.1 percent for a rural area. One urban area will remain unchanged by application of the occupational mix adjustment, and no rural areas will remain unchanged by application of the occupational mix adjustment. These results indicate that a larger percentage of urban areas (53.8 percent) will benefit from application of the occupational mix adjustment than will rural areas (51.1 percent).
As we stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24467 through 24469), in the FY 2015 IPPS/LTCH PPS proposed rule and final rule (79 FR 28060 and 49957, respectively), we stated that, overall, we believed implementing the new OMB labor market area delineations would result in wage index values being more representative of the actual costs of labor in a given area. However, we recognized that some hospitals would experience decreases in wage index values as a result of the implementation of these new OMB labor market area delineations. We also realized that some hospitals would have higher wage index values due to the implementation of the new OMB labor market area delineations.
The FY 2015 IPPS/LTCH PPS final rule (79 FR 49957) explained the methodology utilized in implementing prior transition periods when adopting changes that have significant payment implications, particularly large negative impacts. Specifically, for FY 2005, in the FY 2005 IPPS final rule (69 FR 49032 through 49034), we provided transitional wage indexes when the OMB definitions were implemented after the 2000 Census. The FY 2015 IPPS/LTCH PPS final rule (79 FR 49957 through 49962) established similar transition methodologies to mitigate any negative payment impacts experienced by hospitals due to our adoption of the new OMB labor market area delineations for FY 2015.
As finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49957 through 49960) and as discussed below, for FY 2016, we are in the second year of two 3-year transition periods for wage index: One for hospitals that, for FY 2014, were located in an urban county that became rural under the new OMB delineations, and had no form of wage index reclassification or redesignation in place for FY 2015 (that is, MGCRB reclassifications under section 1886(d)(10) of the Act, redesignations under section 1886(d)(8)(B) of the Act, or rural reclassifications under section 1886(d)(8)(E) of the Act); and one for hospitals deemed urban under section 1886(d)(8)(B) of the Act where the urban area became rural under the new OMB delineations. In addition, the 1-year transition that we applied in FY 2015 for hospitals that experienced a decrease
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49957 through 49959), for hospitals that, for FY 2014, were located in an urban county that became rural under the new OMB delineations, and had no form of wage index reclassification or redesignation in place for FY 2015 (that is, MGCRB reclassifications under section 1886(d)(10) of the Act, redesignations under section 1886(d)(8)(B) of the Act, or rural reclassifications under section 1886(d)(8)(E) of the Act), we adopted a policy to assign them the urban wage index value of the CBSA in which they are physically located for FY 2014 for a period of 3 fiscal years (with the rural and imputed floors applied and with the rural floor budget neutrality adjustment applied to the area wage index). FY 2016 will represent the second year of this transition policy, and we did not propose any changes to this policy in the FY 2016 IPPS/LTCH PPS proposed rule. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49957), we stated our belief that it is appropriate to apply a 3-year transition period for hospitals located in urban counties that would become rural under the new OMB delineations, given the potentially significant payment impacts for these hospitals. We continue to believe that assigning the wage index of the hospitals' FY 2014 area for a 3-year transition is the simplest and most effective method for mitigating negative payment impacts due to the adoption of the new OMB delineations.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR49959), we noted that there were situations where a hospital could not be assigned the wage index value of the CBSA in which it geographically was located in FY 2014 because that CBSA split and no longer exists and some or all of the constituent counties were added to another urban labor market area under the new OMB delineations. If the hospital could not be assigned the wage index value of the CBSA in which it was geographically located in FY 2014 because that CBSA split apart and no longer exists, and some or all of its constituent counties were added to another urban labor market area under the new OMB delineations, we established that hospitals located in such counties that became rural under the new OMB delineations were assigned the wage index of the urban labor market area that contains the urban county in their FY 2014 CBSA to which they are closest (with the rural and imputed floors applied and with the rural floor budget neutrality adjustment applied). Any such assignment made in FY 2015 will continue for FYs 2016 and 2017, except as discussed below. We continue to believe this approach minimizes the negative effects of the change in the OMB delineations.
Under the policy adopted in the FY 2015 IPPS/LTCH PPS final rule, if a hospital for FY 2014 was located in an urban county that became rural for FY 2015 under the new OMB delineations and such hospital sought and was granted reclassification or redesignation for FY 2015 or such hospital seeks and is granted any reclassification or redesignation for FY 2016 or FY 2017, the hospital will permanently lose its 3-year transitional assigned wage index status, and will not be eligible to reinstate it. We established the transition policy to assist hospitals if they experience a negative payment impact specifically due to the adoption of the new OMB delineations in FY 2015. If a hospital chooses to forego this transition adjustment by obtaining some form of reclassification or redesignation, we do not believe reinstatement of this transition adjustment would be appropriate. The purpose of the transition adjustment policy is to assist hospitals that may be negatively impacted by the new OMB delineations in transitioning to a wage index based on these delineations. By obtaining a reclassification or redesignation, we believe that the hospital has made the determination that the transition adjustment is not necessary because it has other viable options for mitigating the impact of the transition to the new OMB delineations.
As we did for FY 2015 (79 FR 49959), and as stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24468), with respect to the wage index computation for FY 2016, we are following our existing policy regarding the inclusion of a hospital's wage index data in the CBSA in which it is geographically located (we refer readers to Step 6 of the method for computing the unadjusted wage index in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51592)). Accordingly, as we began with FY 2015, for FY 2016, the wage data of all hospitals receiving this type of 3-year transition adjustment were included in the statewide rural area in which they are geographically located under the new OMB labor market area delineations. After the 3-year transition period, beginning in FY 2018, these formerly urban hospitals discussed above will receive their statewide rural wage index, absent any reclassification or redesignation.
In addition, we established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49959) that the hospitals receiving this 3-year transition because they are in counties that were urban under the FY 2014 CBSA definitions, but are rural under the new OMB delineations, will not be considered urban hospitals. Rather, they will maintain their status as rural hospitals for other payment considerations. This is because our application of a 3-year transitional wage index for these newly rural hospitals only applies for the purpose of calculating the wage index under our adoption of the new OMB delineations.
We did not receive any public comments on these provisions in the proposed rule.
As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24468), and as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49959 through 49960), there were some hospitals that, for FY 2014, were geographically located in rural areas but were deemed to be urban under section 1886(d)(8)(B) of the Act. For FY 2015, some of these hospitals redesignated under section 1886(d)(8)(B) of the Act were no longer eligible for deemed urban status under the new OMB delineations, as discussed in detail in section III.H.3. of the preamble of the FY 2015 IPPS/LTCH PPS final rule. Similar to the policy implemented in the FY 2005 IPPS final rule (69 FR 49059), and consistent with the FY 2015 policy we established for other hospitals in counties that were urban and became rural under the new OMB delineations, we finalized a policy to apply a 3-year transition to these hospitals redesignated to urban areas under section 1886(d)(8)(B) of the Act for FY 2014 that are no longer deemed urban under the new OMB delineations and revert to being rural.
For FY 2016, we did not propose any changes to this policy and are continuing to the second year of the implementation of our policy to provide a 3-year transition adjustment to hospitals that are deemed urban under section 1886(d)(8)(B) of the Act under the FY 2014 labor market area delineations, but are considered rural under the new OMB delineations, assuming no other form of wage index reclassification or redesignation is granted. We assign these hospitals the area wage index value of hospitals reclassified to the urban CBSA (that is,
We did not receive any public comments specific to either of the 3-year transition policies for hospitals that were located in an urban county that became rural under the new OMB delineations or for hospitals deemed urban under section 1886(d)(8)(B) of the Act where the urban area became rural under the new OMB delineations. Fiscal year 2016 will be the second year of the 3-year transition period. We also remind hospitals that if any affected hospital is approved for any wage index reclassification or redesignation in FY 2016 or FY 2017, it will no longer be eligible for the remaining years of the transitional wage index.
As we indicated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24468), in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49960 through 49962), we stated that, while we believe that instituting the latest OMB labor market area delineations would create a more accurate wage index system, we also recognized that implementing the latest OMB delineations may cause some short-term instability in hospital payments. Therefore, in addition to the 3-year transition adjustments for hospitals being transitioned from urban to rural status as discussed earlier, in the FY 2015 IPPS/LTCH PPS final rule, we established a 1-year blended wage index for all hospitals that would experience any decrease in their actual payment wage index. This 1-year blended wage index expires at the end of FY 2015. We did not propose any additional transition adjustment for hospitals that experienced a decrease in wage index values due to the adoption of the new OMB delineations for FY 2015 and, as discussed previously, will continue the 3-year transition adjustments for hospitals that changed from urban to rural status that we finalized in the FY 2015 IPPS/LTCH PPS final rule. We established a longer 3-year transition adjustment for hospitals losing urban status because there are significantly fewer affected urban-to-rural hospitals, and we believe the negative impacts to a hospital shifting from urban to rural status are typically greater than other types of transitions. We stated our belief that a transition period longer than 1 year to address other impacts of the adoption of the new OMB delineations would reduce the accuracy of the overall labor market area wage index system because far more hospitals would be affected. As we stated in FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24468), the 1-year transition for all negatively affected hospitals in FY 2015 provided an opportunity for hospitals to evaluate potential reclassification options and mitigated initial negative impacts due to labor market assignment changes. We continue to believe that the adoption of the latest labor market delineations improve the accuracy and integrity of the hospital wage index system. Therefore, we believe it is necessary to allow this transition to expire.
Thus, we are allowing the transition adjustment to expire at the end of FY 2015.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50372 through 50373), for FY 2015, we applied the 3-year transition and 50/50 blended wage index adjustments in a budget neutral manner. For FY 2016, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24469), we proposed to apply the 3-year transition adjustments in a budget neutral manner. We proposed to make an adjustment to the standardized amount to ensure that the total payments, including the effect of the transition provisions, would equal what payments would have been if we were not providing for any transitional wage indexes under the new OMB delineations. For a complete discussion on the budget neutrality adjustment for FY 2016, we refer readers to section II.A.4.b. of the Addendum to this final rule, where we also address any public comments we received.
In this final rule, for FY 2016, we are applying the 3-year transition adjustments in a budget neutral manner. We are making an adjustment to the standardized amount to ensure that the total payments, including the effect of the transition provisions, will equal what payments would have been if we were not providing for any transitional wage indexes under the new OMB delineations.
Section 4410(a) of Pubic Law 105-33 provides that, for discharges on or after October 1, 1997, the area wage index applicable to any hospital that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State. This provision is referred to as the “rural floor.” Section 3141 of Public Law 111-148 also requires that a national budget neutrality adjustment be applied in implementing the rural floor. Based on the final FY 2016 wage index associated with this final rule and available via the Internet on the CMS Web site, we estimated that 346 hospitals will receive an increase in their FY 2016 wage index due to the application of the rural floor.
In the FY 2005 IPPS final rule (69 FR 49109 through 49111), we adopted the “imputed floor” policy as a temporary 3-year regulatory measure to address concerns from hospitals in all-urban States that have argued that they are disadvantaged by the absence of rural hospitals to set a wage index floor for those States. Since its initial implementation, we have extended the imputed floor policy five times, the last of which was adopted in the FY 2015 IPPS/LTCH PPS final rule and is set to expire on September 30, 2015. (We refer readers to further discussions of the imputed floor in the FY 2014 and FY 2015 IPPS/LTCH PPS final rules (78 FR 50589 through 50590 and 79 FR 49969 through 49970, respectively) and to the regulations at 42 CFR 412.64(h)(4).) Currently, there are three all-urban States, Delaware, New Jersey, and Rhode Island, with a range of wage indexes assigned to hospitals in these States, including through reclassification or redesignation (we refer readers to discussions of geographic reclassifications and redesignations in section III.J. of the preamble of this final rule).
In computing the imputed floor for an all-urban State under the original methodology, which was established beginning in FY 2005, we calculated the ratio of the lowest-to-highest CBSA wage index for each all-urban State as well as the average of the ratios of lowest-to-highest CBSA wage indexes of those all-urban States. We then compared the State's own ratio to the average ratio for all-urban States and whichever is higher is multiplied by the highest CBSA wage index value in the State—the product of which established the imputed floor for the State. As of FY 2012, there were only two all-urban States, New Jersey and Rhode Island, and only New Jersey benefitted under this methodology. Under the previous OMB labor market area delineations, Rhode Island had only one CBSA (Providence-New Bedford-Fall River, RI-MA) and New Jersey had 10 CBSAs. Therefore, under the original methodology, Rhode Island's own ratio equaled 1.0, and its imputed floor was equal to its original CBSA wage index value. However, because the average ratio of New Jersey and Rhode Island was higher than New Jersey's own ratio, this methodology provided a benefit for New Jersey, but not for Rhode Island.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53368 through 53369), we retained the imputed floor calculated under the original methodology as discussed above, and established an alternative methodology for computing the imputed floor wage index to address the concern that the original imputed floor methodology guaranteed a benefit for one all-urban State with multiple wage indexes (New Jersey) but could not benefit the other all-urban State (Rhode Island). The alternative methodology for calculating the imputed floor was established using data from the application of the rural floor policy for FY 2013. Under the alternative methodology, we first determined the average percentage difference between the post-reclassified, pre-floor area wage index and the post-reclassified, rural floor wage index (without rural floor budget neutrality applied) for all CBSAs receiving the rural floor. (Table 2 (formerly Table 4D) associated with the FY 2013 IPPS/LTCH PPS final rule, which is available via the Internet on the CMS Web site, included the CBSAs receiving a State's rural floor wage index.) The lowest post-reclassified wage index assigned to a hospital in an all-urban State having a range of such values then is increased by this factor, the result of which establishes the State's alternative imputed floor. We amended § 412.64(h)(4) of the regulations to add new paragraphs to incorporate the finalized alternative methodology, and to make reference and date changes. In summary, for the FY 2013 wage index, we did not make any changes to the original imputed floor methodology at § 412.64(h)(4) and, therefore, made no changes to the New Jersey imputed floor computation for FY 2013. Instead, for FY 2013, we adopted a second, alternative methodology for use in cases where an all-urban State has a range of wage indexes assigned to its hospitals, but the State cannot benefit under the original methodology.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50589 through 50590), we extended the imputed floor policy (both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2014, while we continued to explore potential wage index reforms. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49969 through 49970), for FY 2015, we adopted a policy to extend the imputed floor policy (both the original methodology and alternative methodology) for another year, through September 30, 2015, as we continued to explore potential wage index reforms. In these final rules, we also revised the regulations at § 412.64(h)(4) and (h)(4)(vi) to reflect the extension of the imputed floor.
As discussed in section III.B. of the preamble of that FY 2015 final rule, we adopted the new OMB labor market area delineations beginning in FY 2015. Under the new OMB delineations, Delaware became an all-urban State, along with New Jersey and Rhode Island. Under the new OMB delineations, Delaware has three CBSAs, New Jersey has seven CBSAs, and Rhode Island continues to have only one CBSA (Providence-Warwick, RI-MA). We refer readers to a detailed discussion of our adoption of the new OMB labor market area delineations in section III.B. of the preamble of the FY 2015 IPPS/LTCH PPS final rule. Therefore, under the adopted new OMB delineations discussed in section III.B. of the preamble of the FY 2015 IPPS/LTCH PPS final rule, Delaware became an all-urban State and was subject to an imputed floor as well for FY 2015.
For FY 2016, we proposed to extend the imputed floor policy (both the original methodology and the alternative methodology) for 1 additional year, through September 30, 2016, while we continue to explore potential wage index reforms (80 FR 24469 through 24470). We proposed to revise the regulations at § 412.64(h)(4) and (h)(4)(vi) to reflect this proposed additional 1-year extension. We invited public comments on the proposed additional 1-year extension of the imputed floor through September 30, 2016.
After consideration of the public comments we received, we are finalizing our proposal without modification to extend the imputed floor policy under both the original methodology and the alternative methodology for an additional year, through September 30, 2016. We also are adopting as final the proposed revisions to § 412.64(h)(4) and (h)(4)(vi) to reflect the 1-year extension of the imputed floor.
The wage index and impact tables associated with this FY 2016 IPPS/LTCH PPS final rule (which are available via the Internet on the CMS Web site) reflect the continued application of the imputed floor policy at § 412.64(h)(4) and a national budget neutrality adjustment for the imputed floor for FY 2016. There are 21 hospitals in New Jersey that will receive an increase in their FY 2016 wage index due to the continued application of the imputed floor policy under the original methodology and 4 hospitals in Rhode Island that will benefit under the alternative methodology. No hospitals in Delaware will benefit from the imputed floor under either methodology because all hospitals in the affected labor market areas will receive a higher wage index value due to reclassification.
Section 10324 of Public Law 111-148 requires that hospitals in frontier States cannot be assigned a wage index of less than 1.0000 (we refer readers to regulations at 42 CFR 412.64(m) and to a discussion of the implementation of this provision in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50160 through 50161)). Forty-eight hospitals will receive the frontier floor value of 1.0000 for their FY 2016 wage index in this final rule. These hospitals are located in Montana, North Dakota, South Dakota, and Wyoming. Although Nevada also is defined as a frontier State, its FY 2016 rural floor value of 1.0194 is greater than 1.0000, and therefore, no Nevada hospitals will receive a frontier floor value for their FY 2016 wage index. We did not propose any changes to the frontier floor policy for FY 2016, and we did not receive any public comments on the issue.
The areas affected by the rural, imputed, and frontier floor policies for the FY 2016 wage index are identified in Table 2 (formerly Table 4D) associated with this final rule, which is available via the Internet on the CMS Web site.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24470), we proposed to streamline and consolidate the wage index tables associated with the IPPS proposed and final rules for FY 2016 and subsequent fiscal years. The wage index tables have consisted of 12 tables (Tables 2, 3A, 3B, 4A, 4B, 4C, 4D, 4E, 4F, 4J, 9A, and 9C) that are made available via the Internet on the CMS Web site. However, with the exception of Table 4E, we proposed to streamline and consolidate these 11 tables into 2 tables. We refer readers to section VI. of the Addendum to this final rule for a discussion of the proposed and finalized revisions to the wage index tables.
Under section 1886(d)(10) of the Act, the MGCRB considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. Hospitals must apply to the MGCRB to reclassify not later than 13 months prior to the start of the fiscal year for which reclassification is sought (generally by September 1). Generally, hospitals must be proximate to the labor market area to which they are seeking reclassification and must demonstrate characteristics similar to hospitals located in that area. The MGCRB issues its decisions by the end of February for reclassifications that become effective for the following fiscal year (beginning October 1). The regulations applicable to reclassifications by the MGCRB are located in 42 CFR 412.230 through 412.280. (We refer readers to a discussion in the FY 2002 IPPS/LTCH PPS final rule (66 FR 39874 and 39875) regarding how the MGCRB defines mileage for purposes of the proximity requirements.) The general policies for reclassifications and redesignations that we proposed for FY 2016 and are finalizing in this final rule, and the policies for the effects of hospitals' reclassifications and redesignations on the wage index, are the same as those discussed in the FY 2012 IPPS/LTCH PPS final rule for the FY 2012 final wage index (76 FR 51595 and 51596). In addition, in the FY 2012 IPPS/LTCH PPS final rule, we discussed the effects on the wage index of urban hospitals reclassifying to rural areas under 42 CFR 412.103. Hospitals that are geographically located in States without any rural areas are ineligible to apply for rural reclassification in accordance with the provisions of 42 CFR 412.103.
Other commenters suggested that the proximity rule for countywide reclassifications for hospitals in an urban county be modified to permit adjacent county reclassifications, regardless of whether they are in the same CSA or CBSA, or at a minimum, create an exception that would allow this in the event that half of the hospitals in the county are seeking to reclassify.
Under section 1886(d)(10) of the Act, the MGCRB considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. The specific procedures and rules that apply to the geographic reclassification process are specified in regulations under 42 CFR 412.230 through 412.280.
At the time this final rule was constructed, the MGCRB had completed its review of FY 2016 reclassification requests. Based on such reviews, there are 282 hospitals approved for wage index reclassifications by the MGCRB starting in FY 2016 that did not withdraw or terminate their reclassifications within 45 days of the publication of the FY 2016 proposed rule. Because MGCRB wage index reclassifications are effective for 3 years, for FY 2016, hospitals reclassified beginning in FY 2014 or FY 2015 are eligible to continue to be reclassified to a particular labor market area based on such prior reclassifications for the remainder of their 3-year period. There were 248 hospitals approved for wage index reclassifications in FY 2014 that continue for FY 2016, and 311 hospitals approved for wage index reclassifications in FY 2015 that continue for FY 2016. Of all the hospitals approved for reclassification for FY 2014, FY 2015, and FY 2016, based upon the review at the time of this final rule, 841 hospitals are in a reclassification status for FY 2016. We note that the number of hospitals with active reclassifications changed between the proposed rule and the final rule because hospitals have the opportunity to withdraw or terminate their reclassification, or reinstate previously withdrawn reclassifications, within 45 days of the publication of the FY 2016 proposed rule.
Under the regulations at 42 CFR 412.273, hospitals are permitted to withdraw or terminate their MGCRB reclassification within 45 days of the publication of a proposed rule. For information about withdrawing, terminating, or canceling a previous withdrawal or termination of a 3-year reclassification for wage index purposes, we refer readers to 42 CFR 412.273, as well as the FY 2002 IPPS final rule (66 FR 39887 through 39888) and the FY 2003 IPPS final rule (67 FR 50065 through 50066). Additional discussion on withdrawals and terminations and clarifications regarding reinstating reclassifications and “fallback” reclassifications were included in the FY 2008 IPPS final rule (72 FR 47333).
Changes to the wage index that result from withdrawals of requests for reclassification, terminations, wage index corrections, appeals, and the Administrator's review process for FY 2016 are incorporated into the wage index values published in this FY 2016 IPPS/LTCH PPS final rule. These changes affect not only the wage index value for specific geographic areas, but also the wage index value that redesignated/reclassified hospitals receive; that is, whether they receive the wage index that includes the data for both the hospitals already in the area and the redesignated/reclassified hospitals. Further, the wage index value for the area from which the hospitals are redesignated/reclassified may be affected.
Applications for FY 2017 reclassifications are due to the MGCRB by September 1, 2015 (the first working day of September 2015). We note that this is also the deadline for canceling a previous wage index reclassification withdrawal or termination under 42 CFR 412.273(d). Applications and other information about MGCRB reclassifications may be obtained via the Internet on the CMS Web site at:
Section 1886(d)(8)(B)(i) of the Act requires the Secretary to treat a hospital located in a rural county adjacent to one or more urban areas as being located in the urban metropolitan statistical area to which the greatest number of workers in the county commute if certain adjacency and commuting criteria are met. The criteria utilize standards for designating Metropolitan Statistical Areas published in the
We did not receive any public comments on this listing that accompanied the FY 2016 IPPS/LTCH PPS proposed rule.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51599 through 51600), we adopted the policy that, beginning with FY 2012, an eligible hospital that waives its Lugar status in order to receive the out-migration adjustment has effectively waived its deemed urban status and, thus, is rural for all purposes under the IPPS, including being considered rural for the DSH payment adjustment, effective for the fiscal year in which the hospital receives the out-migration adjustment. (We refer readers to a discussion of DSH payment adjustment under section IV.D. of the preamble of this final rule.)
In addition, we adopted a minor procedural change in that rule that allows a Lugar hospital that qualifies for and accepts the out-migration adjustment (through written notification to CMS within 45 days from the publication of the proposed rule) to waive its urban status for the full 3-year period for which its out-migration adjustment is effective. By doing so, such a Lugar hospital would no longer be required during the second and third years of eligibility for the out-migration adjustment to advise us annually that it prefers to continue being treated as rural and receive the out-migration adjustment. Therefore, under the procedural change, a Lugar hospital that requests to waive its urban status in order to receive the rural wage index in addition to the out-migration adjustment would be deemed to have accepted the out-migration adjustment and agrees to be treated as rural for the duration of its 3-year eligibility period, unless, prior to its second or third year of eligibility, the hospital explicitly notifies CMS in writing, within the required period (generally 45 days from the publication of the proposed rule), that it instead elects to return to its deemed urban status and no longer wishes to accept the out-migration adjustment. If the hospital does notify CMS that it is electing to return to its deemed urban status, it would again be treated as urban for all IPPS payment purposes.
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51599 through 51600) for a detailed discussion of the policy and process for waiving Lugar status for the out-migration adjustment.
We did not receive any public comments on the discussion of this policy in the FY 2016 IPPS/LTCH PPS proposed rule.
In accordance with section 1886(d)(13) of the Act, as added by section 505 of Public Law 108-173, beginning with FY 2005, we established a process to make adjustments to the hospital wage index based on commuting patterns of hospital employees (the “out-migration” adjustment). The process, outlined in the FY 2005 IPPS final rule (69 FR 49061), provides for an increase in the wage index for hospitals located in certain counties that have a relatively high percentage of hospital employees who reside in the county but work in a different county (or counties) with a higher wage index.
When the provision of section 1886(d)(13) of the Act was implemented for the FY 2005 wage index, we analyzed commuting data compiled by the U.S. Census Bureau which was derived from a special tabulation of the 2000 Census journey-to-work data for all industries (CMS extracted data applicable to hospitals). These data were compiled from responses to the “long-form” survey, which the Census Bureau used at the time and which contained questions on where residents in each county worked (69 FR 49062). However, the 2010 Census was “short form” only; information on where residents in each county worked was not collected as part of the 2010 Census. The Census Bureau worked with CMS to provide an alternative dataset based on the latest available data on where residents in each county worked in 2010, for use in developing a new out-migration adjustment based on new commuting patterns using the 2010 Census data beginning with FY 2016. We reviewed and analyzed the alternative dataset from the Census Bureau and proposed new out-migration adjustments in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24471
As stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24471), to determine the new out-migration adjustments and applicable counties that we proposed for FY 2016, we analyzed commuting data compiled by the Census Bureau that were derived from a custom tabulation of the American Community Survey (ACS), an official Census Bureau survey, utilizing 2008 through 2012 (5-Year) Microdata. The data were compiled from responses to the ACS questions regarding the county where workers reside and the county to which workers commute. The tabulation was specific to hospital military and civilian employees (hospital sector Census code 8190/NAICS code 622) who worked in the 50 States, Washington, DC, and Puerto Rico and, therefore, provided information about commuting patterns of workers at the county level for residents of the 50 States, Washington, DC, and Puerto Rico. For the ACS, the Census Bureau selects a random sample of addresses where workers reside to be included in the survey, and the sample is designed to ensure good geographic coverage. The ACS samples approximately 3.54 million resident addresses per year. The results of the ACS are used to formulate descriptive population estimates, and, as such, the sample on which the dataset is based represents the actual figures that would be obtained from a complete count.
We did not receive any public comments on the new data source for the FY 2016 out-migration adjustment discussed in the FY 2016 IPPS/LTCH PPS proposed rule.
Section 1886(d)(13)(B) of the Act requires the Secretary to use data the Secretary determines to be appropriate to establish the qualifying counties for the out-migration adjustment. For FY 2016 and subsequent years, until such time that CMS finalizes out-migration adjustments based on the next Census, we proposed that the out-migration adjustment be based on the data derived from the custom tabulation of the ACS described in section III.K.2. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24471 and 24472) and this final rule. As discussed above, we believe that these data are the most appropriate to establish qualifying counties because they are the most accurate and up-to-date data that are available to us. We proposed that the FY 2016 out-migration adjustments continue to be based on the same policies, procedures, and computation that were used for the FY 2012 out-migration adjustment. We have applied these same policies, procedures, and computations since FY 2012 and we believe they continue to be appropriate for FY 2016. (We refer readers to a full discussion of the out-migration adjustment, including rules on deeming hospitals reclassified under section 1886(d)(8) or section 1886(d)(10) of the Act to have waived the out-migration adjustment, in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51601 through 51602).) Table 2 (formerly Table 4J) associated with this final rule (which is available via the Internet on the CMS Web site) lists the final out-migration adjustments for the FY 2016 wage index.
Therefore, we are finalizing the FY 2016 update to the out-migration data as proposed. The FY 2016 out-migration adjustment is based on the data derived from the custom tabulation of the ACS. The FY 2016 out-migration adjustments continue to be based on the same policies, procedures, and computation that were used for the FY 2012 out-migration adjustment.
Section 1886(d)(13)(F) of the Act states that a wage index increase under this paragraph shall be effective for a period of 3 fiscal years, except that the Secretary shall establish procedures under which a subsection (d) hospital may elect to waive the application of such wage index increase. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49984 through 49985), we stated that even if we proposed to adopt new out-migration adjustment data for FY 2016, hospitals that are already receiving an out-migration adjustment beginning with a fiscal year prior to FY 2016 would still receive their out-migration adjustment based on the data used prior to FY 2016 for the years that remain of their 3-year qualification period in FY 2016 and after. Therefore, for FY 2016, hospitals that qualified in FY 2014 or FY 2015 to receive the out-migration adjustment based on the commuting data and the CBSA delineations used for FY 2014 will continue to receive the same out-migration adjustment for the remainder of their 3-year qualification period. For example, if a hospital qualified for the out-migration adjustment in FY 2014, but also will qualify in FY 2016 under the new commuting patterns and the new OMB labor market area delineations for FY 2016, this hospital will still receive the out-migration adjustment based on the commuting data and the CBSA delineations used for FY 2014, regardless of whether the FY 2016 adjustment is higher or lower than the adjustment based on FY 2014 data. If the hospital qualifies in FY 2017 (after the expiration of the 3-year qualifying period for the out-migration adjustment, which began in FY 2014) to receive the out-migration adjustment based on the new commuting data and OMB delineations in effect in FY 2017, it could receive the out-migration adjustment based on the new data for FYs 2017, 2018, and 2019. Conversely, for example, if a hospital qualified for the out-migration adjustment in FY 2014, but would
Based on the new out-migration adjustment data used for this FY 2016 IPPS/LTCH final rule, 336 hospitals will receive the out-migration adjustment for FY 2016. Of hospitals that were eligible for the out-migration adjustment for FY 2015 but whose 3-year qualifying period for the out-migration adjustment expired, 6 hospitals are no longer eligible for the out-migration adjustment under the new data (3 hospitals in Alabama, 1 hospital in Missouri, and 2 hospital in Tennessee). Of the 336 hospitals, the out-migration adjustment of 248 hospitals will be unaffected, as these hospitals will receive the same out-migration adjustment because they are still within an existing 3-year eligibility period under the previous out-migration adjustment data. Of the 336 hospitals, 12 hospitals would have received a higher out-migration adjustment using the new data (1 hospital in Alabama; 2 hospitals in Massachusetts; 1 hospital in Michigan; 4 hospitals in Pennsylvania; 2 hospitals in Tennessee; and 2 hospitals in Wisconsin) and 4 hospitals would have received a lower out-migration adjustment using the new data (1 hospital in Idaho, 2 hospitals in Oregon, and 1 hospital in South Carolina). Seventy-five hospitals are newly eligible for the out-migration adjustment in FY 2016 using the new data. The following table shows the States and Territory in
The preliminary, unaudited Worksheet S-3 wage data files for the proposed FY 2016 wage index were made available on May 23, 2014, and the preliminary CY 2013 occupational mix data files on July 11, 2014, through the Internet on the CMS Web site at:
In the interest of meeting the data needs of the public, beginning with the proposed FY 2009 wage index, we post an additional public use file on our Web site that reflects the actual data that are used in computing the proposed wage index. The release of this file does not alter the current wage index process or schedule. We notify the hospital community of the availability of these data as we do with the current public use wage data files through our Hospital Open Door Forum. We encourage hospitals to sign up for automatic notifications of information about hospital issues and about the dates of the Hospital Open Door Forums at the CMS Web site at:
In a memorandum dated April 7, 2014, we instructed all MACs to inform the IPPS hospitals they service of the availability of the wage index data files and the process and timeframe for requesting revisions (including the specific deadlines listed below). We also instructed the MACs to advise hospitals that these data were also made available directly through their representative hospital organizations.
If a hospital wished to request a change to its data as shown in the May 23, 2014 wage data files and July 11, 2014 occupational mix data files, the hospital was to submit corrections along with complete, detailed supporting documentation to its MAC by October 6, 2014. Hospitals were notified of this deadline and of all other deadlines and requirements, including the requirement to review and verify their data as posted in the preliminary wage index data files on the Internet, through the April 7, 2014 memorandum referenced above.
The MACs notified the hospitals by mid-February 2015 of any changes to the wage index data as a result of the desk reviews and the resolution of the hospitals' early-October revision requests. The MACs also submitted the revised data to CMS by December 16, 2014. CMS published the proposed wage index public use files that included hospitals' revised wage index data on February 13, 2015. Hospitals had until March 2, 2015, to submit requests to the MACs for reconsideration of adjustments made by the MACs as a result of the desk review, and to correct errors due to CMS' or the MAC's mishandling of the wage index data. Hospitals also were required to submit sufficient documentation to support their requests.
After reviewing requested changes submitted by hospitals, MACs were required to transmit to CMS any additional revisions resulting from the hospitals' reconsideration requests by April 8, 2015. The deadline for a hospital to request CMS intervention in cases where the hospital disagreed with the MAC's policy interpretations was April 15, 2015. We note that, as we did for the FY 2015 wage index, for the FY 2016 wage index, in accordance with the FY 2016 wage index timeline posted on the CMS Web site at
Hospitals were given the opportunity to examine Table 2, which was listed in section VI. of the Addendum to the proposed rule and available via the Internet on the CMS Web site at:
We posted the final wage index data public use files on May 1, 2015 on the Internet at:
After the release of the May 2015 wage index data files, changes to the wage and occupational mix data could only be made in those very limited situations involving an error by the MAC or CMS that the hospital could not have known about before its review of the final wage index data files. Specifically, neither the MAC nor CMS will approve the following types of requests:
• Requests for wage index data corrections that were submitted too late to be included in the data transmitted to CMS by the MACs on or before April 8, 2015.
• Requests for correction of errors that were not, but could have been, identified during the hospital's review of the February 13, 2015 wage index public use files.
• Requests to revisit factual determinations or policy interpretations made by the MAC or CMS during the wage index data correction process.
If, after reviewing the May 2015 final public use files, a hospital believed that its wage or occupational mix data were incorrect due to a MAC or CMS error in the entry or tabulation of the final data, the hospital was given the opportunity to notify both its MAC and CMS regarding why the hospital believed an
Verified corrections to the wage index data received timely by CMS and the MACs (that is, by June 1, 2015) were incorporated into the final wage index in this FY 2016 IPPS/LTCH PPS final rule, which will be effective October 1, 2015.
We created the processes described above to resolve all substantive wage index data correction disputes before we finalize the wage and occupational mix data for the FY 2016 payment rates. Accordingly, hospitals that did not meet the procedural deadlines set forth above will not be afforded a later opportunity to submit wage index data corrections or to dispute the MAC's decision with respect to requested changes. Specifically, our policy is that hospitals that do not meet the procedural deadlines set forth above will not be permitted to challenge later, before the PRRB, the failure of CMS to make a requested data revision. We refer readers also to the FY 2000 IPPS final rule (64 FR 41513) for a discussion of the parameters for appeals to the PRRB for wage index data corrections.
Again, we believe the wage index data correction process described above provides hospitals with sufficient opportunity to bring errors in their wage and occupational mix data to the MAC's attention. Moreover, because hospitals had access to the final wage index data by May 1, 2015, they had the opportunity to detect any data entry or tabulation errors made by the MAC or CMS before the development and publication of the final FY 2016 wage index by August 2015, and the implementation of the FY 2016 wage index on October 1, 2015. Given these processes, the wage index implemented on October 1 should be accurate. Nevertheless, in the event that errors are identified by hospitals and brought to our attention after June 1, 2015, we retain the right to make midyear changes to the wage index under very limited circumstances.
Specifically, in accordance with 42 CFR 412.64(k)(1) of our regulations, we make midyear corrections to the wage index for an area only if a hospital can show that: (1) The MAC or CMS made an error in tabulating its data; and (2) the requesting hospital could not have known about the error or did not have an opportunity to correct the error, before the beginning of the fiscal year. For purposes of this provision, “before the beginning of the fiscal year” means by the June deadline for making corrections to the wage data for the following fiscal year's wage index (for example, June 1, 2015, for the FY 2016 wage index). This provision is not available to a hospital seeking to revise another hospital's data that may be affecting the requesting hospital's wage index for the labor market area. As indicated earlier, because CMS makes the wage index data available to hospitals on the CMS Web site prior to publishing both the proposed and final IPPS rules, and the MACs notify hospitals directly of any wage index data changes after completing their desk reviews, we do not expect that midyear corrections will be necessary. However, under our current policy, if the correction of a data error changes the wage index value for an area, the revised wage index value will be effective prospectively from the date the correction is made.
In the FY 2006 IPPS final rule (70 FR 47385 through 47387 and 47485), we revised 42 CFR 412.64(k)(2) to specify that, effective on October 1, 2005, that is, beginning with the FY 2006 wage index, a change to the wage index can be made retroactive to the beginning of the Federal fiscal year only when CMS determines all of the following: (1) The MAC or CMS made an error in tabulating data used for the wage index calculation; (2) the hospital knew about the error and requested that the MAC and CMS correct the error using the established process and within the established schedule for requesting corrections to the wage index data, before the beginning of the fiscal year for the applicable IPPS update (that is, by the June 1, 2015 deadline for the FY 2016 wage index); and (3) CMS agreed before October 1 that the MAC or CMS made an error in tabulating the hospital's wage index data and the wage index should be corrected.
In those circumstances where a hospital requested a correction to its wage index data before CMS calculated the final wage index (that is, by the June 1, 2015 deadline for the FY 2016 wage index), and CMS acknowledges that the error in the hospital's wage index data was caused by CMS' or the MAC's mishandling of the data, we believe that the hospital should not be penalized by our delay in publishing or implementing the correction. As with our current policy, we indicated that the provision is not available to a hospital seeking to revise another hospital's data. In addition, the provision cannot be used to correct prior years' wage index data; and it can only be used for the current Federal fiscal year. In situations where our policies would allow midyear corrections other than those specified in 42 CFR 412.64(k)(2)(ii), we continue to believe that it is appropriate to make prospective-only corrections to the wage index.
We note that, as with prospective changes to the wage index, the final retroactive correction will be made irrespective of whether the change increases or decreases a hospital's payment rate. In addition, we note that the policy of retroactive adjustment will still apply in those instances where a final judicial decision reverses a CMS denial of a hospital's wage index data revision request.
Section 1886(d)(3)(E) of the Act directs the Secretary to adjust the proportion of the national prospective payment system base payment rates that are attributable to wages and wage-related costs by a factor that reflects the relative differences in labor costs among geographic areas. It also directs the Secretary to estimate from time to time the proportion of hospital costs that are labor-related and to adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs of the DRG prospective payment rates. We refer to the portion of hospital costs attributable to wages and wage-related costs as the labor-related share. The labor-related share of the prospective payment rate is adjusted by an index of relative labor costs, which is referred to as the wage index.
Section 403 of Public Law 108-173 amended section 1886(d)(3)(E) of the Act to provide that the Secretary must employ 62 percent as the labor-related share unless this would result in lower payments to a hospital than would otherwise be made. However, this provision of Public Law 108-173 did not change the legal requirement that the Secretary estimate from time to time the proportion of hospitals' costs that are attributable to wages and wage-related costs. Thus, hospitals receive payment based on either a 62-percent labor-related share, or the labor-related
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50596 through 50607), we rebased and revised the hospital market basket. We established a FY 2010-based IPPS hospital market basket to replace the FY 2006-based IPPS hospital market basket, effective October 1, 2013. In that final rule, we presented our analysis and conclusions regarding the frequency and methodology for updating the labor-related share for FY 2014. Using the FY 2010-based IPPS market basket, we finalized a labor-related share for FY 2014 and for FY 2015 of 69.6 percent. In addition, we implemented this revised and rebased labor-related share in a budget neutral manner. However, consistent with section 1886(d)(3)(E) of the Act, we did not take into account the additional payments that would be made as a result of hospitals with a wage index less than or equal to 1.0000 being paid using a labor-related share lower than the labor-related share of hospitals with a wage index greater than 1.0000.
The labor-related share is used to determine the proportion of the national IPPS base payment rate to which the area wage index is applied. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24474 through 24475), for FY 2016, we did not propose to make any further changes to the national average proportion of operating costs that are attributable to wages and salaries, employee benefits, contract labor, the labor-related portion of professional fees, administrative and facilities support services, and all other labor-related services. Therefore, for FY 2016, we proposed to continue to use a labor-related share of 69.6 percent for discharges occurring on or after October 1, 2015.
Tables 1A and 1B, which were published in section VI. of the Addendum to the FY 2016 IPPS/LTCH PPS proposed rule and available via the Internet on the CMS Web site, reflected the proposed labor-related share. For FY 2016, for all IPPS hospitals whose wage indexes are less than or equal to 1.0000, we proposed to apply the wage index to a labor-related share of 62 percent of the national standardized amount. For all IPPS hospitals whose wage indexes are greater than 1.000, for FY 2016, we proposed to apply the wage index to a proposed labor-related share of 69.6 percent of the national standardized amount. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24474 through 24475), we noted that, for Puerto Rico hospitals, the national labor-related share is 62 percent because the national wage index for all Puerto Rico hospitals is less than 1.0000.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50601 through 50603), we also rebased and revised the labor-related share for the Puerto Rico-specific standardized amounts using FY 2010 as a base year. We finalized a labor-related share for the Puerto Rico-specific standardized amounts for FY 2014 of 63.2 percent. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49990), for FY 2015, we did not make any further changes to the Puerto Rico-specific average proportion of operating costs that are attributable to wages and salaries, employee benefits, contract labor, the labor-related portion of professional fees, administrative and facilities support services, and all other labor-related services. For FY 2015, we continued to use a labor-related share for the Puerto Rico-specific standardized amounts of 63.2 percent for discharges occurring on or after October 1, 2014.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24475), for FY 2016, we proposed to continue to use a labor-related share for the Puerto Rico-specific standardized amounts of 63.2 percent for discharges occurring on or after October 1, 2015. Puerto Rico hospitals are paid based on 75 percent of the national standardized amounts and 25 percent of the Puerto Rico-specific standardized amounts. For FY 2016, we proposed that the labor-related share of a hospital's Puerto Rico-specific rate would be either the Puerto Rico-specific labor-related share of 63.2 percent or 62 percent, depending on which results in higher payments to the hospital. If the hospital has a Puerto Rico-specific wage index greater than 1.000 for FY 2016, we proposed to set the hospital's rates using a labor-related share of 63.2 percent for the 25 percent portion of the hospital's payment determined by the Puerto Rico standardized amounts because this amount would result in higher payments. Conversely, a hospital with a Puerto Rico-specific wage index of less than or equal to 1.000 for FY 2016 would be paid using the Puerto Rico-specific labor-related share of 62 percent of the Puerto Rico-specific rates because the lower labor-related share would result in higher payments.
In addition, sections 1886(d)(9)(A) and (d)(9)(E)(iv) of the Act require that Puerto Rico hospitals are paid a blended rate for their inpatient operating costs based on 75 percent of the national standardized amount and 25 percent of the Puerto Rico-specific standardized amount. Therefore, for the portion of payment determined under the national standardized amount, Puerto Rico hospitals must follow section 1886(d)(3)(E) of the Act which requires the Secretary to use 62 percent as the labor-related share unless this would result in lower payments to a hospital than would otherwise be made. For Puerto Rico, the national labor-related share is 62 percent because the national wage index for all Puerto Rico hospitals is less than 1.0000. Therefore, we are unable to change the labor-related share of 62 percent.
After consideration of public comments received, we are finalizing our proposals without modification. For FY 2016, we are continuing to use a labor-related share for the national standardized amount of 69.6 percent for
Puerto Rico hospitals are paid based on 75 percent of the national standardized amounts and 25 percent of the Puerto Rico-specific standardized amounts. For Puerto Rico hospitals, the national labor-related share is 62 percent because the national wage index for all Puerto Rico hospitals is less than 1.0000. For FY 2016, we are continuing to use a labor-related share for Puerto Rico-specific standardized amounts of 63.2 percent for discharges occurring on or after October 1, 2015. We also are finalizing our proposal that the labor-related share of a hospital's Puerto Rico-specific rate for FY 2016 is either the Puerto Rico-specific labor-related share of 63.2 percent or 62 percent, depending on which results in higher payments to the hospital. The final FY 2016 Puerto Rico specific labor-related share of 63.2 percent or 62 percent is reflected in Table 1C, which is published in section VI. of the Addendum to this FY 2016 IPPS/LTCH PPS final rule and available via the Internet on the CMS Web site.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586 through 51590), we revised our policy for reporting costs of qualified defined benefit pension plans for the Medicare wage index. Under that revised policy, the pension costs that are to be included in the wage index equal a hospital's average cash contributions deposited to its defined benefit pension plan over a 3-year period or, if less than a 3-year period, the number of years that the hospital has sponsored a defined benefit plan. The 3-year average is centered on the base cost reporting period for the wage index. For example, the FY 2016 wage index is based on Medicare cost reporting periods beginning during Federal FY 2012, and reflects the average pension contributions made in a hospital's cost reporting period that began during Federal FYs 2011, 2012, and 2013. As stated in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51587), we centered the 3-year average on the base cost reporting period for the wage index in order to ensure that the average annual pension cost reflected in the wage index is consistent with the cost reporting period applicable to all other costs included in the index. We also stated that we did not anticipate that the use of contributions made in the period immediately following the base cost reporting period (for example, using Federal FY 2013 as one of the 3-year periods for FY 2016) would create an administrative burden because by the time the MAC would be reviewing a hospital's base cost reporting period wage data for inclusion in the subsequent year's wage index, trust account statements and general ledger reports to support the contributions should be readily available. We refer readers to the FY 2012 IPPS/LTCH PPS final rule for a complete discussion of this policy.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49987 through 49990), we finalized changes to the FY 2017 wage index timeline. We stated that we believed the timeline changes would not only improve the accuracy of the February public use file (PUF), but also would reduce the number of hospital appeals based on the February PUF. Among these changes to the wage index timeline for FY 2017 is a requirement that hospitals must request revisions to the preliminary PUF by the first week of September 2015. In response to our FY 2015 proposal to change the wage index timeline for FY 2017, a public commenter stated that the proposed FY 2017 deadline of early August 2015 did not provide enough time for hospitals to incorporate their pension data into the desk review process because the Internal Revenue Service (IRS) Form 5500 (used as the basis for reporting pension contributions for defined benefit plans) is due 7 months after the end of the plan year (July 31), with possible extensions through mid-September. In response to that comment, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989), we provided for a general deadline of early September to submit revisions to the wage index data posted in the May 2015 preliminary PUF, but provided a limited exception for submission of pension data for certain hospitals. Specifically, starting with the FY 2017 wage index, we will allow an extension for a hospital with a fiscal year begin date on or after August 15 of a year to submit its initial pension data by mid-October 2015, which would revise the preliminary PUF. We stated that we believed the majority of hospitals, which do have fiscal year begin dates prior to August 15 of a year, would be able to submit their pension data, along with the remainder of their wage index documentation, to their MACs by the beginning of September of each year, in time for the beginning of the annual wage index desk review process. We also stated that, in future rulemaking, we may consider revisions to the 3-year average pension policy that would allow all hospitals to submit their pension data at the same time. We refer readers to the FY 2015 IPPS/LTCH PPS final rule for a complete discussion of the changes to the FY 2017 wage index timeline (79 FR 49987 through 49990).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24475), we stated that we have now reconsidered the changes made to the FY 2017 wage index timeline in light of our experience to date with the administrative aspects of the 3-year average pension policy as explained above and in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51586 through 51590). Based on our findings, we believe that a revision of the 3-year average pension policy is warranted, beginning with the FY 2017 wage index.
Specifically, in the FY 2016 IPPS/LTCH PPS proposed rule, instead of the 3-year average being centered on the base cost reporting period for the wage index, we proposed that, for the FY 2017 wage index and all subsequent fiscal year wage indexes, the 3-year average would be based on pension contributions made during the base cost reporting period plus the prior 2 cost reporting years. For example, the FY 2017 wage index would be based on Medicare cost reporting periods beginning during Federal FY 2013. Therefore, the FY 2017 wage index would reflect the average pension contributions made in hospitals' cost reporting periods beginning during Federal FYs 2011, 2012, and 2013 (rather than Federal FYs 2012, 2013, and 2014 under the FY 2015 policy). Our proposed change in the 3-year averaging period would produce a 1-year lag in reporting pension costs relative to reporting all other costs included in the wage index and, for most hospitals, would result in the same 3-year average pension costs for both the FY 2016 and FY 2017 wage index. That is, for FY 2016, the 3-year average consists of Federal FYs 2011, 2012, and 2013, and under our proposal, the 3-year average for FY 2017 also would consist of Federal FYs 2011, 2012, and 2013. Under our proposal, the 3-year
After consideration of the public comments we received, we are finalizing our proposal without modification that, instead of the 3-year average being centered on the base cost reporting period for the wage index, for the FY 2017 wage index and all subsequent fiscal year wage indexes, the 3-year average will be based on pension contributions made during the base cost reporting period plus the prior 2 cost reporting years.
For FY 2017 only, we proposed that all hospitals submit requests to revise their previously submitted pension data by early October to mid-October (instead of the first week of September, as stated in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989)). We had anticipated proposing an early September deadline for all hospitals to submit revisions on all data in the preliminary PUF, including pension data. However, we realized that such a deadline would involve requiring hospitals to submit all of the revisions to pension data prior to the effective date of the final rule. Therefore, we proposed this deadline change of early October to mid-October so that all hospitals would submit revisions to their pension data by the same deadline, which should simplify the deadline for submitting those data as well as provide more time to most hospitals to submit these data. Because the pension data for FY 2017 would be the same pension data already used in FY 2016 (as mentioned above), we would expect minimal revisions to the pension data for FY 2017. Because we proposed an extension until early to mid-October for all hospitals to revise their pension data for FY 2017, we proposed to eliminate the limited exception and extension for hospitals with a fiscal year begin date of on or after August 15, as set forth in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989). The exception is no longer necessary, given the proposed use of data from older cost reports for the 3-year averaging of pension costs and the proposed extension of time for submission of revisions of pension data for all hospitals for FY 2017. For FY 2018 and subsequent fiscal years, we proposed to require that all hospitals request revisions to the preliminary PUF for all wage index issues, including submission and/or revisions of pension data, by the first week of September. The September deadline for FY 2018 and subsequent fiscal years is consistent with the deadline established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989) for the FY 2017 wage index data. Specifically, in that final rule, in response to commenters, we established the early September deadline as a feasible deadline for hospitals to request revisions to their preliminary wage and occupational mix data. In addition, we also stated that a deadline in early September would be manageable for hospitals, while also providing the MACs with the most amount of time possible to complete their desk reviews.
This proposal also would allow for a single deadline for all hospitals to submit revisions to their wage data, including their pension costs (as stated above). A single deadline is preferable because it would result in less confusion and would be easier to administer for all hospitals. In addition, the limited exception for hospitals with a fiscal year begin date of on or after August 15 would have provided administrative relief only to a minority of hospitals. Furthermore, in many cases, hospitals that participate in a systemwide pension plan or State-run retirement system have been unable to obtain timely documentation to support their allocated share of total plan contributions. We believe that a shift in the 3-year average to the base cost reporting period plus the prior 2 cost reporting years would provide all hospitals sufficient time to collect and submit their pension data by the proposed September deadline, and allow MACs to complete their desk reviews on schedule, thereby improving the accuracy of the February PUF.
The chart below includes the FY 2017 wage index timetable published in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989), except for the mid-October deadline under the limited exception and extension for submitting pension data to the MACs for hospitals with fiscal year begin dates on or after August 15, which we are eliminating in this final rule. It also includes our final policy for FY 2017 for all hospitals to request revisions to their pension data by mid-October 2015 (rather than early October as published in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989)).
For FY 2018 and subsequent fiscal years, we proposed the same timetable as in FY 2017 (adjusted for the years), except there would no longer be a separate deadline in October for submitting and/or revising pension data. Rather, all requests to submit and/or revise pension data (as well as any other requests for revisions to the preliminary PUF) for FY 2018 and subsequent fiscal years would be required to be submitted by hospitals to MACs in the first week of September each year.
Furthermore, because we proposed an extension until early to mid-October for all hospitals to revise their pension data for FY 2017, we proposed to eliminate the limited exception and extension for hospitals with a fiscal year begin date of on or after August 15, as set forth in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49989). The exception is no longer necessary, given the use of data from older cost reports for the 3-year averaging of pension costs and the proposed extension of time for submission of revisions of pension data for all hospitals for FY 2017. Therefore, we are finalizing a mid-October 2015 deadline by which, for FY 2017 only, hospitals must request revisions to their pension data for pension plans that are classified as defined benefit pension plans. Requests to revise data of all other types of pension plans (such as defined contribution plans) must be received by the MACs no later than the first week of September 2015. The final FY 2017 Wage Index Development Timetable will be posted on the following CMS Web site after issuance of this FY 2016 final rule:
In addition, we proposed that, for FY 2018 and subsequent fiscal years, all hospitals are required to request revisions to the preliminary PUF for all wage index issues, including submission and/or revisions of pension data, by the first week of September. We further proposed that the remainder of the timetable for FY 2017 would apply for FY 2018 and subsequent fiscal years (adjusted for the years). The September deadline, consistent with the deadline established in the FY 2015 IPPS/LTCH PPS final rule for the FY 2017 and subsequent year's wage index data (79 FR 49989), is the earliest feasible deadline for hospitals to request revisions to their preliminary wage and occupational mix data. This deadline in early September is manageable for hospitals, while it also provides the MACs with the most amount of time possible to complete their desk reviews. As such, we are finalizing that, for FY 2018 and subsequent fiscal years, all hospitals are required to request revisions to the preliminary PUF for all wage index issues, including submission and/or revisions of pension data, by the first week of September. Further, we are finalizing that the remainder of the timetable for FY 2017 will apply for FY 2018 and subsequent fiscal years (adjusted for the years).
After consideration of the public comments we received, for FY 2017 only, we are finalizing our proposals without modification that all hospitals submit requests to revise their previously submitted defined benefit pension data by early October to mid-October and eliminating the limited exception and extension for hospitals with a fiscal year begin date of on or after August 15 to submit their pension data by mid-October. We also are finalizing our proposals without modification to require that all hospitals request revisions to the preliminary PUF for all wage index issues, including submission and/or revisions of pension data, by the first week of September for FY 2018 and subsequent fiscal years, and to apply the remainder of the timetable for FY 2017 to FY 2018 and subsequent fiscal years (adjusted for the years).
The chart below summarizes the wage index timetables for FY 2018 and subsequent fiscal years.
As discussed in section III.N. of the preamble of this final rule, the pension cost to be included in the Medicare wage index equals a hospital's average cash contributions deposited to its defined benefit pension plan over a 3-year period. Since implementing this policy, we have become aware of some confusion with respect to how hospitals are to compute the 3-year average when allocating their pension costs on the Medicare cost report if a hospital participates in a pension plan or retirement system that also covers other entities. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24477), we clarified that if a hospital participates in a pension plan or retirement system that also covers other entities, the hospital must report its respective 3-year average pension cost (or prefunding balance) reflecting only the hospital's allocated share of total plan contributions, and
We did not received any public comments on this clarification that was included the FY 2016 IPPS/LTCH PPS proposed rule.
In accordance with section 1886(b)(3)(B)(i) of the Act, each year we update the national standardized amount for inpatient operating costs by a factor called the “applicable percentage increase.” For FY 2016, we are setting the applicable percentage increase by applying the adjustments listed below in the same sequence as we did for FY 2015. Specifically, consistent with section 1886(b)(3)(B) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act, we are setting the applicable percentage increase by applying the following adjustments in the following sequence. The applicable percentage increase under the IPPS is equal to the rate-of-increase in the hospital market basket for IPPS hospitals in all areas, subject to (1) a reduction of one-quarter of the applicable percentage increase (prior to the application of other statutory adjustments; also referred to as the market basket update or rate-of-increase (with no adjustments)) for hospitals that fail to submit quality information under rules established by the Secretary in accordance with section 1886(b)(3)(B)(viii) of the Act; (2) a 66
We note that, in compliance with section 404 of the MMA, in the FY 2014 IPPS/LTCH PPS final rule, we replaced the FY 2006-based IPPS operating and capital market baskets with the revised and rebased FY 2010-based IPPS operating and capital market baskets for FY 2014. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 49993 through 49996), we continued to use the FY 2010-based IPPS operating and capital market baskets for FY 2015 and the labor-related share of 69.6 percent, which is based on the FY 2010-based IPPS market basket. For FY 2016, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24477), we proposed to continue using the FY 2010-based IPPS operating and capital market baskets and the labor-related share of 69.6 percent, which is based on the FY 2010-based IPPS market basket. We did not receive any public comments on this proposal and, therefore, for FY 2016, will continue to use the FY 2010-based IPPS operating and capital market baskets and the labor-related share of 69.6 percent.
Based on the most recent data available for the FY 2016 proposed rule, in accordance with section 1886(b)(3)(B) of the Act, we proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24477) to base the FY 2016 market basket update used to determine the applicable percentage increase for the IPPS on IHS Global Insight, Inc.'s (IGI's) first quarter 2015 forecast of the FY 2010-based IPPS market basket rate-of-increase with historical data through fourth quarter 2014, which was estimated to be 2.7 percent. We proposed that if more recent data became subsequently available (for example, a more recent estimate of the market basket and the MFP adjustment), we would use such data, if appropriate, to determine the FY 2016 market basket update and the MFP adjustment in this final rule.
Based on updated data for this FY 2016 IPPS/LTCH PPS final rule, that is, the IGI's second quarter 2015 forecast of the FY 2010-based IPPS market basket rate-of-increase with historical data through first quarter 2015, we estimate that the FY 2016 market basket update used to determine the applicable
For FY 2016, depending on whether a hospital submits quality data under the rules established in accordance with section 1886(b)(3)(B)(viii) of the Act (hereafter referred to as a hospital that submits quality data) and is a meaningful EHR user under section 1886(b)(3)(B)(ix) of the Act (hereafter referred to as a hospital that is a meaningful EHR user), we discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24477 through 24478) that there are four possible applicable percentage increases that can be applied to the standardized amount. Based on more recent data described above, we determined final applicable percentage increases to the standardized amount for FY 2016, as specified in the table below.
In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51689 through 51692), we finalized our methodology for calculating and applying the MFP adjustment. As we explained in that rule, section 1886(b)(3)(B)(xi)(II) of the Act, as added by section 3401(a) of the Affordable Care Act, defines this productivity adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business MFP (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, calendar year, cost reporting period, or other annual period). The Bureau of Labor Statistics (BLS) publishes the official measure of private nonfarm business MFP. We refer readers to the BLS Web site at
MFP is derived by subtracting the contribution of labor and capital input growth from output growth. The projections of the components of MFP are currently produced by IGI, a nationally recognized economic forecasting firm with which CMS contracts to forecast the components of the market baskets and MFP. As described in the FY 2012 IPPS/LTCH PPS final rule, in order to generate a forecast of MFP, IGI replicated the MFP measure calculated by the BLS using a series of proxy variables derived from IGI's U.S. macroeconomic models. In the FY 2012 IPPS/LTCH PPS final rule, we identified each of the major MFP component series employed by the BLS to measure MFP as well as provided the corresponding concepts determined to be the best available proxies for the BLS series.
Beginning with the FY 2016 rulemaking cycle, as discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24478), the MFP adjustment is calculated using a revised series developed by IGI to proxy the aggregate capital inputs. Specifically, IGI has replaced the Real Effective Capital Stock used for Full Employment GDP with a forecast of BLS aggregate capital inputs recently developed by IGI using a regression model. This series provides a better fit to the BLS capital inputs, as measured by the differences between the actual BLS capital input growth rates and the estimated model growth rates over the historical time period. Therefore, we are using IGI's most recent forecast of the BLS capital inputs series in the MFP calculations beginning with the FY 2016 rulemaking cycle. A complete description of the MFP projection methodology is available on our Web site at:
For FY 2016, we proposed an MFP adjustment of 0.6 percentage point (80 FR 24478). Similar to the market basket update, for the proposed rule, we used the most recent data available to compute the MFP adjustment. As noted above, we proposed that if more recent data became subsequently available, we would use such data, if appropriate, to determine the FY 2016 market basket update and MFP adjustment in this FY 2016 IPPS/LTCH PPS final rule.
Based on the most recent data available for this final rule, which is IGI's second quarter 2015 forecast (with historical data through first quarter 2015), the MFP adjustment is 0.5 percentage point for FY 2016.
As stated in the proposed rule, we proposed to use more recently available data to determine the final market basket update and the multifactor productivity adjustment. We did not receive any public comments on this proposal. Therefore, for this final rule, we are finalizing a market basket update of 2.4 percent and an MFP adjustment of 0.5 percentage point based on more recently available data.
Based on the most recent data available for this final rule as described above, we have determined four final applicable percentage increases to the standardized amount for FY 2016, as specified in the table below.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24478), we proposed to revise the existing regulations at 42 CFR 412.64(d) to reflect the current law for the FY 2016 update. Specifically, in accordance with section 1886(b)(3)(B) of the Act, we proposed to modify paragraph (vi) of § 412.64(d)(1) to include the applicable percentage increase to the FY 2016 operating standardized amount. We did not receive any public comments on this proposal. Therefore, we are finalizing our proposed revisions to the regulations at § 412.64(d).
Section 1886(b)(3)(B)(iv) of the Act provides that the applicable percentage increase to the hospital-specific rates for SCHs and MDHs equals the applicable percentage increase set forth in section 1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the IPPS). Therefore, the update to the hospital-specific rates for SCHs and MDHs also is subject to section 1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act. We note that section 205 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted on April 16, 2015) extended the MDH program (which, under previous law, was to be in effect for discharges on or before March 31, 2015 only) for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24478), for FY 2016, we proposed the following updates to the hospital-specific rates applicable to SCHs: An update of 1.9 percent for a hospital that submits quality data and is a meaningful EHR user; an update of 1.225 percent for a hospital that fails to submit quality data and is a meaningful EHR user; an update of 0.55 percent for a hospital that submits quality data and is not a meaningful EHR user; and an update of −0.125 percent for a hospital that fails to submit quality data and is not a meaningful EHR user. We note that at the time of the development of the FY 2016 IPPS/LTCH PPS proposed rule, the MACRA had yet to be signed into law and therefore we did not explicitly address the update of the hospital-specific rates for FY 2016 for MDHs. However, as noted, under section 1886(b)(3)(B)(iv) of the Act, the update to the hospital-specific rates is the same for both MDHs and SCHs and is equal to the applicable percentage increase set forth in section 1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the IPPS). As mentioned above, for the FY 2016 proposed rule, we used IGI's first quarter 2015 forecast (with historical data through fourth quarter 2014) of the FY 2010-based IPPS market basket update. Similarly, we used IGI's first quarter 2015 forecast of the MFP adjustment. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24478), we proposed that if more recent data became subsequently available (for example, a more recent estimate of the market basket and the MFP adjustment), we would use such data, if appropriate, to determine the update for SCHs in this final rule. We did not receive any public comments with regard to this proposal and, therefore, are finalizing the proposal to determine the update to the hospital-specific rates for SCHs and MDHs in this final rule using the most recent data available.
As discussed above, based on more recent data for IGI's second quarter 2015 forecast of the FY 2010-based IPPS market basket update with historical data through first quarter 2015, we estimate that the FY 2016 market basket update used to determine the update factor for this final rule for the hospital-specific rates of SCHs and MDHs is 2.4 percent. Similarly, for this final rule, we used IGI's second quarter 2015 forecast of the MFP adjustment, which is estimated at 0.5 percentage point for FY 2016. Accordingly, we are finalizing the following updates to the hospital-specific rates applicable to SCHs and MDHs: An update of 1.7 percent for a hospital that submits quality data and is a meaningful EHR user; an update of 1.1 percent for a hospital that fails to submit quality data and is a meaningful EHR user; an update of 0.5 percent for a hospital that submits quality data and is not a meaningful EHR user; and an update of −0.1 percent for a hospital that fails to submit quality data and is not a meaningful EHR user.
Puerto Rico hospitals are paid a blended rate for their inpatient operating costs based on 75 percent of the national standardized amount and 25 percent of the Puerto Rico-specific standardized amount. Section 1886(d)(9)(C)(i) of the Act is the basis for determining the applicable percentage increase applied to the Puerto Rico-specific standardized amount. Section 401(c) of Public Law 108-173 amended section
Similarly, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24479), we used IGI's first quarter 2015 forecast of the MFP adjustment. We proposed that if more recent data became subsequently available, we would use such data, if appropriate, to determine the MFP adjustment for the final rule.
We did not receive any public comments concerning our proposal. Therefore, using the most recent data available, for FY 2016, we are finalizing an applicable percentage increase to the Puerto Rico-specific operating amount of 1.7 percent (which reflects a FY 2016 estimate of the FY 2010-based IPPS market basket rate-of-increase of 2.4 percent, less an MFP adjustment of 0.5 percentage point and less an additional reduction of 0.2 percentage point as required by section 1886(b)(3)(B)(xii) of the Act). As we noted above, for the proposed rule, we used the first quarter 2015 forecast of the FY 2010-based IPPS market basket update and MFP with historical data through fourth quarter 2014. For this final rule, we used the most recent data available, which is IGI's second quarter 2015 forecast (with historical data through first quarter 2015).
Under the authority of section 1886(d)(5)(C)(i) of the Act, the regulations at § 412.96 set forth the criteria that a hospital must meet in order to qualify under the IPPS as a rural referral center (RRC). RRCs receive some special treatment under both the DSH payment adjustment and the criteria for geographic reclassification.
Section 402 of Public Law 108-173 raised the DSH payment adjustment for RRCs such that they are not subject to the 12-percent cap on DSH payments that is applicable to other rural hospitals. RRCs also are not subject to the proximity criteria when applying for geographic reclassification. In addition, they do not have to meet the requirement that a hospital's average hourly wage must exceed, by a certain percentage, the average hourly wage of the labor market area in which the hospital is located.
Section 4202(b) of Public Law 105-33 states, in part, that any hospital classified as an RRC by the Secretary for FY 1991 shall be classified as such an RRC for FY 1998 and each subsequent fiscal year. In the August 29, 1997 IPPS final rule with comment period (62 FR 45999), CMS reinstated RRC status for all hospitals that lost that status due to triennial review or MGCRB reclassification. However, CMS did not reinstate the status of hospitals that lost RRC status because they were now urban for all purposes because of the OMB designation of their geographic area as urban. Subsequently, in the August 1, 2000 IPPS final rule (65 FR 47089), we indicated that we were revisiting that decision. Specifically, we stated that we would permit hospitals that previously qualified as an RRC and lost their status due to OMB redesignation of the county in which they are located from rural to urban, to be reinstated as an RRC. Otherwise, a hospital seeking RRC status must satisfy all of the other applicable criteria. We use the definitions of “urban” and “rural” specified in Subpart D of 42 CFR part 412. One of the criteria under which a hospital may qualify as an RRC is to have 275 or more beds available for use (§ 412.96(b)(1)(ii)). A rural hospital that does not meet the bed size requirement can qualify as an RRC if the hospital meets two mandatory prerequisites (a minimum case-mix index (CMI) and a minimum number of discharges), and at least one of three optional criteria (relating to specialty composition of medical staff, source of inpatients, or referral volume). (We refer readers to § 412.96(c)(1) through (c)(5) and the September 30, 1988
• The hospital's CMI is at least equal to the lower of the median CMI for urban hospitals in its census region, excluding hospitals with approved teaching programs, or the median CMI for all urban hospitals nationally; and
• The hospital's number of discharges is at least 5,000 per year, or, if fewer, the median number of discharges for urban hospitals in the census region in which the hospital is located. The number of discharges criterion for an osteopathic hospital is at least 3,000 discharges per year, as specified in section 1886(d)(5)(C)(i) of the Act.
Section 412.96(c)(1) provides that CMS establish updated national and regional CMI values in each year's annual notice of prospective payment rates for purposes of determining RRC status. The methodology we used to determine the national and regional CMI values is set forth in the regulations at § 412.96(c)(1)(ii). The national median CMI value for FY 2016 is based on the CMI values of all urban hospitals nationwide, and the regional median CMI values for FY 2016 are based on the CMI values of all urban hospitals within each census region, excluding those hospitals with approved teaching programs (that is, those hospitals that train residents in an approved GME program as provided in § 413.75). These values are based on discharges occurring during FY 2014 (October 1, 2013 through September 30, 2014), and include bills posted to CMS' records through March 2015.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24479), we proposed that, in addition to meeting other criteria, if rural hospitals with fewer than 275 beds are to qualify for initial RRC status for cost reporting periods beginning on or after October 1,
• 1.6075; or
• The median CMI value (not transfer-adjusted) for urban hospitals (excluding hospitals with approved teaching programs as identified in § 413.75) calculated by CMS for the census region in which the hospital is located. (We refer readers to the table set forth in the FY 2016 IPPS/LTCH PPS proposed rule at 80 FR 24480.)
The final CMI values for FY 2016 are based on the latest available data (FY 2014 bills received through March 2015). In addition to meeting other criteria, if rural hospitals with fewer than 275 beds are to qualify for initial RRC status for cost reporting periods beginning on or after October 1, 2015, they must have a CMI value for FY 2014 that is at least—
• 1.6082; or
• The median CMI value (not transfer-adjusted) for urban hospitals (excluding hospitals with approved teaching programs as identified in § 413.75) calculated by CMS for the census region in which the hospital is located.
The final median CMI values by region are set forth in the following table.
A hospital seeking to qualify as an RRC should obtain its hospital-specific CMI value (not transfer-adjusted) from its MAC. Data are available on the Provider Statistical and Reimbursement (PS&R) System. In keeping with our policy on discharges, the CMI values are computed based on all Medicare patient discharges subject to the IPPS MS-DRG-based payment.
Section 412.96(c)(2)(i) provides that CMS set forth the national and regional numbers of discharges criteria in each year's annual notice of prospective payment rates for purposes of determining RRC status. As specified in section 1886(d)(5)(C)(ii) of the Act, the national standard is set at 5,000 discharges. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24480), for FY 2016, we proposed to update the regional standards based on discharges for urban hospitals' cost reporting periods that began during FY 2013 (that is, October 1, 2012 through September 30, 2013), which are the latest cost report data available at the time the proposed rule was developed.
We proposed that, in addition to meeting other criteria, a hospital, if it is to qualify for initial RRC status for cost reporting periods beginning on or after October 1, 2015, must have, as the number of discharges for its cost reporting period that began during FY 2013, at least—
• 5,000 (3,000 for an osteopathic hospital); or
• The median number of discharges for urban hospitals in the census region in which the hospital is located. (We refer readers to the table set forth in the FY 2016 IPPS/LTCH PPS proposed rule at 80 FR 24480.)
Based on the latest discharge data available at this time (that is, based on FY 2013 cost report data), the final median number of discharges for urban hospitals by census region are set forth in the following table.
We note that the median number of discharges for hospitals in each census region is greater than the national standard of 5,000 discharges. Therefore, under this final rule, 5,000 discharges is the minimum criterion for all hospitals, except for osteopathic hospitals for which the minimum criterion is 3,000 discharges.
Under the IPPS, an additional payment amount is made to hospitals with residents in an approved graduate medical education (GME) program in order to reflect the higher indirect patient care costs of teaching hospitals relative to nonteaching hospitals. The payment amount is determined by use of a statutorily specified adjustment factor. The regulations regarding the calculation of this additional payment, known as the IME adjustment, are located at § 412.105. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51680) for a full discussion of the IME adjustment and IME adjustment factor. Section 1886(d)(5)(B)(ii)(XII) of the Act provides that, for discharges occurring during FY 2008 and fiscal years thereafter, the IME formula multiplier is 1.35. Accordingly, for discharges occurring during FY 2016, the formula multiplier is 1.35. We estimate that application of this formula multiplier for the FY 2016 IME adjustment will result in an increase in IPPS payment of 5.5 percent for every approximately 10 percent increase in the hospital's resident to bed ratio.
We did not receive any public comments on this provision. As noted above, the IME formula multiplier is specified in statute and is 1.35 for FY 2016.
Section 1886(d)(5)(F) of the Act provides for additional Medicare payments to subsection (d) hospitals that serve a significantly disproportionate number of low-income patients. The Act specifies two methods by which a hospital may qualify for the Medicare disproportionate share hospital (DSH) adjustment. Under the first method, hospitals that are located in an urban area and have 100 or more beds may receive a Medicare DSH payment adjustment if the hospital can demonstrate that, during its cost reporting period, more than 30 percent of its net inpatient care revenues are derived from State and local government payments for care furnished to needy patients with low incomes. This method is commonly referred to as the “Pickle method.” The second method for qualifying for the DSH payment adjustment, which is the most common, is based on a complex statutory formula under which the DSH payment adjustment is based on the
Because the DSH payment adjustment is part of the IPPS, the DSH statutory references (under section 1886(d)(5)(F) of the Act) to “days” apply only to hospital acute care inpatient days. Regulations located at § 412.106 govern the Medicare DSH payment adjustment and specify how the DPP is calculated as well as how beds and patient days are counted in determining the Medicare DSH payment adjustment. Under § 412.106(a)(1)(i), the number of beds for the Medicare DSH payment adjustment is determined in accordance with bed counting rules for the IME adjustment under § 412.105(b).
As discussed in section III.G. of the preamble of this final rule, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951) we implemented the revised OMB labor market area delineations (which are based on 2010 Decennial Census data) for the FY 2015 wage index. (In this final rule, we refer to these revised OMB labor market area delineations as the “new OMB delineations.”) We stated that this implementation would have an impact on the calculation of Medicare DSH payments to certain hospitals. Hospitals that are designated as rural with less than 500 beds and that are not rural referral centers (RRCs) are subject to a maximum DSH payment adjustment of 12 percent. Accordingly, hospitals with less than 500 beds that were in urban counties that became rural when we adopted the new OMB delineations, and that did not become RRCs, are subject to a maximum DSH payment adjustment of 12 percent. (We note that urban hospitals are only subject to a maximum DSH payment adjustment of 12 percent if they have less than 100 beds.)
Under the regulation at 42 CFR 412.102, a hospital located in an area that is reclassified from urban to rural, as defined in the regulations, may receive an adjustment to its rural Federal payment amount for operating costs for 2 successive fiscal years. Specifically, the regulations state that, in the first year after a hospital loses urban status, the hospital will receive an additional payment that equals two-thirds of the difference between the DSH payments as applicable to the hospital before its redesignation from urban to rural and the DSH payments applicable to the hospital subsequent to its redesignation from urban to rural. In the second year after a hospital loses urban status, the hospital will receive an additional payment that equals one-third of the difference between the DSH payments applicable to the hospital before its redesignation from urban to rural and the DSH payments otherwise applicable to the hospital subsequent to its redesignation from urban to rural.
For the purposes of ratesetting, calculating budget neutrality, and modeling payment impacts for this FY 2016 final rule, for any hospital that was previously urban but changed to rural status in FY 2015 as a result of the adoption of the new OMB labor market area delineations, in the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to model its DSH payments such that the payment equals the amount of the rural DSH payments plus one-third of the difference between the urban DSH payments and the rural DSH payments.
We did not receive any public comments on our proposal.
Section 3133 of the Patient Protection and Affordable Care Act, as amended by section 10316 of the same Act and section 1104 of the Health Care and Education Reconciliation Act (Pub. L. 111-152), added a new section 1886(r) to the Act that modifies the methodology for computing the Medicare DSH payment adjustment beginning in FY 2014. For purposes of this final rule, we refer to these provisions collectively as section 3133 of the Affordable Care Act.
Medicare DSH payments are calculated under a statutory formula that considers the hospital's Medicare utilization attributable to beneficiaries who also receive Supplemental Security Income (SSI) benefits, and the hospital's Medicaid utilization. Beginning with discharges in FY 2014, hospitals that qualify for Medicare DSH payments under section 1886(d)(5)(F) of the Act receive 25 percent of the amount they previously would have received under the statutory formula for Medicare DSH payments. This provision applies equally to hospitals that qualify for DSH payments under section 1886(d)(5)(F)(i)(I) of the Act and those hospitals that qualify under the Pickle method under section 1886(d)(5)(F)(i)(II) of the Act.
The remaining amount, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, reduced to reflect changes in the percentage of individuals under age 65 who are uninsured, is available to make additional payments to each hospital that qualifies for Medicare DSH payments and that has uncompensated care. The payments to each hospital for a fiscal year are based on the hospital's amount of uncompensated care for a given time period relative to the total amount of uncompensated care for that same time period reported by all hospitals that receive Medicare DSH payments for that fiscal year.
As provided by section 3133 of the Affordable Care Act, section 1886(r) of the Act requires that, for FY 2014 and each subsequent fiscal year, a subsection (d) hospital that would otherwise receive a disproportionate share hospital payment made under section 1886(d)(5)(F) of the Act receives two separately calculated payments. Specifically, section 1886(r)(1) of the Act provides that the Secretary shall pay to such a subsection (d) hospital (including a Pickle hospital) 25 percent of the amount the hospital would have received under section 1886(d)(5)(F) of the Act for DSH payments, which represents the empirically justified amount for such payment, as determined by the Medicare Payment Advisory Commission in its March 2007 Report to the Congress. We refer to this payment as the “empirically justified Medicare DSH payment.”
In addition to this empirically justified Medicare DSH payment, section 1886(r)(2) of the Act provides that, for FY 2014 and each subsequent fiscal year, the Secretary shall pay to such subsection (d) hospital an additional amount equal to the product of three factors. The first factor is the difference between the aggregate amount of payments that would be made to subsection (d) hospitals under section 1886(d)(5)(F) of the Act if
The second factor is, for FYs 2014 through 2017, 1 minus the percent change in the percent of individuals under the age of 65 who are uninsured, determined by comparing the percent of such individuals who are uninsured in 2013, the last year before coverage expansion under the Affordable Care Act (as calculated by the Secretary based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Health Care and Education Reconciliation Act of 2010 that, if determined in the affirmative, would clear such Act for enrollment), minus 0.1 percentage point for FY 2014, and minus 0.2 percentage point for FYs 2015 through 2017. For FYs 2014 through 2017, the baseline for the estimate of the change in uninsurance is fixed by the most recent estimate of the Congressional Budget Office before the final vote on the Health Care and Education Reconciliation Act of 2010, which is contained in a March 20, 2010 letter from the Director of the Congressional Budget Office to the Speaker of the House. (The March 20, 2010 letter is available for viewing on the following Web site:
For FY 2018 and subsequent years, the second factor is 1 minus the percent change in the percent of individuals who are uninsured, as determined by comparing the percent of individuals who are uninsured in 2013 (as estimated by the Secretary, based on data from the Census Bureau or other sources the Secretary determines appropriate, and certified by the Chief Actuary of CMS), and the percent of individuals who are uninsured in the most recent period for which data are available (as so estimated and certified), minus 0.2 percentage point for FYs 2018 and 2019. Therefore, for FY 2018 and subsequent years, the statute provides some greater flexibility in the choice of the data sources to be used for the estimate of the change in the percent of uninsured individuals.
The third factor is a percent that, for each subsection (d) hospital, represents the quotient of the amount of uncompensated care for such hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data), including the use of alternative data where the Secretary determines that alternative data is available which is a better proxy for the costs of subsection (d) hospitals for treating the uninsured, and the aggregate amount of uncompensated care for all subsection (d) hospitals that receive a payment under section 1886(r) of the Act. Therefore, this third factor represents a hospital's uncompensated care amount for a given time period relative to the uncompensated care amount for that same time period for all hospitals that receive Medicare DSH payments in that fiscal year, expressed as a percent.
For each hospital, the product of these three factors represents its additional payment for uncompensated care for the applicable fiscal year. We refer to the additional payment determined by these factors as the “uncompensated care payment.”
Section 1886(r) of the Act applies to FY 2014 and each subsequent fiscal year. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50620 through 50647) and the FY 2014 IPPS interim final rule with comment period (78 FR 61191 through 61197), we set forth our policies for implementing the required changes to the DSH payment methodology made by section 3133 of the Affordable Care Act for FY 2014. In those rules, we noted that, because section 1886(r) of the Act modifies the payment required under section 1886(d)(5)(F) of the Act, it affects only the DSH payment under the operating IPPS. It does not revise or replace the capital IPPS DSH payment provided under the regulations at 42 CFR part 412, subpart M, which were established through the exercise of the Secretary's discretion in implementing the capital IPPS under section 1886(g)(1)(A) of the Act.
Finally, section 1886(r)(3) of the Act provides that there shall be no administrative or judicial review under section 1869, section 1878, or otherwise of any estimate of the Secretary for purposes of determining the factors described in section 1886(r)(2) of the Act or of any period selected by the Secretary for the purpose of determining those factors. Therefore, there is no administrative or judicial review of the estimates developed for purposes of applying the three factors used to determine uncompensated care payments, or the periods selected in order to develop such estimates.
As indicated earlier, the payment methodology under section 3133 of the Affordable Care Act applies to “subsection (d) hospitals” that would otherwise receive a DSH payment made under section 1886(d)(5)(F) of the Act. Therefore, hospitals must receive empirically justified Medicare DSH payments in a fiscal year in order to receive an additional Medicare uncompensated care payment for that year. Specifically, section 1886(r)(2) of the Act states that, in addition to the payment made to a subsection (d) hospital under section 1886(r)(1) of the Act, the Secretary shall pay to
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and the FY 2014 IPPS interim final rule with comment period (78 FR 61193), we provided that hospitals that are not eligible to receive empirically justified Medicare DSH payments in a fiscal year will not receive uncompensated care payments for that year. We also specified that we would make a determination concerning eligibility for interim uncompensated care payments based on each hospital's estimated DSH status for the applicable fiscal year (using the most recent data that are available). We indicated that our final determination on the hospital's eligibility for uncompensated care payments would be based on the hospital's actual DSH status at cost report settlement for that payment year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50622) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50006), we specified our policies for several specific classes of hospitals within the scope of section 1886(r) of the Act. We refer readers to those two final rules for a detailed discussion of our policies. In summary, we specified the following:
•
•
•
•
•
•
As we have discussed earlier, section 1886(r)(1) of the Act requires the Secretary to pay 25 percent of the amount of the DSH payment that would otherwise be made under section 1886(d)(5)(F) of the Act to a subsection (d) hospital. Because section 1886(r)(1) of the Act merely requires the program to pay a designated percentage of these payments, without revising the criteria governing eligibility for DSH payments or the underlying payment methodology, we stated in the FY 2014 IPPS/LTCH PPS final rule that we did not believe that it was necessary to develop any new operational mechanisms for making such payments. Therefore, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50626), we implemented this provision by advising MACs to simply adjust the interim claim payments to the requisite 25 percent of what would have otherwise been paid. We also made corresponding changes to the hospital cost report so that these empirically justified Medicare DSH payments can be settled at the appropriate level at the time of cost report settlement. We provided more detailed operational instructions and cost report instructions following issuance of the FY 2014 IPPS/LTCH PPS final rule that are available on the CMS Web site at:
As we have discussed earlier, section 1886(r)(2) of the Act provides that, for each eligible hospital in FY 2014 and subsequent years, the uncompensated care payment is the product of three factors. These three factors represent our estimate of 75 percent of the amount of Medicare DSH payments that would otherwise have been paid, an adjustment to this amount for the percent change in the national rate of uninsurance compared to the rate of uninsurance in 2013, and each eligible hospital's estimated uncompensated care amount relative to the estimated uncompensated care amount for all eligible hospitals. Below we discuss the data sources and methodologies for computing each of these factors, our final policies for FY 2014 and FY 2015, and our proposed and final policies for FY 2016.
Section 1886(r)(2)(A) of the Act establishes Factor 1 in the calculation of the uncompensated care payment. Section 1886(r)(2)(A) of the Act states that it is a factor equal to the difference between (i) the aggregate amount of payments that would be made to subsection (d) hospitals under section 1886(d)(5)(F) if this section did not apply for such fiscal year (as estimated by the Secretary); and (ii) the aggregate amount of payments that are made to subsection (d) hospitals under section 1886(r)(1) of the Act for such fiscal year (as so estimated). Therefore, section 1886(r)(2)(A)(i) of the Act represents the estimated Medicare DSH payment that would have been made under section 1886(d)(5)(F) of the Act if section 1886(r) of the Act did not apply for such fiscal year. Under a prospective payment system, we would not know
Therefore, Factor 1 is the difference between our estimates of: (1) The amount that would have been paid in Medicare DSH payments for the fiscal year, in the absence of the new payment provision; and (2) the amount of empirically justified Medicare DSH payments that are made for the fiscal year, which takes into account the requirement to pay 25 percent of what would have otherwise been paid under section 1886(d)(5)(F) of the Act. In other words, this factor represents our estimate of 75 percent (100 percent minus 25 percent) of our estimate of Medicare DSH payments that would otherwise be made, in the absence of section 1886(r) of the Act, for the fiscal year.
As we did for FY 2015, in order to determine Factor 1 in the uncompensated care payment formula for FY 2016, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24484), we proposed to continue the policy established in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50628 through 50630) and in the FY 2014 IPPS interim final rule with comment period (78 FR 61194). Under this policy, Factor 1 is determined by developing estimates of both the aggregate amount of Medicare DSH payments that would be made in the absence of section 1886(r)(1) of the Act and the aggregate amount of empirically justified Medicare DSH payments to hospitals under section 1886(r)(1) of the Act through rulemaking. These estimates will not be revised or updated after we know the final Medicare DSH payments for FY 2016.
Therefore, in order to determine the two elements of Factor 1 (Medicare DSH payments
For purposes of calculating Factor 1 and modeling the impact of this provision for the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24484), we used the Office of the Actuary's February 2015 Medicare DSH estimates, which are based on data from the December 2014 update of the Medicare Hospital Cost Report Information System (HCRIS), 2012 cost report data provided to CMS by IHS hospitals, and the FY 2015 IPPS/LTCH PPS final rule IPPS Impact File, published in conjunction with the publication of the FY 2015 IPPS/LTCH PPS final rule. Because SCHs that are projected to be paid under their hospital-specific rate are not subject to the provisions of section 1886(r) of the Act, these hospitals were excluded from the February 2015 Medicare DSH estimates. Furthermore, because section 1886(r) of the Act specifies that the uncompensated care payment is in addition to the empirically justified DSH payment (or 25 percent of DSH payments that would be made without regard to section 1886(r)), Maryland hospitals participating in the Maryland All-Payer Model and hospitals participating in the Rural Community Hospital Demonstration that do not receive DSH payments also are excluded from the Office of the Actuary's Medicare DSH estimates.
Using the data sources discussed above, the Office of the Actuary applies inflation updates and assumptions for future changes in utilization and case-mix to estimate Medicare DSH payments for the upcoming fiscal year. The February 2015 Office of the Actuary estimate for proposed Medicare DSH payments for FY 2016, without regard to the application of section 1886(r)(1) of the Act, was approximately $13.338 billion. Therefore, based on the February 2015 estimate, the estimate for empirically justified Medicare DSH payments for FY 2016, with the application of section 1886(r)(1) of the Act, was $3.335 billion (25 percent of the total amount estimated). Under § 412.106(g)(1)(i) of the regulations, Factor 1 is the difference between these two estimates of the Office of the Actuary. Therefore, in the proposed rule, we proposed that Factor 1 for FY 2016 would be $10,003,425,327.39 ($13,337,900,436.52 minus $3,334,475,109.13). We invited public comments on our proposed calculation of Factor 1 for FY 2016.
Many commenters highlighted that one of the assumptions (the assumption shown in “Other” column) used in determining the proposed Factor 1 for FY 2016 has a substantial negative effect on hospitals, and requested more explanation for that assumption as well as a reassessment of the assumption. They pointed out that this assumption had previously, according to CMS, included the impact of only IPPS discharges and the impact of DSH payments increasing or decreasing at a different rate than other IPPS payments. The commenters expressed concern that the “Other” column changed from 1.0355 in the FY 2015 IPPS/LTCH PPS final rule to 0.9993 in the FY 2016 IPPS/LTCH PPS proposed rule. The commenters noted that the explanation offered in the FY 2015 IPPS/LTCH PPS final rule discussed Medicaid enrollment and utilization patterns and that this did not appear to explain the change in the variable in the FY 2016 IPPS/LTCH PPS proposed rule. Some commenters pointed out that, to some extent, the “Other” assumption is affected by the “Discharge” assumption, and that they believed discharges are decreasing faster than what was taken into consideration in the FY 2015 IPPS/LTCH PPS final rule. In other words, they believed that the trend information used to determine the “Discharge” assumption may be resulting in a lower number for the “Other” assumption.
Several commenters believed that the “Other” assumption should reflect the changes in DSH payments that would result from the Medicaid and CHIP expansion. Other commenters asked CMS to explain how the Medicaid and CHIP expansion is accounted for in the Factor 1 estimate. The commenters stated that the additional Medicaid and CHIP enrollment estimated for 2014 through 2016 by CBO in a February 2014 report represents a 32-percent increase in this population. The commenters stated that they had reviewed other data, including the ASPE Issue Brief entitled “Impact of Insurance Expansion on Hospital Uncompensated Care Costs in 2014,” that indicate that Medicaid enrollment and utilization have increased. The commenters believed that Factor 1 is too low because it does not take this increase into consideration appropriately. They noted that CMS has responded to similar comments in prior rulemaking by stating that “the increase due to Medicaid expansion is not as large as commenters contended due to the actuarial assumption that the new enrollees are healthier than the average Medicaid recipient, and, therefore, use fewer hospital services.” However, the commenters asserted that CMS provided no support for this contention and that CMS should have enrollment and/or utilization information from Medicaid expansion programs. Furthermore, the commenters stated that they believed CMS did not take into consideration any one-time increase in utilization resulting from the new Medicaid enrollment and the previously unmet health care needs of that population. These commenters believed that, in the early years of Medicaid expansion, such an increase in utilization would be more logical than CMS' assertion that new Medicaid enrollees would use fewer hospital services.
Several commenters believed that it would be appropriate to adjust the “Other” assumption in a manner that supports safety-net hospitals in order to reflect the growing number of hospitals that are becoming eligible for DSH. Based on this belief, the commenters expressed concern about the sustainability of continued reductions to aggregate uncompensated care payments. The commenters noted that, as insurance coverage increases, the aggregate amount available for uncompensated care payments will decline and thus reduce the amount of payments to be distributed to help cover the cost of uncompensated care. The commenters further noted that hospitals in States that have not expanded Medicaid are not experiencing a decrease in uncompensated care costs and that reductions in Medicare DSH payments are detrimental to these hospitals. Some commenters noted the reductions in payments they would experience due to CMS' uncompensated care proposal in totality.
Several commenters believed there was incomplete information in the FY 2016 IPPS/LTCH PPS proposed rule regarding the “completion factor” and requested further detail. One commenter believed that the growth rates in DSH payments are higher than the current data indicate because the completion factor for the cost reports in HCRIS for 2012 and 2013 is low. Specifically, the commenter shared an analysis that showed that approximately one-half of the 2012 cost reports contained adjusted Medicaid days data and approximately one-fifth of the 2013 cost reports contained adjusted Medicaid days data. The commenter showed the results of a longitudinal analysis between December 2012 and March 2015 using HCRIS data that demonstrated that Medicaid days increased between when 2010, 2011, and 2012 cost reports were filed and March 2015, regardless of the status of the cost report settlement process (for example, amended, reopened, settled without audit, or settled with audit). The range of increase shown by the commenter's analysis was between 0.3 percent and 3.7 percent. The commenter stated that in its longitudinal analysis of HCRIS data between December 2012 and March 2015, it further examined DSH payments reported in HCRIS and found that payments increased on average 1.1 percent over the 2-year period.
One commenter requested that CMS use the most recent 2012 cost report data in its estimate of Factor 1. The commenter stated that problems in obtaining accurate data for Medicaid days can lead to underreporting in the initial submission of the Medicare cost report and that this delay can also affect the DSH payment calculated in the cost report. Therefore, the commenter requested that CMS revise its estimate of the 2012 DSH payments in the final rule using the latest available update of the 2012 Medicare cost report data.
Commenters wanted to better understand the changes in the estimate of aggregate DSH payments that would have been paid absent implementation of the Affordable Care Act over time and wanted to be able to replicate the figures. The commenters believed that transparency is critical because the statute precludes judicial review of the estimates for purposes of determining the three factors used in computing uncompensated care payments and because they understand that these estimates will not be revised or updated after the final rule.
As we did in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50010), later in this section we provide additional information regarding the data sources, methods, and assumptions employed by the actuaries in determining the Office of the Actuary's updated estimate of Factor 1 for FY 2016. We believe that this discussion addresses the methodological concerns raised by commenters regarding the various assumptions used in the estimate, including the “Other” and “Discharges” assumptions and also provides
In response to the commenters who requested that we adjust the “Other” assumption to reflect the growing number of DSH hospitals in a manner that supports safety-net hospitals, particularly in States that do not have a Medicaid or CHIP expansion, we note that our proposed methodology includes assumptions regarding how DSH payments will increase in aggregate, regardless of how many hospitals qualify for DSH payments. Furthermore, we believe that, while the statute provides the Secretary with discretion to make an estimate, the statute is clear that the computation of Factor 1 begins with an aggregate amount of payments that would be made to subsection (d) hospitals under section 1886(d)(5)(F) if this section did not apply for such fiscal year. In our view, the most appropriate way to do so is to project to the best of our abilities how payments will actually change in aggregate, based on the programs and policies that will be in effect during the fiscal year.
We agree with the commenters that CMS should use the most recent update of the 2012 Medicare cost report data available to us and note that the Office of the Actuary has done so in using the March 2015 extract of 2012 cost reports in HCRIS for this final rule.
After consideration of the public comments we received, we are finalizing, as proposed, the methodology for calculating Factor 1 for FY 2016. Using this methodology, below we discuss the resulting Factor 1 amount for FY 2016.
To determine Factor 1 and to model the impact of this provision for FY 2016, we used the Office of the Actuary's July 2015 Medicare DSH estimates based on data from the March 2015 update of 2012 cost report data included in HCRIS, 2012 cost report data provided
Using the data sources discussed above, the Office of the Actuary applied inflation updates and assumptions for future changes in utilization and case-mix to estimate Medicare DSH payments for the upcoming fiscal year. The July 2015 Medicare DSH estimate for FY 2016, without regard to the application of section 1886(r)(1) of the Act, is $13,411,096,528.05. Based on this estimate, the estimate for empirically justified Medicare DSH payments for FY 2016, with the application of section 1886(r)(1) of the Act, is $3,352,774,132.01 (25 percent of the total amount estimated). Under § 412.106(g)(1)(i) of the regulations, Factor 1 is the difference between these two estimates of the Office of the Actuary. Therefore, for this final rule, Factor 1 for FY 2016 is $10,058,322,396.04 ($13,411,096,528.05 minus $3,352,774,132.01). Below we provide additional detail regarding the development of this estimate.
The Office of the Actuary's estimates for FY 2016 begin with a baseline of $11.637 billion in Medicare DSH expenditures for FY 2012. The following table shows the factors applied to update this baseline through the current estimate for FY 2016.
In this table, the discharge column shows the increase in the number of Medicare fee-for-service (FFS) inpatient hospital discharges. The figures for FYs 2013 and 2014 are based on Medicare claims data that have been adjusted by a completion factor. The discharge figure for FY 2015 is based on preliminary data for 2015. The discharge figure for FY 2016 is an assumption based on recent trends recovering back to the long-term trend and assumptions related to how many beneficiaries will be enrolled in Medicare FFS and also MA plans. The case-mix column shows the increase in case-mix for IPPS hospitals. The case-mix figures for FYs 2013 and 2014 are based on actual data adjusted by a completion factor. The FY 2015 and FY 2016 increases are based on the recommendation of the 2010-2011 Medicare Technical Review Panel. The “Other” column shows the increase in other factors that contribute to the Medicare DSH estimates. These factors include the difference between the total inpatient hospital discharges and the IPPS discharges, various adjustments to the payment rates that have been included over the years but are not reflected in the other columns (such as the increase in rates for the
The table below shows the factors that are included in the “Update” column of the above table.
Section 1886(r)(2)(B) of the Act establishes Factor 2 in the calculation of the uncompensated care payment. Specifically, section 1886(r)(2)(B)(i) of the Act provides that, for each of FYs 2014, 2015, 2016, and 2017, a factor equal to 1 minus the percent change in the percent of individuals under the age of 65 who are uninsured, as determined by comparing the percent of such individuals (I) who are uninsured in 2013, the last year before coverage expansion under the Affordable Care Act (as calculated by the Secretary based on the most recent estimates available from the Director of the Congressional Budget Office before a vote in either House on the Health Care and Education Reconciliation Act of 2010 that, if determined in the affirmative, would clear such Act for enrollment); and (II) who are uninsured in the most recent period for which data are available (as so calculated), minus 0.1 percentage point for FY 2014 and minus 0.2 percentage point for each of FYs 2015, 2016, and 2017.
Section 1886(r)(2)(B)(i)(I) of the Act further indicates that the percent of
In its March 20, 2010 letter to the Speaker of the House of Representatives, the CBO provided two estimates of the “post-policy uninsured population.” The first estimate is of the “Insured Share of the Nonelderly Population Including All Residents” (82 percent) and the second estimate is of the “Insured Share of the Nonelderly Population Excluding Unauthorized Immigrants” (83 percent). Starting in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50631), we used the first estimate that includes all residents, including unauthorized immigrants. We stated that we believe this estimate is most consistent with the statute, which requires us to measure “the percent of individuals under the age of 65 who are uninsured” and provides no exclusions except for individuals over the age of 65. In addition, we stated that we believe that this estimate more fully reflects the levels of uninsurance in the United States that influence uncompensated care for hospitals than the estimate that reflects only legal residents. The March 20, 2010 CBO letter reports these figures as the estimated percentage of individuals with insurance. However, because section 1886(r)(2)(B)(i) of the Act requires that we compare the percent of individuals who are uninsured in the applicable year with the percent of individuals who were uninsured in 2013, in the FY 2014 and FY 2015 IPPS/LTCH PPS final rules (78 FR 50631 and 79 FR 50014), we used the CBO insurance rate figure and subtracted that amount from 100 percent (that is, the total population without regard to insurance status) to estimate the 2013 baseline percent of individuals without insurance. Therefore, for FYs 2014 through 2017, per statute, our estimate of the uninsurance percentage for 2013 is 18 percent.
Section 1886(r)(2)(B)(i) of the Act requires that we compare the baseline uninsurance rate to the percent of such individuals who are uninsured in the most recent period for which data are available. In the FY 2014 and FY 2015 IPPS/LTCH PPS final rules (78 FR 50634 and 79 FR 50014), we used the same data source, the most recent available CBO estimates, to calculate this percent of individuals without insurance. In response to public comments, we also agreed that we should normalize the CBO estimates, which are based on the calendar year, for the Federal fiscal years for which each calculation of Factor 2 is made (78 FR 50633).
Consistent with the data used in FY 2014 and FY 2015, in the FY 2016 IPPS/LTCH PPS proposed rule, we used the CBO's January 2015 estimates of the effects of the Affordable Care Act on health insurance coverage (which are available at
The proposed calculation of Factor 2 for FY 2016 included in the FY 2016 IPPS/LTCH proposed rule was as follows:
• CY 2015 rate of insurance coverage (January 2015 CBO estimate): 87 percent.
• CY 2016 rate of insurance coverage (January 2015 CBO estimate): 89 percent.
• FY 2016 rate of insurance coverage: (87 percent * .25) + (89 percent * .75) = 88.5 percent.
• Percent of individuals without insurance for 2013 (March 2010 CBO estimate): 18 percent
• Percent of individuals without insurance for FY 2016 (weighted average): 11.5 percent
1−((0.115-0.18)/0.18) = 1−0.3611 = 0.6389 (63.89 percent) (We note that, in the proposed rule, this calculation should have read: 1 − |[(0.115-0.18)/0.18)]| = 1−0.3611 = 0.6389 (63.89 percent).)
0.6389 (63.89 percent)−.002 (0.2 percentage points for FY 2016 under section 1886(r)(2)(B)(i) of the Act) = 0.6369 or 63.69 percent
0.6369 = Factor 2
Therefore, we proposed that Factor 2 for FY 2016 would be 63.69 percent. We indicated that our proposal for Factor 2 was subject to change if more recent CBO estimates of the insurance rate became available at the time of the preparation of the final rule. We invited public comments on our proposed calculation of Factor 2 for FY 2016.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24486), we stated that the FY 2016 Proposed Uncompensated Care Amount was $10,003,425,327.39 × 0.6369 = $6,371,181,591.01.
We note that CBO's coverage projections for CY 2015 and CY 2016 reflect changes in the rate of uninsurance arising from participation in the health insurance exchanges, Medicaid and CHIP enrollment, and changes in employer-sponsored, nongroup, and other insurance coverage. Unauthorized immigrants who are not eligible for Medicaid and exchange coverage and low-income residents of States not participating in the Medicaid expansion are included in the uninsured population. In addition, the estimate reflects other individuals who choose to remain uninsured, despite being eligible for Medicaid or having access through an employer, the exchange, or from an insurer. Therefore, the CBO estimates do take into account some uncertainties and risks under the Affordable Care Act, including the probabilities of different outcomes of Medicaid expansions and changes in insurance coverage status over time. More detailed explanations of the methodology and assumptions used by CBO can be accessed on the CBO Web site and particularly in the Appendix of the March 2015 Updated Budget Projections: 2015-2025 (which are available at
Many commenters believed that the information shared by CMS in the FY 2016 IPPS/LTCH PPS proposed rule would be outdated and need to be revised in light of the
With respect to the commenter's concerns about language used in section 1886(r)(2)(B)(i)(II) of the Act, we acknowledge the commenter's point that the statute does not explicitly include the word “estimate” in describing the percent of individuals who are uninsured in the most recent period for which data are available. However, we note that the statute does describe this figure “as so calculated.” We continue to believe that this reference is intended to instruct the Secretary to perform the calculation in the same manner as the calculation under section 1886(r)(2)(B)(i)(I) of the Act. Section
With respect to the commenters' concerns regarding the accuracy of the Factor 2 estimate in light of the
After consideration of the public comments we received, we are finalizing, as proposed, the calculation of Factor 2 for FY 2016. Using this methodology, below we discuss the resulting Factor 2 amount for FY 2016 and the total uncompensated care amount for FY 2016.
To determine Factor 2 for FY 2016, we used the CBO's March 2015 estimates of the effects of the Affordable Care Act on health insurance coverage (which are available at
The calculation of the final Factor 2 for FY 2016, employing a weighted average of the CBO projections for CY 2015 and CY 2016, is as follows:
• CY 2015 rate of insurance coverage (March 2015 CBO estimate): 87 percent.
• CY 2016 rate of insurance coverage (March 2015 CBO estimate): 89 percent.
• FY 2016 rate of insurance coverage: (87 percent * .25) + (89 percent * .75) = 88.5 percent.
• Percent of individuals without insurance for 2013 (March 2010 CBO estimate): 18 percent.
• Percent of individuals without insurance for FY 2016 (weighted average): 11.5 percent.
1−|[(0.115−0.18)/0.18]| = 1−0.3611 = 0.6389 (63.89 percent)
0.6389 (63.89 percent) −.002 (0.2 percentage points for FY 2016 under section 1886(r)(2)(B)(i) of the Act) = 0.6369 or 63.69 percent
0.6369 = Factor 2
Therefore, the final Factor 2 for FY 2016 is 63.69 percent.
The FY 2016 Final Uncompensated Care Amount is: $10,058,322,396.04 × 0.6369 = $6,406,145,534.04.
Section 1886(r)(2)(C) of the Act defines Factor 3 in the calculation of the uncompensated care payment. As we have discussed earlier, section 1886(r)(2)(C) of the Act states that Factor 3 is equal to the percent, for each subsection (d) hospital, that represents the quotient of (i) the amount of uncompensated care for such hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data (including, in the case where the Secretary determines alternative data are available that are a better proxy for the costs of subsection (d) hospitals for treating the uninsured, the use of such alternative data)); and (ii) the aggregate amount of uncompensated care for all subsection (d) hospitals that receive a payment under section 1886(r) of the Act for such period (as so estimated, based on such data).
Therefore, Factor 3 is a hospital-specific value that expresses the proportion of the estimated uncompensated care amount for each subsection (d) hospital and each subsection (d) Puerto Rico hospital with the potential to receive Medicare DSH payments relative to the estimated uncompensated care amount for all hospitals estimated to receive Medicare DSH payments in the fiscal year for which the uncompensated care payment is to be made. Factor 3 is applied to the product of Factor 1 and Factor 2 to determine the amount of the uncompensated care payment that each eligible hospital will receive for FY 2014 and subsequent fiscal years. In order to implement the statutory
In the course of considering how to determine Factor 3 during the rulemaking process for FY 2014, we considered defining the amount of uncompensated care for a hospital as the uncompensated care costs of each hospital and determined that Worksheet S-10 of the Medicare cost report potentially provides the most complete data regarding uncompensated care costs for Medicare hospitals. However, because of concerns regarding variations in the data reported on the Worksheet S-10 and the completeness of these data, we did not propose to use data from the Worksheet S-10 to determine the amount of uncompensated care for FY 2014, the first year this provision was in effect, or for FY 2015. We instead employed the utilization of insured low-income patients, defined as inpatient days of Medicaid patients plus inpatient days of Medicare SSI patients as defined in 42 CFR 412.106(b)(4) and 412.106(b)(2)(i), respectively, to determine Factor 3. We believed that these alternative data, which are currently reported on the Medicare cost report, would be a better proxy for the amount of uncompensated care provided by hospitals. We also indicated that we were expecting reporting on the Worksheet S-10 to improve over time and remained convinced that the Worksheet S-10 could ultimately serve as an appropriate source of more direct data regarding uncompensated care costs for purposes of determining Factor 3.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24487), we stated that we believe it remains premature to propose the use of Worksheet S-10 for purposes of determining Factor 3 for FY 2016 and, therefore, proposed to continue to employ the utilization of insured low-income patients (defined as inpatient days of Medicaid patients plus inpatient days of Medicare SSI patients as defined in § 412.106(b)(4) and § 412.106(b)(2)(i), respectively) to determine Factor 3. We indicated that we believe that continuing to use this methodology would give hospitals more time to learn how to submit accurate and consistent data through Worksheet S-10, as well as give CMS more time to continue to work with the hospital community and others to develop the appropriate clarifications and revisions to Worksheet S-10 to ensure standardized and consistent reporting of all data elements. Accordingly, we proposed that, for FY 2016, CMS would base its estimates of the amount of hospital uncompensated care on utilization data for Medicaid and Medicare SSI patients, as determined by CMS in accordance with §§ 412.106(b)(2)(i) and (b)(4). We stated that we still intend to propose through future rulemaking the use of the Worksheet S-10 data for purposes of determining Factor 3. We invited public comments on this proposal to continue to use insured low-income days to determine Factor 3 for FY 2016.
Some commenters noted that the proxy is appropriate until the Worksheet S-10 data become more reliable and accurate for collecting uncompensated care costs. One commenter indicated that it had performed analyses exploring the relationship between uncompensated care costs and Medicaid expansion. Among other results, the commenter indicated that its analysis showed that the proportion of Medicaid volumes has increased while the proportion of self-pay and charity has decreased in States that have expanded their Medicaid programs. The commenter concluded that Medicaid and uncompensated care are now inversely related in States that have expanded their programs and stated that the validity of the insured low-income days proxy will soon be in question as newer data become available.
Commenters who continued to support use of the proxy for FY 2016 in order to allow for improved data collection on Worksheet S-10 focused on two areas: Changes to Worksheet S-10 and the process to audit Worksheet S-10. With regard to changes to Worksheet S-10, the commenters stated that the Worksheet S-10 form and instructions should be changed in order to improve consistency in reporting across providers and overall accuracy. They stated that the current instructions are imprecise and lack meaningful guidance from CMS. The commenters stated that often stakeholders provide specific recommendations for changes to Worksheet S-10 that CMS should consider, and encouraged CMS to work expeditiously with a broad range of stakeholders to improve Worksheet S-10. Many commenters provided detailed suggestions related to reporting requirements for specific lines of Worksheet S-10. Summaries that illustrate the breadth of the commenters' suggestions as they pertain, in general, to the reporting of uncompensated care, charity care, bad debt, and Medicaid costs are presented below.
• Commenters requested clarification of whether charity care charges should be reported for inpatient hospital services, outpatient hospital services, or both. They requested the ability to report these charges on separate lines and to apply separate CCRs to these separate sets of costs.
• Commenters noted that because Worksheet S-10 is derived from data reported on the Medicare cost report, charges and payments for physician services are currently excluded. However, the commenters stated that hospitals provide physician services to patients with little or no access to private physicians. They noted that safety-net hospitals in low-income communities particularly provide these services. The commenters believed that providers should be encouraged to provide these services and that one means to do so is to revise Worksheet S-10 to include reporting of uncompensated care related to employed physician services and to establish an uncompensated care cost methodology that takes these services into account.
• One commenter pointed out that it would be appropriate to add a self-pay category to Worksheet S-10 to distinguish this uninsured population from others who have some form of third party coverage.
• Commenters requested that the CCR used on Worksheet S-10 to convert charges to costs be changed so that it includes direct GME payments because
• Commenters requested that Worksheet S-10, which currently collects charity care costs based on dates of service, be changed to allow for the reporting of charity care costs based on the date the hospital writes off the charity care. The commenters stated that, under the current requirement, hospitals must spend significant additional time to document charity care write-offs. The commenters also stated that they do not believe the current approach is accurate because hospitals will not have identified and resolved all of their charity care accounts by the time they file their cost reports, which is no later than 5 months after the close of a hospital's fiscal year. The commenters stated that charity care determinations involve complexities, such as changes in specific patient circumstances and time involved in obtaining necessary documentation.
• Commenters noted that the current reporting instructions, particularly in PRM II, Section 4012, exclude discounts to patients from reporting as uncompensated care. They then noted that some States mandate such discounts, and that many hospitals provide discounts to any uninsured patient. In their view, these instructions could create a situation where hospitals are precluded from reporting these costs as charity when, in their view, this is uncompensated care.
• Some commenters believed that CMS should be clearer with regard to how charges related to indigent care programs are reported. The commenters believed that charges for services provided to this patient care population should not be considered uncompensated care costs. Other commenters disagreed and provided specific examples of the types of programs that should be included.
• Commenters requested that CMS define the use of presumptive eligibility tools as an acceptable method to identify and document charity care charges. The commenters believed that the current CMS practice of disallowing charity care based on the finding of presumptive eligibility tools is inappropriate because the current reporting instructions relate to when Medicare beneficiaries should be determined to be indigent and not the application of hospitals' charity care policies to other patient populations and these instructions were developed before presumptive eligibility tools were widely used by hospitals.
• Commenters believed that hospitals should not be required to report expected payments in addition to received payments for charity care accounts. The commenters noted that the difficulty is that the amounts expected from patients for whom there have been partial write-offs in accordance with a hospital's charity care policy are often not paid in full.
• Commenters believed that Worksheet S-10 understates charity care costs for patients who participate in high deductible plans. The commenters also believed that charity care for noncontracted insurance payers is overstated.
• One commenter suggested that bad debt be reported in three categories: Uninsured bad debt from charity patients; uninsured bad debt from noncharity patients; and cost-sharing bad debts. The commenter suggested that CCRs not be applied to bad debt charges related to cost-sharing. The commenter believed this disaggregation would yield data that are comparable to the charity care data reported on Worksheet S-10.
• Commenters requested that CMS be clear with regard to the time period for which bad debt expense should be reported. Specifically, the commenters asked that CMS clearly state that the instructions mean that a hospital should report bad debt expense as reflected on its financial statement. Furthermore, the commenters requested that CMS amend the cost reporting instructions to require hospitals to report amounts based on Generally Accepted Accounting Principles.
• Commenters advised requiring Medicaid DSH payments and Medicaid supplemental payment information to be reported on separate lines and to offset these payments against Medicaid costs reported on Worksheet S-10.
• Some commenters suggested that CMS capture data on the number of patients in various government programs so that any future formula based on Worksheet S-10 could provide differential weighting to hospitals based on their proportion of total inpatient and outpatient utilization by patients in these programs or payments from governmental payors such as Medicare and Medicaid. The commenters suggested collecting patient share information for non-dually eligible FFS Medicare beneficiaries, non-dually eligible Medicare Advantage beneficiaries, dual-eligible FFS beneficiaries, dual-eligible Medicare Advantage beneficiaries, and beneficiaries in the Fully Integrated Duals Advantage demonstration.
Many commenters requested that CMS consider an auditing process, ensure that its contractors administer such a process consistently, and make the instructions for such an audit public. The commenters did not believe that hospitals were purposefully reporting erroneous information on their costs reports. However, many of the commenters were concerned that unclear reporting instructions on the Worksheet S-10 would result in inconsistent and inaccurate reporting of data. They suggested that CMS look to the process used to audit and review the data used for the Medicare wage index annually. Specifically, the commenters requested that CMS develop timetables for the cut-off of submissions or changes to the data, that MACs be engaged to audit these data to ensure validity, consistency and accuracy across hospitals, and that CMS develop a public use file that would include Worksheet S-10 data to be used in that rulemaking cycle and the calculated uncompensated care payment distribution to each eligible hospital. The commenters also suggested that CMS institute a fatal edit in the cost report audit process for negative or zero uncompensated care costs. Relatedly, commenters requested that CMS provide hospitals a means to appeal adjustments to the Worksheet S-10.
Many commenters shared observations regarding concerns and anomalies they identified in data from Worksheet S-10. A number of commenters shared analysis, including analyses that looked at the proportion of hospitals that did not report bad debt expenses, that reported a higher amount for gross charges on Worksheet S-10 than Worksheet C, or reported CCRs that seemed inappropriately high (such as for all-inclusive rate facilities). In addition, one commenter questioned imputed values for CAHs. Other commenters noted that the current requirements result in negative uncompensated care values for some hospitals.
These commenters, as well as commenters who opposed the continuation of the proxy, also requested that CMS provide a tentative timeline and implementation process for when and how the Worksheet S-10 would be used for determining Medicare uncompensated care payments. Some commenters suggested that CMS delay the use Worksheet S-10 until an audit process is established, and suggested a delay of at least 4 years.
Some commenters suggested how CMS should define uncompensated care using information from Worksheet S-10 and additional information that they believed should be collected in order to determine uncompensated care. For example, the commenters believed that bad debts and charity care should be included in the definition of uncompensated care. Some commenters specifically indicated that they believe that CMS should treat the uncompensated portion of state or local indigent care programs as charity care. The commenters also believed that costs not covered by Medicaid payments should be included in the definition of uncompensated care because they are not compensated. The commenters also noted that this approach would improve consistency across hospitals for comparison purposes because some hospitals treat some of these costs as charity care costs based on their charity care policies. Commenters provided different views with regard to publicly funded indigent care programs. Some commenters believed that charges for services provided to these patient populations should not be included. Other commenters believed that these charges should be included and that neither private nor public grant monies should be subtracted from them.
We have noted that we expect to proceed with a proposal to use data on the Worksheet S-10 to determine uncompensated care costs in the future and also have indicated that we will take steps such as revising and clarifying cost report instructions, as appropriate. We have stated that it is our intention to propose introducing the use of the Worksheet S-10 data for purposes of determining Factor 3 within a reasonable amount of time. At this time, we are considering a possible timeline for using Worksheet S-10 data to calculate Factor 3, and we intend to discuss this further in the FY 2017 IPPS proposed rule, which is typically released in April of the preceding fiscal year.
As discussed in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50639), in using Medicaid and Medicare SSI days as a proxy for uncompensated care, we recognize it would be possible for hospitals in States that choose to expand Medicaid to receive higher uncompensated care payments because they may have more Medicaid patient days than hospitals in a State that does not choose to expand Medicaid. Regardless, for the reasons discussed above, we believe that data on insured low-income days remain the best proxy for uncompensated care costs currently available to determine Factor 3.
In the interim, until we are ready move to use of Worksheet S-10 for distributing the uncompensated care payments, we acknowledge that use of SSI Medicare inpatient days in the distribution of uncompensated care payments may disadvantage Puerto Rico hospitals. However, as there was no proposal to modify the methodology for distributing uncompensated care payments to Puerto Rico hospitals in the FY 2016 IPPS/LTCH PPS proposed rule, we do not believe that there would be logical outgrowth to adopt such a change in this FY 2016 IPPS/LTCH PPS final rule. Any change to the proxy used to determine uncompensated care for Puerto Rico hospitals would need to be adopted through notice-and-comment rulemaking. We plan to address this issue for inclusion in the FY 2017 IPPS/LTCH PPS proposed rule if we also propose to continue using inpatient days of Medicare SSI patients as a proxy for uncompensated care in FY 2017.
After consideration of the public comments we received, we continue to believe that using low-income insured days as a proxy for uncompensated care costs provides a reasonable basis to determine Factor 3 as we work to improve Worksheet S-10 to accurately and consistently capture uncompensated care costs. Accordingly, in this final rule, we are finalizing for FY 2016 the policy that we originally adopted in the FY 2014 IPPS/LTCH PPS
As we did for the FY 2014 and FY 2015 IPPS/LTCH PPS proposed rules, for the FY 2016 IPPS/LTCH PPS proposed rule, we published on the CMS Web site a table listing Factor 3 for all hospitals that we estimated would receive empirically justified Medicare DSH payments in FY 2016 (that is, hospitals that we projected would receive interim uncompensated care payments during the fiscal year), and for the remaining subsection (d) hospitals and subsection (d) Puerto Rico hospitals that have the potential of receiving a DSH payment in the event that they receive an empirically justified Medicare DSH payment for the fiscal year as determined at cost report settlement. Hospitals had 60 days from the date of public display of the FY 2016 IPPS/LTCH PPS proposed rule to review these tables and notify CMS in writing of a change in a hospital's subsection (d) hospital status, such as if a hospital closed or converted to a CAH.
After the publication of this FY 2016 IPPS/LTCH final rule, hospitals will have until August 31, 2015, to review and submit comments on the accuracy of these tables. Comments can be submitted to the CMS inbox at
The statute also allows the Secretary the discretion to determine the time periods from which we will derive the data to estimate the numerator and the denominator of the Factor 3 quotient. Specifically, section 1886(r)(2)(C)(i) of the Act defines the numerator of the quotient as the amount of uncompensated care for such hospital
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50018), we finalized a policy to use the most recently available full year of Medicare cost report data for determining Medicaid days and the most recently available SSI ratios. This is consistent with the policy we adopted in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50638) of calculating the numerator and the denominator of Factor 3 for hospitals based on the most recently available full year of Medicare cost report data (including the most recently available data that may be used to update the SSI ratios) with respect to a Federal fiscal year. In other words, we used data from the most recently available full year cost report for the Medicaid days, the most recent cost report data submitted to CMS by IHS hospitals, and the most recently available SSI ratios (that is, latest available SSI ratios before the beginning of the Federal fiscal year) for the Medicare SSI days. Therefore, to estimate Factor 3 for FY 2015, we used data from the most recently available full year cost report and the most recent cost report data submitted to CMS by IHS hospitals for the Medicaid days and the most recently available SSI ratios, which for FY 2015 were data obtained from the 2011/2012 cost reports and the 2010 cost report data submitted by IHS hospitals for the Medicaid days, and the FY 2012 SSI ratios for the Medicare SSI days.
Since the publication of the FY 2015 IPPS/LTCH PPS final rule, we have been informed by the hospital community that they are experiencing difficulties with submitting accurate data for Medicaid days within the timeframes noted in the Provider Reimbursement Manual, Part 2, for a variety of reasons, such as their ability to receive eligibility data from State Medicaid agencies. (As outlined in Section 104, Chapter 1, of the Provider Reimbursement Manual, Part 2, a hospital generally has 5 months after the close of its cost reporting period to file its cost report.) In addition, we have been informed that there is variation in the ability of hospitals and MACs, respectively, to submit and accept amended cost report data in time for the computation of Factor 3. While we continue to believe that it is important to use data that are as recent as possible, we recognize that, from time to time, the balance between recency and accuracy may require refinement. In the case of Factor 3, because we make prospective determinations of the uncompensated care payment without reconciliation, we believe that it would increase the accuracy of the data used to determine Factor 3, and accordingly, each eligible hospital's allocation of the overall uncompensated care amount, if we provided hospitals with more time to submit these data and MACs with more time to consider these submitted data before they are used in the computation of Factor 3. As we described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50018), it is not possible for us to wait for a later database update of the cost report data to calculate the final Factor 3 amount for the final rule because this could cause delay in the publication of the final rule. Therefore, we are unable to provide hospitals additional time to submit supplemental data, or for their MACs to consider and accept those data as applicable and appropriate. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24488), we noted that one alternative would be to use slightly older data within the most recent extract of the hospital cost report data in the HCRIS database. We stated that we believe this would allow hospitals more time to submit data and MACs more time to consider and accept such data as applicable and appropriate.
Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24488), for the computation of Factor 3 for FY 2016, we proposed to hold constant the cost report years used to calculate Factor 3 and to use data from the 12-month 2012 or 2011 cost reports and, in the case of IHS hospitals, the 2012 cost report data submitted to CMS by IHS hospitals. However, because a more recent HCRIS database was available at the time of the development of the FY 2016 proposed rule, we proposed that we would continue to use the most recent HCRIS database extract available to us at the time of the annual rulemaking cycle. We noted that, as in prior years, if the more recent of the two cost reporting periods does not reflect data for a 12-month period, we would use data from the earlier of the two periods so long as that earlier period reflects data for a period of 12 months. If neither of the two periods reflects 12 months, we would use the period that reflects a longer amount of time. We proposed to codify this change for FY 2016 by amending
For the FY 2015 IPPS/LTCH PPS final rule, we used the more recent of the full year 2012 or full year 2011 data from the March 2014 update of the hospital cost report data in the HCRIS database and 2010 cost report data submitted to CMS by IHS hospitals as of March 2014 to obtain the Medicaid days to calculate Factor 3. In addition, we used the FY 2012 SSI ratios published on the following CMS Web site to calculate Factor 3:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24488), we stated that for subsequent years, if we propose and finalize a policy of using insured low-income days in computing Factor 3, we intend to continue to use the most recent HCRIS database extract at the time of the annual rulemaking cycle, and to use the subsequent year of cost reports, as applicable, using the methodology described above (that is, to advance the 12-month cost reports by 1 year). We noted that, starting with the 2013 cost reports, data for IHS hospitals will be included in the HCRIS. Therefore, if an IHS hospital has a 12-month 2013 cost reporting period in the HCRIS database, we will not need to use the 2012 data separately submitted to CMS by the IHS hospital. For example, if we finalize for FY 2017, a policy under which Factor 3 is determined on the basis of insured low-income days, this approach would result in the use of the more recent of the 12-month 2013 or 2012 cost reports in the most recent HCRIS database extract available at the time of rulemaking. In addition, for any subsequent years in which we finalize a policy to use insured low-income days to compute Factor 3, our intention would be to continue to use the most recently available SSI ratio data to calculate Factor 3 at the time of annual rulemaking. As we indicated in the FY 2016 IPPS/LTCH PPS proposed rule, we believe that it is appropriate to state our intentions regarding the specific data we would use in the event Factor 3 is determined on the basis of low-income insured days for subsequent years to provide hospitals with as much guidance as possible so they may best consider how and when to submit cost report information in the future. We note that we will make proposals with regard to our methodology for calculating Factor 3 for subsequent years through notice-and-comment rulemaking.
With regard to the comments from hospitals that found their Factor 3 was calculated using a cost report that was less than 12 months, we are finalizing our proposal to use the 2012 cost report, unless that cost report is unavailable or reflects less than a full 12-month year. In the event the 2012 cost report is for less than 12 months, we will use the cost report from 2012 or 2011 that is
As stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50643), for new hospitals, which for Medicare DSH purposes include hospitals with a CCN established after 2012, we do not have data currently available to determine if the new hospital is eligible for empirically justified Medicare DSH payments and, therefore, eligible to receive an uncompensated care payment for FY 2016, nor do we have the data necessary to calculate a Factor 3 amount. Accordingly, we will treat new hospitals in the same manner as hospitals that are not found to be eligible to receive empirically justified Medicare DSH payments based upon the most recent available cost report from 2012 or 2011, such that the hospital may not receive either interim empirically justified Medicare DSH payments or interim uncompensated care payments. However, if the hospital is later determined to be eligible to receive empirically justified Medicare DSH payments based on its FY 2016 cost report, the hospital also will receive an uncompensated care payment based on the sum of Medicaid days and Medicare SSI days reported on its FY 2016 cost report.
In response to the commenters' concerns about which SSI ratios will be used for what purpose, we note that, consistent with our methodology in FY 2014 and FY 2015, the most recently available SSI ratios, in conjunction with the Medicaid fraction listed in the most recent update of the Provider Specific File, are used to identify which hospitals are projected to receive empirically justified DSH payments for FY 2016, and thus are eligible to receive interim uncompensated care payments for FY 2016. For this FY 2016 IPPS/LTCH PPS final rule, the 2013 SSI ratios are the most recently available SSI ratios and the March 2015 update is the most recent update of the Provider Specific File. The final determination as to whether a hospital is eligible to receive empirically justified DSH payments and therefore eligible to receive an uncompensated care payment is made at cost report settlement using the SSI ratio and Medicaid fraction reported on the provider's FY 2016 cost report. Therefore, for FY 2016, the 2013 SSI ratios are used to project eligibility to receive interim empirically justified DSH payments and interim uncompensated care payments, and the 2016 SSI ratios are used to determine, at cost report settlement, whether the hospital is ultimately eligible for empirically justified DSH payments and the uncompensated care payment. Furthermore, as stated elsewhere in this final rule, the SSI days from the 2013 SSI ratios are used in computing Factor 3. The calculation of Factor 3 in this final rule is a final determination that is not subject to review and will not be revised at cost report settlement to reflect updated information regarding the eligibility of individual hospitals for empirically justified DSH payments and uncompensated care payments.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24488), we proposed to continue the policies that were finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50020) to address several specific issues concerning the process and data to be employed in determining Factor 3 in the case of hospital mergers for FY 2016 and subsequent fiscal years. In order to confirm mergers and ensure the accuracy of the data used to determine each merged hospital's uncompensated care payment, we stated that we would publish a table on the CMS Web site, in conjunction with the issuance of each Federal fiscal year's IPPS/LTCH PPS proposed and final rules, that contains a list of the mergers that we are aware of and the computed uncompensated care payment for each merged hospital. Hospitals have 60 days from the date of public display of each year's IPPS/LTCH PPS proposed rule to review these tables and notify CMS in writing of any
While we continue to believe that recalculation of a surviving hospital's Factor 3 at cost report settlement is the most conducive to administrative efficiency and predictability for both providers and MACs, we may explore the possibility of an alternative approach in which recalculation occurs during the tentative settlement process in future notice-and-comment rulemaking. In addition, we remind the commenters that, in the event that a merger is not identified by the MACs, we allow opportunity for comment on the accuracy of the mergers that we have identified during the comment period for the proposed rule and after the publication of the final rule. Hospitals have until August 31, 2015 to review and submit comments on the accuracy of the list of mergers that we have identified in this final rule.
Section 3025 of the Affordable Care Act, as amended by section 10309 of the Affordable Care Act, added a new section 1886(q) to the Act. Section 1886(q) of the Act establishes the “Hospital Readmissions Reduction Program,” effective for discharges from an “applicable hospital” beginning on or after October 1, 2012, under which payments to those applicable hospitals may be reduced to account for certain excess readmissions.
Section 1886(q)(1) of the Act sets forth the methodology by which payments to “applicable hospitals” will be adjusted to account for excess readmissions. In accordance with section 1886(q)(1) of the Act, payments for discharges from an “applicable hospital” will be an amount equal to the product of the “base operating DRG payment amount” and the adjustment factor for the hospital for the fiscal year. That is, “base operating DRG payments” are reduced by a hospital-specific adjustment factor that accounts for the hospital's excess readmissions. Section 1886(q)(2) of the Act defines the base operating DRG payment amount as the payment amount that would otherwise be made under section 1886(d) of the Act (determined without regard to section 1886(o) of the Act [the Hospital VBP Program]) for a discharge if this subsection did not apply; reduced by any portion of such payment amount that is attributable to payments under paragraphs (5)(A), (5)(B), (5)(F), and (12) of section 1886(d) of the Act. Paragraphs (5)(A), (5)(B), (5)(F), and (12) of section 1886(d) of the Act refer to outlier payments, IME payments, DSH adjustment payments, and add-on payments for low-volume hospitals, respectively.
Furthermore, section 1886(q)(2)(B) of the Act specifies special rules for defining the payment amount that would otherwise be made under section 1886(d) of the Act for certain hospitals, including policies for SCHs and for MDHs for FY 2013. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53374), we finalized policies to implement the statutory provisions related to the definition of “base operating DRG payment amount” with respect to those hospitals.
Section 1886(q)(3)(A) of the Act defines the “adjustment factor” for an applicable hospital for a fiscal year as equal to the greater of (i) the ratio described in subparagraph (B) for the hospital for the applicable period (as defined in paragraph (5)(D)) for such fiscal year; or (ii) the floor adjustment factor specified in subparagraph (C). Section 1886(q)(3)(B) of the Act, in turn, describes the ratio used to calculate the adjustment factor. It states that the ratio is equal to 1 minus the ratio of—(i) the aggregate payments for excess readmissions and (ii) the aggregate payments for all discharges. Section 1886(q)(3)(C) of the Act establishes the floor adjustment factor, which is set at 0.97 for FY 2015 and subsequent fiscal years.
Section 1886(q)(4) of the Act defines the terms “aggregate payments for excess readmissions” and “aggregate payments for all discharges” for an applicable hospital for the applicable period. The term “aggregate payments for excess readmissions” is defined in section 1886(q)(4)(A) of the Act as the sum, for applicable conditions of the product, for each applicable condition, of (i) The base operating DRG payment amount for such hospital for such applicable period for such condition; (ii) the number of admissions for such condition for such hospital for such applicable period; and (iii) the excess readmissions ratio for such hospital for such applicable period minus 1. The “excess readmissions ratio” is a hospital-specific ratio based on each applicable condition. Specifically, section 1886(q)(4)(C) of the Act defines the excess readmissions ratio as the ratio of actual-over-expected readmissions; specifically, the ratio of “risk-adjusted readmissions based on actual readmissions” for an applicable hospital for each applicable condition, to the “risk-adjusted expected readmissions” for the applicable hospital for the applicable condition.
Section 1886(q)(5) of the Act provides definitions of “applicable condition,” “expansion of applicable conditions,” “applicable hospital,” “applicable period,” and “readmission.” The term
Section 1886(q)(5)(C) of the Act defines “applicable hospital,” that is, a hospital subject to the Hospital Readmissions Reduction Program, as a subsection (d) hospital or a hospital that is paid under section 1814(b)(3) of the Act, as the case may be. The term “applicable period,” as defined under section 1886(q)(5)(D) of the Act, means, with respect to a fiscal year, such period as the Secretary shall specify. As explained in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51671), the “applicable period” is the period during which data are collected in order to calculate various ratios and payment adjustments under the Hospital Readmissions Reduction Program.
Section 1886(q)(6) of the Act sets forth the public reporting requirements for hospital-specific readmission rates. Section 1886(q)(7) of the Act limits administrative and judicial review of certain determinations made pursuant to section 1886(q) of the Act. Finally, section 1886(q)(8) of the Act requires the Secretary to collect data on readmission rates for
The payment adjustment factor set forth in section 1886(q) of the Act did not apply to discharges until FY 2013. In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51660 through 51676), we addressed the issues of the selection of readmission measures and the calculation of the excess readmissions ratio, which will be used, in part, to calculate the readmissions adjustment factor. Specifically, in that final rule, we finalized policies that relate to the portions of section 1886(q) of the Act that address the selection of and measures for the applicable conditions, the definitions of “readmission” and “applicable period,” and the methodology for calculating the excess readmissions ratio. We also established policies with respect to measures for readmissions for the applicable conditions and our methodology for calculating the excess readmissions ratio.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through 53401), we finalized policies that relate to the portions of section 1886(q) of the Act that address the calculation of the hospital readmissions payment adjustment factor and the process by which hospitals can review and correct their data. Specifically, in that final rule, we addressed the base operating DRG payment amount, aggregate payments for excess readmissions and aggregate payments for all discharges, the adjustment factor, applicable hospital, limitations on review, and reporting of hospital-specific information, including the process for hospitals to review readmission information and submit corrections. We also established a new Subpart I under 42 CFR part 412 (§§ 412.150 through 412.154) to codify rules for implementing the Hospital Readmissions Reduction Program.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50649 through 50676), we finalized our policies that relate to refinement of the readmissions measures and related methodology for the current applicable conditions, expansion of the “applicable conditions” for FY 2015 and subsequent fiscal years, and clarification of the process for reporting hospital-specific information, including the opportunity to review and submit corrections. We also established policies related to the calculation of the adjustment factor for FY 2014.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50024 through 50048), we made refinements to the readmissions measures and related methodology for applicable conditions for FY 2015 and subsequent fiscal years, expanded the “applicable conditions” for FY 2017 and subsequent fiscal years, discussed the maintenance of technical specifications for quality measures, and described a waiver from the Hospital Readmissions Reduction Program for hospitals formerly paid under section 1814(b)(3) of the Act (§ 412.154(d)). We also specified the applicable period for FY 2015 and made changes to the calculation of the aggregate payments for excess readmissions to include two additional applicable conditions for the FY 2015 payment determination.
In this final rule, for the FY 2016 Hospital Readmissions Reduction Program, we are—
• Specifying the adjustment factor floor for FY 2016 (section IV.E.6. of the preamble of this final rule);
• Specifying the applicable period for FY 2016 (section IV.E.7. of the preamble of this final rule);
• Specifying the calculation of aggregate payments for excess readmissions for FY 2016 (section IV.E.8. of the preamble of this final rule); and
• Adopting an extraordinary circumstance exception policy to address hospitals that experience a disaster or other extraordinary circumstance beginning in FY 2016 and for subsequent years (section IV.E.9. of the preamble of this final rule).
In addition, in this final rule, for the FY 2017 Hospital Readmissions Reduction Program, we are making a refinement to the pneumonia readmissions measure, which would expand the measure cohort, for the FY 2017 payment determination and subsequent years (section IV.E.4. of the preamble of this final rule).
We note that, during the comment period for the FY 2016 IPPS/LTCH PPS proposed rule, we received public comments that were not related to our specific proposals for the Hospital Readmissions Reduction Program and therefore considered out of the scope of the proposed rule. Some of the out-of-scope comments were related to a wide range of aspects of the Hospital Readmissions Reduction Program and its readmissions measures. For example, there were recommendations for statutory changes to the program payment structure and previously finalized program definitions, changes to the program goals, and the frequency of assessing and reporting performance on measures. Notably, there were many public comments on risk adjustment for sociodemographic status (SDS) at the patient-level and hospital-level. While we appreciate the commenters' feedback, we consider these topics to be
All other out-of-scope topics will be taken into consideration when developing policies and program requirements for future years.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of the ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24490 through 24492), for the FY 2017 payment determination and subsequent years, we proposed a refinement of the currently NQF-endorsed CMS Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure (NQF #0506) (hereafter referred to as the CMS 30-Day Pneumonia Readmission Measure (NQF #0506)), which would have expanded the measure cohort. For the purposes of describing the refinement of this measure, we noted that “cohort” is defined as the hospitalizations, or “index admissions,” that are included in the measure. This cohort is the set of hospitalizations that meet all of the inclusion and exclusion criteria, and we proposed an expansion to this set of hospitalizations. The previously adopted CMS 30-Day Pneumonia Readmission Measure (NQF #0506) included hospitalizations for patients with a principal discharge diagnosis of pneumonia indicating viral or bacterial pneumonia. For measure cohort details of the prior version of the measure, we refer readers to the measure methodology report and measure risk adjustment statistical model on our Web site at:
The proposed measure refinement would have expanded the measure cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of either sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission. We suggested that including such patients would better represent the complete population of a hospital's patients who are receiving clinical management and treatment for pneumonia, and ensure the measure includes more complete and comparable populations across hospitals. In addition, use of comparable populations would reduce measurement bias resulting from different coding practices seen across hospitals. We stated our belief that measure results derived from refinement of the measure cohort in the manner we proposed would improve the measure's assessment of avoidable readmissions and more accurately reflect quality and outcome for pneumonia patients. The determination to refine the measure cohort was based on our evaluation of both the frequency and variation in utilization of these diagnosis codes, and as such coding practices have been described in recently published studies. The rationale for expanding the measure cohort for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) was further described in section VIII.A.6.b. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24564 through 24566) under our discussion of proposed refinements for the Hospital IQR Program.
The proposed measure refinement would have expanded the cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of either sepsis or respiratory failure who
The proposed refinement of the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) with this expanded measure cohort was reviewed by the Measure Applications Partnership (MAP), which conditionally supported use of the measure update for the Hospital Readmissions Reduction Program pending NQF review of the measure update and appropriate consideration under the NQF SDS pilot, if required, as detailed in its Pre-Rulemaking 2015 MAP Recommendations Report available at:
We note that during the MAP Hospital Workgroup and MAP Coordinating Committee in-person meetings, some members discussed the benefit of a phased approach that would first allow for public reporting of the refined measure before implementing it in a pay-for-performance program in order to allow providers to gain experience with the measure refinement, while other members expressed concern that this would delay implementation of an improved measure and also cause alignment issues and potential confusion among providers. The MAP supported the use of the measure refinement without stipulating prior public reporting as a condition of support. However, we acknowledge the importance of this consideration and took it into account when determining to propose implementation of the measure refinement in the Hospital Readmissions Reduction Program beginning with the FY 2017 payment determination.
We considered other options in proposing when to implement the refinement of the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) in the Hospital Readmissions Reduction Program, including the option to implement the measure refinement beginning with the FY 2018 payment determination. Delaying implementation of the measure refinement until FY 2018 would allow hospitals to gain more experience with the impact of the measure refinement on their measure results and excess readmissions ratios. However, it also would mean delaying use of an improved measure that we believe would better represent the complete population of a hospital's pneumonia patients and better reflect comparable pneumonia patients across hospitals. Delaying implementation of the measure refinement for the Hospital Readmissions Reduction Program could also potentially increase confusion among hospitals as well as raise alignment issues with other CMS hospital inpatient quality reporting and payment programs that use the same measure.
After considering these options, we proposed to begin with the FY 2017 payment determination to implement the refinement of the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) in the Hospital Readmissions Reduction Program. We believed that after weighing the considerations, the proposed measure refinement should be incorporated into the Hospital Readmissions Reduction Program as soon as statutorily and operationally feasible, primarily because improving the measure in the manner we proposed would greatly improve the measure's assessment of quality and outcome for pneumonia patients and, therefore, its implementation should not be unnecessarily delayed.
The risk adjustment and statistical modeling approach as well as the measure calculation for the proposed measure remained unchanged from the previously adopted measure. However, we did confirm the use of current risk-adjustment variables in the expanded measure cohort by confirming their association with the outcome. We also examined additional risk variables leading to the addition of a few additional risk variables in the measure.
The proposed refinement of the measure cohort for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) would have used the same methodology and statistical modeling approach as the previously adopted in the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) for the Hospital Readmissions Reduction Program, as well as the other Hospital Readmissions Reduction Program measures. We published a detailed description of how the readmission measures estimate the excess readmissions ratios in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53380 through 53381).
We noted that the set of hospitals for which this refined measure would be calculated for the Hospital Readmissions Reduction Program would differ from those used in calculations for the Hospital IQR Program. The Hospital Readmissions Reduction Program includes only subsection (d) hospitals as defined in section 1886(d)(1)(B) of the Act (and, if not waived from participating, those hospitals paid under section 1814(b)(3) of the Act), while the Hospital IQR Program calculations include non-IPPS hospitals, such as CAHs, cancer hospitals, and hospitals located in the Territories of the United States. However, we believed that adoption of the refinement to the measure cohort for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) would be appropriate for both programs.
In summary, we proposed a refinement of the NQF-endorsed CMS 30-Day Pneumonia Readmission Measure (NQF #0506), which would expand the measure cohort, in the Hospital Readmissions Reduction Program for the FY 2017 payment determination and subsequent years.
We invited public comment on this proposal.
As we stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24490 through 24492), the purpose of expanding the cohort of the current pneumonia readmission measure is to include a broader spectrum of pneumonia patients and respond to changes in coding practices that were potentially biasing estimates of the performance of hospitals. Additional analyses were conducted after the proposed rule was published as part of the measure reevaluation and re-specification process. These analyses revealed challenges to the risk adjustment methodology with respect to patients with severe sepsis and respiratory failure, and revealed that the proposed cohort expansion would exacerbate the bias in the existing measure that it was intended to mitigate. Specifically, hospital coding frequency was found to be even more strongly, and inversely, associated with performance. Therefore, we modified the refined cohorts to address this bias.
The decision to finalize the modified version is also consistent with clinical practice, as these sickest patients often receive care in an intensive care unit and other specialized interventions (such as ventilator support) that is clinically distinct from the care provided to patients with less severe forms of pneumonia. The modified version has also been determined to be statistically robust, such that risk-standardization accounted for case-mix differences across hospitals, without being confounded by hospital coding patterns. These changes also are consistent with public comments received in response to the FY 2016 IPPS/LTCH PPS proposed rule. For details on the rationale for the cohort expansion, the analyses supporting the re-specified cohort we are finalizing instead of the specifications previously proposed, and the full specification and results of the measure as adopted in this final rule, we refer readers to the measure methodology report for the finalized measure in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on our Web site at:
This additional analysis indicates that the modified version of the expansion of the cohort we are finalizing responds to potential bias in the current measure, and that risk adjustment is adequate. We believe this revised cohort expansion produces a measure that does not favor or disadvantage hospitals on the basis of their coding practices. We also believe the revised cohort we are adopting still effectively broadens the cohort of patients included in the measure to be more clinically comprehensive (bringing in sepsis and aspiration pneumonia patients) in relation to what we previously proposed. Finally, we believe that we also are being responsive to commenters' concerns by not including those patients that are most severely ill on arrival (those with severe sepsis and respiratory failure, as included in the previously proposed version), because these patients' increased risk is challenging to appropriately account for across hospitals.
We note that because patients with a principal discharge diagnosis of respiratory failure are no longer included in the modified version of the cohort, there is no opportunity for readmissions to be counted in both the pneumonia and COPD readmission measures.
We had previously proposed including the presence of sepsis or respiratory failure in the index admission as covariates, or risk-adjusters, in the model. However, analyses conducted subsequent to publication of the FY 2016 IPPS/LTCH PPS proposed rule revealed that this approach would exacerbate the bias in the existing measure that it was intended to mitigate as such patients' increased risk was challenging to appropriately account for across hospitals. Therefore, in the modified measure, the risk adjustment factors used in the publicly reported version of the readmission measure were retained and one new risk-adjustment variable (respiratory dependence/tracheostomy (CC77)) was added. No additional risk adjustment variables were added for the patients included in the expanded cohort (that is, aspiration pneumonia and sepsis patients).
We conducted additional analyses and found that limiting the measure expansion to aspiration pneumonia patients and sepsis patients without including risk adjustment for these alternate principal diagnoses of respiratory failure and severe sepsis was the most feasible approach that brought in a large portion of patients currently excluded from the measure but mitigated the biases introduced by hospital coding patterns. Specifically, our analysis indicated that under the revisions we are adopting, hospital performance among hospitals with higher rates of patients with sepsis or
We find that hospital performance among hospitals with higher rates of patients with aspiration pneumonia is similar to those with fewer such patients, suggesting that the finalized risk adjustment methodology adequately accounts for the differences in risk among the subgroups of patients. Although major teaching hospitals may have larger increases in the size of their cohorts due to this modification, that should not impose additional burden on these hospitals (as this is a claims-based measure and does not require data collection), nor should it lead to worse performance on the measure by major teaching hospitals due to adequate risk-adjustment for the aspiration pneumonia patients.
The analyses of this measure indicated that an approximately equal numbers of hospitals, and, specifically, equal numbers of teaching hospitals, improved or worsened their categorical performance under the modified version of the measure we are adopting in this final rule. We did not see evidence that teaching hospitals will be differentially burdened or adversely affected on the basis of this modification to the measure. We believe that while some variation in case-mix is to be expected, the risk adjustment methodology we have adopted takes into account many of the risk factors for aspiration pneumonia (including age, neurologic disease, and dementia), and adequately controls for these differences. We found minimal association between aspiration coding patterns and risk-standardized readmission rates. For details on the measure as finalized, we refer readers to the measure methodology report for the finalized measure in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on the CMS Web site at:
Although the modified version of the cohort expansion for this measure that we are finalizing will increase the number of patients included in the measure and change the national readmission rate, we do not believe this constitutes a new measure. The intent of the measure has not changed since initial development and NQF endorsement. The finalized readmission measure cohort will be approximately 15 percent smaller than originally proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24491). In addition, section 1886(q)(5)(B) of the Act allows the use of a feasible and practical measure that has not been NQF-endorsed as long as due consideration has been given to the measure. After extensive consideration, we believe adoption of the modified version of this measure beginning with the FY 2017 payment determination is feasible, practical, and important for
Several commenters also requested delayed implementation of the revised measure in order to provide time to assess the impact of the upcoming transition to ICD-10 on the revised pneumonia readmission measure, and suggested that CMS not make any changes to the current pneumonia measure until any impact can be evaluated. The commenters asked that CMS provide data on the revised measure, including ICD-9 and ICD-10 detailed codes, to allow hospitals to assess impact prior to implementation.
With respect to the upcoming ICD-10 transition, we are aware of stakeholder concerns about the potential impacts to hospital performance on quality measures when ICD-10 is implemented on October 1, 2015, as well as their calls for more extensive testing to understand the impacts before any payments or penalties are implicated. As part of ICD-10 transition planning that has taken place over the past several years, we have performed testing and analyses across the agency with respect to system readiness and claims reimbursement, and we have provided extensive education and outreach to providers, vendors, and other payers. Our systems for quality programs have been tested and will continue to be tested as ICD-10 data are submitted in order to ensure the accuracy of measure calculations and to monitor and assess the translation of measure specifications to ICD-10, potential coding variation, and impacts on measure performance and payment incentive programs. We will continue to work with stakeholders during the ICD-10 transition to monitor and assess impacts and to address any potential issues that may occur.
With respect to the modified version of the expanded measure cohort that we are adopting in this final rule, we refer commenters to the measure methodology report for the details of the measure in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on CMS Web site at:
Based on further analyses and testing of this measure and after consideration of the public comments we received, we are finalizing a modified version of the expanded pneumonia cohort from the version we specified in the FY 2016 IPPS/LTCH PPS proposed rule. The modified version of the expanded pneumonia cohort includes patients with a principal discharge diagnosis of pneumonia or aspiration pneumonia, and patients with a principal discharge diagnosis of sepsis with a secondary diagnosis of pneumonia coded as POA, but does not include patients with a principal discharge diagnosis of respiratory failure or patients with a principal discharge diagnosis of sepsis if they are coded as having severe sepsis.
We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50039) for a discussion of the maintenance of technical specifications for quality measures for the Hospital Readmissions Reduction Program. Technical specifications of the readmission measures are provided on our Web site in the Measure Methodology Reports at:
Section 1886(q)(3)(A) of the Act defines the “adjustment factor” for an applicable hospital for a fiscal year as equal to the greater of (i) the ratio described in subparagraph (B) for the hospital for the applicable period (as defined in paragraph (5)(D)) for such fiscal year; or (ii) the floor adjustment factor specified in subparagraph (C). Section 1886(q)(3)(B) of the Act, in turn, describes the ratio used to calculate the adjustment factor. Specifically, it states that the ratio is equal to 1 minus the ratio of—(i) the aggregate payments for excess readmissions and (ii) the aggregate payments for all discharges. The calculation of this ratio is codified at § 412.154(c)(1) of the regulations. Section 1886(q)(3)(C) of the Act specifies the floor adjustment factor, which is set at 0.97 for FY 2015 and subsequent fiscal years. We codified the floor adjustment factor at § 412.154(c)(2) of the regulations (77 FR 53386).
Consistent with section 1886(q)(3) of the Act, codified at § 412.154(c)(2), the adjustment factor is either the greater of the ratio or, for FY 2015 and subsequent fiscal years, a floor adjustment factor of 0.97. Under our established policy, the ratio is rounded to the fourth decimal place. In other words, for FY 2015 and subsequent fiscal years, a hospital subject to the Hospital Readmissions Reduction Program will have an adjustment factor that is between 1.0 (no reduction) and 0.9700 (greatest possible reduction).
Under section 1886(q)(5)(D) of the Act, the Secretary has the authority to specify the applicable period with respect to a fiscal year under the Hospital Readmissions Reduction Program. In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51671), we finalized our policy to use 3 years of claims data to calculate the readmission measures. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53675), we codified the definition of “applicable period” in the regulations at 42 CFR 412.152 as the 3-year period from which data are collected in order to calculate excess readmissions ratios and adjustments for the fiscal year, which includes aggregate payments for excess readmissions and aggregate payments for all discharges used in the calculation of the payment adjustment.
Consistent with the definition specified at § 412.152, we established that the applicable period for FY 2014 under the Hospital Readmissions Reduction Program is the 3-year period from July 1, 2009, to June 30, 2012. That is, we determined the excess readmissions ratios and calculate the payment adjustment (including aggregate payments for excess readmissions and aggregate payments for all discharges) for FY 2014 using data from the 3-year time period of July 1, 2009 through June 30, 2012, as this was the most recent available 3-year period of data upon which to base these calculations (78 FR 50669).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 40 through 50041), for FY 2015, consistent with the definition specified at § 412.152, we finalized an “applicable period” for the Hospital Readmissions Reduction Program to be the 3-year period from July 1, 2010 through June 30, 2013. That is, we determined the excess readmissions ratios and the payment adjustment (including aggregate payments for excess readmissions and aggregate payments for all discharges) for FY 2015 using data from the 3-year time period of July 1, 2010 through June 30, 2013.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24492), for FY 2016, consistent with the definition specified at § 412.152, we proposed an “applicable period” for the Hospital Readmissions Reduction Program to be the 3-year period from July 1, 2011 through June 30, 2014. In other words, we proposed that the excess readmissions ratios and the payment adjustment (including aggregate payments for excess readmissions and aggregate payments for all discharges) for FY 2016 using data from the 3-year time period of July 1, 2011 through June 30, 2014.
After consideration of the public comments we received, we are finalizing as proposed the applicable period of the 3-year time period of July 1, 2011 to June 30, 2014 to calculate the excess readmission ratios and the readmission payment adjustment factors for FY 2016.
Section 1886(q)(3)(B) of the Act specifies the ratio used to calculate the adjustment factor under the Hospital Readmissions Reduction Program. It states that the ratio is equal to 1 minus the ratio of—(i) the aggregate payments for excess readmissions and (ii) the aggregate payments for all discharges. The definition of “aggregate payments for excess readmissions” and “aggregate payments for all discharges,” as well as a methodology for calculating the numerator of the ratio (aggregate payments for excess readmissions) and the denominator of the ratio (aggregate payments for all discharges) are codified at § 412.154(c)(2) of the regulations (77 FR 53387).
Section 1886(q)(4) of the Act sets forth the definitions of “aggregate payments for excess readmissions” and “aggregate payments for all discharges” for an applicable hospital for the applicable period. The term “aggregate payments for excess readmissions” is defined in section 1886(q)(4)(A) of the Act as for a hospital for an applicable period, the sum, for applicable conditions of the product, for each applicable condition, of (i) The base operating DRG payment amount for such hospital for such applicable period for such condition; (ii) the number of admissions for such condition for such hospital for such applicable period; and (iii) the excess readmissions ratio for such hospital for such applicable period minus 1. We codified this definition of “aggregate payments for excess readmissions” under the regulations at § 412.152 as the product, for each applicable condition, of: (1) The base operating DRG payment amount for the hospital for the applicable period for such condition; (2) the number of admissions for such condition for the hospital for the applicable period; and (3) the excess readmissions ratio for the hospital for the applicable period minus 1 (77 FR 53675).
The excess readmissions ratio is a hospital-specific ratio calculated for each applicable condition. Specifically, section 1886(q)(4)(C) of the Act defines the excess readmissions ratio as the ratio of “risk-adjusted readmissions based on actual readmissions” for an applicable hospital for each applicable condition, to the “risk-adjusted expected readmissions” for the applicable hospital for the applicable condition. The methodology for the calculation of the excess readmissions ratio was finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51673).
The term “aggregate payments for all discharges” is defined at section 1886(q)(4)(B) of the Act as for a hospital for an applicable period, the sum of the base operating DRG payment amounts for all discharges for all conditions from such hospital for such applicable period. “Aggregate payments for all discharges” is the denominator of the ratio used to calculate the adjustment factor under the Hospital Readmissions Reduction Program. We codified this definition of “aggregate payments for all discharges” under the regulations at § 412.152 (77 FR 53387).
We finalized the inclusion of one additional applicable condition, Patients Readmitted Following Coronary Artery Bypass Graft (CABG) Surgery, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50033 through 50039) effective for FY 2017. We will address the inclusion of this additional measure in the calculation of the readmissions payment adjustment for FY 2017 in the FY 2017 rulemaking.
As discussed above, when calculating the numerator (aggregate payments for excess readmissions), we determine the base operating DRG payments for the applicable period. “Aggregate payments for excess readmissions” (the numerator) is defined as the sum, for applicable conditions of the product, for each applicable condition, of (i) the base operating DRG payment amount for such hospital for such applicable period for such condition; (ii) the number of admissions for such condition for such hospital for such applicable period; and (iii) the excess readmissions ratio for such hospital for such applicable period minus 1.
When determining the base operating DRG payment amount for an individual hospital for such applicable period for such condition, we use Medicare inpatient claims from the MedPAR file with discharge dates that are within the same applicable period to calculate the excess readmissions ratio. We use MedPAR claims data as our data source for determining aggregate payments for excess readmissions and aggregate payments for all discharges, as this data source is consistent with the claims data source used in IPPS rulemaking to determine IPPS rates.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24493 through 24496), for FY 2016, we proposed to use MedPAR claims with discharge dates that are on or after July 1, 2011, and no later than June 30, 2014. Under our established methodology, we use the update of the MedPAR file for each Federal fiscal year, which is updated 6 months after the end of each Federal fiscal year within the applicable period, as our data source (that is, the March updates of the respective Federal fiscal year MedPAR files) for the final rules.
The FY 2011 through FY 2014 MedPAR data files can be purchased from CMS. Use of these files allows the public to verify the readmissions adjustment factors. Interested individuals may order these files through the CMS Web site at:
• If using the U.S. Postal Service: Centers for Medicare and Medicaid Services, RDDC Account, Accounting Division, P.O. Box 7520, Baltimore, MD 21207-0520.
• If using express mail: Centers for Medicare and Medicaid Services, OFM/Division of Accounting—RDDC, Mailstop C#-07-11, 7500 Security Boulevard, Baltimore, MD 21244-1850.
In the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to determine aggregate payments for excess readmissions and aggregate payments for all discharges using data from MedPAR claims with discharge dates that are on or after July 1, 2011, and no later than June 30, 2014. However, we noted that, for the purpose of modeling the proposed FY 2016 readmissions payment adjustment factors for the FY 2016 IPPS/LTCH PPS proposed rule, we used excess readmissions ratios for applicable hospitals from the FY 2015 Hospital Readmissions Reduction Program applicable period. For this FY 2016 IPPS/LTCH PPS final rule, applicable hospitals will have had the opportunity to review and correct data from the proposed FY 2016 applicable period of July 1, 2011 to June 30, 2014, before they are made public under our policy regarding the reporting of hospital-specific information, which we discussed in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through 53401).
In the FY 2016 IPPS/LTCH PPS proposed rule, for FY 2016, we proposed to use MedPAR data from July 1, 2011 through June 30, 2014. Specifically, in the FY 2016 IPPS/LTCH PPS proposed rule, we used the March 2012 update of the FY 2011 MedPAR file to identify claims within FY 2011 with discharges dates that are on or after July 1, 2011, the March 2013 update of the FY 2012 MedPAR file to identify claims within FY 2012, the March 2014 update of the FY 2013 MedPAR file to identify claims within FY 2013, and the December 2014 update of the FY 2014 MedPAR file to identify claims within FY 2014 with discharge dates no later than June 30, 2014. For this final rule, we proposed to use the same MedPAR files as listed above for claims within FY 2011, FY 2012 and FY 2013. For claims within FY 2014, we proposed to use in the final rule the March 2015 update of the FY 2014 MedPAR file.
In order to identify the admissions for each condition, to calculate the aggregate payments for excess readmissions for an individual hospital, for FY 2016, we proposed to identify each applicable condition using the ICD-9-CM codes used to identify applicable conditions to calculate the excess readmissions ratios. (Although the compliance date for the ICD-10-CM and ICD10-PCS code sets is October 1, 2015 (79 FR 45128 through 45134), these proposed policies apply to data periods prior to this compliance date.) Under our existing policy, we identify eligible hospitalizations and readmissions of Medicare patients discharged from an applicable hospital having a principal diagnosis for the measured condition in an applicable period (76 FR 51669). The discharge diagnoses for each applicable condition are based on a list of specific ICD-9-CM codes for that condition. These codes are posted on the QualityNet Web site at:
We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50041 through 50048) for a discussion of how we identify the applicable conditions to calculate the aggregate payments for excess readmissions for FY 2015. For FY 2016, we proposed to follow this same approach.
In the FY 2016 IPPS/LTCH PPS proposed rule, for FY 2016, we proposed to continue to apply the same exclusions to the claims in the MedPAR file as we applied for FY 2015 for the current applicable conditions. For FY 2016, in order to have the same types of admissions to calculate aggregate payments for excess readmissions as is used to calculate the excess
• We would exclude admissions that are identified as an applicable condition if the patient died in the hospital, as identified by the discharge status code on the MedPAR claim.
• We would exclude admissions identified as an applicable condition for which the patient was transferred to another provider that provides acute care hospital services (that is, a CAH or an IPPS hospital), as identified through examination of contiguous stays in MedPAR at other hospitals.
• We would exclude admissions identified as an applicable condition for patients who are under the age of 65, as identified by linking the claim information to the information provided in the Medicare Enrollment Database.
• For conditions identified as AMI, we would exclude claims that are same day discharges, as identified by the admission date and discharge date on the MedPAR claim.
• We would exclude admissions for patients who did not have Medicare Parts A and B FFS enrollment in the 12 months prior to the index admission, based on the information provided in the Medicare Enrollment Database.
• We would exclude admissions for patients without at least 30 days post-discharge enrollment in Medicare Parts A and B FFS, based on the information provided in the Medicare Enrollment Database.
• We would exclude all multiple admissions within 30 days of a prior index admission's discharge date, as identified in the MedPAR file, consistent with how multiple admissions within 30 days of an index admission are excluded from the calculation of the excess readmissions ratio.
These exclusions are consistent with our current methodology, which was established in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50048).
Furthermore, we would only identify Medicare FFS claims that meet the criteria (that is, claims paid for under Medicare Part C (Medicare Advantage) would not be included in this calculation), consistent with the methodology to calculate excess readmissions ratios based solely on admissions and readmissions for Medicare FFS patients. Therefore, consistent with our established methodology, for FY 2016, we would exclude admissions for patients enrolled in Medicare Advantage as identified in the Medicare Enrollment Database. This policy is consistent with how admissions for Medicare Advantage patients are identified in the calculation of the excess readmissions ratios under our established methodology. The tables below list the ICD-9-CM codes we proposed to use to identify each applicable condition to calculate the aggregate payments for the excess readmissions proposal for FY 2016. These ICD-9-CM codes also would be used to identify the applicable conditions to calculate the excess readmissions ratios, consistent with our established policy (76 FR 51673 through 51676).
For FY 2016, we proposed to calculate aggregate payments for excess readmissions, using MedPAR claims from July 1, 2011 to June 30, 2014, to identify applicable conditions based on the same ICD-9-CM codes used to identify the conditions for the readmissions measures, and to apply the proposed exclusions for the types of admissions discussed above. To calculate aggregate payments for excess readmissions, we proposed to calculate the base operating DRG payment amounts for all claims in the 3-year applicable period for each applicable condition (AMI, HF, PN, COPD and THA/TKA) based on the claims we have identified as described above. Once we have calculated the base operating DRG amounts for all the claims for the five applicable conditions, we proposed to sum the base operating DRG payments amounts by each condition, resulting in five summed amounts, one amount for each of the five applicable conditions. We proposed to then multiply the amount for each condition by the respective excess readmissions ratio minus 1 when that excess readmissions ratio is greater than 1, which indicates that a hospital has performed, with respect to readmissions for that applicable condition, worse than the average hospital with similar patients. Each product in this computation represents the payments for excess readmissions for that condition. We proposed to then sum the resulting products which represent a hospital's proposed “aggregate payments for excess readmissions” (the numerator of the ratio). Because this calculation is performed separately for each of the five conditions, a hospital's excess readmissions ratio must be less than or equal to 1 on each measure to avoid CMS' determination that there were payments made by CMS for excess readmissions (resulting in a payment reduction under the Hospital Readmissions Reduction Program). In other words, in order to avoid a payment reduction a hospital's excess readmissions ratio must be less than or equal to 1 on each measure. We note that we did not propose any changes to our existing methodology to calculate “aggregate payments for all discharges” (the denominator of the ratio).
We proposed the following methodology for FY 2016 as displayed in the chart below.
We invited public comment on these proposals.
While some commenters asserted that CMS has the authority through rulemaking to modify the calculation of the payment adjustment factor to address these issues, other commenters indicated that these revisions would require a change in statute.
As noted above, ASPE is conducting research on the issue of risk adjustment for sociodemographic status as directed by the IMPACT Act, and expects to issue a report to Congress, including recommendations for improvements to the Hospital Readmissions Reduction Program based on that research.
We did not receive any public comments generally objecting to the other proposed aspects of the calculation of aggregate payments for excess readmissions for FY 2016, such as the specific ICD-9 codes used in the calculation and the data sources for calculation.
After considering the public comments we received, we are finalizing our proposed calculation of aggregate payments for excess readmissions without modification.
In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28117), we welcomed public comment on our proposal to adopt an extraordinary circumstance exception policy for the Hospital Readmissions Reduction Program. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50048), we indicated that we received many comments in support of CMS establishing a formal extraordinary circumstance exception policy for the Hospital Readmissions Reduction Program. We also previously indicated that any specific proposals related to the implementation of an extraordinary circumstance exception policy would be proposed through rulemaking with an opportunity for public comment. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24497), we agreed with commenters that there may be periods of time during which a hospital is not able to submit all claims (from which readmission measures data are derived) in an accurate or timely fashion due to an extraordinary circumstance beyond its control. Section 1886(q)(5)(D) of the Act permits the Secretary to determine the “applicable period” for readmissions data collection, and we believe that the statute allows us to determine that the period not include times when hospitals may encounter extraordinary circumstances.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24497), we proposed adopting an extraordinary circumstance exception policy for the Hospital Readmissions Reduction Program beginning in FY 2016 and for subsequent years. This policy was similar to the extraordinary circumstance exception policy for the Hospital IQR Program, as finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51651), modified in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836) (designation of a non-CEO hospital contact), and further modified in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277) (amended § 412.140(c)(2) to refer to “extension or exemption” instead of the former “extension or waiver”). We also considered how best to align an extraordinary circumstance exception policy for the Hospital Readmissions Reduction Program with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs, such as the Hospital VBP Program, to the extent feasible.
In the proposed rule (80 FR 24497), we also considered the feasibility and implications of excluding data for certain readmission measures for a limited period of time from the calculations for a hospital's excess readmissions ratios for the applicable performance period. By minimizing the data excluded from the program, this approach would enable affected hospitals to continue to participate in the Hospital Readmissions Reduction Program for a given fiscal year if they otherwise continue to meet applicable measure minimum threshold requirements. We believe that this approach could help alleviate the reporting burden for a hospital that is adversely impacted by a natural disaster or other extraordinary circumstance beyond its control, while enabling the hospital to continue to participate in the Hospital Readmissions Reduction Program.
As we stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24497), based upon our prior experience with the Hospital IQR Program and the Hospital VBP Program, we anticipate the need to provide exceptions to only a small number of hospitals affected by a natural disaster or other extraordinary circumstance. During the review of a hospital's request for an extraordinary circumstance exception, we will maintain the general principle that providing high quality of care and ensuring patient safety is of paramount importance, especially in difficult circumstances. We do not intend to allow a hospital to use this proposed policy and the request process to seek exclusion from the Hospital Readmissions Reduction Program in its entirety for a given fiscal year(s) solely because of experiencing an extraordinary circumstance. Rather, we intend to provide relief for a hospital whose ability to accurately or timely submit all of its claims (from which readmission measures data are derived) has been negatively impacted as a direct result of experiencing a significant disaster or other extraordinary circumstance beyond the control of the hospital.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24497 through 24498) we proposed that the request process for an extraordinary circumstance exception begin with the submission of an extraordinary circumstance exception request form by a hospital within 90 calendar days of the natural disaster or other extraordinary circumstance. We believe that the 90-calendar day timeframe is an appropriate period of time for a hospital to determine whether to submit an extraordinary circumstance exception request. It is also the same length of time as the current time period allowed under the Hospital VBP Program. Under this policy, a hospital will be able to request a Hospital Readmissions Reduction Program extraordinary circumstance exception at the same time it may request similar exceptions under the Hospital IQR Program (§ 412.140(c)(2)), the Hospital VBP Program (78 FR 50704 through 50706), and the HAC Reduction Program (which we are finalizing in section IV.G.8.b. of the preamble to this final rule). The extraordinary circumstance exception
The following minimum set of information will be required to submit the request:
• Hospital CCN;
• Hospital name;
• Hospital Chief Executive Officer (CEO) and any other designated personnel contact information, including name, email address, telephone number, and mailing address (must include a physical address; a post office box address is not acceptable);
• Hospital's reason for requesting an exception, including:
++ CMS program name (the Hospital Readmissions Reduction Program);
++ The measure(s) and submission quarters affected by the extraordinary circumstance that the hospital is seeking an exception for should be accompanied with the specific reasons why the exception is being sought; and
++ How the extraordinary circumstance negatively impacted performance on the measure(s) for which an exception is being sought;
• Evidence of the impact of the extraordinary circumstances, including but not limited to, photographs, newspaper, and other media articles; and
• The request form must be signed by the hospital's CEO or designated non-CEO contact and submitted to CMS.
The same set of information is currently required under the Hospital IQR Program and the Hospital VBP Program on the request form from a hospital seeking an extraordinary circumstance exception with respect to these programs. The specific list of required information is subject to change from time to time at the discretion of CMS.
Following receipt of the request form, CMS will: (1) Provide a written acknowledgement of receipt of the request using the contact information provided in the request form to the CEO and any additional designated hospital personnel; and (2) provide a formal response to the CEO and any additional designated hospital personnel using the contact information provided in the request notifying them of our decision. Under this policy, we will review each request for an extraordinary circumstance exception on a case-by-case basis at our discretion. To the extent feasible, we also will review requests in conjunction with any similar requests made under other IPPS quality reporting and payment programs, such as the Hospital IQR Program and the Hospital VBP Program.
This policy would not preclude CMS from granting extraordinary circumstance exceptions to hospitals that do not request them if we determine at our discretion that a disaster or other extraordinary circumstance has affected an entire region or locale. If CMS makes such a determination to grant an extraordinary circumstance exception to hospitals in an affected region or locale, we will convey this decision through routine communication channels to hospitals, vendors, and QIOs, including, but not limited to, issuing memos, emails, and notices on the QualityNet Web site. This provision also aligns with the Hospital IQR Program's extraordinary circumstances extensions or exemptions policy.
We invited public comment on this proposal.
After consideration of the public comments we received, we are adopting the extraordinary circumstances exception policy as proposed.
Section 1886(o) of the Act, as added by section 3001(a)(1) of the Affordable Care Act, requires the Secretary to establish a hospital value-based purchasing program (the Hospital VBP Program) under which value-based incentive payments are made in a fiscal year to hospitals that meet performance standards established for a performance period for such fiscal year. Both the performance standards and the performance period for a fiscal year are to be established by the Secretary.
For more of the statutory background and descriptions of our current policies for the Hospital VBP Program, we refer readers to the Hospital Inpatient VBP Program final rule (76 FR 26490 through 26547); the FY 2012 IPPS/LTCH PPS final rule (76 FR 51653 through 51660); the CY 2012 OPPS/ASC final rule with comment period (76 FR 74527 through 74547); the FY 2013 IPPS/LTCH PPS final rule (77 FR 53567 through 53614); the FY 2014 IPPS/LTCH PPS final rule (78 FR 50676 through 50707); the CY 2014 OPPS/ASC final rule with comment period (78 FR 75120 through 75121); and the FY 2015 IPPS/LTCH PPS final rule with comment period (79 FR 50048 through 50087).
We have also codified certain requirements for the Hospital VBP Program at 42 CFR 412.160 through 412.167.
Section 1886(o)(7)(B) of the Act instructs the Secretary to reduce the base operating DRG payment amount for a hospital for each discharge in a fiscal year by an applicable percent. Under section 1886(o)(7)(A) of the Act, the sum total of these reductions in a fiscal year must equal the total amount available for value-based incentive payments for all eligible hospitals for the fiscal year, as estimated by the Secretary. We finalized details on how we would implement these provisions in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53571 through 53573) and refer readers to that rule for further details.
Under section 1886(o)(7)(C)(iv) of the Act, the applicable percent for the FY 2016 program year is 1.75 percent. Using the methodology we adopted in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53571 through 53573), we estimate that the total amount available for value-based incentive payments for FY 2016 is $1,499,107,502, based on the December 2014 update of the FY 2014 MedPAR file. We intend to update this estimate for the FY 2016 IPPS/LTCH PPS final rule, using the March 2015 update of the FY 2014 MedPAR file.
As finalized in the FY 2013 IPPS/LTCH PPS final rule, we will utilize a linear exchange function to translate this estimated amount available into a value-based incentive payment percentage for each hospital, based on its Total Performance Score (TPS) (77 FR 53573 through 53576). We will then calculate a value-based incentive payment adjustment factor that will be applied to the base operating DRG payment amount for each discharge occurring in FY 2016, on a per-claim basis. We published proxy value-based incentive payment adjustment factors in Table 16 of the FY 2016 IPPS/LTCH PPS proposed rule (which is available via the Internet on the CMS Web site at:
We stated that we intended to update this table as Table 16A in this FY 2016 IPPS/LTCH PPS final rule (which will be available via the Internet on the CMS Web site) to reflect changes based on the March 2015 update to the FY 2014 MedPAR file. We also stated that we intended to update the slope of the linear exchange function used to calculate those updated proxy value-based incentive payment adjustment factors. The updated proxy value-based incentive payment adjustment factors for FY 2016 will continue to be based on historic FY 2015 program year TPSs because hospitals will not have been given the opportunity to review and correct their actual TPSs for the FY 2016 program year until after this FY 2016 IPPS/LTCH PPS final rule is published. After hospitals have been given an opportunity to review and correct their actual TPSs for FY 2016, we will add Table 16B (which will be available via the Internet on the CMS Web site) to display the actual value-based incentive payment adjustment factors, exchange function slope, and estimated amount available for the FY 2016 program year. We expect that Table 16B will be posted on the CMS Web site in October 2015.
With regard to the FY 2016 proxy factors, while we understand commenters' concerns, we make these calculations using the most recently available performance data that hospitals have had the opportunity to review, which at the time of the final rule's publication does not include the scoring data for the next fiscal year. We do not believe it would be useful to publish proxy factors using domain weights finalized for the next fiscal year without the corresponding performance scoring data from the same program year because that action would mix policies between fiscal years, which is why we adopted the practice of calculating proxy factors from the previous year. We believe that these calculations represent the most accurate data available at the time of the final rule's publication and appropriately reflect policies for a single program year.
We also received a number of general comments on the Hospital VBP Program:
Several commenters also suggested that CMS ensure the measures are appropriately validated and risk-adjusted by limiting performance-based payment programs to measures that have been endorsed by NQF and approved for specific program use by the MAP, a public-private partnership convened by the NQF for the purpose of providing input to the Secretary on the selection of certain quality and efficiency measures.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of socioeconomic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
MORT-30-HF: NQF 0229 is available at
MORT-30-PN: NQF 0468 is available at:
Hip/knee complications NQF 1550 is available at
We further stress that the HAC Reduction Program and the Hospital VBP Program are separate programs with different purposes and policy goals. The HAC Reduction Program reduces payments to hospitals for excess HACs to increase patient safety in hospitals. On the other hand, the Hospital VBP Program is an incentive program that redistributes a portion of the Medicare payments made to hospitals based on their performance on various measures. Therefore, although the measures exist in more than one program, the measures are used and calculated for very distinct purposes. Accordingly, we believe that the critical importance of these measures to patient safety warrants their inclusion in both programs.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53592), we finalized our proposal to readopt measures from the prior program year for each successive program year, unless proposed and finalized otherwise (for example, if we propose and finalize the removal of a measure). We stated our belief that this policy would facilitate measure adoption for the Hospital VBP Program for future program years, as well as align the Hospital VBP Program with the Hospital IQR Program (77 FR 53592). In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24498), we did not propose to change our current policy of readopting measures from the prior program year for each successive program year.
We received several comments on measures we readopted into the FY 2018 program year:
Further, commenters suggested that PSI-12 relies on risk adjustment criteria that could lead to potential unintended consequences (for example, the measure could tag every LE thrombophlebitis, whether or not it is clinically significant, which could lead to useless data that will have little impact on quality). Finally, commenters noted that the PSI-12 component includes not otherwise specified (NOS) codes, including superficial thrombosis, which commenters did not believe is appropriate to measure because there are predictors of DVT that are outside of the control of the facility.
As we discussed more fully above, while we appreciate these comments and the importance of the role that sociodemographic status plays in the care of patients, we continue to have concerns about holding hospitals to different standards for the outcomes of their patients of low sociodemographic status because we do not want to mask potential disparities or minimize incentives to improve the outcomes of disadvantaged populations. We routinely monitor the impact of sociodemographic status on hospitals' results on our measures. To date, we have found that hospitals that care for large proportions of patients of low sociodemographic status are capable of performing well on our measures (we
There are three questions on the HCAHPS survey which directly address the issue of pain control during a patient's hospital stay. Recent studies have shown a positive relationship between patients being satisfied with their pain relief while in the hospital (that is, giving high scores on pain control questions) and decreased chronic opioid use.
There is evidence that good physician and nurse communication are the strongest predictors of better patient experience survey scores, including HCAHPS scores.
With respect to opioid abuse, recent studies have shown a positive relationship between patients being satisfied with their pain relief in the hospital and decreased chronic opioid use.
One consideration in determining whether a measure should be retained or removed from the program is based on an analysis of whether the measure is “topped-out.” We have adopted two criteria for determining the “topped-out” status of Hospital VBP measures:
• Statistically indistinguishable performance at the 75th and 90th percentiles; and
• Truncated coefficient of variation ≤ 0.10.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24498 through 24500), we proposed to remove the IMM-2: Influenza Immunization and AMI-7a: Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival measures, effective for the FY 2018 program year. We believe that removing these measures will continue to ensure that we make valid statistical comparisons through our finalized scoring methodology, while reducing the reporting burden on participating hospitals.
Based on our evaluation of the most recently available data, we believe that IMM-2 is “topped-out.” As we have discussed in prior rulemaking, measuring hospital performance on “topped-out” measures will have no meaningful effect on a hospital's TPS, given that performance on “topped-out” measures is generally so high and unvarying that meaningful distinctions and improvements in performance can no longer be made.
As discussed further in section VIII.A.3.b. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24557 through 24558) and this final rule, we believe that this measure should continue to be part of the Hospital IQR Program measure set because it is the only measure that addresses the Best Practices to Enable Healthy Living goal in the CMS Quality Strategy and priority of the same name in the National Quality Strategy.
We invited public comment on this proposal.
After consideration of the public comments we received, we are finalizing the proposal to remove IMM-2 from the FY 2018 program year and subsequent years. (2) Removal of AMI-7a: Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival Measure.
Our evaluation of the most recently available data shows that AMI-7a is not widely reported by hospitals, and that many hospitals have less than the minimum number of cases required for reporting because most acute myocardial infarction patients receive percutaneous coronary intervention instead of fibrinolytic therapy. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24499), we proposed to remove AMI-7a because collection of the measure data is burdensome to hospitals and measure data are infrequently reported. Therefore, we do not believe that its continued adoption under the Hospital VBP Program will advance our quality improvement goals. As discussed in section VIII.A.3.b. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24558 through 24559), we also proposed to remove the chart-abstracted version of
We invited public comment on this proposal.
After consideration of the public comments we received, we are finalizing the proposal to remove AMI-7a from the Hospital VBP Program for the FY 2018 program year and subsequent years.
We consider measures for adoption based on the statutory requirements, including specification under the Hospital IQR Program, posting dates on the
The 3-Item Care Transition Measure (CTM-3) is an NQF-endorsed measure. We adopted this measure in the Hospital IQR Program in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53513 through 53516). Initial measure data were posted on
The CTM-3 measure adds three questions to the HCAHPS Survey, as follows:
• During this hospital stay, staff took my preferences and those of my family or caregiver into account in deciding what my health care needs would be when I left.
□ Strongly disagree
□ Disagree
□ Agree
□ Strongly agree
• When I left the hospital, I had a good understanding of the things I was responsible for in managing my health.
□ Strongly disagree
□ Disagree
□ Agree
□ Strongly agree
• When I left the hospital, I clearly understood the purpose for taking each of my medications.
□ Strongly disagree
□ Disagree
□ Agree
□ Strongly agree
□ I was not given any medication when I left the hospital
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50065 through 50066), we stated that we were considering proposing to add the CTM-3 measure from the HCAHPS Survey to the Patient and Caregiver Centered Experience of Care/Care Coordination (PCCEC/CC) domain of the FY 2018 program year, and we sought public comments on this topic. We specifically sought public comments on how the new CTM-3 dimension should be included in the scoring methodology that we have adopted for the PCCEC/CC domain.
Based on other public comments last year, we agreed to release additional information about the validity, reliability, and statistical properties of the CTM-3 measure when we proposed the measure (79 FR 50066). We made this information publicly available in 2014 through the NQF re-endorsement process of the HCAHPS Survey (NQF #0166), available at:
We note that the MAP supported the inclusion of the CTM-3 measure in the Hospital VBP Program in its MAP Pre-Rulemaking Report: 2013 Recommendations on Measures Under Consideration by HHS, available at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24499), we proposed this measure for the Hospital VBP Program based on the MAP recommendation, our adoption of the measure in the Hospital IQR Program and our posting of measure data on
We invited public comment on this proposal.
Some commenters suggested that CMS should consider using a threshold (such as percentiles) rather than a consistency score to ensure that this new measure does not adversely affect the HCAHPS domain. Several commenters recommended CMS decrease the HCAHPS consistency score to 10 percent and weight the HCAHPS measure total score with the CTM-3 measure at 90 percent. Another commenter recommended revising the methodology of the consistency score to more accurately measure consistent performance and retaining the 20 percent score. Instead, this commenter suggested using the HCAHPS floor values as the minimum range for consistency, and that CMS could use the 25th percentile value. The commenter stated that, in this way, consistency points would only be rewarding hospitals that maintain a reasonable level of performance in each HCAHPS measure.
With respect to response rates and burden of the HCAHPS survey, available evidence suggests the addition of 3 items has no measurable effect on response rates. National HCAHPS response rates are unchanged to the nearest percentage point over the last four years. A 2008 meta-analysis found response rates are only weakly associated with non-response bias in probability sample surveys similar to HCAHPS, surveys that also adhere to high process standards of survey methodology.
As indicated by the formula, consistency points only reward performance that is consistently good across the HCAHPS dimensions. Consistently poor performance does not earn consistency points. Consistency points provide additional incentives beyond achievement and improvement points to improve a hospital's lowest-performing dimension. Adding the CTM measure to the HCAHPS performance score should not adversely affect consistency point scoring. In particular, the score for this measure for the purposes of consistency points is compared to all other hospitals in the baseline period. A hospital will be awarded the maximum 20 consistency points when its performance on each HCAHPS dimension during the performance period equals or exceeds each dimension's achievement threshold. Otherwise, if any dimension rate is less than the achievement threshold, consistency points are awarded based on the lowest dimension's location relative to the worst performing hospital on that dimension. Evaluations have found that consistency points have good psychometric properties and positively correlate with overall HCAHPS performance.
After consideration of the public comments we received, we are finalizing the proposal to add CTM-3 to the FY 2018 program year and subsequent years.
We have previously adopted three measures for the Clinical Care—Process subdomain for the FY 2017 program year (for example, 79 FR 50062 (Table on Previously Adopted and New Measures for the FY 2017 program year)). However, as proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24499), we are finalizing our proposal to remove the AMI-7a and IMM-2 measures from the Hospital VBP Program, and we did not propose to adopt any additional measures for the Clinical Care—Process subdomain. Because only one measure, PC-01 Elective Delivery, which measures the incidence of elective births prior to 39 weeks gestation, would remain in the Clinical Care—Process subdomain for the FY 2018 program year, we proposed to move PC-01 to the Safety domain and to remove the Clinical Care—Process subdomain beginning with the FY 2018 program year.
As we have stated over the past several years (for example, 79 FR 50084), we desire the Hospital VBP Program to be as inclusive as possible while maintaining and ensuring the reliability of the domains. We believe that the PC-01 Elective Delivery measure continues to be appropriate for the Hospital VBP Program because, in 2012, nearly one million Medicare beneficiaries were women age 45 and under.
We believe that the PC-01 Elective Delivery measure, currently in the Clinical Care—Process subdomain, can appropriately be recategorized as a Safety domain measure. PC-01 addresses a process designed to reduce risk to both the neonate and the mother, thereby making care safer. Guidelines from the American College of Obstetricians and Gynecologists and the American Academy of Pediatrics state elective deliveries should not be performed at <39 weeks gestation unless medically indicated.
Finally, we proposed that if we finalize our proposal to remove the Clinical Care—Process subdomain, we would rename the Clinical Care—Outcomes subdomain as simply the Clinical Care domain. We also proposed to reweight the domains to reflect our proposals, which we detail in section
We invited public comments on these proposals.
A few commenters noted that the four current Hospital VBP Program domains could accommodate process of care measures in the future, if needed.
After consideration of the public comments we received, we are finalizing the proposal to move PC-01 to the Safety domain, remove the Clinical Care—Process subdomain, and rename the Clinical Care—Outcomes subdomain as the Clinical Care domain for the FY 2018 program year and subsequent years.
The NHSN measures are calculated by CDC, and currently include the CAUTI, CLABSI, MRSA bacteremia, CDI, and Colon and Abdominal Hysterectomy SSI measures in the FY 2017 program year and subsequent program years. They measure the occurrence of these HAIs in hospitals participating in the Hospital VBP Program. In order to calculate the NHSN measures for use in both the Hospital IQR Program and the Hospital VBP Program, CDC must go through several steps. First, CDC determines each NHSN measure's number of predicted infections.
As part of routine measure maintenance, CDC is updating the “standard population data” to ensure the NHSN measures' number of predicted infections reflect the current state of HAIs in the United States.
Because the Hospital VBP Program calculates improvement points using comparisons between data collected from hospitals in a baseline period and data collected in a performance period, the Hospital VBP Program must treat CDC's standard population data update differently than other quality programs. We have determined that we cannot equally compare CDC's “new standard population data” to the “current standard population data” in order to calculate improvement points. If we do not address the CDC's measure update, we will be unable to compare the baseline and performance periods for NHSN measures in the FY 2017 and FY 2018 program years. To address the problem, we intend to use the “current standard population data” to calculate performance standards and calculate
For a discussion addressing the “new standard population data” in the Hospital IQR Program, we refer readers to sections VIII.A.4.b. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24562) and this final rule.
Several commenters recommended that if assessment identifies potential problems, then CDC should use CY 2016 as the “standard population data” because it will be more stable. One commenter requested that CDC publish the differences from year-to-year collection.
In summary, for the FY 2018 program, we are adopting the following measure set:
Due to the time necessary to adopt measures, we often adopt policies for the Hospital VBP Program well in advance of the program year for which they will be applicable (for example, 76 FR 26490 through 26547; 76 FR 51653 through 51660; 76 FR 74527 through 74547; 77 FR 53567 through 53614; 78 FR 50676 through 50707; 78 FR 75120 through 75121; 79 FR 50048 through 50087). In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24501 through 24503), we signaled our intent to include additional data in certain NHSN measures beginning with the FY 2019 program year, proposed to adopt a new measure beginning with the FY 2021 program year, and summarized all previously adopted and newly proposed measures.
The Hospital VBP Program uses adult, pediatric, and neonatal intensive care unit (ICU) data to calculate performance standards and measure scores for the CAUTI and CLABSI measures for the FY 2017 and FY 2018 program years (79 FY 50061). In the FY 2014 IPPS/LTCH PPS proposed rule, we proposed under the Hospital IQR Program to expand the collection of CAUTI and CLABSI measures to include several selected ward (non-ICU) locations beginning with events occurring on or after January 1, 2014 (78 FR 27684). In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50787), after consideration of the public comments received, we deferred the implementation date of the CAUTI and CLABSI measure expansion to selected ward (non-ICU) settings for the Hospital IQR Program from January 1, 2014 to January 1, 2015 (78 FR 50787). Selected ward (non-ICU) locations are defined as adult or pediatric medical, surgical, and medical/surgical wards (79 FY 50061; 78 FR 50787).
In the FY 2015 IPPS/LTCH PPS final rule, we signaled our intent to consider using data from selected ward (non-ICU) locations for the Hospital VBP Program, beginning in the FY 2019 program year for purposes of calculating performance standards for the CAUTI and CLABSI measures (79 FR 50061). In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24501 through 24502), we stated our intent to propose to include the selected ward (non-ICU) locations in the CAUTI and CLABSI measures beginning with the FY 2019 program year in future rulemaking. We intend to propose to adopt a baseline period of January 1, 2015 through December 31, 2015, and a performance period of January 1, 2017 through December 31, 2017, for the CAUTI and CLABSI measures. This expansion of the CAUTI and CLABSI measures would be consistent with the NQF re-endorsement update to these measures, which allows application of the measures beyond ICUs (78 FR 50787). We believe this expansion of the measures will allow hospitals that do not have ICU locations to use the tools and resources of the NHSN for quality improvement and public reporting efforts (78 FR 50787).
We invited public comment on this plan to accommodate these measures' expansions in the Hospital VBP Program future rulemaking.
We thank the commenters for their views on our intent to propose to include the selected ward (non-ICU) locations in the CAUTI and CLABSI measures beginning with the FY 2019 program year in future rulemaking.
Hospital 30-Day, All-Cause, RSMR following COPD Hospitalization (NQF #1893) (MORT-30-COPD) is a risk-adjusted, NQF-endorsed mortality measure monitoring mortality rates following COPD hospitalizations. We adopted this measure in the Hospital IQR Program in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50792). Initial measure data were posted on
Chronic lower respiratory disease (including COPD) is the third leading cause of death in the United States.
The MAP supported the inclusion of the MORT-30-COPD measure in the Hospital VBP Program as detailed in the “Spreadsheet of MAP 2015 Final Recommendations.”
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24502), we proposed this measure for the Hospital VBP Program based on the MAP recommendation, our adoption of the measure in the Hospital IQR Program and our posting of measure data on
We invited public comment on this proposal.
Commenters expressed concern with the measure's reliability. The commenters noted that testing results showed only moderate reliability. These commenters recommended that CMS develop a plan to improve or replace the claims-based mortality measures used in the Hospital VBP Program.
One commenter suggested that MORT-30-COPD is not a good measure of a hospital's evidence-based quality practices for COPD. Another commenter suggested that hospitals will be penalized twice in two different programs. Finally, one commenter noted that the current form of the measure does not address end of life or palliative care, which greatly affects hospitals that specialize in these areas of service.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of socioeconomic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
While we acknowledge the commenters' concerns regarding the measure's reliability, we note that we use the same statistical approach to reliability for the COPD mortality measure that we have established for our other hospital risk-adjusted outcome measures. Reliability is related to sample-size, and we adopted a risk-adjustment modeling methodology that takes into account sample size. Moreover, as stated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53591) and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50693), we believe that the mortality measures capture important quality data for purposes of the Hospital VBP Program. We believe that the claims-based mortality measures are sufficiently reliable for inclusion in the Hospital VBP Program, and they are NQF-endorsed.
We disagree with the commenter that the COPD mortality measure is not a good measure of evidenced-based quality practices, as high quality care is necessary to achieve low mortality rates. In regard to the commenter's concern that the measure does not address end-of life or palliative care, we note that patients enrolled in hospice any time in the 12 months prior to the index admission, including the first day of the index admission, are excluded from the measure because mortality is not necessarily an adverse outcome or indicator of poor quality care in this population. However, the measure does not exclude patients who transition to hospice or palliative care because such transitions may be the result of quality failures that have led to poor clinical outcomes.
After consideration of the public comments we received, we are finalizing the proposal to add MORT-30-COPD to the FY 2021 program year and subsequent years.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50063), we finalized our proposal to adopt the Hospital-Level Risk-Standardized Complication Rate Following Elective Primary THA/TKA measures for the FY 2019 program year and subsequent years. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50063
In this final rule, we are finalizing our proposal to adopt the MORT-30-COPD measure for the FY 2021 program year and subsequent years.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50066 through 50070), we responded to comments on measures that could potentially be used to expand the Efficiency and Cost Reduction domain in the future. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24503), we again sought public comments on this issue. We indicated that we were interested in expanding the Efficiency and Cost Reduction domain to include a more robust measure set, which may include measures that supplement the MSPB measure with more condition and/or treatment specific episode measures. In the FY 2016 IPPS/LTCH PPS proposed rule, we also encouraged comment on Efficiency and Cost Reduction measures already included in the Hospital IQR Program as well as measures we proposed in section VIII.A.7. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24566 through 24581) for inclusion in the Hospital IQR Program beginning with the FY 2018 payment determination.
We also received several comments related to the potential future inclusion of the clinical episode-based payment measures in the Hospital VBP Program. We summarize and respond to those comments below.
We also received several comments providing thoughts on other new measures for us to add in future program years:
Section 1886(o)(4) of the Act requires the Secretary to establish a performance period for the Hospital VBP Program that begins and ends prior to the beginning of such fiscal year. We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50048 through 50087) for the baseline and performance periods for the Clinical Care—Process, PCCEC/CC, Clinical Care—Outcomes, and Efficiency and Cost Reduction domains that we have adopted for the FY 2017 program year.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50692 through 50694), we adopted baseline and performance periods for the 30-day mortality measures for FY 2017, FY 2018, and FY 2019, and for the PSI-90 measure for FY 2017 and FY 2018 (78 FR 50692 through 50694, 50698 through 50699).
Since the FY 2015 program year, we have adopted a 12-month baseline period and 12-month performance period for measures in the PCCEC/CC domain (77 FR 53598; 78 FR 50692; 79 FR 50072). We continue to believe that a 12-month performance period for the HCAHPS Survey and proposed CTM-3 measure provides us sufficient data on which to score hospital performance, which is an important goal for both us and stakeholders. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24503), for the FY 2018 program year, we proposed to adopt a 12-month performance period of January 1, 2016 through December 31, 2016 for the PCCEC/CC domain. We also proposed to adopt a corresponding 12-month baseline period of January 1, 2014 through December 31, 2014 for purposes of calculating improvement points and calculating performance standards.
We invited public comment on these proposals.
We did not receive any public comments on these proposals, and we
Since the FY 2016 program year, we have adopted a 12-month baseline period and 12-month performance period for NHSN measures (78 FR 75121; 79 FR 50071). In addition, we adopted the PC-01 measure for the FY 2017 program year with a 12-month baseline period and 12-month performance period (79 FR 50072). We continue to believe that a 12-month performance period provides us with sufficient data on which to score hospital performance on the NHSN measures, as well as the PC-01 measure, in the Safety domain. We also note that 12-month baseline and performance periods are consistent with the reporting periods used for these measures under the Hospital IQR Program. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24503), for the FY 2018 program year, we proposed to adopt a performance period of January 1, 2016 through December 31, 2016 for the NHSN measures and the PC-01 measure in the Safety domain. We also proposed to adopt a corresponding baseline period of January 1, 2014 through December 31, 2014 for purposes of calculating improvement points and calculating performance standards.
We invited public comment on these proposals.
After consideration of the public comment we received, we are finalizing the baseline and performance periods as proposed.
Since the FY 2016 program year, we have adopted a 12-month baseline period and 12-month performance period for the MSPB-1 measure in the Efficiency and Cost Reduction domain (79 FR 50072; 78 FR 50692). These baseline and performance periods enable us to collect sufficient measure data, while allowing time to calculate and incorporate MSPB-1 measure data into the Hospital VBP Program scores in a timely manner. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24503), for the FY 2018 program year, we proposed to adopt a 12-month performance period of January 1, 2016 through December 31, 2016 for the MSPB-1 measure in the Efficiency and Cost Reduction domain. We also proposed to adopt a corresponding baseline period of January 1, 2014 through December 31, 2014. We note that these proposed baseline and performance periods align with the baseline and performance periods for the PCCEC/CC domain and all measures in the Safety domain with the exception of PSI-90.
We invited public comment on these proposals.
We did not receive any public comments on these proposals, and we are finalizing the baseline and performance period as proposed.
The table below summarizes the baseline and performance periods for the FY 2018 program year (with previously adopted baseline and performance periods for the mortality and PSI composite (PSI-90) measures noted). We note that we are finalizing our proposal, discussed above, to remove the Clinical Care—Process subdomain from the Hospital VBP Program beginning with the FY 2018 program year. We note further that these baseline and performance periods would continue to align with the PCCEC/CC domain and the Efficiency and Cost Reduction domain, as well as the periods proposed for certain measures in the Safety domain.
The table below summarizes the previously adopted baseline and performance periods for the Clinical Care domain and PSI-90 measures for the FY 2019 program year.
The table below summarizes the previously adopted and proposed baseline and performance periods for the FY 2020 program year that we proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24504). In the FY 2020 program year, we proposed to adopt a performance period of July 1, 2016 to June 30, 2018 for the PSI-90 measure. We proposed a corresponding baseline period of July 1, 2012 to June 30, 2014. This will allow us to collect 24-months of data from hospitals on the PSI-90 measure.
We invited comment on these proposals.
We did not receive any public comments on these proposals, and we are finalizing the baseline and performance period as proposed.
The table below summarizes the proposed baseline and performance periods for the FY 2021 program year that we proposed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24504 through 24505). In the FY 2014 IPPS/LTCH PPS and FY 2015 IPPS/LTCH PPS final rules (78 FR 50692 through 50694; 79 FR 50072 through 50073), we adopted baseline and performance periods for the three 30-day mortality measures for the FY 2017, FY 2018, FY 2019, and FY 2020 program years. We adopted baseline and performance periods for the THA/TKA measure for the FY 2019 and FY 2020 program years (79 FR 50073). We adopted this policy in light of the length of the performance period that is needed to collect enough measure data for reliable performance scoring. We continue to believe that we should adopt 36-month baseline and performance periods for the mortality measures when possible to accommodate those durations.
We believe that a similar rationale applies to the new MORT-30-COPD measure that we proposed to adopt for the Clinical Care domain for the FY 2021 program year. Furthermore, we are attempting to align measurement periods under the Hospital VBP Program with measurement periods under the Hospital IQR Program for the 30-day mortality measures. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24504 through 24505), for the FY 2021 program year, we proposed to adopt a 36-month performance period of July 1, 2016 through June 30, 2019 for all mortality measures (the three previously adopted mortality measures, as well as the proposed MORT-30-COPD measure) in the Clinical Care domain. We also proposed to adopt a corresponding baseline period of July 1, 2011 through June 30, 2014. We note that the proposed performance periods will align with the reporting periods for the mortality measures in the Hospital IQR Program for the first time.
For the THA/TKA measure in the FY 2021 program year, we proposed to adopt a 36-month performance period of April 1, 2016 through March 31, 2019. We also proposed to adopt a corresponding baseline period of April 1, 2011 through March 31, 2014. This baseline and performance period will align with the THA/TKA measure reporting period for the Hospital IQR Program and will make reporting more seamless for hospitals.
We invited public comment on these proposals.
We did not receive any public comments on these proposals, and we are finalizing the baseline and performance period as proposed.
a. Background
Section 1886(o)(3)(A) of the Act requires the Secretary to establish performance standards for the measures selected under the Hospital VBP Program for a performance period for the applicable fiscal year. The performance standards must include levels of achievement and improvement, as required by section 1886(o)(3)(B) of the Act, and must be established not later than 60 days before the beginning of the performance period for the fiscal year involved, as required by section 1886(o)(3)(C) of the Act. We refer readers to the Hospital Inpatient VBP Program final rule (76 FR 26511 through 26513) for further discussion of achievement and improvement standards under the Hospital VBP Program.
In addition, when establishing the performance standards, section 1886(o)(3)(D) of the Act requires the Secretary to consider appropriate factors, such as: (1) Practical experience with the measures, including whether a significant proportion of hospitals failed to meet the performance standard during previous performance periods; (2) historical performance standards; (3) improvement rates; and (4) the opportunity for continued improvement.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53599 through 53604), we adopted performance standards for the FY 2015 program year and certain FY 2016 program year measures. We also finalized our policy to update performance standards for future program years via notice on the CMS Web site or another publicly available Web site. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50694 through 50698), we revised our regulatory definitions of “achievement threshold” and “benchmark” at 42 CFR 412.160 and adopted performance standards for additional FY 2016 program year measures. We also adopted an interpretation of “achievement threshold” and “benchmark” under 42 CFR 412.160 to exclude the numerical values that result when the performance standards are calculated. We have further adopted a policy under which we may update a measure's performance standards for a fiscal year once if we identify data issues, calculation errors, or other problems that would significantly affect the displayed performance standards (79 FR 50079). We refer readers to the FY 2014 IPPS/LTCH PPS final rule for the complete set of FY 2016 performance standards (78 FR 50697 through 50698).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50077 through 50079), we adopted a policy under which we may adopt technical updates to performance standards under the Hospital VBP Program. We adopted this policy by amending the definition of “performance standards” under 42 CFR 412.160 of our regulations to enable us to update performance standards' numerical values to incorporate nonsubstantive technical updates made to Hospital VBP Program measures between the time that they are adopted for a particular program year and the time that we actually calculate hospital performance on those measures after the performance period for the program year has concluded. We stated our intent to continue to use rulemaking to adopt substantive updates to measures adopted for the Hospital VBP Program. We stated that examples of changes that we might consider to be substantive include those in which the changes are so significant that the measure is no longer the same measure or when a standard of performance assessed by a measure becomes more stringent. However, we stated our intent to determine what constitutes substantive versus nonsubstantive changes on a case-by-case basis, although we affirmed our intent to be as transparent as possible with stakeholders about any such updates we might adopt.
On January 29, 2015, we announced a technical update to the performance standards that we have adopted for the PSI-90 measure for the FY 2017 program year. The announcement was published on QualityNet and can be viewed at:
For more detailed information on the updates implemented in Version 4.5a, we refer readers to the Log of Coding Updates and revisions, posted on QualityNet, available at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24506 through 24507), in accordance with our finalized methodology for calculating performance standards (discussed more fully in the Hospital Inpatient VBP Program final rule (76 FR 26511 through 26513)), we proposed to adopt the following additional performance standards for the FY 2018 program year. We noted that the numerical values for the performance standards displayed below represent estimates based on the most recently available data, and we stated that we intended to update the numerical values in the FY 2016 IPPS/LTCH PPS final rule. We note further that the MSPB-1 measure's performance standards are based on performance period data; therefore, we are unable to provide numerical equivalents for the standards at this time.
We note further that the performance standards for the NHSN measures, the PSI-90 measure, and the MSPB-1 measure are calculated with lower values representing better performance. This distinction is made in contrast to other measures for which higher values indicate better performance. As discussed further in the FY 2014 IPPS/LTCH PPS final rule, the performance standards for the Colon and Abdominal Hysterectomy SSI are computed separately for each procedure stratum, and we will first award achievement and improvement points to each stratum separately, then compute a weighted average of the points awarded to each stratum by predicted infections (78 FR 50684).
We note that the achievement threshold and benchmarks for the PSI-90, MORT-30-AMI, MORT-30-HF, and MORT-30-PN measures have not been updated from the FY 2016 IPPS/LTCH PPS proposed rule because those performance standards were based on the most recent data available. All other measures have been updated to reflect new data in the chart below.
Based on public comments in the FY 2015 IPPS/LTCH PPS final rule, we proposed to adopt the “normalization” approach to scoring the PCCEC/CC domain, which will introduce only minor changes to the original scoring formula, as follows. For purposes of the HCAHPS Base Score, the new CTM-3 dimensions would be calculated in the same manner as the eight existing HCAHPS dimensions. For each of the nine dimensions, Achievement Points (0-10 points) and Improvement Points (0-9 points) would be calculated, the larger of which would be summed across the nine dimensions to create a prenormalized HCAHPS Base Score (0-90 points, as compared to 0-80 points when only eight dimensions were included). The prenormalized HCAHPS Base Score would then be multiplied by 8/9 (0.88888) and rounded according to standard rules (values of 0.5 and higher are rounded up, values below 0.5 are rounded down) to create the normalized HCAHPS Base Score. Each of the nine dimensions would be of equal weight, so that, as before, the normalized HCAHPS Base Score would range from 0 to 80 points. HCAHPS Consistency Points would then be calculated in the same manner as before and would continue to range from 0 to 20 points. The Consistency Points would now consider scores across all nine of the
We invited public comments on these proposed performance standards.
After consideration of the public comments we received, we are finalizing the performance standards for the FY 2018 program year as proposed.
As discussed above, we have adopted certain Safety and Clinical Care domain measures for future program years in order to ensure that we can adopt baseline and performance periods of sufficient length for performance scoring purposes. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50062 through 50065), we adopted the PSI-90 measure in the Safety domain and the THA/TKA measure in the Clinical Care domain for the FY 2019 program year. As with the PSI-90, MSPB-1, and NHSN measures described above, the THA/TKA measure is calculated with lower values representing better performance. Therefore, in the FY 2015 IPPS/LTCH PPS final rule we adopted the following performance standards for the FY 2019 program year (79 FR 50077):
As discussed above, we have adopted certain Safety and Clinical Care domain measures for future program years in order to ensure that we can adopt baseline and performance periods of sufficient length for performance scoring purposes. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50063 through 50065), we adopted the PSI-90 measure in the Safety domain and the THA/TKA measure in the Clinical Care domain for the FY 2019 program year and subsequent years. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50077), we also adopted the following performance standards for the MORT-30-AMI, MORT-30-HF, MORT-30-PN, and THA/TKA measures for the FY 2020 program year. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24507 through 24508), we proposed performance standards for the PSI-90 measure for the FY 2020 program year as set forth below:
We did not receive any public comments on this proposal, and we are finalizing the performance standards as proposed.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24508), we proposed the following performance standards for the FY 2021 program year for the Clinical Care domain measures (THA/TKA, MORT-30-HF, MORT-30-AMI, MORT-30-PN, and the proposed MORT-30-COPD):
We did not receive any public comments on this proposal, and we are finalizing the performance standards as proposed.
In the FY 2015 IPPS/LTCH PPS final rule, we adopted the following domains and domain weights for the FY 2017 program year for hospitals that receive a score in all newly aligned domains:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24498 through 24499), for the FY 2018 program year, we proposed to remove two “topped-out” measures from the Clinical Care—Process subdomain. In addition, we proposed to move one measure (PC-01) from the Clinical Care—Process subdomain to the Safety domain and to remove the Clinical Care—Process subdomain (80 FR 24500).
We stated that if these proposals are adopted, the Safety domain will include seven measures for the FY 2018 program year, including PC-01, which would be new to that domain. Because we proposed to move one measure to the Safety domain, and because we continue to believe that hospitals should be provided strong incentives to perform well on measures of patient safety, we proposed to increase the Safety domain's weight by 5 percentage points. We proposed to adopt the following FY 2018 program year domain weighting for hospitals receiving a score on all newly-aligned domains:
We invited public comments on the proposed domain weights.
With regard to the concern that the domain is comprised of only one measure, we acknowledge the potential for building a more robust efficiency measure set, as we stated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53585 through 53586) and FY 2014 IPPS/LTCH PPS final rule (79 FR 50048 through 50087). In the FY 2015 IPPS/LTCH PPS rulemaking (79 FR 28122 through 28224; 79 FR 50066 through 50070), we sought comment on measures that could potentially be used to expand the Efficiency and Cost Reduction domain in the future. We also again solicited and received public comments on how we might pursue that goal in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24503). In the interim, we continue to believe that increased emphasis on efficiency is an important goal for the Hospital VBP Program, and that the efficiency domain weight should remain at 25 percent accordingly. However, we thank the commenters for their thoughts and intend to continue examining domain weighting and will consider revisiting this issue in the future.
We further stress that the HAC Reduction Program and the Hospital VBP Program are separate programs with different purposes and policy goals. The HAC Reduction Program reduces payments to hospitals for excess hospital acquired conditions to increase patient safety in hospitals. On the other hand, the Hospital VBP Program is an incentive program that redistributes a portion of the Medicare payments made to hospitals based on their performance on various measures. Therefore, although the measures exist in more than one program, the measures are used and calculated for very distinct purposes. Accordingly, we believe that the critical importance of these measures to patient safety warrants their inclusion in both programs. We will, in the future, continue to monitor the HAC Reduction Program and Hospital VBP Program and analyze the impact of our measures selection, including any unintended consequences with having a measure in more than one program, and will revise the measure set in one or both programs if needed.
After consideration of the public comments we received, we are finalizing the domain weights as proposed.
In prior program years, we finalized a policy that hospitals must have received domain scores on all finalized domains in order to receive a TPS. However, because the Hospital VBP Program has evolved from its initial two domains to an expanded measure set with additional domains, we considered whether it was appropriate to continue this policy.
Therefore, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53606 through 53607), we finalized our proposal that, for the FY 2015 program year and subsequent years, hospitals with sufficient data to receive at least two out of the four domain scores that existed for the FY 2015 program year (that is, sufficient cases and measures to receive a domain score on at least two domains) will receive a TPS. We also finalized our proposal that, for hospitals with at least two domain scores, TPSs would be reweighted proportionately to the scored domains to ensure that the TPS is still scored out of a possible 100 points and that the relative weights for the scored domains remain equivalent to the weighting which occurs when there are scores in all four domains. We believe that this approach allows us to include relatively more hospitals in the Hospital VBP Program while continuing to focus on reliably scoring hospitals on their quality measure performance.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50701 through 50702), we continued this approach for the FY 2016 program year and subsequent program years for purposes of eligibility for the program.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50084 through 50085), we adopted a policy that, for the FY 2017 program year and subsequent years, hospitals must receive domain scores on at least three quality domains in order to receive a TPS. We stated our belief that, by adopting this policy, we will continue to allow as many hospitals as possible to participate in the program while ensuring that reliable TPSs result. We also finalized a policy that hospitals with sufficient data on at least three of four domains for FY 2017 will have their TPSs proportionately reweighted. Finally, in the FY 2015 IPPS/LTCH PPS final rule, we adopted case minimums for the FY 2016 program year and subsequent years (79 FR 50085 through 50086).
Under these policies, in order to receive a TPS for the FY 2018 program year:
• Hospitals must meet the requirements to receive an HCAHPS Survey measure score in order to receive a PCCEC/CC domain score. Hospitals must report a minimum number of 100 HCAHPS surveys for a hospital to receive a PCCEC/CC domain score (76 FR 26530).
• Hospitals must meet the requirements to receive a MSPB-1 measure score in order to receive an Efficiency and Cost Reduction domain score. Hospitals must report a minimum number of 25 cases for the MSPB-1 measure (77 FR 53609 through 53610).
• Hospitals must receive a minimum of two measure scores within the Clinical Care domain. Hospitals must report a minimum number of 25 cases for each of the mortality measures (77 FR 53609 through 53610).
• Hospitals must receive a minimum of three measure scores within the Safety domain.
++ Hospitals must report a minimum of three cases for any underlying indicator for the PSI-90 measure based on AHRQ's measure methodology (77 FR 53608 through 53609).
++ Hospitals must report a minimum of one predicted infection for NHSN-based surveillance measures based on CDC's minimum case criteria (77 FR 53608 through 53609).
++ Hospitals must report a minimum of 10 cases for the PC-01 measure (76 FR 26530).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24509), we did not propose any changes to the minimum numbers of cases and measures that we have adopted above. However, because we proposed to remove the Clinical Care—Process subdomain from the Hospital VBP Program effective with the FY 2018 program year, we considered whether we should revisit our finalized requirement that hospitals must receive scores on at least three domains in order to receive a TPS. However, we continue to believe that this requirement appropriately balances our desire to enable as many hospitals as possible to participate in the Hospital VBP Program and the need for TPSs to be sufficiently reliable to provide meaningful distinctions between hospitals' performance on quality measures. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24509), we did not propose to change this requirement at that time. We welcomed public comments on whether we should consider adopting a different policy on this topic. We indicated that we will continue to proportionately reweight hospitals' TPSs when they have sufficient data on only three domains.
We did not receive any public comments on this issue.
We refer readers to section V.I.1.a. of the FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through 50708) for a general overview of the HAC Reduction Program.
Section 3008 of the Affordable Care Act added section 1886(p) to the Act to provide an incentive for certain hospitals to reduce the incidence of HACs. Section 1886(p) of the Act requires the Secretary to make an adjustment to payments to “applicable hospitals” effective beginning on October 1, 2014, and for subsequent program years. Section 1886(p)(1) of the Act sets forth the requirements by which payments to “applicable hospitals” will be adjusted to account for HACs with respect to discharges occurring during FY 2015 or later. For hospitals with HAC scores in the top quartile relative to other applicable hospitals for a given fiscal year, the amount of Medicare payment is reduced to 99 percent of the amount of payment that would otherwise apply to discharges under section 1886(d) or 1814(b)(3) of the Act, as applicable. Section 1886(p)(2)(A) of the Act defines “applicable hospitals” as subsection (d) hospitals that meet certain criteria. Section 1886(p)(2)(B)(i) of the Act defines these criteria and specifies that the payment adjustment would apply to an applicable hospital that ranks in the top quartile (25 percent) of all subsection (d) hospitals, relative to the national average, of conditions acquired during the applicable period, as determined by the Secretary. Section 1886(p)(2)(B)(ii) of the Act requires the Secretary to establish and apply a risk-adjustment methodology in calculating HAC scores for each hospital.
Sections 1886(p)(3) and (p)(4) of the Act define “hospital-acquired conditions” and “applicable period,” respectively. The term “hospital-acquired condition” means “a condition identified in subsection 1886(d)(4)(D)(iv) of the Act and any other condition determined appropriate by the Secretary that an individual acquires during a stay in an applicable hospital, as determined by the Secretary.” The term “applicable period” means, with respect to a fiscal year, a period specified by the Secretary.
Section 1886(p)(5) of the Act requires that, prior to FY 2015 and each subsequent fiscal year, the Secretary provide confidential reports to each applicable hospital with respect to the HAC Reduction Program scores for the applicable period, to give the hospitals an opportunity to review and correct the data. Section 1886(p)(6)(A) of the Act sets forth the reporting requirements by which the Secretary would make information available to the public regarding HACs for each applicable hospital. Section 1886(p)(6)(B) of the Act requires the Secretary to ensure that an applicable hospital has the opportunity to review, submit corrections, and for the information to
Section 1886(p)(7) of the Act limits administrative and judicial review of certain determinations made pursuant to section 1886(p) of the Act. These determinations include: what qualifies as an applicable hospital; the specifications of a HAC; the Secretary's determination of the “applicable period”; the provision of confidential reports submitted to the applicable hospital; and the information publicly reported on the
For further description of our policies for the HAC Reduction Program, we refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through 50729) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50087 through 50104). These policies describe the general framework for implementation of the HAC Reduction Program, including: (a) The relevant definitions applicable to the program; (b) the payment adjustment under the program; (c) the measure selection and conditions for the program, including a risk-adjustment and scoring methodology; (d) performance scoring; (e) the process for making hospital-specific performance information available to the public, including the opportunity for a hospital to review the information and submit corrections; and (f) limitation of administrative and judicial review.
We have also codified certain requirements of the HAC Reduction Program at 42 CFR 412.170 through 412.172.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24509 through 24514), we did not propose any changes to the above described policies for the implementation of the HAC Reduction Program for FY 2016. However, we remind readers that, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50101 through 50102), we finalized the following measures for use in the FY 2016 program: AHRQ PSI-90 Composite and CDC Central Line-Associated Bloodstream Infection (CLABSI), Catheter-Associated Urinary Tract Infection (CAUTI), and Colon and Abdominal Hysterectomy Surgical Site Infection (SSI). In the FY 2016 IPPS/LTCH PPS proposed rule, we did not propose to add or remove any measures for FY 2016.
We provided an update on NQF proceedings for three of the measures previously finalized for the FY 2016 program: PSI-90 Composite; CLABSI; and CAUTI. For FY 2016, we are retaining the AHRQ PSI-90 Composite measure (in Domain 1) that we adopted in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50717). As we noted in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50090), the AHRQ PSI-90 Composite measure is undergoing NQF maintenance review. At the time of development of this final rule, the PSI-90 Composite measure consists of eight component indicators: PSI-3 Pressure ulcer rate; PSI-6 Iatrogenic pneumothorax rate; PSI-7 Central venous catheter related blood stream infections rate; PSI-8 Postoperative hip fracture rate; PSI-12 Perioperative pulmonary embolism or Deep vein thrombosis rate; PSI-13 Postoperative sepsis rate; PSI-14 Postoperative wound dehiscence rate; and PSI-15 Accidental puncture or laceration rate.
As part of the NQF maintenance review process, AHRQ is considering revisions to the composite weighting system as well as the addition of PSI-9 Perioperative hemorrhage rate, PSI-10 Postoperative physiologic and metabolic derangement rate, and PSI-11 Postoperative respiratory failure rate measures, or a combination of these three measures, to the PSI-90 Composite measure. We consider the potential inclusion of additional component measures in the PSI-90 Composite measure to be a significant change to the measure and, if that occurs, we would engage in notice-and-comment rulemaking prior to requiring the reporting of the revised composite for the HAC Reduction Program. At the time of development of this final rule, the AHRQ PSI-90 Composite measure is continuing to undergo NQF maintenance review. No changes have been finalized. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24510), we did not propose any changes to this measure.
Similarly, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50090), we noted that the CDC NHSN CAUTI and CLABSI measures in Domain 2 that we adopted in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50717) for inclusion in FYs 2015, 2016, and 2017 were undergoing NQF maintenance review. We stated in the FY 2015 IPPS/LTCH PPS final rule that if there are significant changes to these measures, we would engage in notice-and-comment rulemaking prior to requiring the reporting of the revised measures. These measures have now completed the NQF maintenance review process, and modified versions of the measures were reendorsed by NQF on November 10, 2014.
We noted in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24511) that we anticipated providing hospitals with their confidential hospital-specific reports and discharge level information used in the calculation of their FY 2016 Total HAC Score in late summer 2015 via the
For the HAC Reduction Program, no such statutory exclusion exists and section 1886(p)(1) of the Act states that the payment for applicable hospitals shall be equal to 99 percent of the amount of payment that would otherwise apply. Therefore, the HAC Reduction Program payment adjustment will continue to be applied after the application of the other program adjustments, including add-on payments consisting of outliers, DSH, uncompensated care, and IME. We refer readers to the FY 2015 IPPS/LTCH PPS final rule (78 FR 50088) for additional information on the HAC Reduction Program's payment adjustment.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk-adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of socioeconomic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these ASPE reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We further note that the HAC Reduction Program and the Hospital VBP Program are separate programs with different purposes and policy goals. The HAC Reduction Program is a program that reduces payments to hospitals for excess HACs to increase patient safety in hospitals. On the other hand, the Hospital VBP Program is an incentive program that redistributes a portion of the Medicare payments made to hospitals based on their performance on various measures. Therefore, although the measures exist in more than one program, the measures are used and calculated for very distinct purposes. Accordingly, we believe that the critical importance of these measures to patient safety warrants their inclusion in both programs. We will, in the future, monitor the HAC Reduction Program and the Hospital VBP Program and analyze the impact of our measures selection, including any unintended consequences with having a measure in more than one program, and will revise the measure set in one or both programs if warranted.
• Require hospitals to make an annual attestation that they are explicitly following specific coding and documentation practices, as outlined by professional organizations such as the Association for Clinical Documentation Improvement Specialists (ACDIS) and American Health Information Management Association (AHIMA);
• Release joint consensus statements in collaboration with AHIMA, ACDIS, and Coding Clinics to provide clarity to hospitals around codes that will include or exclude a case from claims-based measures;
• Require that hospitals maintain a record of codes that are changed as a result of internal coding reviews to provide a record for coding and documentation audits; and
• Conduct random and routine audits of these documentation and coding practices at the hospital level.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50717), we finalized the following measures for use in the FY 2017 program: AHRQ PSI-90 Composite and CDC NHSN CLABSI, CAUTI, Colon and Abdominal Hysterectomy SSI, Methicillin-Resistant
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24511 through 24512), for FY 2017, we proposed three changes to existing program policies: (1) The dates of the time period used to calculate hospital performance; (2) the addition of a narrative rule used in the methodology to calculate the Domain 2 score; and (3) the relative contribution of Domain 1 (patient safety) and Domain 2 (infection) to the Total HAC Score. Each proposal is described in more detail below.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50717), we finalized and codified policy at 42 CFR 412.170 that provided that there will be a 2-year applicable time period to collect data used to calculate the Total HAC Score.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24511), for FY 2017, we proposed to continue similar 2-year time periods for the calculation of HAC Reduction Program measure results. For the Domain 1 measure (AHRQ PSI-90 Composite measure), we proposed to use the 24-month period from July 1, 2013 through June 30, 2015. The claims for all Medicare FFS beneficiaries discharged during this period would be included in the calculations of measure results for FY 2017. For the CDC NHSN measures, previously finalized for use in the FY 2017 HAC Reduction Program (CLABSI, CAUTI, Colon and Abdominal Hysterectomy SSI, MRSA Bacteremia, and CDI), we proposed to use data from CYs 2014 and 2015.
We sought public comment on the proposal to use these updated time periods for calculation of measure results for the FY 2017 program.
After consideration of the public comments we received, we are finalizing the proposed applicable time periods discussed above for the FY 2017 HAC Reduction Program without modification.
We noted in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50723) that there will be instances in which applicable hospitals may not have data on all Domain 1 and 2 measures, and, therefore, a set of narrative rules were finalized to determine how to score each Domain. The scoring rules were finalized in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50723 through 50725) and clarified in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50096 through 50098). For FY 2017, we will follow the rules as previously finalized. As described below, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24511 through 24512), we also proposed an additional narrative rule for use beginning in the FY 2017 program year. This additional narrative rule would be applicable to calculation of the Domain 2 score and would treat each Domain 2 measure independently when determining if a score of 10 (maximal score) should be assigned to the measure for nonsubmission of data without a waiver (if applicable).
We note that the current narrative rules for Domain 2 assign a score for each Domain 2 measure and the measure scores are averaged to provide a Domain 2 Score. For the FY 2015 and FY 2016 HAC Reduction Program, if a hospital reports data for at least one of the Domain 2 measures, its Domain 2 Score is based solely on the measure(s) the hospital reported and the hospital is not assigned the maximum number of points for any nonreported measure(s). This approach was employed for the FY 2015 and FY 2016 HAC Reduction Program because the applicable periods for the Domain 2 measures for those program years (the FY 2015 period was January 1, 2012 through December 31, 2013, and the FY 2016 period was January 1, 2013 through December 31, 2014) occurred, at least in part, prior to the announcement of the HAC Reduction Program with the publication of the FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through 50729) in August 2013. The proposed applicable period for Domain 2 measures in the FY 2017 program (CYs 2014 and 2015) occurs in its entirety after the HAC Reduction Program was announced. In the FY 2016 IPPS/LTCH PPS proposed rule, we informed hospitals of the impact that not reporting these data would have on their FY 2017 Total HAC Score. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24511 through 24512), we proposed, for FY 2017 and subsequent program years, that each Domain 2 measure be treated independently when determining if a score of 10 (maximal score) should be assigned to the measure for nonsubmission of data without a waiver (if applicable). For instance, if a hospital does not submit data for the Colon and Abdominal Hysterectomy SSI measure and does not have a valid waiver for nonreporting, the measure would receive a score of 10. This score of 10 would then be combined with the measure scores the hospital received for data reported on the other FY 2017 Domain 2 measures (CLABSI and CAUTI) to calculate the hospital's total Domain 2 score. The rationale for this proposed change in methodology is to encourage hospitals to submit all available data on all measures in the program and to further encourage hospitals to reduce all HACs included in the program.
We invited public comments on our proposal to implement the score calculations discussed above in FY 2017 and subsequent years, as well as our proposal for an additional narrative rule that would treat each Domain 2 measure independently when determining if a score of 10 (maximal score) should be assigned to the measure for nonsubmission of data without a waiver (if applicable).
After consideration of the public comments we received, we are finalizing the narrative rules used in the calculation of the Domain 2 Score discussed above as proposed.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50102), we finalized for FY 2016 a methodology for calculating a Total HAC Score for each hospital by determining a score for each domain, then multiplying each domain score by a weight (Domain 1—AHRQ Patient Safety Indicators, 25 percent; Domain 2—CDC NHSN measures, 75 percent), and adding together the weighted domain scores to determine the Total HAC Score (§ 412.172(e)(3)).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24512), for FY 2017, we proposed to adjust the weighting of Domains 1 and 2 so that the weight of Domain 1 would be 15 percent and the weight of Domain 2 would be 85 percent. We proposed to decrease the Domain 1 weight for two reasons. First, with the implementation of the CDC MRSA Bacteremia and CDI measures in the FY 2017 program, we believe the weighting of both domains
After consideration of the public comments we received, we are finalizing the Domain 1 and 2 weightings for FY 2017 as proposed.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24512 through 24513), we proposed measure refinements to the CDC NHSN CLABSI and CAUTI measures that were previously adopted for the HAC Reduction Program to include select ward (non-ICU) locations beginning in the FY 2018 program. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50712 through 50719), we adopted the CLABSI and CAUTI measures inclusive of pediatric and adult patients in ICUs for the HAC Reduction Program beginning with FY 2015. We noted at that time that the Hospital IQR Program finalized data collection for these measures for adult and pediatric patients in medical, surgical, and medical/surgical wards (also referred to as select ward locations), in addition to ICU locations, effective beginning January 1, 2015, and that we would propose the additional locations for the HAC Reduction Program in the future.
The refined CAUTI and CLABSI measures that include select ward locations in addition to ICU locations
As described in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24512), we considered a number of options for when to begin using the refined measures in the HAC Reduction Program. The CDC NHSN measure data used in the HAC Reduction Program are obtained from data that hospitals report as part of their participation in the Hospital IQR Program. Therefore, due to the timing of the Hospital IQR Program including select ward locations (beginning January 1, 2015), the FY 2017 HAC Reduction Program, using the applicable period of CYs 2014 and 2015 for the CDC NHSN measures, is the first time data from select ward locations could be included in the program. However, using select ward location data in the FY 2017 program would result in hospitals with ICU locations having the opportunity to contribute 2 years of data, while hospitals without ICU locations would have the opportunity to contribute 1 year of data for measure result calculation. We believe this systematically unequal distribution of data could introduce bias in the program and should be avoided. If the introduction of select ward location data for the CLABSI and CAUTI measures is delayed until the FY 2018 HAC Reduction Program (applicable period would likely be CYs 2015 and 2016), all hospitals, regardless of whether or not they have ICUs, would have the opportunity to contribute 2 years of data for measure result calculations.
In addition, delaying implementation until FY 2018 would allow CMS and providers to gain some experience with the impact that the inclusion of these data would have on a hospital's HAC Reduction Program scores. We also considered the possibility of further delaying implementation of the refined measures until the FY 2019 program (applicable period would likely be CYs 2016 and 2017) in order to not include the first year of reporting (CY 2015) in a payment program measure calculation.
After considering these three options, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24512), we proposed to include data from pediatric and adult medical ward, surgical ward, and medical/surgical ward locations in addition to data from adult and pediatric ICU locations for the CDC NHSN CLABSI and CAUTI measures beginning with the FY 2018 HAC Reduction Program. This option balances our belief that the refinement of the CLABSI and CAUTI measures to include select ward locations results in an improved measure that more accurately captures hospital-wide performance regarding these HACs with the need to provide hospitals with the opportunity to submit data for the full period of performance and the desire to gain experience with the refined measures before incorporating them into the HAC Reduction Program. We also believe this measure refinement will allow hospitals that do not have ICU locations to use the tools and resources of the NHSN for quality improvement and public reporting efforts (78 FR 50787).
We invited public comment on our proposal.
Commenters suggested that CMS refrain from using CY 2015 as part of the performance period for the refined CDC NHSN CAUTI and CLABSI measures. In the alternative, the commenters suggested that CMS utilize CY 2016 as the 1-year performance period if it insisted on incorporating the refined measures in FY 2018, or using a 12-month performance-reporting period. Some commenters suggested that CMS
Allowing FY 2017 to serve as the first program year would permit hospitals with ICU locations to contribute 2 years of data, while hospitals without ICU locations would only have 1 year of data to contribute for measure result calculations. We believe this unequal distribution of data could introduce bias in the program and should be avoided. We note that implementation in FY 2018 would allow all hospitals, regardless of whether or not they have ICUs, to have the opportunity to contribute 2 years of data for measure result calculations. This option balances our belief that the refinement of the CLABSI and CAUTI measures to include select ward locations results in an improved measure that more accurately captures hospital-wide performance.
To address the commenters' specific point to delay implementation to align the HAC Reduction Program with the Hospital VBP Program, we continue to stress that the HAC Reduction Program and the Hospital VBP Program are separate programs with different purposes and policy goals. The HAC Reduction Program incentivizes the improvement of patient safety in hospitals by reducing payments to hospitals for excess HACs, while the Hospital VBP Program is an incentive program that redistributes a portion of the Medicare payments made to hospitals based on their performance on various measures. We also note that the Hospital VBP Program has a specific statutory requirement at section 1886(o)(2)(C)(i) of the Act that measures selected under the program must have had measure data posted on
After consideration of the public comments we received, we are finalizing the inclusion of data from pediatric and adult medical ward, surgical ward, and medical/surgical ward locations, in addition to data from adult and pediatric ICU locations for the CDC NHSN CLABSI and CAUTI measures, beginning in FY 2018, as proposed.
In this section, we provide information regarding upcoming changes to the standard population data that are used to calculate the SIR for the CDC NHSN measures. These changes are occurring as part of routine measure maintenance.
The CDC NHSN measures are used to monitor hospital performance on prevention of healthcare-associated infections (HAIs). For each NHSN measure, CDC calculates the SIR, which compares a hospital's observed number of HAIs to the number of infections predicted for the hospital, adjusting for several risk factors.
As part of routine measure maintenance, CDC will be updating the standard population data to ensure the NHSN measures' number of predicted infections reflects the current state of HAIs in the United States.
To address commenters' concerns about program overlap, we note that the Hospital VBP Program has a specific statutory requirement at section 1886(o)(2)(C)(i) of the Act that measures selected under the program must have had measure data posted on
Technical specifications for AHRQ's PSI-90 Composite measure in Domain 1 can be found at AHRQ's Web site at:
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50100), we described a policy under which we use a subregulatory process to make nonsubstantive updates to measures used for the HAC Reduction Program. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24513), we did not propose any changes to this policy.
In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28142), we welcomed public comment on whether a potential waiver or exception policy for hospitals located in areas that experience disasters or other extraordinary circumstances should be implemented, and the policy and operational considerations of such an extraordinary circumstance exception policy for the HAC Reduction Program. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50101), we indicated that we received many comments in support of CMS establishing a formal extraordinary circumstance exception policy under the HAC Reduction Program. We also previously indicated that any specific proposals related to the implementation of an extraordinary circumstance exception policy would be proposed through notice-and-comment
In developing this proposed extraordinary circumstance exception policy for the HAC Reduction Program beginning in FY 2016 and for subsequent years, we considered a policy and process similar to that for the Hospital IQR Program, as finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51651), modified by the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836) (designation of a non-CEO hospital contact), and further modified in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277) (amended § 412.40(c)(2)) to refer to “extension or exemption” instead of the former “extension or waiver”). We also considered how best to align an extraordinary circumstance exception policy for the HAC Reduction Program with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs, such as the Hospital VBP Program, to the extent feasible.
We considered the feasibility and implications of excluding data for certain measures for a limited period of time from the calculations for a hospital's measure results or Total HAC Score for the applicable performance period. By minimizing the data excluded from the program, the proposed policy would enable affected hospitals to continue to participate in the HAC Reduction Program for a given fiscal year if they otherwise continue to meet applicable measure minimum threshold requirements. We believe that this approach could help alleviate the reporting burden for a hospital that is adversely impacted by a natural disaster or other extraordinary circumstance beyond its control, while enabling the hospital to continue to participate in the HAC Reduction Program.
Based upon our prior experience with the Hospital IQR Program and the Hospital VBP Program, we anticipate the need to provide exceptions to only a small number of hospitals affected by a natural disaster or other extraordinary circumstance. During the review of a hospital's request for an extraordinary circumstance exception, we will maintain the general principle that providing high quality of care and ensuring patient safety is of paramount importance. We do not intend to allow a hospital to use this proposed policy and the request process to seek exclusion from the HAC Reduction Program in its entirety for a given fiscal year(s) solely because of experiencing an extraordinary circumstance. Rather, we intend to provide relief for a hospital whose ability to accurately collect quality measure data and/or to report those data in a timely manner has been negatively impacted as a direct result of experiencing a significant disaster or other extraordinary circumstance beyond the control of the hospital. Section 1886(p)(4) of the Act permits the Secretary to determine the “applicable period” for HAC data collection, and we believe that the statute allows us to determine that the period not include times when hospitals may encounter extraordinary circumstances.
We proposed that the request process for an extraordinary circumstance exception begin with the submission of an extraordinary circumstance exception request form by a hospital within 90 calendar days of the natural disaster or other extraordinary circumstance. We believe that the 90-calendar day timeframe is an appropriate period of time for a hospital to determine whether to submit an extraordinary circumstance exception request. It is also the same length of time as the current time period allowed under the Hospital VBP Program. Under this proposed policy, a hospital would be able to request a HAC Reduction Program extraordinary circumstance exception at the same time it may request a similar exception under the Hospital IQR Program, the Hospital VBP Program, and the Hospital Readmissions Reduction Program (if an extraordinary circumstance exception policy is adopted for the Hospital Readmissions Reduction Program as described in section IV.E.9. of the preamble of FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24497 through 24498)). The extraordinary circumstance exception request form would be made available on the QualityNet Web site (
The following minimum set of information would be required to submit the request:
• Hospital CCN;
• Hospital name;
• Hospital Chief Executive Officer (CEO) and any other designated personnel contact information, including name, email address, telephone number, and mailing address (must include a physical address; a post office box address is not acceptable);
• Hospital's reason for requesting an exception, including:
++ CMS program name (for example, the HAC Reduction Program, the Hospital VBP Program, or the Hospital IQR Program);
++ The measure(s) and submission quarters affected by the extraordinary circumstance that the hospital is seeking an exception for should be accompanied with the specific reasons why the exception is being sought; and
++ How the extraordinary circumstance negatively impacted performance on the measure(s) for which an exception is being sought;
• Evidence of the impact of the extraordinary circumstances, including but not limited to, photographs, newspaper articles, and other media articles; and
• The request form must be signed by the hospital's CEO or designated non-CEO contact and submitted to CMS.
The same set of information is currently required under the Hospital IQR Program and the Hospital VBP Program on the request form from a hospital seeking an extraordinary circumstance exception with respect to these programs. The specific list of required information would be subject to change from time to time at the discretion of CMS.
Following receipt of the request form, CMS would: (1) Provide a written acknowledgement of receipt of the request using the contact information provided in the request form to the CEO and any additional designated hospital personnel; and (2) provide a formal response to the CEO and any additional designated hospital personnel using the contact information provided in the request notifying them of the CMS decision. Under the proposed policy, we would review each request for an extraordinary circumstance exception on a case-by-case basis at CMS' discretion. To the extent feasible, we also would review such a request in conjunction with any similar requests made under other IPPS quality reporting and payment programs, such as the Hospital IQR Program and the Hospital VBP Program.
The proposed policy would not preclude CMS from granting extraordinary circumstance exceptions to hospitals that do not request them if we determine at our discretion that a disaster or other extraordinary circumstance has affected an entire region or locale. If CMS makes such a determination to grant an extraordinary circumstance exception to hospitals in an affected region or locale, we would convey this decision through routine communication channels to hospitals, vendors, and QIOs, including, but not limited, to issuing memos, emails, and
We invited public comment on this proposal.
After consideration of the public comments we received, we are finalizing the extraordinary circumstance exception policy as proposed.
The Medicare hospital cost report employs a cost-finding methodology to allocate direct and indirect costs using statistics appropriate to each department within a hospital. The costs of nonrevenue-producing cost centers (general service or overhead cost centers) are allocated to each other and to the revenue-producing cost centers using statistical bases and related statistics that measure the amount of service furnished by each cost center to the other cost centers (42 CFR 413.24(b) and (d)). In this regard, cost-finding is the process of recasting the data derived from the accounts ordinarily kept by a hospital to ascertain costs of the various types of services furnished (42 CFR 413.24(b)(1)).
In the FY 1997 IPPS final rule (61 FR 46214 through 46215), CMS implemented the simplified cost allocation methodology at 42 CFR 412.302(d)(4) for hospitals as an alternative to the standard cost-finding methodology. The simplified cost allocation methodology reduces the number of statistical bases that a hospital must maintain. Under the simplified cost allocation methodology, a hospital must use a prescribed list of statistical bases, without deviation, as set forth in the Provider Reimbursement Manual (PRM), Part II (CMS Pub. 15-2), Chapter 40, Section 4020, Form CMS-2552. The simplified cost allocation methodology was devised in response to concerns expressed by the hospital industry over 20 years ago regarding the high costs of the recordkeeping required under the cost reporting rules. Since implementation of the simplified cost allocation methodology, there have been advances in technology of recordkeeping for hospitals, resulting in less arduous and costly recordkeeping. It was expected that, although use of the simplified cost allocation methodology by hospitals would result in reduced recordkeeping costs, it also would likely result in reduced Medicare payments to hospitals.
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50075 through 50080), we created standard cost centers for Magnetic Resonance Imaging (MRI) and computed tomography (CT) scans, and required that hospitals report the costs and charges for these services under new cost centers on the Medicare cost report Form CMS-2552-10. The new standard cost centers for MRIs and CT scans were effective for cost reporting periods beginning on or after May 1, 2010.
Beginning in FY 2014, we started to calculate the MS-DRG relative weights using 19 CCRs, including distinct CCRs for MRIs and CT scans. In addition, beginning in the CY 2014 OPPS, we started to calculate the OPPS relative payment weights using distinct CCRs for MRIs and CT scans. Some stakeholders expressed concern that CMS was not appropriately determining the cost of advanced imaging for inpatient and outpatient hospital services because, when the costs of hospitals that use the simplified cost allocation methodology are included in cost determinations, less precise CCRs are generated. This is because the simplified cost allocation methodology requires a hospital to use
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24514 through 24515), we proposed to eliminate the simplified cost allocation methodology because, as discussed above, the allocation of the costs of capital-related movable equipment using the required basis (square footage) under the simplified cost allocation methodology, instead of the recommended basis (dollar value) yields less precise calculated CCRs. We stated in the proposed rule that, currently, less than 1 percent of hospitals have elected to use the simplified cost allocation methodology. Based on FY 2013 HCRIS data, we stated that only 9 of 1,269 CAHs and 23 of 4,389 hospitals other than CAHs used the simplified cost allocation methodology. Furthermore, we stated that we believe that advances in technology have reduced the cost of recordkeeping, allowing hospitals to maintain accurate statistical data and affording them the flexibility to change to a more precise allocation methodology.
The regulations applicable to the election of the simplified cost allocation methodology are located in 42 CFR 412.302. For the reasons set forth in section IV.H.1. of the preamble of the FY 2016 IPPS/LTCH proposed rule (80 FR 24514 through 24515), we proposed to amend § 412.302 by revising paragraph (d)(4) to eliminate a hospital's ability to elect the simplified cost allocation methodology under the terms and conditions provided in the instructions for CMS Form 2552 for cost reporting periods beginning on or after October 1, 2015.
We set forth below summaries of the public comments that we received and our responses to those public comments.
Using the FY 2013 HCRIS data, we applied filters using the 19 statistical bases required by the simplified cost allocation methodology and determined that less than 100 hospitals used the simplified cost allocation methodology. We began with a total hospital population of 5,658 from the FY 2013 HCRIS. First, we applied a filter to the 5,658 hospitals for the “buildings and fixtures” and “movable equipment” cost centers using square footage as the statistical basis for the simplified cost allocation methodology and determined that 3,337 hospitals used this basis. In so doing, we were able to eliminate 2,321 hospitals that were not using the simplified cost allocation methodology's basis of square footage for these cost centers. We then applied a second filter to the 3,337 hospitals for the “laundry and linen” cost center using patient days as the statistical basis for the simplified cost allocation methodology and determined that 1,008 hospitals used patient days. After applying the second filter, we were able to eliminate an additional 2,329 hospitals that may have used square footage but were not using the simplified cost allocation methodology's basis of patient days for this cost center; in most cases, hospitals used pounds of laundry or an alternative basis not within the simplified cost allocation methodology. We next applied a third filter to the resulting 1,008 hospitals for the “dietary” cost center using patient days as the statistical basis for the simplified cost allocation methodology and determined that 687 hospitals used patient days. After applying the third
In our original data analysis set forth in the proposed rule, we excluded hospitals with cost centers that were listed in the HCRIS report as blank because we assumed that if a cost center was blank, a hospital was not using the simplified cost allocation methodology. However, upon revisiting the data following the receipt of public comments, we determined that if a cost center was blank, it did not necessarily mean the hospital was not using the simplified cost allocation methodology. In this regard, we broadened the filters to include hospitals with the blank cost centers which broadened the population. Within this larger population, we concluded that there were more hospitals using the simplified cost allocation methodology than originally cited in the proposed rule. Although this second data analysis was more conservative and included a larger population, we still found that less than 100 hospitals are using the simplified cost allocation methodology.
Dollar value is the statistical basis that uses the actual cost of the asset being depreciated and more accurately allocates costs among the cost centers using those assets. In the CY 2014 OPPS/ASC final rule with comment period, we indicated that commenters had expressed concern that the use of square footage as the statistical basis of allocation “results in CCRs that lack face validity” (78 FR 74843 through 74847). It has been CMS' longstanding
In summary, after consideration of the public comments we received, we are not finalizing our proposal to eliminate the simplified cost allocation methodology. Instead, we are modifying the simplified cost allocation methodology set forth at CMS Pub. 15-2, Chapter 40, Section 4020, to provide additional flexibility to hospitals that use the simplified cost allocation methodology by allowing them to obtain approval from their MACs to use an alternative statistical basis of dollar value for capital-related moveable equipment. In this regard, hospitals using the simplified cost allocation methodology will no longer be restricted to using square footage as a statistical basis for capital-related moveable equipment. Instead, hospitals using the simplified cost allocation methodology may obtain MAC approval in accordance with the instructions set forth in Section 2313 of CMS Pub. 15-1 to use either square footage or dollar value as the statistical basis for capital-related moveable equipment. However, we encourage all hospitals, regardless of their cost-finding methodology, to use dollar value as a statistical basis for the capital-related moveable equipment cost center because we believe it results in more precise CCRs.
Hospitals that are not currently using the simplified cost allocation methodology but desire to do so will need to obtain approval from their MACs, consistent with our current policy set forth at Section 2313 of CMS Pub. 15-1. MACs will approve new requests to use the simplified cost allocation methodology if the hospital demonstrates that the maintenance of the new statistics is less costly and the use does not result in inappropriately shifting costs.
Hospitals that are not using the simplified cost allocation methodology but are using one or more, but not all, of the statistical bases from the cost center list under the simplified cost allocation methodology in Section 4020, Chapter 40 of CMS Pub. 15-2 and have been permitted to do so by their MACs, will continue to be permitted to request such usage from their MACs.
Section 410A(a) of Public Law 108-173 required the Secretary to establish a demonstration program to test the feasibility and advisability of establishing “rural community” hospitals to furnish covered inpatient hospital services to Medicare beneficiaries. The demonstration pays rural community hospitals under a reasonable cost-based methodology for Medicare payment purposes for covered inpatient hospital services furnished to Medicare beneficiaries. A rural community hospital, as defined in section 410A(f)(1), is a hospital that—
• Is located in a rural area (as defined in section 1886(d)(2)(D) of the Act) or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act;
• Has fewer than 51 beds (excluding beds in a distinct part psychiatric or rehabilitation unit) as reported in its most recent cost report;
• Provides 24-hour emergency care services; and
• Is not designated or eligible for designation as a CAH under section 1820 of the Act.
Section 410A(a)(4) of Public Law 108-173 specified that the Secretary was to select for participation no more than 15 rural community hospitals in rural areas of States that the Secretary identified as having low population densities. Using 2002 data from the U.S. Census Bureau, we identified the 10 States with the lowest population density in which rural community hospitals were to be located in order to participate in the demonstration: Alaska, Idaho, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Utah, and Wyoming (source: U.S. Census Bureau, Statistical Abstract of the United States: 2003).
CMS originally solicited applicants for the demonstration in May 2004; 13 hospitals began participation with cost reporting periods beginning on or after October 1, 2004. In 2005, 4 of these 13 hospitals withdrew from the program and converted to CAH status. This left nine hospitals participating at that time. In 2008, we announced a solicitation for up to six additional hospitals to participate in the demonstration program. Four additional hospitals were selected to participate under this solicitation. These four additional hospitals began under the demonstration payment methodology with the hospital's first cost reporting period starting on or after July 1, 2008. At that time, 13 hospitals were participating in the demonstration.
Five hospitals (3 of the hospitals were among the 13 hospitals that were original participants in the demonstration program and 2 of the hospitals were among the 4 hospitals that began the demonstration program in 2008) withdrew from the demonstration program during CYs 2009 and 2010. (Three of these hospitals indicated that they would be paid more for Medicare inpatient hospital services under the rebasing option allowed under the SCH methodology provided for under section 122 of the Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275). One hospital restructured to become a CAH, and one hospital closed.) In CY 2011, one hospital that was among the original set of hospitals that participated in the demonstration withdrew from the demonstration. These actions left seven of the originally participating hospitals (that is, hospitals that were selected to participate in either 2004 or 2008) participating in the demonstration program as of June 1, 2011.
Sections 3123 and 10313 of the Affordable Care Act (Pub. L. 111-148) amended section 410A of Public Law 108-173, changing the rural community hospital demonstration program in several ways. First, the Secretary is required to conduct the demonstration program for an additional 5-year period, to begin on the date immediately following the last day of the initial 5-
In addition, the Affordable Care Act provides that, during the 5-year extension period, the Secretary shall expand the number of States with low population densities determined by the Secretary to 20. Furthermore, the Secretary is required to use the same criteria and data that the Secretary used to determine the States for the initial 5-year period. The Affordable Care Act also allows not more than 30 rural community hospitals in such States to participate in the demonstration program during the 5-year extension period.
We published a solicitation for applications for additional participants in the rural community hospital demonstration program in the
Three of these 19 hospitals declined participation prior to the start of the cost reporting periods for which they would have begun the demonstration. In addition to the 7 hospitals that were selected in either 2004 or 2008, the new selection led to a total of 23 hospitals in the demonstration. During CY 2013, one additional hospital among the set selected in 2011 withdrew from the demonstration, similarly citing a relative financial advantage to returning to the customary SCH payment methodology, which left 22 hospitals participating in the demonstration.
In addition, section 410A(c)(2) of Public Law 108-173 required that, in conducting the demonstration program under this section, the Secretary must ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented. This requirement is commonly referred to as “budget neutrality.” Generally, when we implement a demonstration program on a budget neutral basis, the demonstration program is budget neutral in its own terms; in other words, the aggregate payments to the participating hospitals do not exceed the amount that would be paid to those same hospitals in the absence of the demonstration program. Typically, this form of budget neutrality is viable when, by changing payments or aligning incentives to improve overall efficiency, or both, a demonstration program may reduce the use of some services or eliminate the need for others, resulting in reduced expenditures for the demonstration program's participants. These reduced expenditures offset increased payments elsewhere under the demonstration program, thus ensuring that the demonstration program as a whole is budget neutral or yields savings. However, the small scale of this demonstration program, in conjunction with the payment methodology, makes it extremely unlikely that this demonstration program could be viable under the usual form of budget neutrality.
Specifically, cost-based payments to participating small rural hospitals are likely to increase Medicare outlays without producing any offsetting reduction in Medicare expenditures elsewhere. Therefore, a rural community hospital's participation in this demonstration program is unlikely to yield benefits to the participant if budget neutrality were to be implemented by reducing other payments for these same hospitals.
In the past 11 IPPS final rules, spanning the period for which the demonstration program has been implemented, we have adjusted the national inpatient PPS rates by an amount sufficient to account for the added costs of this demonstration program, thus applying budget neutrality across the payment system as a whole rather than merely across the participants in the demonstration program. As we discussed in the FYs 2005 through 2015 IPPS final rules (69 FR 49183; 70 FR 47462; 71 FR 48100; 72 FR 47392; 73 FR 48670; 74 FR 43922, 75 FR 50343, 76 FR 51698, 77 FR 53449, 78 FR 50740, and 79 FR 50141, respectively), we believe that the language of the statutory budget neutrality requirements permits the agency to implement the budget neutrality provision in this manner.
In general terms, in each of these previous years, we used available cost reports for the participating hospitals to derive an estimate of the additional costs attributable for the demonstration. Prior to FY 2013, we used finalized, or settled, cost reports, as available, and “as submitted” cost reports for hospitals for which finalized cost reports were not available. Annual market basket percentage increase amounts provided by the CMS Office of the Actuary reflecting the growth in the prices of inputs for inpatient hospitals were applied to these cost amounts. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53452), we used “as submitted” cost reports (for cost reporting periods ending in CY 2010) for each hospital participating in the demonstration in estimating the costs of the demonstration. In addition, in FY 2013, we incorporated different update factors (the market basket percentage increase and the applicable percentage increase, as applicable, to several years of data as opposed to solely using the market basket percentage increase) for the calculation of the budget neutrality offset amount. Finally, in each of the previous years, an annual update factor provided by the CMS Office of the Actuary reflecting growth in the volume of inpatient operating services also was applied. For the budget neutrality calculations in the IPPS final rules for FYs 2005 through 2011, the annual volume adjustment applied was 2 percent; for the IPPS final rules for FYs 2012, 2013, 2014, and 2015, it was 3 percent. For a detailed discussion of our budget neutrality offset calculations, we refer readers to the IPPS final rule applicable to the fiscal year involved.
In general, for FYs 2005 through 2009, we based the budget neutrality offset estimate on the estimated cost of the demonstration in an earlier given year. For these periods, we derived that estimated cost by subtracting the estimated amount that would otherwise be paid without the demonstration in an earlier given year from the estimated amount for the same year that would be paid under the demonstration under the reasonable cost-based methodology authorized by section 410A of Public Law 108-173. The reasonable cost-based methodology authorized by section 410A of Public Law 108-173, as amended, is hereafter referred to as the “reasonable cost methodology.” (We ascertained the estimated amount that would be paid in an earlier given year under the reasonable cost methodology and the estimated amount that would otherwise be paid without the
Following upon the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we continued to propose a methodology for calculating the budget neutrality offset amount to account for both the estimated demonstration costs in the upcoming fiscal year and an amount by which the actual demonstration costs corresponding to an earlier, given year (which would be known once finalized cost reports became available for that year) exceeded the budget neutrality offset amount finalized in the corresponding year's IPPS final rule. However, we noted in the FYs 2011, 2012, and 2013 IPPS final rules that, because of a delay affecting the settlement process for cost reports for IPPS hospitals occurring on a larger scale than merely for the demonstration, we were unable to finalize this component of the budget neutrality offset amount accounting for the amount by which the actual demonstration costs in a given year exceeded the budget neutrality offset amount finalized in the corresponding year's IPPS final rule for cost reports of demonstration hospitals dating to those beginning in FY 2007.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53449 through 53453), we adopted changes to the methodology for calculating the budget neutrality offset amount in an effort to further improve and refine the methodology. We noted that the revised methodology varied, in part, from the methodology finalized in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51698 through 51705). We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53449 through 53453) for a detailed discussion of the methodology we used for FY 2013. We noted that, although we made changes to certain aspects of the budget neutrality offset amount calculation for FY 2013, several core components of the methodology remained unchanged. For example, we continued to include in the budget neutrality offset amount the estimate of the demonstration costs for the upcoming fiscal year and the amount by which the actual demonstration costs corresponding to an earlier year (which would be determined once we have finalized cost reports for that year) exceeded the budget neutrality offset amount finalized in the corresponding year's IPPS final rule.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50739 through 50744), we determined the final budget neutrality offset amount to be applied to the FY 2014 IPPS rates to be $52,589,741. This amount was comprised of two distinct components: (1) The final resulting difference between the total estimated FY 2014 reasonable cost amount to be paid under the demonstration to the 22 participating hospitals for covered inpatient hospital services, and the total estimated amount that would otherwise be paid to such hospitals in FY 2014 without the demonstration (this amount was $46,549,861); and (2) the amount by which the actual costs of the demonstration for FY 2007 (as shown in the finalized cost reports for cost reporting periods beginning in FY 2007 for the 9 hospitals that participated in the demonstration during FY 2007) exceeded the budget neutrality offset amount that was finalized in the FY 2007 IPPS final rule (this amount was $6,039,880).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50141 through 50145), we determined the final budget neutrality offset amount to be applied to the FY 2015 IPPS rates to be $64,566,915. This amount was comprised of two distinct components: (1) The final resulting difference between the total estimated FY 2015 reasonable cost amount to be paid under the demonstration to the 22 participating hospitals for covered inpatient hospital services, and the total estimated amount that would otherwise be paid to such hospitals in FY 2015 without the demonstration (this amount was $54,177,144); and (2) the amount by which the actual costs of the demonstration for FY 2008 (as shown in the finalized cost reports for cost reporting periods beginning in FY 2008 for the hospitals that participated in the demonstration during FY 2008) exceeded the budget neutrality offset amount that was finalized in the FY 2008 IPPS final rule (this amount was $10,389,771).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24518), in general, we proposed to use the established methodology used in FY 2015 (79 FR 50141 through 50145), with some modifications as discussed below, for determining the budget neutrality offset amount to be applied to the FY 2016 national IPPS rates to reflect the costs of the demonstration. We proposed to use “as submitted” cost reports ending in CY 2013 as the basis for estimating the reasonable cost amounts for covered services under the demonstration, as well as the amounts that would be paid absent the demonstration. As in previous years' IPPS rules, we believe that because these are the most recent available cost reports, they will be an accurate predictor of these amounts.
As discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24518), although the proposed methodology for FY 2016 is similar to that for the past several rules, we note that the demonstration will have begun to phase out by the beginning of FY 2016, and because of this, we believe additional calculations would be appropriate. The 7 “originally participating hospitals,” that is, those hospitals that began the demonstration between 2005 and 2009, will have ended their participation in the 5-year extension period authorized by the Affordable Care Act prior to the start of FY 2016. Therefore, we proposed that the financial experience of these hospitals would not factor into the estimated reasonable cost amount and the estimated amounts that would otherwise be paid without the demonstration for FY 2016.
The participation period for the 15 hospitals that entered the demonstration in 2011 and 2012 through the solicitation that followed the Affordable Care Act amendments expanding the demonstration program and that are still participating in the demonstration will end on a rolling basis according to the end dates of the hospitals' cost report periods, respectively, from April 30, 2016, through December 31, 2016. As further discussed below, our proposed methodology for estimating the reasonable cost amounts for covered
For each of these 8 hospitals, we proposed that the FY 2016 estimated reasonable cost amount and the estimated amount that would otherwise be paid without the demonstration derived from the “as submitted” cost reports for cost reporting periods ending in CY 2013 be prorated according to the ratio of the number of months between October 1, 2015 and the end of the hospital's cost reporting period in relation to the entire 12-month period. (For example, if a hospital's cost reporting period end date is June 30, 2016, the factor to be multiplied by the estimated reasonable cost amount and the estimated amount that would otherwise be paid without the demonstration from the calendar year end 2013 cost report is 0.75.) For the 7 hospitals that would end the demonstration on either September 30, 2016 or December 31, 2016, estimates of these amounts would correspond to the amounts indicated in the calendar year end 2013 cost reports.
We note that the 7 hospitals that started the demonstration between FYs 2005 and 2009 also will have ended their participation on a rolling basis during FY 2015. In the FY 2015 IPPS/LTCH PPS final rule, in accordance with the policy we finalized in the FY 2015 IPPS/LTCH PPS final rule, we based the estimate of the cost of the demonstration for FY 2015 on the financial experience as indicated on these hospitals' CY 2012 “as submitted” cost reports (as discussed earlier) without making any adjustment to reflect the fact that hospitals would be ending at different points during FY 2015. We believe this methodology was reasonable because only 5 hospitals are ending their participation in the demonstration before September 30, 2015, out of the 22 hospitals on which the estimate of the cost of the demonstration for that year was based. Furthermore, as discussed previously, the methodology stated in this and previous rules for determining the costs of the demonstration in a given fiscal year entails the comparison of the actual costs of the demonstration as determined from finalized cost reports for that fiscal year (when they are available) to the estimated amount identified for that fiscal year in the corresponding fiscal year's final rule. Consistent with this policy, this second step will be used to reconcile any differences between the estimated and actual demonstration costs for FY 2015 once finalized cost reports for cost reporting periods beginning in FY 2015 are available. Although we believe that our methodology for estimating costs for FY 2015 was reasonable, for FY 2016, we proposed a more refined methodology to estimate the costs of the demonstration; that is, one that entails prorating, as discussed above, the estimated reasonable cost amount and the estimated amounts that would otherwise be paid without the demonstration as indicated on the “as submitted” cost reports for cost reporting periods ending in CY 2013 based on the number of months that each hospital will have participated in the demonstration during FY 2016.
Similar to previous years, we proposed the methodology for calculating the budget neutrality offset amount to proceed in several steps, as follows:
Given that 8 hospitals will be participating in the demonstration for only part of FY 2016, we believe that such a methodology of prorating represents an appropriate refinement to the methodology established in previous rules for estimating the reasonable cost amount paid under the demonstration because each hospital's relevant cost experience, respectively, which this estimated amount reflects, would apply for the specific number of months for which it is participating in the demonstration in FY 2016. We believe that applying the relevant fraction, representing the number of months that the hospital will have participated during FY 2016 out of the 12 months in the fiscal year, will lead to more precise estimates.
Because section 410A of Public Law 108-173 stipulates that swing-bed services are to be included among the covered inpatient hospital services for which the demonstration payment methodology applies, we proposed to include the cost of these services, as reported on the “as submitted” cost reports ending in CY 2013 for the hospitals that provided swing-bed services in CY 2013, similarly prorated by the fraction of the number of months that the hospital will be participating out of the total number of months within FY 2016.
Similar to the methodology applied in FY 2015, we proposed to sum the two above-referenced amounts to calculate the general total estimated FY 2013 reasonable cost amount for covered inpatient hospital services for all participating hospitals. Next, we proposed to multiply the derived sum by the FY 2014, FY 2015, and FY 2016 IPPS market basket percentage increases, which are formulated by the CMS Office of the Actuary. We proposed to use the final FY 2016 IPPS market basket percentage increase in this final rule. We proposed to multiply this product of the prorated reasonable cost amount for all 15 hospitals (based on CY 2013 “as submitted” cost reports) and the market basket percentage increases applicable to the years involved by a 3-percent annual volume adjustment for FYs 2014, 2015, and 2016. The result was the proposed total estimated FY 2016 reasonable cost amount for covered inpatient hospital services for all hospitals participating in FY 2016.
We proposed to apply the IPPS market basket percentage increases applicable for FYs 2014 through 2016 to the reasonable cost amount derived from CY 2013 cost reports described earlier to model the estimated FY 2016 reasonable cost amount under the demonstration. We proposed to use the IPPS market basket percentage increases because we believe that these update factors appropriately indicate the trend of increase in inpatient hospital operating costs under the reasonable cost methodology involved. The 3-percent annual volume adjustment was stipulated by the CMS Office of the Actuary and is being used because it is intended to reflect the tendency of hospitals' inpatient caseloads to increase. Because inpatient caseloads for small hospitals may fluctuate, we proposed to incorporate into the estimate of demonstration costs a factor
Similarly, as in Step 1, for the hospitals that provide swing-bed services, we proposed to include the amount that would otherwise be paid for these services without the demonstration, as reported on the “as submitted” cost reports ending in CY 2013 for the hospitals that provided swing-bed services in CY 2013. We proposed to prorate, as appropriate, the estimated amount that would otherwise be paid for these services (as indicated on the “as submitted” cost report for cost reporting periods ending in CY 2013) by the fraction of the number of months that the hospital will be participating in FY 2016 out of the total number of months within FY 2016, and include this amount in the total FY 2013 general estimated amount that would otherwise be paid for covered inpatient hospital services without the demonstration.
Similar to the methodology applied in FY 2015, we proposed to sum these two amounts and multiply the derived sum by the FYs 2014, 2015, and 2016 IPPS applicable percentage increases. We proposed to use the final FY 2016 applicable percentage increase in this final rule. This methodology differs from Step 1, in which we proposed to apply the IPPS market basket percentage increases to the sum of the hospitals' general total FY 2013 estimated reasonable cost amount for covered inpatient hospital services. We believe that the IPPS applicable percentage increases are appropriate update factors to estimate the amounts that would generally otherwise be paid without the demonstration. This is because IPPS payments would constitute the majority of payments that would otherwise be made without the demonstration and the applicable percentage increase is the factor used under the IPPS to update the inpatient hospital payment rates. We proposed then to multiply this product by a 3-percent annual volume adjustment for FYs 2014, 2015, and 2016. The result represents the proposed general total estimated FY 2016 amount that would otherwise be paid for covered inpatient hospital services without the demonstration to the hospitals that would be participating in FY 2016.
For the FY 2016 proposed rule, the resulting difference was $26,195,949 (80 FR 24520). This estimated amount was based on the specific assumptions identified regarding the data sources used, that is, “as submitted” recently available cost reports. We stated in the proposed rule that if updated data became available prior to the FY 2016 IPPS/LTCH PPS final rule, we would use them to the extent appropriate to estimate the costs for the demonstration program in FY 2016. Therefore, we indicated that the estimated budget neutrality offset amount may change in the final rule, depending on the availability of updated data.
Therefore, in the proposed rule, we identified the difference between the actual cost of the demonstration as indicated on these finalized FY 2009 cost reports and the budget neutrality offset amount that was identified in the FY 2009 IPPS final rule (73 FR 48670 through 48671), and we proposed to adjust the current year's budget neutrality offset amount by that difference. We stated that if there is a reopening that necessitates a recalculation for any of these reports, we would conduct another calculation once the affected cost reports are revised and finalized to determine the difference between the cost of the demonstration as reflected on the
As further discussed below, we noted in the proposed rule that Step 4 would result in the amount indicating the actual cost of the demonstration for FY 2009 (determined from the current finalized FY 2009 cost reports described in Step 4) being less than the amount that was originally identified in the FY 2009 IPPS final rule as the estimated cost of the demonstration. Therefore, we proposed to include that component as a negative adjustment to the budget neutrality offset amount for FY 2016 (as explained below).
Therefore, for the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24521), we proposed to incorporate the following components into the calculation of the total budget neutrality offset:
(a) The amount, derived from Step 3, representing the difference between the sum of the estimated reasonable cost amounts that would be paid under the demonstration to participating hospitals for covered inpatient hospital services for FY 2016 and the sum of the estimated amounts that would generally be paid if the demonstration had not been implemented. This amount would be based on “as submitted” cost reports for cost reporting periods ending in CY 2013, and would be prorated according to the number of months that each hospital will have participated in the demonstration in FY 2016 out of the 12-month fiscal year period. This amount was $26,195,949.
(b) The amount, as derived from Step 4, by which the actual costs of the demonstration for FY 2009 (as shown in the finalized cost reports for the 10 hospitals that completed a cost reporting period beginning in FY 2009) differ from the budget neutrality offset amount that was finalized in the FY 2009 IPPS final rule. Analysis of this set of cost reports shows that the budget neutrality offset amount that was finalized in the FY 2009 IPPS final rule exceeds the actual cost of the demonstration by $8,457,452.
For FY 2016, the total budget neutrality offset amount that we proposed to apply was the amount determined under item (a) of Step 5 ($26,195,949) minus the amount determined under item (b) of Step 5 ($8,457,452), or $17,738,497. We proposed to subtract the amount under item (b) from that under item (a) because the amount under item (b) represents the amount by which the budget neutrality offset finalized in the FY 2009 IPPS final rule exceeded the actual costs of the demonstration for FY 2009. Accordingly, we proposed to reduce the budget neutrality offset amount for FY 2016 by that amount (80 FR 24521).
We stated in the proposed rule that if updated data became available prior to this FY 2016 IPPS/LTCH PPS final rule, we would use them to the extent appropriate to determine the budget neutrality offset amount for FY 2016. Therefore, we indicated that the amount of the budget neutrality offset may change in this FY 2016 IPPS/LTCH PPS final rule based on the availability of updated data. In addition, similar to previous years, we proposed that if finalized cost reports for all of the demonstration hospitals that participated in an applicable year (FY 2010 or FY 2011) are available prior to the FY 2016 IPPS/LTCH PPS final rule, we would adjust the budget neutrality offset amount to reflect the difference between the actual cost of the demonstration for the year (FY 2010 or FY 2011) and the budget neutrality offset amount applicable to such year as finalized in the respective year's final rule, as explained in Step 4. The resulting total would be the amount for which an adjustment to the national IPPS rates would be made.
We did not receive any public comments on our proposed budget neutrality offset methodology, as discussed above. Therefore, we are finalizing the FY 2016 budget neutrality offset methodology as proposed, with the modifications discussed below, that will be used to derive the respective components that comprise the budget neutrality offset amount for which the adjustment to the national IPPS rates is calculated for FY 2016.
(a) The budget neutrality offset amount as set forth in the FY 2010 IPPS final rule (74 FR 43923 through 43924) included two different components. First, it included the estimate of the costs of the demonstration for FY 2010 for the 11 hospitals that were scheduled to participate in the demonstration as of the date the FY 2010 IPPS final rule was issued (this amount was $15,081,251). Second, the amounts by which the actual costs of the demonstration program in FYs 2005 and 2006, respectively, exceeded the budget neutrality offset amounts identified in the IPPS final rules for those years were incorporated as additional, discrete amounts into the budget neutrality offset amount for FY 2010 (we note that, because these amounts do not reflect the estimated demonstration costs for FY 2010, they are not included in our calculation under this Step 3).
(b) Given that when the FY 2010 IPPS final rule was published, the demonstration was expected to end in FY 2010, the estimate of the costs of the demonstration for FY 2010 for the 11 hospitals that were scheduled to participate in FY 2010 was calculated in the FY 2010 IPPS final rule using a prorating methodology similar to that described above for the estimate for FY 2016. Thus, the fraction of the number of months that the hospital was scheduled to participate in the demonstration during FY 2010 out of the 12-month fiscal year period served as the basis for estimating the reasonable cost amount that would be paid under the demonstration and the amount that would have been paid without the demonstration in FY 2010.
(c) Following upon the extension of the demonstration in 2010, as required by the Affordable Care Act, the FY 2011 IPPS final rule (75 FR 50344 through 50345) incorporated into the budget neutrality offset amount the estimated costs of the demonstration for FY 2010 that were not accounted for in the FY 2010 IPPS final rule because, in that final rule, we calculated the cost for FY 2010 assuming that for a subset of hospitals the demonstration would end before the end of that fiscal year. (This amount was $6,488,221.)
Therefore, the estimated costs of the demonstration for FY 2010 (and the budget neutrality offset amount relating to these costs) were finalized in the FYs 2010 and 2011 IPPS final rules, as discussed above. Accordingly, we are summing these two amounts, specified in the FYs 2010 and 2011 IPPS final rules ($15,081,251 and $6,488,221 respectively). This summed amount is $21,569,472. In this final rule, we are determining the difference between this amount and the actual costs of the demonstration in FY 2010. The actual cost of the demonstration in FY 2010 is determined from finalized cost reports for the hospitals that participated in the demonstration and that had cost reporting periods beginning in FY 2010; that amount is $16,817,922. Therefore, the estimated costs of the demonstration identified in the applicable final rules ($21,569,472) exceeded the actual costs of the demonstration ($16,817,922) by $4,751,550 for FY 2010.
(a) The amount, derived from Step 1, representing the difference between the sum of the estimated reasonable cost amounts to be paid under the demonstration to participating hospitals for covered inpatient hospital services for FY 2016 and the sum of the estimated amounts that would generally be paid in FY 2016 if the demonstration had not been implemented. This amount is based on “as submitted” cost reports for cost reporting periods ending in CY 2013, and is prorated according to the number of months that each hospital will have participated in the demonstration in FY 2016 out of the 12-month fiscal year period. This amount is $26,044,620.
(b) The amount, as derived from Step 2, by which the actual costs of the demonstration for FY 2009 (as shown in the finalized cost reports for the 10 hospitals that completed a cost reporting period beginning in FY 2009) differ from the budget neutrality offset amount that was finalized in the FY 2009 IPPS final rule. Analysis of this set of cost reports shows that the budget neutrality offset amount that was finalized in the FY 2009 IPPS final rule exceeds the actual cost of the demonstration by $8,457,452 for FY 2009.
(c) The amount, as derived from Step 3, by which the actual costs of the demonstration for FY 2010 (as shown in the finalized cost reports for the 9 hospitals that completed a cost reporting period beginning in FY 2010) differ from the amount that was finalized as the costs of the demonstration for FY 2010 in the FYs 2010 and 2011 IPPS final rules. Analysis of this set of cost reports shows that the budget neutrality offset amount that was finalized to account for the demonstration costs in FY 2010 (as set forth in the FYs 2010 and 2011 IPPS final rules as discussed above) exceeds the actual cost of the demonstration for FY 2010 by $4,751,550.
For FY 2016, the total budget neutrality offset amount that we are applying to the national IPPS rates is:
Finally, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24521), we indicated that we were considering whether to propose in future rulemaking that the calculation of the final costs of the demonstration for a fiscal year reflect that some of the participating hospitals would otherwise have been eligible for the payment adjustment for low-volume hospitals in that fiscal year if they had not participated in the demonstration. Our policy under the demonstration is that hospitals participating in the demonstration are not able to receive the low-volume payment adjustment in addition to the reasonable cost-based payment authorized by section 410A of Public Law 108-173. We refer readers to Change Request 7505, dated July 22, 2011, available on the CMS Web site at:
To the extent a hospital would have received a low-volume hospital payment adjustment if it had not participated in the demonstration, we believe it would be reasonable to take this into account in future rulemaking in determining what the hospital would have otherwise been paid in an applicable year without the demonstration. Because this payment adjustment has not been factored into the estimation of payments that otherwise would have been paid under the demonstration, such a proposal would require detailed consideration of the data sources and methodology that would be used to determine which among the demonstration hospitals would have otherwise been eligible for the low-volume payment adjustment and to estimate the amount of the adjustment. We invited public comments on this issue.
We did not receive any public comments on this issue. We will continue to examine this issue and consider which data sources and methodology would be appropriate for determining which among the demonstration hospitals would have otherwise been eligible for the low-volume payment adjustment and for estimating the amount of that adjustment. We may address this issue again in the FY 2017 IPPS/LTCH PPS proposed rule.
We also intend to discuss in the FY 2017 IPPS/LTCH PPS proposed rule how we propose to reconcile the budget neutrality offset amounts identified in the IPPS final rules for FYs 2011 through 2016 with the actual costs of the demonstration for those years, considering the fact that the demonstration will end December 31, 2016.
Existing regulations at § 412.4(a) define discharges under the IPPS as situations in which a patient is formally released from an acute care hospital or dies in the hospital. Section 412.4(b) defines acute care transfers, and § 412.4(c) defines postacute care transfers. Our policy set forth in § 412.4(f) provides that when a patient is transferred and his or her length of stay is less than the geometric mean length of stay for the MS-DRG to which the case is assigned, the transferring hospital is generally paid based on a graduated per diem rate for each day of stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred.
The per diem rate paid to a transferring hospital is calculated by dividing the full MS-DRG payment by the geometric mean length of stay for the MS-DRG. Based on an analysis that showed that the first day of hospitalization is the most expensive (60 FR 45804), our policy generally provides for payment that is twice the per diem amount for the first day, with each subsequent day paid at the per diem amount up to the full MS-DRG payment (§ 412.4(f)(1)). Transfer cases also are eligible for outlier payments. In general, the outlier threshold for transfer cases, as described in § 412.80(b), is equal to the fixed-loss outlier threshold for nontransfer cases (adjusted for geographic variations in costs), divided by the geometric mean length of stay for the MS-DRG, and multiplied by the length of stay for the case, plus 1 day.
We established the criteria set forth in § 412.4(d) for determining which DRGs qualify for postacute care transfer payments in the FY 2006 IPPS final rule (70 FR 47419 through 47420). The determination of whether a DRG is subject to the postacute care transfer policy was initially based on the Medicare Version 23.0 GROUPER (FY 2006) and data from the FY 2004 MedPAR file. However, if a DRG did not exist in Version 23.0 or a DRG included in Version 23.0 is revised, we use the current version of the Medicare GROUPER and the most recent complete year of MedPAR data to determine if the DRG is subject to the postacute care transfer policy. Specifically, if the MS-DRG's total number of discharges to postacute care equals or exceeds the 55th percentile for all MS-DRGs and the proportion of short-stay discharges to postacute care to total discharges in the MS-DRG exceeds the 55th percentile for all MS-DRGs, CMS will apply the postacute care transfer policy to that MS-DRG and to any other MS-DRG that shares the same base MS-DRG. In the preamble to the FY 2006 IPPS final rule (70 FR 47419), we stated that we will
To account for MS-DRGs subject to the postacute care policy that exhibit exceptionally higher shares of costs very early in the hospital stay, § 412.4(f) also includes a special payment methodology. For these MS-DRGs, hospitals receive 50 percent of the full MS-DRG payment, plus the single per diem payment, for the first day of the stay, as well as a per diem payment for subsequent days (up to the full MS-DRG payment (§ 412.4(f)(6)). For an MS-DRG to qualify for the special payment methodology, the geometric mean length of stay must be greater than 4 days, and the average charges of 1-day discharge cases in the MS-DRG must be at least 50 percent of the average charges for all cases within the MS-DRG. MS-DRGs that are part of an MS-DRG severity level group will qualify under the MS-DRG special payment methodology policy if any one of the MS-DRGs that share that same base MS-DRG qualifies (§ 412.4(f)(6)).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24522), we discussed that, based on our annual review of MS-DRGs, we had identified two proposed new MS-DRGs that we proposed to include on the list of MS-DRGs subject to the postacute care transfer policy. As we discussed in section II.G. of the preamble of the proposed rule (80 FR 24349 through 24410), in response to public comments and based on our analysis of FY 2014 MedPAR claims data, we proposed to make changes to MS-DRGs, effective for FY 2016.
As discussed in section II.G.3.b. of the preamble of the proposed rule (80 FR 24356 through 24361), we proposed to modify the MS-DRG assignment of certain cardiovascular procedures currently assigned to MS-DRGs 246 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent with MCC or 4+ Vessels/Stents), 247 (Percutaneous Cardiovascular Procedures with Drug-Eluting Stent without MCC), 248 (Percutaneous Cardiovascular Procedures with Non-Drug Eluting Stent with MCC or 4+ Vessels/Stents), 249 (Percutaneous Cardiovascular Procedures with Non-Drug Eluting Stent without MCC), 250 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent with MCC), and 251 (Percutaneous Cardiovascular Procedures without Coronary Artery Stent without MCC) to improve the clinical homogeneity of these MS-DRGs and reflect the resource cost of specialized equipment. We proposed to create new MS-DRGs 273 and 274 (Percutaneous Intracardiac Procedures with and without MCC, respectively) and to reassign the procedures performed within the heart chambers using intracardiac techniques from their existing assignment in MS-DRGs 246 through 251 to the two proposed new MS-DRGs.
To improve clinical coherence for the various cardiovascular procedures assigned to MS-DRGs 237 and 238 (Major Cardiovascular Procedures with and without MCC, respectively), as discussed in section II.G.3.e. of the preamble of the proposed rule (80 FR 24362 through 24379), we also proposed to delete MS-DRGs 237 and 238 and to create five new proposed MS-DRGs. Proposed new MS DRGs 268 and 269 (Aortic and Heart Assist Procedures Except Pulsation Balloon with MCC and without MCC, respectively) would contain the more complex, more invasive aortic and heart assist procedures assigned to MS-DRGs 237 and 238. Proposed new MS-DRGs 270 (Other Major Cardiovascular Procedures with MCC), 271 (Other Major Cardiovascular Procedures with CC), and 272 (Other Major Cardiovascular Procedures without CC/MCC) would include the less complex, less invasive cardiovascular procedures assigned to MS-DRGs 237 and 238.
In light of these proposed changes to the MS-DRGs for FY 2016, according to the regulations under § 412.4(c), we evaluated these proposed MS-DRGs against the general postacute care transfer policy criteria using the FY 2014 MedPAR data. If an MS-DRG qualified for the postacute care transfer policy, we also evaluated that MS-DRG under the special payment methodology criteria according to regulations at § 412.4(f)(6). We continue to believe it is appropriate to reassess MS-DRGs when proposing reassignment of procedures and/or diagnostic codes that would result in material changes to an MS-DRG. As a result of our review, we proposed to update the list of MS-DRGs that are subject to the postacute care transfer policy to include the proposed new MS-DRGs 273 and 274. We determined that existing MS-DRGs 246 through 251 do not qualify for the postacute care transfer policy and would not meet the review criteria for FY 2016. Proposed new MS-DRGs 268 through 272 also would not qualify for postacute care transfer policy status.
We did not receive any public comments on our proposals. Therefore, we are finalizing our proposals to update the list of MS-DRGs that are subject to the postacute care transfer policy to include new MS-DRGs 273 and 274. We omitted data for MS-DRGs 246 through 251 from the table published in the proposed rule (80 FR 24522 through 24523) and stated they did not meet review criteria. However, because we proposed changes to MS-DRGs 246 through 251 due to the reassignment of procedures to new MS-DRGs 273 and 274, we are including data for MS-DRGs 246 through 251 in the table in this final rule that show that MS-DRGs 246 through 251 do not qualify for the postacute care transfer policy for FY 2016. New MS-DRGs 268 through 272 also do not qualify for postacute care transfer policy status for FY 2016. The table below lists the MS-DRGs that are subject to the postacute care transfer policies for FY 2016.
In addition, in the FY 2016 IPPS/LTCH PPS proposed rule, we determined that proposed new MS-DRGs 273 and 274 also would meet the criteria for the special payment methodology. Therefore, we proposed that the two proposed new MS-DRGs would be subject to the MS-DRG special payment methodology, effective FY 2016.
We did not receive any public comments on our proposal. Therefore, we are finalizing our proposal that new MS-DRGs 273 and 274 will be subject to the MS-DRG special payment methodology, effective FY 2016. The table below lists the MS-DRGs that are subject to the special payment policy for FY 2016.
The postacute care transfer status and special payment policy status of these MS-DRGs are reflected in Table 5 associated with this final rule, which is listed in section VI. of the Addendum to this final rule and available via the Internet on the CMS Web site.
We noted in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24523) that hospitals and physicians continue to voice their concern with parts of the 2-midnight rule finalized in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50943 through 50954). We indicated that we were considering this feedback carefully, as well as recent MedPAC recommendations, and expected to include a further discussion of the broader set of issues related to short inpatient hospital stays, long outpatient stays with observation services, and the related −0.2 percent IPPS payment adjustment in the CY 2016 hospital outpatient prospective payment system proposed rule. We refer readers to the proposal and related discussion of these issues that were included in the CY 2016 OPPS/ASC proposed rule that appeared in the
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Public Law 114-10, enacted on April 16, 2015, extended the Medicare-dependent, small rural hospital (MDH) program as well as certain provisions relating to payment to low-volume hospitals under the IPPS. Section 204 of the MACRA extended the temporary changes to the low-volume hospital qualifying criteria and payment adjustment under the IPPS, originally provided for by the Affordable Care Act, for discharges occurring on or after April 1, 2015 through FY 2017 (September 30, 2017). Section 205 of the MACRA extended the MDH program for hospital discharges occurring on or after April 1, 2015 through FY 2017 (September 30, 2017). Due to the timing of the development of the FY 2016 IPPS/LTCH PPS proposed rule and the enactment of the MACRA, we were unable to address these legislative extensions in that proposed rule.
Section 1886(d)(12) of the Act provides for an additional payment to each qualifying low-volume hospital that is paid under IPPS beginning in FY 2005, and the low-volume hospital payment policy is set forth in the regulations at 42 CFR 412.101. Sections 3125 and 10314 of the Affordable Care Act provided for a temporary change in the low-volume hospital payment policy for FYs 2011 and 2012. Specifically, the provisions of the Affordable Care Act amended the qualifying criteria for low-volume hospitals to specify, for FYs 2011 and 2012, that a hospital qualifies as a low-volume hospital if it is more than 15 road miles from another subsection (d) hospital and has less than 1,600 discharges of individuals entitled to, or enrolled for, benefits under Medicare Part A during the fiscal year. In addition, the statute as amended by the Affordable Care Act, provides that the low-volume hospital payment adjustment (that is, the percentage increase) is to be determined using a continuous linear sliding scale ranging from 25 percent for low-volume hospitals with 200 or fewer discharges of individuals entitled to, or enrolled for, benefits under Medicare Part A in the fiscal year to 0 percent for low-volume hospitals with greater than 1,600 discharges of such individuals in the fiscal year. We revised the regulations governing the low-volume hospital policy at § 412.101 to reflect the changes to the qualifying criteria and the payment adjustment for low-volume hospitals according to the provisions of the Affordable Care Act in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50238 through 50275 and 50414).
The temporary changes to the low-volume hospital qualifying criteria and payment adjustment originally provided for by the Affordable Care Act have been extended by subsequent legislation as follows: Through FY 2013 by the American Taxpayer Relief Act of 2012 (ATRA), Public Law 112-240; through March 31, 2014, by the Pathway for SGR Reform Act of 2013, Public Law 113-167; through March 31, 2015, by the Protecting Access to Medicare Act of 2014 (PAMA), Public Law 113-93; and most recently through FY 2017 by section 204 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), Public Law 114-10. The extension provided by section 204 of the MACRA is discussed in greater detail in section IV.L.2.b. of the preamble of this interim final rule with comment period. For additional details on the implementation of the previous extensions, through March 31, 2015, of the temporary changes to the low-volume hospital qualifying criteria and payment adjustment originally provided for by the Affordable Care Act, we refer readers to the following
Section 204 of the MACRA provided for an extension of the temporary changes to the low-volume hospital qualifying criteria and payment adjustment for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017). We addressed the extension of the temporary changes to the low-volume hospital payment policy for the last half of FY 2015, that is, for discharges occurring on or after April 1, 2015, through September 30, 2015, in instructions issued in Change Request 9197, Transmittals 3263 and 3281. (We note that Change Request 9197 was originally issued on May 22, 2015 as Transmittal 3263, and reissued on June 5, 2015 as Transmittal 3281 to correct a date in Attachment 3, draft Notification to Provider letter. All other information remained the same.) Generally, hospitals that were receiving the low-volume hospital payment adjustment for FY 2015 as of March 31, 2015 would continue to have low-volume hospital status for the second half of FY 2015, as long as the hospital continued to meet the applicable qualifying low-volume hospital criteria.
In the instructions issued in Change Request 9197, for discharges occurring on or after April 1, 2015, through September 30, 2015, consistent with the existing regulations at § 412.101(b)(2)(ii), we state that the same discharge data used for the low-volume adjustment for discharges occurring during the first half of FY 2015 will continue to be used for discharges occurring during the last half of FY 2015, as these data were the most recent available data at the time of the development of the FY 2015 payment rates. Specifically, for FY 2015 discharges occurring on or after April 1, 2015, through September 30, 2015, the low-volume hospital qualifying criteria and payment adjustment (percentage increase) is determined using FY 2013 Medicare discharge data from the March 2014 update of the MedPAR files. These discharge data can be found in Table 14 of the Addendum to the FY 2015 IPPS/LTCH PPS final rule, which is available via the Internet on the CMS Web site at:
As discussed above, under section 1886(d)(12) of the Act, as amended by section 204 of the MACRA, the temporary changes in the low-volume hospital payment policy originally provided by the Affordable Care Act and extended through subsequent legislation, are effective through FY 2017. Under the prior extension, in accordance with section 105 of PAMA, those temporary changes in the low-volume hospital payment policy were to be in effect for discharges on or before March 31, 2015 only. Due to the timing of the development of the FY 2016 IPPS/LTCH PPS proposed rule and the enactment of the MACRA, we were unable to address the extension of the changes in the low-volume hospital payment policy for FY 2016 (or the last half of FY 2015, as discussed in section IV.L.2.b. of the preamble of this interim final rule with comment period) in that proposed rule. In this interim final rule with comment period, we are revising the regulations at § 412.101 to conform to the provisions of section 204 of the MACRA.
To implement the low-volume hospital payment adjustment for FY 2016 consistent with provisions of the MACRA, in accordance with existing § 412.101(b)(2)(ii) and consistent with our historical approach, we are updating the discharge data source used to identify qualifying low-volume hospitals and calculate the payment adjustment (percentage increase). Under existing § 412.101(b)(2)(ii), for the applicable fiscal years, a hospital's Medicare discharges from the most recently available MedPAR data, as determined by CMS, are used to determine if the hospital meets the discharge criteria to receive the low-volume payment adjustment in the current year. The applicable low-volume percentage increase, as originally provided for by the Affordable Care Act, is determined using a continuous linear sliding scale equation that results in a low-volume hospital payment adjustment ranging from an additional 25 percent for hospitals with 200 or fewer Medicare discharges to a zero percent additional payment adjustment for hospitals with 1,600 or more Medicare discharges. For FY 2016, consistent with our historical policy, qualifying low-volume hospitals and their payment adjustment will be determined using the most recently available Medicare discharge data from the March 2015 update of the FY 2014 MedPAR file, as these data are the most recent data available. Table 14 listed in the Addendum of the FY 2016 IPPS/LTCH PPS final rule (which is available via the Internet on the CMS Web site at:
In order to receive a low-volume hospital payment adjustment under § 412.101 for FY 2016, consistent with our previously established procedure, a hospital must notify and provide documentation to its MAC that it meets the discharge and distance requirements under § 412.101(b)(2)(ii), as revised. Specifically, for FY 2016, a hospital must make a written request for low-volume hospital status that is received by its MAC no later than September 1, 2015, in order for the applicable low-volume hospital payment adjustment to be applied to payments for its FY 2016 discharges occurring on or after October 1, 2015. Under this procedure, a hospital that qualified for the low-volume payment adjustment in FY 2015 may continue to receive a low-volume payment adjustment for FY 2016 without reapplying if it continues to meet the Medicare discharge criterion established for FY 2016 and the mileage criterion. However, the hospital must send written verification that is received by its MAC no later than September 1, 2015, stating that it continues to be more than 15 miles from any other “subsection (d)” hospital. This written verification could be a brief letter to the MAC stating that the hospital continues to meet the low-volume hospital distance criterion as documented in a prior low-volume hospital status request. If a hospital's written request for low-volume hospital status for FY 2016 is received after September 1, 2015, and if the MAC determines that the hospital meets the criteria to qualify as a low-volume hospital, the MAC will apply the applicable low-volume hospital payment adjustment to determine the payment for the hospital's FY 2016 discharges, effective prospectively within 30 days of the date of its low-volume hospital status determination, consistent with past practice.
(For additional details on our established process for the low-volume hospital payment adjustment, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53408) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50000 through 50001).)
In this interim final rule with comment period, we are making conforming changes to the existing regulations text at § 412.101 to reflect the extension of the changes to the qualifying criteria and the payment adjustment methodology for low-volume hospitals through FY 2017 (that is, through September 30, 2017) in accordance with section 204 of the MACRA. In general, these conforming changes consist of replacing the phrase “through FY 2014, and the portion of FY 2015 before April 1, 2015” with “through FY 2017” each place it appears, and replacing the phrase “the portion of FY 2015 beginning on April 1, 2015, and subsequent fiscal years” with the phrase “FY 2018 and subsequent fiscal years” each place it appears. Specifically, we are revising paragraphs (b)(2)(i), (b)(2)(ii), (c)(1), (c)(2), and (d) of § 412.101. Under these revisions to § 412.101, beginning with FY 2018, consistent with section 1886(d)(12) of the Act, as amended, the low-volume hospital qualifying criteria and payment adjustment methodology will revert to that which was in effect prior to the amendments made by the Affordable Care Act and subsequent legislation (that is, the low-volume hospital payment adjustment policy in effect for FYs 2005 through 2010).
Section 1886(d)(5)(G) of the Act provides special payment protections, under the IPPS, to a Medicare-dependent, small rural hospital (MDH). (For additional information on the MDH program and the payment methodology, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51683 through 51684).)
Since the extension of the MDH program through FY 2012 provided by section 3124 of the Affordable Care Act, the MDH program has been extended by subsequent legislation as follows: First, section 606 of the ATRA (Pub. L. 112-240) extended the MDH program through FY 2013 (that is, for discharges occurring before October 1, 2013). Second, section 1106 of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67) extended the MDH program through the first half of FY 2014 (that is, for discharges occurring before April 1, 2014). Third, section 106 of the PAMA (Pub. L. 113-93) extended the MDH program through the first half of FY 2015 (that is, for discharges occurring before April 1, 2015). Most recently, section 205 of the MACRA (Pub. L. 114-10) extended the MDH program though FY 2017 (that is, for discharges occurring before October 1, 2017). For additional information on the extensions of the MDH program after FY 2012, we refer readers to the following
Section 205 of the MACRA provided for an extension of the MDH program for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017). Specifically, section 205 of the MACRA amended sections 1886(d)(5)(G)(i) and 1886(d)(5)(G)(ii)(II) of the Act by striking “April 1, 2015” and inserting “October 1, 2017”. Section 205 of the MACRA also made conforming amendments to sections 1886(b)(3)(D)(i) and 1886(b)(3)(D)(iv) of the Act.
In this interim final rule with comment period, we are making conforming changes to the regulations at § 412.108(a)(1) and (c)(2)(iii) to reflect the extension of the MDH program provided for by the MACRA. Due to the timing of the development of the FY 2016 IPPS/LTCH PPS proposed rule and the enactment of the MACRA, we were unable to address the extension of the MDH program for FY 2016 (or the last half of FY 2015) in that proposed rule. After the MACRA was enacted, we addressed the extension of the MDH program for the last half of FY 2015 (that is, for discharges occurring on or after April 1, 2015, through September 30, 2015) in instructions issued in Change Request 9197, Transmittals 3263 and 3281. (We note that Change Request 9197 was originally issued May 22, 2015 as Transmittal 3263, and reissued June 5, 2015 as Transmittal 3281 to correct a date in Attachment 3, draft Notification to Provider letter. All other information remained the same.)
As explained in Change Request 9197, consistent with the previous extensions of the MDH program and the regulations at § 412.108, generally, a provider that was classified as an MDH as of March 31, 2015, was reinstated as an MDH effective April 1, 2015, with no need to reapply for MDH classification. However, if the MDH had classified as an SCH or cancelled its rural classification under § 412.103(g) effective on or after April 1, 2015, the effective date of MDH status may not be retroactive to April 1, 2015. For more details regarding MDH status for the second half of FY 2015, we refer the reader to Change Request 9197.
Because of the large number of public comments we normally receive on
We ordinarily publish a notice of proposed rulemaking in the
Sections 204 and 205 of the MACRA require the agency to make the changes to the payment adjustment for low-volume hospitals and the MDH program set forth in sections IV.B. and C. of the preamble of this interim final rule with comment period, effective April 1, 2015 through September 30, 2017. We are conforming our regulations at § 412.101 and § 412. 108 to specific statutory requirements contained in sections 204 and 205 of the MACRA or that directly result from those statutory requirements and informing the public of the procedures and practices the agency will follow to ensure compliance with those statutory provisions. To the extent that notice-and-comment rulemaking or a delay in effective date, or both, would otherwise apply, we believe that there is good cause to waive such requirements and to implement the requirements of section 204 and 205 of the MACRA through an interim final rule with comment period. Specifically, we find it unnecessary to undertake notice-and-comment rulemaking in this instance because this interim final rule with comment period sets forth the requirements for the extension of the temporary changes to the payment adjustment for low-volume hospitals and the extension of the MDH program as prescribed by the MACRA, as well as procedures and practices that directly result from those statutory requirements. As changes related to requirements of section 204 and 205 of the MACRA outlined in this interim final rule with comment period have already taken effect, it also would be impracticable to undertake notice-and-comment rulemaking.
For the reasons outlined, we find good cause to waive the notice of proposed rulemaking for the requirements for the extension of the temporary changes to the payment adjustment for low-volume hospitals and the extension of the MDH program as prescribed by the sections 204 and 205 of the MACRA and implement these provisions on an interim final basis. Even though we are waiving notice of proposed rulemaking requirements and are issuing these provisions on an interim basis, we are providing a 60-day public comment period. For these reasons, we also find that a waiver of any delay in effective date, if it were otherwise applicable, is necessary to comply with the requirements of section 204 and 205 of the MACRA. Therefore, we find good cause to waive notice-and-comment procedures as well as any delay in the effective dates for these MACRA requirements.
This interim final rule with comment period does not impose information collection and recordkeeping requirements. Consequently, it need not be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 35).
Based on the latest available data, we estimate that approximately 593 hospitals will qualify as a low-volume hospital in FY 2016. We project that the extension for FY 2016 of the temporary changes to the low-volume hospital definition and the payment adjustment methodology provided for by the MACRA will result in an increase in payments of approximately $322 million in FY 2016 as compared to payments to qualifying hospitals without the extension of the temporary changes to the low-volume hospital definition and the payment adjustment methodology.
As discussed above, in this interim final rule with comment period, we are making conforming changes to the regulations at § 412.108(a)(1) and (c)(2)(iii) to reflect the extension of the MDH program provided for by the MACRA. Hospitals that qualify as MDHs receive the higher of operating IPPS payments made under the Federal standardized amount or the payments made under the Federal standardized amount plus 75 percent of the amount by which the hospital-specific rate (a hospital-specific cost-based rate) exceeds the Federal standardized amount. Based on the latest available data we have for 163 MDHs, we project that 90 MDHs will receive the blended payment (that is, the Federal standardized amount plus 75 percent of the amount by which the hospital-specific rate exceeds the Federal standardized amount) for FY 2016. We estimate that those hospitals will experience an overall increase in payments of approximately $96 million as compared to payments they would have received had the MDH program not been extended for FY 2016.
Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient acute hospital services in accordance with a prospective payment system established by the Secretary. Under the statute, the Secretary has broad authority in establishing and implementing the IPPS for acute care hospital inpatient capital-related costs. The IPPS for capital-related costs was initially implemented in the Federal fiscal year (FY) 1992 IPPS final rule (56 FR 43358), in which we established a 10-year transition period to change the payment methodology for Medicare hospital inpatient capital-related costs from a reasonable cost-based methodology to a prospective methodology (based fully on the Federal rate).
FY 2001 was the last year of the 10-year transition period established to phase in the IPPS for hospital inpatient capital-related costs. For cost reporting periods beginning in FY 2002, capital IPPS payments are based solely on the Federal rate for almost all acute care hospitals (other than hospitals receiving certain exception payments and certain new hospitals). (We refer readers to the FY 2002 IPPS final rule (66 FR 39910 through 39914) for additional information on the methodology used to determine capital IPPS payments to hospitals both during and after the transition period.)
The basic methodology for determining capital prospective payments using the Federal rate is set forth in § 412.312 of the regulations. For the purpose of calculating capital payments for each discharge, the standard Federal rate is adjusted as follows:
(Standard Federal Rate) × (DRG Weight) × (Geographic Adjustment Factor (GAF)) × (COLA for hospitals located in Alaska and Hawaii) × (1 + Capital DSH Adjustment Factor + Capital IME Adjustment Factor, if applicable).
In addition, under § 412.312(c), hospitals also may receive outlier payments under the capital IPPS for extraordinarily high-cost cases that qualify under the thresholds established for each fiscal year.
The regulations at § 412.348 provide for certain exception payments under the capital IPPS. The regular exception payments provided under §§ 412.348(b) through (e) were available only during the 10-year transition period. For a certain period after the transition period, eligible hospitals may have received additional payments under the special exceptions provisions at § 412.348(g). However, FY 2012 was the final year hospitals could receive special exceptions payments. For additional details regarding these exceptions policies, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51725).
Under § 412.348(f), a hospital may request an additional payment if the hospital incurs unanticipated capital expenditures in excess of $5 million due to extraordinary circumstances beyond the hospital's control. Additional information on the exception payment for extraordinary circumstances in § 412.348(f) can be found in the FY 2005 IPPS final rule (69 FR 49185 and 49186).
Under the capital IPPS, § 412.300(b) of the regulations defines a new hospital as a hospital that has operated (under previous or current ownership) for less than 2 years and lists examples of hospitals that are not considered new hospitals. In accordance with § 412.304(c)(2), under the capital IPPS a new hospital is paid 85 percent of its allowable Medicare inpatient hospital capital-related costs through its first 2 years of operation, unless the new hospital elects to receive full prospective payment based on 100 percent of the Federal rate. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51725) for additional information on payments to new hospitals under the capital IPPS.
Section 412.374 of the regulations provides for the use of a blended payment amount for prospective payments for capital-related costs to
The annual update to the capital PPS Federal and Puerto Rico-specific rates, as provided for at § 412.308(c), for FY 2016 is discussed in section III. of the Addendum to this final rule.
We note that, in section II.D. of the preamble of this final rule, we present a discussion of the MS-DRG documentation and coding adjustment, including previously finalized policies and historical adjustments, as well as the recoupment adjustment to the standardized amounts under section 1886(d) of the Act that we are finalizing for FY 2016 in accordance with the amendments made to section 7(b)(1)(B) of Public Law 110-90 by section 631 of the ATRA. Because section 631 of the ATRA requires CMS to make a recoupment adjustment only to the operating IPPS standardized amount, we are not making a similar adjustment to the national or Puerto Rico capital IPPS rates (or to the operating IPPS hospital-specific rates or the Puerto Rico-specific standardized amount). This approach is consistent with our historical approach regarding the application of the recoupment adjustment authorized by section 7(b)(1)(B) of Public Law 110-90.
Certain hospitals excluded from a prospective payment system, including children's hospitals, 11 cancer hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa) receive payment for inpatient hospital services they furnish on the basis of reasonable costs, subject to a rate-of-increase ceiling. A per discharge limit (the target amount as defined in § 413.40(a) of the regulations) is set for each hospital based on the hospital's own cost experience in its base year, and updated annually by a rate-of-increase percentage. For each cost reporting period, the updated target amount is multiplied by total Medicare discharges during that period and applies as an aggregate upper limit (the ceiling as defined in § 413.40(a)) of Medicare payments for total inpatient operating costs for a hospital's cost reporting period. In accordance with § 403.752(a) of the regulations, RNHCIs also are subject to the rate-of-increase limits established under § 413.40 of the regulations discussed above.
As explained in the FY 2006 IPPS final rule (70 FR 47396 through 47398), beginning with FY 2006, we have used the percentage increase in the IPPS operating market basket to update the target amounts for children's hospitals, cancer hospitals, and RNHCIs. Consistent with §§ 412.23(g), 413.40(a)(2)(ii)(A), and 413.40(c)(3)(viii), we also have used the percentage increase in the IPPS operating market basket to update the target amounts for short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. As we finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50156 through 50157), we will continue to use the percentage increase in the FY 2010-based IPPS operating market basket to update the target amounts for children's hospitals, cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa for FY 2016 and subsequent fiscal years. Accordingly, for FY 2016, the rate-of-increase percentage to be applied to the target amount for these children's hospitals, cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa is the FY 2016 percentage increase in the FY 2010-based IPPS operating market basket.
For the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24525), based on IHS Global Insight, Inc.'s 2015 first quarter forecast, we estimated that the FY 2010-based IPPS operating market basket update for FY 2016 was 2.7 percent (that is, the estimate of the market basket rate-of-increase). We indicated in the proposed rule that if more recent data became available for the final rule, we would use them to calculate the IPPS operating market basket update for FY 2016. For this FY 2016 IPPS/LTCH PPS final rule, based on IHS Global Insight, Inc.'s 2015 second quarter forecast (which is the most recent data available), we calculated the FY 2010-based IPPS operating market basket update for FY 2016 to be 2.4 percent. Therefore, the FY 2016 rate-of-increase percentage that is applied to the FY 2015 target amounts in order to calculate the FY 2016 target amounts for children's hospitals, cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa is 2.4 percent, in accordance with the applicable regulations at 42 CFR 413.40.
Section 4419(b) of Public Law 105-33 requires the Secretary to publish annually in the
The process of requesting, adjusting, and awarding an adjustment payment is likely to occur over a 2-year period or longer. First, generally, an excluded hospital must file its cost report for the fiscal year in accordance with § 413.24(f)(2) of the regulations. The MAC reviews the cost report and issues a notice of provider reimbursement (NPR). Once the hospital receives the NPR, if its operating costs are in excess of the ceiling, the hospital may file a request for an adjustment payment. After the MAC receives the hospital's request in accordance with applicable regulations, the MAC or CMS, depending on the type of adjustment requested, reviews the request and determines if an adjustment payment is warranted. This determination is sometimes not made until more than 180 days after the date the request is filed because there are times when the request applications are incomplete and additional information must be requested in order to have a completed request application. However, in an attempt to provide interested parties with data on the most recent adjustment payments for which we have data, we are publishing data on adjustment payments that were processed by the MAC or CMS during FY 2014.
The table below includes the most recent data available from the MACs and CMS on adjustment payments that were adjudicated during FY 2014. As indicated above, the adjustments made during FY 2014 only pertain to cost reporting periods ending in years prior
In response to the FY 2016 IPPS/LTCH PPS proposed rule, we received the following public comment relating to conditions for payment for inpatient services furnished in critical access hospitals (CAHs), which we consider to be outside of the scope of the FY 2016 proposed rule.
One commenter specifically addressed the requirement that, for inpatient CAH services to be payable under Medicare Part A, a physician must certify that the individual may reasonably be expected to be discharged or transferred to a hospital within 96 hours after admission to the CAH (section 1814(a)(8) of the Act; 42 CFR 424.15). The commenter stated that this certification is inconsistent with the congressional intent of the CAH program and should be eliminated. The commenter stated that CAHs provide high quality and cost-efficient care, which allows Medicare beneficiaries living in rural areas to receive this care close to home. The commenter noted that some CAHs have established general surgery programs, which allow senior citizens to receive surgical services in a nearby and familiar location. However, the commenter believed that the 96-hour certification requirement for payment of inpatient services furnished in a CAH prohibits CAHs from receiving payment for providing these surgical services.
We acknowledge the commenter's concerns. However, because we did not specifically propose any changes related to the 96-hour certification requirement for CAH inpatient services, we consider this comment to be outside the scope of the proposed rule and are not addressing the comment at this time. We note that the 96-hour certification requirement was last addressed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50163 through 50165).
Section 123 of the Medicare, Medicaid, and SCHIP (State Children's Health Insurance Program) Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106-113) as amended by section 307(b) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) provides for payment for both the operating and capital-related costs of hospital inpatient stays in long-term care hospitals (LTCHs) under Medicare Part A based on prospectively set rates. The Medicare prospective payment system (PPS) for LTCHs applies to hospitals that are described in section 1886(d)(1)(B)(iv) of the Act, effective for cost reporting periods beginning on or after October 1, 2002.
Section 1886(d)(1)(B)(iv)(I) of the Act defines an LTCH as a hospital which has an average inpatient length of stay (as determined by the Secretary) of greater than 25 days. Section 1886(d)(1)(B)(iv)(II) of the Act also provides an alternative definition of LTCHs: specifically, a hospital that first received payment under section 1886(d) of the Act in 1986 and has an average inpatient length of stay (as determined by the Secretary of Health and Human Services (the Secretary)) of greater than 20 days and has 80 percent or more of its annual Medicare inpatient discharges with a principal diagnosis that reflects a finding of neoplastic disease in the 12-month cost reporting period ending in FY 1997.
Section 123 of the BBRA requires the PPS for LTCHs to be a “per discharge” system with a diagnosis-related group (DRG) based patient classification system that reflects the differences in patient resources and costs in LTCHs.
Section 307(b)(1) of the BIPA, among other things, mandates that the Secretary shall examine, and may provide for, adjustments to payments under the LTCH PPS, including adjustments to DRG weights, area wage adjustments, geographic reclassification, outliers, updates, and a disproportionate share adjustment.
In the August 30, 2002
The LTCH PPS replaced the reasonable cost-based payment system under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248) for payments for inpatient services provided by an LTCH with a cost reporting period beginning on or after October 1, 2002. (The regulations implementing the TEFRA reasonable cost-based payment provisions are located at 42 CFR part 413.) With the implementation of the PPS for acute care hospitals authorized by the Social Security Amendments of 1983 (Pub. L. 98-21), which added section 1886(d) to the Act, certain hospitals, including LTCHs, were excluded from the PPS for acute care hospitals and were paid their reasonable costs for inpatient services subject to a per discharge limitation or target amount under the TEFRA system. For each cost reporting period, a hospital-specific ceiling on payments was determined by multiplying the hospital's updated target amount by the number of total current year Medicare discharges. (Generally, in this section
In the August 30, 2002 final rule, we provided for a 5-year transition period from payments under the TEFRA system to payments under the LTCH PPS. During this 5-year transition period, an LTCH's total payment under the PPS was based on an increasing percentage of the Federal rate with a corresponding decrease in the percentage of the LTCH PPS payment that is based on reasonable cost concepts, unless an LTCH made a one-time election to be paid based on 100 percent of the Federal rate. Beginning with LTCHs' cost reporting periods beginning on or after October 1, 2006, total LTCH PPS payments are based on 100 percent of the Federal rate.
In addition, in the August 30, 2002 final rule, we presented an in-depth discussion of the LTCH PPS, including the patient classification system, relative weights, payment rates, additional payments, and the budget neutrality requirements mandated by section 123 of the BBRA. The same final rule that established regulations for the LTCH PPS under 42 CFR part 412, subpart O, also contained LTCH provisions related to covered inpatient services, limitation on charges to beneficiaries, medical review requirements, furnishing of inpatient hospital services directly or under arrangement, and reporting and recordkeeping requirements. We refer readers to the August 30, 2002 final rule for a comprehensive discussion of the research and data that supported the establishment of the LTCH PPS (67 FR 55954).
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51733 through 51743) for a chronological summary of the main legislative and regulatory developments affecting the LTCH PPS through the annual update cycles prior to the FY 2014 rulemaking cycle. In addition, in this rule, we discuss the provisions of the Pathway for SGR Reform Act of 2013 (Pub. L. 113-67), enacted on December 26, 2013, and the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-97), enacted on March 27, 2014, both of which affect the LTCH PPS. In section VII.B. of the preamble of this final rule, we discuss our finalized policies to implement the provisions of section 1206(a) of Public Law 113-67, which amended section 1886(m) of the Act by adding paragraph (6) and established, among other things, patient-level criteria for payments under the LTCH PPS for implementation beginning with FY 2016, and our changes to the calculation of the greater than 25-day average length of stay criteria, consistent with the statute, in section VII.F. of the preamble of this final rule. In section VII.E. of the preamble of this final rule, as discussed in the preamble, we are finalizing several technical clarifications relating to our implementation of the new statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities (subject to certain defined exceptions) and the new statutory moratorium on bed increases in existing LTCHs under section 1206(b)(2) of Public Law 113-67, as amended.
Under the regulations at § 412.23(e)(1), to qualify to be paid under the LTCH PPS, a hospital must have a provider agreement with Medicare. Furthermore, § 412.23(e)(2)(i), which implements section 1886(d)(1)(B)(iv)(I) of the Act, requires that a hospital have an average Medicare inpatient length of stay of greater than 25 days to be paid under the LTCH PPS. Alternatively, § 412.23(e)(2)(ii) states that, for cost reporting periods beginning on or after August 5, 1997, a hospital that was first excluded from the PPS in 1986 and can demonstrate that at least 80 percent of its annual Medicare inpatient discharges in the 12-month cost reporting period ending in FY 1997 have a principal diagnosis that reflects a finding of neoplastic disease must have an average inpatient length of stay for all patients, including both Medicare and non-Medicare inpatients, of greater than 20 days.
The following hospitals are paid under special payment provisions, as described in § 412.22(c) and, therefore, are not subject to the LTCH PPS rules:
• Veterans Administration hospitals.
• Hospitals that are reimbursed under State cost control systems approved under 42 CFR part 403.
• Hospitals that are reimbursed in accordance with demonstration projects authorized under section 402(a) of the Social Security Amendments of 1967 (Pub. L. 90-248) (42 U.S.C. 1395b-1) or section 222(a) of the Social Security Amendments of 1972 (Pub. L. 92-603) (42 U.S.C. 1395b-1 (note)) (Statewide all-payer systems, subject to the rate-of-increase test at section 1814(b) of the Act).
• Nonparticipating hospitals furnishing emergency services to Medicare beneficiaries.
In the August 30, 2002 final rule, we presented an in-depth discussion of beneficiary liability under the LTCH PPS (67 FR 55974 through 55975). This discussion was further clarified in the RY 2005 LTCH PPS final rule (69 FR 25676). In keeping with those discussions, if the Medicare payment to the LTCH is the full LTC-DRG payment amount, consistent with other established hospital prospective payment systems, § 412.507 currently provides that an LTCH may not bill a Medicare beneficiary for more than the deductible and coinsurance amounts as specified under §§ 409.82, 409.83, and 409.87 and for items and services specified under § 489.30(a). However, under the LTCH PPS, Medicare will only pay for days for which the beneficiary has coverage until the short-stay outlier (SSO) threshold is exceeded. If the Medicare payment was for a SSO case (§ 412.529), and that payment was less than the full LTC-DRG payment amount because the beneficiary had insufficient remaining Medicare days, the LTCH is currently also permitted to charge the beneficiary for services delivered on those uncovered days (§ 412.507). In light of our finalized policies to implement section 1206(a) of Public Law 113-67, we also need to address beneficiary charges in the context of the new site neutral payment rate. Therefore, in section VII.B.7.c. of the preamble of this final rule, we are finalizing proposals to amend the existing regulations relating to the limitation on charges to address beneficiary charges under the new LTCH PPS payment rate.
Claims submitted to Medicare must comply with both the Administrative Simplification Compliance Act (ASCA) (Pub. L. 107-105), and the Health Insurance Portability and Accountability Act of 1996 (HIPAA) (Pub. L. 104-191). Section 3 of the ASCA requires that the Medicare Program deny payment under Part A or Part B for any expenses incurred for items or services for which a claim is submitted other than in an electronic form specified by the Secretary. Section 1862(h) of the Act (as added by section 3(a) of the ASCA) provides that the Secretary shall waive such denial in two
The Department of Health and Human Services (HHS) has a number of initiatives designed to encourage and support the adoption of health information technology and promote nationwide health information exchange to improve health care. The Office of the National Coordinator for Health Information Technology (ONC) leads these efforts in collaboration with other agencies, including CMS and the Office of the Assistant Secretary for Planning and Evaluation (ASPE). Through a number of activities, including several open government initiatives, HHS is promoting the adoption of electronic health record (EHR) technology certified under the ONC Health Information Technology (HIT) Certification Program developed to support secure, interoperable, health information exchange. The HIT Policy Committee (a Federal Advisory Committee) has recommended areas in which HIT certification under the ONC HIT Certification Program would help support providers that are eligible for the Medicare and Medicaid EHR Incentive Programs, such as long-term care and postacute care hospitals and behavioral health care providers. We believe that the use of certified EHRs by LTCHs (and other types of providers that are ineligible for the Medicare and Medicaid EHR Incentive Programs) can effectively and efficiently help providers improve internal care delivery practices, support the exchange of important information across care partners and during transitions of care, and could enable the reporting of electronically specified clinical quality measures (eCQMs) (as described elsewhere in this rule). More information on the ONC HIT Certification Program and efforts to develop standards applicable to LTCHs can be found by accessing the following Web sites and resources:
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Section 1206 of Public Law 113-67 mandates significant changes to the payment system for LTCHs beginning with LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. Under the current LTCH PPS, all discharges are paid under the LTCH PPS standard Federal payment rate (that is, payments calculated under the existing regulations, including adjustments, in Subpart O of 42 CFR part 412). Section 1206 requires the establishment of an alternate “site neutral” payment rate for Medicare inpatient discharges from an LTCH that fail to meet certain statutorily defined criteria. Discharges that meet the criteria will continue to be paid the LTCH PPS standard Federal payment rate. Discharges that do not meet the statutory criteria will be paid at a new site neutral payment rate, as described below. We note that, for the remainder of this section, the phrase “LTCH PPS standard Federal payment rate case” refers to an LTCH PPS case that meets the criteria for exclusion from the site neutral payment rate under section 1886(m)(6)(A)(ii) of the Act as discussed in section VII.B.3. of the preamble of this final rule, and the phrase “site neutral payment rate case” refers to an LTCH PPS case that does
Under section 1886(m)(6)(A) of the Act as added by section 1206(a) of Public Law 113-67, beginning in cost reporting periods starting on or after October 1, 2015, all LTCH discharges are paid according to the site neutral payment rate unless certain criteria are met. For LTCH cases that meet the criteria for exclusion, the site neutral payment rate does not apply and payment is made without regard to the provisions of section 1886(m)(6) of the Act. For cases that meet the criteria for exclusion from the site neutral payment rate, payment will continue to be based on the LTCH PPS standard Federal payment rate as determined in § 412.523. As discussed in section VII.B.3. of the preamble of this final rule, under section 1886(m)(6)(A)(ii) of the Act, the criteria for exclusion from the site neutral payment rate are: (1) The discharge from the LTCH does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation; (2) admission to the LTCH was immediately preceded by discharge from a subsection (d) hospital; and (3) the immediately preceding stay in a subsection (d) hospital included at least 3 days in an intensive care unit (ICU) (referred to in this final rule as the ICU criterion) or the discharge from the LTCH is assigned to a MS-LTC-DRG based on the patient's receipt of ventilator services of at least 96 hours (referred to in this final rule as the ventilator criterion).
In this section of the final rule, we discuss our proposed and finalized policies to implement the required changes to the LTCH PPS payment rate, as well as other related finalized policy provisions in accordance with section 1206(a) of Public Law 113-67 under the broad authority of section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA.
For FY 2016, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24527), we proposed to add a new section to the regulations under 42 CFR part 412 Subpart O (new § 412.522) to establish the site neutral payment rate required by section 1886(m)(6) of the Act as added by section 1206(a)(1) of Public Law 113-67. Specifically, section 1886(m)(6) of the Act requires that, beginning in cost reporting periods occurring on or after October 1, 2015, all LTCH discharges are paid under the site neutral payment rate unless certain criteria are met. All LTCH discharges that meet the criteria for exclusion from the site neutral payment rate will continue to be paid the LTCH PPS standard Federal payment rate. Accordingly, in this final rule, under the broad authority of section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA and in accordance with section 1206(a) of Public Law 113-67, we are establishing policies to implement the statutory criteria for excluding cases from the site neutral payment rate under new § 412.522(b), as well as establish the requirements for determining the site neutral payment rate for a given LTCH discharge under new § 412.522(c) (as discussed in detail below).
In addition, we proposed certain changes to § 412.521 in light of our
In fact, we have considered the issues raised by the commenters in our development of the claims processing systems changes needed to implement the new dual rate LTCH PPS payment structure. We believe that these claims processing systems changes will appropriately identify all LTCH discharges, consistent with the statutory requirements under the new dual rate LTCH PPS payment structure, based on the best available data at the time the LTCH discharge claim is processed. Furthermore, our operational design of the claims processing system requirements under this new dual rate LTCH PPS payment structure also includes automatic prompts to appropriately adjust the LTCH PPS payment for an LTCH case if there is a change in either the subsection (d) hospital's claim information or the LTCH's claim information that would result in any change in payment (that is, from the site neutral payment rate to the LTCH PPS standard Federal payment rate or vice versa), consistent with the statutory criteria.
However, we acknowledge that, as this is a new payment structure, it may not work flawlessly in each and every instance. In those rare instances where an obvious error occurs in the determination of the LTCH PPS payment amount for a particular case, LTCHs can contact their MACs and we will reevaluate our available information to ensure that the correct payment is made under current policies. We appreciate ongoing feedback from hospitals concerning ways to make these processes more efficient and cost effective, while continuing to ensure that LTCH claims are paid appropriately. As we gain experience under the revised LTCH PPS, we may modify some of our operational approaches.
As stated earlier, section 1206(a) of Public Law 113-67 amended section 1886(m) of the Act by adding paragraph (6), which specifies that beginning in cost reporting periods starting on or after October 1, 2015, all LTCH PPS discharges will be paid based on the site neutral payment rate unless certain criteria are met. In general, under section 1886(m)(6)(A)(ii) of the Act, the criteria for exclusion from the site neutral payment rate are: The discharge from the LTCH does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation, the admission to the LTCH was immediately preceded by discharge from a subsection (d) hospital, and that immediately preceding stay in a subsection (d) hospital included at least 3 days in an intensive care unit (ICU) (referred to in this final rule as the ICU criterion) or the discharge from the LTCH is assigned to an MS-LTC-DRG based on the patient's receipt of at least 96 hours of ventilator services during the LTCH stay (referred to in this final rule as the ventilator criterion). Below we summarize our proposals and the public comments received, and provide our responses to those comments and the finalized policies to implement the statutory criteria for exclusion from the site neutral payment rate.
Section 1886(m)(6)(A)(ii)(II) of the Act specifies that in order for an LTCH discharge to be excluded from payment under the site neutral payment rate, the LTCH discharge cannot have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation. To implement this criterion, under the broad authority of section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA and in accordance with section 1206(a) of Public Law 113-67, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24528 through 24529), we proposed to identify cases with a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation that would be assigned to specific MS-LTC-DRG groupings that we believe indicate such principal diagnoses using the most recent version of the MS-LTC-DRGs. We invited public comments on our proposed approach and our proposed list of applicable MS-LTC-DRGs.
After consideration of the public comments we received, we are finalizing without change our proposal to identify discharges with a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation that are assigned to the specific MS-LTC-DRG groupings included in our proposal using the most recent version of the MS-LTC-DRGs. (For additional information on the version of the MS-DRGs, and by extension the MS-LTC-DRGs, that is Version 33, we refer readers to section II.G. of the preamble of this final rule.)
Accordingly, as we proposed, we are establishing that an LTCH discharge assigned to one of the following ICD-10 MS-LTC-DRG groupings in the most recent version of the MS-LTC-DRGs (that is, Version 33 for FY 2016) will be identified as a case with a principal diagnosis relating to a psychiatric diagnosis:
• MS-LTC-DRG 876 (O.R. Procedure with Principal Diagnosis of Mental Illness);
• MS-LTC-DRG 880 (Acute Adjustment Reaction & Psychosocial Dysfunction);
• MS-LTC-DRG 881 (Depressive Neuroses);
• MS-LTC-DRG 882 (Neuroses except Depressive);
• MS-LTC-DRG 883 (Disorders of Personality & Impulse Control);
• MS-LTC-DRG 884 (Organic Disturbances & Mental Retardation);
• MS-LTC-DRG 885 (Psychoses);
• MS-LTC-DRG 886 (Behavioral & Developmental Disorders);
• MS-LTC-DRG 887 (Other Mental Disorder Diagnoses);
• MS-LTC-DRG 894 (Alcohol/Drug Abuse or Dependence, Left Ama);
• MS-LTC-DRG 895 (Alcohol/Drug Abuse or Dependence, with Rehabilitation Therapy);
• MS-LTC-DRG 896 (Alcohol/Drug Abuse or Dependence, without Rehabilitation Therapy with MCC); and
• MS-LTC-DRG 897 (Alcohol/Drug Abuse or Dependence, without Rehabilitation Therapy without MCC).
Furthermore, as we proposed, we also are establishing that an LTCH discharge assigned to one of the following ICD-10 MS-LTC-DRG groupings in the most recent version of the MS-LTC-DRGs (that is, Version 33 for FY 2016) will be identified as an LTCH discharge with a principal diagnosis relating to rehabilitation:
• MS-LTC-DRG 945 (Rehabilitation with CC/MCC); and
• MS-LTC-DRG 946 (Rehabilitation without CC/MCC).
Under this finalized policy, as we proposed, an LTCH discharge grouped to any of the MS-LTC-DRG groupings listed above will not meet the criteria under new § 412.522(b)(1)(i) to be excluded from the site neutral payment rate.
The site neutral payment rate established in section 1206(a) of Public Law 113-67 includes several references to “subsection (d) hospitals.” The term “subsection (d) hospital” is defined in section 1886(d)(1)(B) of the Act as a hospital that is located in 1 of the 50 States or the District of Columbia that is not a psychiatric hospital, a rehabilitation hospital, a children's hospital, an LTCH, or a cancer hospital. However, section 1886(m)(6)(D) of the Act, as added by section 1206(a)(1) of Public Law 113-67, added that, for LTCH PPS purposes, any reference to a “subsection (d) hospital” is deemed to include a “subsection (d) Puerto Rico hospital,” which is defined by section 1886(d)(9)(A) of the Act (providing that the term “subsection (d) Puerto Rico hospital” means a hospital that is located in Puerto Rico and that would be considered a subsection (d) hospital (as defined in paragraph (d)(1)(B)) if it were located in 1 of the 50 States).
Given these statutory provisions, as part of our implementation of section 1206(a) of Public Law 113-67, and under the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24529), we proposed to add a definition of the term “subsection (d) hospital” to § 412.503 (defined as any hospital qualifying as a subsection (d) hospital under section 1886(d)(1)(B) of the Act and any hospital located in Puerto Rico that would be qualified as a subsection (d) hospital under section 1886(d)(1)(B) of the Act if it were located in 1 of the 50 States).
After consideration of the public comments received, we are finalizing our proposal to add the proposed definition for a “subsection (d) hospital” under § 412.503, without change.
Section 1886(m)(6)(A)(ii)(II) of the Act specifies that, in order to be excluded from payment under the site neutral payment rate, the LTCH discharge must meet the ICU criterion at section 1866(m)(6)(A)(iii) of the Act or the ventilator criterion at section 1866(m)(6)(A)(iv) of the Act. Both the ICU criterion and the ventilator criterion require that the LTCH admission be “immediately preceded” by a discharge from a subsection (d) hospital. Therefore, under the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24529 through 24530), we proposed to define the phrase “immediately preceded” in the context of a discharge from a subsection (d) hospital. Specifically, we proposed that the discharged Medicare patient would have to depart the subsection (d) hospital and arrive for admission to the LTCH without having returned home or being admitted to any other inpatient setting, including an IRF, an IPF, or a SNF. As required by the statute, we proposed that any LTCH admission that did not qualify under this definition as having been “immediately preceded” by a discharge from a subsection (d) hospital would not be eligible to qualify for exclusion from the site neutral payment rate based on the ICU or the ventilator criterion. We proposed to codify these proposals at new § 412.522(b)(1)(ii).
To implement these policies, we proposed to look at the Medicare patient's discharge date on the subsection (d) hospital's claim, and compare it to the admission date on the LTCH's Medicare claim for the patient. In doing so, we proposed that the discharge date had to have occurred on the same date as the LTCH admission (or, for those rare circumstances where a patient is discharged from a subsection (d) hospital before the midnight census, but was not admitted to the LTCH until after the midnight census of that date of discharge, the day before the calendar date of the LTCH admission) if a patient's discharge were to qualify as being immediately preceded by a discharge from a subsection (d) hospital.
We also proposed to condition eligibility for exclusion from the site neutral payment rate on the immediately preceding subsection (d) hospital's claim using of certain codes,
In making these proposals, we also noted that our proposed interpretation of “immediately preceded” by a subsection (d) hospital would work in tandem with our existing interrupted stay policy at § 412.531. An interruption of stay occurs when, during the course of an LTCH hospitalization, the patient is discharged to an inpatient acute care hospital, an IRF, or a SNF for treatment for a service that is not available at the LTCH for a specified period followed by readmittance within a specified number of days to the same LTCH. In such cases, the care following readmission is considered a continuation of the care interrupted by the first discharge, so both “halves” of the LTCH episode of care are bundled, and Medicare makes a single payment based on the second date of discharge. As the two halves constitute a single episode of care, the discharge that is relevant to determining if that episode of care was immediately preceded by the required subsection (d) hospital stay is the care provided prior to the first admission to the LTCH. Using these concepts, any interruption of stay defined under § 412.531 would not invalidate the immediately preceded status for the single episode of care—only the care provided prior to the first LTCH admission would be relevant.
After consideration of the public comments we received, we are finalizing our proposed policy that conditions eligibility for exclusion from the site neutral payment rate on the LTCH admission having been “immediately preceded” by a subsection (d) hospital stay, as evidenced by the admission to the LTCH occurring either on the date of or, in certain rare circumstances, the calendar date after the discharge from the preceding subsection (d) hospital. As discussed above, we are not finalizing our proposals regarding the discharge status codes as reported on the preceding subsection (d) hospital's claim. As finalized at new § 412.522(b)(1)(ii), an LTCH discharge will be considered to have been immediately preceded by a discharge from a subsection (d) hospital if there was a direct admission from such a hospital, as evidenced by the dates of discharge and admission, to the LTCH.
Section 1886(m)(6)(A)(iii)(I) of the Act specifies that in order to be excluded from payment under the site neutral payment rate under the ICU criterion, the LTCH admission must be immediately preceded by a discharge from a subsection (d) hospital that included at least 3 days in an intensive care unit (ICU), as determined by the Secretary. In doing so, section 1886(m)(6)(A)(iii)(II) of the Act requires the use of data from revenue center codes 020X or 021X (or such successor codes as the Secretary may establish). As discussed in the proposed rule (80 FR 24530), revenue center codes are reported on the hospital claim with revenue center code 020X (indicating intensive care), and the revenue center code 021X (indicating coronary care). Both of these revenue center codes are used to bill Medicare for services provided by “intensive care units (ICUs)” as defined under our existing definition at § 413.53(d) of the regulations, and, as indicated by the “X” in the revenue code descriptions both are further divided into subcategories that form a revenue center code series.
As described in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24530), we proposed to implement the ICU criterion under new § 412.522(b)(2). In that section, we proposed that the claim
After consideration of the public comments we received, we are finalizing without modification our proposal that at least 3 days of ICU services must be reported on the preceding subsection (d) hospital claim using revenue center codes 020X or 021X, and that such coding must be consistent with our policies governing ICU services under § 413.53(d) in order for an LTCH discharge to fulfill the requirements of the ICU criterion for exclusion from the site neutral payment rate. As we proposed, we are codifying this policy under new § 412.522(b)(2).
Section 1886(m)(6)(A)(vi) of the Act specifies that in order to be excluded from payment under the site neutral payment rate under the ventilator criterion, the LTCH admission must be immediately preceded by a discharge from a subsection (d) hospital (as discussed in section VII.B.3.d. of the preamble of this final rule), and the LTCH discharge must be assigned to an MS-LTC-DRG based on the beneficiary's receipt of at least 96 hours of ventilator services in the LTCH. As we discussed in the preamble of the proposed rule (80 FR 24531), we proposed that, for the purposes of a discharge being excluded from the site neutral payment rate based on the ventilator criterion, the discharge must use the applicable procedure code to indicate that at least 96 hours of ventilator services were received during the LTCH stay. Currently, under the ICD-9-CM coding system, procedure code 96.72 (Continuous invasive mechanical ventilation for 96 consecutive hours or more) is used to describe such long-term mechanical ventilator services. As discussed in sections II.G.1.a. and VII.C. of the preamble of this final rule, the use of the ICD-10-CM/PCS coding system is required beginning October 1, 2015. Under the ICD-10-PCS coding system, procedure code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours) describes such long-term mechanical ventilator services. Therefore, we further proposed, effective with discharges in cost reporting periods beginning on or after October 1, 2015, to determine if a discharge meets the requirements of the ventilator criterion in order to be eligible for exclusion from the site neutral payment rate based on whether the LTCH reports procedure code 5A1955Z on its hospital claim. If finalized, we proposed to place these requirements under new § 412.522(b)(3).
Under this proposal, any LTCH claims that do not report this procedure code would not meet the requirements of the ventilator criterion in order to be eligible for exclusion from the site neutral payment rate. For more detail regarding the ventilator criterion proposals and the alternatives that we had considered in developing those proposals (including the use of MS-LTC-DRGs in lieu of this procedure code), we refer readers to the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24531).
We have considered the commenters' suggestions. While we agree that our proposed use of procedure code 5A1945Z would not identify a case where the patient received
We first considered the commenters' suggested alternative method, but determined that it was not a viable option because, under the ICD-10 coding guidelines and Version 33.0 MS-DRGs (discussed in section II.G.1.a. of this preamble) and by extension the MS-LTC-DRGs, discharges with ICD-10-PCS procedure code 5A1945Z (Respiratory ventilation, 24-96 consecutive hours), but not ICD-10-PCS procedure code 5A1955Z (Respiratory ventilation, greater than 96 consecutive hours), will not be grouped into any of the MS-LTC-DRGs suggested by the commenters. That is, the commenters' suggested alternative is not possible because the GROUPER logic for those MS-LTC-DRGs only includes ICD-10-PCS procedure code 5A1955Z. Furthermore, based on existing claims elements and ICD-10-PCS procedure codes' descriptions, we were unable to identify any feasible alternative procedure code to identify a case where the patient received
With respect to the commenters' concerns regarding counting the number of hours in which a patient is being weaned from mechanical ventilator services, the AHA Coding Clinic (4th Quarter 2014) instructs coders that, in general, “[w]hen the patient is being weaned from mechanical ventilation, the entire duration of the weaning process is counted to determine the correct code assignment.” We also refer readers to the AHA Coding Clinic guidelines, which provide guidance on determining the duration of mechanical ventilation services, including any weaning period. Therefore, we do not believe that the use of ICD-10-PCS procedure code 5A1955Z, which specifies more than 96 hours of continuous ventilation, would discourage LTCHs from weaning patients of a ventilator in less than 96 hours because the use of this procedure code accounts for hours spent during the ventilator weaning process. However, we remind providers that providing medically unnecessary services to patients (including additional time on a ventilator in order to meet the requirements for exclusion from the site neutral payment rate) and reporting charges for such services constitutes fraudulent behavior for which we will monitor. We also intend to continue to monitor the appropriateness of the use of ICD-10-PCS procedure code 5A1955Z, and may propose alternative implementation measures for the ventilator criterion to the extent experience under the revised LTCH PPS demonstrates such action is necessary.
After consideration of the public comments we received, we are finalizing our proposal, without modification, and codifying our ventilator criterion under new § 412.522.
Section 1206(a) of Public Law 113-67 amended section 1886(m) of the Act by adding paragraph (6), which specifies that beginning with cost reporting periods starting on or after October 1, 2015, all LTCH PPS discharges are paid according to the site neutral payment rate unless certain criteria are met. In general, section 1886(m)(6)(B)(ii) of the Act specifies that the site neutral payment rate is the lower of the IPPS comparable per diem amount under § 412.529(d)(4), including any applicable outlier payments under § 412.525(a), or 100 percent of the estimated cost of the case. Consistent with the requirements of section 1886(m)(6)(B)(ii) of the Act, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24531 through 24532), we proposed under new § 412.522(c)(1) that the site neutral payment rate is the lower of the IPPS comparable per diem amount determined under § 412.529(d)(4), including any applicable outlier payments under § 412.525(a), or 100 percent of the estimated cost of the case determined under § 412.529(d)(2).
Under our proposed calculation of the site neutral payment rate, new § 412.522(c)(1)(i) provides that the IPPS comparable per diem amount would be calculated using the same method used to determine an amount comparable to the hospital IPPS per diem amount as set forth in the existing regulations at§ 412.529(d)(4), consistent with section 1886(m)(6)(B)(ii)(I) of the Act. Specifically, in the RY 2007 LTCH PPS final rule (71 FR 27852 through 27853), we established a method to determine an amount payable under 42 CFR part 412, subpart O, that is comparable to what would otherwise be paid under the IPPS for the costs of inpatient operating services, which is commonly referred to as the “the IPPS comparable per diem amount.” Accordingly, consistent with § 412.529(d)(4), we proposed to determine the IPPS comparable per diem amount based on the standardized amount determined under § 412.64(c), adjusted by the applicable DRG weighting factors determined under § 412.60 as specified at § 412.64(g). We also proposed to further adjust this amount to account for differences in area wage levels based on geographic location using the applicable IPPS labor-related share and the IPPS wage index for nonreclassified hospitals published in the annual IPPS final rule in accordance with § 412.525(c). For LTCHs located in Alaska and Hawaii, we proposed that this amount would be further adjusted by the applicable COLA factors established annually during the rulemaking cycle. We also proposed that the IPPS comparable per diem amount include an adjustment for treating a disproportionate share of low-income patients, consistent with the DSH payment adjustment under § 412.106, as applicable, which would include a proxy adjustment for the uncompensated care payment (78 FR 50765 through 50767). In the case of an LTCH that is a teaching hospital, we proposed that the IPPS comparable per diem amount include an IME payment adjustment, consistent with the formula set forth under § 412.105, where the LTCH's IME cap (that is, the limit on the number of full-time equivalent (FTE) residents that may be counted for IME) would be imputed from the LTCH's direct GME cap as set forth at § 413.79(c)(2). In addition, we proposed that the IPPS comparable per diem amount also include payment for inpatient capital-related costs, based on the capital IPPS Federal rate determined in accordance with § 412.308(c), adjusted by the applicable IPPS DRG weighting factors. We proposed to further adjust the capital IPPS Federal rate by the applicable geographic adjustment factors based on the geographic location of the LTCH and the COLA factors for LTCHs located Alaska and Hawaii, consistent with § 412.316. In addition, we proposed to include in this amount the adjustments to the capital IPPS Federal rate for DSH payments in accordance with § 412.320 and IME payments in accordance with § 412.322. Consistent with
After consideration of the public comments we received, we are finalizing, without modification, our proposal to establish that the site neutral payment rate is the lesser of the IPPS comparable per diem amount, or 100 percent of the estimated cost of the case.
The IPPS comparable per diem amount described under § 412.529(d)(4) does not include additional payments for extraordinarily high-cost cases under the IPPS outlier policy. Therefore, consistent with the requirements of section 1886(m)(6)(B)(ii)(I) of the Act, under our proposed calculation of the site neutral payment rate under new § 412.522(c)(1), we proposed to add any high-cost outlier (HCO) payment that may be payable under § 412.525(a) to the IPPS comparable per diem amount. To do so, we also proposed to revise the HCO policy under existing § 412.525(a) to provide for high-cost outlier payments under the site neutral payment rate calculated under proposed new § 412.522(c) (as discussed in greater detail in section VII.B.7.b. of the preamble of this final rule). We proposed that site neutral payment rate cases receive an additional payment for HCOs that would be equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold, which we are proposing would be the sum of site neutral payment rate for the case and the IPPS fixed-loss amount. We also proposed that HCO payments for site neutral payment rate cases would be budget neutral and proposed to apply a budget neutrality factor to the LTCH PPS payments for those cases to maintain budget neutrality. (For additional information on our revised HCO policy in regard to site neutral payment rate cases under § 412.525(a), we refer readers to section VII.B.7.b. of the preamble of this final rule.)
Furthermore, under our proposed calculation of the site neutral payment rate, under proposed new § 412.522(c)(1)(ii), we proposed to calculate 100 percent of the estimated cost of a case by multiplying the LTCH's hospital-specific cost-to-charge ratio (CCR) by the Medicare allowable charges for the LTCH case, which is the same method we use to determine SSO payments under § 412.529(d)(2), as well as HCO payments under the HCO policy under § 412.525(a). Consistent with our existing policies for computing CCRs under the LTCH PPS, we also proposed to apply the payment policies described under §§ 412.529(f)(4)(i) through (f)(4)(iii) to the calculation of the estimated cost of the case for site neutral payment rate cases under proposed new § 412.522(c)(1)(ii). Under this proposal, the CCR applied at the time a claim is processed would generally be based on either the most recent settled cost report or the most recent tentatively settled cost report, whichever is from the latest cost reporting period. CMS may specify an alternative to the CCR otherwise applicable if we believe that the CCR being applied is inaccurate, in accordance with section 150.24 of Chapter 3 of the Medicare Claims Processing Manual (Pub. 100-4), or an LTCH may request an alternate (higher or lower) CCR based on its presentation of substantial evidence in support of that alternate. The CMS Regional Office must approve the request, and the MAC notifies the LTCH whenever a change is made to its CCR. The applicable MAC may also use the statewide average CCR that is established annually by CMS if it is unable to determine an accurate CCR for an LTCH under one of the circumstances specified at existing § 412.529(f)(4)(iii) (that is, in general, for a new LTCH, when the LTCH's CCR exceeds 3 standard deviations from the corresponding national geometric mean CCR, and for an LTCH for which data to calculate a CCR are otherwise not available). These same CCR policies also are applicable under the LTCH PPS HCO policy (§§ 412.525(a)(4)(iv)(B) and (a)(4)(iv)(C)).
We did not receive any public comments on our proposal to calculate 100 percent of the estimated cost of a site neutral payment rate case by multiplying the LTCH's hospital-specific CCR by the Medicare allowable charges for the LTCH case, and to codify this policy under new § 412.522(c)(1)(ii). Therefore, we are adopting that proposal, without modification.
In the FY 2016 IPPS/LTCH PPS (80 FR 24532), we proposed to include a reconciliation adjustment to site neutral payment rate cases. Currently, under the LTCH PPS, payments for HCO and SSO cases may be subject to reconciliation at cost report settlement under § 412.525(a)(4)(iv)(D) and § 412.529(f)(4)(iv), respectively. Under these policies, reconciliation is based on the CCR calculated using the CCR computed from the settled cost report that coincides with the discharge. Under our existing criteria, reconciliation occurs in instances where an LTCH's actual CCR for the cost reporting period fluctuates plus or minus 10 percentage points compared to the interim CCR used to calculate payments when a
Therefore, we are not finalizing the proposal to apply, under new § 412.522(c)(4), a reconciliation policy to payments made for site neutral payment rate cases. However, we are finalizing the proposal to include any HCO payments made for site neutral payment rate cases under the existing reconciliation policy at § 412.525(a)(4)(iv)(D). (As noted previously, our HCO policy for site neutral payment rate cases is discussed in detail in section VII.B.7.b. of the preamble of this final rule.)
Section 1886(m)(6)(B) of the Act establishes a transitional payment method for cases that will be paid the site neutral payment rate for LTCH discharges occurring in cost reporting periods beginning during FY 2016 or FY 2017. For those discharges, the applicable site neutral payment rate is to be the blended payment rate specified in section 1886(m)(6)(B)(iii) of the Act. For LTCH discharges occurring in cost reporting periods beginning during FY 2018 or later, the applicable site neutral payment rate will be the site neutral payment rate as defined in section 1886(m)(6)(B)(ii) of the Act.
Section 1886(m)(6)(B)(iii) of the Act specifies that the blended payment rate is comprised of 50 percent of the site neutral payment rate for the discharge under section 1886(m)(6)(B)(ii) of the Act and 50 percent of the LTCH PPS standard Federal payment rate that would have applied to the discharge if paragraph (6) of section 1886(m) of the Act had not been enacted. As previously discussed, we proposed to codify the site neutral payment rate specified under section 1886(m)(6)(B)(ii) of the Act under proposed new § 412.522(c)(1), as adjusted under proposed new § 412.522(c)(2). Under proposed new § 412.522(c)(1), the site neutral payment rate is the lower of the IPPS comparable per diem amount determined under § 412.529(d)(4), including any applicable outlier payments under § 412.525(a), or 100 percent of the estimated cost of the case determined under § 412.529(d)(2). For purposes of the blended payment rate, we proposed that the payment rate that would otherwise be applicable if section 1886(m)(6) of the Act had not been enacted would be the LTCH PPS standard Federal payment; which, in light of other proposals presented in the proposed rule, would be the LTCH PPS standard Federal payment rate that is applicable to discharges that meet the criteria for exclusion from the site neutral payment rate under proposed new § 412.522(a)(2). That rate is the LTCH PPS standard Federal payment rate determined under § 412.523. Therefore, consistent with the requirements of section 1886(m)(6)(B)(ii) of the Act, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24533), we proposed under proposed new § 412.522(c)(3), for LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015, and on or before September 30, 2017 (that is, discharges occurring in cost reporting periods beginning during
After consideration of the public comments we received, we are finalizing our proposed policy, without modification.
Section 1206(a) of Public Law 113-67 amended section 1886(m) of the Act by adding paragraph (6), which specifies that beginning with cost reporting periods starting on or after October 1, 2015, all LTCH PPS discharges are paid according to the site neutral payment rate, unless certain criteria are met. For detailed discussion of our proposed and finalized policies regarding the criteria for exclusion from the site neutral payment rate, we refer readers to section VII.B.3. of the preamble of this final rule. For LTCH cases that meet the criteria for exclusion from the site neutral payment rate, section 1886(m)(6)(A)(ii) of the Act specifies that the site neutral payment rate will not apply and payment will be made without regard to requirements of section 1886(m)(6)(A)(ii) of the Act. Consistent with these statutory requirements, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24533), we proposed under new § 412.522(a)(2) that for LTCH discharges that meet the criteria for exclusion from site neutral payment rate under new § 412.522(b), payment will be based on the LTCH PPS standard Federal payment rate as determined in § 412.523. That is, under new § 412.522(a)(2), LTCH PPS standard Federal payment rate cases would continue to be paid based on the LTCH PPS standard Federal payment rate. Under this policy, all of the existing payment adjustments under § 412.525(d), that is, the adjustments for SSO cases under § 412.529, the adjustments for interrupted stays under § 412.531, and the 25-percent threshold policy under § 412.534 and § 412.536, would still apply if appropriate. In addition, as discussed in greater detail in section VII.B.7.b. of the preamble of the proposed rule and this final rule, we proposed that our existing HCO policy would apply to LTCH PPS standard Federal payment rate cases, except that the 8 percent HCO target would be established using only data from LTCH PPS standard Federal payment rate cases.
We did not receive any public comments on our proposal to pay for LTCH discharges that meet the criteria for exclusion from the site neutral payment rate under new § 412.522(a)(2) based on the LTCH PPS standard Federal payment rate. We are adopting this policy as final, without modification. We note that we proposed changes to the MS-LTC-DRG relative weight calculations and HCO policy for LTCH PPS standard Federal payment rate cases, which are discussed in in section VII.B.7. of the preamble of this final rule and include summations of the public comments we received and our responses.
Consistent with current LTCH PPS payment policies for adjusting Federal prospective payments, under the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24533 through 24534), we proposed that certain existing payment adjustments under the special payment provisions set forth at existing § 412.525(d), with the exception of the SSO adjustment described under § 412.525(d)(1) would apply to site neutral payment rate cases. These adjustments include the interrupted stay policy and the 25-percent threshold policy. The current payment adjustment under the interrupted stay policy at § 412.531 was developed and implemented prior to the statutory LTCH PPS dual rate payment structure and contains terms specific to payment based on the LTCH PPS standard Federal payment rate (such as LTC-DRG payment and Federal LTC-DRG prospective payment). Under our proposal, the site neutral payment rate would not be calculated based on the LTCH PPS standard Federal payment rate because the payment would generally be the lower of the IPPS comparable per diem amount (including any applicable outlier payments), or 100 percent of the estimated cost of the case. Consequently, in order to apply the provisions of the existing interrupted stay policy at § 412.531 to site neutral payment rate cases, under proposed new § 412.522(c)(2)(ii), we proposed to specify that, for purposes of the application of the provisions of § 412.531 to LTCH discharges described under § 412.522(a)(1), the LTCH PPS standard payment-related terms, such as “LTC-DRG payment”, “full Federal LTC-DRG prospective payment”, and “Federal prospective payment,” mean the site neutral payment rate calculated under proposed new § 412.522(c).
We stated in the proposed rule that we believe that it is appropriate to apply these adjustments to the site neutral payment rate cases because the site neutral payment rate merely establishes an alternate payment amount under the LTCH PPS, as opposed to creating an exception from the LTCH PPS. Additionally, we believe that the policy concerns upon which these policies are based apply equally to payments made under the LTCH PPS site neutral payment rates and the standard Federal payment rates.
We established the interrupted stay policy to address instances in which a patient is discharged from an LTCH and later readmitted to that LTCH within a certain amount of time. This kind of readmission to the LTCH represents a continuation or resumption of the initial, interrupted treatment, rather than a new episode of care. (For a
The 25-percent threshold payment adjustment policy was implemented based on analyses of Medicare discharge data that indicated that patterns of patient shifting appeared to be occurring more for provider financial advantage than for patient benefit. In order to discourage such activity, a payment adjustment was applied to LTCH discharges of patients who were admitted to the LTCH from the same referring hospital in excess of an applicable percentage threshold (79 FR 50185). We refer readers to the detailed discussions of the 25-percent threshold payment adjustment policy for LTCH hospital-within-hospitals (HwHs) and LTCH satellite facilities in the FY 2005 IPPS/LTCH final rule (69 FR 49191 through 49214) and its application to all other LTCHs in the RY 2008 LTCH PPS final rule (72 FR 26919 through 26944), as well as our discussion in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50185 through 50187), for additional details on the 25-percent threshold payment adjustment. We do not believe that the site neutral payment rate will address these patient shifting concerns unless the 25-percent threshold payment adjustment is applied to site neutral payment rate cases in the same manner as it is applied to LTCH PPS standard Federal payment rate cases.
In considering the potential policy proposals, we recognized that there is a current statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy under section 1206(b)(1)(A) of Public Law 113-67 that is scheduled to expire in FY 2016. (For a discussion of our implementation of the current statutory moratorium on the full implementation of the 25-percent threshold payment adjustment policy, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50185 through 50187).) In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24533 through 24534), we proposed to apply all of the payment adjustments to site neutral payment rates in the same manner as they are currently applied (and will continue to be applied for the foreseeable future) to LTCH PPS standard Federal payment rates—including, as applicable, the moratorium on implementing the 25-percent threshold payment adjustment.
We did not propose to apply the SSO payment adjustment to the site neutral payment rate at this time because, while the policy goal of ensuring patients in an LTCH receive a full course of treatment remains, under our current method of paying for SSOs as described under § 412.529, we pay for SSOs based on the lowest of several payment options, one of which is the LTCH's estimated cost of the case. As described above, site neutral payment rate cases are paid the lower of the IPPS comparable per diem amount, or 100 percent of the estimated cost of the case. Because the estimated cost option is used in determining both SSO payments and site neutral payment rates and both methods make payment based on the lowest of their respective payment options, in most cases, applying our current SSO payment adjustment to site neutral payment rate cases would not affect the resulting LTCH PPS payment made for the discharge. We may consider proposing the application of an alternative SSO payment adjustment in the future if we find evidence that Medicare beneficiaries are not regularly receiving the full course of treatment when such treatment is paid for at the site neutral payment rate.
After consideration of public comments we received, we are finalizing, without modification, our proposals to apply the interrupted stay policy and the 25-percent threshold policy to site neutral payment rate cases, and not to apply the SSO policy to site neutral payment rate cases at this time.
Section 1886(m)(6)(C) of the Act, as added by section 1206 of Public Law 113-67, imposes several requirements related to an LTCH's discharge payment percentage. As defined by section 1886(m)(6)(C)(iv) of the Act, the term “LTCH discharge payment percentage” is a ratio, expressed as a percentage, of Medicare discharges not paid the site neutral payment rate to total number of Medicare discharges occurring during the cost reporting period. In other words, an LTCH's discharge payment percentage would be the ratio of an LTCH's Medicare discharges that meet the criteria for exclusion from the site neutral payment rate (as described under new § 412.522(a)(2)) to an LTCH's total number of Medicare discharges paid under the LTCH PPS (that is, both Medicare discharges paid under the site neutral payment rate and those that meet the criteria for exclusion from the site neutral payment rate, as described under new §§ 412.522(a)(1) and (2), respectively) during the cost reporting period. Therefore, consistent with the statutory requirement at section 1886(m)(6)(C)(iv) of the Act and under the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24534) under proposed new § 412.522(d)(1), we proposed to define an LTCH's discharge payment percentage as a ratio, expressed as a percentage, of Medicare discharges excluded from the site neutral payment rate as described under proposed new § 412.522(a)(2) to total Medicare discharges paid under the LTCH PPS (in accordance with 42 CFR part 412, subpart O) during the cost reporting period.
After consideration of the public comments we received, we are finalizing our proposed definition of the discharge patient percentage under new § 412.522(d)(1), including the technical correction of the typographical error in the phrase “paid under this Subpart O” that we are correcting to read as “paid under this subpart” for clarity.
In addition, section 1886(m)(6)(C)(i) of the Act requires that we provide notice to each LTCH of the LTCH's discharge payment percentage (as defined in section 1886(m)(6)(C)(iv) of the Act) for LTCH cost reporting periods beginning during or after FY 2016. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24534 through 24535), we proposed to codify this statutory requirement at proposed new § 412.522(d)(2). Under this proposal, for cost reporting periods beginning on or after October 1, 2015, as required by the statute, we would inform each LTCH of their discharge payment percentage as defined under proposed new § 412.522(d)(1). We stated that we plan to develop such a notification process through subregulatory guidance. We also note that, under section 1886(m)(6)(C)(ii) of the Act, for cost reporting periods beginning on or after October 1, 2020, the statute requires that any LTCH whose discharge payment percentage for the period is not at least 50 percent will be informed of such a fact and all of the LTCH's discharges in each successive cost reporting period will be paid the payment amount that would apply under subsection (d) for the discharge if the hospital were a subsection (d) hospital, subject to the process for reinstatement provided for by section 1886(m)(6)(C)(iii) of the Act.
Because this statutory requirement is not effective until cost reporting periods beginning on or after October 1, 2020, we did not propose to make any changes related to the limitation requirement or the process for reinstatement at this time. However, we invited public comments on the development and implementation of the process for reinstatement under section 1886(m)(6)(C)(iii) of the Act.
After consideration of the public comments we received, we are finalizing, without modification, our proposals to codify the statutory requirement under new § 412.522(d)(2) that we provide notice to each LTCH of its discharge payment percentage for each cost reporting period beginning on or after October 1, 2015.
As discussed earlier in this section, section 1206(a) of Public Law 113-67 amended section 1886(m) of the Act by adding paragraph (6), which establishes patient-level criteria for payments made under the LTCH PPS for LTCH discharges occurring during cost reporting periods beginning on or after October 1, 2015 (FY 2016). In the FY 2015 IPPS/LTCH PPS proposed and final rules, we stated our intent to implement the requirements established by section 1206(a) of Public Law 113-67 through notice and comment rulemaking during the FY 2016 IPPS/LTCH PPS rulemaking cycle. In the FY
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50197 through 50198), we summarized the comments we received in response to our request for input from LTCH stakeholders. As we stated in that same final rule, we appreciated the commenters' thoughtful and detailed feedback, particularly those comments regarding the MS-LTC-DRG relative payment weights and the high-cost outlier policy under the new LTCH PPS dual rate payment structure established by section 1206(a) of Public Law 113-67. In developing the proposals presented in the FY 2016 IPPS/LTCH PPS proposed rule, we considered the recommendations and information provided by those commenters. Below we discuss our proposed and finalized policies related to the MS-LTC-DRG payment relative weights and high-cost outlier policy in regard to our implementation policies under the LTCH PPS dual rate payment structure required by section 1206(a) of Public Law 113-67.
Under the LTCH PPS, relative payment weights for each MS-LTC-DRG are a primary element used to account for the variations in cost per discharge and resource utilization between the diagnosis-related groups (§ 412.515). Each year, based on the latest available LTCH claims data, we calculate a relative payment weight for each MS-LTC-DRG that represents the resources used for an average inpatient LTCH case assigned to that MS-LTC-DRG to ensure that Medicare patients with conditions or illnesses classified under each MS-LTC-DRG have access to an appropriate level of services and to encourage efficiency (79 FR 50170). CMS adjusts the classifications and weighting factors annually to reflect changes in factors affecting the relative use of hospital resources, such as treatment patterns, technology, and the number of discharges (§ 412.517).
Under the new dual rate LTCH PPS payment structure, section 1206(a) of Public Law 113-67 establishes two distinct payment rates for LTCH discharges: discharges meeting specified patient-level criteria that will be excluded from the site neutral payment rate and all other patient discharges that will be paid under the site neutral payment rate. As discussed in greater detail in section VII.B.4.c. of the preamble of our proposed rule and this final rule, under new § 412.522(a)(2), we are establishing that LTCH discharges that meet the criteria for exclusion from site neutral payment rate will be paid using the LTCH PPS standard Federal payment rate described under § 412.523, as adjusted. In general, the LTCH PPS standard Federal payment rate is calculated by adjusting the standard Federal rate (determined under § 412.523(c)(3)) by the applicable MS-LTC-DRG relative payment weight for that Medicare cases. Under new § 412.522(c) (as discussed in greater detail in section VII.B.4.a. of the preamble of this final rule), consistent with section 1886(m)(6)((B)(ii) of the Act, we are establishing that the site neutral payment rate is the lower of the IPPS comparable per diem amount (including any applicable outlier payments), or 100 percent of the estimated cost of the case. Under this policy, the IPPS comparable per diem amount is determined using the same method to determine adjusted payments under the SSO policy at § 412.529(d)(4), and the estimated cost of the case is determined using the same method to determine estimated costs under the SSO policy at § 412.529(d)(2). We also note that the methodology we are adopting to determine payments for site neutral payment rate cases does not use the LTCH PPS standard Federal payment rate or the applicable MS-LTC-DRG relative payment weights.
As discussed above, in preparation for the proposed rule, we considered LTCH stakeholder input and evaluated whether it would be appropriate to modify our historical MS-LTC-DRG relative payment weight methodology to account for the establishment of the two distinct payment rates for LTCH discharges under the statutory changes to the LTCH PPS. Specifically, we examined whether our historical methodology, which uses data from all LTCH PPS discharges, should be continued when we calculate the MS-LTC-DRG relative payment weights under the new LTCH PPS dual rate payment structure, or whether it would be more appropriate to limit the data used to calculate relative payment weights to that obtained from discharges paid based on the LTCH PPS standard Federal payment rate (that is, discharges that would have met the criteria to be excluded from the site neutral payment rate had those criteria been in effect at the time of the discharge). Our existing methodology for developing the MS-LTC-DRG relative payment weights includes established policies related to the data used to calculate the relative payment weights, the hospital-specific relative value methodology, the treatment of severity levels in the MS-LTC-DRGs, the low-volume and no-volume MS-LTC-DRGs, adjustments for nonmonotonicity, and the calculation of the MS-LTC-DRG relative payment weights with a budget neutrality factor
In response to our solicitation for stakeholder input during the FY 2015 rulemaking cycle, we received numerous comments that addressed the calculation of the MS-LTC-DRG relative payment weights under the new statutory LTCH PPS structure. In its comment, MedPAC urged CMS to establish “ . . . new relative payment weights for each MS-LTC-DRG based solely on the most recent available standardized data associated with discharges meeting the specified patient-level criteria” because those discharges under the new law would represent cases treating the most severely ill, incurring higher resource costs that warrant higher LTCH payments. MedPAC also stated that the change in methodology should not result in increased aggregate payments for the cases paid under the LTCH PPS standard Federal payment rate under the new statutory LTCH PPS structure. Most of the other commenters agreed with MedPAC's recommendation that the MS-LTC-DRG relative payment weights under the new statutory structure should be calculated using only the data from cases that meet the statutory patient-level criteria for exclusion from the site neutral payment rate (or cases that would have qualified for exclusion had the new LTCH PPS payment structure been in effect at the time of discharge) A few commenters conducted their own analyses and found that both relative payment weight approaches (that is, using data from all LTCH PPS cases as compared to using only data from standard Federal payment rate cases) produce MS-LTC-DRG relative payment weights that are similar. In addition, some of the commenters urged CMS to focus on keeping payments for LTCH PPS standard Federal payment rate cases at the same level that would have been in the absence of the statutory changes, or otherwise consider employing a methodology that promotes stability and predictability in the MS-LTC-DRG relative payment weights. Therefore, the overwhelming majority of the preliminary stakeholder feedback we received did not support using data from all LTCH PPS cases to determine the MS-LTC-DRG relative payment weights for the LTCH PPS standard Federal payment rate cases (80 FR 24536).
In the FY 2016 IPPS/LTCH PPS proposed rule, we expressed our appreciation for the commenters' detailed feedback and took into consideration their concerns and recommendations in our evaluation the issue of the MS-LTC-DRG relative payment weights under the new LTCH PPS structure required by section 1206(a) of Public Law 113-67 in preparation for that proposed rule. As part of our evaluation, as we discussed in the proposed rule (80 FR 24536), we examined the FY 2013 LTCH claims data used to determine the FY 2015 MS-LTC-DRG relative weights and found that approximately 54 percent of LTCH cases would meet the criteria for exclusion from the site neutral payment rate (that is, those cases would be paid the LTCH PPS standard Federal payment rate had the new criteria been in effect at the time of the discharge) and approximately 46 percent of LTCH cases would be paid the site neutral payment rate (had the new criteria been in effect at the time of the discharge). We then compared the MS-LTC-DRG relative payment weights computed using data from all LTCH PPS cases to the MS-LTC-DRG relative payment weights computed using only data from the LTCH PPS standard Federal payment rate cases (had those criteria been in effect at the time of the discharge). Specifically, using the FY 2013 LTCH claims data (the same LTCH claims data used in the FY 2015 IPPS/LTCH PPS final rule), we calculated FY 2015 MS-LTC-DRG relative payment weights using only data from the 54 percent of LTCH PPS cases that would be paid the LTCH PPS standard Federal payment rate, and compared them to the FY 2015 MS-LTC-DRG relative payment weights established in Table 11 of the FY 2015 IPPS/LTCH PPS final rule, which were calculated using data from all LTCH cases (that is, both case that would have been LTCH PPS standard Federal payment rate cases and would have been site neutral payment rate cases had those criteria been in place at the time of the discharge). Similar to results found by industry stakeholders, we found that both approaches produced comparable MS-LTC-DRG payments for LTCH PPS standard Federal payment rate cases. For example, our analysis of the average MS-LTC-DRG relative payment weight (that is, the case-mix) of LTCH PPS cases that would be paid the LTCH PPS standard Federal payment rate showed that the average case-mix using relative payment weights determined from using only data from LTCH PPS standard Federal payment rate cases differed by only approximately 0.01 percentage point from the average case-mix of those same cases using relative weights determined from data from all LTCH PPS cases.
However, we also discussed our belief that the costs and resource use for cases paid at the site neutral payment rate in the future may be lower on average than the costs and resource use for LTCH cases in our historical data that would have been paid at the site neutral payment rate if the statutory changes were in place when the discharges occurred. We believe that this is likely, even if the proportion of site neutral payment rate cases in future data remains similar to the historical data (that is, 46 percent). (We discuss our assumptions about cases paid at the site neutral payment rate in the future in more detail in section VII.B.7.b. of the preamble of this final rule, where we present our proposed and final policies regarding outlier payments for site neutral payment rate cases.) Therefore, even though the analysis described shows that including or excluding what would have been site neutral payment rate cases if the new statutory requirements were applied to the historical discharges would not have much impact on the relative payment weight calculation for FY 2016, over time we believe that the relative payment weights could become distorted if future site neutral payment rate cases involve less intensive resource use and lower costs, which we believe is a plausible response to the lower site neutral payment rates under the statutory LTCH PPS changes. This also could lead to less stability in the MS-LTC-DRG relative payment weights because these cases become incorporated into data used to calculate the relative payment weights.
Taking all of this information into account and given the feedback we received on this issue in the FY 2015 rulemaking cycle, we believe that computing the MS-LTC-DRG relative payment weights using only data from LTCH PPS cases that will be (or, in the future, are) paid the LTCH PPS standard Federal payment rate (that is, cases that meet the criteria for exclusion from the site neutral payment rate) will result in the most appropriate payments under
In addition, we proposed to continue to apply the existing budget neutrality requirement for the annual changes to the MS-LTC-DRG classifications and relative payment weights at § 412.517(b), which specifies that any such changes must be made in a budget neutral manner such that estimated aggregate LTCH PPS payments are not affected. We explained that we believe that a budget neutrality requirement is appropriate for the MS-LTC-DRG relative payment weights that would be used to determine LTCH PPS payments for LTCH PPS standard Federal payment rate cases for the same reasons discussed when the policy was originally adopted in the FY 2008 LTCH PPS final rule (72 FR 26880 through 26884). Therefore, we did not propose to make any changes to the budget neutrality requirement at § 412.517(b).
Some commenters agreed with CMS' proposal to continue to make the annual changes to the MS-LTC-DRG classifications and relative payment weights in a budget neutral manner such that estimated aggregate LTCH PPS payments are not affected. One commenter believed that the budget neutrality requirement should not be included until the new payment system is in place, consistent the original implementation of the budget neutrality requirement, which was introduced a few years after the initial implementation of the LTCH PPS.
Furthermore, using only data from LTCH PPS cases that meet the criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) to compute the MS-LTC-DRG relative payment weights for FY 2016 is consistent with the HCO policy calculations we are finalizing in this final rule after consideration of public comments, which are discussed in section VII.B.7.b. of the preamble of this final rule. While we appreciate the commenters' recognition that using all of the cases in the historical data or only using cases that would have met the criterial for exclusion for the site neutral payment rate (had those criteria been in effect at the time of the discharge) would not have substantial impact on the relative weight calculation for FY 2016, we are aware that variation for specific MS-LTC-DRGs would occur as noted by commenters. However, such a variation can occur with the annual update of the relative weights based on the latest available LTCH PPS data under existing § 412.517, and, in general, appropriately adjusts the relative weights to reflect the resource use of LTCHs based on the best available data. For these reasons, we are not adopting the commenters' suggestions to calculate the FY 2016
We appreciate the comments we received in support of our proposal to continue to make the annual changes to the MS LTC DRG classifications and relative payment weights in a budget neutral manner such that estimated aggregate LTCH PPS payments are not affected. In addition to resulting in appropriate payments, we believe that this adjustment will continue to help to provide stability in LTCH PPS payments that are computed using the MS-LTC-DRG weights because the purpose of the budget neutrality adjustment is to ensure that estimated aggregate LTCH PPS payments do not increase or decrease as a result of the annual update of the MS-LTC-DRG classifications and relative weights. We do not believe that this change in Medicare payments to LTCHs is parallel to the change in Medicare payments to LTCHs under the initial implementation of the LTCH PPS in a way that would make it necessary to delay the continued application of the MS-LTC-DRG budget neutrality requirement. The period under which there was no MS-LTC-DRG budget neutrality requirement allowed LTCHs to adjust to a complete change in the structure of Medicare reimbursement; that is, from reasonable cost-based payments to a DRG-based prospective payment system, in which one of the primary elements for the basis of payments the coding of the diagnosis and procedure codes that are used to determine DRG assignment. As we explained when the policy was originally adopted, there had been fluctuations in the MS-LTC-DRG relative weights during the first 4 years of the LTCH PPS that were, in part, due to actual improvements in coding so that cases are appropriately assigned to MS-LTC-DRGs. We believed it was appropriate to establish the MS-LTC-DRG budget neutrality adjustment in the 5th year of the LTCH PPS when our annual case-mix index analysis indicated that changes in LTCH coding practices, which we believe were a primary contributor to in fluctuations in the MS-LTC-DRG relative weights in the past, had appeared to be stabilizing as LTCHs became more familiar with a DRG-based system (72 FR 26880). While the new dual rate LTCH PPS payment structure is arguably the most extensive change since the implementation of the LTCH PPS, it is not a complete change in the structure of Medicare payments to LTCHs, as was the case when LTCHs moved from cost-based payments to prospective payments. Therefore, we disagree with the commenter that it would be appropriate to delay the application of the MS-LTC-DRG budget neutrality requirement until LTCHs gain experience under the revised LTCH PPS.
After consideration of public commenters we received, for the reasons discussed above, we are finalizing, without modification, our proposal to compute the MS-LTC-DRG relative payment weights using only data from LTCH PPS cases that met the criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases), or that would have met the criteria had the new dual rate LTCH PPS payment structure been in effect at the time of discharge, and to continue to apply the existing budget neutrality requirement for the annual changes to the MS-LTC-DRG classifications and relative payment weights. Furthermore, we are clarifying the language we proposed to codify this policy under new paragraph (c) of § 412.517, to specify that beginning in FY 2016, the annual recalibration of the MS-LTC-DRG relative weights is determined using LTCH PPS discharges described in § 412.522(a)(2) (or that would have been described in such section had the application of site neutral payment rate been in effect at the time of the discharge).
Under the LTCH PPS, the existing regulations at § 412.525(a) provide for an additional adjustment to LTCH PPS payments to account for outlier cases that have extraordinarily high costs relative to the costs of most discharges (referred to as high-cost outliers (HCOs).) Providing such adjustments for HCOs strongly improves the accuracy of the LTCH PPS in determining resource costs at the patient and hospital level. In addition, HCO payments reduce the financial losses that would otherwise be incurred by hospitals when treating patients who require more costly care and, therefore, reduce the incentives to underserve these patients. Currently, we set the HCO threshold before the beginning of the payment year so that total estimated HCO payments are projected to equal 8 percent of estimated total payments under the LTCH PPS. Under our current HCO policy, an LTCH would receive an additional payment if the estimated cost of a case exceeds the adjusted LTCH PPS payment plus a fixed-loss amount. In such cases, the additional HCO payment amount is equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold, which is the sum of the adjusted Federal MS-LTC-DRG prospective payment amount for the case and the fixed-loss amount. The fixed-loss amount is the amount used to limit the loss that an LTCH would incur under the HCO policy for a case with unusually high costs. This results in Medicare and the LTCH sharing financial risk in the treatment of extraordinarily costly cases. Under the HCO policy, the fixed-loss amount is the maximum loss that an LTCH can incur for a case with unusually high costs before receiving an additional payment amount. The additional payment amount under the LTCH PPS HCO policy is determined using a marginal cost factor, which is a fixed percentage of costs above the HCO threshold. The marginal cost factor under the LTCH PPS HCO policy is 80 percent.
Under the current HCO policy, we annually determine a fixed-loss amount, that is, the maximum loss that an LTCH can incur under the LTCH PPS for a case with unusually high costs before an adjustment is made to the payment for the case. We do so by using the best available data to estimate aggregate LTCH PPS payments with and without a HCO policy, and, based on those estimates, set the fixed-loss amount at an amount that result in estimated total HCO payments being equal to 8 percent of estimated total LTCH PPS payments. Additional information on the LTCH PPS HCO methodology can be found in the FY 2003 LTCH PPS final rule (67 FR 56022 through 56027) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50398 through 50400).
As discussed in the previous section, under the new statutory LTCH PPS structure, section 1206(a) of Public Law 113-67 establishes two distinct payment rates for LTCH discharges beginning in FY 2016. To implement this statutory change, in the FY 2016 IPPS/LTCH PPS proposed rule, under proposed new § 412.522(a)(2), we proposed to pay for LTCH discharges that meet the criteria for exclusion from site neutral payment rate based on the LTCH PPS standard Federal payment rate, which includes HCO payments. Under proposed new § 412.522(c), consistent with the statute, we proposed that the site neutral payment rate is the lower of the IPPS comparable per diem amount as determined under existing
In response to our solicitation for stakeholder input included in the FY 2015 IPPS/LTCH PPS proposed rule, we received numerous comments that addressed the HCO policy under the new statutory LTCH PPS structure. In its comment, MedPAC recommended that both LTCH PPS standard Federal payment rate cases and site neutral payment rate cases receive HCO payments, and that estimated total HCO payments under the LTCH PPS continue to be projected to be equal to 8 percent of estimated total LTCH PPS payments for all cases (that is, both the LTCH PPS standard Federal payment rate cases and the site neutral payment rate cases). In contrast, most of the other commenters recommended that separate HCO fixed-loss amounts and separate HCO payment “targets” (that is, the projected percentage that estimated HCO payments are of estimated total payments) be determined for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases. Specifically, these commenters recommended that we calculate a fixed-loss amount under the current HCO policy for LTCH PPS standard Federal payment rate cases using only data (and estimated payments) from what would have been or are LTCH PPS standard Federal payment rate cases, without including data (and estimated payments) from cases that would have been or are paid the site neutral payment rate. In addition, some of the commenters recommended initially applying the existing HCO policy separately to both LTCH PPS standard Federal payment rate cases and site neutral payment rate cases; that is, determining separate HCO fixed-loss amounts so that estimated HCO payments would be equal to 8 percent of estimated total payments for each of the two LTCH PPS payment types (the LTCH PPS standard Federal payment rate cases and site neutral payment rate cases), respectively, and then adjusting the HCO targets as more data under the statutory revisions to the LTCH PPS become available. In other words, commenters suggested that it may be more appropriate to have different HCO targets for the two LTCH PPS payment types rather than two HCO targets of 8 percent. When making recommendations regarding the HCO policy under the statutory LTCH PPS changes, several commenters urged CMS to focus on maintaining LTCH PPS payments for LTCH PPS standard Federal payment rate cases at the same payment level as they are currently under the LTCH PPS, including the level of HCO payments, and to mitigate any instability in the HCO fixed-loss amount for LTCH PPS standard Federal payment rate cases.
Several commenters conducted independent analyses that looked at separate HCO fixed-loss amounts for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases. Upon review of their analyses, these commenters specifically recommended that separate HCO fixed-loss amounts be used for the two LTCH PPS payment types. A few of the commenters' analyses included assumptions about LTCH behavioral response to statutory changes to the LTCH PPS (such as changes in patient volume and costs). A few commenters indicated that using historical data would not reflect the anticipated behavioral response as a result of the new statutory payment structure and, therefore, may lead to an overestimation of costs and HCO payments (particularly with regard to payments for site neutral payment rate cases), resulting in a fixed-loss amount that is set too high relative to the HCO target. If this were to occur, these commenters expressed concern that LTCHs would be “underpaid” because HCO payments are budget neutral and actual HCO payments would fall below the HCO payments target.
In the FY 2016 IPPS/LTCH PPS proposed rule, we stated our appreciation for the commenters' detailed feedback and indicated that we had taken their concerns and recommendations into consideration while framing our proposed HCO policy under the new statutory LTCH PPS structure. As we always have for the LTCH PPS, we designed our proposed HCO policy under the new statutory structure to achieve a balance of the following goals: To reduce financial risk, reduce incentives to underserve costly beneficiaries, and improve the overall fairness of the PPS (67 FR 56023). With these goals in mind, we evaluated whether it would be appropriate to modify our current HCO policy to account for the establishment of the new dual rate LTCH PPS payment structure. This included examining whether our current HCO target, under which we set a single fixed-loss amount so that estimated total HCO payments are projected to equal 8 percent of estimated total LTCH PPS payments, should continue to be used upon implementation of the statutory LTCH PPS payment changes, or whether it would be more appropriate to have two separate HCO targets (one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases).
In examining this issue, we considered how LTCH discharges based on historical claims data would have been classified under the new dual rate LTCH PPS payment structure and the CMS' Office of the Actuary (OACT) projections regarding how LTCHs would likely respond to our proposed implementation of policies resulting from the statutory payment changes. For FY 2016, our actuaries currently project that the proportion of cases that would qualify as LTCH PPS standard Federal payment rate cases verses site neutral payment rate cases under the new statutory provisions would remain consistent with what is reflected in the historical LTCH PPS claims data. (As previously noted, based on FY 2013 LTCH claims data, we found that approximately 54 percent of LTCH cases would have been paid the LTCH PPS standard Federal payment rate and approximately 46 percent of LTCH cases would have been paid the site neutral payment rate if those rates had been in effect at that time.) While our actuaries do not project an immediate change in these proportions, they do project cost and resource changes to take into account the lower payment rates. Our actuaries also project that the costs and resource use for cases paid at the site neutral payment rate would likely be lower, on average, than the costs and resource use for cases paid at the LTCH PPS standard Federal payment rate and would likely mirror the costs and resource use for IPPS cases assigned to the same MS-DRG, regardless of whether the proportion of site neutral payment rate cases in the future remains similar to what is found based on the historical data. This actuarial assumption is based on our expectation that site neutral payment rate cases would generally be paid based on an IPPS comparable per diem amount under the statutory LTCH PPS payment changes, which, in the majority of cases, is much lower than the payment that would have been paid if these statutory changes were not enacted. These assumptions are consistent with statements from several commenters who noted that the type of site neutral payment rate cases may change in cost and severity over time in response to the new statutory payment structure because the payment for those cases
In light of these projections and expectations, we stated in the proposed rule that we believe that the use of a single fixed-loss amount and HCO target for all LTCH PPS cases would be problematic. Currently, the FY 2015 LTCH PPS fixed-loss amount is $14,972, which was determined using FY 2013 LTCH claims data (79 FR 50400). The FY 2015 IPPS fixed-loss amount is $25,799 (79 FR 50374). A single fixed-loss amount and target under the LTCH PPS would allow LTCH cases paid at the site neutral payment rate to qualify for HCO payments much more easily than comparable IPPS cases assigned to the same MS-DRG. This would occur because the HCO threshold (which is generally the sum of the adjusted Federal PPS payment for the case and the fixed-loss amount) under the IPPS would be higher than the HCO threshold under the LTCH PPS for a case assigned to the same MS-DRG (which would be expected to have a comparable adjusted Federal PPS payment, costs and resource use to a case paid as a LTCH PPS site neutral payment rate case). We also stated in the proposed rule that while we recognize that differing statutory requirements between the two payment systems result in comparable LTCH PPS site neutral payment rate cases and IPPS cases not being paid exactly the same amount, we did not believe that it would be appropriate for comparable LTCH PPS site neutral payment rate cases to receive dramatically different HCO payments from those cases that would be paid under the IPPS. Based on the FY 2015 figures, an IPPS hospital would have to absorb approximately $11,000 more in additional estimated costs than the LTCH treating a comparable case based on the difference between the IPPS fixed-loss amount of $25,799 and the LTCH PPS fixed-loss amount of $14,792 before it would begin to receive HCO payments. We believe that the most appropriate fixed-loss amount for site neutral payment rate cases under the LTCH PPS for a given fiscal year beginning with FY 2016 would be the IPPS fixed-loss amount for that fiscal year. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24538 through 24539), for FY 2016, we proposed a fixed-loss amount for site neutral payment rate cases of $24,485, which was the same proposed FY 2016 IPPS fixed-loss amount discussed in section II.A.4.g.(1) of the Addendum to the proposed rule and this final rule. We believe that this policy will reduce differences between HCO payments for similar cases under the IPPS and site neutral payment rate cases under the LTCH PPS and promote fairness between the two systems. We also proposed to make a payment adjustment for HCOs paid under the site neutral payment rate at a rate equal to 80 percent of the difference between the estimated cost of the case and the proposed IPPS HCO threshold, which is consistent with the current LTCH PPS HCO policy. The proposed IPPS HCO threshold for site neutral payment rate cases would be the sum of the LTCH PPS payment for such cases and the proposed IPPS fixed-loss amount of $24,485. As stated above, we believe that this policy will reduce differences between HCO payments for similar cases under the IPPS and site neutral payment rate cases under the LTCH PPS and promote fairness between the two systems. We also proposed to codify these proposals by making revisions to the existing HCO policy at § 412.525(a). In light of these proposals, we noted that any site neutral payment rate case that is paid 100 percent of the estimated cost of the case because that amount is lower than the IPPS comparable per diem amount will never be eligible to receive a HCO payment because, by definition, the estimated costs of such cases will never exceed the IPPS comparable per diem amount by any threshold.
After consideration of public comments we received, we are finalizing without modification our proposals to have separate HCO policies under the new dual rate LTCH PPS payment structure and our proposed methodology for calculating site neutral payment rate case the HCO payments, including the use of the IPPS FLT. We also are finalizing proposed revisions to the existing HCO policy at § 412.525(a) to codify these policies, as discussed below in this section.
Therefore, in this final rule, we are establishing a fixed-loss amount for site neutral payment rate cases for FY 2016 of $22,544, which was the same FY 2016 IPPS fixed-loss amount discussed in section II.A.4.g.(1) of the Addendum to this final rule. As stated above, we believe that this policy will reduce differences between HCO payments for similar cases under the IPPS and site neutral payment rate cases under the LTCH PPS and promote fairness between the two systems.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24539), after having established the IPPS fixed-loss amount as an appropriate threshold to propose for HCOs paid under the site neutral payment rate, we next examined how to establish an appropriate fixed-loss amount and HCO target for LTCH PPS standard Federal payment rate
In the FY 2016 IPPS/LTCH PPS proposed rule, to codify our proposed changes to the HCO policy to account for the new dual rate LTCH PPS payment structure, we proposed to revise paragraphs (a)(1), (a)(2), and (a)(3), and add a new paragraph (a)(4) to existing § 412.525. In existing § 412.525 (a)(1), (a)(2), and (a)(3), we proposed to make technical changes to the existing language to make it clear that the provisions in those paragraphs apply to LTCH discharges under both LTCH PPS payment rates (that is, site neutral payment rate cases as described at new § 412.522(a)(1) and the standard Federal payment rate cases as described at new § 412.522(a)(2)). Under the proposed new paragraph (a)(4) to § 412.525, we also proposed to specify what the terms “applicable LTCH PPS prospective payment” and “applicable fixed-loss amount” mean for purposes of this paragraph. Specifically, we proposed that, for purposes of § 412.525(a), “applicable LTCH PPS prospective payment” means either the site neutral payment rate under new § 412.522(c) for LTCH discharges described under new § 412.522(a)(1) or the standard Federal prospective payment rates under § 412.523 for LTCH discharges described under new § 412.522(a)(2). Similarly, we proposed that, for purposes of § 412.525(a), “applicable fixed-loss amount” means either, for LTCH described under new § 412.522(a)(1), the fixed-loss amount established for such cases, or, for LTCH discharges described under new § 412.522(a)(2), the fixed-loss amount established for such cases. In addition, we proposed to add language to paragraph (a) of § 412.525 to clarify that the fixed-loss is the maximum loss that a LTCH can incur under the LTCH PPS for a case with unusually high costs “before receiving an additional payment,” and is not the maximum loss an LTCH can incur. We proposed to make this clarification to highlight that the additional payment under the revised HCO policy is 80 percent (not 100 percent) of the estimated costs above the outlier threshold (that is, the sum of the applicable LTCH PPS prospective payment and the applicable fixed-loss amount).
For the calculation of the fixed-loss amount in the second year of the revised LTCH PPS (that is, FY 2017), there is no difference between the historical cases that would have been paid using the LTCH PPS standard Federal payment
We considered the approach requested by commenters of using the historical cases that would have been paid using the LTCH PPS standard Federal payment rate had the revised FY 2016 PPS been in effect at the time of the discharge to calculate the fixed-loss amount for FY 2016. However, we believe that approach would lead to less stability in the fixed-loss amount between FY 2016 and FY 2017 because cases not meeting the criteria for exclusion from the site neutral payment rate (had those criteria been in effect) would be included in the calculation of the fixed-loss amount for FY 2016 and then not included in the calculation for FY 2017. As we stated in the proposed rule, we believe our proposal would result in increased stability over time with respect to HCO payments for the LTCH PPS standard Federal payment rate cases (80 FR 24539). In addition, as noted earlier, there is uncertainty surrounding the site neutral payment rate case population under the new dual rate LTCH PPS payment structure. For the portion of the site neutral payment rate case population that will continue to be paid at the LTCH PPS standard Federal payment rate for a portion of FY 2016 (that is, those FY 2016 cases that would not meet the criteria for exclusion and would be paid the site neutral payment rate were those cases in LTCH cost reporting periods subject to those criteria at the time of the discharge), there is even greater uncertainty as to what the costs of those cases will be during that time. Therefore, we disagree that our proposed methodology is inaccurate. However, we acknowledge that these two approaches result in different estimated aggregate FY 2016 payments for cases paid using the LTCH PPS standard Federal payment rate, but that is due to the transitory effect of the statutory phase-in of the revised LTCH PPS. In FY 2017, the two approaches would result in the same estimated aggregate FY 2017 LTCH PPS expenditures.
After consideration of the public comments we received, for the reasons discussed, we are finalizing our policy as proposed without modification. In this final rule, we are calculating the fixed-loss amount for FY 2016 so that estimated aggregate FY 2016 HCO payments for cases that meet the criteria for exclusion from the site neutral payment rate are estimated to be equal to 8 percent of estimated aggregate FY 2016 payments for cases that meet the criteria for exclusion from the site neutral payment rate, rather than calculating the fixed-loss amount so that estimated aggregate FY 2016 HCO payments for cases paid using the LTCH PPS standard Federal payment rate are estimated to be equal to 8 percent of estimated aggregate FY 2016 payments for cases paid using the LTCH PPS standard Federal payment rate. We also are finalizing our proposals, without modification, to codify the changes to the HCO policy to account for the new dual rate LTCH PPS payment structure in existing § 412.525.
The current LTCH PPS HCO policy has a budget neutrality requirement in which the LTCH PPS standard Federal payment rate is reduced by an adjustment factor to account or the estimated proportion of HCO payments to total estimated LTCH PPS payments, that is, 8 percent. (We refer readers to § 412.523(d)(1) of the regulations.) This budget neutrality requirement is intended to ensure that the HCO policy would not result in any change in estimated aggregate LTCH PPS payments. Under our proposal to continue to apply the current HCO methodology as it relates to LTCH PPS standard Federal payment rate cases (other than determining a fixed-loss amount using only data from LTCH PPS standard Federal payment rate cases (had the new statutory patient criteria been in effect at the time of the discharge), we also would continue to apply the current budget neutrality requirement (described above). In accordance with the current LTCH PPS HCO policy budget neutrality requirement, we believe that the HCO policy for site neutral payment rate cases should also be budget neutral, meaning that the proposed site neutral payment rate HCO payments should not result in any change in estimated aggregate LTCH PPS payments. In order to achieve this, under new § 412.522(c)(2)(i), we proposed to apply a budget neutrality factor to the payment for all site neutral payment rate cases described under proposed new § 412.522(a)(1), which would also be established on an estimated basis. This approach was consistent with the HCO policy proposed LTCH PPS standard Federal payment rate cases HCO policy, which is budget neutral within the universe of LTCH PPS standard Federal payment rate cases (had the new statutory patient criteria been in effect at the time of the discharge). We invited public comments on this approach and the alternative approach of applying a single budget neutrality factor to all LTCH PPS cases, irrespective of the site neutral payment rate.
In order to estimate the magnitude a proposed budget neutrality adjustment under our proposed HCO payment budget neutrality requirement for site neutral payment rate cases, we again relied on the assumption by our actuaries that site neutral payment rate cases would have lengths of stay and costs comparable to IPPS cases assigned to the same MS-DRG. Under the IPPS, the fixed-loss amount is estimated based on a 5.1 percent target (79 FR 50378). In accordance with section 1886(d)(5)(A)(iv) of the Act, estimated operating IPPS HCO payments for any year are projected to be at least 5 percent, but no more than 6 percent of estimated total operating DRG payments, which does not include IME and DSH payments plus HCO payments. When setting the HCO threshold, we historically compute a 5.1 percent target by dividing the total operating IPPS HCO payments by the total operating IPPS DRG payments plus operating IPPS HCO payments (79 FR 50374). We believe that it is reasonable to set the site neutral payment rate case HCO target at the IPPS HCO target because these cases are expected to have lengths of stay and costs comparable to IPPS cases assigned to the same MS-DRG. Furthermore, using the IPPS fixed-loss threshold for the site neutral payment rate cases would be expected to result in HCO payments for site neutral payment rate cases that are similar in proportion as is seen in IPPS cases assigned to the same MS-DRG; that is, 5.1 percent. We recognize that, given the uncertainty surrounding the site neutral payment rate case population under the revised LTCH PPS and differences between the relative utilization of the MS-DRGs and MS-LTC-DRGs between the two systems, this prediction may not
Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24540 through 24541), under proposed new § 412.522(c)(2)(i), we proposed to adjust payments to site neutral payment rate cases (that is, LTCH PPS discharges described under proposed new § 412.522(a)(1)) by a budget neutrality factor so that the estimated HCO payments payable to site neutral payment rate cases do not result any increase in aggregate LTCH PPS payments. As discussed in greater detail in section V.D.4. of the Addendum to the proposed rule and this final rule, in estimating total LTCH PPS payments in Federal FY 2016, we proposed to apply an adjustment to account for the varying effective dates of the statutory LTCH PPS payment changes required by section 1886(m)(6) of the Act, as amended by section 1206 of Public Law 113-67, which are effective for discharges occurring in cost reporting periods beginning on or after October 1, 2015.
After consideration of the public comments we received, for the reasons discussed above, we are adopting our proposal to adjust payments to site neutral payment rate cases by a budget neutrality factor so that the estimated HCO payments payable to site neutral payment rate cases do not result any increase in aggregate LTCH PPS payments (relative to LTCH PPS payments without HCO payments to site neutral payment rate cases), without modification. In doing so, we note that we present and respond to the comments on CMS' proposed approach for determining the proposed site neutral payment rate budget neutrality factor, including the technical changes recommended by some commenters, in section V.D.4. of the Addendum to this final rule.
In addition to the proposed changes to the existing HCO policy under § 412.525(a) and the budget neutrality adjustment to account for site neutral payment rate HCO payments under proposed § 412.522(c)(2)(i), we proposed to make conforming changes to existing § 412.523 under paragraph (d)(1) to specify that the HCO target of 8 percent in that provision only applies to HCO payments under § 412.525(a) as they relate to LTCH PPS standard Federal payment rate cases; that is, HCO payments made for discharges described under proposed new § 412.522(a)(2) and not all HCO payments described under proposed new § 412.525(a).
We did not receive any public comments on the proposed conforming changes to existing § 412.523(d)(1). Therefore, we are adopting these changes as final without modification.
In summary, in this final rule, we are finalizing the policy to have separate HCO fixed-loss amounts and HCO targets (and corresponding budget neutrality adjustments) for site neutral payment rate cases and LTCH PPS standard Federal payment rate cases, respectively, under the new dual rate LTCH PPS payment structure. For the reasons discussed above, we believe that separate and independent HCO fixed-loss amounts for each of the two types of LTCH PPS cases will result in the most appropriate payments under the LTCH PPS and achieve the stated goals of our HCO policy. In accordance with our revised HCO policy for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases, we are establishing that, beginning with FY 2016, our current HCO policy will apply to LTCH PPS standard Federal payment rate cases, such that LTCH PPS standard Federal payment rate cases will receive an additional payment for an HCO case that is equal to 80 percent of the difference between the estimated cost of the case and the LTCH PPS standard Federal payment HCO threshold (which is the sum of the LTCH PPS standard Federal payment rate for the case and the fixed-loss amount for such cases). The fixed-loss amount for LTCH PPS standard Federal payment rate cases will be determined so that estimated HCO payments will be projected to equal 8 percent of estimated total LTCH PPS payments for LTCH PPS standard Federal payment rate cases. To maintain budget neutrality, the LTCH PPS standard Federal payment rate will
In accordance with existing regulations and for the consistency with other established hospital prospective payment systems polices, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24541), we proposed to revise § 412.507 to establish allowable charges to Medicare beneficiaries whose discharge from the LTCH is paid under the site neutral payment rate (as described in section VII.B.4. of the preamble of the proposed rule and this final rule). Section 1206(a)(1) of Public Law 113-67 requires that, beginning with cost reporting periods occurring on or after October 1, 2015, all LTCH discharges be paid at the applicable site neutral payment rate unless certain criteria are met. In general, the site neutral rate payment is based on the lesser of 100 percent of the estimated cost of the case or the IPPS comparable per diem amount (as discussed more detail in section VII.B.4.a. of the preamble of this final rule). We believe that, in general, the LTCH PPS payment an LTCH receives at the site neutral payment rate represents a full payment for purposes of determining allowable beneficiary charges for covered services. As such, using the broad authority conferred upon the Secretary under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, in the proposed rule, we proposed to revise § 412.507 to limit allowable charges to beneficiaries. Specifically, we proposed that, if Medicare has paid the full site neutral payment rate for a discharge, an LTCH may only charge the beneficiary applicable deductibles and copay amounts until the high-cost outlier threshold is met. In addition, we proposed to revise the terminology used under § 412.507 to differentiate between cases paid under the site neutral payment rate and those paid under the LTCH PPS standard Federal payment rate. We noted that, under this proposed revision, for a case paid under the site neutral payment rate, that payment applies to the LTCH's costs for services furnished until the high-cost outlier threshold is met, and LTCHs may charge the beneficiary for noncovered services in the same manner as if the case were paid under the LTCH PPS standard Federal payment rate, as specified under existing § 412.507. We did not propose to make any additional changes to our current provisions limiting charges to beneficiaries for discharges paid as SSO cases because, as explained in section VII.B.5. of the preamble of the proposed rule and this final rule, we did not propose to adopt any SSO payment adjustment policies for discharges paid under the site neutral payment rate at this time. We stated that we believe that these proposals concerning the limitation on charges to beneficiaries are in accordance with existing regulations and consistent with other established hospital payment systems policies.
We did not receive any public comments concerning our proposed changes to the regulations limiting charges to beneficiaries. Therefore, we are finalizing, without modification, our proposals to limit charges to beneficiaries.
Section 123 of the BBRA required that the Secretary implement a PPS for LTCHs to replace the cost-based payment system under TEFRA. Section 307(b)(1) of the BIPA modified the requirements of section 123 of the BBRA by requiring that the Secretary examine the feasibility and the impact of basing payment under the LTCH PPS on the use of existing (or refined) hospital DRGs that have been modified to account for different resource use of LTCH patients.
When the LTCH PPS was implemented for cost reporting periods beginning on or after October 1, 2002, we adopted the same DRG patient classification system utilized at that time under the IPPS. As a component of the LTCH PPS, we refer to this patient classification system as the “long-term care diagnosis-related groups (LTC-DRGs).” Although the patient classification system used under both the LTCH PPS and the IPPS are the same, the relative weights are different. The established relative weight methodology and data used under the LTCH PPS result in relative weights under the LTCH PPS that reflect the differences in patient resource use of LTCH patients, consistent with section 123(a)(1) of the BBRA (Pub. L. 106-113).
As part of our efforts to better recognize severity of illness among patients, in the FY 2008 IPPS final rule with comment period (72 FR 47130), the MS-DRGs and the Medicare severity long-term care diagnosis-related groups (MS-LTC-DRGs) were adopted under the IPPS and the LTCH PPS, respectively, effective beginning October 1, 2007 (FY 2008). For a full description of the development, implementation, and rationale for the use of the MS-DRGs and MS-LTC-DRGs, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47141 through 47175 and 47277 through 47299). (We note that, in that same final rule, we revised the regulations at § 412.503 to specify that for LTCH discharges occurring on or after October 1, 2007, when applying the provisions of 42 CFR part 412, subpart O applicable to LTCHs for policy descriptions and payment calculations, all references to LTC-DRGs would be considered a reference to MS-LTC-DRGs. For the remainder of this section, we present the discussion in terms of the current MS-LTC-DRG patient classification system unless specifically referring to the previous LTC-DRG patient classification system that was in effect before October 1, 2007.)
The MS-DRGs adopted in FY 2008 represent an increase in the number of DRGs by 207 (that is, from 538 to 745) (72 FR 47171). The MS-DRG classifications are updated annually. There are currently 753 MS-DRG groupings. For FY 2016, there are 758 MS-DRG groupings that we are
In this final rule, in general, for FY 2016, we are using our existing methodology to determine the MS-LTC-DRG relative weights (as discussed in greater detail in section VII.C.3. of the preamble of this final rule). However, under the new dual rate LTCH PPS payment structure, we are establishing that, beginning with FY 2016, the annual recalibration of the MS-LTC-DRG relative weights will be determined (1) using only data from available LTCH PPS claims that would have qualified for payment under the new LTCH PPS standard Federal payment rate if that rate were in effect when claims data from time periods before the new dual rate LTCH PPS payment structure applies were used to calculate the relative weights, and (2) using only data from available LTCH PPS claims that qualify for payment under the new LTCH PPS standard Federal payment rate when claims data from time periods after the dual rate LTCH PPS payment structure applies are used to calculate the relative weights. For the remainder of this discussion, we use the phrase “applicable LTCH cases” or “applicable LTCH data” when referring to the resulting claims data set used to calculate the relative weights (as described in greater detail in section VII.C.3.c. of the preamble of this final rule). In addition, we are continuing to exclude the data from all-inclusive rate providers and LTCHs paid in accordance with demonstration projects, as well as any Medicare Advantage claims from the MS-LTC-DRG relative weight calculations for the reasons discussed in section VII.C.3.c. of the preamble of this final rule.
Under our finalized policies, the MS-LTC-DRG relative weights will not be used to determine the LTCH PPS payment for cases paid at the site neutral payment rate and data from cases paid at the site neutral payment rate or that would have been paid at the site neutral payment if the dual rate LTCH PPS payment structure had been in effect will not be used to develop the relative weights. (For details on our finalized policies regarding the application of the site neutral payment rate, we refer readers to section VII.B. of the preamble of this final rule. For additional information on our finalized policy to use data from applicable LTCH cases to determine the MS-LTC-DRG relative weights under the new dual rate LTCH PPS payment structure, we refer readers to section VII.B.7.a. of the preamble of this final rule.)
Furthermore, for FY 2016, in using data from applicable LTCH cases to establish MS-LTC-DRG relative weights, we will continue to establish low-volume MS-LTC-DRGs (that is, MS-LTC-DRGs with less than 25 cases) using our quintile methodology in determining the MS-LTC-DRG relative weights because LTCHs do not typically treat the full range of diagnoses as do acute care hospitals. Therefore, for purposes of determining the relative weights for the large number of low-volume MS-LTC-DRGs, we group all of the low-volume MS-LTC-DRGs into five quintiles based on average charges per discharge. Then, under our existing methodology, we account for adjustments made to LTCH PPS standard Federal payment rate payments for short-stay outlier (SSO) cases (that is, cases where the covered length of stay at the LTCH is less than or equal to five-sixths of the geometric average length of stay for the MS-LTC-DRG), and we make adjustments to account for nonmonotonically increasing weights, when necessary. The methodology is premised on more severe cases under the MS-LTC-DRG system requiring greater expenditure of medical care resources and higher average charges such that, in the severity levels within a base MS-LTC-DRG, the relative weights should increase monotonically with severity from the lowest to highest severity level. (We discuss each of these components of our MS-LTC-DRG relative weight methodology in greater detail in section VII.C.3.g. of the preamble of this final rule.)
The MS-DRGs (used under the IPPS) and the MS-LTC-DRGs (used under the LTCH PPS) are based on the CMS DRG structure. As noted above in this section, we refer to the DRGs under the LTCH PPS as MS-LTC-DRGs although they are structurally identical to the MS-DRGs used under the IPPS.
The MS-DRGs are organized into 25 major diagnostic categories (MDCs), most of which are based on a particular organ system of the body; the remainder involve multiple organ systems (such as MDC 22, Burns). Within most MDCs, cases are then divided into surgical DRGs and medical DRGs. Surgical DRGs are assigned based on a surgical hierarchy that orders operating room (O.R.) procedures or groups of O.R. procedures by resource intensity. The GROUPER software program does not recognize all ICD-9-CM procedure codes as procedures affecting DRG assignment. That is, procedures that are not surgical (for example, EKGs), or minor surgical procedures (for example, a biopsy of skin and subcutaneous tissue (procedure code 86.11)) do not affect the MS-LTC-DRG assignment based on their presence on the claim.
Generally, under the LTCH PPS, a Medicare payment is made at a predetermined specific rate for each discharge and that payment varies by the MS-LTC-DRG to which a beneficiary's stay is assigned. Cases are classified into MS-LTC-DRGs for payment based on the following six data elements:
• Principal diagnosis;
• Additional or secondary diagnoses;
• Surgical procedures;
• Age;
• Sex; and
• Discharge status of the patient.
Currently, for claims submitted on the 5010 format, up to 25 diagnosis codes and 25 procedure codes are considered for an MS-DRG assignment. This includes one principal diagnosis and up to 24 secondary diagnoses for severity of illness determinations. (For additional information on the processing of up to 25 diagnosis codes and 25 procedure codes on hospital inpatient claims, we refer readers to section II.G.11.c. of the preamble of the FY 2011 IPPS/LTCH PPS final rule (75 FR 50127).)
Under HIPAA transactions and code sets regulations at 45 CFR parts 160 and 162, covered entities must comply with the adopted transaction standards and operating rules specified in Subparts I through S of Part 162. Among other requirements, by January 1, 2012, covered entities were required to use the ASC X12 Standards for Electronic Data Interchange Technical Report Type 3—Health Care Claim: Institutional (837), May 2006, ASC X12N/005010X223, and Type 1 Errata to Health Care Claim: Institutional (837) ASC X12 Standards for Electronic Data Interchange Technical Report Type 3, October 2007,
HIPAA requires covered entities to use the applicable medical data code set requirements when conducting HIPAA transactions (45 CFR 162.1000). Currently, upon the discharge of the patient, the LTCH must assign appropriate diagnosis and procedure codes from the most current version of the Internal Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). For additional information on the ICD-9-CM coding system, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47241 through 47243 and 47277 through 47281). We also refer readers to the detailed discussion on correct coding practices in the August 30, 2002 LTCH PPS final rule (67 FR 55981 through 55983).
Currently, providers use the code sets under the ICD-9-CM coding system to report diagnoses and procedures for Medicare hospital inpatient services under the MS-DRG system. We have been discussing the conversion to the ICD-10 coding system for many years. Hospitals, including LTCHs, are required to use the ICD-10 coding system effective October 1, 2015. Consequently, providers will begin using the code sets under the ICD-10 coding system to report diagnoses (ICD-10-CM codes) and procedures (ICD-10-PCS codes) for Medicare hospital inpatient services under the MS-DRG system (and by extension the MS-LTC-DRG system) beginning October 1, 2015. For additional information on the implementation of the ICD-10 coding system, we refer readers to section II.G.1. of the preamble of this final rule. Additional coding instructions and examples are published in the AHA's
To create the MS-DRGs (and by extension, the MS-LTC-DRGs), base DRGs were subdivided according to the presence of specific secondary diagnoses designated as complications or comorbidities (CCs) into one, two, or three levels of severity, depending on the impact of the CCs on resources used for those cases. Specifically, there are sets of MS-DRGs that are split into 2 or 3 subgroups based on the presence or absence of a CC or a major complication or comorbidity (MCC). We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a detailed discussion about the creation of MS-DRGs based on severity of illness levels (72 FR 47141 through 47175).
MACs enter the clinical and demographic information submitted by LTCHs into their claims processing systems and subject this information to a series of automated screening processes called the Medicare Code Editor (MCE). These screens are designed to identify cases that require further review before assignment into a MS-LTC-DRG can be made. During this process, certain cases are selected for further development (74 FR 43949).
After screening through the MCE, each claim is classified into the appropriate MS-LTC-DRG by the Medicare LTCH GROUPER software on the basis of diagnosis and procedure codes and other demographic information (age, sex, and discharge status). The GROUPER software used under the LTCH PPS is the same GROUPER software program used under the IPPS. Following the MS-LTC-DRG assignment, the Medicare contractor determines the prospective payment amount by using the Medicare PRICER program, which accounts for hospital-specific adjustments. Under the LTCH PPS, we provide an opportunity for LTCHs to review the MS-LTC-DRG assignments made by the Medicare contractor and to submit additional information within a specified timeframe as provided in § 412.513(c).
The GROUPER software is used both to classify past cases to measure relative hospital resource consumption to establish the MS-LTC-DRG relative weights and to classify current cases for purposes of determining payment. The records for all Medicare hospital inpatient discharges are maintained in the MedPAR file. The data in this file are used to evaluate possible MS-DRG and MS-LTC-DRG classification changes and to recalibrate the MS-DRG and MS-LTC-DRG relative weights during our annual update under both the IPPS (§ 412.60(e)) and the LTCH PPS (§ 412.517), respectively.
As specified by our regulations at § 412.517(a), which require that the MS-LTC-DRG classifications and relative weights be updated annually, and consistent with our historical practice of using the same patient classification system under the LTCH PPS as is used under the IPPS, we are updating the MS-LTC-DRG classifications effective October 1, 2015, through September 30, 2016 (FY 2016) consistent with the changes to specific MS-DRG classifications presented in section II.G. of the preamble of this final rule. Therefore, the MS-LTC-DRGs for FY 2016 presented in this final rule are the same as the MS-DRGs that are being used under the IPPS for FY 2016. Specifically, as discussed in section II.G.1.b. of this preamble of this final rule, we are using the ICD-10 MS-DRGs Version 33 as the replacement logic for the ICD-9-CM based MS-DRGs Version 32 as part of the MS-DRG updates (and by extension the MS-LTC-DRG) updates for FY 2016. The GROUPER Version 33 is based on ICD-10-CM/PCS diagnoses and procedure codes, consistent with the requirement to use ICD-10 beginning October 1, 2015, as noted above and discussed in greater detail in section II.G.1. of the preamble of this final rule.
In the proposed rule, we invited public comments on how well the ICD-10 MS-DRGs Version 33 (and by extension the ICD-10 MS-LTC-DRGs Version 33) replicates the logic of the ICD-9 MS-DRGs Version 32 (and by extension ICD-9 MS-LTC-DRGs Version 32). These comments and our responses are discussed in section II.G.1.a. of the preamble of this final rule. (We note that, when referencing MS-LTC-DRGs Version 33 in the remainder of this section, we are referring to the ICD-10-based MS-LTC-DRGs Version 33 unless otherwise stated. Similarly, when referencing MS-LTC-DRGs Version 32 for the remainder of this section, we are referring to the ICD-9-based MS-LTC-DRGs Version 32 unless otherwise stated.) In addition, because the MS-LTC-DRGs for FY 2016 are the same as the MS-DRGs for FY 2016, the other changes that affect MS-DRG (and by extension MS-LTC-DRG) assignments under GROUPER Version 33, as discussed in section II.G. of the preamble of this final rule, including the changes to the MCE software and the ICD-10 coding system, will also be applicable under the LTCH PPS for FY 2016.
One of the primary goals for the implementation of the LTCH PPS is to pay each LTCH an appropriate amount for the efficient delivery of medical care to Medicare patients. The system must be able to account adequately for each LTCH's case-mix in order to ensure both fair distribution of Medicare payments and access to adequate care for those Medicare patients whose care is more costly (67 FR 55984). To accomplish these goals, we have annually adjusted the LTCH PPS standard Federal prospective payment system rate by the applicable relative weight in determining payment to LTCHs for each case. In order to make these annual
The established methodology to develop the MS-LTC-DRG relative weights is consistent with the methodology established when the LTCH PPS was implemented in the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55991), with the exception of some modifications of our historical procedures for assigning relative weights in cases of zero volume and/or nonmonotonicity resulting from the adoption of the MS-LTC-DRGs. (For details on these modifications to our historical procedures for assigning relative weights in cases of zero volume and/or nonmonotonicity, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47289 through 47295) and the FY 2009 IPPS final rule (73 FR 48542 through 48550).) Under the LTCH PPS, relative weights for each MS-LTC-DRG are a primary element used to account for the variations in cost per discharge and resource utilization among the payment groups (§ 412.515). To ensure that Medicare patients classified to each MS-LTC-DRG have access to an appropriate level of services and to encourage efficiency, we calculate a relative weight for each MS-LTC-DRG that represents the resources needed by an average inpatient LTCH case in that MS-LTC-DRG. For example, cases in a MS-LTC-DRG with a relative weight of 2 will, on average, cost twice as much to treat as cases in a MS-LTC-DRG with a relative weight of 1.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50170 through 50176), we presented our policies for the development of the MS-LTC-DRG relative weights for FY 2015.
In this final rule, as proposed, we are continuing to use our existing methodology to determine the MS-LTC-DRG relative weights for FY 2016, including the application of established policies related to, the hospital-specific relative value methodology, the treatment of severity levels in the MS-LTC-DRGs, low-volume and no-volume MS-LTC-DRGs, adjustments for nonmonotonicity, and the steps for calculating the MS-LTC-DRG relative weights with a budget neutrality factor. However, as previously noted and discussed in greater detail in section VII.B.7.a. of the preamble of this final rule, under the new dual rate LTCH PPS payment structure, after consideration of public comments, as we proposed, we are establishing that the FY 2016 MS-LTC DRG relative weights will be determined based only on data from applicable LTCH cases (which includes our finalized policy of using only cases that would meet the criteria for exclusion from the site neutral payment rate (had those criteria been in effect at the time of the discharge)). We discuss the effects of our finalized policies concerning the data used to determine the FY 2016 MS-LTC-DRG relative weights on the various components of our existing methodology in the discussion that follows.
Furthermore, as we have done since the FY 2008 update, and as we proposed, we are applying a two-step budget neutrality adjustment to the annual update to the MS-LTC-DRG classifications and relative weights at § 412.517(b) (in conjunction with § 412.503), such that estimated aggregate LTCH PPS payments would be unaffected, that is, would be neither greater than nor less than the estimated aggregate LTCH PPS payments that would have been made without the classification and relative weight changes (72 FR 26882 through 26884). For additional information on the established two-step budget neutrality methodology, we refer readers to the FY 2008 IPPS final rule (72 FR 47295 through 47296). Below we present our proposed methodology for determining the proposed MS-LTC-DRG relative weights for FY 2016 LTCH PPS standard Federal payment rate payments, which is generally consistent with our existing methodology, except for the proposed use of applicable LTCH data.
For this final rule, to calculate the MS-LTC-DRG relative weights for FY 2016 LTCH PPS standard Federal payment rate payments, we obtained total charges from FY 2014 Medicare LTCH claims data from the March 2015 update of the FY 2014 MedPAR file, which are the best available data at this time, and the finalized Version 33 of the GROUPER to classify LTCH cases. Consistent with our historical practice and as we proposed, we are using those data and the finalized Version 33 of the GROUPER in establishing the FY 2016 MS-LTC-DRG relative weights in this final rule. To calculate the FY 2016 MS-LTC-DRG relative weights under the new dual rate LTCH PPS payment structure that will be effective beginning October 1, 2015, beginning with the annual recalibration of the MS-LTC-DRG relative weights for FY 2016, we are using applicable LTCH data, which, as previously discussed in section VII.B.7.a. of this preamble of, includes our finalized policy of using only cases that meet the criteria for exclusion from the site neutral payment rate (or would meet the criteria had they been in effect at the time of the discharge). Accordingly, as we proposed, we began by first evaluating the LTCH claims data in the March 2015 update of the FY 2014 MedPAR file to determine which LTCH cases would have met the criteria for exclusion from the site neutral payment rate under § 412.522(b) (as discussed in greater detail in section VII.B.3. of the preamble of this final rule) had the new dual rate LTCH PPS payment structure been in effect at the time of discharge. We identified the FY 2014 LTCH cases that were not assigned to MS-LTC-DRGs 876, 880, 881, 882, 883, 884, 885, 886, 887, 894, 895, 896, 897, 945 and 946, which, under our finalized policies, will identify LTCH cases that do not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation (as discussed in section VII.B.3.b. of the preamble of this final rule); and that either—
• The admission to the LTCH was “immediately preceded” by discharge from a subsection (d) hospital and the immediately preceding stay in that subsection (d) hospital included at least 3 days in an ICU, as we define under the ICU criterion (discussed in section VII.B.3.e. of the preamble of this final rule); or
• The admission to the LTCH was “immediately preceded” by discharge from a subsection (d) hospital and the claim for the LTCH discharge includes the applicable procedure code that indicates at least 96 hours of ventilator services were provided during the LTCH stay, as we define under the ventilator criterion (discussed in section VII.B.3.f. of the preamble of this final rule). Claims data from the March 2015 update of the FY 2014 MedPAR file that reported ICD-9-CM procedure code
Then, consistent with our historical methodology and as we proposed, we excluded any claims in the resulting data set that were submitted by LTCHs that are all-inclusive rate providers and LTCHs that are reimbursed in accordance with demonstration projects authorized under section 402(a) of Public Law 90-248 or section 222(a) of Public Law 92-603. In addition, consistent with our historical practice and as we proposed, we excluded the Medicare Advantage (Part C) claims that were in the resulting data set based on the presence of a GHO Paid indicator value of “1” in the MedPAR files. The claims that remained after these three trims (that is, the applicable LTCH data) were then used to calculate the relative weights for the LTCH PPS standard Federal payment rate payments for FY 2016.
In summary, in identifying the claims data for the development of the FY 2016 MS-LTC-DRG relative weights in this final rule, we are using claims data after we trim the claims data of 10 all-inclusive rate providers reported in the March 2015 update of the FY 2014 MedPAR file, as well as any Medicare Advantage claims data for cases that would have met the criteria for exclusion from the site neutral payment rate under § 412.522(b) if the new dual rate LTCH PPS payment structure were in effect at the time of discharge. (We note, there were no data from any LTCHs that are paid in accordance with a demonstration project reported in the March 2015 update of the FY 2014 MedPAR file. However, had there been we would we trim the claims data from those LTCHs as well, in accordance with our established policy.) We are using the remaining data (that is, the applicable LTCH data) to calculate the relative weights for the LTCH PPS standard Federal payment rate payments for FY 2016. We note, the public comments we received, our responses to those comments, and our finalized policy of using only cases that would meet the criteria for exclusion from the site neutral payment rate (had those criteria been in effect at the time of the discharge) for the annual recalibration of the MS-LTC-DRG relative weights beginning for FY 2016 is presented in section VII.B.7.a. of this preamble of this final rule. We did not receive any public comments on the other parts of our proposals on the applicable LTCH data used to determine the relative weights for MS-LTC-DRGs for FY 2016, and are adopting those proposals as final without change.
After consideration of the public comments we received, we are finalizing our proposals on the applicable LTCH data used to determine the relative weights for MS-LTC-DRGs for FY 2016 without change.
By nature, LTCHs often specialize in certain areas, such as ventilator-dependent patients. Some case types (MS-LTC-DRGs) may be treated, to a large extent, in hospitals that have, from a perspective of charges, relatively high (or low) charges. This nonrandom distribution of cases with relatively high (or low) charges in specific MS-LTC-DRGs has the potential to inappropriately distort the measure of average charges. To account for the fact that cases may not be randomly distributed across LTCHs, consistent with the methodology we have used since the implementation of the LTCH PPS, as proposed, we are continuing to use a hospital-specific relative value (HSRV) methodology to calculate the MS-LTC-DRG relative weights for FY 2016 LTCH PPS standard Federal payment rate payments. We believe this method removes this hospital-specific source of bias in measuring LTCH average charges (67 FR 55985). Specifically, under this methodology, we are reducing the impact of the variation in charges across providers on any particular MS-LTC-DRG relative weight by converting each LTCH's charge for an applicable LTCH case to a relative value based on that LTCH's average charge for such cases.
Under the HSRV methodology, we standardize charges for each LTCH by converting its charges for each applicable LTCH case to hospital-specific relative charge values and then adjusting those values for the LTCH's case-mix. The adjustment for case-mix is needed to rescale the hospital-specific relative charge values (which, by definition, average 1.0 for each LTCH). The average relative weight for a LTCH is its case-mix; therefore, it is reasonable to scale each LTCH's average relative charge value by its case-mix. In this way, each LTCH's relative charge value is adjusted by its case-mix to an average that reflects the complexity of the applicable LTCH cases it treats relative to the complexity of the applicable LTCH cases treated by all other LTCHs (the average LTCH PPS case-mix of all applicable LTCH cases across all LTCHs).
In accordance with our established methodology, for FY 2016, we standardized charges for each applicable LTCH case by first dividing the adjusted charge for the case (adjusted for SSOs under § 412.529 as described in section VII.C.3.g. (Step 3) of the preamble of this final rule) by the average adjusted charge for all applicable LTCH cases at the LTCH in which the case was treated. SSO cases are cases with a length of stay that is less than or equal to five-sixths the average length of stay of the MS-LTC-DRG (§ 412.529 and § 412.503). The average adjusted charge reflects the average intensity of the health care services delivered by a particular LTCH and the average cost level of that LTCH. The resulting ratio was multiplied by that LTCH's case-mix index to determine the standardized charge for the case (67 FR 55989).
Multiplying the resulting ratio by the LTCH's case-mix index accounts for the fact that the same relative charges are given greater weight at a LTCH with higher average costs than they would at a LTCH with low average costs, which is needed to adjust each LTCH's relative charge value to reflect its case-mix relative to the average case-mix for all LTCHs. Because we standardized charges in this manner, we count charges for a Medicare patient at a LTCH with high average charges as less resource intensive than they would be at a LTCH with low average charges. For example, a $10,000 charge for a case at a LTCH with an average adjusted charge of $17,500 reflects a higher level of relative resource use than a $10,000 charge for a case at a LTCH with the same case-mix, but an average adjusted charge of $35,000. We believe that the adjusted charge of an individual case more accurately reflects actual resource use for an individual LTCH because the variation in charges due to systematic differences in the markup of charges among LTCHs is taken into account.
We did not receive any public comments concerning our proposal to continue to use HSRV methodology to determine the MS-LTC-DRG relative weights for FY 2016, and therefore, we are finalizing this proposed policy, without modification.
For purposes of determining the MS-LTC-DRG relative weights, under our historical methodology, there are three different categories of MS-DRGs based on volume of cases within specific MS-LTC-DRGs: (1) MS-LTC-DRGs with at
We provide in-depth discussions of our finalized policy regarding weight-setting for low-volume MS-LTC-DRGs in section VII.C.3.f. of the preamble of this final rule and for no-volume MS-LTC-DRGs, under Step 5 in section VII.C.3.g. of the preamble of this final rule.) Furthermore, in determining the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments, when necessary, as proposed, we made adjustments to account for nonmonotonicity, as discussed in greater detail below in Step 6 of section VII.C.3.g. of the preamble of this final rule. We refer readers to the discussion in the FY 2010 IPPS/RY 2010 LTCH PPS final rule for our rationale for including an adjustment for nonmonotonicity (74 FR 43953 through 43954).
In order to account for MS-LTC-DRGs for LTCH PPS Standard Federal payment rate cases with low-volume (that is, with fewer than 25 applicable LTCH cases), consistent with our existing methodology for purposes of determining the FY 2015 MS-LTC-DRG relative weights, as proposed, we are employing the quintile methodology for low-volume MS-LTC-DRGs, such that we grouped the “low-volume MS-LTC-DRGs” (that is, MS-LTC-DRGs that contained between 1 and 24 applicable LTCH cases into one of five categories (quintiles) based on average charges (67 FR 55984 through 55995 and 72 FR 47283 through 47288). In cases where the initial assignment of a low-volume MS-LTC-DRG to a quintile resulted in nonmonotonicity within a base-DRG, as proposed, we made adjustments to the resulting low-volume MS-LTC-DRGs to preserve monotonicity, as discussed in detail below in section VII.C.3.g. (Step 6) of the preamble of this final rule.
In the proposed rule, using the most current available data at that time, we noted our identification of 250 MS-LTC-DRGs that contained between 1 and 24 applicable LTCH cases. Based on the best available data for this final rule (that is, the March 2015 update of the FY 2014 MedPAR files, we now identified 251 MS-LTC-DRGs that contained between 1 and 24 applicable LTCH cases. This list of MS-LTC-DRGs was then divided into one of the 5 low-volume quintiles, each containing 50 MS-LTC-DRGs (251/5 = 50, with a remainder of 1). We assigned the low-volume MS-LTC-DRGs to specific low-volume quintiles by sorting the low-volume MS-LTC-DRGs in ascending order by average charge in accordance with our established methodology. Based on the data available for the proposed rule, the number of MS-LTC-DRGs with less than 25 applicable LTCH cases was evenly divisible by 5. Therefore, it was not necessary to employ our historical methodology for determining which of the low-volume quintiles contain an additional low-volume MS-LTC-DRG. However, for this final rule, based on the most current data available at this time, because the number of MS-LTC-DRGs with less than 25 applicable LTCH cases has shifted to 251 (which does not divide evenly), as proposed, we used our historical methodology for determining which quintiles would contain the additional MS-LTC-DRGs. Specifically for this final rule, after organizing the MS-LTC-DRGs by ascending order by average charge, we assigned the first fifth (1st through 50th) of low-volume MS-LTC-DRGs (with the lowest average charge) into Quintile 1. The 50 MS-LTC-DRGs with the highest average charge cases were assigned into Quintile 5. Because the average charge of the 151st low-volume MS-LTC-DRG in the sorted list was closer to the average charge of the 150th low-volume MS-LTC-DRG (assigned to Quintile 3) than to the average charge of the 152nd low-volume MS-LTC-DRG (assigned to Quintile 4), we are assigning it to Quintile 3 (such that Quintile 3 contains 51 low-volume MS-LTC-DRGs before any adjustments for nonmonotonicity, as discussed below). This results in 4 of the 5 low-volume quintiles containing 50 MS-LTC-DRGs (Quintiles 1, 2, 4 and 5) and one low-volume quintile containing 51 MS-LTC-DRGs (Quintiles 3). Table 13A, listed in section VI. of the Addendum to this final rule and available via the Internet, lists the composition of the low-volume quintiles for MS-LTC-DRGs for FY 2016.
Accordingly, in order to determine the FY 2016 relative weights for the MS-LTC-DRGs with low-volume, as proposed, we are using the five low-volume quintiles described above. We determined a relative weight and (geometric) average length of stay for each of the five low-volume quintiles using the methodology described in section VII.C.3.g. of the preamble of this final rule. As we proposed, we assigned the same relative weight and average length of stay to each of the low-volume MS-LTC-DRGs that make up an individual low-volume quintile. We note that, as this system is dynamic, it is possible that the number and specific type of MS-LTC-DRGs with a low-volume of applicable LTCH cases will vary in the future. Furthermore, we note that we will continue to monitor the volume (that is, the number of applicable LTCH cases) in the low-volume quintiles to ensure that our quintile assignments used in determining the MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments result in appropriate payment for LTCH cases that will be grouped to low-volume MS-LTC-DRGs and do not result in an unintended financial incentive for LTCHs to inappropriately admit these types of cases.
We did not receive any public comments concerning our proposals related to low-volume MS-LTC-DRGs. Therefore, we are finalizing, without modification, these proposals.
In this final rule, as proposed, we are generally using our existing methodology to determine the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments. However, in doing so, we are using only applicable LTCH cases and data to determine the FY 2016 MS-LTC-DRG relative weights (including our finalized policy of using only cases that met or would have met the criteria for exclusion from the site neutral payment rate (had those criteria been in effect at the time of the discharge as discussed in section VII.B.7.a. of the preamble of this final rule).
After consideration of the public comments we received, we are finalizing our proposal to continue to use our existing methodology to calculation the MS-LTC-DRG relative weights for FY 2016, including calculating the values in the ordered steps we have employed in this calculation from the onset of the LTCH PPS. To reflect this, in this final rule, we are correcting the order of steps described in this preamble to reflect the order in which they have been, and will continue to be applied in the application of our existing policy.
In summary, to determine the FY 2016 MS-LTC-DRG relative weights, we grouped applicable LTCH cases to the appropriate MS-LTC-DRG, while taking into account the low-volume quintiles (as described above) and cross-walked no-volume MS-LTC-DRGs as described below. After establishing the appropriate MS-LTC-DRG (or low-volume quintile), we calculated the FY 2016 relative weights for LTCH PPS standard Federal payment rate payments by first removing cases with a length of stay of 7 days or less and statistical outliers (Steps 1 and 2 below). Next, we adjusted the number of applicable LTCH cases in each MS-LTC-DRG (or low-volume quintile) for the effect of SSO cases (Step 3 below). After removing applicable LTCH cases with a length of stay of 7 days or less (Step 1 below) and statistical outliers (Step 2 below) and, which are the SSO-adjusted applicable LTCH cases and corresponding charges (step 3 below), we calculated “relative adjusted weights” for each MS-LTC-DRG (or low-volume quintile) using the HSRV method. Below we discuss in detail the steps for calculating the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments.
The first step in our calculation of the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments is to remove cases with a length of stay of 7 days or less. The MS-LTC-DRG relative weights reflect the average of resources used on representative cases of a specific type. Generally, cases with a length of stay of 7 days or less do not belong in a LTCH because these stays do not fully receive or benefit from treatment that is typical in a LTCH stay, and full resources are often not used in the earlier stages of admission to a LTCH. If we were to include stays of 7 days or less in the computation of the FY 2016 MS-LTC-DRG relative weights, the value of many relative weights would decrease and, therefore, payments would decrease to a level that may no longer be appropriate. We do not believe that it would be appropriate to compromise the integrity of the payment determination for those LTCH cases that actually benefit from and receive a full course of treatment at a LTCH by including data from these very short stays. Therefore, consistent with our existing relative weight methodology, in determining the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments, we removed LTCH cases with a length of stay of 7 days or less from applicable LTCH cases. (For additional information on what would be removed in this step of the relative weight methodology, we refer readers to 67 FR 55989 and 74 FR 43959.)
The next step in our calculation of the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments is to remove statistical outlier cases from the LTCH cases with a length of stay of at least 8 days. Consistent with our existing relative weight methodology, as proposed, we are continuing to define statistical outliers as cases that are outside of 3.0 standard deviations from the mean of the log distribution of both charges per case and the charges per day for each MS-LTC-DRG. These statistical outliers are removed prior to calculating the relative weights because we believe that they may represent aberrations in the data that distort the measure of average resource use. Including those LTCH cases in the calculation of the relative weights for LTCH PPS standard Federal payment rate payments could result in an inaccurate relative weight that does not truly reflect relative resource use among those MS-LTC-DRGs. (For additional information on what would be removed in this step of the relative weight methodology, we refer readers to 67 FR 55989 and 74 FR 43959.) After removing cases with a length of stay of 7 days or less and statistical outliers, we are left with applicable LTCH cases that have a length of stay greater than or
As the next step in the calculation of the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments, consistent with our historical approach, we adjusted each LTCH's charges per discharge for those remaining cases (that is, trimmed applicable LTCH cases) for the effects of SSOs (as defined in § 412.529(a) in conjunction with § 412.503). Specifically, we made this adjustment by counting an SSO case as a fraction of a discharge based on the ratio of the length of stay of the case to the average length of stay for the MS-LTC-DRG for non-SSO cases. This has the effect of proportionately reducing the impact of the lower charges for the SSO cases in calculating the average charge for the MS-LTC-DRG. This process produces the same result as if the actual charges per discharge of an SSO case were adjusted to what they would have been had the patient's length of stay been equal to the average length of stay of the MS-LTC-DRG.
Counting SSO cases as full LTCH cases with no adjustment in determining the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments will lower the FY 2016 MS-LTC-DRG relative weight for affected MS-LTC-DRGs because the relatively lower charges of the SSO cases will bring down the average charge for all cases within a MS-LTC-DRG. This will result in an “underpayment” for non-SSO cases and an “overpayment” for SSO cases. Therefore, as proposed, we are continuing to adjust for SSO cases under § 412.529 in this manner because it results in more appropriate payments for all LTCH PPS standard Federal payment rate cases. (For additional information on this step of the relative weight methodology, we refer readers to 67 FR 55989 and 74 FR 43959.)
Consistent with our historical relative weight methodology, we then calculated the FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments using the HSRV methodology, which is an iterative process. First, for each SSO-adjusted trimmed applicable LTCH case, we calculated a hospital-specific relative charge value by dividing the charge per discharge after adjusting for SSOs of the LTCH case (from Step 3) by the average charge per SSO-adjusted discharge for the LTCH in which the case occurred. The resulting ratio was then multiplied by the LTCH's case-mix index to produce an adjusted hospital-specific relative charge value for the case. An initial case-mix index value of 1.0 was used for each LTCH.
For each MS-LTC-DRG, we calculated the FY 2016 relative weight by dividing the SSO-adjusted average of the hospital-specific relative charge values for applicable LTCH cases (that is, the sum of the hospital-specific relative charge value from above divided by the sum of equivalent cases from step 3 for each MS-LTC-DRG) for the MS-LTC-DRG by the overall SSO-adjusted average hospital-specific relative charge value across all applicable LTCH cases for all LTCHs (that is, the sum of the hospital-specific relative charge value from above divided by the sum of equivalent applicable LTCH cases from step 3 for each MS-LTC-DRG). Using these recalculated MS-LTC-DRG relative weights, each LTCH's average relative weight for all of its SSO-adjusted trimmed applicable LTCH cases (that is, its case-mix) was calculated by dividing the sum of all the LTCH's MS-LTC-DRG relative weights by its total number of SSO-adjusted trimmed applicable LTCH cases. The LTCHs' hospital-specific relative charge values (from above) were then multiplied by the hospital-specific case-mix indexes. The hospital-specific case-mix adjusted relative charge values were then used to calculate a new set of MS-LTC-DRG relative weights across all LTCHs. This iterative process was continued until there was convergence between the relative weights produced at adjacent steps, for example, when the maximum difference was less than 0.0001. (We note that, although we are not making any changes to this step of our relative weight methodology in this final rule, we have made some minor changes to the description of this step to clarify the application of our existing policy.)
Using the trimmed applicable LTCH cases, we identified the MS-LTC-DRGs for which there were no claims in the March 2015 update of the FY 2014 MedPAR file and, therefore, for which no charge data was available for these MS-LTC-DRGs. Because patients with a number of the diagnoses under these MS-LTC-DRGs may be treated at LTCHs, consistent with our historical methodology, we are generally assigning a relative weight to each of the no-volume MS-LTC-DRGs for LTCH PPS standard Federal payment rate cases based on clinical similarity and relative costliness (with the exception of “transplant” MS-LTC-DRGs, “error” MS-LTC-DRGs, and MS-LTC-DRGs that indicate a principal diagnosis related to a psychiatric diagnosis or rehabilitation (referred to as the “psychiatric or rehabilitation” MS-LTC-DRGs), as discussed below). (For additional information on this step of the relative weight methodology, we refer readers to 67 FR 55991 and 74 FR 43959 through 43960.)
As proposed, we are cross-walking each no-volume MS-LTC-DRG to another MS-LTC-DRG for which we calculated a relative weight (determined in accordance with the methodology described above). Then, the “no-volume” MS-LTC-DRG was assigned the same relative weight (and average length of stay) of the MS-LTC-DRG to which it was cross-walked (as described in greater detail below).
Of the 758 MS-LTC-DRGs for FY 2016, we identified 367 MS-LTC-DRGs for which there are no trimmed applicable LTCH cases (the number identified includes no trimmed applicable LTCH cases in the 8 “transplant” MS-LTC-DRGs, the 2 “error” MS-LTC-DRGs, and the 15 “psychiatric or rehabilitation” MS-LTC-DRGs, which are discussed below). As proposed, we are assigning relative weights to each of the 342 no-volume MS-LTC-DRGs that contained trimmed applicable LTCH cases based on clinical similarity and relative costliness to one of the remaining 391 (758—367= 391) MS-LTC-DRGs for which we were able to calculate relative weights based on the trimmed applicable LTCH cases in the FY 2014 MedPAR file data using the steps described above. (For the remainder of this discussion, we refer to the “cross-walked” MS-LTC-DRGs as the MS-LTC-DRGs to which we cross-walked one of the 342 “no volume” MS-LTC-DRGs.) Then, we generally assigned the 342 no-volume MS-LTC-DRG the relative weight of the cross-walked MS-LTC-DRG. (As explained below in Step 6, when necessary, we made adjustments to account for nonmonotonicity.)
As proposed, we cross-walked the no-volume MS-LTC-DRG to a MS-LTC-DRG for which we were able to calculate relative weights based on the March 2015 update of the FY 2014 MedPAR file, and to which it is similar clinically in intensity of use of resources and relative costliness as determined by criteria such as care provided during the period of time surrounding surgery, surgical approach (if applicable), length of time of surgical procedure, postoperative care, and length of stay.
We then assigned the relative weight of the cross-walked MS-LTC-DRG as the relative weight for the no-volume MS-LTC-DRG such that both of these MS-LTC-DRGs (that is, the no-volume MS-LTC-DRG and the cross-walked MS-LTC-DRG) have the same relative weight (and average length of stay) for FY 2016. We note that, if the cross-walked MS-LTC-DRG had 25 applicable LTCH cases or more, its relative weight (calculated using the methodology described in Steps 1 through 4 above) was assigned to the no-volume MS-LTC-DRG as well. Similarly, if the MS-LTC-DRG to which the no-volume MS-LTC-DRG was cross-walked had 24 or less cases and, therefore, was designated to one of the low-volume quintiles for purposes of determining the relative weights, we assigned the relative weight of the applicable low-volume quintile to the no-volume MS-LTC-DRG such that both of these MS-LTC-DRGs (that is, the no-volume MS-LTC-DRG and the cross-walked MS-LTC-DRG) have the same relative weight for FY 2016. (As we noted above, in the infrequent case where nonmonotonicity involving a no-volume MS-LTC-DRG resulted, additional adjustments as described in Step 6 were required in order to maintain monotonically increasing relative weights.)
For this final rule, a list of the no-volume MS-LTC-DRGs and the MS-LTC-DRGs to which each was cross-walked (that is, the cross-walked MS-LTC-DRGs) for FY 2016 is shown in Table 13B, which is listed in section VI. of the Addendum to this final rule and is available via the Internet on the CMS Web site.
To illustrate this methodology for determining the relative weights for the FY 2016 MS-LTC-DRGs with no applicable LTCH cases, we are providing the following example, which refers to the no-volume MS-LTC-DRGs crosswalk information for FY 2016 provided in Table 13B.
Again, we note that, as this system is dynamic, it is entirely possible that the number of MS-LTC-DRGs with no volume will vary in the future. As proposed, we are using the most recent available claims data to identify the trimmed applicable LTCH cases from which we determined the relative weights in this final rule.
For FY 2016, consistent with our historical relative weight methodology, as we proposed, we are establishing a relative weight of 0.0000 for the following transplant MS-LTC-DRGs: Heart Transplant or Implant of Heart Assist System with MCC (MS-LTC-DRG 1); Heart Transplant or Implant of Heart Assist System without MCC (MS-LTC-DRG 2); Liver Transplant with MCC or Intestinal Transplant (MS-LTC-DRG 5); Liver Transplant without MCC (MS-LTC-DRG 6); Lung Transplant (MS-LTC-DRG 7); Simultaneous Pancreas/Kidney Transplant (MS-LTC-DRG 8); Pancreas Transplant (MS-LTC-DRG 10); and Kidney Transplant (MS-LTC-DRG 652). This is because Medicare will only cover these procedures if they are performed at a hospital that has been certified for the specific procedures by Medicare and presently no LTCH has been so certified. At the present time, we include these eight transplant MS-LTC-DRGs in the GROUPER program for administrative purposes only. Because we use the same GROUPER program for LTCHs as is used under the IPPS, removing these MS-LTC-DRGs would be administratively burdensome. (For additional information regarding our treatment of transplant MS-LTC-DRGs, we refer readers to the RY 2010 LTCH PPS final rule (74 FR 43964).) In addition, consistent with our historical policy and as we proposed, we are establishing a relative weight of 0.0000 for the 2 “error” MS-LTC-DRGs (that is, MS-LTC-DRG 998 (Principal Diagnosis Invalid as Discharge Diagnosis) and MS-LTC-DRG 999 (Ungroupable)) because applicable LTCH cases grouped to these MS-LTC-DRGs cannot be properly assigned to an MS-LTC-DRG according to the grouping logic.
In the proposed rule, for FY 2016, we proposed to establish a relative weight equal to the respective FY 2015 relative weight of the MS-LTC-DRGs for the following “psychiatric or rehabilitation” MS-LTC-DRGs: MS-LTC-DRG 876 (O.R. Procedure with Principal Diagnoses of Mental Illness); MS-LTC-DRG 880 (Acute Adjustment Reaction & Psychosocial Dysfunction); MS-LTC-DRG 881 (Depressive Neuroses); MS-LTC-DRG 882 (Neuroses Except Depressive); MS-LTC-DRG 883 (Disorders of Personality & Impulse Control); MS-LTC-DRG 884 (Organic Disturbances & Mental Retardation); MS-LTC-DRG 885 (Psychoses); MS-LTC-DRG 886 (Behavioral & Developmental Disorders); MS-LTC-DRG 887 (Other Mental Disorder Diagnoses); MS-LTC-DRG 894 (Alcohol/Drug Abuse or Dependence, Left Ama); MS-LTC-DRG 895 (Alcohol/Drug Abuse or Dependence, with Rehabilitation Therapy); MS-LTC-DRG 896 (Alcohol/Drug Abuse or Dependence, without Rehabilitation Therapy with MCC); MS-LTC-DRG 897 (Alcohol/Drug Abuse or Dependence, without Rehabilitation Therapy without MCC); MS-LTC-DRG 945 (Rehabilitation with CC/MCC); and MS-LTC-DRG 946 (Rehabilitation without CC/MCC). Under our proposed implementation of the new dual rate LTCH PPS payment structure, LTCH discharges that are grouped to these 15 “psychiatric and rehabilitation” MS-LTC-DRGs would not meet the criteria for exclusion from the site neutral payment rate. As such, under our proposed implementation of the criterion for a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation (which we are finalizing, as discussed in section VII.B.3.b. of the preamble of this final rule), there are no applicable LTCH cases to use in calculating a relative weight for the “psychiatric and rehabilitation” MS-LTC-DRGs. In other words, any LTCH PPS discharges grouped to any of the 15 “psychiatric and rehabilitation” MS-LTC-DRGs will always be paid at the site neutral payment rate, and, therefore, those MS-LTC-DRGs will never include any LTCH cases that meet the criteria for exclusion from the site neutral payment rate. However, section 1886(m)(6)(B) of the Act establishes a transitional payment method for cases that will be paid at the site neutral payment rate for LTCH discharges occurring in cost reporting periods beginning during FY 2016 or FY 2017. Under the transitional payment method
In summary, in this final rule, for FY 2016, as we proposed, we are establishing a relative weight (and average length of stay thresholds) equal to the respective FY 2015 relative weight of the MS-LTC-DRGs for the 15 “psychiatric or rehabilitation” MS-LTC-DRGs listed above (that is, MS-LTC-DRGs 876, 880, 881, 882, 883, 884, 885, 886, 887, 894, 895, 896, 897, 945, and 946). Table 11, which is listed in section VI. of the Addendum to this final rule and is available via the Internet on the CMS Web site, reflects the correction of the technical error discussed above.
As discussed earlier in this section, the MS-DRGs contain base DRGs that have been subdivided into one, two, or three severity of illness levels. Where there are three severity levels, the most severe level has at least one secondary diagnosis code that is referred to as an MCC (that is, major complication or comorbidity). The next lower severity level contains cases with at least one secondary diagnosis code that is a CC (that is, complication or comorbidity). Those cases without an MCC or a CC are referred to as “without CC/MCC.” When data do not support the creation of three severity levels, the base MS-DRG is subdivided into either two levels or the base MS-DRG is not subdivided. The two-level subdivisions could consist of the MS-DRG with CC/MCC and the MS-DRG without CC/MCC. Alternatively, the other type of two-level subdivision may consist of the MS-DRG with MCC and the MS-DRG without MCC.
In those base MS-LTC-DRGs that are split into either two or three severity levels, cases classified into the “without CC/MCC” MS-LTC-DRG are expected to have a lower resource use (and lower
In accordance with the regulations at § 412.517(b) (in conjunction with § 412.503), the annual update to the MS-LTC-DRG classifications and relative weights is done in a budget neutral manner such that estimated aggregate LTCH PPS payments would be unaffected, that is, would be neither greater than nor less than the estimated aggregate LTCH PPS payments that would have been made without the MS-LTC-DRG classification and relative weight changes. (For a detailed discussion on the establishment of the budget neutrality requirement for the annual update of the MS-LTC-DRG classifications and relative weights, we refer readers to the RY 2008 LTCH PPS final rule (72 FR 26881 and 26882).)
The MS-LTC-DRG classifications and relative weights are updated annually based on the most recent available LTCH claims data to reflect changes in relative LTCH resource use (§ 412.517(a) in conjunction with § 412.503). Under the budget neutrality requirement at § 412.517(b), for each annual update, the MS-LTC-DRG relative weights are uniformly adjusted to ensure that estimated aggregate payments under the LTCH PPS would not be affected (that is, decreased or increased). Consistent with that provision, we are updating the FY 2016 MS-LTC-DRG classifications and relative weights for LTCH PPS standard Federal payment rate payments based on the most recent available LTCH data for applicable LTCH cases, and applying a budget neutrality adjustment in determining the FY 2016 MS-LTC-DRG relative weights.
To ensure budget neutrality in the update to the MS-LTC-DRG classifications and relative weights under § 412.517(b), as proposed, we are continuing to use our established two-step budget neutrality methodology. As discussed previously in this section, this approach is consistent with our general policies regarding the continued use of our existing methodologies, as presented in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50175 through 50176).
In this final rule, in the first step of our MS-LTC-DRG budget neutrality methodology, for FY 2016, we calculated and applied a normalization factor to the recalibrated relative weights (the result of Steps 1 through 6 above) to ensure that estimated payments were not affected by changes in the composition of case types or the changes to the classification system. That is, the normalization adjustment is intended to ensure that the recalibration of the MS-LTC-DRG relative weights (that is, the process itself) neither increases nor decreases the average case-mix index.
To calculate the normalization factor for FY 2016 (the first step of our budget neutrality methodology), we used the following three steps: (1.a.) We used the most recent available applicable LTCH cases from the most recent available data (that is, LTCH discharges from the FY 2014 MedPAR file) and grouped them using the FY 2016 GROUPER (that is, Version 33 for FY 2016) and the recalibrated FY 2016 MS-LTC-DRG relative weights (determined in Steps 1 through 6 above) to calculate the average case-mix index; (1.b.) we grouped the same applicable LTCH cases (as are used in Step 1.a.) using the FY 2015 GROUPER (Version 32) and FY 2015 MS-LTC-DRG relative weights and calculated the average case-mix index; and (1.c.) we computed the ratio of these average case-mix indexes by dividing the average CMI for FY 2015 (determined in Step 1.b.) by the average case-mix index for FY 2016 (determined in Step 1.a.). As a result, in determining the MS-LTC-DRG relative weights for FY 2016, each recalibrated MS-LTC-DRG relative weight was multiplied by 1.27929 (determined in Step 1.c.) in the first step of the budget neutrality methodology, which produces “normalized relative weights.”
In the second step of our MS-LTC-DRG budget neutrality methodology, we calculated a second budget neutrality factor consisting of the ratio of estimated aggregate FY 2016 LTCH PPS standard Federal payment rate payments for applicable LTCH cases (the sum of all calculations under Step 1.a. above) after reclassification and recalibration to estimated aggregate payments for FY 2015 LTCH PPS standard Federal payment rate payments for applicable LTCH cases before reclassification and recalibration (that is, the sum of all calculations under Step 1.b. above).
That is, for this final rule, for FY 2016, under the second step of the budget neutrality methodology, we determined the budget neutrality adjustment factor using the following three steps: (2.a.) We simulated estimated total FY 2016 LTCH PPS standard Federal payment rate payments for applicable LTCH cases using the normalized relative weights for FY 2016 and GROUPER Version 33 (as described above); (2.b.) we simulated estimated total FY 2015 LTCH PPS standard Federal payment rate payments for applicable LTCH cases using the FY 2015 GROUPER (Version 32) and the FY 2015 MS-LTC-DRG relative weights in Table 11 of the FY 2015 IPPS/LTCH PPS final rule available on the Internet, as described in section VI. of the Addendum of that final rule (79 FR 5040 through 50402); and (2.c.) we calculated the ratio of these estimated total payments by dividing the value determined in Step 2.b. by the value determined in Step 2.a. In determining the FY 2016 MS-LTC-DRG relative weights, each normalized relative weight was then multiplied by a budget neutrality factor of 1.0033952
Accordingly, in determining the FY 2016 MS-LTC-DRG relative weights in this final rule, consistent with our existing methodology, we applied a normalization factor of 1.27929 and a budget neutrality factor of 1.0033952 (computed as described above). Table 11, which is listed in section VI. of the Addendum to this rule and is available via the Internet on the CMS Web site, lists the MS-LTC-DRGs and their respective relative weights, geometric mean length of stay, five-sixths of the geometric mean length of stay (used to identify SSO cases under § 412.529(a)), and the “IPPS Comparable Thresholds” (used in determining SSO payments under § 412.529(c)(3)), for FY 2016 (and reflect both the normalization factor of 1.27929 and the budget neutrality factor of 1.0033952).
We did not receive any public comments on our proposed methodology for calculating the FY 2016 MS-LTC-DRG reclassification and recalibration budget neutrality factor, and we are adopting it as final without modification. We note that the public comments we received, our responses to those comments, and our finalized policy of applying a budget neutrality requirement as part of the annual recalibration of the MS-LTC-DRG relative weights for FY 2016 are presented in section VII.B.7.a. of this preamble of this final rule.
The basic methodology for determining LTCH PPS standard Federal prospective payment rates is set forth at § 412.515 through § 412.536. In this section, we discuss the factors that we used to update the LTCH PPS standard Federal payment rate for FY 2016, that is, effective for LTCH discharges occurring on or after October 1, 2015 through September 30, 2016. As previously discussed, under the dual rate LTCH PPS payment structure required by statute, we are establishing that, beginning with FY 2016, only LTCH discharges that meet the criteria for exclusion from the site neutral payment rate will be paid based on the LTCH PPS standard Federal payment rate specified at § 412.523. (For additional details on our finalized policies related to the dual rate LTCH PPS payment structure required by statute, we refer readers to section VII.C. of the preamble of this final rule.)
For details on the development of the initial FY 2003 standard Federal rate, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56027 through 56037). For subsequent updates to the LTCH PPS standard Federal rate as implemented under § 412.523(c)(3), we refer readers to the following final rules: RY 2004 LTCH PPS final rule (68 FR 34134 through 34140); RY 2005 LTCH PPS final rule (68 FR 25682 through 25684); RY 2006 LTCH PPS final rule (70 FR 24179 through 24180); RY 2007 LTCH PPS final rule (71 FR 27819 through 27827); RY 2008 LTCH PPS final rule (72 FR 26870 through 27029); RY 2009 LTCH PPS final rule (73 FR 26800 through 26804); FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44021 through 44030); FY 2011 IPPS/LTCH PPS final rule (75 FR 50443 through 50444); FY 2012 IPPS/LTCH PPS final rule (76 FR 51769 through 51773); FY 2013 IPPS/LTCH PPS final rule (77 FR 53479 through 53481); FY 2014 IPPS/LTCH PPS final rule (78 FR 50760 through 50765); and FY 2015 IPPS/LTCH PPS final rule (79 FR 50176 through 50180).
In this FY 2016 final rule, we present our finalized policies related to the annual update to the LTCH PPS standard Federal payment rate for FY 2016, which includes the annual market basket update. Consistent with our historical practice of using the best data available, as proposed, we also used more recent data to determine the FY 2016 annual market basket update to the LTCH PPS standard Federal payment rate in this final rule.
The application of the update to the LTCH PPS standard Federal payment rate for FY 2016 is presented in section V.A. of the Addendum to this final rule. The components of the annual market basket update to the LTCH PPS standard Federal payment rate for FY 2016 are discussed below, including the reduction to the annual update for LTCHs that fail to submit quality reporting data for fiscal year FY 2016 as required by the statute (as discussed in section VII.D.2.c. of the preamble of this final rule). In addition, as discussed in section V.A. of the Addendum of this final rule, we made an adjustment to the LTCH PPS standard Federal payment rate to account for the estimated effect of the changes to the area wage level adjustment for FY 2016 on estimated aggregate LTCH PPS payments, in accordance with § 412.523(d)(4).
Historically, the Medicare program has used a market basket to account for price increases in the services furnished by providers. The market basket used for the LTCH PPS includes both operating and capital-related costs of LTCHs because the LTCH PPS uses a single payment rate for both operating and capital-related costs. As discussed in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53468 through 53476), we adopted the newly created FY 2009-based LTCH-specific market basket for use under the LTCH PPS beginning in FY 2013. For additional details on the historical development of the market basket used under the LTCH PPS, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53467 through 53468).
Section 3401(c) of the Affordable Care Act provides for certain adjustments to any annual update to the LTCH PPS standard Federal payment rate and refers to the timeframes associated with such adjustments as a “rate year” (which are discussed in more detail in section VII.C.2.b. of the preamble of this final rule.) We note that because the annual update to the LTCH PPS policies, rates, and factors now occurs on October 1, we adopted the term “fiscal year” (FY) rather than “rate year” (RY) under the LTCH PPS beginning October 1, 2010, to conform with the standard definition of the Federal fiscal year (October 1 through September 30) used by other PPSs, such as the IPPS (75 FR 50396 through 50397). Although the language of sections 3004(a) 3401(c), 10319, and 1105(b) of the Affordable Care Act refers to years 2010 and thereafter under the LTCH PPS as “rate year,” consistent with our change in the terminology used under the LTCH PPS from “rate year” to “fiscal year,” for purposes of clarity, when discussing the annual update for the LTCH PPS standard Federal payment rate, including the provisions of the Affordable Care Act, we use “fiscal year” rather than “rate year” for 2011 and subsequent years.
Section 1886(m)(3)(A) of the Act, as added by section 3401(c) of the Affordable Care Act, specifies that, for rate year 2010 and each subsequent rate year through 2019, any annual update to the LTCH PPS standard Federal payment rate shall be reduced:
• For rate year 2010 through 2019, by the “other adjustment” specified in sections 1886(m)(3)(A)(ii) and (m)(4) of the Act; and
• For rate year 2012 and each subsequent year, by the productivity adjustment (which we refer to as “the multifactor productivity (MFP) adjustment”) described in section 1886(b)(3)(B)(xi)(II) of the Act.
Section 1886(m)(3)(B) of the Act provides that the application of paragraph (3) of section 1886(m) of the Act may result in the annual update being less than zero for a rate year, and may result in payment rates for a rate year being less than such payment rates for the preceding rate year.
Section 1886(b)(3)(B)(xi)(II) of the Act defines the MFP adjustment as equal to the 10-year moving average of changes in annual economy-wide, private nonfarm business multifactor productivity (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, calendar year, cost reporting period, or other annual period). Under our methodology, the end of the 10-year moving average of changes in the MFP coincides with the end of the appropriate FY update period. In addition, the MFP adjustment that is applied in determining any annual update to the LTCH PPS standard Federal payment rate is the same adjustment that is required to be applied in determining the applicable percentage increase under the IPPS under section 1886(b)(3)(B)(i) of the Act as they are both based on a fiscal year. We refer readers to section IV.A.1. of the preamble of this final rule for more information on the FY 2016 MFP adjustment.
In accordance with section 1886(m)(5) of the Act, as added by section 3004(a) of the Affordable Care Act, the Secretary established the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). The reduction in the annual update to the LTCH PPS standard Federal payment rate for failure to report quality data under the LTCH QRP for FY 2014 and subsequent fiscal years is codified under § 412.523(c)(4) of the regulations. (As previously noted, although the language of section 3004(a) of the Affordable Care Act refers to years 2011 and thereafter under the LTCH PPS as “rate year,” consistent with our change in the terminology used under the LTCH PPS from “rate year” to “fiscal year,” for purposes of clarity, when discussing the annual update for the LTCH PPS, including the provisions of the Affordable Care Act, we use “fiscal year” rather than “rate year” for 2011 and subsequent years.) The LTCH QRP, as required for FY 2014 and beyond by section 1886(m)(5)(A)(i) of the Act, applies a 2.0 percentage point reduction to any update under § 412.523(c)(3) for an LTCH that does not submit quality reporting data to the Secretary in accordance with section 1886(m)(5)(C) of the Act with respect to such a year (that is, in the form and manner and at the time specified by the Secretary under the LTCH QRP) (§ 412.523(c)(4)(i)). Section 1886(m)(5)(A)(ii) of the Act provides that the application of the 2.0 percentage points reduction may result in an annual update that is less than 0.0 for a year, and may result in LTCH PPS payment rates for a year being less than such LTCH PPS payment rates for the preceding year (§ 412.523(c)(4)(iii)). Furthermore, section 1886(m)(5)(B) of the Act specifies that the 2.0 percentage points reduction is applied in a noncumulative manner, such that any reduction made under section 1886(m)(5)(A) of the Act shall apply only with respect to the year involved, and shall not be taken into account in computing the LTCH PPS payment amount for a subsequent year (§ 412.523(c)(4)(ii)). We discuss the application of the 2.0 percentage point reduction under § 412.523(c)(4)(i) in our discussion of the annual market basket update to the LTCH PPS standard Federal payment rate for FY 2016 in section VII.D.2.e. of the preamble of this final rule. (For additional information on the history of the LTCH QRP, including the statutory authority and the selected measures, we refer readers to section VII.C. of the preamble of this final rule.)
Under the authority of section 123 of the BBRA as amended by section 307(b) of the BIPA, we adopted a newly created FY 2009-based LTCH-specific market basket for use under the LTCH PPS beginning in FY 2013. The FY 2009-based LTCH-specific market basket is based solely on the Medicare cost report data submitted by LTCHs and, therefore, specifically reflects the cost structures of only LTCHs. For additional details on the development of the FY 2009-based LTCH-specific market basket, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53467 through 53476).
For FY 2016, as proposed, we are continuing to use the FY 2009-based LTCH-specific market basket to update the LTCH PPS for FY 2016. We continue to believe that the FY 2009-based LTCH-specific market basket appropriately reflects the cost structure of LTCHs for the reasons discussed when we adopted the FY 2009-based LTCH-specific market basket for use under the LTCH PPS in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53467 through 53476).
After consideration of the public comments we received, we are finalizing our proposal to continue to use the FY 2009-based LTCH-specific market basket to update the LTCH PPS standard Federal payment rate for FY 2016.
Consistent with our historical practice and our proposal, we estimate the market basket update and the MFP adjustment based on IGI's forecast using the most recent available data. Based on IGI's second quarter 2015 forecast, the FY 2016 full market basket estimate for the LTCH PPS using the FY 2009-based LTCH-specific market basket is 2.4 percent. The current estimate of the MFP adjustment for FY 2016 based on IGI's second quarter 2015 forecast is 0.5 percent, as discussed in section IV.A. of the preamble of this final rule. In addition, consistent with our historical practice, we are using a more recent estimate of the market basket and the MFP adjustment) to determine the FY 2016 market basket update and the MFP adjustment in this final rule.
For FY 2016, section 1886(m)(3)(A)(i) of the Act requires that any annual update to the LTCH PPS standard Federal payment rate be reduced by the productivity adjustment (“the MFP adjustment”) described in section 1886(b)(3)(B)(xi)(II) of the Act. Consistent with the statute, we are reducing the full FY 2016 market basket update by the FY 2016 MFP adjustment. To determine the market basket update for LTCHs for FY 2016, as reduced by the MFP adjustment, consistent with our established methodology, we subtracted the FY 2016 MFP adjustment from the FY 2016 market basket update. Furthermore, sections 1886(m)(3)(A)(ii) and 1886(m)(4)(E) of the Act requires that any annual update to the LTCH PPS standard Federal payment rate for FY 2016 be reduced by the “other adjustment” described in paragraph (4), which is 0.2 percentage point for FY 2016. Therefore, following application of the productivity adjustment, as proposed, we are further reducing the adjusted market basket update (that is, the full market basket increase less the MFP adjustment) by the “other adjustment” specified by sections 1886(m)(3)(A)(ii) and 1886(m)(4) of the Act. (For additional details on our established methodology for adjusting the market basket increase by the MFP and the “other adjustment” required by the statute, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51771).)
For FY 2016, section 1886(m)(5) of the Act requires that for LTCHs that do not submit quality reporting data as required under the LTCHQR Program, any annual update to an LTCH PPS standard Federal payment rate, after application of the adjustments required by section 1886(m)(3) of the Act, shall be further reduced by 2.0 percentage points. Therefore, the update to the LTCH PPS standard Federal payment rate for FY 2016 for LTCHs that fail to submit quality reporting data under the LTCH QRP, the full LTCH PPS market basket increase estimate, subject to an adjustment based on changes in economy-wide productivity (“the MFP adjustment”) as required under section 1886(m)(3)(A)(i) of the Act and an additional reduction required by sections 1886(m)(3)(A)(ii) and 1886(m)(4) of the Act, will also be further reduced by 2.0 percentage points.
In this final rule, in accordance with the statute, consistent with our proposal, we are reducing the FY 2016 full market basket estimate of 2.4 percent (based on IGI's second quarter 2015 forecast of the FY 2009-based LTCH-specific market basket) by the FY 2016 MFP adjustment of 0.5 percentage point (based on IGI's second quarter 2015 forecast). Following application of the productivity adjustment, the adjusted market basket update of 1.9 percent (2.4 percent minus 0.5 percentage point) was then reduced by 0.2 percentage point, as required by sections 1886(m)(3)(A)(ii) and 1886(m)(4)(E) of the Act. Therefore, in this final rule, under the authority of section 123 of the BBRA as amended by section 307(b) of the BIPA, we are establishing an annual market basket update under to the LTCH PPS standard Federal payment rate for FY 2016 of 1.7 percent (that is, the most recent estimate of the LTCH PPS market basket update of 2.4 percent, less the MFP adjustment of 0.5 percentage point, and less the 0.2 percentage point required under section 1886(m)(4)(E) of the Act). Accordingly, consistent with our finalized policy, we are revising § 412.523(c)(3) by adding a new paragraph (xii), which specifies that the LTCH PPS standard Federal payment rate for FY 2016 is the LTCH PPS standard Federal payment rate for the previous LTCH PPS year updated by 1.7 percent, and as further adjusted, as appropriate, as described in § 412.523(d). For LTCHs that fail to submit quality reporting data under the LTCH QRP, under § 412.523(c)(3)(xi) in conjunction with § 412.523(c)(4), we are further reducing the annual update to the LTCH PPS standard Federal payment rate by 2.0 percentage points in accordance with section 1886(m)(5) of the Act. Accordingly, consistent with our finalized policy, we are establishing an annual update to the LTCH PPS standard Federal payment rate of −0.3 percent (that is, 1.7 percent minus 2.0 percentage points) for FY 2016 for LTCHs that fail to submit quality reporting data as required under the LTCH QRP. As stated above, consistent with our historical practice, as proposed, we are using a more recent estimate of the market basket and the MFP adjustment to establish an annual update to the LTCH PPS standard Federal payment rate for FY 2016 under § 412.523(c)(3)(xii) in this final rule. (We note that we also are adjusting the FY 2016 LTCH PPS standard Federal payment rate by an area wage level budget neutrality factor in accordance with § 412.523(d)(4) (as discussed in section V.B.5. of the Addendum of this final rule).)
After consideration of the public comments we received, we are finalizing our of proposal to update the LTCH PPS standard Federal payment rate using the market basket update and the MFP adjustment based on IGI's forecast using the most recent available data (and the `other' adjustments required by the statute). Accordingly, as stated above, consistent with our finalized policy, we are specifying at § 412.523(c)(3)(xii) that the LTCH PPS standard Federal payment rate for FY 2016 is the LTCH PPS standard Federal payment rate for the previous LTCH PPS year updated by 1.7 percent, and as further adjusted, as appropriate, as described in § 412.523(d).
Section 1206(b)(2) of Public Law 113-67, as amended by section 112(b) of the Protecting Access to Medicare Act of 2014 (PAMA) (Pub. L. 113-93), established “new” statutory moratoria on the establishment of new LTCHs and LTCH satellite facilities and on the increase in the number of hospital beds in existing LTCHs and LTCH satellite facilities. For a discussion on our implementation of these moratoria, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50189 through 50193). Since the implementation of these LTCH PPS policy moratoria, we have been informed that some confusion may exist regarding the exceptions to the moratorium on the establishment of new LTCH and LTCH satellite facilities, as well as the application of the moratorium on an increase in the number of beds in existing LTCH and LTCH satellite facilities.
Under existing regulations at 42 CFR 412.23(e)(6), we specify that, to qualify for an exception under the moratorium to establish a new LTCH or LTCH satellite facility during the timeframe between April 1, 2014, and September 30, 2017, a hospital or entity must meet the following criteria:
• The hospital or entity must have begun its qualifying period for payment as an LTCH in accordance with § 412.23(e).
• The hospital or entity must have a binding written agreement with an outside, unrelated party for the actual construction, renovation, lease, or demolition for an LTCH, and must have expended before April 1, 2014, at least 10 percent of the estimated cost of the project or, if less, $2,500,000.
• The hospital or entity must have obtained an approved certificate of need in a State where one is required.
As we stated in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24553), we believe that the existing regulation text regarding the moratorium on the establishment and classification of new LTCHs and LTCH satellite facilities could be misread as requiring fulfillment of all three conditions in order to qualify for an exception to the moratorium on the establishment of new LTCH and LTCH satellite facilities. This was not our intent, and we acknowledge that implementing the moratorium in that manner would have been directly contradictory to the statutory requirement. Technically, while we did not explicitly specify in the regulations text under § 412.23(e)(6) that only one of the listed criteria had to be met in order to qualify for an exception to the moratorium on the establishment of new LTCHs and LTCH satellite facilities (the language text states “as applicable”), we clearly stated it in the preamble of the FY 2015 IPPS/LTCH PPS final rule. (We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50189 through 50193).) In addition, the requirement that one of the three exceptions had to be met in order to qualify for an
As we stated in the preamble of the FY 2015 IPPS/LTCH PPS final rule, the provisions in the new moratorium are nearly identical to the language in the prior “expired” moratorium under section 114(d) of MMSEA (Pub. L. 110-173). As also noted, the mechanics of exceptions to the new and expired moratoria on the establishment of new LTCHs and LTCH satellite facilities are analogous. Therefore, except as noted, to the extent that the new and expired moratoria were consistent, we proposed and adopted the identical implementation mechanisms. To minimize the confusion that may exist as a result of the existing regulations text, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24553), we proposed to revise the regulations under § 412.23(e)(6)(ii) to more clearly convey the established policy that only one of the statutory conditions needs to be met in order to qualify for the exception to the new moratorium on the establishment of new LTCH and LTCH satellite facilities.
We also have become aware of some confusion concerning what constitutes the “estimated cost of the project” with regard to the second exception. To alleviate confusion, we are further clarifying our longstanding policy on what constitutes the “estimated cost of the project.” In discussing this exception in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50189 through 50193), we noted that the “cost of the project” included the activities (plural) that were enumerated in the first prong of the exception. Those enumerated activities included “the actual construction, renovation, lease, or demolition for a long-term care hospital.” That is, our policy is that the sum total of any costs associated with any of the enumerated activities that comprised the project as a whole (with the project being the establishment of a new LTCH or a new LTCH satellite facility) would be considered in determining whether the facility met the amount specified in the statute. In using an “or” in this list of activities, we intended to acknowledge that any one project may or may not include every element listed (for example, new construction may not include any demolition), but if it does include an element, our policy is that the cost of that element and the costs of any other of the listed elements in the project are to be summed to determine the total cost of the project. Therefore, under our longstanding policy, when determining whether 10 percent of the estimated cost of the project had been expended prior to the start of the moratorium, the “project” is the establishment of a new LTCH or LTCH satellite facility, not any one element that, when combined with other elements listed in the first prong, would lead to the establishment of the LTCH or LTCH satellite facility. For example, if an entity has expended 10 percent of the costs of demolition, but that amount is less than both 10 percent of the estimated cost of the project, and less than the $2,500,000.00 ceiling amount, the entity would not qualify for this exception to the moratorium.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24554), we also noted that we were taking that opportunity to provide additional clarification on our policy concerning the moratorium on increases in the number of beds in existing LTCH and LTCH satellite facilities. As we noted in the FY 2015 IPPS/LTCH PPS final rule, while the expired moratorium specifically included an exception to the moratorium on the increase in the number of beds in existing LTCHs and LTCH satellite facilities, the new moratorium under section 1206(b)(2)(B) of Public Law 113-67 expressly noted that the exceptions to the expired moratoria would not apply under the “new” moratoria. Further amendments made by section 112(b) of Public Law 113-93, created certain exceptions, but did not retract the prior statement regarding the express omission of any exceptions (79 FR 50189 through 50193). As the further amendments only provided exception to the moratorium on establishing new satellites, the express omission of any exceptions to the new moratorium on increasing the number of beds in an existing LTCH or LTCH satellite facility remained in place. As such, an LTCH may not increase the total number of Medicare certified beds beyond the number that existed prior to April 1, 2014, including when an existing LTCH meets one of the exceptions to the moratorium on the establishment of a new LTCH satellite facility. An LTCH satellite facility's beds historically have been, and continue to be, counted as the LTCH's beds. Therefore, under our existing regulation at § 412.23(e)(7)(iii), an existing LTCH cannot, through meeting the criteria for an exception to the new moratorium on the establishment of a new LTCH satellite facility, increase its total number of Medicare certified beds by establishing any number beds at the new LTCH satellite facility that would result in the total number of Medicare certified beds in that LTCH exceeding what existed prior to April 1, 2014. That is, if an existing LTCH meets one of the statutory exceptions for new satellite facilities and opens a new LTCH satellite facility during the moratorium, that new LTCH satellite facility's beds must come from the movement of beds in existence prior to April 1, 2014, from other locations of the existing LTCH to the new LTCH satellite facility. This requirement also applies to any remote locations that may be established by an existing LTCH during the moratorium on new beds.
In summary, without exception, an LTCH may not increase the total number of Medicare certified beds beyond the number that existed prior to April 1, 2014. The number of Medicare certified beds in an LTCH includes beds in all locations, including, as applicable, satellite facilities.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24554), we proposed to revise § 412.23 to bring it into conformance with the self-
Section 1206(a)(3)(A) of Public Law 113-67 specified that, in general, for discharges occurring in cost reporting periods beginning on or after October 1, 2015, applicable total Medicare inpatient days and discharges that are paid at the site neutral payment rate (discussed in section VII.B. of the preamble of the proposed rule and this final rule with comment period), or for which payments are made under an MA plan, are to be excluded from the calculation of an LTCH's average length of stay. Section 1206(a)(3)(B) of Public Law 113-67 further required that this exclusion of site neutral and MA days would not apply to an LTCH that was classified as a “subsection (d) hospital” as of December 10, 2013. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to amend § 423.23 to conform with this self-implementing statutory exclusion and the self-implementing statutory exception to the exclusion, by revising paragraphs (e)(3)(ii) through (e)(3)(v), adding a new paragraph (e)(3)(vi), and revising the introductory text of paragraph (e)(6)(ii).
We did not receive any public comments on our proposals. However, upon further consideration, we realized that section 112(c)(2) of Public Law 113-93 altered the “subsection (d) hospital” language established by section 1206(a)(3)(B) of Public Law 113-67 to “long-term care hospital.” That is, section 112(c)(2) of Public Law 113-93 removed the phrase “subsection (d) hospital” in the provision regarding entities “classified as a subsection (d) hospital as of December 10, 2013” and in its place inserted “long-term care hospital”, resulting in the combined statutory mandates providing “classified as a long-term care hospital as of December 10, 2013”. While we initially mistakenly thought of this legislative language change as a technical change, we now recognize its substantive effect. As the change is statutorily mandated and self-implementing, we are making conforming changes to what we proposed in paragraph (e)(3)(vi) of § 412.23 (which specified that the provisions do not apply to a hospital classified as a “subsection (d) hospital” as of December 10, 2013). As the statute does not set forth any discretion on this provision, and as commenters did not object to the other content of our proposed text for § 412.23, using the authority noted below, we are waiving notice-and-comment rulemaking for this change (replacing “subsection (d) hospital” with “long-term care hospital”) in our proposed rule's text, finalizing that change, and otherwise finalizing the remaining proposed regulation text changes in § 412.23 without modification.
We ordinarily publish a notice of proposed rulemaking in the
We seek to promote higher quality and more efficient healthcare for Medicare beneficiaries. This effort is supported by the adoption of widely agreed-upon quality measures. We have worked with relevant stakeholders to define quality measures for most settings and to measure various aspects of care for most Medicare beneficiaries. These measures assess structural aspects of care, clinical processes, patient experiences with care, care coordination, and improving patient outcomes.
We have implemented quality reporting programs for multiple care settings, including:
• Hospital inpatient services under the Hospital Inpatient Quality Reporting (IQR) Program (formerly referred to as the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) Program);
• Hospital outpatient services under the Hospital Outpatient Quality Reporting (OQR) Program (formerly referred to as the Hospital Outpatient Quality Data Reporting Program (HOP QDRP));
• Care furnished by physicians and other eligible professionals under the Physician Quality Reporting System (PQRS, formerly referred to as the Physician Quality Reporting Program Initiative (PQRI));
• Inpatient rehabilitation facilities under the Inpatient Rehabilitation Facility Quality Reporting Program (IRF QRP);
• Long-term care hospitals under the Long-Term Care Hospital Quality Reporting Program (LTCH QRP) (also referred to as the LTCHQR Program);
• PPS-exempt cancer hospitals under the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program;
• Ambulatory surgical centers under the Ambulatory Surgical Center Quality Reporting (ASCQR) Program;
• Inpatient psychiatric facilities under the Inpatient Psychiatric Facilities Quality Reporting (IPFQR) Program;
• Home health agencies under the home health quality reporting program (HH QRP); and,
• Hospice facilities under the Hospice Quality Reporting Program.
We have also implemented the End-Stage Renal Disease Quality Incentive Program and Hospital VBP Program (described further below) that link payment to performance.
In implementing the Hospital IQR Program and other quality reporting
We also have implemented a Hospital VBP Program under section 1886(o) of the Act, described in the Hospital Inpatient VBP Program final rule (76 FR 26490 through 26547). We most recently adopted additional policies for the Hospital VBP Program in section IV.I. of the FY 2015 IPPS/LTCH PPS final rule (79 FR 50048 through 50087). Under the Hospital VBP Program, hospitals receive value-based incentive payments based on their performance with respect to performance standards for a performance period for the fiscal year involved. The measures under the Hospital VBP Program must be selected from the measures (other than readmission measures) specified under the Hospital IQR Program as required by section 1886(o)(2)(A) of the Act.
In selecting measures for the Hospital IQR Program, we are mindful of the conceptual framework we have developed for the Hospital VBP Program. Because measures adopted for the Hospital VBP Program must first have been specified under the Hospital IQR Program, these two programs are linked and the reporting infrastructure for the programs overlap. We view the Hospital VBP Program as the next step in promoting higher quality care for Medicare beneficiaries by transforming Medicare from a passive payer of claims into an active purchaser of quality healthcare for its beneficiaries. Value-based purchasing is an important step to revamping how care and services are paid for, moving increasingly toward rewarding better value, outcomes, and innovations.
We also view the Hospital-Acquired Condition (HAC) payment adjustment program authorized by section 1886(p) of the Act, as added by section 3008 of the Affordable Care Act, and the Hospital VBP Program, as related but separate efforts to reduce HACs. The Hospital VBP Program is an incentive program that awards payments to hospitals based on quality performance on a wide variety of measures, while the HAC Reduction Program creates a payment adjustment resulting in payment reductions for poorly performing hospitals based on their rates of HACs.
In the preamble of the FY 2016 IPPS/LTCH PPS proposed rule, we proposed changes to the following Medicare quality reporting systems:
• In section VIII.A. (80 FR 24555 through 24590), the Hospital IQR Program.
• In section VIII.B. (80 FR 24590 through 24595), the PCHQR Program.
• In section VIII.C. (80 FR 24595 through 24611), the LTCH QRP.
In addition, in section VIII.D. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24611 through 24615), we proposed changes to the Medicare EHR Incentive Program for eligible hospitals and CAHs.
We refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43860 through 43861) and the FY 2011 IPPS/LTCH PPS final rule (75 FR 50180 through 50181) for detailed discussions of the history of the Hospital IQR Program, including the statutory history, and to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50217 through 50249) for the measures we have adopted for the Hospital IQR measure set through the FY 2017 payment determination and subsequent years.
The technical specifications for the Hospital IQR Program measures, or links to Web sites hosting technical specifications, are contained in the CMS/The Joint Commission (TJC) Specifications Manual for National Hospital Quality Measures (Specifications Manual). This Specifications Manual is posted on the QualityNet Web site at
The technical specifications for the HCAHPS patient experience of care survey are contained in the current HCAHPS
Many of the quality measures used in different Medicare and Medicaid reporting programs are endorsed by the National Quality Forum (NQF). As part of its regular maintenance process for endorsed performance measures, the NQF requires measure stewards to submit annual measure maintenance updates and undergo maintenance of endorsement review every three years. We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50202 through 50203) for additional detail on the measure maintenance process.
We believe that it is important to have in place a subregulatory process to incorporate nonsubstantive updates to the measure specifications for measures we have adopted for the Hospital IQR Program so that these measures remain up-to-date. We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53504 through 53505) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50203) for our policy for using the
Section 1886(b)(3)(B)(viii)(VII) of the Act was amended by the Deficit Reduction Act (DRA) of 2005. Section 5001(a) of the DRA requires that the Secretary establish procedures for making information regarding measures submitted available to the public after ensuring that a hospital has the opportunity to review its data before they are made public. We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50776 through 50778) for a more detailed discussion about public display of quality measures. We did not propose to change our current policy of reporting data from the Hospital IQR Program as soon as it is feasible on CMS Web sites such as the
The
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53512 through 53513), for our finalized measure retention policy. When we adopt measures for the Hospital IQR Program beginning with a particular payment determination, these measures are automatically adopted for all subsequent payment determinations unless we propose to remove, suspend, or replace the measures.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24556), we did not propose any changes to our policy for retaining previously adopted measures for subsequent payment determinations.
As discussed above, we generally retain measures from the previous year's Hospital IQR Program measure set for subsequent years' measure sets except when we specifically propose to remove, suspend, or replace a measure. We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50185) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50203 through 50204) for more information on the criteria we consider for removing quality measures. We also take into account the views of the Measure Applications Partnership (MAP) when determining when a measure should be removed, and we strive to eliminate redundancy of similar measures (77 FR 53505 through 53506). In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50203 through 50204), we also finalized our proposal to clarify the criteria for determining when a measure is “topped out.” In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24556), we did not propose any changes to the two criteria that we use to determine whether or not a measure is “topped out.”
We use these previously adopted measure removal criteria to help evaluate when we should propose a measure for removal. However, we continue to believe that there are circumstances in which a measure that meets criteria for removal should be retained regardless, because the drawbacks of removing a measure could be outweighed by other benefits to retaining the measure. Therefore, because of the continued need to balance benefits and drawbacks as well as our desire to increase transparency, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24556 through 24557), we proposed additional factors to consider for measure removal and also include factors to consider in order to retain measures.
Specifically, we proposed to take into consideration the following additional factor in determining whether a measure should be removed:
• Feasibility to implement the measure specifications.
In addition, we proposed to remove one of the factors (“Availability of alternative measures with a stronger relationship to patient outcomes”) we take into consideration when determining whether to remove measures, because it is duplicates another factor (“The availability of a measure that is more strongly associated with desired patient outcomes for the particular topic”).
We also proposed to take into consideration the following factors in determining whether a measure should be retained:
• Measure aligns with National Quality Strategy or CMS Quality Strategy goals;
• Measure aligns with other CMS programs, including other quality reporting programs, or the EHR Incentive Program; and
• Measure supports efforts to move facilities towards reporting electronic measures
For example, we may consider retaining a measure that is statistically “topped-out” in order to align with the Medicare EHR Incentive Program. Below is a table of newly proposed and previously adopted factors that we would take into consideration in removing or retaining measures:
We note that these removal/retention factors continue to be considerations taken into account when deciding whether or not to remove measures; but they are not firm requirements.
We invited public comments on our proposal.
After consideration of the public comments we received, we are finalizing factors that we would take into consideration in removing or retaining measures as proposed. Specifically, we are finalizing: (1) The addition of the removal factor “feasibility to implement the measure specifications;” (2) the removal of the factor “availability of alternative measures with a stronger relationship to patient outcomes;” and (3) the addition of the retention factors “measure aligns with National Quality Strategy or CMS Quality Strategy goals,” “measure aligns with other CMS programs, including other quality reporting programs, or the
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24557 through 24560), we proposed to remove the following nine measures, either in their entirety or just the chart abstracted form, from the Hospital IQR Program measure set for the FY 2018 payment determination and subsequent years: STK-01: Venous Thromboembolism (VTE) Prophylaxis (NQF #0434), STK-06: Discharged on Statin Medication (NQF #0439), STK-08: Stroke Education (NQF endorsement removed), VTE-1: Venous Thromboembolism Prophylaxis (NQF #0371), VTE-2: Intensive Care Unit Venous Thromboembolism Prophylaxis (NQF #0372), VTE-3: Venous Thromboembolism Patients with Anticoagulation Overlap Therapy (NQF #0373), IMM-1: Pneumococcal Immunization (NQF #1653), AMI-7a: Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival (NQF #0164), and SCIP-Inf-4: Cardiac Surgery Patients with Controlled Postoperative Blood Glucose (NQF #0300).
We proposed to remove the chart-abstracted versions of STK-01, STK-06, STK-08, VTE-1, VTE-2, and VTE-3 because these measures are “topped-out.” However, we proposed to retain STK-06, STK-08, VTE-1, VTE-2, and VTE-3 as electronic clinical quality measures for the FY 2018 payment determination and subsequent years. As we state in section VIII.A.3.a. of the preamble of this final rule, in our discussion of factors we consider in removing or retaining a measure, “topped-out” status is only one of many factors, which we consider.
In balancing the benefits and disadvantages of removing or retaining a measure, we believe that the benefits of retaining the electronic versions of these measures outweigh the possible disadvantages. Specifically, we believe that while these measures are statistically “topped-out,” retaining the electronic versions of the measures is beneficial because they align the Hospital IQR Program with the Medicare EHR Incentive Program. In addition, retaining the electronic version of the measures would allow us to monitor the effectiveness of measure reporting by EHRs and help to familiarize hospitals with reporting electronically specified measures to CMS under the Hospital IQR Program.
Our data show that the electronically specified versions of these measures are reported with non-zero values by as many as 2,864 hospitals attesting under 2014 Meaningful Use and that hospitals report on the full range of available electronic clinical quality measures. Accordingly, we know that EHRs are certified to these measures, and that hospitals do indeed report them. The available data suggest that retaining STK-06, STK-08, VTE-1, VTE-2, and VTE-3 as electronic clinical quality measures furthers CMS' high priority goal to enable the electronic reporting of quality data and to align the Hospital IQR and EHR Incentive Programs.
We also believe that reporting electronic clinical quality measures presents minimal burden on hospitals as compared to their chart-abstracted equivalents and that retaining the electronically specified versions of these measures is appropriate until we fully understand the differences between the chart-abstracted and electronic versions of quality measures. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50808) we stated that we do not believe that the measures, in their electronically specified form, are substantively different than their chart-abstracted form, although we recognized that the EHR-based extraction methodology is different from the chart-abstraction data collection methodology.
However, CMS now recognizes that although the intent of a measure is the same whether it is reported via chart-abstraction or electronically, the submission modes are not the same and measure rates may be different.
As described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50258), we have only heard anecdotal comments about actual performance level differences between the two modes of collection. We do not have sufficient data to be able to confirm these comments, but in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50273), we finalized a proposal to conduct a validation pilot test for electronically specified measures, which we intend to complete in 2015. The results of this pilot are not yet available. As we have stated in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53555), determining the equivalence of electronic clinical quality measures and chart-abstracted measures would require extensive testing given that the data for the Hospital IQR Program supports public reporting for both the Hospital IQR and Hospital VBP Programs. Due to the reasons described above, we believe it is appropriate to retain the electronically specified version of these five measures at this time.
We invited public comment on our proposals.
Some commenters recommended that the chart-abstracted versions of “topped-out” measures be retained and requested that both electronic clinical quality measure and chart-abstracted measure data be published, to enable comparisons.
In addition, we believe that retaining the electronic versions of six measures (STK-06, STK-08, VTE-1, VTE-2, VTE-3, and AMI-7a) is appropriate because they align the Hospital IQR Program with the Medicare EHR Incentive Program, allow us to monitor the effectiveness of measure reporting by EHRs, and help to familiarize hospitals with reporting electronically specified measures to CMS. We also note that a validation pilot test for electronically specified measures is being completed in 2015 in order to ensure that electronic measures can be submitted and reported with high fidelity, accuracy and quality threshold requirements. Finally, we note that the Hospital IQR Program measure set includes six measures (ED-1, ED-2, STK 04, VTE-5, VTE-6, and PC-01) which have the capability to be reported both via chart-abstraction and electronically. We refer readers to section VIII.8.b. of the preamble of this final rule below in which we discuss our modified policies finalized, including that these measures are required via chart-abstraction and data will be posted to
In regards to the comment that electronic clinical quality measure reporting requires an inappropriate use of resources, we disagree, and note that a movement towards the use of electronic data is a national priority, as evidenced by the HITECH act and Meaningful Use program requirements. We believe that the collection of electronic clinical quality measure data will enable hospitals to efficiently capture and calculate quality data that can be used to address quality at the point of care and track improvements over time.
We will make note of the issues raised in the comments received for next year's proposed rule, when we may consider removing additional electronic clinical
• VTE-3 VTE Patients with Anticoagulation Overlap Therapy (NQF #0373);
• VTE-4 VTE Patients Receiving Unfractionated Heparin (UFH) with Dosages/Platelet Count Monitoring by Protocol (or Nomogram) (NQF N/A);
• VTE-5 VTE Discharge Instructions (NQF N/A);
• VTE-6 Incidence of Potentially Preventable VTE (NQF N/A);
• PN-6 Initial Antibiotic Selection for Community- Acquired Pneumonia (CAP) in Immunocompetent Patients (NQF #0147);
• Healthy Term Newborn (NQF #0716);
• AMI-7a Fibrinolytic Therapy Received Within 30 minutes of Hospital Arrival (NQF #0164);
• SCIP-INF-9 Urinary Catheter Removed on Postoperative Day 1 (POD1) or Postoperative Day 2 (POD2) with Day of Surgery Being Day Zero (NQF N/A);
• CAC-3 Home Management Plan of Care (HMPC) Document Given to Patient/Caregiver (NQF N/A);
• AMI-2-Aspirin Prescribed at Discharge for AMI (NQF N/A);
• AMI-10 Statin Prescribed at Discharge (NQF N/A);
• SCIP-INF-1a Prophylactic Antibiotic Received within 1 Hour Prior to Surgical Incision (NQF #0527); and,
• SCIP-INF-2 Prophylactic Antibiotic Selection for Surgical Patients.
After consideration of the public comments we received, we are finalizing our proposal to remove the chart-abstracted versions of STK-01, STK-06, STK-08, VTE-1, VTE-2, and VTE-3, but also retain STK-06, STK-08, VTE-1, VTE-2, and VTE-3 as electronic clinical quality measures for the FY 2018 payment determination and subsequent years as proposed.
One additional measure, IMM-2, has been determined to be statistically “topped-out;” however, after considering the benefits and disadvantages of removing or retaining this measure, we are retaining this measure in the Hospital IQR Program measure set for the FY 2018 payment determination and subsequent years, because the benefits outweigh the disadvantages. One of the factors that we consider when determining whether to remove or retain a measure is whether a measure aligns with National Quality Strategy (NQS) or CMS Quality Strategy goals. Currently, IMM-2 is the only Hospital IQR Program measure to address the Best Practices to Enable Healthy Living NQS Priority and CMS Quality Strategy goal. In addition, IMM-2 supports the NQS priorities and CMS Quality Strategy goals to promote effective interventions to prevent and reduce the leading causes of mortality.
After consideration of the public comments we received, we are finalizing our policy to retain IMM-2 Influenza Immunization (NQF #1659) as proposed.
We adopted the IMM-1 Pneumococcal Immunization measure (NQF #1653) for the FY 2014 payment determination and subsequent years with data collection beginning with January 1, 2012 discharges (75 FR 50211). In October 2012, subsequent to the beginning of IMM-1 data collection on January 1, 2012, the Advisory Committee on Immunization Practices (ACIP) published new guidelines on pneumococcal vaccination.
As part of our efforts to re-specify IMM-1 to account for the many potential scenarios that must be considered when determining if pneumococcal vaccination is appropriate, we determined that it was not feasible to implement the measure specifications that incorporated the new guidelines given their complexity.
Specifically, the October 2012 ACIP guidelines recommended the routine use of 13-valent pneumococcal conjugate (PCV13) vaccine for adults aged ≥19 years with certain comorbid conditions, and that PCV13 should be administered to eligible adults in addition to the 23-valent pneumococcal polysaccharide vaccine (PPSV23) that was currently recommended for these groups of adults. The timing of vaccination with PCV13 and PPSV23 is dependent upon if and when an individual has received the other vaccine.
In order to implement the measure consistent with these new guidelines, providers would need reliable, detailed data on: (1) Whether or not a pneumococcal vaccine was previously administered; (2) which type of pneumococcal vaccine (PCV13 vs. PPSV23) was administered; and (3) when it was administered. When considering possible clinical scenarios of screening and vaccinating for pneumonia, current chart and electronic data do not consistently allow for successful abstraction of these varied and detailed historical facts, all of which are needed to appropriately administer a pneumococcal vaccine.
We believe that the measure, as updated by ACIP guidelines, would burden hospitals with data abstraction and yield results with only questionable meaningfulness and reliability. We outlined these pneumococcal vaccination implementation issues in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50780 through 50781), and suspended data collection for IMM-1 until further notice.
Since the suspension of IMM-1, ACIP again updated its 2012 guidelines in
In determining whether to remove the IMM-1 measure, we considered the factors stated above in section VIII.A.3.a. of the preamble of this final rule, in our discussion of considerations for the removal and retention of quality measures from the Hospital IQR Program. Based on the continued lack of ready access to comprehensive patient-level immunization data by hospital staff and the continued infeasibility to implement or align this measure with current clinical guidelines or practice, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24558) we proposed to remove this measure from the Hospital IQR Program. We emphasize that, despite the proposed removal of the IMM-1 measure from the Hospital IQR Program, we understand and value the role pneumococcal vaccines play in preventing pneumococcal disease
We invited public comments on this proposal to remove IMM-1 from the Hospital IQR Program beginning in CY 2016 for the FY 2018 payment determination and subsequent years.
In addition, this measure was not required for the Hospital IQR Program beginning with January 1, 2014 discharges, and was suspended from the program in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50780 through 50781). Furthermore, while we recognize that CMS awarded QIOs a four-year contract to improve immunization rates and reduce immunization disparities, we note that QIO performance is not dependent upon vaccination in the hospital setting.
After consideration of the public comments we received, we are finalizing our policy to remove Immunization 1 (IMM-1) Pneumococcal Immunization (NQF #1653) for the FY 2018 payment determination and subsequent years as proposed.
Our evaluation of the most recently available data shows that AMI-7a is not widely reported by hospitals, and according to the most recent data available, hospitals reporting this
However, we proposed to retain AMI-7a as an electronic clinical quality measure. We believe that once electronic capture of the measure is possible, the time and resources for electronic reporting should be significantly less as compared to manual abstraction. In addition, as discussed above in section VIII.A.3.a. of the preamble of this final rule, retaining the electronically specified version of a measure allows us to support the alignment of the Hospital IQR Program and the Medicare EHR Incentive Program. In addition, retaining this measure will both allow us to monitor the effectiveness of measure reporting by EHRs and help familiarize hospitals with reporting electronically specified measures under the Hospital IQR Program.
We invited public comments on our proposal to remove the chart-abstracted version of AMI-7a but retain the electronic version for the CY 2016/FY 2018 payment determination and subsequent years.
After consideration of the public comments we received, we are finalizing our policy to remove the chart-abstracted version of AMI-7a Fibrinolytic Therapy Received within 30 Minutes of Hospital Arrival Measure (NQF #0164), but retain the electronic version for the CY 2016/FY 2018 payment determination and subsequent years as proposed.
In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66876), we finalized SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose (NQF #0300) for the Hospital IQR Program for FY 2009 and subsequent years. We also stated that hospitals were required to begin submitting data for SCIP-Inf-4 beginning with January 1, 2008 discharges.
Since the finalization of SCIP-Inf-4 for the Hospital IQR Program, the measure underwent routine NQF maintenance endorsement proceedings in 2012. During the NQF maintenance proceedings, the NQF Steering Committee discussed and recommended that the measure assess a lower blood glucose level target and lengthen the timeframe for achieving the lower blood glucose level target. As part of the maintenance endorsement renewal process, SCIP-Inf-4 was modified with the goal of achieving post-operative blood glucose levels of 180 mg/dl at 18-24 hours after surgery (previously, the timeframe was to achieve 200 mg/dl by 6 a.m. on post-operative days 1 and 2). We finalized the adoption of these measure refinements (see revised measure specifications at
Since finalizing the refinements to SCIP-Inf-4, we have been contacted by stakeholders and experts in the field of endocrinology regarding the newly refined goal of 180 mg/dl within an 18-24 hour timeframe. Specifically, there are concerns about the following aspects of the measure: (1) Defining “optimal glycemic control;” (2) measuring the correlation between optimal glycemic goals and better outcomes;
Experts in the endocrinology field have shared that providers' enthusiasm to meet the measure blood glucose goals in the specified timeframe may lead to the following unintended consequences: (1) Providers delaying patients' meals until the 24-hour timeframe has passed; (2) providers keeping diabetic patients in intensive care units on insulin drips until the 24-hour timeframe has passed; (3) providers ensuring patients' postprandial glucose levels are kept below 180 mg/dl by concurrent use of intravenous and subcutaneous insulin
In view of stakeholder concerns, the seriousness of the potential negative unintended consequences, and recent analysis that shows the refined measure is “topped-out,” on January 9, 2015, we formally suspended the collection of data for SCIP-Inf-4 beginning with July 1, 2014 discharges. We refer readers to
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24559), we proposed to remove SCIP-Inf-4 from the Hospital IQR Program effective beginning with CY 2016 discharges for the FY 2018 payment determination and subsequent years. We believe removal of this measure, rather than continued suspension, is appropriate for several reasons. First, performance on this measure does not result in better patient outcomes. Recent literature has highlighted that not meeting optimal glycemic control for a narrow point in time does not result in poorer outcomes.
We invited public comments on our proposal to remove SCIP-Inf-4 from the Hospital IQR Program for the FY 2018 payment determination and subsequent years.
After consideration of the public comments we received, we are finalizing our proposal to remove SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose (NQF #0300) for the FY 2018 payment determination and subsequent years as proposed.
The table below lists the measures we are finalizing for removal for the FY 2018 payment determination and subsequent years.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50246), we described that the Hospital IQR Program measure set for the FY 2017 payment determination and subsequent years includes a total of 64 measures:
In the FY 2015 IPPS/LTCH PPS final rule, we described that of the 63 measures making up the Hospital IQR Program measure set for the FY 2017 payment determination and subsequent years, 42 were previously finalized measures, 11 were measures newly adopted in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49865) and 10 were measures that were determined to be “topped-out” but were retained in the Hospital IQR Program as voluntary electronic clinical quality measures (79 FR 50208).
The following table shows measures previously adopted for the Hospital IQR Program FY 2017 payment determination and subsequent years. For a detailed list of the Hospital IQR Program FY 2018 payment determination and subsequent years measure set, we refer readers to section VIII.A.7.f. of the preamble of this final rule.
Since publication of the FY 2015 IPPS/LTCH PPS final rule (79 FR 50236), where we discuss the original finalized version of the measure, changes to the specifications have been undertaken by the steward and endorsed by NQF in response to newly published evidence. Changes have centered on one of the composite elements, referred to as “Element F.” These changes do not reflect variations to the measurement strategy. The measure has seven elements. “Element F” reassesses the patient for volume status (that is, does the patient have enough fluid in circulation?) and perfusion status (that is, is that fluid circulated appropriately?).
In 2014, the measure was updated so that it reassessed volume and perfusion (Element F) using a complicated and invasive approach to patient care. It called for assessment of central venous pressure (CVP) and percent of oxygen saturation in blood returning to the heart (ScVO2). This assessment required providers to place a long catheter in the patient's neck or chest in a position that approximated the location of the heart. Blood and pressure readings were obtained from this catheter.
The measure has since been updated,
These changes to the requirement to reassess volume and perfusion (Element F) were made after three clinical research studies were published. In March 2014, the Protocolized Care for Early Septic Shock (ProCESS)
The revised Element F only makes compliance with the previously posted
The previously adopted NHSN measures include the CAUTI, CLABSI, MRSA Bacteremia, CDI, colon and abdominal hysterectomy SSI measures, and HCP for the FY 2017 payment determination and subsequent years. We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50200 through 50202) and the FY 2012 IPPS/LTCH PPS final rule (76 FR 51616 through 51618; 76 FR 51629 through 51633) for more information about these measures. These NHSN measures measure the incidence of HAIs in hospitals participating in the Hospital IQR Program. In order to calculate the NHSN measures for use in the Hospital IQR Program, CDC must go through several steps.
First, CDC determines each NHSN measure's number of predicted infections. CDC determines this number using both specific hospital characteristics (for example, number of central line days for CLABSI) and infection rates that occurred among a standard population (sometimes referred to by CDC as “national baseline” but referred to here as “standard population data”). CDC currently uses data it collected in calendar year (CY) 2009 for the CAUTI measure's standard population data.
In addition, for each NHSN measure, CDC calculates the Standardized Infection Ratio (SIR) by comparing a hospital's reported number of HAIs with the standard population data. For more information about the way NHSN measures are calculated, we refer readers to the QualityNet Web page on HAI measures at:
We are notifying the public that CDC will update the standard population data to ensure the NHSN measures' number of predicted infections reflect the current state of HAIs in the United States. The standard referent population that CDC uses to calculate the Standardized Infection Ratios (SIRs) is comprised of healthcare-associated infection data that CDC's NHSN collects from healthcare facilities throughout the United States for infection events that occurred in a specified baseline time period. Beginning in CY 2016, CDC will use data collected for infection events that occurred in 2015 as the new standard referent population. To do so, CDC will collect HAI data that healthcare facilities are reporting for events that have or will occur in CY 2015 to use in updating the standard population data for HAI measures. This new CY 2015 standard population data for HAI measures will hereinafter be referred to as “new standard population data.”
While this is not a Hospital IQR Program proposal, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24562), we still invited public input on the CDC's plans to update the standard population data for HAI measures.
While this was not a Hospital IQR Program proposal, we appreciated public input on the CDC's plans to update the standard population data for HAI measures.
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53510 through 53512) for a discussion of the
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24562 through 24566) we proposed refinements to the measure cohorts for: (1) The Hospital 30-day, All-cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization (NQF #0468) measure; and (2) the Hospital 30-day, All-Cause, Risk-Standardized Readmission Rate following Pneumonia Hospitalization (NQF #0506) measure. The proposed refined measures were included on a publicly available document entitled “List of Measures Under Consideration for December 1, 2014” in compliance with section 1890A(a)(2) of the Act, and they were reviewed by the MAP as discussed in its MAP Pre-Rulemaking Report.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24562 through 24564), we proposed a refinement to the previously adopted Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Pneumonia Hospitalization (NQF #0468) measure (hereinafter referred to as the CMS 30-day Pneumonia Mortality Measure), which expands the measure cohort. For the purposes of describing the refinement of this measure, we note that “cohort” is defined as the hospitalizations, or “index admissions,” that are included in the measure and evaluated to ascertain whether the patient subsequently died within 30 days of the index admission. This cohort is the set of hospitalizations that meet all of the inclusion and exclusion criteria, and we proposed an expansion to this set of hospitalizations.
The previously adopted CMS 30-day Pneumonia Mortality Measure (72 FR 47351) includes hospitalizations for patients with a principal discharge diagnosis of pneumonia indicating viral or bacterial pneumonia. For more cohort details on the measure as currently implemented, we refer readers to the measure methodology report and measure risk adjustment statistical model in the AMI, HF, PN, COPD, and Stroke Mortality Update zip file on our Web site at:
The proposed measure refinement would have expanded the measure cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of either sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission.
This refinement to the CMS 30-Day Pneumonia Mortality Measure was proposed for several reasons. First, recent evidence has shown an increase in the use of sepsis and respiratory failure as principal diagnosis codes among patients hospitalized with pneumonia.
Second, because patients with a principal diagnosis of sepsis and respiratory failure are not included in the current CMS 30-Day Pneumonia Mortality Measure specifications, efforts to evaluate changes over time in pneumonia outcomes could be biased as coding practices change.
Finally, another published study
In response to these emerging data, we examined coding patterns across hospitals caring for Medicare patients and sought to forecast the impact of enhancing or broadening the measure cohort to include the complete patient population, at each hospital, who are receiving clinical management and treatment for pneumonia. Our findings were consistent with a published study.
In addition to assessing the use of the principal diagnosis codes of sepsis and respiratory failure, we also analyzed coding patterns and the impact of expanding the pneumonia measure to include patients with the principal diagnosis of aspiration pneumonia. We noted after our analyses that aspiration pneumonia: (1) Is a common reason for pneumonia hospitalization, particularly among the elderly; (2) is currently not included in the CMS hospital outcome measure specifications for pneumonia patients; and (3) appears to be similarly subject to variation in diagnosis, documentation, and coding. These findings suggest that a measure with an enhanced or broader cohort for the current CMS 30-Day Pneumonia Mortality Measure will ensure that the measure includes more complete and comparable populations across hospitals. Use of comparable populations would reduce measurement bias resulting from different coding practices across hospitals.
The proposed 30-Day Pneumonia Mortality Measure with this expanded measure cohort was included on a publicly available document entitled “List of Measures Under Consideration for December 1, 2014” with identification number E0468 and has been reviewed by the MAP. The revised measure was conditionally supported
The proposed measure refinement expands the cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of sepsis or respiratory failure who also have a secondary diagnosis of pneumonia that is coded as present on admission. The data sources, exclusion criteria, assessment of the outcome of mortality, and 3 year data evaluation period all remained unchanged.
The statistical modeling approach as well as the measure calculation remained unchanged from the previously adopted measure. The risk adjustment approach also remains unchanged; however, we included additional risk variables to account for the discharge diagnoses added as part of the expanded cohort. For the full measure specifications of the proposed change to the measure, we referred readers to the AMI, HF, PN, COPD, and Stroke Readmission Update zip file on our Web site at:
Using administrative claims data for FY 2015 (that is, discharges between July 2010-June 2013), we analyzed and simulated the effect of the proposed cohort refinements on the CMS 30-day Pneumonia Mortality Measure as if these changes had been applied for FY 2015. We note that these statistics are for illustrative purposes only, and we did not propose to revise the measure calculations for the FY 2015 payment determination.
Expanding the measure cohort to include a broader population of patients as proposed would have added a large number of patients, as well as additional hospitals (which would now meet the minimum threshold of 25 eligible cases), to the CMS 30-day Pneumonia Mortality Measure. In the FY 2010 IPPS/LTCH PPS final rule (74 FR 43881), we established that if a hospital has fewer than 25 eligible cases combined over a measure's reporting period, we would replace the hospital's data with a footnote indicating that the number of cases is too small to reliably determine how well the hospital is performing. These cases are still used to calculate the measure; however, for hospitals with fewer than 25 eligible cases, the hospital's mortality rates and interval estimates are not publicly reported for the measure. For more information about this minimum case threshold for public reporting, we refer readers to section VIII.A.13. of the preamble of this final rule. The increase in the size of the measure cohort proposed in the FY 2016 IPPS/LTCH PPS proposed rule would have changed results for many hospitals and would change the number of hospitals that have greater than 25 cases.
The previously adopted pneumonia mortality measure cohort includes 976,590 patients and 4,418 hospitals for the FY 2015 payment determination. We noted the following effects for the CMS 30-Day Pneumonia Mortality Measure if the proposed expanded cohort had been applied for FY 2015: (1) The expansion of the cohort would include an additional 686,605 patients (creating a total measure cohort size of 1,663,195 patients); (2) an additional 86 hospitals would meet the minimum 25 patient cases volume threshold over the 3-year measure period and would be publicly reported for the measure; (3) 41 percent of the refined measure cohort would consist of patients with a principal discharge diagnosis of aspiration pneumonia and patients with a principal discharge diagnosis of sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission; and (4) there would be an increase in the number of hospitals considered outliers and a shift in some hospitals' outlier status classification, for example from “better than the national rate” to “no different than the national rate” or from “worse than the national rate” to “no different than the national rate.”
A detailed description of the refinements to the CMS 30-Day Pneumonia Mortality Measure and the effects of the change are available in the AMI, HF, PN, COPD, and Stroke Readmission Update zip file on our Web site at:
We invited public comment on our proposal to refine the previously adopted Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Pneumonia Hospitalization (NQF #0468) measure, expanding the measure cohort.
Because comments for this proposal also overlap with those for the next section (VIII.A.6.b. of the preamble of this final rule (Refinement of Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization (NQF #0506) Measure Cohort)), we address comments related to both proposals after the next section.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24564 through 24566), we proposed a refinement of the previously adopted measure, Hospital 30-day all-cause, risk-standardized readmission rate following pneumonia hospitalization (NQF #0506) (hereinafter referred to as the CMS 30-Day Pneumonia Readmission Measure) which expands the measure cohort. For the purposes of describing the refinement of this measure, we note that “cohort” is defined as the hospitalizations, or “index admissions,” that are included in the measure and evaluated to ascertain whether the patient was subsequently readmitted to the hospital within 30 days of the index admission. This cohort is the set of hospitalizations that meets all of the inclusion and exclusion criteria and we proposed an expansion to this set of hospitalizations.
The previously adopted CMS 30-Day Pneumonia Readmission Measure, as specified in the FY 2009 IPPS PPS proposed rule (73 FR 23648) and adopted in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68780 through 68781), includes hospitalizations for patients with a principal discharge diagnosis of pneumonia indicating viral or bacterial pneumonia. For measure cohort details of the currently implemented measure, we refer readers to the measure methodology report and measure risk adjustment statistical model in the AMI, HF, PN, COPD, and Stroke Readmissions Update zip file on our Web site at:
This proposed measure refinement would have expanded the measure cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of either sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission. The determination to refine the measure cohort was based on our evaluation of both the frequency and variation in utilization of these diagnosis codes, as such coding practices have been described in recently published studies.
This refinement to the CMS 30-Day Pneumonia Readmission Measure was being proposed in response to recent evidence showing increasing use of the principal diagnosis codes of sepsis and respiratory failure among patients hospitalized with pneumonia. Including such patients could better represent the complete population of a hospital's patients who are receiving clinical management and treatment for pneumonia. In addition, because patients with a principal diagnosis of sepsis and respiratory failure are not included in the current CMS 30-Day Pneumonia Readmission Measure specifications, efforts to evaluate changes over time in pneumonia outcomes could be biased as coding practices change.
Wide variation exists in the use of sepsis and respiratory failure codes across hospitals, potentially biasing efforts to compare hospital performance on 30-day readmission rates.
In response to this emerging data, we examined coding patterns across hospitals caring for Medicare patients and sought to forecast the impact of broadening the measure cohort to include the complete population of patients at each hospital who are receiving clinical management and treatment for pneumonia. Our findings were consistent with a published study
The proposed refined measure was included on a publicly available document entitled “List of Measures Under Consideration for December 1, 2014” with identification number E0506, has been reviewed by the MAP, and was conditionally supported pending NQF review of the measure update. In particular, MAP members noted that the measure should be considered for sociodemographic status (SDS) adjustment in the upcoming NQF trial period, reviewed for the empirical and conceptual relationship between SDS factors and risk-standardized readmission rates, and endorsed with appropriate consideration of SDS factors as determined by NQF standing committees. We refer readers to the “Spreadsheet of MAP 2015 Final Recommendations” available at:
The proposed measure refinement would have expanded the measure cohort to include hospitalizations for patients with a principal discharge diagnosis of aspiration pneumonia and for patients with a principal discharge diagnosis of sepsis or respiratory failure who also have a secondary diagnosis of pneumonia that is coded as present on admission. The data sources, exclusion criteria, assessment of the outcome of readmission, and previous 3 years data evaluation period remained unchanged.
The statistical modeling approach as well as the measure calculation remained unchanged from the previously adopted measure. The risk adjustment approach also remains unchanged; however, we included additional risk variables to account for the discharge diagnoses added as part of the expanded cohort. For the full measure specifications of the proposed changes to the measure, we referred readers to the AMI, HF, PN, COPD, and Stroke Readmissions Update zip file on our Web site at:
Using administrative claims data for FY 2015 (that is, discharges between July 2010-June 2013); we analyzed and simulated the effect of the proposed measure cohort refinements on the CMS 30-Day Pneumonia Readmission Measure as if these changes had been applied for FY 2015. We note that these statistics are for illustrative purposes
Based on our analysis, we anticipate that expanding the measure cohort to include a broader population of patients as proposed would have added a large number of patients, as well as additional hospitals (which would now meet the minimum threshold of 25 eligible cases), to the CMS 30-Day Pneumonia Readmission Measure. In the FY 2010 IPPS/LTCH PPS final rule (74 FR 43881), CMS established that if a hospital has fewer than 25 eligible cases combined over a measure's reporting period, we would replace the hospital's data with a footnote indicating that the number of cases is too small to reliably tell how well the hospital is performing. These cases are still used to calculate the measure; however, for hospitals with fewer than 25 eligible cases, the hospital's readmission rates and interval estimates are not publicly reported for the measure. For more information about this minimum case threshold for public reporting, we refer readers to section VIII.A.13of the preamble of this final rule. The increase in the size of the measure cohort proposed in FY 2016 IPPS/LTCH PPS proposed rule for this measure cohort would have changed results for many hospitals and would change the number of hospitals that have greater than 25 cases.
The previously adopted pneumonia readmission measure cohort includes 1,094,959 patients and 4,451 hospitals for FY 2015 payment determination. We noted the following effects for the CMS 30-Day Pneumonia Readmission Measure if the proposed expanded cohort had been applied for FY 2015: (1) The expansion of the CMS 30-Day Pneumonia Readmission Measure cohort would include an additional 670,491 patients (creating a total measure cohort of 1,765,450 patients); (2) there would be an additional 67 hospitals that meet the minimum 25 patient cases volume threshold over the 3-year applicable period and would be publicly reported for the measure; (3) patients with a principal discharge diagnosis of aspiration pneumonia and patients with a principal discharge diagnosis of sepsis or respiratory failure who also have a secondary diagnosis of pneumonia present on admission would represent 38 percent of the total expanded measure cohort; and (4) there would be an increase in the number of hospitals considered outliers and a shift in some hospitals' outlier status classification, for example from “better than the national rate” to “no different than the national rate” or from “worse than the national rate” to “no different than the national rate.”
A detailed description of the refinements to the CMS 30-Day Pneumonia Readmission Measure and the effects of the change are available in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on our Web site at:
We invited public comment on our proposals to refine the previously adopted Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization (NQF #0506) measure, and the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization (NQF #0468) measure which expands the measure cohort.
In the proposed rule, we described an expanded measure cohort that included patients with: (1) A principal discharge diagnosis of bacterial/viral pneumonia; (2) a principal discharge diagnosis of aspiration pneumonia; (3) a principal discharge diagnosis of sepsis if pneumonia was POA; (4) a principal discharge diagnosis of severe sepsis (including septic shock) if pneumonia was POA; and (5) principal discharge diagnosis of respiratory failure if pneumonia was POA. We also proposed including the presence of sepsis or respiratory failure in the index admission as covariates, or risk-adjusters, in the model.
However, analyses conducted after publication of the proposed rule as part of the measure reevaluation and respecification process revealed challenges to risk adjustment with respect to patients with severe sepsis and respiratory failure, and suggested that this proposed cohort expansion could exacerbate the bias in the existing measure that it was intended to mitigate. Specifically, hospital coding frequency was found to be even more strongly, and inversely, associated with performance; hospitals with the greatest proportion of patients receiving a principal diagnosis of sepsis or respiratory failure had the lowest risk-adjusted mortality and were more likely to be `better-performing' outliers. This finding was concerning, because clinically, we do not expect differences in coding practices to be related to performance on the measure. Our aim was to expand the cohort to adequately capture the wide range of pneumonia patients across hospitals, regardless of coding patterns, but that would adequately account for different degrees of illness among the hospitals' population.
The reevaluation and respecification of the proposed expansions resulted in measure cohorts that are a broader clinical representation than the currently reported measures cohorts and that account for the wider spectrum of clinical severity of pneumonia among Medicare beneficiaries receiving acute care at IPPS U.S. hospitals. During this subsequent analysis, the measures were then modified so that the cohorts were expanded to only include: (1) Patients with a principal discharge diagnosis of pneumonia (current reported cohort), (2) patients with a principal discharge diagnosis of aspiration pneumonia, and (3) patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia that was POA. Patients with: (4) A principal discharge diagnosis of severe sepsis (including septic shock) if pneumonia was POA; and (5) principal discharge diagnosis of respiratory failure if pneumonia was POA were not included. The finalized measures, with the modified expanded cohort, also do not include additional risk variables for the presence of sepsis or respiratory failure in index admission as part of the measures' risk-adjustment since the patients with respiratory failure or severe sepsis will not be included in the finalized measures. This respecification was determined to be statistically robust, such that in the finalized measures, with the modified expanded cohort, risk-standardization adequately accounted for case-mix differences across hospitals, without being confounded by hospital coding patterns. Furthermore, this respecification is also consistent with clinical patterns of care, as the very sickest patients (those with principal discharge diagnosis of severe sepsis or respiratory failure) often require care in an intensive care unit (ICU) and other specialized interventions (such as ventilator support) that is clinically distinct from the care provided to patients with less severe forms of pneumonia.
These analyses led to our decision to not include the sickest patients in the refinements of the Hospital 30-day, All-Cause, Risk Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization (NQF #0468) measure and the Hospital 30-day, All-Cause, Risk Standardized Readmission Rate following Pneumonia Hospitalization (NQF #0506) measure. Upon this further analysis and in response to public comment, we are modifying our proposal and finalizing a modified version of the expanded pneumonia cohort. Instead of including all five proposed diagnosis categories as described above, we are finalizing only three: (1) Patients with a principal discharge diagnosis of pneumonia (the current reported cohort); (2) patients with a principal discharge diagnosis of aspiration pneumonia; and (3) patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia POA. We are not including patients with the most severe illness, which are represented in the two patient groups we are not finalizing: (4) Patients with a principal discharge diagnosis of respiratory failure; and (5) patients with a principal discharge diagnosis of severe sepsis (including septic shock). As a result, we are also not finalizing our proposal to risk adjust with respect to these two conditions being present during the index admission.
We find that this modified cohort expansion produces a measure that does not favor or disadvantage hospitals on the basis of their coding practices. Although the modified expansion of the cohort for these measures will increase the number of included patients and change the national readmission and mortality rates, we do not believe this constitutes a new measure; the intent of the measure has not changed since initial development and NQF endorsement. The modified measures will not expand the population by as much or change the national rate as much as noted in the proposed rule. The modified mortality measure cohort will be approximately 18 percent smaller than what was proposed and the modified readmission measure cohort will be approximately 15 percent smaller than what was proposed.
We believe the modified versions of the measure refinements being finalized effectively broadens the cohort of patients included to be more clinically comprehensive than that of the current reported measures (bringing in sepsis and aspiration pneumonia patients), but avoids including patients that are most severely ill on arrival (those with severe sepsis and respiratory failure). Those patients' increased risk was challenging to appropriately account for across hospitals. By limiting measure expansion without including risk-adjustment for these alternate principal diagnoses (that is, severe sepsis and respiratory failure), we brought in a large portion of patients currently excluded from the measures, but mitigated the biases introduced by hospital coding patterns.
Based on our additional evaluation, we confirmed that after removing the risk variables for sepsis and respiratory failure during the index admission from the previously proposed approach, risk-adjustment was effective for the modified refinements to the measures, as hospital coding frequency was no longer associated with performance on either the mortality or readmission measures. As was previously proposed, the risk adjustment factors used in the current publicly reported versions of the mortality and readmission measures
In addition, we believe the finalized measures' (with the modified expanded cohort) reliability, validity and appropriateness are sufficient. CMS' reliability testing demonstrated moderate reliability that is comparable to other CMS claims-based outcome measures. The finalized measures, with the modified expanded cohort, have both clinical and face validity. The inclusion of additional patient groups is based on research findings and an aim to maintain clinically comparable cohorts across hospitals. The validity of the measures is further based on prior findings demonstrating the adequacy of claims-based risk-adjustment outcome measures. Furthermore, the finalized measures' validity is based on the demonstration that they mitigate biases introduced by hospital coding patterns. For more details on the measures, including predictive ability, reliability, and validity, we refer readers to the measure methodology reports in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on our Web site at:
When the appropriate measure endorsement project has a call for measures in 2015, the finalized measures, with the modified expanded cohorts, will be submitted to the NQF for reendorsement. The original 30-day, All-Cause, Risk-Standardized Readmission Rate following Pneumonia Hospitalization and 30-day, All-Cause, Risk-Standardized Mortality Rate following Pneumonia Hospitalization measures were previously NQF-endorsed, and we do not believe the intent of the measures have changed.
We appreciate the commenters concerns that community acquired pneumonia and aspiration pneumonia have different causes and associated risks (for example, recurrent aspiration due to other comorbidities). While the pathological causes of aspiration pneumonia are slightly different from the causes of community acquired pneumonia, in routine clinical practice, evidence shows it can be very challenging for physicians to differentiate aspiration syndromes including pneumonitis and pneumonia, from other types of pneumonia included in the measure. This is reflected in the tremendous variation across hospitals in the use of aspiration pneumonia diagnosis codes. This variation suggests that hospitals are not consistently distinguishing between these conditions as distinct subtypes regardless of patients' comorbid conditions.
Moreover, the treatment of patients hospitalized for pneumonia, aspiration pneumonia, or sepsis due to pneumonia is very similar and involves treatment with antibiotics, IV fluids, and symptom management. In addition, although some patients with aspiration pneumonia, such as medically frail patients or those who have suffered a stroke as noted by the commenter, have a higher predicted mortality or readmission risk, many of the associated
Specifically, our analyses found that hospital performance among hospitals with higher rates of patients with sepsis or aspiration pneumonia hospital performance is similar to those with fewer such patients, suggesting that the risk adjustment methodology adequately accounts for the differences in risk among the subgroups of patients; further information can be found in the subsequent link provided. Details regarding the number of hospitals that would change performance categories and how their performance is related to their coding practices is detailed in the measure specifications report for the measure as finalized are provided in the measure methodology report and measure risk adjustment statistical model in the AMI, HF, PN, COPD, and Stroke Readmission Updates zip file on our Web site at:
After consideration of the public comments we received and extensive evaluation and analysis of the results of the refined measures, we are finalizing a modified version of the measure refinements (expanded pneumonia cohort) proposed for the FY 2017 payment determination and subsequent years for both the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization (NQF #0506) measure and the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization (NQF #0468) measure. Instead of including all five proposed diagnosis categories, we are finalizing only three: (1) Patients with a principal discharge diagnosis of pneumonia (the current reported cohort); (2) patients with a principal discharge diagnosis of aspiration pneumonia; and (3) patients with a principal discharge diagnosis of sepsis (excluding severe sepsis) with a secondary diagnosis of pneumonia coded as present on admission (POA). We are not including patients with the most severe illness, which are represented in the 2 diagnosis categories we are not finalizing: (1) Patients with a principal discharge diagnosis of respiratory failure with a secondary diagnosis of pneumonia present on admission; and (2) patients with a principal discharge diagnosis of sepsis (including septic shock) with a secondary diagnosis of pneumonia present on admission. As a result, we are also not finalizing our proposal to risk adjust with respect to these two conditions.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24566 through 24581), we proposed to add eight new measures to the Hospital IQR Program for the FY 2018 payment determination and subsequent years. We proposed to adopt seven new claims-based measures and one new structural measure: (1) Hospital Survey on Patient Safety Culture (structural); (2) Kidney/UTI Clinical Episode-Based Payment measure (claims-based); (3) Cellulitis Clinical Episode-Based Payment measure (claims-based); (4) Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure (claims-based); (5) Lumbar Spine Fusion/Re-Fusion Clinical Episode-Based Payment measure (claims-based); (6) Hospital-Level, Risk-Standardized Payment Associated with an Episode-of-Care for Primary Elective THA/TKA (claims-based); (7) Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (claims-based); and (8) Excess Days in Acute Care after Hospitalization for Heart Failure (claims-based).
The proposed measures were included on a publicly available document entitled “List of Measures Under Consideration for December 1, 2014”
For purposes of the Hospital IQR Program, section 1886(b)(3)(B)(IX)(aa) of the Act requires that any measure specified by the Secretary must have been endorsed by the entity with a contract under section 1890(a) of the Act. The NQF currently holds this contract. However, section 1886(b)(3)(B)(IX)(bb) of the Act provides an exception that, in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary.
We invited public comment on each of the proposed measures listed above. We address general comments received on all proposed measures here and discuss more specific comments in subsequent sections below.
In addition, all of the proposed measures were reviewed by the MAP, as discussed in its MAP Pre-Rulemaking Report and Spreadsheet of MAP 2015 Final Recommendations, indicating that they have been determined to be appropriate for the Hospital IQR Program. We note that measure developers conduct reliability and validity testing and that the MAP considers whether the measure under consideration is appropriate for a program.
Finally, we note that we specifically select and propose measures that address goals for improving care and that the measures being finalized in this final rule all address NQS or CMS Quality Strategy Goals, which include
The factors we take into account in implementing and expanding the Hospital IQR Program are described in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53510).
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of socioeconomic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We discuss specific comments and our finalized policies for each of the proposed measures below.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24566 through 24567), for the FY 2018 payment determination and subsequent years, we proposed to adopt the Hospital Survey on Patient Safety Culture. This proposed structural measure assesses whether a hospital administers a patient safety culture survey. Improving the safety of patient care is a priority and a quality improvement goal for CMS. We believe this structural measure will allow us to gain an understanding of whether hospitals are using a survey of patient safety culture in their hospitals. Because the number of questions in this measure is limited to five and can be completed using a Web-based tool, we believe this structural measure will not add undue reporting burden to hospitals.
We note that patient safety culture surveys are useful tools for measuring organizational conditions that can lead to adverse events and other incidences that can cause harm to patients in health care organizations.
There are multiple surveys that are currently used by the healthcare industry to assess patient safety culture including: The Pascal Metrics' Safety Attitudes Questionnaire (SAQ);
Through the proposed Hospital Survey on Patient Safety Culture Measure, we will begin to understand how hospitals are using surveys, like the examples cited above, in improving their patient safety culture. This proposed measure will allow CMS to collect data on whether a hospital conducts a patient safety culture survey, and if so, which tool they use, how frequently the tool is administered, and the response rate. This structural measure will help inform CMS of whether a measure targeting the culture of patient safety using a specific survey is feasible.
Finally, we note that the MAP supports this measure and specifically highlighted that a patient safety culture survey is an important tool for hospitals to use to build a system of quality improvement within health care facilities.
Reporting on a patient safety culture survey involves providing answers to the following questions listed below. Hospitals would submit answers via a Web-based tool on the QualityNet Web site:
(A) Does your facility administer a detailed assessment of patient safety culture using a standardized collection protocol and structured instrument?
(B) What is the name of the survey that is administered?
(C) How frequently is the survey administered?
(D) Does your facility report survey results to a centralized location? (Optional response options include the following: National data repository; state-based data repository; health system repository; other; and do not report the data outside the facility.)
(E) During the most recent assessment:
(a) How many staff members were requested to complete the survey?
(b) How many completed surveys were received?
(These questions can allow calculation of a response rate.)
For FY 2018 payment determination and subsequent years, we proposed that data collection for this structural measure for hospitals occur from January 1 through December 31 of each calendar year, with data submission occurring the following year. For the first year, data collection would be from January 1, 2016 through December 31, 2016. These data will be collected via a Web-based tool available on the QualityNet Web site.
We invited public comment on our proposal to adopt the Hospital Survey on Patient Safety Culture measure for the FY 2018 payment determination and subsequent years.
This structural measure will allow us to assess whether hospitals are using surveys, which surveys are being utilized, and the frequency of their use. This information will assist us in assessing the feasibility of implementing a single survey on patient safety culture in the future.
After consideration of the public comments we received, we are finalizing the adoption of the Hospital Survey on Patient Safety Culture measure for the FY 2018 payment determination and subsequent years as proposed.
Clinical Episode-Based Payment measures are clinically coherent groupings of healthcare services that can be used to assess providers' resource use. Combined with other clinical quality measures, they contribute to the overall picture of providers' clinical effectiveness and efficiency. Episode-based performance measurement allows meaningful comparisons between providers based on resource use for certain clinical conditions or procedures, as noted in the NQF report for the “Episode Grouper Evaluation Criteria” project available at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24567 through 24572), we proposed four Clinical Episode-Based Payment measures for inclusion in the Hospital IQR Program beginning with the FY 2018 payment determination: The Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure, the Cellulitis Clinical Episode-Based Payment measure, the Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure, and the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure. The proposed measures evaluate the difference between observed and expected episode cost at the episode level before comparing at the provider level.
The MAP conditionally supported these measures pending NQF endorsement.
The measures we proposed are described below, and detailed specifications can be found in the “Measure Methodology” report for proposed episodic payment measures, available at:
Mathematically, the methodology described below first computes the provider's Episode Amount (calculated as the average of the ratios of each episode's observed costs to its expected costs multiplied by the national average observed episode cost) and then divides the provider's Episode Amount by the episode-weighted median of all providers' Episode Amounts (as shown in equation (A) below).
This methodology builds on that which was submitted to the MAP, in response to MAP feedback, and in order to yield a national episode-weighted measure. We proposed these Clinical Episode-Based Payment measures because they meet the following episode selection criteria we established for the purpose of selecting the best conditions and procedures to begin with, for Clinical Episode-Based Payment measures: (1) The condition constitutes a significant share of Medicare payments and potential savings for hospitalized patients during and surrounding a hospital stay; (2) there was a high degree of agreement among clinical experts consulted for this project that standardized Medicare payments for services provided during
We discuss measure-specific comments after each measure discussion. However, because many comments apply to all of the proposed Clinical Episode-Based Payment measures, a discussion of comments that are not measure-specific can be found after the measure discussions.
Inpatient hospital stays and associated services assessed by the Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure have high costs with substantial variation. In CY 2012, Medicare FFS beneficiaries experienced over 234,000 kidney/urinary tract infection episodes triggered by related inpatient stays.
The MAP conditionally supported this measure pending NQF review and endorsement. Members noted that this measure addresses the cost of care for common conditions, but other members expressed caution that the most efficient providers may reduce overall hospitalizations and that the remaining hospitalizations may be a biased sample for measuring performance across providers. In response to this concern, we note that this measure is limited by design to the inpatient hospital, which means that resource use is evaluated only for patients that have been hospitalized for the episode condition, and providers are evaluated relative to other providers treating hospitalized patients. To address the concern that providers involved in the hospitalization of only the most complex cases might be disadvantaged under the measure, we note that the episode is risk-adjusted to account for differences in patient characteristics that may affect costs, such that expected costs for more complex patients will be higher and expected costs for less complex patients will be lower. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement.
We proposed this measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered other existing measures related to efficiency that have been endorsed by the NQF and we were unable to identify any NQF-endorsed measures that assess kidney/urinary tract infection. We also are not aware of any other measures that assess kidney/urinary tract infection treatment efficiency and found no other feasible and practical measures on this topic.
The Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure includes the set of services provided to treat, manage, diagnose, and follow up on (including postacute care) a kidney/urinary tract infection-related hospital admission. This measure, like the NQF-endorsed MSPB measure (NQF #2158), assesses the cost of services initiated during an episode that spans the period immediately prior to, during, and following a beneficiary's hospital stay (the “episode window”). In contrast to the MSPB measure, however, this measure includes Medicare payments for services during the episode window only if they are clinically related to the health condition that was treated during the index hospital stay.
The Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure is an administrative claims-based measure. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized with an MS-DRG that identifies a kidney/urinary tract infection.
The measure sums the Medicare payment amounts for clinically related Part A and Part B services provided during the episode window and attributes them to the hospital at which the index hospital stay occurred. Medicare payments included in this episode-based measure are standardized and risk-adjusted. The period of performance for the measure is 1 year, beginning with CY 2016. Similar to the MSPB measure's construction, this measure is expressed as a risk-adjusted ratio, which allows for ease of comparison over time, without need to adjust for inflation or any potential changes in CMS payment policy. The numerator is the Episode Amount, calculated as the average of the ratios of each episode's observed costs to its expected costs multiplied by the national average observed episode cost. The denominator is the episode-weighted median of all providers' Episode Amounts. A kidney/urinary tract infection episode begins 3 days prior to the initial (that is, index) admission and extends 30 days following the discharge from the index hospital stay.
The measure cohort includes Medicare FFS beneficiaries hospitalized with an MS-DRG that indicates a kidney/urinary tract infection. Additional details including the exclusion criteria are described in section VIII.A.7.b.(6) of the preamble of this final rule.
We invited public comment on our proposal to adopt the Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
The proposed Clinical Episode-Based Payment measures' episodes were created using the methodology for grouping treatment and post-discharge services as well as the risk adjustment model all outlined in the supplemental documentation for the FY 2016 IPPS and LTCH Prospective Payment System Proposed Rule available at:
Inpatient hospital stays and associated services assessed by the Cellulitis Clinical Episode-Based Payment measure have high costs with substantial variation. In CY 2012, Medicare FFS beneficiaries experienced more than 143,000 cellulitis episodes triggered by related inpatient stays.
The MAP conditionally supported this measure pending NQF review and endorsement. Members noted that this measure addresses the cost of care for an important condition. Other members expressed caution on the use of this measure noting that cellulitis is a highly variable condition that may be challenging to measure using an episode-based framework. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement. We note that there is substantial variation in cellulitis episode costs that is driven by variation in post-discharge costs clinically-related to the inpatient hospitalization. This variation suggests that there may be opportunity to improve the efficiency of care for cellulitis treatment.
We proposed this measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered other existing measures related to efficiency that have been endorsed by the NQF and we were unable to identify any NQF-endorsed measures that assess cellulitis. We also are not aware of any other measures that assess cellulitis treatment efficiency, and found no other feasible and practical measures on this topic.
The Cellulitis Clinical Episode-Based Payment measure includes the set of services provided to treat, manage, diagnose, and follow up on (including post-acute care) a cellulitis-related hospital admission. The Cellulitis Clinical Episode-Based Payment measure, like the MSPB measure, assesses the cost of services initiated during an episode that spans the period immediately prior to, during, and following a beneficiary's hospital stay (the “episode window”). In contrast to the MSPB measure, the Cellulitis Clinical Episode-Based Payment measure includes Medicare payments for services during the episode window only if they are clinically related to the health condition that was treated during the index hospital stay.
The Cellulitis Clinical Episode-Based Payment measure is an administrative claims-based measure. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized with an MS-DRG that identifies cellulitis.
The measure sums the Medicare payment amounts for clinically related Part A and Part B services provided during this episode window and
The measure cohort includes Medicare FFS beneficiaries hospitalized with an MS-DRG that indicates cellulitis. Additional details including the exclusion criteria are described in section VIII.A.7.b.(6) of the preamble of this final rule.
We invited public comment on our proposal to adopt the Cellulitis Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
Furthermore, we do not agree that comorbidities might make it difficult to group all cellulitis patients together. The episode measure contains three clinical subtypes to address the heterogeneity present among beneficiaries hospitalized for this condition: (1) Cellulitis as a complication of diabetes; (2) cellulitis as a complication of decubitus pressure ulcers; and (3) other cellulitis. We note that beneficiaries with ulcers were not compared to beneficiaries with uncomplicated cellulitis. This breakdown creates more cohorts of beneficiaries for comparison. Risk adjustment is also applied to account for other comorbidities and complex issues in cellulitis patients. Finally, the episode focuses only on care that is directly related to those infections. The high frequency of cellulitis episodes highlights the importance of creating a measure for this condition.
Inpatient hospital stays and associated services assessed by the Gastrointestinal (GI) Hemorrhage Clinical Episode-Based Payment measure have high costs with substantial variation. In calendar year 2012, Medicare FFS beneficiaries experienced 181,646 GI hemorrhage episodes triggered by related inpatient stays.
The MAP conditionally supported this measure pending NQF review and endorsement. MAP members noted that this measure addresses the cost of care for GI bleeding. Several members expressed caution that the most efficient providers may reduce overall hospitalizations thus those inpatient hospitalizations that remain are a biased sample for measuring performance across providers. In response to these concerns, we note that this measure is limited by design to GI hemorrhage episodes treated in the inpatient hospital, which means that resource use is evaluated only for patients that have been hospitalized for the episode condition, and providers are evaluated relative to other providers treating hospitalized patients. With regard to the concern that efficient providers may reduce hospitalizations, leaving a biased sample of less efficient providers, we note that the episode is risk-adjusted to account for differences in patient characteristics that may affect costs, thus to the extent that variation in treatment prior to hospitalization results in patterns of sicker (or healthier) GI hemorrhage patients admitted to certain hospitals, risk adjustment addresses these differences. For example, for providers who admit comparatively less complex patients to the inpatient hospital for treatment of GI bleeds, risk adjustment would cause their expected costs to be lower. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement.
We proposed this measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered other existing measures related to efficiency that have been endorsed by the NQF and we were unable to identify any NQF-endorsed
The Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure includes the set of services provided to treat, manage, diagnose, and follow up on (including postacute care) a gastrointestinal hemorrhage-related hospital admission. This measure, like the MSPB measure, assesses the cost of services initiated during an episode that spans the period immediately prior to, during, and following a beneficiary's hospital stay (the “episode window”). In contrast to the MSPB measure, the Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure includes Medicare payments for services during the episode window only if they are clinically related to the health condition that was treated during the index hospital stay.
The Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure is an administrative claims-based measure. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized with an MS-DRG that identifies a gastrointestinal hemorrhage.
The measure sums the Medicare payment amounts for clinically related Part A and Part B services provided during the episode window and attributes them to the hospital at which the index hospital stay occurred. Medicare payments included in this episode-based measure are standardized and risk-adjusted. The period of performance is 1 year, beginning with CY 2016. Similar to the MSPB measure's construction, this measure is expressed as a risk-adjusted ratio, which allows for ease of comparison over time, without need to adjust for inflation or any potential changes in CMS payment policy. The numerator is the Episode Amount, calculated as the average of the ratios of each episode's observed costs to its expected costs multiplied by the national average observed episode cost. The denominator is the episode-weighted median of all providers' Episode Amounts. A gastrointestinal hemorrhage episode begins 3 days prior to the initial (that is, index) admission and extends 30 days following the discharge from the index hospital stay.
The measure cohort includes Medicare FFS beneficiaries hospitalized with an MS-DRG that indicates gastrointestinal hemorrhage. Additional details including the exclusion criteria are described in section VIII.A.7.b.(6) of the preamble of this final rule.
We invited public comment on our proposal to adopt the Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
Furthermore, we believe that risk adjustment will account for other health and demographic factors that may impact a beneficiary's episode costs. Risk adjustment factors in age, 70 severity of illness measures, and comorbidities that may affect a GI hemorrhage episode: Diabetes, inflammatory bowel disease, hematological disorders, drug and alcohol dependence, liver cirrhosis, and intestinal obstruction/perforation, among others. The data showed that there was sufficient similarity in the experiences of these patients that episodes could be created. In selecting post-discharge services to group to the episode, clinicians focused on care that was directly related to the bleeding. Care was taken at this time to group only services that had a direct connection to the bleed that triggered the episode.
Inpatient hospital stays and associated services assessed by the Spinal Fusion/Refusion Clinical Episode-Based Payment measure have high costs with substantial variation. In CY 2012, Medicare FFS beneficiaries experienced about 69,000 spinal fusion/refusion episodes triggered by related inpatient stays.
The MAP conditionally supported this measure pending NQF review and endorsement. Some members raised concerns that patients with cancer should be excluded from this measure. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement. We note that this measure is titled “Spine Fusion/Refusion Clinical Episode-Based Payment measure” in the MAP spreadsheet. In addition, the episode is risk-adjusted to account for differences in patient characteristics, including the presence of cancer in the patient's
We proposed this measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered other existing measures related to efficiency that have been endorsed by the NQF and we were unable to identify any NQF-endorsed measures that assess spinal fusion/refusion. We also are not aware of any other measures that assess spinal fusion/refusion treatment efficiency, and found no other feasible and practical measures on this topic.
The Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure includes the set of services provided to treat, manage, diagnose, and follow up on (including postacute care) a lumbar spine fusion/refusion-related hospital admission. The Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure, like the MSPB measure, assesses the cost of services initiated during an episode that spans the period immediately prior to, during, and following a beneficiary's hospital stay (the “episode window”). In contrast to the MSPB measure, the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure includes Medicare payments for services during the episode window only if they are clinically related to the health condition that was treated during the index hospital stay.
The Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure is an administrative claims-based measure. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized with an MS-DRG and ICD-9-CM procedure code that identify a lumbar spine fusion/refusion.
The measure sums the Medicare payment amounts for clinically related Part A and Part B services provided during the episode window and attributes them to the hospital at which the index hospital stay occurred. Medicare payments included in this episode-based measure are standardized and risk-adjusted. The period of performance is 1 year, beginning with calendar year 2016. Similar to the MSPB measure's construction, this measure is expressed as a risk-adjusted ratio, which allows for ease of comparison over time, without need to adjust for inflation or any potential changes in CMS payment policy. The numerator is the Episode Amount, calculated as the average of the ratios of each episode's observed costs to its expected costs multiplied by the national average observed episode cost. The denominator is the episode-weighted median of all providers' Episode Amounts. A lumbar spine fusion/refusion episode begins 3 days prior to the initial (that is, index) admission and extends 30 days following the discharge from the index hospital stay.
The measure cohort includes Medicare FFS beneficiaries hospitalized with an MS-DRG and ICD-9 Procedure code that indicate lumbar spine fusion/refusion. Additional details including the exclusion criteria are described in section VIII.A.7.b.(6) of the preamble of this final rule.
We invited public comment on our proposal to adopt the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
Therefore, in response to commenters' concerns regarding the heterogeneity of the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure, we are not finalizing it for the Hospital IQR Program at this time. We will continue development of this measure, and if after further refinement and discussion with clinical experts we believe the measure should be included in the Hospital IQR Program, we would propose the measure again through future rulemaking.
Currently, the risk adjustment used for these measures is the same as that of the NQF-endorsed MSPB measure (NQF #2158). Therefore, providers and hospitals that treat patients with greater complexity will be accounted for through payment standardization and risk adjustment.
As the commenters noted, the quality of post-discharge care can affect the
With regard to the comments that the measure might incentivize hospitals to avoid needed post-discharge care and that lower cost does not necessarily indicate better quality, we note that this measure was proposed as one measure within the Hospital IQR Program, which includes numerous measures spanning various aspects of hospital quality. In addition to our belief that hospitals are interested in providing the best and most appropriate care for the Medicare beneficiaries they serve, cost measures are balanced by a wide array of quality measures. We do not believe that a hospital would avoid providing needed care (and forego the associated Medicare payments for such services), in the interest of improving performance on one payment measure. Rather, we believe that Clinical Episode-Based Payment measures incentivize hospitals to look for opportunities to gain efficiencies, avoid unnecessary services, which represent poor quality, and avoid unnecessary re-hospitalizations.
However, as discussed above in response to comments concerning the heterogeneity of the universe included in the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure, we are not finalizing it for the FY 2018 payment determination and subsequent years for the Hospital IQR Program as proposed.
A full list of the MS-DRG codes used to identify beneficiaries included in the final cohort for each of the proposed episode-based payment measures can be found in the “FY 2016 IPPS NPRM Episode Supplemental Documentation” report in the “Downloads” section at: “NPRM Episode Supplemental Documentation” report at:
The exclusion methodology applied to each of these measures is the same as the one used to calculate the previously adopted NQF-endorsed MSPB measure (NQF #2158) described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51626) and available in the “MSPB Measure Information Form” at:
• Lack of continuous enrollment in Medicare Parts A and B from 90 days prior to index admission through the end of the episode with Medicare as the primary payer.
• Death date during episode window.
• Enrollment in Medicare Advantage during the episode window.
In addition, claims that meet any of the following criteria do not trigger, or open, an episode:
• Claims with data coding errors, including missing date of birth or death dates preceding the date of the trigger event.
• Claims with payment ≤ 0.
• Acute inpatient stays that involved a transfer.
• Claims from a non-IPPS or non-subsection (d) hospital.
Claims that meet the following criterion will not be included in an episode:
• Claims with payment ≤ 0.
Standardization, or payment standardization, is the process of adjusting the allowed charge for a Medicare service to facilitate comparisons of resource use across geographic areas. Medicare payments included in these proposed episode-based measures would be standardized according to the standardization methodology previously finalized for the Hospital IQR Program MSPB measure in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51626) and used for all of the payment measures included in the Value-Based Payment Modifier Program. The methodology removes geographic payment differences, such as wage index and geographic practice cost index, incentive payment adjustments, and other add-on payments that support broader Medicare program goals, such as add-on payments for indirect graduate medical education (IME) and add-ons for serving a disproportionate share of uninsured patients (DSH).
Risk adjustment uses patient claims history to account for case-mix variation and other factors. The steps used to calculate risk-adjusted payments align with the NQF-endorsed MSPB measure (NQF #2158) method as specified in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51624 through 51626). Specifications for the risk-adjustment employed in the proposed episode-based payment measures are included in the “FY 2015 IPPS NPRM Episode Supplemental Documentation” report, Section 4, titled “Calculating the Hospital-Based Episode Measure,” which can be found in the “FY 2016 IPPS NPRM Episode Supplemental Documentation” report at:
We invited public comment on our proposals.
We received a number of comments on the proposed measures in general. The following comments apply to all four of the proposed episode-based payment measures.
The measures have been conditionally supported by the MAP, and the measures will be submitted to the NQF when the NQF opens a call for submission for episode-based measures. We think that these measures serve an important purpose and fill a gap in available resource use data. Public reporting will help consumers identify hospitals involved in the provision of efficient care for these conditions and procedures. In addition, public reporting is an important tool to incentivize changes in behavior and encourage hospitals to look for opportunities for improved efficiency. Further, we believe that publicly displaying measure performance data allows us to provide the desired transparency to consumers and stakeholders.
In response to commenters' concerns about validity and feasibility of the Clinical Episode-Based Payment measures, the measures follow the general construction of the previously adopted, NQF-endorsed, Hospital IQR Program measure, Payment-Standardized Medicare Spending per Beneficiary (MSPB) (NQF #2158), described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51626). Similar to the MSPB measure, the Clinical Episode-Based Payment measures are constructed using Medicare Parts A and B claims data. As in the MSPB measure, these episode-based payment measures group Parts A and B payment for three days prior to hospital admission to 30 days post-discharge and utilize a risk adjustment model that includes patient characteristics along with other factors (for example, attributes of inpatient stays) similar to the MSPB measure. The successful implementation of the MSPB measure provides evidence to the feasibility of the Clinical Episode-Based Payment measures.
As we noted in the FY 2013 IPPS/LTCH PPS final rule, published research indicates that spending for an episode of care varies “greatly” among hospitals (N Engl J Med. 2008; 359: 3-5) and measures for which there is a larger inter-hospital variability are more likely to be reliable (77 FR 53588 through 53589). The condition-specific cost measures we proposed were selected, in part, because they represent common conditions with evidence of large variation in payments. In addition to the positive correlation between high variability and measure reliability, the selection of measures reflecting common conditions and procedures with large variation in cost encourages hospitals to work to provide higher value care where there is the most opportunity for improvement. This will allow the greatest number of patients to benefit from improvements, and will ensure the largest sample sizes to ensure reliability. Episodes were also chosen based on the ability of the initial hospital care provided for a condition or procedure to influence near-term patient outcomes. This selection criterion helps to ensure measure validity, because there is less chance that differences are due to chance, but rather, they are more likely to be due to the actions taken by the hospital. The proposed measures were fully tested and reviewed by physicians from a variety of specialties to ensure clinical validity. Data on episode cost, frequency, and variation in costs from measure testing, which reflect the validity of the measures are included in the “Measure Methodology” report for proposed episodic payment measures, available at:
These measures are constructed using Medicare administrative claims data, which have been shown to be a reliable data element for measure construction. The NQF has found other resource use measures that are based on Medicare claims data to be reliable and valid. As one example, for the all-cause readmission measure (NQF #1789), “reliability and validity [at the data element level and at the measured score level] was generally received as adequate by the steering committee” (NQF, Feb. 2012: Patient Outcomes All Cause Readmissions Expedited Review Pre-voting Call Transcript), available at:
Further, in a memorandum to the NQF Board of Directors, the NQF's Senior Vice President for Performance Measures report noted that the majority of NQF committee members stated that the Hospital-wide All Cause Readmission Measure was highly reliable (Burstin, June 2012: Appeal of All Cause Hospital-wide All Cause Readmission Measure), available at:
Although we believe the measures to be valid and reliable, in response to comments, we will post a measure reliability analysis and propose in future rulemaking a minimum number of cases for reporting to ensure reliability of publicly-reported data, prior to public reporting of these measures.
In response to comments, we are postponing implementation and we are finalizing these three measures for the FY 2019 payment determination and subsequent years (CY 2017 performance period and subsequent years), instead of for the FY 2018 payment determination and subsequent years (CY 2016 performance period and subsequent years) as proposed, in order to allow hospitals to gain experience with the measures through confidential feedback reports. During the interim FY 2018 payment determination (CY 2016 performance period) and prior to inclusion for public reporting, we will provide hospitals with confidential hospital-specific feedback reports and supplemental files containing performance data on the three Clinical Episode-Based Payment measures we are finalizing. We currently provide confidential hospital-specific feedback reports and supplemental files for the MSPB measure, and we intend to create similar reports and supplemental files for the three Clinical Episode-Based Payment measures. We believe that the confidential hospital-specific feedback reports and supplemental files will provide hospitals with valuable data to facilitate improvement in the efficiency of the care they provide.
With regard to the comment that the measures do not account for the degree of health system integration, the aforementioned opportunities for hospitals to exert control over post discharge expenditure and efficiency exists, regardless of the degree of integration of a health system, and in cases where systems are not well-integrated, there may be an even greater opportunity for redesign of care processes to achieve high performance on these measures. We are even more confident now that hospitals can exert influence over post-discharge expenditures in the case of the proposed episode-based payment measures, because the services within the episodes are only those that are clinically-related to the reason for admission.
To ensure that it would be appropriate to attribute the Medicare payments included in these measures to a discharging hospital, one of the selection criteria for episode development was the degree to which the clinical experts consulted agree that standardized Medicare payments for services provided during the episode can be linked to the care provided during the hospitalization. Hospital-based providers exert influence on referrals to post-acute care and service utilization, thus linking hospitalization with near-term outcomes. Measuring national variation in service utilization for these episodes would facilitate the identification of the clinical practices and arrangements that have best outcomes and efficiency. In addition, we have selected condition-specific cost measures for common conditions with evidence of large variation in payments to encourage higher value care where there is the most opportunity for improvement, the greatest number of patients to benefit from improvements, and the largest sample size to ensure reliability.
In response to the comment that the measures do not adequately address the variation in the mix of patients for whom Medicare expenditures are captured in the proposed measures, we note that the episodes within the measures are risk-adjusted, to account for the age and severity of illness of the beneficiary. This risk adjustment methodology is the same as that used for the NQF-endorsed MSPB measure (NQF #2158) and acknowledges the differences in a given hospital's case mix, so that their performance can be compared to a national average.
Furthermore, while we agree with the commenters' views regarding the value in aligning resource use measures across settings, we disagree that the reporting of these important Medicare payment measures is not appropriate for hospital-level reporting or that they would be more appropriate in an Accountable Care Organization or bundled payments structure.
With regard to the comment that the measures should be delayed until physicians and post-acute care settings are addressed, we note that we currently have physician-based analogues of the measures in the Physician Feedback Program. While post-acute care measurement programs are under development, we will take the commenter's suggestion that similar measures should be incorporated into them under consideration. We do not believe that it would be appropriate to delay the public reporting of this valuable and actionable payment information until such time as any similar, post-acute care measures are implemented. As noted above, these measures were developed in response to hospital stakeholders' feedback that we should develop a more robust and clinically cohesive measure set for hospitals. Data for these measures were reported in the 2012 Supplemental Quality and Resource Use Reports (QRURs), which are confidential feedback reports for physicians and group practices, and will be reported again in the 2014 Supplemental QRURs (79 FR 40515). More information can be found at:
These measures will be displayed on
After consideration of the public comments we received, we are finalizing a modification of our proposals for the episode-base payment measures. We are finalizing three of the four proposed measures (the Kidney/Urinary Tract Infection Clinical Episode-Based Payment measure, the Cellulitis Clinical Episode-Based Payment measure, and the Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure). We are not finalizing the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure.
In addition, we are postponing implementation and finalizing these three measures for the FY 2019 payment determination and subsequent years (CY 2017 performance period and subsequent years), instead of the FY 2018 payment determination and subsequent years (CY 2016 performance period and subsequent years) as proposed.
Furthermore, we will provide hospitals with confidential hospital-specific feedback reports containing performance data on these three measures during the interim FY 2018 payment determination (CY 2016 performance period) prior to inclusion for public reporting. Since we are not finalizing the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure, it will not be included in the confidential hospital-specific feedback reports.
Between 2009 and 2012, there were 337,419 total hip arthroplasty (THA) procedures and 750,569 total knee arthroplasty (TKA) procedures for Medicare FFS patients 65 years and older.
There is evidence of variation in payments at hospitals for patients undergoing THA and/or TKA. The mean 90-day risk-standardized payment among Medicare FFS patients aged 65 or older with a qualifying elective primary THA/TKA procedure in 2010-2012 was $23,248, and ranged from $16,421 to $35,123 across 2,614 hospitals.
Quality measures for THA/TKA, such as: (1) Hospital-level risk-standardized complication rate (RSCR) following elective primary total hip arthroplasty (THA) and/or total knee arthroplasty (TKA) (NQF #1550) (77 FR 53515 through 53518), and (2) Hospital-level risk-standardized readmission rate (RSRR) following elective primary total hip arthroplasty (THA) and/or total knee arthroplasty (TKA) (NQF #1551) (77 FR 53519 through 53521), are already adopted in the Hospital IQR Program and publicly reported, making THA/TKA an ideal procedure for which to assess payments for Medicare patients and relative hospital value. Including this proposed measure in the Hospital IQR Program and publicly reporting it on
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24572 through 24574), we proposed to include this non-NQF-endorsed measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. Although the proposed measure is not currently NQF-endorsed, we considered available measures that have been endorsed by the NQF, and were unable to identify any measures that assess hospital risk-standardized payment associated with a 90-day episode-of-care for elective primary THA/TKA. We also are not aware of any other 90-day episode-of-care THA/TKA measures that have been endorsed or adopted by a consensus organization, and found no other feasible and practical measures on this topic.
The MAP conditionally supported this measure on December 10, 2014 pending a timely review by the NQF Cost and Resource Use Standing Committee. The MAP recommended
The THA/TKA payment measure assesses hospital risk-standardized payment associated with a 90-day episode-of-care for elective primary THA/TKA for any hospital participating in the Hospital IQR Program.
When considering payments for Medicare patients, we focused on a 90-day episode-of-care triggered by admission for several key reasons. First, THA and TKA procedures require ongoing post-discharge care. Second, the 90-day preset window encourages hospitals to optimize post-discharge care. Third, mechanical complications and wound or joint infections may present after 30 days and rates of these complications remain elevated for at least 90 days. Fourth, the 90-day post-admission timeframe is consistent with CMS' THA/TKA complication measure, which captures specific complications up to 90 days after admission. Furthermore, we obtained input from a national Technical Expert Panel (TEP) on the most appropriate window for the episode-of-care. Based on TEP feedback, we chose a measure follow-up period of 90 days that includes all payments for the initial 30 days of the episode, and all payments in a predefined set of care settings and services for days 31 through 90.
We refer readers to the measure methodology report and measure risk adjustment statistical model on our Measure Methodology page, under the “Downloads” section of the Web page. We refer readers to the “Hip and Knee Arthroplasty Payment” zip file on our Web site at:
The proposed Hospital-Level, Risk-Standardized Payment Associated with a 90-Day Episode-of-Care for Elective Primary THA and/or TKA measure uses Part A and Part B Medicare administrative claims data that contain payments for Medicare FFS beneficiaries who were hospitalized and underwent an elective THA/TKA. This measure will use 3 years of data.
The primary outcome of this measure is the hospital-level risk-standardized payment for an elective primary THA/TKA episode-of-care. This measure captures payments for Medicare patients across multiple care settings, services, and supplies (inpatient, outpatient, skilled nursing facility, home health, hospice, physician/clinical laboratory/ambulance services, and durable medical equipment, prosthetics/orthotics, and supplies). This measure includes patient copayments as well as payments from coinsurance. While the approach to standardization in calculating payments over the episode is very similar to the previously adopted Hospital IQR Program measure, Payment-Standardized Medicare Spending Per Beneficiary (MSPB) as described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51626), the THA/TKA measure has a different cohort and risk-model. For more information on how MSPB is calculated, we refer readers to the measure development reports found on the QualityNet Web site at
To isolate payment variation that reflects practice patterns rather than CMS payment adjustments, this measure excludes policy and geography payment adjustments unrelated to clinical care decisions. We achieve this by “stripping” or “standardizing” payments for each care setting. Stripping refers to removing geographic differences and policy adjustments in payment rates for individual services from the total payment for that service. Standardizing refers to averaging payments across geographic areas for those services where geographic differences in payment cannot be stripped. Stripping and standardizing the payment amounts allows for a fair comparison across hospitals based solely on payments for decisions related to clinical care of THA/TKA.
By risk standardizing the payment measure, we are able to adjust for case-mix at any given hospital and compare a specific hospital's risk-standardized payment (RSP) to an average hospital with a similar case-mix. We define our analytic timeframe as beginning with the index admission for an elective primary THA/TKA to 90 days post-admission. The measurement includes all payments for the first 30 days after admission and only certain payments based on a pre-defined set of care settings and services for days 31-90.
The measure includes Medicare FFS patients aged 65 or older admitted for elective primary THA and/or TKA, and calculates payments made on behalf of these patients (including payments made by CMS, patients, and other insurers) over a 90-day episode-of-care beginning with the index admission. The measure cohort aligns with another previously adopted Hospital IQR Program measure—90-day hospital-level risk-standardized complication rate (RSCR) following elective primary THA and/or TKA (NQF #1550) (77 FR 53516 through 53518). Consistent with this previously adopted measure, the proposed measure includes hospitalizations identified by a procedure code of either THA or TKA, as classified by the ICD-9-CM codes 81.51 and 81.54, respectively. The measure includes only those hospitalizations from short-stay acute care hospitals in the index cohort and restricts the cohort to patients enrolled in FFS Medicare Parts A and B (with no Medicare Advantage coverage).
This proposed measure includes hospitalizations for patients 65 years and older at the time of index admission. An index admission/hospitalization is the initial admission for a qualifying elective primary THA/TKA that triggers the 90-day episode-of-care for this payment measure. An index admission is the hospitalization to which the RSP outcome is attributed and includes index admissions for patients having a qualifying elective primary THA/TKA procedure. The measure excludes the following admissions from the measure cohort: (1) Admissions for patients without at least 90 days of post-admission enrollment in FFS Medicare Parts A and B because this is necessary to identify the outcome (payments) in the dataset over the analytic period; (2) admissions for patients discharged against medical advice (AMA) because hospitals had limited opportunity to implement high quality care; (3) admissions for patients transferred to federal hospitals because we do not have claims data for these
The measure adjusts for differences across hospitals in how payments are affected by patient comorbidities relative to patients cared for by other hospitals. We refer readers to the measure risk adjustment statistical model on our Measure Methodology Web page, under the “Downloads” section of the Web page. Please see the “Hip and Knee Arthroplasty Payment” zip file on our Web site at:
The measure is calculated using a hierarchical generalized linear model with a log link and an inverse Gaussian distribution, which is a widely accepted statistical method that enables fair evaluation of relative hospital performance by taking into account patient risk factors as well as the number of patients that a hospital treats. This statistical model accounts for the structure of the data (patients clustered within hospitals) and calculates: (1) How much variation in hospital payment overall is accounted for by patients' individual risk factors (such as age and other medical conditions); and (2) how much variation is accounted for by hospital-specific performance. This approach appropriately models a positive, continuous, right-skewed outcome like payment and also accounts for the types of patients a hospital treats (that is, hospital case mix), the number of patients it treats, and the quality of care it provides. This hierarchical generalized linear model is an appropriate statistical approach to measuring quality based on patient outcomes when the patients are clustered within hospitals and sample sizes vary across hospitals. Clustered patients are within the same hospital, and the quality of care of the hospital affects all patients, so the outcomes for each hospital's patients are not fully independent (that is, completely unrelated) as is assumed by many statistical models. As noted above, the measure methodology defines hospital case mix based on the clinical diagnoses provided in the hospital claims for their patients' inpatient and outpatient visits for the 12 months prior to the THA/TKA hospitalization as well as select conditions indicated by secondary diagnosis codes on index admission. This methodology specifically does not, however, account for diagnoses present in the index admission that may indicate complications of care rather than patient comorbidities.
The RSP is calculated as the ratio of predicted payments to expected payments and then the ratio is multiplied by the national unadjusted average payment for an episode-of-care. The ratio is greater than one for hospitals that have higher payments than would be expected for an average hospital with similar cases and less than one if the hospital has lower payments than would be expected for an average hospital with similar cases. This approach is analogous to a ratio of “observed” or “crude” rate to an “expected” or “risk-adjusted” rate used in other similar types of statistical analyses. The RSP is a point estimate—the best estimate of a hospital's payment based on the hospital's case-mix.
To calculate the measure result for the Hospital IQR Program, we computed an interval estimate, which is similar to the concept of a confidence interval, to characterize the level of uncertainty around the point estimate. We use the point estimate and interval estimate to determine hospital performance (for example, higher than expected, as expected, or lower than expected). The interval estimate indicates that the true value of the payment ratio lies between the lower limit and the upper limit of the interval. For more detailed information on the calculation methodology, we refer readers to our Measure Methodology Web page, under the “Downloads” section. We refer readers to the “Hip and Knee Arthroplasty Payment” zip file on our Web site at:
We invited public comment on our proposal to adopt the Hospital-Level, Risk-Standardized Payment Associated with a 90-Day Episode-of-Care for Elective Primary THA and/or TKA measure for the FY 2018 payment determination and subsequent years.
The THA/TKA episode-of-care payment measure's results are intended to reflect differences in payments for patients over a 90-day period that are influenced by hospital care decisions. However, these results alone do not reflect the quality of care provided by hospitals. The payment measure's results are more meaningful when presented in the context of other outcome measures to facilitate profiling hospital value (payments and quality). Accordingly, we aligned key specifications of the payment measure with those of the corresponding complication measure. We plan to report the results of the payment measure on
We considered available measures that have been endorsed or adopted by the NQF. We also are not aware of any other similar measures that have been endorsed or adopted by a consensus organization, and found no other feasible and practical measures on this topic. We believe it is imperative to adopt this measure as it aims to address common elective procedures among Medicare beneficiaries with substantial variability in payments due to different practice patterns. In addition, the measure aligns with our priority objectives and the National Quality Strategy to transform the national healthcare system by measuring and rewarding affordable, quality care. This measure provides transparency on the payments made for Medicare beneficiaries undergoing THA/TKA. Hospitals receive detailed information on how they compare with other institutions regarding the amount and venues of resources expended on patients. Therefore, the measure provides insight to hospitals that is not otherwise possible. Given that hospitals have experience with similar payment measure methodology, such as the measures of AMI, HF and PN payment that are reported on
The MAP conditionally supported this measure on December 10, 2014 pending a timely review by the NQF Cost and Resource Use Standing Committee. Although the measure is not currently NQF-endorsed, it is pending submission to NQF for initial endorsement and will be brought to the entity once an appropriate project is called.
We ensure the measure reliability, in part, because this measure uses variables from claims data submitted by hospitals for payment, data from Medicare fee schedules, data from final rules for Medicare prospective payment systems and payment policies, and CMS-published wage index data. Our final rules dictate payment adjustments and fees for services for each year across care settings. By incorporating these publicly available final rules into our payment calculation, we ensure our payment calculations are reliably estimated for that year. In constructing the measure, we aimed to utilize only those data elements from the claims data that have both face validity and reliability. Moreover, we assess the measure reliability as part of the development process and found very strong reliability for this measure when comparing the results for hospitals measured with two different random samples.
In addition, during development of the THA/TKA payment measure, we convened a national TEP. We reviewed the cohort, outcome and risk-adjustment approach with the TEP as well as public comments on the measure. We asked the TEP to evaluate the face validity of the measure and the consensus of the TEP favored the face validity of the measure. Finally, the measure is consistent with the technical approach to outcomes measurement set forth in NQF guidance for outcomes measures,
Regarding the breadth of costs assessed in the THA/TKA payment measure, we believe this measure gives stakeholders the opportunity to gain insight into a cascade of medical events triggered by THA/TKA hospitalization and the payments associated with those events. The measure sums payments for Medicare patients, including index admission as well as post-discharge payments for: readmission or other post-discharge inpatient care, skilled nursing facilities, outpatient providers, home health agencies, hospice care, physician/clinical laboratory/ambulance services, and durable medical equipment, prosthetics/orthotics, and supplies. From days 0-30, the measure includes all payments for claims made in this time period. From days 31-90, the measure includes only payments related to THA/TKA. The results show differences in the patterns of post-discharge care and associated payments for Medicare patients across a continuum of care beginning with a hospitalization for THA/TKA and following patients 90 days after admission. It is important to include this span of payment information to appropriately examine the patterns of post-discharge care. For full details, we
We also note that the THA/TKA episode-of-care payment measure does include risk adjustment for 56 administrative claims-based variables to account for differences in patient case mix that could lead to differences in payments, including patient comorbidities. The measure includes risk variables that assess patient frailty, such as protein-calorie malnutrition, metastatic cancer, dementia, and age, and thus likely does capture the clinical risk factors most concerning to clinicians. In addition, the measure includes risk adjustment for demographic variables, including age and gender. For full details on the measure's clinical variables included in the risk adjustment, we refer readers to Table 5 of the Hospital-Level, Risk-Standardized Payment Associated with a 90-Day Episode of Care for Elective Primary Total Hip Arthroplasty (THA) and/or Total Knee Arthroplasty (TKA) (Version 1.0) 2014 Measure Methodology Report (
Key specifications of the THA/TKA payment measure have been harmonized and are aligned with the corresponding THA/TKA complications measure methodology.
The objective of this episode-of-care payment measure is to encourage efficiencies gained by well-coordinated care across a patient's experience of total hip/knee arthroplasty. Hospitalizations represent a brief period of care that requires ongoing management post-discharge and hospitals are often directly responsible for scheduling post-discharge follow-up. This measure includes only primary elective THA/TKA. Therefore, providers have an opportunity to plan for both the acute and post-acute care their patients will receive including follow-up visits, choice of rehabilitation facility or home health services, as well as necessary durable medical equipment. Hospital quality also influences the likelihood of costly prolonged hospital stay or returns to the hospital in the post-discharge
We believe that even though this measure does not only reflect beneficiaries' own financial obligation, it still provides valuable information. This measure provides transparency on the payments made for Medicare beneficiaries undergoing THA/TKA. The THA/TKA episode-of-care payment measure's results are intended to reflect differences in payments for patients over a 90-day period that are influenced by hospital care decisions. Consumers will be able to examine the payment measure results to determine if the payments for the 90 day episode-of-care following a hip or knee replacement at a given hospital are higher than would be expected at an average hospital. This measure includes payments made by Medicare, other insurers, as well as patients themselves. We believe this transparency will provide information about variation in costs of care for THA/TKA that can inform patient decisions for this primary, elective procedure.
Furthermore, we believe this measure will be beneficial to patients, and is more meaningful, when presented in the context of other outcome measures to facilitate profiling hospital value (payments and quality); and so its inclusion in the Hospital IQR Program is appropriate and beneficial. We aligned key specifications of the payment measure with those of the corresponding complication measure already adopted in the Hospital IQR Program. We plan to report the results of the payment measure on
In addition, as already established in the Hospital IQR Program, hospitals have the opportunity to review its data before they are made public (79 FR 50203). During this preview period prior to public reporting, we will send hospitals hospital-specific reports (HSRs) that will provide patient-level data, as well as State and national results. This will give hospitals an opportunity to review granular resource use data for the THA/TKA payment measure.
The MAP conditionally supported this measure on December 10, 2014 pending a timely review by the NQF Cost and Resource Use Standing Committee. Although the measure is not currently NQF endorsed, it is pending submission to NQF for initial endorsement and will be brought to the entity once an appropriate project is called.
After consideration of the public comments we received, we are finalizing the Hospital Level, Risk-Standardized Payment Associated with a 90-Day Episode-of-Care for Elective Primary THA and/or TKA measure for the FY 2018 payment determination and subsequent years as proposed.
Acute myocardial infarction (AMI) is a priority area for outcomes measurement because it is a common condition associated with considerable morbidity, mortality, and healthcare spending. We note that AMI was the tenth most common principal discharge diagnosis among patients with Medicare in 2012.
Some of the costs for AMI can be attributed to high acute care utilization for post-discharge AMI patients in the form of readmissions, observation stays, and ED visits. We note that patients admitted for AMI have disproportionately high readmission rates, and that readmission rates following discharge for AMI are highly variable across hospitals in the United States.
In addition, over the past decade, the use of observation stays has rapidly increased. Specifically, between 2001 and 2008, the use of observation services increased nearly three-fold,
Thus, in the context of the previously adopted and publicly reported READM-30-AMI measure, the increasing use of ED visits and observation stays has raised concerns that the READM-30-AMI measure does not capture the full range of unplanned acute care in the post-discharge period. In particular, there exists concern that high use of observation stays could in some cases replace readmissions, and hospitals with high rates of observation stays in the post-discharge period may therefore have low readmission rates that do not accurately reflect the quality of care.
In response to these concerns, CMS improved on a previously existing non-Hospital IQR Program measure entitled “30-Day Post-Hospital AMI Discharge Care Transition Composite” (NQF
The measure assesses all-cause acute care utilization for post-discharge AMI patients for several reasons. First, from the patient perspective, acute care utilization for any cause is undesirable. It is costly, exposes patients to additional risks of medical care, interferes with work and family care, and imposes significant burden on caregivers. Second, limiting the measure to inpatient utilization may make it susceptible to gaming. Finally, it is often hard to exclude quality concerns and accountability based on the documented cause of a hospital visit. Therefore, this measure includes all-cause utilization.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24574 through 24576), we proposed to include this improved measure under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered existing measures related to care transitions that have been endorsed by the NQF. Existing process measures capture many important domains of care transitions such as education, medication reconciliation and follow-up, but all require chart review and manual abstraction. Existing outcome measures are focused entirely on readmissions or complications and do not include observation stays or ED visits. We also are not aware of any other measures that assess the quality of transitional care by measuring 30-day risk-standardized days in acute care (hospital readmissions, observation stays, and ED visits) following hospitalization for AMI that have been endorsed or adopted by a consensus organization, and found no other feasible and practical measures on this topic.
The MAP conditionally supported this measure on the condition that this measure is reviewed by NQF and endorsed. We refer readers to the Spreadsheet of MAP 2015 Final Recommendations available at:
This Excess Days in Acute Care after Hospitalization for AMI measure is a risk-standardized outcome measure that compares the number of days that patients are predicted to spend in acute care across the full spectrum of possible acute care events (hospital readmissions, observation stays, and ED visits) after discharge from a hospital for AMI, compared to the days expected based on their degree of illness.
The proposed measure is administrative claims-based and will use 3 years of data. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized for AMI.
The outcome of the measure is the excess number of days patients spend in acute care (hospital readmissions, observation stays, and ED visits) per 100 discharges during the first 30 days after discharge from the hospital, relative to the number spent by the same patients discharged from an average hospital. The measure defines days in acute care as days spent: (1) In an ED, (2) admitted to observation status, or (3) admitted as an unplanned readmission for any cause within 30 days from the date of discharge from the index AMI hospitalization. Readmission days are calculated as the discharge date minus the admission date. Admissions that extend beyond the 30-day follow-up period are truncated on day 30. Observation days are calculated by the hours in observation, rounded up to the nearest half day. On the advice of our TEP, an ED treat-and-release visit is counted as one half day. ED visits are not counted as a full day because the majority of treat-and-release visits last fewer than 12 hours.
“Planned” readmissions are those planned by providers for anticipated medical treatment or procedures that must be provided in the inpatient setting. This measure excludes planned readmissions using the planned readmission algorithm previously developed for the READM-30-AMI measure. A more detailed discussion of exclusions follows below.
The measure counts all use of acute care occurring in the 30-day post-discharge period. For example, if a patient returns to the ED three times, the measure counts each ED visit as a half-day. Similarly, if a patient has two hospitalizations within 30 days, the days spent in each are counted. We take this approach to capture the full patient experience of need for acute care in the post-discharge period.
We defined the eligible cohort using the same criteria as the existing Hospital IQR Program measure, READM-30-AMI, except that this proposed measure does not include patients admitted to Veterans Administration hospitals. That is, the cohort includes Medicare FFS patients aged 65 years or older: (1) With a principal discharge diagnosis of AMI; (2) enrolled in Part A and Part B Medicare for the 12 months prior to the date of admission, and enrolled in Part A during the index admission; (3) who were discharged from a non-Federal acute care hospital; (4) who were not transferred to another acute care facility; and (5) were alive at discharge. We defined the cohorts using the following ICD-9-CM diagnosis codes identified in inpatient claims data:
• 410.00 (Acute myocardial infarction of anterolateral wall, episode of care unspecified);
• 410.01 (Acute myocardial infarction of anterolateral wall, initial episode of care);
• 410.10 (Acute myocardial infarction of other anterior wall, episode of care unspecified);
• 410.11 (Acute myocardial infarction of other anterior wall, initial episode of care);
• 410.20 (Acute myocardial infarction of inferolateral wall, episode of care unspecified);
• 410.21 (Acute myocardial infarction of inferolateral wall, initial episode of care);
• 410.30 (Acute myocardial infarction of inferoposterior wall, episode of care unspecified);
• 410.31 (Acute myocardial infarction of inferoposterior wall, initial episode of care);
• 410.40 (Acute myocardial infarction of other inferior wall, episode of care unspecified);
• 410.41 (Acute myocardial infarction of other inferior wall, initial episode of care);
• 410.50 (Acute myocardial infarction of other lateral wall, episode of care unspecified);
• 410.51 (Acute myocardial infarction of other lateral wall, initial episode of care);
• 410.60 (True posterior wall infarction, episode of care unspecified);
• 410.61 (True posterior wall infarction, initial episode of care);
• 410.70 (Subendocardial infarction, episode of care unspecified);
• 410.71 (Subendocardial infarction, initial episode of care);
• 410.80 (Acute myocardial infarction of other specified sites, episode of care unspecified);
• 410.81 (Acute myocardial infarction of other specified sites, initial episode of care);
• 410.90 (Acute myocardial infarction of unspecified site, episode of care unspecified);
• 410.91 (Acute myocardial infarction of unspecified site, initial episode of care).
The measure excludes the following admissions from the measure cohort: (1) Hospitalizations without at least 30 days of post-discharge enrollment in Part A and Part B FFS Medicare because the 30-day outcome cannot be assessed in this group since claims data are used to determine whether a patient was readmitted, was placed under observation, or visited the ED; (2) discharged against medical advice (AMA) because providers did not have the opportunity to deliver full care and prepare the patient for discharge; (3) hospitalizations for patients admitted and discharged on the same day (and not transferred or deceased) because these patients likely did not suffer clinically significant AMI; and (4) hospitalizations for patients with an index admission within 30 days of a previous index admission because additional AMI admissions within 30 days are part of the outcome, and we choose not to count a single admission both as an index admission and a readmission for another index admission.
The measure adjusts for variables that are clinically relevant and have strong relationships with the outcome. The measure seeks to adjust for case-mix differences among hospitals based on the clinical status of the patient at the time of the index admission. Accordingly, only comorbidities that convey information about the patient at that time or in the 12 months prior, and not complications that arise during the course of the index hospitalization, are included in the risk adjustment. The measure does not adjust for patients' admission source or their discharge disposition (for example, skilled nursing facility) because these factors are associated with the structure of the healthcare system, not solely patients' clinical comorbidities. Regional differences in the availability of post-acute care providers and practice patterns might exert undue influence on model results. In addition, these data fields are not audited and are not as reliable as diagnosis codes.
The outcome is risk adjusted using a two-part random effects model. This statistical model, often referred to as a “hurdle” model, accounts for the structure of the data (patients clustered within hospitals) and the observed distribution of the outcome. Specifically, it models the number of acute care days for each patient as: (a) A probability that they have a non-zero number of days; and (b) a number of days, given that this number is non-zero. The first part is specified as a logit model, and the second part is specified as a Poisson model, with both parts having the same risk-adjustment variables and each part having a random effect. This is an accepted statistical method that explicitly estimates how much of the variation in acute care days is accounted for by patient risk factors, how much by the hospital where the patient is treated, and how much is explained by neither. This model is used to calculate the predicted (including random effects) and expected (assuming random effects are zero) number of days for each patient, and the average difference between these for each hospital is used to construct the risk-standardized Excess Acute Care Days.
The EACD is calculated as the difference between the average of the predicted number of days spent in acute care for patients discharged from each hospital and the average number of days that would have been expected if those patients had been cared for at an average hospital, and then the difference is multiplied by 100 so that EACD represents EACD per 100 discharges. We multiply the final measure by 100 to be consistent with the reporting of the existing READM-30-AMI measure. A positive result indicates that patients spend more days in acute care post-discharge than expected; a negative result indicates that patients spend fewer days in acute care than expected.
We invited public comment on our proposal to adopt the Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction measure for the FY 2018 payment determination and subsequent years.
Because comments received apply to both the Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction measure and Excess Days in Acute Care after Hospitalization for Heart Failure measure, we discuss comments and our final policies for both measures at the end of section VIII.A.7.e.(8) of the preamble of this final rule.
Heart failure is a priority area for outcomes measurement because it is a common condition associated with considerable morbidity, mortality, and healthcare spending. Heart failure was the second most common principal discharge diagnosis among patients with Medicare in 2012.
Some of the costs for heart failure can be attributed to high acute care utilization for post-discharge heart failure patients in the form of readmissions, observation stays, and ED visits. Patients admitted for heart failure have disproportionately high readmission rates. Readmission rates following discharge for heart failure are highly variable across hospitals in the United States.
In addition, over the past decade, the use of observation stays has rapidly increased. Specifically, between 2001 and 2008, the use of observation services increased nearly three-fold,
Thus, in the context of the currently adopted and publicly reported Hospital IQR Program READM-30-HF measure, the increasing use of ED visits and observation stays has raised concerns that the READM-30-HF measure does not capture the full range of unplanned acute care in the post-discharge period. In particular, there exists concern that high use of observation stays could in some cases replace readmissions, and hospitals with high rates of observation stays in the post-discharge period may therefore have low readmission rates that do not accurately reflect the quality of care.
In response to these concerns, we improved on an existing non-Hospital IQR Program measure entitled “30-Day Post-Hospital HF Discharge Care Transition Composite” (NQF #0699). The improved measure (now called Excess Days in Acute Care after Hospitalization for Heart Failure) is a risk-adjusted outcome measure for heart failure that incorporates the full range of acute care use that patients may experience post-discharge: Hospital readmissions, observation stays, and ED visits.
The measure assesses all-cause acute care utilization for post-discharge heart failure patients for several reasons. First, from the patient perspective, acute care utilization for any cause is undesirable. It is costly, exposes patients to additional risks of medical care, interferes with work and family care, and imposes significant burden on caregivers. Second, limiting the measure to inpatient utilization may make it susceptible to gaming. Finally, it is often hard to exclude quality concerns and accountability based on the documented cause of a hospital visit. Therefore, this measure includes all-cause utilization.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24576 through 234779), we proposed this improved measure in the Hospital IQR Program under the exception authority in section 1886(b)(3)(B)(IX)(bb) of the Act as previously discussed in section VIII.A.7. of the preamble of this final rule. We considered other existing measures related to care transitions that have been endorsed by the NQF. Existing process measures capture many important domains of care transitions such as education, medication reconciliation and follow-up, but all require chart review and manual abstraction. Existing outcome measures are focused entirely on readmissions or complications and do not include observation stays or ED visits. We also are not aware of any other measures that assess the quality of transitional care by measuring 30-day risk-standardized days in acute care (hospital readmissions, observation stays and ED visits) following hospitalization for heart failure that have been endorsed or adopted by a consensus organization, and found no other feasible and practical measures on this topic.
The MAP conditionally supported this measure on the condition that it is reviewed by NQF and endorsed, as detailed in the “Spreadsheet of MAP 2015 Final Recommendations” available at:
This Excess Days in Acute Care after Hospitalization for Heart Failure measure is a risk-standardized outcome measure that compares the number of days that patients are predicted to spend in acute care across the full spectrum of possible acute care events (hospital
The proposed measure is administrative claims-based and will use 3 years of data. It uses Part A and Part B Medicare administrative claims data from Medicare FFS beneficiaries hospitalized for heart failure.
The outcome of the measure is the excess number of days patients spend in acute care (hospital readmissions, observation stays, and ED visits) per 100 discharges during the first 30 days after discharge from the hospital, relative to the number spent by the same patients discharged from an average hospital. The measure defines days in acute care as days spent: (1) In an ED; (2) admitted to observation status; or (3) admitted as an unplanned readmission for any cause within 30 days from the date of discharge from the index heart failure hospitalization. Readmission days are calculated as the discharge date minus the admission date. Admissions that extend beyond the 30-day follow-up period are truncated on day 30. Observation days are calculated by the hours in observation, rounded up to the nearest half day. On the advice of our TEP, an ED treat-and-release visit is counted as one half day. ED visits are not counted as a full day because the majority of treat-and-release visits last fewer than 12 hours.
“Planned” readmissions are those planned by providers for anticipated medical treatment or procedures that must be provided in the inpatient setting. This measure excludes planned readmissions using the planned readmission algorithm (78 FR 50786 through 50787), a set of criteria for classifying readmissions that are likely to be planned among the general Medicare population using Medicare claims data, previously developed for Hospital IQR Program 30-day readmission measures, including the previously adopted READM-30-HF measure.
The measure counts all use of acute care occurring in the 30-day post-discharge period. For example, if a patient returns to the ED three times, the measure counts each ED visit as a half-day. Similarly, if a patient has two hospitalizations within 30 days, the days spent in each are counted. We take this approach to capture the full patient experience of need for acute care in the post-discharge period.
We defined the eligible cohort using the same criteria as the previously adopted Hospital IQR Program READM-30-HF measure (73 FR 46806 through 48610). The READM-30-HF cohort criteria are included in a report posted on our Measure Methodology Web page, under the “Downloads” section in the “AMI, HF, PN, COPD, and Stroke Readmission Updates” zip file on our Web site at:
• 402.01 (Malignant hypertensive heart disease with heart failure);
• 402.11 (Benign hypertensive heart disease with heart failure);
• 402.91 (Unspecified hypertensive heart disease with heart failure);
• 404.01 (Hypertensive heart and chronic kidney disease, malignant, with heart failure and with chronic kidney disease stage I through stage IV, or unspecified);
• 404.03 (Hypertensive heart and chronic kidney disease, malignant, with heart failure and with chronic kidney disease stage V or end stage renal disease);
• 04.11 (Hypertensive heart and chronic kidney disease, benign, with heart failure and with chronic kidney disease stage I through stage IV, or unspecified);
• 404.13 (Hypertensive heart and chronic kidney disease, benign, with heart failure and chronic kidney disease stage V or end stage renal disease);
• 404.91 (Hypertensive heart and chronic kidney disease, unspecified, with heart failure and with chronic kidney disease stage I through stage IV, or unspecified);
• 404.93 (Hypertensive heart and chronic kidney disease, unspecified, with heart failure and chronic kidney disease stage V or end stage renal disease);
• 428.0 (Congestive heart failure, unspecified);
• 428.1 (Left heart failure);
• 428.20 (Systolic heart failure, unspecified);
• 428.21 (Acute systolic heart failure);
• 428.22 (Chronic systolic heart failure);
• 428.23 (Acute on chronic systolic heart failure);
• 428.30 (Diastolic heart failure, unspecified);
• 428.31 (Acute diastolic heart failure);
• 428.32 (Chronic diastolic heart failure);
• 428.33 (Acute on chronic diastolic heart failure)
• 428.40 (Combined systolic and diastolic heart failure, unspecified);
• 428.41 (Acute combined systolic and diastolic heart failure);
• 428.42 (Chronic combined systolic and diastolic heart failure);
• 428.43 (Acute on chronic combined systolic and diastolic heart failure);
• 428.9 (Heart failure, unspecified).
The measure excludes the following admissions from the measure cohort: (1) Hospitalizations without at least 30 days of post-discharge enrollment in Part A and Part B FFS Medicare because the 30-day outcome cannot be assessed in this group because claims data are used to determine whether a patient was readmitted, was placed under observation, or visited the ED; (2) discharged against medical advice (AMA) because providers did not have the opportunity to deliver full care and prepare the patient for discharge; and (3) hospitalizations for patients with an index admission within 30 days of a previous index admission because additional heart failure admissions within 30 days are part of the outcome, and we choose not to count a single admission both as an index admission and a readmission for another index admission.
The measure adjusts for variables that are clinically relevant and have strong relationships with the outcome. The measure seeks to adjust for case-mix differences among hospitals based on the clinical status of the patient at the time of the index admission. Accordingly, only comorbidities that convey information about the patient at that time or in the 12 months prior, and not complications that arise during the course of the index hospitalization, are included in the risk adjustment. The measure does not adjust for patients' admission source or their discharge
The outcome is risk adjusted using a two-part random effects model. This statistical model, often referred to as a “hurdle” model, accounts for the structure of the data (patients clustered within hospitals) and the observed distribution of the outcome. Specifically, it models the number of acute care days for each patient as: (a) A probability that they have a non-zero number of days and (b) a number of days, given that this number is non-zero. The first part is specified as a logit model, and the second part is specified as a Poisson model, with both parts having the same risk-adjustment variables and each part having a random effect. This is an accepted statistical method that explicitly estimates how much of the variation in acute care days is accounted for by patient risk factors, how much by the hospital where the patient is treated, and how much is explained by neither. This model is used to calculate the predicted (including random effects) and expected (assuming random effects are zero) number of days for each patient, and the average difference between these for each hospital is used to construct the risk-standardized Excess Acute Care Days.
The EACD is calculated as the difference between the average of the predicted number of days spent in acute care for patients discharged from each hospital and the average number of days that would have been expected if those patients had been cared for at an average hospital, and then the difference is multiplied by 100 so that EACD represents EACD per 100 discharges. We multiply the final measure by 100 to be consistent with the reporting of the existing READM-30-HF measure. A positive result indicates that patients spend more days in acute care post-discharge than expected; a negative result indicates that patients spend fewer days in acute care than expected.
We invited public comment on our proposals to adopt both the Excess Days in Acute Care (EDAC) after Hospitalization for Heart Failure measure and the Excess Days in Acute Care (EDAC) after Hospitalization for Acute Myocardial Infarction measure (hereinafter, collectively referred to as the EDAC measures) for the FY 2018 payment determination and subsequent years.
Although the cohorts may contain patients with different disease severity, and therefore, different levels of risk, these measures are risk-adjusted to account for the fact that hospitals may have a different mix of patients with differing disease severity. For more details about the risk-adjustment methodology, we refer readers to the measures' methodology reports on our Measure Methodology Web page, under the “Downloads” section of the Web page. Please see the “AMI Excess Days in Acute Care” and “HF Excess Days in Acute Care” zip files on our Web site at:
Regarding adjusting for mortality, although death is not included as an outcome in the EDAC measures, the risk of death is accounted for within the EDAC measures. The EDAC measures only assess whether patients return to acute care during post-discharge days in which a patient is alive and therefore, at risk of returning to acute care in the “denominator.” Because some patients do not survive 30 days, not all patients are at the same risk for an acute event for the same amount of time. Therefore, we calculated exposure time as the number of days each patient survives after discharge, which is incorporated as part of the outcome. Moreover, to ensure that mortality rates are considered, we also report separate measures of 30-day mortality for AMI and heart failure within the Hospital IQR Program.
The measures are not intended as resource use measures, but do count the days in acute care. This reason for the use of a day count is two-fold: Longer stays may reflect that patients are returning with greater severity of illness and also because it reflects the experience of patients; the longer the stay, the greater the direct impact on the patients in terms of lost days of work or caregiving, cost, and risk of complications.
Several commenters were concerned that the inclusion of observation patients in the new excess acute care day measures masks the root causes of the increased use of observation stays which the commenter contended is the Recovery Audit Contractor process and the “2-midnight” policy. For this reason, the commenters encouraged CMS to further refine the RAC program as well as refine the assignment of patient status to ensure readmission measurement accuracy.
The EDAC measures are not being finalized for use in a pay-for-performance program, only for use in the pay-for-reporting Hospital IQR Program. Although these measures and the readmission measures all count readmission, the EDAC measures provide patients a more comprehensive and patient-centered perspective on the 30-day post-discharge experience. The Medicare spending measure (that is, MSPB measure) assess the payments made for care providing insight into costs, but do not directly assess the days that patients spend in an acute care setting following hospital discharge. For the Hospital IQR Program, hospitals would submit Medicare administrative claims for calculation of the EDAC measures, and regardless of the outcome of that data, hospitals would receive credit for submitting the information under the Program. Therefore, we do not believe hospitals would be “penalized” as they are not being asked to submit additional information and payment will not be adjusted based on results of these measures.
We understand that commenters have concerns about the interaction between Medicare payment policy regarding admissions spanning two midnights and the EDAC measures. However, the EDAC measures aim to capture all post-discharge acute care days, regardless of whether they are considered outpatient or inpatient. Therefore, the “2-midnight” policy or any changes to such policy will not influence the outcome of these measures, as all post-discharge days in acute care are captured whether they are billed as outpatient or inpatient days.
In the CY 2013 OPPS/ASC proposed rule (77 FR 45155 through 45157) and final rule with comment period (77 FR 68426 through 68433), we expressed concern about recent increases in the length of time that Medicare beneficiaries spend as hospital outpatients receiving observation services. Subsequently, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50906 through 50954), we addressed several of these concerns through changes in
At the same time, we imposed a moratorium on Recovery Auditor reviews related to patient status, which has been extended to impact dates of service spanning October 1, 2013 through September 30, 2015. In our CY 2016 OPPS/ASC proposed rule (80 FR 39350), we announced our plans to limit future Recovery Audit reviews surrounding patient status to providers with high denial rates, as determined through patient reviews conducted by CMS Quality Improvement Organizations, related to Part A payment policies for inpatient admission. In addition, Recovery Auditor patient status reviews will be performed under an abbreviated look-back period, if the provider bills the claim within 3 months of the date of service, to provide increased opportunities for denied Part A claims to receive inpatient Part B payment. We believe such ongoing and future initiatives address the commenters' concerns regarding extended observation.
Although the measures cannot capture all reasons for variability among hospitals, the EDAC measures incorporate risk adjustment using claims data to account for patient factors that could account for the observed variability. The measures use claims-based risk adjusters that are clinically relevant and have strong relationships with the outcome as has been done in other claims-based outcome measures in the Hospital IQR Program. This approach was supported by the TEP. As part of regular measure reevaluation, we monitor ongoing hospital performance to evaluate if certain hospitals are negatively affected by the measures.
Regarding whether better performance indicates better outcomes, we disagree that it is unclear whether performance on the measure indicates better outcomes. We are confident that for most patients, remaining home or remaining in a non-acute setting rather than returning to the hospital indicates a better outcome. Although some hospital returns are unavoidable, others may result from poor quality of care, overutilization of care or inadequate transitional care. Transitional care includes effective discharge planning, transfer of information at the time of discharge, patient assessment and education, and coordination-of-care and monitoring in the post-discharge period. When appropriate care transition processes are in place (for example, a patient is discharged to a suitable location, communication occurs between clinicians, medications are correctly reconciled, timely follow-up is arranged), fewer patients return to an acute care setting, either for an ED visit, observation stay, or hospital readmission during the 30 days post-discharge. Numerous studies have found an association between quality of inpatient or transitional care and early (typically 30-day) readmission rates
Regarding the commenters concern about combining the count of days for readmissions, observations stays or ED visits, we note that all acute care utilization is not equal in its disruption, cost or risk to patients. Longer returns to the hospital are more disruptive and impart greater risk to patients, and often represent greater severity of illness on return. This is why the EDAC measures' outcomes are expressed in days. We believe from a patient perspective it is the count of total days that is most meaningful and representative of the disruption. This is also why we combine day counts for each type of event and do not separately report rates of each type of event. This is also valuable for hospitals, because a hospital with a high number of ED visits may still be able to achieve a low number of total days in acute care by actively coordinating care from the ED and avoiding rehospitalizations. The measure combines these three visit types based on the concept that the rate of each type of event is not as relevant to patients as the total days that they spend in acute care settings.
We note that the EDAC measures will be submitted to NQF with appropriate consideration for SDS, if required, for endorsement proceedings once an appropriate measure endorsement project has a call for measures. We believe it is important to move forward with these measures in this program because they fill an important measurement gap. These measures address measurement gaps by including a range of outcomes that are important to patients (that is, readmissions, ED visits, and observation stays), by capturing the total amount of time patients spend in acute care, and by accounting for time at risk of an event (that is, survival time). We anticipate that the measures will support hospital efforts to further optimize quality of care, particularly the quality of transitional care, by providing a more comprehensive picture of post-discharge events. The measures will also provide more detailed information to consumers on what to expect following discharge. These measures also addresses the NQS priority of care coordination. The MAP conditionally supported these measures. Some MAP members noted these measures could help address concerns about the growing use of observation stays.
We do not dismiss the importance of hospital-level care and support hospitals using the level of care most appropriate for each particular patient's condition. Some returns to the acute care setting are necessary and the goal is not to avoid all post-discharge acute care service utilization. However, acute care utilization after discharge (that is, return to the ED, observation stay, and readmission), for any reason, is disruptive to patients and caregivers, costly to the healthcare system, and puts patients at additional risk of hospital-acquired infections and complications. When appropriate care transition processes are in place (for example, a patient is discharged to a suitable location, communication occurs between clinicians, medications are correctly reconciled, timely follow-up is arranged), fewer patients return to an acute care setting, whether for an ED visit, observation stay, or hospital readmission during the 30 days post-discharge. Numerous studies, which we cited in response to other comments, have found an association between quality of inpatient or transitional care and early (typically 30-day) readmission rates, and ED visits for a wide range of conditions including AMI and heart failure.
We do not believe this measure will limit patient anonymity in any fashion. We also note that the measure does not pose additional risks to patient confidentiality because the measure is based on claims data already collected.
We will continue to fine-tune the measure as we do with all measures, through the process of annual measure reevaluation. However, we measure all-cause acute care utilization for several reasons. First, from the patient perspective, acute care utilization for any cause is undesirable. Second, limiting the measures to acute care utilization for HF exacerbation and AMI may make them susceptible to gaming. Moreover, it is often hard to exclude quality concerns and accountability based on the documented cause of a hospital visit. Measuring all-cause acute care utilization encourages hospitals to evaluate the full range of factors that increase the risk of a patient's return to the acute care setting.
We appreciate the commenter's feedback on considering ED treat-and-release visits as half a day. The average length of stay for a treat-and-release patient from the ED is approximately four hours. Thus, we received feedback from the TEP advising that we consider a treat-and-release ED visit to be equivalent to one half day. A shorter length of stay may not capture the full burden on the patient to return to the hospital (for example, travel time and lost work time).
After consideration of the public comments we received, we are finalizing both the Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction and Excess Days in Acute Care after Hospitalization for Heart Failure measures for the FY 2018 payment determination and subsequent years as proposed.
The table below outlines the Hospital IQR Program measure set for the FY 2018 and FY 2019 payment determinations and subsequent years and includes both previously adopted measures and measures adopted in this final rule. We note that in past rules, we have included separate charts for each FY; however, here, we are combining the chart for the FY 2018 payment determination and subsequent years with that of the FY 2019 payment determination and subsequent years. We identify those measures that begin to be included in the program starting with the FY 2019 payment determination with a ±. In addition, all measures finalized for removal in this rule are not included in this chart.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24581 through 245820), we clarified our policy for one previously adopted voluntarily reported electronic clinical quality measure for the FY 2017 payment determination. Specifically, we clarified our requirements for the submission of STK-01 for CY 2015/FY 2017 payment determination. In addition, we proposed to expand our electronic clinical quality measure policy in order to make reporting of electronic clinical quality measures required for the FY 2018 payment determination and subsequent years.
For a discussion of our previously finalized electronic clinical quality measures and policies, we refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50811 through 50819), and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50241 through 50253; 50256 through 50259; and 50273 through 50276).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24581), we proposed to clarify reporting requirements for the Venous Thromboembolism (VTE) Prophylaxis (STK—01) Measure (NQF #0434). In the FY 2016 IPPS/LTCH PPS final rule (78 FR 50808), we stated that hospitals need not report the STK-01 measure as part of the STK measure set if reporting electronically, because no electronic specification existed for STK-01. In other words, hospitals that successfully submit STK-02, STK-03, STK-04, STK-05, STK-06, STK-08, and STK-10 as electronic clinical quality measures are not required to also chart-abstract and submit STK-01 in order to meet Hospital IQR Program requirements for the FY 2016 payment determination. However, hospitals that do not submit the specified electronic clinical quality measures must continue to chart-abstract and submit STK-01 as previously required. To review the details in the 2014 IPPS/LTCH PPS final rule, we refer readers to our Web site at:
We proposed to clarify that this policy continues for the CY 2015/FY 2017 payment determination. Hospitals that chose to submit the STK-02, STK-03, STK-04, STK-05, STK-06, STK-08, and STK-10 as electronic clinical quality measures are not required to also chart-abstract and submit STK-01 in order to meet Hospital IQR Program requirements for the FY 2017 payment determination. However, hospitals that do not submit the specified electronic clinical quality measures must continue to chart-abstract and submit STK-01 as previously required. We note that STK-01 is proposed for removal for CY 2016/FY 2018 payment determination and refer readers to section VIII.A.3.b. of the preamble of this final rule for more details.
We invited public comment on this proposal.
After consideration of the public comments we received, we are finalizing our clarification that the policy regarding STK-01 continue for the CY 2015/FY 2017 payment determination. Hospitals that chose to submit the STK-02, STK-03, STK-04, STK-05, STK-06, STK-08, and STK-10 as electronic clinical quality measures are not required to also chart-abstract and submit STK-01 in order to meet Hospital IQR Program requirements for the FY 2017 payment determination. However, hospitals that do not submit the specified electronic clinical quality measures must continue to chart-abstract and submit STK-01 as previously required.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24581 through 24582). We proposed to expand our electronic clinical quality measure policy in order to make reporting of electronic clinical quality measures required, rather than voluntary, under the Hospital IQR Program. Specifically, we proposed that, beginning in CY 2016/FY 2018 payment determination and subsequent years, we will require hospitals to select and submit 16 electronic clinical quality measures covering three NQS domains from the 28 available electronic clinical quality measures. For the FY 2018 payment determination and subsequent years, we proposed that hospitals must submit Q3 and Q4 data for 16 measures chosen by a hospital and reported as electronic clinical quality measures. For example, for the FY 2018 payment determination, hospitals would be required to submit Q3 and Q4 CY 2016 data for 16 measures of their choice. This proposal is in alignment with the Medicare EHR Incentive Program, as discussed in section VIII.D.2.b. of the preamble of this final rule.
Hospitals would not fail validation based on these data for CY 2016/FY 2018 payment determination reporting because validation for electronic measures is currently under development. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50269 through 50273), we finalized a proposal to conduct a validation pilot test for electronically specified measures in FY 2015. The pilot is currently underway and therefore, the results are not yet available.
We will delay publicly reporting electronic clinical quality measure data submitted by hospitals for CY 2016/FY 2018 payment determination in order to allow time for us to evaluate the effectiveness of electronically reported clinical quality measure data. In the meantime, measures reported via electronic clinical quality measure will be marked with a footnote on
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50815 through 50818), we adopted a policy under which we would only publicly report electronic clinical quality measure data under the Hospital IQR Program if we determined that the data are accurate enough to be reported. We believe that our current proposal to delay public reporting of electronic clinical quality measure data submitted by hospitals for CY 2016/FY 2018 payment determination is also in line with our existing policies. In future rulemaking, we will continue to address our intent to ensure that measures meet the reliability and validity requirements set for public reporting and that the measures are accurate and understandable before measures are publicly reported on
As shown in the table above entitled “Hospital IQR Program Measures for the FY 2018 Payment Determination and Subsequent Years,” 6 measures (ED-1, ED-2, STK-04, VTE-5, VTE-6, and PC-01) may be reported either via chart-abstraction or as electronic clinical quality measures. For the FY 2018 payment determination and subsequent years, we proposed that hospitals may either report a full year of data (Q1 through Q4) in accordance with the submission requirements for chart-abstracted data, or electronically submit two quarters of data (Q3 and Q4) for each of these 6 measures. If hospitals chose to report these 6 measures electronically, the measures could be used to count toward the Hospital IQR Program's 16 required electronic clinical quality measures. Hospitals choosing to report these 6 measures via chart-abstraction would have to select other electronic measures to meet the requirement to report 16 electronic clinical quality measures. Additional detail on submitting electronic data for measures can be found in section VIII.A.10.d.(3) of the preamble of this final rule.
We recognize that measure rates may not be comparable between measures reported via chart-abstraction and measures that are electronically specified. Collecting electronic measure data according to our proposal that hospitals must select and submit 16 electronic clinical quality measures will help us evaluate variations in data capture modes (chart-abstracted versus electronic clinical quality measures) in order to determine whether and what adjustments are necessary for the two different modes of collection. We refer readers to section VIII.A.3.b. of the preamble of this final rule, where we discuss CMS' belief that, although the intent of a measure is the same whether it is reported via chart-abstraction or electronically, the submission modes and measure rates are not the same.
We also considered two alternative required electronic clinical quality measure reporting options. Alternative A would require hospitals to submit 10 of 28 quality measures: (1) VTE-1; (2) STK-02; (3) ED-1; (4) STK-05; (5) STK-06; (6) STK-10; (7) VTE-2; (8) STK-08; (9) ED-2; and (10) STK-03. Our data show that these measures are most frequently reported with non-zero values among hospitals attesting under 2014 Meaningful Use. In addition, all 10 of these measures have been included in the Hospital IQR Program measure set as voluntary electronic clinical quality measures since CY 2014/FY 2016 payment determination (79 FR 50209 through 50211). Alternative B would require hospitals to submit 10 of 28 quality measures of each hospital's choice. Both alternatives differ from our proposal only in the number and/or composition of the electronic clinical quality measures to be reported; that is, for both of these alternatives, the reporting periods and submission requirements would be the same as those proposed in the proposed rule.
However, we determined not to pursue these alternative reporting options as we believe that requiring hospitals to report more measures electronically is in line with our goals to move towards electronic clinical quality measure reporting and to align with the EHR Incentive Program, which requires reporting on 16 clinical quality measures covering at least three domains.
We believe that our proposals will ultimately decrease reporting burden to hospitals. Once capture is possible within EHR, the time and resources
We welcomed public comment on our proposal to require hospitals to select and submit 16 electronic clinical quality measures covering three NQS domains from the 28 available electronic clinical quality measures for eligible hospitals and CAHs for the FY 2018 payment determination and subsequent years. We refer readers to section VIII.A.10.d.(3) of the preamble of this final rule for details on reporting periods and submission deadlines for electronic clinical quality measures.
As a result of these concerns, many commenters requested an extension in the roll-out of this requirement, in order to allow hospitals time to prepare to meet reporting requirements and to allow more time for mapping and testing of this reporting approach. Many commenters recommended that CMS continue its current policy of voluntary electronic submission. Many of these commenters expressed support for CMS' goal to move towards electronic reporting, but specifically requested that CMS delay a requirement for hospitals to report electronic clinical quality measures until CY 2018, in order to align with the EHR Incentive Program. Other commenters recommended that CMS require electronic clinical quality measure reporting no sooner than CY 2017. One commenter recommended that we allow dual submission of electronic data on a voluntary basis for the Hospital IQR and EHR Incentive Programs until FY 2020.
Some commenters recommended that CMS require fewer than 16 electronic clinical quality measures. Specifically, the commenters recommended that CMS require either 2 to 3, 5, or 10 electronic clinical quality measures.
However, we recognize the challenges associated with electronic reporting and encourage hospitals to work with their vendors to achieve electronic capture and reporting despite mapping and integration issues. In response to comments, we are finalizing a modification of our proposals in order to reduce the effort for hospitals with vendor challenges. We believe that requiring a lesser number of eCQMs will reduce these burdens on hospitals because the burden associated with mapping issues, which is dependent on the number of measures required to be reported, were cited as a major concern among commenters. However, we anticipate increasing this number in future rules to propose the 16 measure requirement. We believe that a full year should be enough time for hospitals to address their mapping issues and that it is important to continue to make progress towards electronic reporting.
Therefore, instead of requiring hospitals to report 16 of the 28 electronic clinical quality measures for the CY 2016/FY 2018 payment determination as proposed, we will require hospitals to report a minimum of 4 of the 28 electronic clinical quality measures for CY 2016 reporting. Suggestions from commenters ranged from 2 to 10 regarding the number of electronic clinical quality measures that should be required. We believe that requiring hospitals to report a minimum of 4 electronic clinical quality measures is reasonable because it significantly reduces burden for hospitals from the 16 proposed, but still allows us to collect data derived from EHRs to further our plans for electronic data collection and validation. Specifically, requiring only 4 electronic clinical quality measures reduces hospitals' burden of reporting by 75 percent compared to the burden of submitting 16 electronic clinical quality measures.
Further, instead of requiring hospitals to report 2 quarters of data (Q3 and Q4) two months following the reporting period as proposed, we will require hospitals to report the 4 electronic clinical quality measures for only 1 quarter (either Q3 or Q4) of CY 2016/FY 2018 payment determination, with a submission deadline of February 28, 2017. We believe this will allow more time for hospitals to overcome vendor issues, such as mapping and testing. Under this modified version of the proposals, no NQS domain distribution will be required.
Several commenters recommended allowing parallel reporting of chart-abstracted and electronically extracted measures during a transition period to ensure that eCQMs can be reported consistently, accurately and with a quality threshold. One commenter recommended that hospitals should be able to report the electronic clinical quality measures adopted under the Hospital IQR Program via chart-abstraction.
We note that we do not agree that hospitals should be able to report all electronic measures via chart-abstraction instead, because such a policy would not further our goals to move towards electronic clinical quality measure reporting and align with the EHR Incentive Program. We also note that SEP-1, IMM-2, which are chart-abstracted measures in the Hospital IQR Program measure set, are required for reporting in order for hospitals to successfully meet program requirements.
However, we recognize the challenges associated with electronic reporting and encourage hospitals of all sizes to work with their vendors to achieve electronic capture and reporting. In response to comments and as stated above, we are finalizing a modification of our proposals in order to reduce the effort for hospitals with vendor challenges.
In addition, we will continue to allow hospitals to apply the zero denominator and case threshold exceptions described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50323 through 50324). Furthermore, we are expanding our previously established Extraordinary Circumstances Extensions/Exemptions policy (79 FR 50277) to address commenters' suggestions. We are finalizing a policy, effective starting with the FY 2018 payment determination, to allow hospitals to utilize the existing Extraordinary Circumstances Exemption (ECE) form to request an exemption from the Hospital IQR Program's electronic clinical quality measure reporting requirement for the applicable program year based on hardships preventing hospitals from electronically reporting. Such hardships could include, but are not limited to, infrastructure challenges (hospitals must demonstrate that they are in an area without sufficient internet access or face insurmountable barriers to obtaining infrastructure) or unforeseen circumstances, such as vendor issues outside of the hospital's control (including a vendor product losing certification). In addition, hospitals newly participating in the Hospital IQR Program, that are required to begin data submission under Hospital IQR Program procedural requirements at 42 CFR 412.140(c)(1), which describes submission and validation of Hospital IQR Program data, may also be considered undergoing hardship and can apply for an exemption. This expansion of our Extraordinary Circumstances Extensions/Exemptions policy is also discussed in section VIII.10.d.(3) of the preamble of this final rule.
In addition, requiring eCQMs ensures that we will have data to address commenters' concerns regarding the comparability of electronic and chart-abstracted data. We also refer readers to section VIII.A.3.b. of the preamble of this final rule, where we discuss our position that, although the intent of a measure is the same whether it is reported via chart-abstraction or electronically, we recognize that the submission modes and measure rates are not the same.
In regards to the suggestion that we utilize data reported for the EHR Incentive Program, we appreciate commenters' suggestions, but note that hospitals have the option to report eCQMs by attestation, and 95 percent of hospitals chose to attest, under the EHR Incentive Program. Attestation data cannot inform measure validity.
We do not agree that electronic clinical quality measure reporting should remain voluntary until both providers and policymakers agree on the maturity of eCQM specifications. We believe that electronic clinical quality measures have matured since their inception,
Reliable, accurate data and electronic reporting are all important priorities to us. We believe that, with the advancement of technology and the use of electronic measures, even more precise, accurate, and reliable data will be captured for analysis.
After consideration of the public comments we received, we are finalizing a modified version of our proposal. Specifically, instead of requiring hospitals to report 16 electronic clinical quality measures as proposed, we are finalizing that hospitals must report at least 4 electronic clinical quality measures. However, we intend to propose to increase the number of required electronic clinical quality measures in the FY 2017 IPPS/LTCH PPS proposed rule, as hospitals should have sufficient time to address the mapping issues by February 2017. In addition, instead of requiring that hospitals select and report electronic clinical quality measures across three NQS domains as proposed, under our finalized policy, we will not require that any of the 4 electronic clinical quality measures fall under any particular NQS domain.
Furthermore, instead of requiring two quarters of electronic clinical quality measure data (Q3 and Q4 of CY 2016) for the FY 2018 payment determination (CY 2016 reporting), we are finalizing that hospitals must submit electronic clinical quality measure data for only one quarter, either Q3 or Q4, of CY 2016 for the FY 2018 payment determination by February 28, 2017. We also note that, although we proposed to allow hospitals to report 6 measures (ED-1, ED-2, PC-01, STK-4, VTE-5, and VTE-6) either via chart-abstraction or electronically, these measures will remain required via chart-abstraction as previously required. However, hospitals may choose to submit electronic data, in addition to chart-abstracted data, on any of these 6 measures to meet the requirement to report 4 of 28 electronic clinical quality measures.
Finally, while we proposed that measures reported via electronic clinical quality measure would be marked with a footnote on
We have implemented several claims-based measures comparing hospital performance on 30-day mortality, 30-day readmission, and complications following hospitalization for several conditions and procedures in the Hospital IQR, Hospital Readmissions Reductions, and Hospital VBP Programs. Although these measures have been shown to provide valid information about hospital performance, the clinical community continues to express the opinion that data gathered directly from patients and used by clinicians to guide diagnostic decisions and treatment are preferable for risk adjustment of hospital outcome measures. In response to clinicians and providers' feedback in public comment periods during measure development, and keeping with our goal to move toward the use of electronic health records (EHRs) for electronic quality measure reporting throughout CMS programs, where feasible, we are considering: (1) The use of core clinical data elements derived from EHRs for use in future quality measures (for example, risk adjustment of outcome measures); (2) the collection of additional administrative linkage variables to link a patient's episode-of-care from EHR data with his administrative claim data, and (3) use of content exchange standards.
During a July 2014 public comment period on the CMS Call for Public Comment Web site
In response to this public feedback, as well as CMS policy goals, we have identified a set of 21 clinical variables, or core clinical data elements, which we note are routinely collected on hospitalized adults and feasibly extracted from hospital EHRs. We believe that these core clinical data elements can be adapted for future use as part of specific quality measures. During our testing, we found that these 21 core clinical data elements can be used to risk adjust 30-day mortality and 30-day readmission outcome measures. Although we have thus far only tested the core clinical data elements for use in the risk adjustment models of hospital-level outcome measures, they could be utilized in other ways in the future. We anticipate that EHRs will continue to improve capturing of relevant clinical data and we also anticipate future expansion of the list of core clinical data elements.
In the future, one way in which we envision using core clinical data elements in conjunction with other sources of data, such as administrative claims, is to calculate “hybrid” outcome measures, which are quality measures that utilize more than one source of data. We believe that these types of hybrid measures could enhance the current CMS administrative claims-based outcome measures by utilizing patient clinical data captured in the EHR. We have shown that core clinical data elements captured in EHRs and used to risk adjust hospital outcome measures improve the discrimination of the measures, or the ability to distinguish good and poor performers, as assessed by the c-statistic, which evaluates the measure's ability to discriminate or differentiate among high and low performing hospitals.
To illustrate one way in which the 21 core clinical data elements can be used, we developed two hybrid measures: (1) Hospital 30-Day Risk-Standardized
Core clinical data elements are a set of clinical variables derived from EHRs that can be used to risk adjust hospital outcome measures. We have currently identified a set of 21 core clinical data elements that: (1) Can be feasibly extracted from current EHR systems; (2) are available on most adult patients; and (3) are relevant to patient outcomes following hospitalization. These core clinical data elements are listed in the table below.
This set of core clinical data elements consists of the first captured vital signs, and the results of a complete blood count and basic chemistry panel. These core clinical data elements were selected because they were empirically shown to be captured during routine clinical practice on most adult hospitalized patients.
In the context of risk-adjustment, future hybrid measures would utilize some or all of the 21 core clinical data elements listed above, as well as any future feasible core clinical data elements. For example, the Hospital 30-day Risk-Standardized Acute Myocardial Infarction (AMI) Mortality eMeasure (NQF #2473) uses five core clinical data elements: Age; heart rate; systolic blood pressure; troponin; and creatinine.
We note that the 21 core clinical data elements included are already routinely recorded in the EHR by clinical staff at the beginning of an inpatient encounter to diagnose and treat patients. Collection of these core clinical data elements are in response to stakeholder preference, and in particular, for the use of clinical information in risk models, but is not meant to guide or alter the care patients receive. We believe clinical staff should continue to only perform measurements or tests that are appropriate for diagnostic assessment or treatment of patients.
We assessed the feasibility of extraction of the 21 core clinical data elements in models of readmission and mortality outcome measures (Core Clinical Data Elements Development is discussed below). For additional detail on testing and the measure methodologies, we refer readers to the 2013 Core Clinical Data Elements Technical Report Version 1.1 methodology report posted on our Measure Methodology Web page, under the “Downloads” section in Core Clinical Data Elements and Hybrid Measures zip file, on our Web site at:
To identify this set of core clinical data elements, we first focused on those data elements that can be used to risk adjust hospital outcome measures. We developed a systematic five-step approach in which we: (1) Established a set of criteria to assess the feasibility of consistently identifying and extracting EHR data elements, and convened a diverse group of health information technology experts and end users to apply these criteria to EHR data; (2) conducted a systematic review of the literature to identify clinical data that has been shown to predict patient outcomes following acute care hospital admissions; (3) assessed the frequency and timing of capture of candidate data elements using a dataset from an active EHR data warehouse of a large healthcare system serving over 3.3 million beneficiaries;
To identify and test the core clinical data elements, a TEP was convened. TEP members applied feasibility criteria to each data type in the Quality Data Model (QDM) considering the context of adult hospitalized patients only. The QDM is an information model that provides a standardized description of the clinical information captured in EHRs, and provides a uniform framework to support quality measurement that utilizes EHR data. TEP members were asked to indicate whether at least one data element within each data type was: (1) Consistently obtained in the target population (patients 18 years and older) based on current clinical practice; (2) captured with a standard definition and recorded in a standard format within the EHR; and (3) entered in structured fields that are feasibly retrieved from current EHR systems.
Next, we conducted a systematic review of the literature to identify clinical data shown to be predictive of mortality and readmission in statistical models. A thorough review of studies revealed that several categories of clinical information from patient medical records captured during diagnostic assessment and treatment were commonly used to predict mortality and readmission. These included, but were not limited to, basic demographic information, laboratory test results, and vital sign findings. The results are described in the 2013 Core Clinical Data Elements Technical Report (Version 1.1) and is available on our Measure Methodology Web page, under the “Downloads” section in Core Clinical Data Elements and Hybrid Measures zip file found on our Web site at:
In order to empirically establish the feasibility of potential clinical data elements identified by the TEP, we used a large multi-site database from a healthcare system serving over 3.3 million beneficiaries. We examined the format of the clinical data elements, the consistency and timing of capture, and the distribution of these extracted clinical data values across conditions, hospitals, and point of hospital entry. From the results of that analysis, we identified a list of clinical data elements that were consistently captured for more than 90 percent of adults admitted for common medical conditions. In addition, only the first clinical data elements captured close to the time a patient arrived at the facility were considered in order to reflect patients' clinical status when they presented, and not the results of treatment received at the facility. Analyses showed that vital signs (heart rate, systolic blood pressure, diastolic blood pressure, respiratory rate, temperature, and oxygen saturation) were captured within 2 hours of arrival to the hospital for most patients who were subsequently admitted to the same facility. In addition, analyses showed that weight and laboratory tests (hemoglobin, hematocrit, platelet, white blood cell (WBC) count, potassium, sodium, chloride, bicarbonate, blood urea nitrogen (BUN), creatinine, glucose, and troponin) were captured within 24 hours of arrival to the hospital for most patients who were subsequently admitted to the same facility. This was true whether patients were first assessed in the emergency department, or an inpatient unit. From these analyses, we specified the units of measurement and time window for first captured values for each of the 21 feasible and relevant core clinical data elements.
In order to demonstrate that the core clinical data elements improved hospital outcome measures, we tested them in models of 30-day mortality and 30-day readmission following hospitalization from a variety of conditions. The 21 core clinical data elements shown in the table above were statistically significant predictors in at least one measure of 30-day mortality after admission for eight common
In the future, we are considering requiring hospitals to electronically submit core clinical data elements in several contexts. One use considered would be to risk-adjust claims-based hybrid quality measures similar to what is described in our discussion above. In addition, we are also considering using core clinical data elements for quality measures that apply more generally to an all-payer population (that is, a population greater than or equal to 18 years of age). As we learn more about this method of data collection, we will be able to give more information. As it stands, we envision that use of core clinical data elements for an all payer population would not be limited to merely risk-adjustment or in claims-based hybrid measures. However, should we require reporting of core clinical data elements, it would be in the context of specific measures proposed through rulemaking for the Hospital IQR Program and potentially other CMS quality programs. Specific electronically submitted core clinical data elements required would depend on the individual measure adopted.
For claims-based hybrid measures, linking variables would be required to ensure that the datasets containing administrative claims data are correctly linked with EHR datasets containing the core clinical data elements for proper risk adjustment. The linkage variables would come from an additional requirement for hospitals to submit these variables. Such linkage variables, for example, might include admission and discharge dates, CMS certification number, and date of birth. Some of these linkage variables are already routinely collected by EHRs; however, actual linkage variables required for a specific hybrid measure would depend on empirical testing of approaches to linkage for individual measure cohorts.
Data can be collected in EHRs and health information technology (IT) systems using standardized formats to promote consistent representation and interpretation, as well as to allow for systems to compute data without needing human interpretation. These standards are referred to as content exchange standards, because the standard details how data should be represented and the relationships between data elements. This allows the data to be exchanged across EHRs and health IT systems while retaining their meaning. Commonly used content exchange standards include the Consolidated Clinical Data Architecture (C-CDA) and the Quality Reporting Data Architecture (QRDA). The C-CDA standard is frequently used for the representation of summary care records and provides a format for electronically representing data within document templates and sections.
The core clinical data elements we are considering could be electronically reported to CMS formatted according to either the C-CDA or QRDA standard to promote consistent representation and more efficient calculation of hybrid measure results. These standards are also currently required for participation in the Medicare and Medicaid EHR Incentive Programs. Sections 1886(n) and 1814(l) of the Act, as added by the HITECH Act, authorize incentive payments under Medicare for eligible hospitals and critical access hospitals that successfully demonstrate the meaningful use of Certified EHR Technology (CEHRT). Section 1903(t)(6)(C) of the Act also requires that Medicaid providers adopt, implement, upgrade, or meaningfully use CEHRT if they are to receive incentives. We refer readers to the CEHRT definition adopted by the Office of the National Coordinator for Health IT (ONC) in its 2014 Edition standards and certification criteria final rule (77 FR 53972). ONC's CEHRT definition is adopted in § 170.102 and includes the capabilities defined for the Base EHR, including certification to create transitions of care documents using the C-CDA standard and to successfully report clinical quality measures using the QRDA standard (we refer readers to Table 6 of the ONC 2014 Edition standards and certification criteria final rule at 77 FR 54265).
We are specifically considering the use of QRDA Category I (QRDA I) as the transmission standard for core clinical data elements to CMS, because the core clinical data elements specified for risk adjustment need to be captured in relation to the start of an inpatient encounter, to be certain the data has been appropriately connected to the encounter. The QRDA I standard enables an individual patient-level quality report that contains quality data for one patient for one or more quality measures. For further detail on QRDA I, the most recently available QRDA I specifications can be found at:
Regardless of whether C-CDA or QRDA I was used for the reporting of core clinical data elements, we note that these data exchange standards would enhance alignment across CMS programs, as well as reduce EHR developer and provider burden by adopting standards that are already in place for the exchange of electronically specified clinical and quality data.
As part of this comment solicitation, we are inviting comment on whether
In summary, we sought public comment on the concept of collecting core clinical data elements, and in particular, we are interested in feedback specifically regarding: (1) The use of the core clinical data elements derived from EHRs for use in risk adjustment of outcome measures as well as other types of measures; (2) the collection of additional administrative linkage variables to link a patient's episode-of-care from EHR data with his/her administrative claim data; and (3) the use of content exchange standards for reporting these data elements. Regarding the use of content exchange standards, we welcome input on the benefits and implementation considerations if CMS were to require QRDA I, as well as the tradeoffs to requiring QRDA I instead of C-CDA or other content exchange standards.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, ASPE is conducting research on the issue of risk adjustment for sociodemographic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
We thank the commenter's suggestion to include another laboratory value. To reduce the reporting burden on hospitals, the core clinical data elements were developed as a minimum dataset that could be used across a variety of condition cohorts and measures. However, not all core clinical data elements referenced might be needed for all hybrid measures, and there may be some additional measure-specific data elements that need to be collected. For example, patients who are suspected of having had an acute myocardial infarction have a troponin test added to their blood work. Therefore, the hybrid AMI mortality measure includes four core clinical data elements, and one measure-specific core clinical data element for troponin, in the risk model. Troponin is a core clinical data element that would assist in capturing the severity of a patient's AMI. Similarly, other condition-specific data elements will be considered during development of future hybrid measures and will be included in the models if they are reliable, can be feasibly extracted, and are statistically significant in the models. We intend to continue seeking input from all stakeholders in the development of the hybrid measures.
We thank the commenters for their feedback and note that we will consider it in future rulemaking.
Sections 1886(b)(3)(B)(viii)(I) and (b)(3)(B)(viii)(II) of the Act state that the applicable percentage increase for FY 2015 and each subsequent year shall be reduced by one-quarter of such applicable percentage increase (determined without regard to sections 1886(b)(3)(B)(ix), (xi), or (xii) of the Act) for any subsection (d) hospital that does not submit data required to be submitted on measures specified by the Secretary in a form and manner, and at a time, specified by the Secretary. Previously, the applicable percentage increase for FY 2007 and each subsequent fiscal year until FY 2015 was reduced by 2.0 percentage points for subsection (d) hospitals failing to submit data in accordance with the description above. In accordance with the statute, the FY 2015 payment determination begins the first year that the Hospital IQR Program will reduce the applicable percentage increase by one-quarter of such applicable percentage increase.
In order to participate in the Hospital IQR Program, hospitals must meet specific procedural, data collection,
The Hospital IQR Program procedural requirements are codified in regulation at 42 CFR 412.140. We refer readers to the codified regulations for participation requirements, as further explained by the FY 2014 IPPS/LTCH PPS final rule (78 FR 50810 through 50811). We did not propose any changes to the procedural requirements.
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51640 through 51641), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53536 through 53537), and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50811) for details on the Hospital IQR Program data submission requirements for chart-abstracted measures.
We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50256 through 50259) for our policies to align electronic clinical quality measures data reporting and submission periods on a calendar year basis for the FY 2017 payment determination for both the Medicare EHR Incentive Program for eligible hospitals and CAHs, and the Hospital IQR Program. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24587 through 245888), we proposed to: (1) Continue to require Certified Electronic Health Record Technology (CEHRT) 2014 Edition and (2) update reporting periods and submission deadlines, for the FY 2018 payment determination for the Hospital IQR Program.
As described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50251), for the Hospital IQR Program, hospitals that submit electronic clinical quality measures data for the FY 2017 payment determination are required to submit data using CEHRT 2014 Edition, which is an Electronic Health Record certification. Although we required CEHRT, eligible hospitals were not required to ensure that their CEHRT products were recertified to the most recent version of the electronic specifications for the clinical quality measures. We also stated in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50251), that for the FY 2017 payment determination, a hospital could submit electronic clinical quality measures for the Hospital IQR Program during CY 2015 even if they attest their aggregate measure numerators and denominators through the Medicare EHR Incentive Program. The hospital could submit as test data or production data. Test data submissions are submissions that do not count as submissions; they are practice submissions. Production data submissions are considered final submissions meant to fulfill Hospital IQR Program submission requirements.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24587), we proposed to continue the requirement for hospitals to use CEHRT 2014 Edition
One commenter requested clarification on whether electronic clinical quality measures must be submitted via a QRDA I report, or if the electronic measures may be submitted via a data submission vendor. One commenter requested clarification on whether hospitals may abstract data from non-certified sources and then input these data into a certified technology for calculation and noted that organizations may have difficulty collecting all the necessary data elements required for electronic clinical quality measure reporting using their CEHRT technology.
Requiring hospitals to report via QRDA I is consistent with our previous policies (described below in the preamble of this rule). It has been a requirement of 2014 Edition CEHRT under the EHR Incentive Program (we refer readers to section VIII.D.2.b. of the preamble of this final rule). In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50206), we specified that hospitals that chose to voluntarily submit electronic clinical quality measures report using QRDA I. The electronic clinical quality measure validation pilot described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50269 through 50273) stated that participating hospitals must be able to produce QRDA Category 1 Revision 2 files extracted automatically from an EHR. Therefore, we disagree with the commenter's concern that hospitals do not have sufficient time to prepare to submit data via QRDA I.
We believe that requiring data via QRDA I is important, because: (1) It allows for patient-level validation of data rather than aggregated data; and (2) CEHRT requires data capture and reporting in QRDA I. In summary, hospitals must report data via QRDA I for 4 of 28 available eCQMs for one quarter (either CY 2016 Q3 or Q4) by the submission deadline of February 28, 2017. We believe the delayed reporting period and submission deadlines finalized will provide hospitals with adequate time to prepare to report using QRDA I.
In response to comments regarding use of a data submission vendor, hospitals may use a third party to submit QRDA I files on their behalf. Hospitals may also use abstraction or may pull the data from non-certified sources and then input these data into CEHRT for capture and reporting (QRDA I).
In response to concerns about a lack of vendor assistance with technical mapping, we recognize that technical mapping may be potentially burdensome and encourage hospitals to work with their vendors to overcome these issues. Further, we believe that requiring hospitals to report 4 electronic clinical quality measures for only 1 quarter (in either Q3 or Q4) of CY 2016/FY2018 payment determination, with a submission deadline of February 28, 2017, will allow more time for hospitals to overcome vendor issues, such as mapping and testing. We note that by requiring only 4 electronic clinical quality measures, we have reduced the burden of reporting by 75 percent as compared to the proposal to require 16 electronic clinical quality measures. We believe the burden associated with mapping will also be reduced by our policy to require fewer electronic clinical quality measures. In addition, we are finalizing an expansion of our Extraordinary Circumstances Extensions and Exemptions policy to include an exemption based on hardships preventing hospitals from electronically reporting. We refer readers to section VII.A.8.c. of the preamble of this final rule for a discussion of this expansion.
In response to the suggestion that we work closely with vendors to enable electronic reporting by hospitals, we currently meet with associations on a monthly basis and invite vendors to participate in Lean initiatives.
We also refer readers to the HITPC recommendations (
In regard to commenter concerns about certification requirements potentially duplicating effort and limiting product development initiatives and enhancement for stage 3 and in response to suggestions that updates be limited to major changes to avoid increasing burden, we note that updating standards and requirements is necessary to reduce development efforts and ease burden associated with reporting electronic clinical quality measures.
In response to the request that 18 months be allowed for hospitals to implement standards, we are requiring hospitals to report just 4 electronic clinical quality measures for only 1 quarter (in either Q3 or Q4) of CY 2016/FY 2018 payment determination, with a submission deadline of February 28, 2017 (we refer readers to section VIII.A.8.c. of the preamble of this final rule for a further discussion of these requirements). We believe the extended submission deadline will provide more time for hospitals to update to the required specifications.
After consideration of the public comments we received, we are finalizing a modification of our proposals. Although we proposed to continue the requirement for hospitals
In addition, as discussed in this section above, we are finalizing that hospitals must submit electronic data via a QRDA Category I file.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50256 through 50259), we finalized our policy that hospitals could voluntarily submit electronic clinical quality measure data for one calendar year (CY) quarter's data for either CY Q1 (January 1-March 31, 2015), CY Q2 (April 1-June 30, 2015), or CY Q3 (July 1-September 30) by November 30, 2015.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24587 through 24588), for the FY 2018 payment determination, we proposed changes to both the reporting periods and the submission deadlines.
For the FY 2018 payment determination, we proposed that hospitals must submit both Q3 and Q4 of 2016 data for 16 measures reported as electronic clinical quality measures. We also proposed that for the FY 2018 payment determination, hospitals must submit the electronic clinical quality measure data for these two quarters (Q3 and Q4 of 2016) within 2 months after the end of the applicable calendar year quarter. For CY 2016, these deadlines would be November 30, 2016 for Q3 and February 28, 2017 for Q4. We refer readers to the table entitled “Proposed CY 2016/FY 2018 Payment Determination Hospital IQR Program Electronic Reporting Periods and Submission Deadlines for Eligible Hospitals,” set out in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24588).
As part of our measure maintenance process, each year we make updates to the electronic specifications of the Clinical Quality Measures approved for submission in CMS programs. These annual updates are found on the CMS Web site at:
We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50319 through 50321) for a detailed discussion of the final policy in the Medicare EHR Incentive Program for eligible hospitals and CAHs as well as section VIII.D. of the preamble of this final rule where the EHR Incentive Program discusses its proposals to further align with the Hospital IQR Program.
We invited public comments on our proposal to update our electronic clinical quality measure data reporting and submission periods for the CY 2016/FY 2018 payment determination.
Therefore, because of the continued need to balance benefits and drawbacks as well as our desire to increase transparency, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24556 through 24557), we proposed, and are finalizing in this final rule, additional factors to consider for measure removal and also include factors to consider in deciding whether to retain measures. Two of those factors are: (1) Measure aligns with other CMS programs, including other quality reporting programs, or the EHR Incentive Program; and (2) measure supports efforts to move facilities towards reporting electronic measures. We believe it is valuable and important to retain the electronic versions of these measures as hospitals learn to submit data in this form and manner.
After consideration of the public comments received, and in accordance with our modified electronic clinical quality measure reporting requirements finalized in this final rule, we are finalizing a modification of our electronic clinical quality measure reporting periods from those proposed. Specifically, we are finalizing that instead of requiring hospitals to submit both Q3 and Q4 of CY 2016 data within 2 months after the end of the applicable calendar year quarter (November 30, 2016 for Q3 and February 28, 2017 for Q4), hospitals are required to submit only one quarter (either Q3 or Q4) of CY 2016 data by February 28, 2017. We refer readers to the table below.
We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50221), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51641), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53537), and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50819) for details on our sampling and case thresholds for the FY 2016 payment determination and subsequent years. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24588), we made one proposal regarding our population and sampling policy. However, we did not propose any changes to case thresholds.
Currently, hospitals must submit to CMS quarterly aggregate population and sample size counts for Medicare and non-Medicare discharges for all measures in the topic areas for which chart-abstracted data must be submitted. Hospitals are required to submit their aggregate population and sample size count for each topic area. In accordance with the policy we first adopted in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50221), hospitals that have not treated patients in a specific topic area must still submit quarterly population and sample size counts for all Hospital IQR Program chart-abstracted data topics. For example, if a hospital has not treated AMI patients, the hospital is still required to submit a zero for its quarterly aggregate population and sample count for that topic in order to meet the requirement.
In the proposed rule, we proposed to revise this policy so that, beginning with the FY 2018 payment determination and subsequent years, hospitals will be required to submit population and sample size data only
We invited public comments on this proposal.
After consideration of the public comment we received, we are finalizing our policy that hospitals will be required to submit population and sample size data only for those measures that a hospital submits as chart-abstracted measures under the Hospital IQR Program as proposed.
We did not propose any changes to case thresholds. As stated in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50258), we will continue to apply the zero denominator and case threshold exemption polices for the electronic clinical quality measures for the Hospital IQR Program. The zero denominator and case threshold exemptions are described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50323 through 50324).
We refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50220), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51641 through 51643), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53537 through 53538), and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50819 through 50820) for details on HCAHPS requirements. We did not propose any changes to HCAHPS requirements.
Hospitals and HCAHPS survey vendors should check the official HCAHPS Web site at
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51643 through 51644) and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53538 through 53539) for details on the data submission requirements for structural measures. We did not propose any changes to data submission requirements for structural measures.
For details on the data submission and reporting requirements for healthcare-associated infection (HAI) measures reported via the CDC's National Healthcare Safety Network (NHSN) Web site, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51629 through 51633; 51644 through 51645), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53539), and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50821 through 50822). Clarifications to the HAI data reporting and submission requirements policy can also be found in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50259 through 50262). The data submission deadlines are posted on the QualityNet Web site at:
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53539 through 53553), we finalized the processes and procedures for validation of chart-abstracted measures in the Hospital IQR Program for the FY 2015 payment determination and subsequent years; the FY 2013 IPPS/LTCH PPS final rule also contains a comprehensive summary of all procedures finalized in previous years and still in effect. Several modifications to these processes were finalized for the FY 2016 and FY 2017 payment determinations in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50822 through 50835).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50262 through 50273) for the FY 2017 payment determination and subsequent years, we finalized additional modifications to these processes. These changes fall into the following categories: (a) Eligibility criteria for hospitals selected for validation; (b) number of charts to be submitted per hospital for validation; (c) combining scores for HAI and clinical process of care measures; (d) processes to submit patient medical records for chart-abstracted measures; and (e) plans to validate electronic clinical quality measure data.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50269 through 50273), we finalized a policy to conduct a validation pilot test for electronic clinical quality measures. We stated that we intended to complete pilot activities in CY 2015 (79 FR 50271) and that continues to be our intention. We did not propose any changes to our validation pilot test.
However, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24588 through 24589), we proposed modifications to existing processes for validation of chart-abstracted measures, specifically for the Influenza Immunization (NQF #1659) measure.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50265 through 50273), we finalized a validation process, which included a separate validation stratum for the Influenza Immunization (NQF #1659) measure (the immunization measure validation stratum) because that measure overlapped with the
As discussed in section IV.F.2.b.(1) of the preamble of this final rule, we proposed to remove the IMM-2 Influenza Immunization measure from the Hospital VBP Program. Given the proposed removal of the Influenza Immunization measure from the Hospital VBP Program, it would be no longer necessary to ensure validation of this topic area by including a separate stratum for the Influenza measure. As a result, in the proposed rule, for the Hospital IQR Program beginning with the FY 2018 payment determination and for subsequent years, we proposed to remove the separate immunization validation stratum and include the Influenza Immunization measure in the clinical process of care measure validation stratum. Under this proposal, we would continue to apply our chart-abstracted measure validation processes only to those chart-abstracted measures that are required under the Hospital IQR Program in a chart-abstracted form (as opposed to those measures that a hospital reports as electronic clinical quality measures, for example). This proposal is consistent with our proposed policy to require population and sample size data only for those measures that are required under the Hospital IQR Program. We refer readers to section VIII.A.10.e. of the preamble of this final rule for more detail on that proposal.
Although this proposal includes an adjustment to the composition of the clinical process of care validation stratum, we did not propose any changes to the overall validation sample size. Under the existing validation process, a total of eight charts are drawn for validation—five of which are drawn from the clinical process of care measures stratum and three of which are drawn from the immunization measure stratum. Under this proposal, however, while the total number of charts drawn is the same (eight), all eight measures will be drawn from the clinical process of care measure stratum, which would then include the Influenza Immunization measure. Accordingly, one sample of charts will be drawn from the clinical process of care measures.
The proposed removal of the immunization validation stratum and inclusion of the Influenza Immunization measure in the clinical process of care validation stratum would result in an expanded pool of clinical process of care topic areas sampled for validation to include STK, VTE, ED, Sepsis, and Immunization. As described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50266), all chart-abstracted measure topic areas included in the Hospital IQR Program, with the exception of the Perinatal Care topic area, are automatically included in the validation process. We do not include this topic area because the Elective Delivery PC-01 (NQF#0469) measure is reported in aggregate form, which is not consistent with our patient-level validation process (79 FR 50266).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50268 through 50269), we outlined the weighting of each of three validation topic areas: Healthcare-associated infection (66.7 percent); Immunization (22.2 percent); and Other/Clinical Process of Care (11.1 percent). The table below shows the proposed effect on topic area weighting of our proposal to remove the immunization measure validation stratum and to move the Influenza Immunization (NQF #1659) measure to the clinical process of care validation stratum.
We invited public comments on our proposal to remove the immunization measure validation stratum, to move the Influenza Immunization (NQF #1659) measure to the clinical process of care validation stratum, and to reweight the topic areas for validation beginning with the FY 2018 payment determination and for subsequent years.
After consideration of the public comments we received, we are finalizing our proposals to remove the immunization measure validation stratum, to move the Influenza Immunization (NQF #1659) measure to the clinical process of care validation
We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53554) for details on Data Accuracy and Completeness Acknowledgement (DACA) requirements. We did not propose any changes to the DACA requirements.
We refer readers to the FY 2008 IPPS final rule (72 FR 47364), the FY 2011 IPPS/LTCH PPS final rule (75 FR 50230), the FY 2012 IPPS/LTCH PPS final rule (76 FR 51650), the FY 2013 IPPS/LTCH PPS final rule (77 FR 53554), and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836) for details on public display requirements. The Hospital IQR Program quality measures are typically reported on the
For the Mortality, Readmission, Complication, Payment and AHRQ measures, we will continue to replace publically reported data with a footnote for hospitals that do not have data for at least 25 cases combined during the reporting period. If there are fewer than 25 eligible cases, the measures are assigned to a separate category described as “The number of cases is too small (fewer than 25) to reliably tell how well the hospital is performing.” The measures are included in the calculation but are not publicly reported on
We refer readers to section VIII.A.8.b. of the preamble of this final rule, where we discuss our proposal to delay publicly reporting electronic clinical quality measure data submitted by hospitals for CY 2016/FY 2018 payment determination in order to allow time for us to evaluate the effectiveness of electronically reported clinical quality measure data. In the meantime, measures reported via electronic clinical quality measures will be marked with a footnote on
After consideration of the public comments we received here and in our discussion of required eCQMs in section VIII.A.8.c. of the preamble of this final rule, we are modifying our proposal to publicly report electronic clinical quality measure data submitted by hospitals for CY 2016/the FY 2018 payment determination in order to allow time for us to evaluate the effectiveness of electronically reported clinical quality measure data. Instead of
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51650 through 51651), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836), and at 42 CFR 412.140(e) for details on reconsideration and appeal procedures for the FY 2017 payment determination and subsequent years. We did not propose any changes to the reconsideration and appeals procedures.
We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51651 through 51652), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50836 through 50837), and 42 CFR 412.140(c)(2) for details on the Hospital IQR Program extraordinary circumstances extensions or exemptions policy.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50277), we indicated that we will refer to the process as the extraordinary circumstances extensions or exemptions process and, accordingly, finalized changes reflecting this updated language in the corresponding regulation text. We did not propose any changes to the Hospital IQR Program's extraordinary circumstances extensions or exemptions policy.
This policy is based on our previously established extraordinary circumstances extensions/exemptions policy (79 FR 50277). Under the policy we are finalizing, hospitals may use the existing ECE form, which is available on QualityNet at:
After consideration of the public comments we received, we are expanding the Hospital IQR Program's Extraordinary Circumstances Extensions or Exemptions policy to include an exemption for hospitals that demonstrate hardship in reporting eCQMs according to the criteria discussed above. This expansion will be effective starting with the FY 2018 payment determination.
Section 3005 of the Affordable Care Act added new sections 1866(a)(1)(W) and (k) to the Act. Section 1866(k) of the Act establishes a quality reporting program for hospitals described in section 1886(d)(1)(B)(v) of the Act (referred to as “PPS-Exempt Cancer Hospitals” or “PCHs”) that specifically applies to PCHs that meet the requirements under 42 CFR 412.23(f). Section 1866(k)(1) of the Act states that, for FY 2014 and each subsequent fiscal year, a PCH must submit data to the Secretary in accordance with section 1866(k)(2) of the Act with respect to such a fiscal year. For additional background information, including previously finalized measures and other policies for the PCHQR Program, we refer readers to the following final rules: The FY 2015 IPPS/LTCH PPS final rule (79 FR 50277 through 50288); the FY 2014 IPPS/LTCH PPS final rule (78 FR 50838 through 50846); and the FY 2013 IPPS/LTCH PPS final rule (77 FR 53556 through 53561).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24590), we proposed to remove six SCIP measures from the PCHQR Program beginning with fourth quarter (Q4) 2015 discharges and for subsequent years. Under this proposal, PCHs will meet reporting requirements for the FY 2016 and FY 2017 programs by submitting first quarter (Q1) through third quarter (Q3) 2015 data for these measures:
• Surgery Patients Who Received Appropriate Venous Thromboembolism Prophylaxis within 24 Hours Prior to Surgery to 24 Hours After Surgery (NQF #0218)
• Urinary Catheter Removed on Post-Operative Day One (POD1) or Post-Operative Day Two (POD2) with Day of Surgery Being Day Zero (formerly NQF #0453)
• Prophylactic Antibiotic Received Within One Hour Prior to Surgical Incision (NQF #0527)
• Prophylactic Antibiotic Selection for Surgical Patients (NQF #0528)
• Prophylactic Antibiotic Discontinued Within 24 Hours After Surgery End Time (NQF #0529)
• Surgery Patients on Beta-Blocker Therapy Prior to Admission who Received a Beta-Blocker During the Perioperative Period (NQF #0284)
We first adopted the six SCIP measures in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50840 through 50841) and refer readers to that rule for a detailed discussion of the measures. As described in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50205), these measures have been determined to be topped-out in the Hospital IQR Program and were removed from that program. To meet FY 2016 and FY 2017 program requirements, we proposed that PCHs would continue to submit these six measures for first quarter (Q1) 2015 through third quarter (Q3) 2015 discharges in accordance with the submission timeline we finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50285). We proposed to remove these measures from the PCHQR Program because we have removed them from the Hospital IQR Program and, because they have been removed from that program, it is no longer operationally feasible to collect these measures under the PCHQR Program. By removing these measures, we also would alleviate the maintenance costs and administrative burden for PCHs associated with reporting them (79 FR 50205).
We invited public comments on these proposals.
After consideration of the public comments we received, we are finalizing our proposal to remove these six SCIP measures from the PCHQR Program beginning with fourth quarter (Q4) 2015 discharges and for subsequent years.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53556), the FY 2014 IPPS/LTCH PPS final rule (78 FR 50837 through 50838), and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50278), we indicated that we have taken a number of principles into consideration when developing and selecting measures for the PCHQR Program, and that many of these principles are modeled on those we use for measure development and selection under the Hospital IQR Program. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24590 through 24591), we did not propose any changes to the principles we consider when developing and selecting measures for the PCHQR Program.
For the FY 2018 PCHQR Program, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24591 through 24593), we proposed to adopt three new quality measures. These measures meet the requirement under section 1866(k)(3)(A) of the Act that measures specified for the PCHQR Program be endorsed by the entity with a contract under section 1890(a) of the Act (currently the NQF).
The proposed measures are as follows:
• Centers for Disease Control and Prevention (CDC) National Healthcare Safety Network (NHSN) Facility-wide Inpatient Hospital-onset
• CDC NHSN Facility-wide Inpatient Hospital-onset Methicillin-resistant
• CDC NHSN Influenza Vaccination Coverage Among Healthcare Personnel (HCP) Measure (NQF #0431) (CDC NHSN HCP Measure)
The proposed measures were included on a publicly available
In addition, all three of the proposed measures are currently reported under the Hospital IQR Program as described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51630 through 51631). We refer readers to CDC's Web site for detailed measure information for these three measures.
Healthcare-associated infections (HAIs), such as CDI and MRSA, are a significant cause of morbidity and mortality. At any given time, approximately one in every 25 inpatients has an infection related to hospital care.
CDC reports that prolonged antibiotic exposure, a long length of stay in a health care setting, and the existence of a serious underlying illness or immunocompromised condition (for example, cancer) increase the risk of CDI.
This proposed measure addresses the National Quality Strategy (NQS) Patient Safety domain. The measure reports the standardized infection ratio (SIR) of hospital-onset CDI Laboratory-identified events (LabID events) among all patients in the facility. The numerator includes the total number of observed hospital-onset CDI LabID events among all inpatients in the facility, excluding well baby-nurseries and Neonatal Intensive Care Units.
Beginning with a 2010-2011 baseline SIR of 1.0, we set a national goal to reduce the incidence of facility-onset CDI overall by 30 percent (to a SIR of 0.70) by no later than 2013. However, we were not able to meet that goal, and the rate of facility-onset CDI decreased by only 2 percent as of 2012 (to a SIR of 0.98). Therefore, we believe it is critical to continue collecting data on CDI in the hospital setting, and to adopt this measure for the PCH setting, in order to ensure the highest quality of care for cancer patients and continue our effort to support HHS' National Action Plan to Prevent Healthcare Associated Infections (HAIs) and our proposed 2020 goal to reduce facility-onset of CDI by 30 percent from the 2015 baseline.
By proposing this measure in the PCHQR Program, we aim to continue to provide a common mechanism (that is, reporting to CDC's NHSN) that all hospitals, including PCHs, can use to uniformly submit and report measure data and inform their clinicians of the impact of targeted prevention efforts.
We invited public comments on our proposal to add the CDC NHSN CDI Outcome Measure to the PCHQR Program beginning with the FY 2018 program.
After consideration of the public comments we received, we are finalizing our proposal to add the CDC NHSN CDI Outcome Measure to the PCHQR Program beginning with the FY 2018 program.
Invasive MRSA infections may cause approximately 18,000 deaths per year during a hospital stay.
This proposed measure addresses the NQS Patient Safety domain. This measure reports the SIR of hospital-onset unique blood source MRSA LabID events among all inpatients in a facility. The numerator includes the total number of observed hospital-onset unique blood source MRSA LabID events among all inpatients in the facility.
Beginning with a 2009 baseline SIR of 1.0, we set a national goal to reduce the incidence of facility-onset MRSA infections by 50 percent by 2020. However, by 2012 the rate of facility-onset MRSA infections decreased by only 3 percent (to a SIR of 0.97). Therefore, we believe it is critical to continue collecting data on CDI in the hospital setting, and to adopt this measure for the PCH setting, to ensure the highest quality of care for cancer patients and continue our effort to support the HHS' National Action Plan and the proposed 2020 goal to reduce facility-onset MRSA infections by 50 percent from the 2015 baseline.
The collection and evaluation of MRSA data will allow PCH staff to evaluate whether their infection control efforts need improvement. By proposing this measure in the PCHQR Program, we aim to continue to provide a common mechanism (CDC NHSN) for all hospitals, including PCHs, to uniformly report measure data and inform their clinicians of the impact of targeted prevention efforts. Furthermore, we recognize the severe impact of MRSA and aim to continue our efforts to increase patient protection and safety, while at the same time preventing adverse infections in the PCH setting.
We invited public comments on our proposal to add the CDC NHSN MRSA Measure to the PCHQR Program beginning with the FY 2018 program.
In consultation with the CDC, we agree that the current risk models used for the calculation of MRSA bacteremia SIRs may not accurately predict these types of events in the cancer patient population, particularly within cancer hospitals. Until there are sufficient data with which to risk adjust MRSA bacteremia in this population, CDC plans to submit unadjusted, facility-specific healthcare facility-onset, incidence rates without comparison to a national benchmark. We further are clarifying that we have not provided any guidance surrounding the definition of a benchmark for any of the PCHQR Program measures.
However, MRSA is extremely prevalent and highly contagious,
After consideration of the public comments we received, we are finalizing our proposal to add the CDC NHSN MRSA Measure to the PCHQR Program beginning with the FY 2018 program.
CDC estimates that in the United States, each year, on average 5 to 20 percent of the population gets influenza and more than 200,000 people are hospitalized from seasonal influenza-related complications.
This proposed measure addresses the NQS Patient Safety domain. The measure reports the percent of HCP who receive the influenza vaccination.
We believe it is important to collect data on this measure in order to ensure the highest quality of care for cancer patients in our effort to support one of the Healthy People 2020 goals of immunizing 90 percent of health care personnel nationally by 2020.
We believe that this measure is applicable to the PCH setting based on CDC guidelines that patients who currently have cancer or who have had certain types of cancer in the past (such as lymphoma or leukemia), are at high risk for complications from influenza, including hospitalization and death.
By proposing this measure in the PCHQR Program, we aim to not only provide a common mechanism (CDC NHSN) for all hospitals, including PCHs, to uniformly report the measure data, but also to inform their clinicians of the impact of targeted prevention efforts. In addition, and most importantly, we believe that collecting this measure data in the PCH setting is necessary to support our effort to prevent unnecessary additional or prolonged hospitalizations (and associated costs), and to decrease premature death among cancer patients.
We invited public comments on our proposal to add the CDC NHSN HCP Measure to the PCHQR Program beginning with the FY 2018 program.
The CDC provides guidance on influenza infection control posted to their “Infection Control in Health Care Facilities” Web page, which is located at
After consideration of the public comments we received, we are finalizing our proposal to add the CDC NHSN HCP Measure to the PCHQR Program beginning with the FY 2018 program.
In summary, we are finalizing the addition of three new measures for reporting beginning with the FY 2018 program and removing six SCIP measures beginning with Q4 2015 discharges. The PCHQR measure set will consist of 16 measures beginning with the FY 2018 program. Our policies regarding the form, manner, and timing of data collection for these measures are discussed in section VIII.B.7. of the preamble to this final rule.
The table below lists all adopted measures as well as the new measures we are finalizing for the PCHQR Program beginning with the FY 2018 program.
Future quality measure topics and quality measure domain areas are discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50280). In addition, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24593), we welcomed public comment and specific suggestions for measure topics addressing the following CMS Quality Strategy domains: making care affordable; communication and coordination; and working with communities to promote best practices of healthy living.
We maintain technical specifications for the PCHQR Program measures, and we periodically update those specifications. The specifications may be found on the QualityNet Web site at:
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50281), we described a policy under which we use a subregulatory process to make nonsubstantive updates to measures
Section 1866(k)(4) of the Act requires the Secretary to establish procedures for making the data submitted under the PCHQR Program available to the public. Such procedures must ensure that a PCH has the opportunity to review the data that are to be made public with respect to the PCH prior to such data being made public. Section 1866(k)(4) of the Act also provides that the Secretary must report quality measures of process, structure, outcome, patients' perspective on care, efficiency, and costs of care that relate to services furnished in such hospitals on the CMS Web site.
In order to meet these requirements, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53562 through 53563), we finalized our policy to publicly display PCHQR Program data on the
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50847 through 50848), we finalized our proposal to display publicly in 2014 and subsequent years the data for two measures. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50282), we finalized our proposal to display publicly in 2015 and subsequent years the data for one measure and our proposal to display publicly no later than 2017 the data for two additional measures. In summary, we have finalized proposals to publicly display five PCHQR measures on
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24594), we proposed to publicly display six additional PCHQR measures beginning in 2016 and for subsequent years:
• Oncology: Radiation Dose Limits to Normal Tissues (NQF #0382)
• Oncology: Plan of Care for Pain (NQF #0383)
• Oncology: Pain Intensity Quantified (NQF #0384)
• Prostate Cancer: Adjuvant Hormonal Therapy for High Risk Patients (NQF #0390)
• Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low-Risk Patients (NQF #0389)
• HCAHPS (NQF #0166)
We invited public comment on these proposals.
For clarification purposes, in consultation with the CDC, we learned that the CAUTI definition working group (WG) (comprised of internal and external subject-matter experts (for example, infection preventionists, microbiologists, and hospital epidemiologists and infection disease physicians)) takes into consideration all patients (including cancer patients) when they review the NHSN CAUTI surveillance measure. While the WG agreed that these patients may be at an increased risk of Urinary Tract Infection (UTI), they also agreed that information used to identify these patients and to exclude them from surveillance is often difficult to ascertain because of shortcomings in clinical documentation of presence and timing of instrumentation.
In addition, removing these patients from CAUTI surveillance would mean omitting their UTIs and their urinary catheter days. Separating these patients and excluding their data from surveillance would be labor intensive and beyond what is logistically feasible for many, if not most, PCHs. We note that only in the case that a concomitant urine culture collected from the urethral
For clarification purposes, in consultation with the CDC, we learned that the expert panel that the CDC worked with to develop the MBI-LCBI criteria developed the list of organisms which would be associated with MBI-LCBI events. This list was not intended to represent every organism that is common to the human gut, but rather to include only those which, when cultured from the bloodstream, were clinically most likely due to mucosal barrier injury rather than some other cause. Some organisms which are common to the human intestine are more commonly identified in the bloodstream due to other causes, including being associated with the presence of a central line. These organisms, for instance Pseudomonas spp., were intentionally excluded from the list for this reason. As experience with MBI-LCBI surveillance continues, the MBI-LCBI list will be reconsidered.
In addition, excluding patients from developing a CLABSI simply because they have any of the symptoms listed in the measure specification manual could result in a CLABSI measure that is tremendously insensitive. The symptoms listed are often poorly defined; variation exists in the ways that clinicians identify them and rate them. They are therefore not good candidates for inclusion in surveillance definitions and protocols. For further information on this measure, we refer readers to the CDC's Web site (
Currently, we have in place outreach and education materials (for example, tools, Webinars, among others) to assist PCHs in their data abstraction (including sampling). Information on this outreach is available on our QualityNet Web site at: (
After consideration of the public comments we received, we are finalizing our proposal to publicly display these six additional PCHQR measures beginning in 2016 and for subsequent years. A summary of previously adopted and newly finalized public display policies is listed in the table below.
Section 1866(k)(2) of the Act requires that, beginning with the FY 2014 PCHQR Program, each PCH must submit to the Secretary data on quality measures specified under section 1866(k)(3) of the Act in a form and manner, and at a time, as specified by the Secretary.
Data submission requirements and deadlines for the PCHQR Program are generally posted on the QualityNet Web site at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24594 through 24595), we proposed that PCHs submit CDC NHSN CDI, MRSA, and HCP measure data for all patients to the CDC through the NHSN database. This is the same procedural/reporting mechanism used for the CDC NHSN CLABSI and CAUTI measures that we finalized in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53563 through 53564) and for the CDC SSI measure that we finalized in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50848 through 50850). The data submission and reporting procedures have been set forth by the CDC for NHSN participation in general and for submission of the CDC NHSN CDI, MRSA, and HCP measures to NHSN. We refer readers to the CDC's Web site (
We proposed to adopt a quarterly submission process for the CDC NHSN CDI and MRSA measures as shown in the table below. We have successfully implemented this reporting mechanism in the Hospital IQR Program (77 FR 53539), and we strongly believe that this type of data submission is the most feasible option because PCHs are currently reporting the CDC NHSN CAUTI, CLABSI, and CDC SSI measures to the CDC NHSN this way.
For the CDC NHSN HCP measure, we proposed that data be submitted annually by May 15 of the applicable year as shown in the table below. The vaccination period runs from October through March. The proposed reporting period for FY 2018 will include Q4 2016 and Q1 2017 counts submitted by May 15, 2017.
We invited public comments on these proposals.
After consideration of the public comments we received, we are finalizing our proposals for the form, manner, and timing of the CDC NHSN CDI, MRSA, and HCP measures.
As specified by CDC, the CDC NHSN CDI, MRSA, and HCP measures are reported on a facility-wide basis.
We also intend to issue guidance to PCHs that will provide additional information regarding the specific data submission deadlines that we previously finalized for certain PCHQR measures. This guidance will be issued through the QualityNet Web site.
Section 3004(a) of the Affordable Care Act amended section 1886(m)(5) of the Act, requiring the Secretary to establish the Long-Term Care Hospital Quality Reporting Program (LTCH QRP). This program applies to all hospitals certified by Medicare as LTCHs. Beginning with the FY 2014 payment determination and subsequent years, the Secretary is required to reduce any annual update to the standard Federal rate for discharges occurring during such fiscal year by 2 percentage points for any LTCH that does not comply with the requirements established by the Secretary.
The Act requires that, for the FY 2014 payment determination and subsequent years, each LTCH submit data on quality measures specified by the Secretary in a form and manner, and at a time, specified by the Secretary. The Secretary is required to specify quality measures that are endorsed by the entity with a contract under section 1890(a) of the Act. This entity is currently the NQF. Information regarding the NQF is available at:
In addition, section 1206(c) of the Pathway for SGR Reform Act of 2013 added section 1886(m)(5)(D)(iv) of the Act, which requires the Secretary to establish, not later than October 1, 2015, a functional status quality measure under the LTCH QRP for change in mobility among inpatients requiring ventilator support. We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50298 through 50301) for a detailed discussion of the Functional Outcome Measure: Change in Mobility Among Long-Term Care Hospital Patients Requiring Ventilator Support (NQF #2632, endorsed on 7/23/15), which we adopted in the LTCH QRP for the FY 2018 payment determination and subsequent years to meet the requirements of section 1886(m)(5)(D)(iv) of the Act.
Finally, the Improving Medicare Post-Acute Care Transformation Act of 2014 (Pub. L. 113-185) (the IMPACT Act) amended the Act in ways that affect the LTCH QRP. Specifically, section 2(a) of the IMPACT Act added section 1899B of the Act, and section 2(c)(3) of the IMPACT Act amended section 1886(m)(5) of the Act.
New section 1899B of the Act is titled Standardized Post-Acute Care (PAC) Assessment Data for Quality, Payment and Discharge Planning. Under section 1899B(a)(1) of the Act, the Secretary must require post-acute care (PAC) providers (defined in section 1899B(a)(2)(A) of the Act to include HHAs, SNFs, IRFs, and LTCHs) to submit standardized patient assessment data in accordance with section 1899B(b) of the Act, data on quality measures required under section 1899B(c)(1) of the Act, and data on resource use and other measures required under section 1899B(d)(1) of the Act. The Act also sets out specified application dates for each of the measures. The Secretary must specify the quality, resource use, and other measures not later than the applicable specified application date defined in section 1899B(a)(2)(E) of the Act.
Section 1899B(b) of the Act describes the standardized patient assessment data that PAC providers are required to submit in accordance with section 1899B(b)(1) of the Act; requires the Secretary, to the extent practicable, to match claims data with standardized patient assessment data in accordance with section 1899B(b)(2) of the Act; and requires the Secretary, as soon as practicable, to revise or replace existing patient assessment data to the extent that such data duplicate or overlap with standardized patient assessment data, in accordance with section 1899B(b)(3) of the Act.
Sections 1899B(c)(1) and (d)(1) of the Act direct the Secretary to specify
• Functional status, cognitive function, and changes in function and cognitive function;
• Skin integrity and changes in skin integrity;
• Medication reconciliation;
• Incidence of major falls; and
• Accurately communicating the existence of and providing for the transfer of health information and care preferences of an individual to the individual, family caregiver of the individual, and providers of services furnishing items and services to the individual when the individual transitions (1) from a hospital or CAH to another applicable setting, including a PAC provider or the home of the individual, or (2) from a PAC provider to another applicable setting, including a different PAC provider, hospital, CAH, or the home of the individual.
Section 1899B(c)(2)(A) of the Act provides that, to the extent possible, the Secretary must require such reporting through the use of a PAC assessment instrument and modify the instrument as necessary to enable such use.
Section 1899B(d)(1) of the Act provides that the resource use and other measures on which PAC providers, including LTCHs, are required to submit any necessary data specified by the Secretary, which may include standardized assessment data in addition to claims data, must be with respect to at least the following domains:
• Resource use measures, including total estimated Medicare spending per beneficiary;
• Discharge to community; and
• Measures to reflect all-condition risk-adjusted potentially preventable hospital readmission rates.
Sections 1899B(c) and (d) of the Act indicate that data satisfying the eight measure domains in the IMPACT Act is the minimum data reporting requirement. Therefore, the Secretary may specify additional measures and additional domains.
Section 1899B(e)(1) of the Act requires that the Secretary implement the quality, resource use, and other measures required under sections 1899B(c)(1) and (d)(1) of the Act in phases consisting of measure specification, data collection, and data analysis; the provision of feedback reports to PAC providers in accordance with section 1899B(f) of the Act; and public reporting of PAC providers' performance on such measures in accordance with section 1899B(g) of the Act. Section 1899B(e)(2) of the Act generally requires that each measure specified by the Secretary under section 1899B of the Act be NQF-endorsed, but authorizes an exception under which the Secretary may select non-NQF-endorsed quality measures in the case of specified areas or medical topics determined appropriate by the Secretary for which a feasible or practical measure has not been endorsed by the NQF, as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary. Section 1899B(e)(3) of the Act provides that the pre-rulemaking process required by section 1890A of the Act applies to quality, resource use, and other measures specified under sections 1899B(c)(1) and (d)(1) of the Act, but authorizes exceptions under which the Secretary may (1) use expedited procedures, such as ad hoc reviews, as necessary in the case of a measure required with respect to data submissions during the 1-year period before the applicable specified application date, or (2) alternatively, waive section 1890A of the Act in the case of such a measure if applying section 1890A of the Act (including through the use of expedited procedures) would result in the inability of the Secretary to satisfy any deadline specified under section 1899B of the Act with respect to the measure.
Section 1899B(f)(1) of the Act requires the Secretary to provide confidential feedback reports to PAC providers on the performance of such PAC providers with respect to quality, resource use, and other measures required under sections 1899B(c)(1) and (d)(1) of the Act beginning 1 year after the applicable specified application date.
Section 1899B(g) of the Act requires the Secretary to establish procedures for making available to the public information regarding the performance of individual PAC providers with respect to quality, resource use, and other measures required under sections 1899B(c)(1) and (d)(1) of the Act beginning not later than 2 years after the applicable specified application date. The procedures must ensure, including through a process consistent with the process applied under section 1886(b)(3)(B)(viii)(VII) of the Act for similar purposes, that each PAC provider has the opportunity to review and submit corrections to the data and information that are to be made public with respect to the PAC provider prior to such data being made public.
Section 1899B(h) of the Act sets out requirements for removing, suspending, or adding quality, resource use, and other measures required under sections 1899B(c)(1) and (d)(1) of the Act.
Section 1899B(i) of the Act requires that not later than January 1, 2016, and periodically thereafter (but not less frequently than once every 5 years), the Secretary must promulgate regulations to modify the Medicare conditions of participation (CoP) and subsequent interpretative guidance applicable to PAC providers, hospitals, and CAHs to, among other things, take into account quality, resource use, and other measures in the discharge planning process.
Section 1899B(j) of the Act requires the Secretary to allow for stakeholder input, such as through town halls, open door forums, and mailbox submissions, before the initial rulemaking process to implement section 1899B of the Act.
Section 2(c)(3) of the IMPACT Act amended section 1886(m)(5) of the Act to address the payment consequences for LTCHs with respect to the additional data which LTCHs are required to submit under section 1899B of the Act. This section added new sections 1886(m)(5)(F) and (G) to the Act and made conforming changes. New section 1886(m)(5)(F) of the Act requires LTCHs (other than a hospital classified under section 1886(d)(1)(B)(iv)(II)) of the Act) to submit the following additional data: (1) For the fiscal year beginning on the applicable specified application date and subsequent years, data on the quality, resource use, and other measures required under sections 1899B(c)(1) and (d)(1) of the Act; and (2) for FY 2019 and subsequent years, the standardized patient assessment data required under section 1899B(b)(1) of the Act. Such data must be submitted in the form and manner, and at the time, specified by the Secretary. Finally, new section 1886(m)(5)(G) of the Act generally provides that to the extent that the additional data required under section 1886(m)(5)(F) of the Act duplicates other data required under section 1886(m)(5)(C) of the Act, submission of the former must be in lieu of submission of the latter.
As stated above, the IMPACT Act adds a new section 1899B to the Act that imposes new data reporting requirements for certain PAC providers, including LTCHs. Sections 1899B(c)(1) and 1899B(d)(1) of the Act collectively require that the Secretary specify quality measures and resource use and other
Under the current LTCH QRP, the general timeline and sequencing of measure implementation occurs as follows: specification of measures; proposal and finalization of measures through notice-and-comment rulemaking; LTCH submission of data on the adopted measures; analysis and processing of the submitted data; notification to LTCHs regarding their quality reporting compliance with respect to a particular rate year; consideration of any reconsideration requests; and imposition of a payment reduction in a particular rate year for failure to satisfactorily submit data with respect to that rate year. Any payment reductions that are taken with respect to a rate year begin approximately one year after the end of the data submission period for that rate year and approximately two years after we first adopt the measure.
To the extent that the IMPACT Act could be interpreted to shorten this timeline so as to require us to reduce an LTCH's PPS payment for failure to satisfactorily submit data on a measure specified under section 1899B(c)(1) or (d)(1) of the Act beginning with the same rate year as the specified application date for that measure, such a timeline would not be feasible. The current timeline discussed above reflects operational and other practical constraints, including the time needed to specify and adopt valid and reliable measures, collect the data, and determine whether an LTCH has complied with our quality reporting requirements. It also takes into consideration our desire to give LTCHs enough notice of new data reporting obligations so that they are prepared to timely start reporting the data. Therefore, we intend to follow the same timing and sequence of events for measures specified under sections 1899B(c)(1) and (d)(1) of the Act that we currently follow for other measures specified under the LTCH QRP. We intend to specify each of these measures no later than the specified application dates set forth in section 1899B(a)(2)(E) of the Act and, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24597), we proposed to adopt them consistent with the requirements in the Act and Administrative Procedure Act. To the extent that we finalize a proposal to adopt a measure for the LTCH QRP that satisfies an IMPACT Act measure domain, we intend to require LTCHs to report data on the measure for the rate year that begins two years after the specified application date for that measure. Likewise, we intend to require LTCHs to begin reporting any other data specifically required under the IMPACT Act for the rate year that begins two years after we adopt requirements that would govern the submission of that data.
We received several public comments regarding the IMPACT Act, which we summarize and respond to below.
We will use the rulemaking process to communicate timelines for implementation, including timelines for the replacement of items in PAC assessment tools, timelines for implementation of new or revised quality measures, and timelines for public reporting. As described more fully above, the IMPACT Act requires us to specify measures that relate to at least five stated quality domains and three stated resource use and other measure domains.
In addition, we must follow all processes in place for adoption of measures including the Measure Applications Partnership (MAP) and the notice and comment rulemaking process, subject to certain exceptions under section 1899B(e)(3) of the Act for expedited procedures or, alternatively, waiver of section 1890A of the Act. In our selection and specification of measures, we employ a transparent
One commenter noted that CMS did provide opportunities for input into listening sessions and open door forums. However, the commenter expressed concern that these events did not provide an opportunity for substantive input. For example, the commenter noted that the open door forum call did not provide measure specifications for public input and that the listening sessions did not include a discussion of the proposed measures. One commenter specifically noted an appreciation for the listening sessions held by CMS thus far, but also requested opportunities for more extensive collaboration.
Because the IMPACT Act requires us to utilize the rulemaking process, prior notice of timeline and sequencing outside of the rulemaking process is not feasible. However, it should also be noted the IMPACT Act specifies a general timeline for standardization of patient assessment data. For example, the IMPACT Act specifies that LTCHs shall submit standardized patient assessment data to the Secretary for FY 2019 and for each subsequent fiscal year.
Also, as a part of the rulemaking process, we have made additional details regarding standardization of patient assessment data and the cross-setting measure specifications available at the following Web site:
Another commenter asked that CMS more clearly define the subregulatory process criteria for determining what constitutes a nonsubstantive change. In addition, the commenter requested that CMS consider any potential impacts that measure numerator or denominator changes would have on the relative ranking of LTCH providers on the measure. The commenter further noted that while a change may appear to be nonsubstantive, it might adversely affect an LTCH facility ranking.
We believe that it is important to have in place a subregulatory process to incorporate nonsubstantive updates made by the NQF into the measure specifications so that the measures remain up-to-date. For example, we could use the CMS Web site as a place to announce changes. As noted in the proposed rule, the subregulatory process proposed is the same process as we have adopted for the Hospital IQR Program and which has been used successfully in that program. We believe that the criteria for what constitutes a non-substantive change could vary widely and is best described by examples, as we have done in the proposed rule. As noted, what constitutes a substantive versus a nonsubstantive change is determined on a case-by-case basis.
We also will continue to assess current risk adjustment methods for IMPACT Act quality and resource use measures. As a part of measure development and maintenance, CMS supports the ongoing evaluation of risk adjustment which includes obtaining expert input, the review of relevant literature for identification of appropriate risk adjusters and appropriate testing through data analysis. We will continue these processes to promote appropriate utilization of measures in PAC settings.
We thank the commenters for their views, and we will consider them as we develop quality measures and future quality measure proposals for the LTCH QRP and other PAC settings, including those that are developed and proposed in order to meet the requirements of the IMPACT Act.
We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50286 through 50287) for a detailed discussion of the considerations we use for the selection of LTCH QRP quality measures. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24597), we applied the same considerations to the selection of quality, resource use, and other measures required under section 1899B of the Act for the LTCH QRP, in addition to the considerations discussed below.
The quality measures we proposed and are finalizing address some of the measure domains that the Secretary is required to specify under sections 1899B(c)(1) and (d)(1) of the Act. The totality of the measures considered to meet the requirements of the IMPACT Act will evolve, and additional measures will be proposed over time as they become available.
To meet the first specified application date applicable to LTCHs under section 1899B(a)(2)(E) of the Act, which is October 1, 2016, we have focused on measures that:
• Correspond to a measure domain in section 1899B(c)(1) or (d)(1) of the Act and are setting-agnostic: For example, falls with major injury and the incidence of pressure ulcers;
• Are currently adopted for one or more of our PAC quality reporting programs that are already either NQF-endorsed and in place or finalized for use, or already previewed by the MAP with support;
• Minimize added burden on LTCHs;
• Minimize or avoid, to the extent feasible, revisions to the existing items in assessment tools currently in use (for example, the LTCH CARE Data Set);
• Avoid, where possible, duplication of existing assessment items.
In our selection and specification of measures, we employ a transparent process in which we seek input from stakeholders and national experts and engage in a process that allows for pre-rulemaking input on each measure, as required by section 1890A of the Act. This process is based on a private-public partnership, and it occurs via the MAP. The MAP is composed of multi-stakeholder groups convened by the NQF, our current contractor under section 1890 of the Act, to provide input on the selection of quality and efficiency measures described in section 1890(b)(7)(B) of the Act. The NQF must convene these stakeholders and provide us with the stakeholders' input on the selection of such measures. We, in turn, must take this input into consideration in selecting such measures. In addition, the Secretary must make available to the public by December 1 of each year a list of such measures that the Secretary is considering under title XVIII of the Act.
As discussed in section VIII.C.1. of the preamble of this final rule, section 1899B(e)(3) of the Act provides that the pre-rulemaking process required by section 1890A of the Act applies to the measures required under section 1899B of the Act, subject to certain exceptions for expedited procedures or, alternatively, waiver of section 1890A of the Act.
We initiated an Ad Hoc MAP process for the review of the quality measures under consideration for proposal in preparation for adoption of those quality measures into the LTCH QRP that are required by the IMPACT Act, and which must be specified by October 1, 2016. The List of Measures under Consideration (MUC List) under the IMPACT Act was made available to the public for comment during the MAP Meeting on February 9, 2015 (
As discussed in section VIII.C.1. of the preamble of this final rule, section 1899B(j) of the Act requires that we allow for stakeholder input as part of the pre-rulemaking process. To meet this requirement, we provided the following opportunities for stakeholder input: (1) Our measure development contractor convened a TEP that included stakeholder experts and patient representatives on February 3, 2015; (2) we provided two separate listening sessions on February 10, 2015 and March 5, 2015; (3) we sought public input during the February 2015 Ad Hoc MAP process provided for the sole purpose of reviewing the measures we proposed in reaction to the IMPACT Act; and (4) we sought public comment as part of our NQF measure maintenance submissions. In addition, we implemented a mailbox for the submission of comments in January 2015,
For measures that do not have NQF endorsement, or which are not fully supported by the MAP for the LTCH QRP, we proposed measures that most closely align with the national priorities discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50286 through 50287), and for which the MAP supports the measure concept. Further discussion as to the importance and high-priority status of these measures in the LTCH setting is included under each quality measure proposal in the preamble of this final rule. In addition, for measures not endorsed by the NQF, we have sought, to the extent practicable, to adopt measures that have been endorsed or adopted by a national consensus organization, recommended by multi-stakeholder organizations, and/or developed with the input of providers, purchasers/payers, and other stakeholders.
While we did not solicit comments specifically regarding the general considerations used for selecting quality, resource use, and other measures for the LTCH QRP, we received several comments, most notably on the NQF MAP pre-rulemaking process and MAP review process, which are addressed under the comments and responses portion of section VIII.C.1. of the preamble of this final rule.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53614 through 53615), for the LTCH QRP, we adopted a policy that once a quality measure is adopted, it will be retained for use in subsequent years, unless otherwise stated. For the purpose of streamlining the rulemaking process, when we initially adopt a measure for the LTCH QRP for a payment determination, this measure will be automatically adopted for all subsequent years or until we propose to remove, suspend, or replace the measure. For further information on how measures are considered for removal, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53614 through 53615).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24598), we did not propose any changes to this policy for retaining LTCH QRP measures adopted for previous payment determinations.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53615 through 53616), we finalized a policy that if the NQF updates an endorsed measure that we have adopted for the LTCH QRP in a manner that we consider to not substantively change the nature of the measure, we will use a subregulatory process to incorporate those updates to the measure specifications that apply to the LTCH QRP. Substantive changes will be proposed and finalized through rulemaking. We refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53615 through 53616) for further information on what constitutes substantive and nonsubstantive changes to a measure. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24598), we did not propose any changes to the policy for adopting changes to LTCH QRP measures.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53624 through 53636), for the FY 2014 payment determination and subsequent years, we adopted updated versions of National Healthcare Safety Network (NHSN) Catheter-Associated Urinary Tract Infection (CAUTI) Outcome Measure (NQF #0138) and the NHSN Central Line-Associated Blood Stream Infection (CLABSI) Outcome Measure (NQF #0139). For the FY 2015 payment determination and subsequent years, we retained the application of Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure to the LTCH setting (initially adopted in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51745 through 51750)). We also adopted two new quality measures for the LTCH QRP for the FY 2016 payment determination and subsequent years, in addition to the three previously adopted measures (the CAUTI measure, CLABSI measure, and Pressure Ulcer measure): (1) Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680); and (2) Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431) (77 FR 53624 through 53636).
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50861 through 50863), we adopted the NQF-endorsed version of the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure for the LTCH QRP for the FY 2015 payment determination and subsequent years.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50289 through 50305), we revised the data collection and submission period for the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure.
Set out below are the quality measures, both previously adopted measures retained in the LTCH QRP and measures adopted in FY 2013 and FY 2014 IPPS/LTCH PPS final rules, for the FY 2015 and FY 2016 payment determinations and subsequent years.
In the FY 2014 IPPS/LTCH PPS final rule, we adopted three additional measures—National Healthcare Safety Network (NHSN) Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50289 through 50305), we: (1) Revised the data collection and submission period for one measure, an application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674); and (2) adopted three new quality measures—Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015), Functional Status Outcome
These measures are set out in the table below.
For the FY 2018 payment determination and subsequent years, in addition to the measures we are retaining under our policy described in VIII.C.3. of the preamble of this final rule, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24599 through 24605), we proposed four quality measures in order to reflect the NQF endorsement of one measure (NQF #2512) and three measures (NQF #0678; application of NQF #0674; application of NQF #2631; endorsed on 07/23/2015) to meet the requirements of the IMPACT Act. Specifically, we proposed the following measures: (a) All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) to reflect NQF endorsement; (b) Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) to meet the requirements of the IMPACT Act; (c) an application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) to meet the requirements of the IMPACT Act; and (d) an application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) to meet the requirements of the IMPACT Act. These quality measures are discussed in more detail below.
The All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) was adopted for use in the LTCH QRP in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50868 through 50874). In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24600), we proposed to adopt this measure to reflect that it is NQF-endorsed for use in the LTCH setting as of December 2014. Current specifications of this NQF-endorsed measure are available for download on the NQF Web site at:
As adopted in the FY 2014 IPPS/LTCH PPS final rule, this is a Medicare FFS claims-based measure, and LTCHs are not required to report any additional data to CMS. Because we would calculate this measure based on claims data that are already reported to the Medicare program for payment purposes, we believe there would be no additional data collection burden on LTCHs resulting from our implementation of this measure as part of the LTCH QRP. In the FY 2014 IPPS/LTCH PPS final rule, we stated that we will calculate this measure using claims data beginning with FY 2013 and FY 2014 and provide initial feedback to LTCHs prior to public reporting of this measure. However, the NQF-endorsed measure (NQF #2512) is based on 2 consecutive calendar years of Medicare FFS claims data. Therefore, in addition to our proposal to adopt the NQF-endorsed version of this measure, we proposed that the initial calculation of the measure and feedback to LTCHs, prior to public reporting of this measure, would be based on CY 2013 and CY 2014 Medicare FFS claims data related to readmissions post-LTCH discharge.
The description of this measure provided in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50868 through 50874) noted this measure is the ratio of the number of risk-adjusted predicted unplanned readmissions for each LTCH, including the estimated facility effect, to the average number of risk-adjusted predicted unplanned readmissions for the same patients if treated at a facility with the average effect on readmissions. This ratio is referred to as the standardized risk ratio or SRR. The NQF-endorsed specifications compute the risk-standardized readmission rate (RSRR) for this measure. The RSRR is the SRR multiplied by the overall national raw readmission rate for all LTCH stays; it is expressed as a percentage rate rather than a ratio.
This measure, which was developed to harmonize with the Hospital-Wide All-Cause Unplanned Readmission
We invited public comments on: (1) Our proposal to adopt the NQF-endorsed version of All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) for the LTCH QRP and (2) our proposal that the initial feedback to LTCHs, prior to public reporting of this measure, would be based on CY 2013 and CY 2014 Medicare FFS claims data related to readmissions post-LTCH discharge.
NQF is currently undertaking a 2-year trial period in which new measures and measures undergoing maintenance review will be assessed to determine if risk-adjusting for sociodemographic factors is appropriate for each measure. For 2 years, NQF will conduct a trial of a temporary policy change that will allow inclusion of sociodemographic factors in the risk-adjustment approach for some performance measures. At the conclusion of the trial, NQF will determine whether to make this policy change permanent. Measure developers must submit information such as analyses and interpretations as well as performance scores with and without sociodemographic factors in the risk adjustment model.
Furthermore, the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is conducting research to examine the impact of socioeconomic status on quality measures, resource use, and other measures under the Medicare program as directed by the IMPACT Act. We will closely examine the findings of these reports and related Secretarial recommendations and consider how they apply to our quality programs at such time as they are available.
After consideration of the public comments we received, we are finalizing our proposal to adopt the NQF-endorsed version of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) for the LTCH QRP effective with the FY 2018 payment determination. We are also finalizing our proposal that the initial calculation of the measure and feedback to LTCHs, prior to public reporting of this measure, would be based on CY 2013 and CY 2014 Medicare FFS claims data related to readmissions post-LTCH discharge.
Section 1899B(c)(1) of the Act directs the Secretary to specify quality measures on which PAC providers are required under the applicable reporting provisions to submit standardized patient assessment data and other necessary data specified by the Secretary with respect to five quality domains, one of which is skin integrity and changes in skin integrity. The
As described in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51754 through 51756), pressure ulcers are high-cost adverse events and are an important measure of quality. For information on the detailed rationale for relevance, evidence, appropriateness, importance, and applicability of this quality measure in the LTCH QRP, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51754 through 51756) and the FY 2014 IPPS/LTCH PPS final rule (78 FR 50861 through 50863). Measure specifications are available on the NQF Web site at:
The IMPACT Act requires the implementation of quality measures and resource use and other measures that are standardized and interoperable across PAC settings as well as the reporting of standardized patient assessment data and other necessary data specified by the Secretary. This requirement is in line with the NQF Steering Committee report, which stated, “to understand the impact of pressure ulcers across settings, quality measures addressing prevention, incidence, and prevalence of pressure ulcers must be harmonized and aligned.”
The Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure was adopted for use in the IRF QRP in the FY 2012 IRF PPS final rule (76 FR 47876 through 47878) for the FY 2014 payment determination and subsequent years and has been successfully submitted by IRFs using the Inpatient Rehabilitation Facility—Patient Assessment Instrument (IRF-PAI) since October 2012. It has also been implemented in the CMS Nursing Home Quality Initiative, using the Minimum Data Set (MDS) Version 3.0 since 2011, and is currently publicly reported on CMS'
A TEP convened by our measure development contractor in February 2015, provided input on the technical specifications of this quality measure, as well as the applicability of this measure as a cross-setting measure across PAC settings, including the LTCH setting, to meet the requirements of the IMPACT Act. The TEP supported the applicability of this measure as a cross-setting measure across PAC settings and also supported our efforts to standardize items for data collection and submission of this measure as well as our efforts to standardize the measure for cross-setting development. In addition, on February 9, 2015, the MAP met to provide input to CMS on the measure. The MAP supported the use of Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure in the LTCH QRP as a cross-setting quality measure. More information about the MAP's recommendations for this measure is included in: The MAP Off-Cycle Deliberations 2015: Measures under Consideration to Implement Provisions of the IMPACT Act: Final Report which is available at:
We proposed that data collection for this measure continue to occur through the LTCH CARE Data Set submitted through the CMS Quality Improvement and Evaluation System (QIES) Assessment Submission and Processing (ASAP) system. LTCHs have been submitting data on the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure through the LTCH CARE Data Set since October 2012. By building on the existing reporting and submission infrastructure for LTCHs, we intend to minimize the administrative burden related to data collection and submission for this measure under the LTCH QRP. For more information on LTCH QRP reporting using the QIES ASAP system, we refer readers to our Web site at:
We proposed that data collected using standardized items through the LTCH CARE Data Set would continue to be used to calculate this quality measure. LTCH CARE Data Set items used to identify new or worsened pressure ulcers consist of: M0800A
The specifications and data elements for the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure for LTCHs are available in the LTCH QRP Manual at:
We invited public comment on our proposal to adopt the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure for the FY 2018 payment determination and subsequent years to fulfill the requirements of the IMPACT Act.
In fall 2015, prior to the implementation of new quality measures and new items of LTCH CARE Data Set version 3.00, we intend to offer free trainings to LTCH providers and interested stakeholders. This training is part of our ongoing strategy to ensure successful implementation of the LTCH QRP. In addition, we will continue to maintain and provide guidance through the LTCH help desk via
Another commenter was concerned that the measure is limited to only high risk patients or residents, and that the denominator size is decreased by excluding individuals who are low risk. The commenter indicated that that pressure ulcers do develop in low-risk individuals and that this exclusion will impact each PAC setting differently because the prevalence of low risk individuals varies across settings. The commenter suggested that CMS use a logistic regression model for risk adjustment to allow for an increase in the measure sample size by including all admissions, take into consideration low-volume providers, and capture the development of pressure ulcers in low-risk individuals. This commenter expressed concern that the current risk factors for this measure were selected for the SNF setting and are therefore inappropriate for the LTCH setting, and recommended use of an ordinal scale related to an increasing number and severity of risk factors rather than grading risk dichotomously (for example, high risk vs. low risk). The commenter further recommended additional risk stratification and expanding the list of risk factors to better capture variation across different PAC settings. Finally, the commenter noted that the TEP that evaluated this cross-setting pressure ulcer measure recommended that CMS consider modifying the risk adjustment model and either excluding or risk adjusting for Hospice patients and patients receiving end-of-life care.
In regard to the commenter who recommended we risk adjust using a logistic regression model and incorporate low risk patients into the measure, we believe that this commenter may have submitted comments regarding the wrong quality measure. Their comments apply to the quality measure, Percent of High Risk Residents with Pressure Ulcers (Long Stay) (NQF #0679), which is not the measure that we proposed for the LTCH QRP. The proposed measure is Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (NQF #0678). This measure is currently risk-adjusted using a logistic regression model and includes low-risk patients. In the model, patients are categorized as either high or low risk for four risk factors: functional limitation, bowel incontinence, diabetes or peripheral vascular disease (PVD)/peripheral arterial disease (PAD), and low body mass index (BMI). Low-risk patients are included in the measure calculation. An expected score is calculated for each patient or resident using that patient or resident's risk level on the four risk factors described above. The patient/resident-level expected scores are then averaged to calculate the facility-level expected score, which is compared to the facility-level observed score to calculate the adjusted score for each facility. Additional detail regarding risk adjustment for this measure is available in the measure specifications, available at:
We have determined that the current risk-adjustment methodology is appropriate for this measure and have developed and implemented the risk adjustment model for this measure. To arrive at this determination, we rely on ongoing measure development and measure maintenance activities undertaken by our measure development contractor, RTI International. These activities include a review of the relevant literature, careful analyses to examine the appropriateness of current and additional risk factors using facility-level data submitted by over 400 LTCHs nationwide by means of the LTCH CARE Data Set as part of the LTCH QRP, input from a LTCH-setting-specific TEP, input from a cross-setting TEP, and advisement and clinical guidance of subject matter experts and other stakeholders to examine current risk factors and to identify additional risk factors.
We recognize that it is important to continue to examine additional risk-adjustment factors to ensure valid and reliable quality measures and to consider further improvement of the risk adjustment model for our quality measures for the LTCH QRP. To this end, we will take into consideration the TEP discussion and these commenters' thoughtful feedback to inform our ongoing assessment of risk factors and future risk adjustment and stratification model for the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure, including consideration of the recommendation to exclude or adjust for hospice patients and patients receiving end-of-life care. We remain committed to conducting ongoing testing and measure development activities in an effort to improve the risk adjustment of quality measures implemented through the quality reporting programs. These activities will ensure that this quality measure remains valid and reliable and provides usable information to inform quality improvement activities within the LTCH setting as well as other PAC settings, and to fulfill the public reporting goals of the CMS quality reporting programs, including the LTCH QRP.
The application of this quality measure for use in the LTCH QRP and IRF QRP was established in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51745 through 51750) and the IRF PPS FY 2012 (76 FR 47876 through 47878) when this quality measure was finalized for use in the LTCH QRP and IRF QRP, respectively. The NQF endorsement was expanded to the LTCH and IRF settings in 2012. The expanded measure was finalized in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50861 through 50863) and the FY 2014 IRF PPS final rule (78 FR 47911 through 47912) for use in the LTCH and IRF QRP, respectively. As part of NQF endorsement maintenance for this measure, CMS and our measure contractor will continue to perform reliability and validity testing. Findings from early data analyses have shown that the measure continues to be valid and reliable for LTCH and IRF settings in addition to the SNF/NH setting.
The commenter specifically mentioned the frequency of assessments, highlighting the fact that the LTCH and IRF versions of the measure are calculated using data from assessments conducted at two points in time (admission and discharge), while the SNF version uses assessments at more than two points in time. The commenter expressed concern that the higher frequency of assessments for the MDS could potentially result in higher rates of pressure ulcer counts for SNFs. Another commenter voiced particular concerns regarding differences in the look back periods, for the items used on the IRF, SNF and LTCH assessments (MDS = 7-day assessment period; IRF = 3-day assessment period; LTCH = 3-day assessment period) and suggested that this would result in different rates of detection of new or worsened ulcers. Commenters encouraged CMS to address all of these discrepancies, and suggested that CMS should switch to using only an admission and discharge assessment in the SNF version of the measure.
As to the concern that the pressure ulcer measure calculation is based on more frequent assessments in the SNF setting than in the LTCH and IRF settings, we wish to clarify that result of the measure calculation for all three PAC providers is the same. For all three PAC providers, the measure calculation ultimately shows the difference between the number of pressure ulcers present on admission and the number of new or worsened pressure ulcers present on discharge. While SNF measure calculation arrives at that number differently than does the measure calculation in the IRF and LTCH settings, ultimately all three settings report the same result—as noted, the difference between the number of pressure ulcers present on admission and the new or worsened pressure ulcers at discharge. To explain, in IRFs and LTCHs, pressure ulcer assessment data is obtained only at two points in time—on admission and on discharge. Therefore, the calculation of the measure includes all new or worsened pressure ulcers since admission. In contrast, in SNFs, pressure ulcer assessment data is obtained on admission, at intervals during the stay (referred to as “interim assessments”), and at discharge. Each interim assessment and the discharge assessment only look back to whether there were new or worsened pressure ulcers since the last interim assessment. The sum of number of new or worsened pressure ulcers identified at each interim assessment and at the time of discharge yields the total number of new or worsened pressure ulcers that occurred during the stay and that were present on discharge. In other words, the collection of pressure ulcer data in LTCHs and IRFs is cumulative, whereas in SNFs, data collection is sequential. In both cases the calculation reaches the same result—the total number of new or worsened pressured ulcers between admission and discharge. Thus, this is the same result of the measure calculation for SNFs as is obtained for IRFs and LTCHs.
We interpret the commenter's concern related to a higher frequency of assessments for the MDS potentially resulting in higher rates of pressure ulcer counts pertains to the potential inclusion of wounds that are new or worsened and are identified on such interim assessments but actually heal by the time of discharge. We wish to clarify that, as with the LTCH and IRF measure calculation that does not include pressure ulcers that heal, we will calculate the quality measure such that any new or worsened pressure ulcer wounds found on interim assessments but have healed will not be included.
In regard to the commenter's concern about different look-back periods, we acknowledge that although the LTCH CARE Data Set and IRF-PAI allow up to the third day starting on the day of admission as the assessment period and the MDS allows for an assessment period of admission up to day 7, we note that the training manuals for SNFs, LTCHs and IRFs provide specific and equivalent-coding instructions related to the items used to calculate this measure (found in Section M—skin conditions for all three assessments). These instructions ensure that the assessment of skin integrity occurs at the initiation of patients' or residents' PAC stays regardless of setting. All three manuals direct providers to complete the skin assessment for pressure ulcers present on admission as close to admission as possible, ensuring a harmonized approach to the timing of the initial skin assessment. Regardless of differences in the allowed assessment periods, providers across PAC settings should adhere to best clinical practices, established standards of care, and the instructions in their respective training manuals, to ensure that skin integrity information is collected as close to admission as possible. Although the manual instructions are harmonized to ensure assessment at the beginning of the stay, based on the commenter's feedback, we will take into consideration the incorporation of uniform assessment periods for this section of the assessments.
In addition to NQF review, this measure has been reviewed by several TEPs, which included representatives from the LTCH setting. In June and November 2013, our measure development contractor convened a cross-setting pressure ulcer TEP, which included representatives from the LTCH setting and provided detailed input regarding the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678).
As noted, this measure was fully supported by the MAP at their meeting on February 9, 2015 for use in the LTCH QRP as a cross-setting quality measure.
After consideration of the public comments we received, we are finalizing our proposal to adopt the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678) measure for the FY 2018 payment determination and subsequent years to fulfill the requirements of the IMPACT Act.
Section 1899B of the Act directs the Secretary to specify quality measures on which PAC providers are required under the applicable reporting provisions to submit standardized patient assessment data and other necessary data specified by the Secretary with respect to five quality domains, one of which is the incidence of major falls. The specified application date by which the Secretary must specify quality measures to address this domain for IRFs, SNFs, and LTCHs is October 1, 2016, and for HHAs is January 1, 2019. To satisfy these requirements, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24601 through 24602), we proposed to adopt an application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure in the LTCH QRP as a cross-setting quality measure that addresses the domain of incidence of major falls. The purpose of our proposal was to establish this measure's use as a cross-setting measure that satisfies the required adoption of such a measure under the domain of falls with major injury. There is no difference between this measure and the measure we previously adopted, beyond the proposed intent to use the measure to satisfy the requirements of the IMPACT Act. Data collection would start on April 1, 2016. The reporting of data for this measure would affect the payment determination for FY 2018 and subsequent years.
For the LTCH setting, this measure would report the percentage of patients who experienced one or more falls with major injury during the LTCH stay. This measure was developed by CMS and is NQF-endorsed, currently for long-stay residents of nursing facilities. It was adopted for the LTCH QRP in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50874 through 50877). In the FY 2015 IPPS/LTCH PPS final rule, we adopted a revised start for data collection of April 1, 2016 and affecting FY 2018 payment determination, and we adopted data collection and submission timelines for the FY 2018 payment determination and subsequent years. For information on the detailed rationale for relevance, evidence, appropriateness, importance, and applicability of this quality measure in the LTCH QRP, we refer readers to these final rules.
Measure specifications are available on the NQF Web site at:
The IMPACT Act requires the implementation of quality measures and resource use and other measures that are standardized and interoperable across PAC settings as well as the reporting of standardized patient assessment data and other necessary data specified by the Secretary. The Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure is NQF-endorsed for long-stay residents of nursing facilities and has been successfully implemented in such settings. The NQF-endorsed measure has been in use as part of the CMS Nursing Home Quality Initiative since
We reviewed the NQF's consensus endorsed measures and did not identify any NQF-endorsed cross-setting quality measures focused on falls with major injury applicable to multiple PAC settings. We are unaware of any other cross-setting quality measures for falls with major injury that have been endorsed or adopted by another consensus organization. Therefore, we proposed an application of the measure, the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure under the Secretary's authority to select non-NQF-endorsed measure.
A TEP convened by our measure development contractor provided input on the measure specifications, as well as the feasibility and clinical appropriateness of implementing the measure across PAC settings, including the LTCH setting. The TEP supported the implementation of this measure across PAC settings and also supported CMS' efforts to standardize this measure for cross-setting development. In addition, the MAP met on February 9, 2015, and provided input to CMS on the measure. The MAP conditionally supported the use of an application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure in the LTCH QRP as a cross-setting quality measure. More information about the MAP's recommendations for this measure is included in The MAP Off-Cycle Deliberations 2015: Measures under Consideration to Implement Provisions of the IMPACT Act: Final Report which is available at:
More information on the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure can be found on the NQF Web site at:
We proposed that data for this proposed quality measure be collected using the LTCH CARE Data Set, with submission through the QIES ASAP system. For more information on LTCH QRP reporting through the QIES ASAP system, we refer readers to the CMS Web site at:
The calculation of the proposed application of the measure would be based on item J1900C,
We invited public comment on our proposal to adopt an application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure, with data collection beginning on April 1, 2016 for the FY 2018 payment determination and subsequent years to fulfill the requirements in the IMPACT Act.
While we acknowledge that patient characteristics that elevate the risk for falls with major injury vary across the LTCH population, a TEP convened in 2009 by the measurement development contractor asserted that risk adjustment of this quality measure concept was inappropriate because it is each facility's responsibility to take steps to reduce the rate of injurious falls, especially since such events are considered to be “never events.” We note that the PAC PRD did not analyze falls with major injury, as falls with major injury was not an assessment item that was tested. However, as the commenter pointed out, the prevalence of a history of falls prior to the PAC admission did vary across post-acute settings (as assessed by Item B7 from the CARE tool: “History of Falls. Has the patient had two or more falls in the past year or any fall with injury in the past year?”). Nonetheless, we believe that as part of best clinical practice, LTCHs should assess residents for falls risk and take steps to prevent future falls with major injury.
A TEP of LTCH experts convened in 2011 agreed that falls with major injury are very important to track in LTCHs and did not recommend risk adjustment for this measure. The numerator, denominator, and exclusions definitions provided to the TEP in 2015 are virtually identical to the specifications we proposed to adopt for this measure, and did not include risk adjustment. Two out of 11 members of the 2015 TEP supported risk adjustment of the falls measure. For more information on the 2015 TEP, please visit
We believe factors that increase the risk of falling, such as cognitive impairment, should be included by facilities in their risk assessment to support proper care planning. As cited in the proposed rule, research suggests that 78 percent of falls are anticipated falls, occurring in individuals who could have been identified as at-risk for a fall using a risk-assessment scale. Risk adjusting for falls with major injury could unintentionally lead to insufficient risk prevention by the provider. As required by the DRA, the Hospital Acquired Conditions-Present On Admission (HAC-POA) Indicator Reporting provision requires a quality adjustment in the Medicare Severity-Diagnosis Related Groups (MS-DRG) payments for certain Hospital Acquired Conditions (HACs), which include falls and trauma, and these payment reductions are not risk adjusted. The need for risk assessment, based on varying risk factors among patients, does not remove the obligation of providers to minimize that risk.
With regard to the MAP recommendation to risk adjust this measure cited by the commenter, the MAP feedback regarding risk adjustment for this quality measure applied to the home health setting, not to the SNF setting. We also refer readers to a more recent Cochrane review of 60 randomized controlled trials, which found that within care facilities, multifactorial interventions have the potential to reduce rates of falls and risk of falls.
In addition, we note that this measure was previously finalized for use in the LTCH QRP through the FY 2014 IPPS/LTCH PPS final rule (78 FR 50874 through 50877), and our proposal of this previously adopted measure to establish its cross-setting use, in order to address the domain of incidence of major falls to meet the requirements of the IMPACT Act, does not add any additional burden for LTCHs.
There is no difference between this measure and the measure we previously adopted through the FY 2014 IPPS/LTCH PPS final rule (78 FR 50874 through 50877).
We also are clarifying that while this measure is currently endorsed for the nursing home setting, we believe the data collection items, measure definition, and measure specifications are applicable across multiple PAC settings, including the LTCH setting (78 FR 50876). With regard to the adequacy of the measure's testing, the item-level testing during the development of the MDS 3.0 (data elements in the LTCH CARE Data Set were adapted from MDS 3.0) showed near-perfect inter-rater reliability for the MDS item (J1900C) used to identify falls with major injury. The NQF measure evaluation criteria do not require measure-level reliability if item reliability is high. However, we believe that, given the overlap in the populations and item-level testing results, the application of this measure for LTCH patients will be reliable. In addition, we intend to test the measure for the LTCH setting once data collection begins as part of LTCH QRP and as part of ongoing maintenance of the measure for NQF endorsement.
In addition, our measure development contractor convened a TEP in 2011 that supported the importance of a quality measure to address falls with a major injury in the LTCH setting. This measure on reports falls with major injuries which is an important patient safety concern for LTCH patients. For the reasons listed above, we have concluded that this measure is appropriate for LTCH patients.
With regard to the measure specifications posted on the NQF Web site, the most up-to-date version of the measure specifications were posted for stakeholder review at the time of the
After consideration of the public comments we received, we are finalizing our proposal to adopt the application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure, with data collection beginning on April 1, 2016, for the FY 2018 payment determination and subsequent years to fulfill the requirements in the IMPACT Act.
Section 1899B(c)(1) of the Act directs the Secretary to specify quality measures on which PAC providers are required under the applicable reporting provisions to submit standardized patient assessment data and other necessary data specified by the Secretary with respect to five quality domains, one of which is functional status, cognitive function, and changes in function and cognitive function. The specified application date by which the Secretary must specify quality measures to address this domain for IRFs and SNFs is October 1, 2016, for LTCHs is October 1, 2018, and for HHAs is January 1, 2019. To satisfy these requirements, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24602 through 24605), we proposed to adopt an application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF #2631; endorsed on 07/23/2015) measure that we have already adopted in the LTCH QRP as a cross-setting quality measure that addresses the domain of functional status, cognitive function, and changes in function and cognitive function. The reporting of data for this measure would affect the payment determination for FY 2018 and subsequent years. This quality measure reports the percent of patients with both an admission and a discharge functional assessment and a goal that addresses function.
The National Committee on Vital and Health Statistics, Subcommittee on Health,
The majority of patients who receive PAC services, such as care provided by SNFs, HHAs, IRFs and LTCHs, have functional limitations, and many of these patients are at risk for further decline in function due to limited mobility and ambulation.
Lastly, in addition to having complex medical care needs for an extended period of time, LTCH patients often have limitations in functioning because of the nature of their conditions, as well as deconditioning due to prolonged bed rest and treatment requirements (for example, ventilator use). The clinical practice guideline Assessment of Physical Function
Given the variation in patient and resident populations across the PAC settings, the functional activities that are typically assessed by clinicians for each type of PAC provider may vary. For example, the activity of rolling left and right in bed is an example of a functional activity that may be most relevant for low-functioning patients or residents who are chronically critically
Although functional assessment data are currently collected by SNFs, HHAs, IRFs and LTCHs, this data collection has employed different assessment instruments, scales, and item definitions. The data collected cover similar topics, but are not standardized across PAC settings. Further, the different sets of functional assessment items are coupled with different rating scales, making communication about patient functioning challenging when patients transition from one type of setting to another. Collection of standardized functional assessment data across SNFs, HHAs, IRFs and LTCHs, using common data items, would establish a common language for patient functioning, which may facilitate communication and care coordination as patients transition from one type of provider to another. The collection of standardized functional status data may also help improve patient or resident functioning during an episode of care by ensuring that basic daily activities are assessed at the start and end of each episode of care with the aim of determining whether at least one functional goal has been established.
The functional assessment items included in the proposed functional status quality measure were originally developed and tested as part of the Post-Acute Care Payment Reform Demonstration (PAC PRD) version of the Continuity Assessment Record and Evaluation (CARE) Item Set, which was designed to standardize the assessment of patients' status across acute care and PAC settings, including SNFs, HHAs, IRFs and LTCHs. The functional status items on the CARE Item Set are daily activities that clinicians typically assess at the time of admission and/or discharge in order to determine patients' or residents' needs, evaluate patient progress and prepare patients or residents and families for a transition to home or to another setting.
The development of the CARE Item Set and a description and rationale for each item is described in a report entitled “The Development and Testing of the CARE Item Set: Final Report on the Development of the CARE Item Set: Volume 1 of 3.”
The cross-setting function quality measure we proposed to adopt for the FY 2018 payment determination and subsequent years to meet the IMPACT Act requirements is a process measure that is an application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure. This quality measure was developed by the CMS. It reports the percent of patients with both an admission and a discharge functional assessment and a treatment goal that addresses function. The treatment goal provides documentation that a care plan with a goal has been established for the patient.
We proposed to use the data that will be collected and submitted using the LTCH CARE Data Set version 3.00 for the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure starting April 1, 2016 in order to calculate this cross-setting application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) quality measure. The items in the cross-setting application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure are a subset of the items included in the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure, which was finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50291 through 50298). Therefore, the adoption of this quality measure to satisfy the requirements of the IMPACT Act would not result in the addition of new items to the LTCH CARE Data Set version 3.00 and, therefore, would not result in additional burden for data collection and data submission to LTCHs.
This process measure requires the collection of functional status admission and discharge assessment data using standardized clinical assessment items, or data elements that assess specific functional activities, that is, self-care, mobility activities. The self-care and mobility function activities on the LTCH CARE Data Set version 3.00 are coded using a 6-level rating scale that indicates the patient's level of independence with the activity; higher scores indicate more independence. For this quality measure, documentation of a goal for one of the function items reflects that the patient's care plan addresses function. The function goal is recorded at admission for at least one of the standardized self-care or mobility function items using the 6-level rating scale.
To the extent that a patient had an incomplete stay (for example, for the purpose of being admitted to an acute care facility), collection of discharge functional status data might not be feasible. Therefore, for patients with incomplete stays, admission functional status data and at least one treatment goal would be required; however, discharge functional status data would not be required to be reported.
A TEP convened by our measure development contractor provided input on the technical specifications of this quality measure, as well as the feasibility of implementing the measure across PAC settings, including the LTCH setting. The TEP supported the implementation of this measure across PAC settings and also supported our efforts to standardize this measure for cross-setting use.
In addition, the MAP met on February 9, 2015, and provided input to CMS on the measure. The MAP conditionally supported the use of an application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure for use in the LTCH QRP as the cross-setting measure. The conditions stated
The measure we proposed is an Application of the Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF #2631: endorsed on 07/23/2015). The proposed measure is derived from the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function quality measure. The specifications are available for review at the LTCH QRP Web site at:
We reviewed the NQF's consensus endorsed measures and were unable to identify any NQF-endorsed cross-setting quality measures focused on assessment of function for PAC patients. We are also unaware of any other cross-setting quality measures for functional assessment that have been endorsed or adopted by another consensus organization. Therefore, we proposed to adopt this functional assessment measure for use in the LTCH QRP for the FY 2018 payment determination and subsequent years under the Secretary's authority to select non-NQF-endorsed measures.
As discussed previously, we proposed that this cross-setting quality measure use a subset of data collected for Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) using the LTCH CARE Data Set, with submission through the QIES ASAP system. For more information on LTCH QRP reporting through the QIES ASAP system, we refer readers to the CMS Web site at:
We described the measure calculation algorithm for this measure in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24605).
This measure is calculated at two points in time, at admission and discharge (we refer readers to section VIII.C.9.b. of the preamble of this final rule, Form, Manner and Timing of Quality Data Submission, for more information on the proposed data collection and submission timeline for this proposed quality measure).
The items would assess specific self-care and mobility activities, and would be based on functional items included in the PAC PRD version of the CARE Item Set. The items have been developed and tested for reliability and validity in SNFs, HHAs, IRFs, and LTCHs. More information pertaining to item testing is available on our Post-Acute Care Quality Initiatives Web page at:
We invited public comments on our proposal to adopt the Application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure that we have already adopted in the LTCH QRP as a cross-setting quality measure that addresses the domain of functional status, cognitive function, and changes in function and cognitive function to satisfy the requirement of the IMPACT Act, with data collection starting on April 1, 2016, for the FY 2018 payment determination and subsequent years. Further, we invited public comments on our proposal to use a subset of data collected for the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure to meet the requirements for this cross-setting quality measure that addresses the domain of functional status, cognitive function, and changes in function and cognitive function to satisfy the requirement of the IMPACT Act.
In addition, we note that for the LTCH QRP, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50301), we adopted an outcome measure, Functional Outcome Measure: Change in Mobility Among LTCH Patients Requiring Ventilator Support (NQF #2632; endorsed on 07/23/2015), for implementation starting April 1, 2016.
To reduce potential burden associated with collecting additional items, we have included several mechanisms in Section GG of the LTCH CARE Data Set that allow the clinician to skip questions in the data set that are not appropriate for an individual patient in order to reduce burden. We have instituted skip options so that the final number of items assessed per patient is limited depending on their complexity and capabilities. Therefore, although all of the items are available for assessment, we have built in mechanism that enables the assessor to include assessment information as, and when, appropriate.
We further note that there is no new burden associated with this process measure since it will utilize data elements in the LTCH CARE Data Set that are already collected for the previously adopted measure, Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015).
Further, as discussed above, the measure has attributes within the assessment and data collection that enables outcomes-based evaluation by the provider.
As discussed above, this function quality measure, NQF #2631; endorsed on 07/23/2015, has attributes within the assessment and data collection that enables outcomes-based evaluation by the provider.
The IMPACT Act specifically mentions goals of care as an important aspect of the use of standardized assessment data, quality measures, and resource use to inform discharge planning and incorporate patient preference. We are currently developing functional outcome measures, specifically self-care and mobility quality measures, which may be considered in the future for use in the LTCH setting as part of the LTCH QRP. These outcome function quality measures are being designed to use the same standardized functional assessment items that are included in the cross-setting person and family-centered function process measure in order to capitalize on the data collected for this process measure (that is, an Application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015)), which will inform further development, while allowing for the consideration of limited additional burden.
We believe that assessing patient function goals should be part of clinical care and builds upon the conditions of participation (CoPs) for LTCH providers. The IMPACT Act also specifically mentions goals of care as an important aspect of the use of standardized assessment data, quality measures, and resource use to inform discharge planning and incorporate resident preference. We agree that, for many PAC patients, the goal of therapy is to improve function, and we also recognize that, for some patients, delaying decline may be the goal. We believe that individual, person-centered goals exist in relation to individual preferences and needs. We will provide instructions about reporting of goals in a training manual and in training sessions to better clarify that goals set at admission may be focused on improvement of function or maintenance of function.
In addition to the PAC PRD analyses, as part of the NQF application process, we conducted additional analyses focused on the six submitted IRF and LTCH function quality measures, including item-level, scale-level and facility-level analyses testing the reliability and validity of the CARE function data. The members of this panel reviewed this measure and concluded that the measure does meet the scientific acceptability requirements at a moderate level. A description of the analyses and the results are available on the NQF Web site's Person- and Family-Centered Care project at:
We understand the importance of education in assisting providers to collect accurate data, and we have worked in the past with public outreach including training sessions, training manuals, Webinars, open door forums and help desk support. Further, we note that, as part of the LTCH QRP, we intend to evaluate the national-level data for this quality measure submitted by LTCHs to CMS. These data will inform ongoing measure development and maintenance efforts, including further analysis of reliability and validity of the data elements and the quality measure. Finally, we agree that ongoing reliability and validity testing is critical for all items used to calculate quality measures.
While activities such as “toileting hygiene” and “walking” may have high rates of “activity not attempted” codes at the time of admission for LTCH patients, these activities are completed more often at discharge. Assessment of these activities is particularly important to assess for LTCH patients returning to their home. Using national Medicare FFS claims data from 2010 through 2013, we examined the percentage of LTCH patients who were admitted from an acute hospital and discharged home. The national percentage of LTCH patients discharged home was 40.1 percent in 2010, 39.5 percent in 2011, 38.4 percent in 2012, and 37.5 percent in 2013. These findings demonstrate that a large proportion of LTCH patients are discharged home directly from the LTCH setting. These data strongly support the importance of functional assessment in the LTCH setting, and ensuring patient safety from a functional perspective prior to discharge. Assessment of a patient's level of independence and safety in performing functional activities such as walking is critical for a safe patient transition from the LTCH to the home setting.
Public input and a TEP in 2013 provided feedback to CMS pertaining to the pattern of scores including that of letter codes. TEP members included experts from LTCHs, as well as IRFs and SNFs. A report summarizing recent TEP meetings focused on functional status quality measures titled “Summary of Feedback from TEP on the Development of Cross-Setting Functional Status Quality Measures” is available at:
We believe that standardization of assessment items across the spectrum of PAC settings is an important goal. In the cross-setting process measure, there is a common core subset of function items that will allow tracking of patients' functional status across settings. We recognize that there are some differences in patients' clinical characteristics, including medical acuity, across the LTCH, SNF and IRF settings, and that certain functional items may be more relevant for certain patients. Decisions regarding item selection for each quality measure were based on our review of the literature, input from a TEP convened by our measure contractor, our experiences and review of data in each setting from the PAC PRD, and public comments.
To clarify which specific items are included in each function measure for each QRP, we added a table to the document entitled, LTCH QRP: Specifications of Quality Measures Adopted in the FY 2016 Final Rule, which identifies which functional assessment items are used in the cross-setting process measure, as well as the setting-specific IRF and LTCH outcome quality measures. The document is available for download at:
The PAC PRD tested a range of items, some of which were duplicative, to identify the best performing items in each domain. Select items were removed from the item set where testing results and clinician feedback suggested the need for fewer items to be included in a particular measure or scale. We also received feedback on the items from a cross-setting TEP convened by our measure development contractor, RTI International. The measure is based on analyses which are available on our Web site at:
We chose from this subset of data items to develop the function-based CARE measures, such as the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) measure. Additional function items are included on the LTCH CARE Data Set due to the adoption of additional outcome-based quality measure (Functional Status Outcome Measure: Change in Mobility Among LTCH Patients Requiring Ventilator Support, NQF #2632; endorsed on 07/23/2015) in the LTCH setting. Therefore, we believe that the core set of items in Section GG are standardized to one another by item and through the use of the standardized 6-level rating scale. Further, we will continue to work to harmonize the assessment instructions to better guide the coding of the assessment, as we believe that this will lead to accurate and reliable data, allowing us to compare the data within each setting. We also believe that the assessment of these activities is part of routine clinical care at a minimum at the start of care and at the end of care.
We recognize that there are some differences in patients' clinical characteristics, including medical acuity across the SNF, LTCH and IRF settings, and that certain functional items may be more relevant for certain patients. For example, one item, “Wash Upper Body” is included in the LTCH quality measure, Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015), but is not included in the IRF outcome measures or the cross-setting measure, an Application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015), because this item overlaps with the item “Bathe/Shower Self,” which focused on washing the entire body. For the LTCH setting, where patients are chronically critically ill, bathing the upper body is more likely to occur than washing the entire body. In IRFs and SNFs, clinicians typically assess showering or bathing of the entire body.
To clarify which function items are included in each function measure for each QRP, we added a table to the document entitled, LTCH QRP: Specifications of Quality Measures Adopted in the FY 2016 Final Rule, which identifies which functional assessment items are used in the cross-setting process measure, as well as the setting-specific IRF and LTCH outcome quality measures. The document is available at:
We have addressed similar concerns with training in the past with public outreach including training sessions, training manuals, Webinars, open door forums, help desk support, and a Web site that hosts training information (
We also disagree with the comment that we failed to provide the specifications to the proposed measure. The proposed function process quality measure is an application of the measure, the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF #2631; endorsed on 7/23/2015). The quality measure was endorsed by NQF on July 23, 2015 and was proposed and finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50291 through 50298) for adoption in the LTCH QRP. An application of this measure was proposed in the FY 2016 SNF QRP proposed rule, and similarly it was proposed in the FY 2016 IPPS/LTCH PPS proposed rule and the FY 2016 IRF PPS proposed rule. We proposed the cross-setting version, an application of the LTCH QRP quality measure, based on guidance from multiple TEPs convened by our measure contractor, RTI International. The specifications for this measure are located on the LTCH Quality Reporting Program Measures Information Web page at:
As discussed in section VIII.C.6.c. of the preamble of this rule, prior to our consideration to propose this measure's use in the LTCH QRP, we reviewed the NQF's endorsed measures and were unable to identify any NQF-endorsed, cross-setting or standardized quality measures focused on assessment of function for PAC patients/residents. We were also unaware of any other cross setting quality measures for functional assessment that have been endorsed or adopted by another consensus organization. Therefore, we proposed a modified version of the quality measure, the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF #2631; endorsed on 7/23/2015), with such modifications to allow for its cross-setting application in the LTCH QRP for the FY 2018 payment determination and subsequent years under the Secretary's authority to select a non-NQF-endorsed measure. Since the cross-setting measure is not identical to the measure recommended for NQF-endorsement, it is considered an application of the measure.
We appreciate the commenters' views pertaining to the differences in the function quality measure denominators by payer type across the IRF, SNF and LTCH settings. We also appreciate the commenters' suggested expansion of the population used to calculate all measures to include payer sources beyond Medicare PPS and agree that quality measures that include all persons treated in a facility are better able to capture the health outcomes of that facility's patients or residents, and that quality reporting on all patients or residents is a worthy goal. We believe that quality care is best represented through the inclusion of all patient data regardless of payer source and we agree that consistency in the data would reduce confusion in data interpretation and enable a more comprehensive evaluation of quality. We appreciate the commenter's concerns and, although we had not proposed all payer data collection through this current rulemaking, we will take into consideration the expansion of the LTCH QRP to include all payer sources through future rulemaking.
Finally, we are clarifying that while the IMPACT Act requires the enablement of interoperability through the use of standardized data, there will be instances whereby some provider types may need more or less standardized items than other provider types.
The items were developed with the input with who would be performing the assessments, which included OTs, PTs, SLPs, and RNs. Regarding the questions about scoring assessments and staff that will be trained to complete functional assessments, we have historically provided training for providers. As we prepare for this type of training, we have this type of information available to the public to increase transparency and readiness.
After consideration of the public comments we received, we are finalizing our proposal to adopt the application of the Percent of LTCH Patients with an Admission and
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24605), we did not propose any additional LTCH QRP quality measures for the FY 2019 payment determination and subsequent years. Under our policy discussed in section VIII.C.3. of the preamble of this final rule, we will retain all previously adopted quality measures and, the additional finalized measures in this FY 2016 IPPS/LTCH PPS final rule for the FY 2019 payment determination and subsequent years.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24605), we invited public comments on importance, relevance, appropriateness, and applicability of each of the quality measures and quality measure concepts listed in the table below for future years in the LTCH QRP. Specifically, we invited public comments regarding the clinical importance to the LTCH patient population and the feasibility of data collection and implementation in the LTCH setting for these measures and measure concepts in order to inform and improve quality of care delivered to LTCH patients.
This commenter also commented on the MSPB measure. The commenter expressed similar concerns on this measure as with the hospital readmission measure and discharge to the community measure. In addition, the commenter noted that a 30-days post-discharge episode is not sufficiently long to capture the consequences of receiving care in an LTCH. The commenter noted the importance of assessing an alternative definition of MSPB and the value of incorporating assessment data for risk adjustment before using this measure to assess performance across settings.
Another commenter recommended the implementation of a malnutrition quality measure because malnutrition is a patient safety issue which can negatively impact patient outcomes across healthcare settings. The commenter noted that early identification of patients at-risk for malnutrition, prompt nutrition intervention, and implementation of a care plan for patients diagnosed as malnourished or at-risk for malnutrition are critical to improve outcomes and patient safety by reducing complications, such as infections, falls, and pressure ulcers.
We thank the commenters for their views and we will consider them as we develop future measures and future proposals.
Section 1886(m)(5)(C) of the Act requires that, for the FY 2014 payment determination and subsequent years, each LTCH submit to the Secretary data on quality measures specified by the Secretary. In addition, section 1886(m)(5)(F) of the Act requires that, for the fiscal year beginning on the specified application date, as defined in section 1899B of the Act, and each subsequent year, each LTCH submit to the Secretary data on measures specified by the Secretary under section 1899B of the Act. The data required under section 1886(m)(5)(C) and (F) of the Act must be submitted in a form and manner, and at a time, specified by the Secretary. As required by section 1886(m)(5)(A)(i) of the Act, for any LTCH that does not submit data in accordance with section 1886(m)(5)(C) of the Act with respect to a given rate year, any annual update to the standard Federal rate for discharges for the LTCH during the rate year must be reduced by 2 percentage points.
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50857 through 50861 and 50878 through 50881), we finalized the data submission timelines and submission deadlines for measures for the FY 2016 and FY 2017 payment determinations. We refer readers to the FY 2014 IPPS/LTCH PPS final rule for a more detailed discussion of these timelines and deadlines. Specifically, we refer readers to the table at 78 FR 50878 of the FY 2014 IPPS/LTCH PPS final rule for the data collection period and submission deadlines for the FY 2016 payment determination and the tables at 78 FR 50881 of that final rule for the data collection timelines and submission deadlines for the FY 2017 payment determination.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50307 through 50311), we:
• Revised the previously adopted data collection period and submission deadlines for the Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680) measure for the FY 2016 payment determination and subsequent years;
• Adopted data submission mechanisms for the FY 2018 payment determination and subsequent years for new LTCH QRP quality measures and for revisions to previously adopted quality measures;
• Adopted data collection periods and submission deadlines for certain measures under the LTCH QRP for the FY 2018 payment determination;
• Revised data collection timelines and submission deadlines for the application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure for the FY 2018 payment determination and subsequent years; and
• Adopted data collection timelines and submission deadlines under the LTCH QRP for the FY 2019 payment determination and subsequent years.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24606), beginning with the FY 2017 payment determination, we proposed that a new LTCH be required to begin reporting quality data under the LTCH QRP by no later than the first day of the calendar quarter subsequent to 30 days after the date on its (CCN) notification letter. For example, if an LTCH's CCN notification letter is dated March 15, then the LTCH would be required to begin reporting quality data to CMS beginning on July 1 (March 15 + 30 days = April 14 (quarter 2)). The LTCH would be required to begin collecting quality data on the first day of the quarter subsequent to quarter 2, which is quarter 3, or July 1. The collection of quality data would begin on the first day of the calendar year quarter identified as the start date, and would include all LTCH admissions and subsequent discharges beginning on, and subsequent to, that day; however, submission of quality data would be required by previously finalized or newly proposed quarterly deadlines.
In order to determine which quality measure data an LTCH would need to begin submitting, we refer readers to section VIII.C.9.c. of the preamble of this final rule, below, as it will vary depending upon the timing of the CY quarter identified as a start date. We also proposed to codify this requirement for the timing of new LTCHs to begin reporting for purposes of the LTCH QRP at new proposed § 412.560(a). We invited public comment on our proposals to add and codify this requirement for the timing of new LTCHs to begin reporting for purposes of the LTCH QRP.
We did not receive any public comments on these proposals. Therefore, we are finalizing our proposals regarding the timing for new LTCHs to being reporting quality data under the LTCH QRP for the FY 2017 payment determination and subsequent years.
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53636 through 53637), we finalized new quarterly quality data submission deadlines for LTCHs. We contracted the deadlines from the original 4.5-months post-CY quarter submission deadlines, to 1.5 months (approximately 45 days) deadlines. In order to align the data submission and correction deadlines with the IRF QRP and Hospital IQR Program as we near public reporting, and to meet the requirements of the IMPACT Act, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24606 through 24608), we proposed to revise the data submission and correction deadlines for quality measures previously adopted for the LTCH QRP for the FY 2017 and FY 2018 payment determinations and subsequent years.
We proposed to adopt new deadlines that allow 4.5 months (approximately 135 days) after the end of each calendar year quarter for quality data submission, beginning with quarter 4 2015 (October 2015 through December 2015). Under this new policy, LTCHs will have approximately 135 days following the end of each calendar year quarter, during which to submit, review, and correct their quality data for that CY quarter. We also proposed data collection and data submission timelines for quality measures that we proposed for the FY 2018 payment determination and subsequent years. Further, for the measures proposed in the proposed rule, and finalized within this final rule—Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), the application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674), and the application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015)—we proposed that the data collection and data submission timelines align with the proposed data collection and data submission timelines for each respective measure starting with April 1, 2016. Because the All-Cause Unplanned Readmission Measure for 30 Days Post-
The tables below present the data collection period and data submission timelines for quality measures affecting the FY 2017 payment determination, as well as the revisions to the data collection period and data submission timelines for quality measures for the FY 2018 payment determination and subsequent years.
We would like to note that the tables below, as displayed in the proposed rule, contained technical errors with respect to the measure Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). In the FY 2016 IPPS/LTCH PPS proposed rule, we accidentally omitted this measure from the first table below, which refers to measures affecting the FY 2017 payment determination. We have added this measure (NQF #0431) back to the first table below, including the correct submission deadlines, as they related to our decision to refrain from applying this policy to this measure. In the proposed rule we also listed the data submission deadlines as they pertain to this same measure (NQF #0431) related to the FY 2018 payment determination and subsequent years, but note that the data submission deadlines in table two have been corrected to reflect our decision to finalize this policy with exception of this measure.
We invited public comments on our proposals.
After consideration of the public comments we received, we are finalizing our proposal to revise the data submission and correction timelines for the FY 2017 and FY 2018 payment determinations and subsequent years for all measures except the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). For the reasons stated above, for the measure Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431), we are retaining previously finalized data submission timelines for the FY 2017 and FY 2018 payment determinations and subsequent years. We refer readers to FY 2014 IPPS/LTCH PPS final rule (78 FR 50858 through 50858) for data submission deadlines for FY 2017 payment determination for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). We refer readers to FY 2014 IPPS/LTCH PPS final rule (78 FR 50882 through 50883) for data submission deadlines for FY 2018 payment determination for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431). We refer readers to FY 2015 IPPS/LTCH PPS final rule ((79 FR 50311)) for data submission deadlines for FY 2019 payment determination for the Influenza Vaccination Coverage Among Healthcare Personnel (NQF #0431).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50311 through 50314), we finalized specific LTCH QRP thresholds for completeness of LTCH data submissions. To ensure that LTCHs are meeting an acceptable standard for completeness of submitted data, we finalized the policy that, beginning with the FY 2016 payment determination and for each subsequent year, LTCHs must meet or exceed two separate data completeness thresholds: One threshold set at 80 percent for completion of quality measures data collected using the LTCH CARE Data Set and submitted through the QIES ASAP system; and a second threshold set at 100 percent for quality measures data collected and submitted using the CDC NHSN.
In addition, we stated that we would apply the same thresholds to all measures adopted as the LTCH QRP expands and LTCHs report data on the finalized measure sets. That is, as we finalize new measures through the regulatory process, LTCHs will be held accountable for meeting the previously finalized data completion threshold requirements for each measure until such time that updated threshold requirements are proposed and finalized through a subsequent regulatory cycle.
Further, we finalized the requirement that a LTCH must meet or exceed both thresholds in order to avoid receiving a 2-percentage point reduction to their annual payment update for a given fiscal year, beginning with FY 2016 and for all subsequent payment updates. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24608), we did not propose any changes to these policies. We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50311 through 50314) for a detailed discussion of the finalized data completion requirements of the LTCH QRP.
Historically, we have built consistency and internal validation checks into our data submission specifications to ensure that the data elements of the LTCH CARE Data Set assessments conform to requirements such as proper format and facility information. These internal consistency checks are automated and occur during the LTCH data entry and submission process, and help ensure the integrity of the data submitted by LTCHs by rejecting submissions or issuing warnings when LTCH data contain logical inconsistencies. These internal consistency checks are referred to as “system edits” and are further outlined in the LTCH Data Submission Specifications version 1.01, which are available for download on the LTCH Quality Reporting Technical Information Web page at:
Validation is intended to provide added assurance of the accuracy of the data that will be reported to the public as required by sections 1886(m)(5)(E) and 1899B(g) of the Act. In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28275 through 28276), we proposed, for the FY 2016 payment determination and subsequent years, to validate the data elements submitted to CMS for quality purposes. We also proposed policies regarding the application of the 2-percentage point reduction for LTCHs that failed to meet the data accuracy threshold.
However, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50314 through 50316), we decided to further explore suggestions from commenters before finalizing the LTCH data validation process that we proposed. Therefore, we did not finalize the data validation proposals.
At this time, we are continuing to explore data accuracy validation methods and threshold policies that will limit the amount of burden and cost to LTCHs, while allowing us to establish estimations of the accuracy of LTCH QRP data. Therefore, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24608), we did not propose any new policies related to data accuracy validation, but we plan to do so in future rulemaking cycles.
While we did not solicit comments specifically regarding our policies related to data accuracy validation, we received a comment, which we summarize and respond to below.
Section 1886(m)(5)(E) of the Act requires the Secretary to establish procedures for making the LTCH QRP data available to the public. In so doing, the Secretary must ensure that LTCHs have the opportunity to review any such data with respect to the LTCH prior to its release to the public. Section 1899B(g) of the Act requires the Secretary to establish procedures for making available to the public information regarding the performance of individual PAC providers with respect to the measures required under section 1899B of the Act beginning not later than 2 years after the applicable specified application date. The procedures must ensure, including through a process consistent with the process applied under section 1886(b)(3)(B)(viii)(VII) of the Act for similar purposes, that each PAC provider has the opportunity to review and submit corrections to the data and information that are to be made public with respect to the PAC provider prior to such data being made public.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24608 through 24610), we proposed to display performance data related to the LTCH QRP quality measures, as applicable, required by the LTCH QRP by fall 2016 on a CMS Web site, such as the
The
The initial display of information would contain performance data on four quality measures: (1) NHSN CAUTI Outcome Measure (NQF #0138); (2) NHSN CLABSI Outcome Measure (NQF #0139); (3) Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678); and (4) All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512). We proposed to publicly report data beginning with data collected on these measures for the first quarter of 2015, or discharges beginning January 1, 2015, with exception of the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512). Rates would be displayed based on four (4) rolling quarters of data and would use discharges from January 1, 2015 through December 31, 2015 (CY 2015), for calculation, with exception of the measure All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512). With respect to LTCH performance related to the All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512), proposed to publicly report readmission rates beginning with Medicare FFS claims data for patient discharges starting with January 1, 2013. Readmission rates will be calculated using Medicare FFS claims data for two consecutive years (for example, readmission rates will be calculated using Medicare FFS claims data for January 1, 2013 through December 31, 2014 (CY 2013 and CY 2014)) and displayed on a calendar year basis.
Calculations for the CAUTI and CLABSI measures adjust for differences in the characteristics of hospitals and patients using a Standardized Infection Ratio (SIR). The SIR is a summary measure that takes into account differences in the types of patients that a hospital treats. The SIR may take into account the type of patient care location, laboratory methods, hospital affiliation with a medical school, bed size of the hospital, patient age, and American Society of Anesthesiologists' classification of physical health. It compares the actual number of HAIs in a facility or State to a national benchmark based on previous years of reported data and adjusts the data based on several factors. A confidence interval with a lower and upper limit is displayed around each SIR to indicate that there is a high degree of confidence that the true value of the SIR lies within that interval. A SIR with a lower limit that is greater than 1.0 means that there were more HAIs in a facility or State than were predicted, and the facility is classified as “Worse than the U.S. National Benchmark.” If the SIR has an upper limit that is less than 1, the facility had fewer HAIs than were predicted and is classified as “Better than the U.S. National Benchmark.” If the confidence interval includes the value of 1, there is no statistical difference between the actual number of HAIs and the number predicted, and the facility is classified as “No Different than U.S. National Benchmark.” If the number of predicted infections is less than 1, the SIR and confidence interval cannot be calculated.
Calculations for the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (NQF #0678) would be risk-adjusted. Resident- or patient-level covariate risk adjustment is performed. Resident- or patient-level covariates are used in a logistic regression model to calculate a resident- or patient-level expected quality measure (QM) score (the probability that the resident or patient will evidence the outcome, given the presence or absence of patient
Finally, calculation for performance on the measure All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) will also be risk-adjusted. The risk adjustment methodology is available, along with the specifications for this measure, on our LTCH Quality Reporting Measures Information Web page at:
We are currently developing reports that will allow providers to view the data that is submitted to CMS via the QIES ASAP system and the CDC's NHSN (Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), the NHSN CAUTI Outcome Measure (NQF #0138) and the NHSN CLABSI Outcome Measure (NQF #0139), respectively). These reports, although not initially, will also include provider performance on any currently reported quality measure that is calculated based on CMS claims data that we plan on publicly reporting (All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512)). Although real time results will not be available, the report will refresh all of the data submitted at least once a month.
We proposed a process to give providers an opportunity to review and correct data submitted to the QIES ASAP system or to the CDC's NHSN by utilizing that report. Under this proposed process, providers would to have the opportunity to review and correct data they submit on all assessment-based measures. Providers can begin submitting data on the first admission of any reporting quarter. Providers are encouraged to submit data early in the submission schedule so that they can identify errors and resubmit data before the quarterly submission deadline. The data would be populated into reports that are updated at least once a month with all data that have been submitted. That report would contain the provider's performance on each measure calculated based on assessment submissions to the QIES ASAP system or CDC NHSN. We believe that the submission deadline timeframe, which we proposed in the proposed rule to extend from the current 1.5 month policy to 4.5 months beyond the end of each calendar year quarter, is sufficient time for providers to be able to submit, review data, make corrections to the data, and view their data. We proposed that once the provider has an opportunity to review and correct quarterly data related to measures submitted via the QIES ASAP system or CDC NHSN, we would consider the provider to have been given the opportunity to review and correct this data. We would not allow patient-level data correction after the submission deadline or for previous years. This is because we must set a deadline to ensure timely computation of measure rates and payment adjustment factors. Before we display this information, providers will be permitted 30 days to review their information as recorded in the QIES ASAP system or CDC NHSN.
We invited public comment on these proposals.
We have continually urged LTCHs to submit their quality data as soon as possible, thus allowing ample time for review and correction. We will not allow any correction of patient-level data during the 30-day preview period. We will issue a preview report at the beginning of this period that contains provider performance data, and LTCHs will have 30 days during which to refute any quality measure calculations they feel have been made in error. This policy aligns with that of the Hospital IQR Program and the IRF QRP. Allowing for patient level data correction at this time would have the effect of negating our data submission deadlines.
Regarding the comment that we should develop a separate
After consideration of the public comments we received, we are finalizing our proposals to display performance data for the quality beginning in fall 2016 on a CMS Web site, such as the
In addition to our proposal to publicly display LTCH performance data on the required quality measures under the LTCH QRP, we also proposed to publish a list of LTCHs that successfully meet the reporting requirements for the applicable payment determination on the LTCH QRP Web site at:
We invited public comment on these proposals.
We did not receive any public comments on our proposals to publish a list of LTCHs that successfully meet
At the conclusion of each fiscal year reporting cycle, we review the data received from each LTCH to determine if the LTCH met the reporting requirements set forth for that reporting cycle. LTCHs that are found to be noncompliant will receive a reduction in the amount of 2 percentage points to their annual payment update for the applicable fiscal year. In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50317 through 50318), we described and adopted an updated process that enables an LTCH to request a reconsideration of our initial noncompliance decision in the event that an LTCH believes that it was incorrectly identified as being subject to the 2-percentage point reduction to its annual payment due to noncompliance with the LTCH QRP reporting requirements for a given reporting period.
We are clarifying that any LTCH that wishes to submit a reconsideration request must do so by submitting an email to CMS containing all of the requirements listed on the LTCH QRP Web site at:
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24610 through 24611), we proposed to continue using the LTCH QRP reconsideration and appeals procedures that were adopted in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50317 through 50318) and that have been posted on the LTCH QRP Web site for the FY 2017 payment determination and subsequent years, with an exception regarding the way in which noncompliant LTCHs are notified of this determination.
Previously, only LTCHs found to be noncompliant with the reporting requirements set forth for a given payment determination received a notification of this finding along with instructions for requesting reconsideration in the form of a certified letter via the USPS. In an effort to communicate as quickly, efficiently, and broadly as possible with LTCHs regarding annual compliance, we proposed changes to our communications method regarding annual notification of reporting compliance in the LTCH QRP. In addition to sending a letter via regular USPS mail, beginning with the FY 2016 payment determination and for subsequent fiscal years, we proposed the QIES ASAP system as a mechanism to communicate to LTCHs regarding their compliance with the reporting requirements for the given reporting cycle.
We note that all LTCHs have been required to use the QIES ASAP system in order to report on required LTCH QRP measures since October 1, 2012. Therefore, we proposed that all Medicare-certified LTCH compliance letters be uploaded into the QIES ASAP system for each LTCH to access. Instructions to download files from QIES ASAP system may be found on the Web site at:
The purpose of the compliance letter is to notify an LTCH that it has been identified as either being compliant or noncompliant with the LTCH QRP reporting requirements for the given reporting cycle. If the LTCH is determined to be noncompliant, the notification would indicate that the LTCH is scheduled to receive a 2 percentage point reduction to its upcoming annual payment update and that it may file a reconsideration request if it disagrees with this finding. LTCHs may request a reconsideration of a noncompliance determination through the CMS reconsideration request process.
We also proposed that the notification of our decision regarding received reconsideration requests will be made available through the QIES ASAP system. We did not propose to change the process or requirements for requesting reconsideration, and we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50317 through 50318) for a discussion of the LTCH QRP reconsideration and appeals procedures.
We also proposed to publish a list of LTCHs that successfully meet the reporting requirements for the applicable payment determination on the LTCH QRP Web site at:
We proposed to codify the LTCH QRP reconsideration and appeal procedures at new proposed §§ 412.560(d) and (e).
We invited public comment on the proposals to change the communication mechanism to the QIES ASAP system for the dissemination of compliance notifications and reconsideration decisions, to publish a list of compliant LTCHs on the LTCH QRP Web site, and to codify these processes at new proposed §§ 412.560(d)(1) and (d)(3).
After consideration of the public comments we received, we are finalizing our proposals to change the communication mechanism to the QIES system for the dissemination of compliance notifications and reconsideration decisions, to publish a list of compliant LTCHs on the LTCH QRP Web site, to update the list after reconsideration requests are processed on an annual basis, and to codify the requirements for reconsideration and appeals, as proposed.
We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50883 through 50885) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50316 through 50317) for a detailed discussion of the LTCH QRP Submission Exception and Extension requirements. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24611), for the FY 2017 payment determination and subsequent years, we did not propose any changes to the LTCH QRP requirements that we adopted in these final rules. However, we proposed to codify the LTCH QRP Submission Exception and Extension Requirements at new §§ 412.560(c) and (d).
We remind readers that, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50316 through 50317), we stated that LTCHs must submit request an exception or extension by submitting a written request along with all supporting documentation to CMS via email to the LTCH mailbox at
We invited public comments on our proposal to codify the LTCH QRP submission exception and extension requirements.
We did not receive any public comments on this proposal. Therefore, we are finalizing our proposal to codify the LTCH QRP submission exception and extension requirements at new §§ 412.560(c) and (d).
The HITECH Act (Title IV of Division B of the ARRA, together with Title XIII of Division A of the ARRA) authorizes incentive payments under Medicare and Medicaid for the adoption and meaningful use of certified electronic health record (EHR) technology (CEHRT). Eligible hospitals and CAHs may qualify for these incentive payments under Medicare (as authorized under sections 1886(n) and 1814(l) of the Act, respectively) if they successfully demonstrate meaningful use of CEHRT, which includes reporting on clinical quality measures (CQMs) using CEHRT.
Sections 1886(b)(3)(B) and 1814(l) of the Act also establish downward payment adjustments under Medicare, beginning with FY 2015, for eligible hospitals and CAHs that are not meaningful users of CEHRT for certain associated reporting periods. Section 1903(a)(3)(F)(i) of the Act establishes 100 percent Federal financial participation (FFP) to States for providing incentive payments to eligible Medicaid providers (described in section 1903(t)(2) of the Act) to adopt, implement, upgrade and meaningfully use CEHRT.
Under sections 1886(n)(3)(A) and 1814(l)(3)(A) of the Act and the definition of “meaningful EHR user” under 42 CFR 495.4, eligible hospitals and CAHs must report on CQMs selected by CMS using CEHRT, as part of being a meaningful EHR user under the Medicare EHR Incentive Program. The set of CQMs from which eligible hospitals and CAHs will report under the EHR Incentive Program beginning in FY 2014 is listed in Table 10 of the EHR Incentive Program Stage 2 final rule (77 FR 54083).
In the EHR Incentive Program Stage 3 proposed rule
ONC, in its 2015 Edition proposed rule (80 FR 16844), also indicated that it intends to propose certification policy for the reporting of CQMs for eligible hospitals and CAHs in or with annual IPPS rulemaking to better align with the reporting goals of other CMS programs.
In the EHR Incentive Program Stage 2 final rule, we outlined the CQMs available for use in the EHR Incentive Programs beginning in 2014 for eligible hospitals and CAHs in Table 10 at 77 FR 54083 through 54087, as well as the form and method for submission at 77 FR 54087 through 54089. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24611 through 24613), for CQM reporting for the EHR Incentive Programs in 2016, we proposed to maintain the existing requirements established in earlier rulemaking for the reporting of CQMs, unless indicated otherwise in the proposed rule. These requirements include reporting on 16 CQMs covering at least 3 NQS domains for eligible hospitals and CAHs (77 FR 54079).
As we expand the current measures to align with the National Quality Strategy and the CMS Quality Strategy
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50319 through 50321), we began to shift CQM reporting to a calendar year basis for eligible hospitals and CAHs for the Medicare EHR Incentive Program. We established that, for eligible hospitals and CAHs that submit CQMs electronically in 2015, the reporting period is one calendar quarter
In the Electronic Health Record Incentive Program—Modifications to Meaningful Use in 2015 Through 2017 proposed rule (80 FR 20353), beginning in 2015, we proposed to change the definition of “EHR reporting period” in § 495.4 for EPs, eligible hospitals, and CAHs such that the EHR reporting period would begin and end in relation to a calendar year. In connection with that proposal, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24611 through 24612), we proposed that the reporting period for CQMs in 2016 for eligible hospitals and CAHs for the Medicare and Medicaid EHR Incentive Programs also would be based on the calendar year. We stated that we believe it is important to continue our goal of aligning the EHR Incentive Program with the Hospital IQR Program because alignment of these programs will serve to reduce hospital reporting burden and encourage the adoption and meaningful use of CEHRT by eligible hospitals and CAHs.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24581 through 24582), we proposed to require quarterly reporting and submission periods of CQMs for the 3rd and 4th CY quarters of 2016 (for the FY 2018 payment determination) of the Hospital IQR Program. We also stated that we believe it is important for us to maintain our goal of alignment between the Hospital IQR and EHR Incentive Programs. Therefore, we proposed to align the reporting period in CY 2016 for eligible hospitals and CAHs that report CQMs electronically for the Medicare EHR Incentive Program with that of the Hospital IQR Program and require quarterly reporting and submission periods for CQMs in the 3rd and 4th CY quarters. We refer readers to section VIII.A.8.c. of the preamble of this final rule for further discussion of the proposals and our finalized policies for the Hospital IQR Program.
In addition, in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24587 through 24588), we proposed to change the Hospital IQR Program's submission period for CQMs from annual to quarterly submission, and proposed to change the submission deadline from November 30, 2015 to ending 2 calendar months after the close of the reporting CY quarter (for CY 2016/FY 2018 payment determination, the proposed deadlines are November 30, 2016 for Q3 and February 28, 2017 for Q4). We refer readers to the Hospital IQR Program discussion in section VIII.A.10.d.(3) of the preamble of this final rule for more information about these proposals. Therefore, to coincide with the submission period in the Hospital IQR Program, we also proposed to align the Medicare EHR Incentive Program submission period for CY 2016 with the submission period proposed for the Hospital IQR Program.
We proposed the following CQM reporting periods and submission deadlines for eligible hospitals and CAHs participating in the Medicare EHR Incentive Program in CY 2016:
• Eligible hospitals and CAHs Reporting CQMs by Attestation
++ For eligible hospitals and CAHs demonstrating meaningful use for the first time in 2016, any continuous 90-day reporting period within CY 2016; or one full calendar year reporting period for CY 2016. Attestation by February 28, 2017.
++ For eligible hospitals and CAHs that demonstrated meaningful use in any year prior to 2016, one full calendar year reporting period for CY 2016. Attestation by February 28, 2017.
• Eligible hospitals and CAHs Reporting CQMs Electronically —Two full quarters of data (Q3 and Q4 of CY 2016) submitted via electronic reporting within 2 months after the close of each quarter (Q3 by November 30, 2016; Q4 by February 28, 2017).
We also proposed that the CQM reporting period for eligible hospitals and CAHs participating in the Medicaid EHR Incentive Program would be any continuous 90-day reporting period within CY 2016 for eligible hospitals and CAHs demonstrating meaningful use for the first time; and one full calendar year reporting period of CY 2016 for eligible hospitals and CAHs that demonstrated meaningful use in any year prior to 2016. Providers should refer to their State Medicaid program for requirements on submission methods and deadlines.
We note that, beginning in CY 2017 and in subsequent years, we proposed in the EHR Incentive Program Stage 3 proposed rule (80 FR 16739 through 16740) to require a reporting period of one full calendar year for CQM reporting for all providers participating in the EHR Incentive Programs, with a limited exception for Medicaid providers demonstrating meaningful use for the first time.
We invited public comment on these proposals.
We refer readers to the Hospital IQR Program discussion in section VIII.A.8.c. of the preamble of this final rule for further discussion of these and other related comments and our responses.
After consideration of the public comments we received, and with further consideration of the discussion in sections VIII.A.8.c. and VIII.A.10.d.(3) of the preamble of this final rule, we are aligning our reporting periods and requirements for electronically submitted CQMs for the Medicare EHR Incentive Program with the reporting periods and requirements for electronically submitted CQMs for the Hospital IQR Program. Specifically, we are not finalizing our proposals to require 16 CQMs across three NQS domains reported quarterly for Q3 and Q4 of 2016. Instead, for hospitals that choose to report CQMs electronically for the Medicare EHR Incentive Program for the reporting period in CY 2016, we are requiring a minimum of 4 electronically submitted CQMs in either Q3 or Q4 of CY 2016, with a submission deadline of February 28, 2017. We note that this final policy does not change the reporting periods or requirements for the meaningful use objectives and associated measures under 42 CFR part 495 or apply for CQMs that are reported by attestation via the Registration and Attestation System. We further note that providers should refer to their State Medicaid program for requirements on submission methods and deadlines for the Medicaid EHR Incentive Program.
In the EHR Incentive Program Stage 2 final rule (77 FR 54087 through 54089), we finalized the reporting methods for eligible hospitals and CAHs for the Medicare EHR Incentive Program, which included reporting electronically or by attestation. We finalized that eligible hospitals and CAHs that are beyond their first year of meaningful use will be required to electronically submit the selected 16 CQMs. Subsequent to the Stage 2 final rule, we determined that electronic submission of aggregate-level data using QRDA-III would not be feasible in 2014 and 2015, and thus, eligible hospitals and CAHs would have the option to continue to report aggregate CQM results through attestation for the reporting periods in 2014 and 2015 (78 FR 50904 through 50905; 79 FR 50321 through 50322).
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24612 through 24613), we proposed to continue our existing policy that eligible hospitals and CAHs in any year of participation in the Medicare EHR Incentive Program in 2016 may report CQMs by attestation or electronically using the options previously outlined for electronic reporting either for single program participation in the Medicare EHR Incentive Program, or for participation in multiple programs if the requirements of the aligned quality program are met. The options for CQM submission for eligible hospitals and CAHs in the Medicare EHR Incentive Program are as follows:
• Eligible hospital and CAH options for Medicare EHR Incentive Program participation
++ Option 1: Attest to CQMs through the EHR Registration & Attestation System.
++ Option 2: Electronically report CQMs through QualityNet Portal.
• Eligible hospital and CAH options for electronic reporting for multiple programs
For the Medicaid EHR Incentive Program, States will continue to be responsible for determining whether and how electronic reporting of CQMs would occur, or if they wish to allow reporting through attestation. Any changes that States make to their CQM reporting methods must be submitted through the State Medicaid Health IT Plan (SMHP) process for CMS review and approval prior to being implemented.
We proposed to continue our policy that electronic submission of CQMs will require the use of the most recent release of the CQM version for each CQM to which the EHR is certified. For electronic reporting in 2016, this means eligible hospitals and CAHs would be required to use the Spring 2015 release of the CQMs available at the CMS eCQM Library (
The form and method of electronic submission are further explained in subregulatory guidance and the certification process. For example, the following documents are updated annually to reflect the most recent CQM electronic specifications: The CMS QRDA Implementation Guide; program specific performance calculation guidance; and CQM electronic specifications and guidance documents. These documents are located on the CMS eCQM Library (
We invited public comments on this proposal.
After consideration of the public comments we received, we are finalizing our proposals to allow eligible hospitals and CAHs in any year of participation in the Medicare EHR Incentive Program in 2016 to report CQMs by attestation or electronically, and to continue our policy that electronic submission of CQMs will require the use of the most recent release of the CQM version. We note that an EHR certified for CQMs under the 2014 Edition certification criteria does not need to be recertified each time it is updated to a more recent version of the CQMs.
Several commenters sought clarification regarding the requirement to submit QRDA-I data, and asking whether the QRDA-III option would be available to eligible hospitals and CAHs for reporting to the EHR Incentive Program and the Hospital IQR Programs. We note that, in the EHR Incentive Program Stage 3 proposed rule (80 FR 16771), we proposed to remove the QRDA-III option for eligible hospitals and CAHs. Therefore, we refer readers to that proposed rule for further discussion of this proposal. Due to the timing of the expected publication of the Stage 3 final rule and the questions raised concerning this topic in the public comments on the FY 2016 IPPS/LTCH PPS proposed rule, we are addressing our proposal to remove the QRDA-III option in this FY 2016 IPPS/LTCH PPS final rule instead of in the upcoming Stage 3 final rule. We note the public comment period for the Stage 3 proposed rule ended on May 29, 2015 (80 FR 16732). Below is a summary of the public comments we received in response to our proposal in the Stage 3 proposed rule to remove the QRDA-III option, as well as comments received on this topic in response to the FY 2016 IPPS/LTCH PPS proposed rule.
After consideration of the public comments we received, and in consideration of the limitations outlined above, we are finalizing our proposal to remove the QRDA-III as an option for reporting under the Medicare EHR Incentive Program. For 2016 and future
In the 2015 Edition proposed rule (80 FR 16814), ONC proposed a 2015 Edition certification criterion for “CQMs—report”
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24613 through 24614), for the requirements for the 2015 Edition certification criteria, ONC proposed the following at proposed new § 170.315(c)(3) for clinical quality measurement to state that technology certified to the 2015 Edition must enable a user to electronically create a data file for transmission of clinical quality measurement data which is:
• At a minimum, in accordance with the standards specified in § 170.205(h) and § 170.205(k); and
• Optionally, can be electronically accepted by CMS.
As detailed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24613 through 24614), ONC solicited public comment on the versions of the Quality Reporting Document Architecture—Category I standard that should be adopted under § 170.205(h) and the versions of the Quality Reporting Document Architecture—Category III standard that should be adopted under § 170.205(k) for individual patient level and aggregate level reports, respectively. In order to give full consideration to the public comments received on the versions of the standards that should be adopted under § 170.205(h) and (k), we are not finalizing the “CQMs-report” certification criterion in this FY 2016 IPPS/LTCH PPS final rule. We anticipate finalizing both the certification criterion and the versions of the standards that should be adopted for this criterion in a subsequent final rule later this year. We also intend to address public comments received on both the proposed “CQMs-report” certification criterion and the versions of the standards that should be adopted for this criterion in that same rule.
We stated in the EHR Incentive Program Stage 2 final rule (77 FR 54055) that we do not intend to use notice-and-comment rulemaking as the means to update or modify CQM specifications. Given the necessity to update CQM specifications after they have been published to ensure their continued clinical relevance, accuracy, and validity, we publish annual updates to the electronic specifications for EHR submission. Although we require eligible hospitals and CAHs to submit the most updated versions of CQMs when reporting electronically, CEHRT is not required to be recertified on annual basis. CMS and ONC understand that standards for electronically representing CQMs continue to evolve, and believe there may be value in retesting certified Health IT Modules (including CEHRT) periodically to ensure that CQMs are being accurately calculated and represented, and that they can be reported to CMS in the “form and manner” required for the Hospital IQR Program and EHR Incentive Program. As mentioned previously, CMS and ONC encourage health IT developers to retest their certified technology annually, and solicited public comments on the appropriate frequency for requiring retesting and recertification to the most updated versions of CQMs and most recent “form and manner” reporting requirements.
However, given the continuing evolution of technology and clinical standards, as well as the need for a predictable cycle from measure development to provider data submission, CMS intends to publish a request for information (RFI) on the establishment of an ongoing cycle for the introduction and certification of new measures, the testing of updated measures, and the testing and certification of submission capabilities. We encourage readers to submit their insights and recommendations for our consideration upon publication of that RFI.
Under section 1886(e)(4)(B) of the Act, the Secretary must consider MedPAC's recommendations regarding hospital inpatient payments. Under section 1886(e)(5) of the Act, the Secretary must publish in the annual proposed and final IPPS rules the Secretary's recommendations regarding MedPAC's recommendations. We have reviewed MedPAC's March 2015 “Report to the Congress: Medicare Payment Policy” and have given the recommendations in the report consideration in conjunction with the policies set forth in this final rule. MedPAC recommendations for the IPPS for FY 2016 are addressed in Appendix B to this final rule.
For further information relating specifically to the MedPAC reports or to obtain a copy of the reports, contact MedPAC at (202) 653-7226, or visit MedPAC's Web site at:
In order to respond promptly to public requests for data related to the prospective payment system, we have established a process under which commenters can gain access to raw data on an expedited basis. Generally, the data are now available on compact disc (CD) format. However, many of the files are available on the Internet at:
Commenters interested in discussing any data used in constructing this final rule should contact Chioma Obi at (410) 786-6050.
Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the
• The need for the information collection and its usefulness in carrying out the proper functions of our agency.
• The accuracy of our estimate of the information collection burden.
• The quality, utility, and clarity of the information to be collected.
• Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24616 through 24621), we solicited public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs).
Sections II.I.1. of the preambles of the proposed rule (80 FR 24418 through 24463) and this final rule discuss add-on payments for new services and technologies. Specifically, this section states that applicants for add-on payments for new medical services or technologies for FY 2017 must submit a formal request. A formal request includes a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement. In addition, the request must contain a significant sample of the data to demonstrate that the medical service or technology meets the high-cost threshold.
We believe the burden associated with this requirement is exempt from the PRA under 5 CFR 1320.3(c), which defines the agency collection of information subject to the requirements of the PRA as information collection imposed on 10 or more persons within any 12-month period. This information collection does not impact 10 or more entities in a 12-month period. For FYs 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015, and 2016, we received 1, 4, 5, 3, 3, 5, 5, 7, and 9 applications, respectively. We note that two of the nine applications received for FY 2016 were withdrawn after publication of the proposed rule, as indicated in section III.I. of the preamble of this final rule.
We did not receive any public comments regarding this information collection.
Sections III.E. and F. of the preambles of the proposed rule (80 FR 24465 through 24467) and this final rule discuss the occupational mix adjustment to the proposed and final FY 2016 wage index, respectively. While the preambles of these rules do not contain any new ICRs, we note that there is an OMB approved information collection request associated with the hospital wage index.
Section 304(c) of Public Law 106-554 amended section 1886(d)(3)(E) of the Act to require CMS to collect data at least once every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program in order to construct an occupational mix adjustment to the wage index. We collect the data via the occupational mix survey.
The burden associated with this information collection requirement is the time and effort required to collect and submit the data in the Hospital Wage Index Occupational Mix Survey to CMS. The aforementioned burden is subject to the PRA; it is currently approved under OMB control number 0938-0907.
We did not receive any public comments regarding this information collection.
Sections III.J.2. of the preambles of the proposed rule (80 FR 24470 through 24471) and this final rule discuss proposed and finalized changes to the wage index based on hospital reclassifications, respectively. As stated in those sections, under section 1886(d)(10) of the Act, the MGCRB has the authority to accept short-term IPPS hospital applications requesting geographic reclassification for wage
The burden associated with this application process is the time and effort necessary for an IPPS hospital to complete and submit an application for reclassification to the MGCRB. The burden associated with this requirement is subject to the PRA. It is currently approved under OMB control number 0938-0573.
We did not receive any public comments regarding this information collection.
In sections IV.H. of the preamble of the proposed rule (80 FR 24514 through 24515), we discussed our proposal to amend the regulations at 42 CFR 412.302(d)(4) to limit a hospital's ability to elect the simplified cost allocation methodology under the terms and conditions provided in the instructions for CMS Form 2552 to cost reporting periods beginning before October 1, 2015. After consideration of the public comments we received, we are not finalizing our proposal to limit the election of the simplified cost allocation methodology in this final rule. Instead, we are retaining the simplified cost allocation methodology with some modifications to afford hospitals using the simplified cost allocation methodology flexibility to obtain approval from their MACs to use dollar value as an alternative statistical basis to square footage for capital-related moveable equipment. Based on FY 2013 HCRIS data, less than 100 hospitals have elected to use the simplified cost allocation methodology.
Although we are not finalizing our proposal to eliminate the simplified cost allocation methodology for hospitals, but instead are affording hospitals greater flexibility to obtain approval from their MAC to use dollar value as an alternative statistical basis to square footage for capital related moveable equipment, we believe the currently approved burden estimates for the Hospital and Health Care Complex Cost Report (OMB control number 0938-0050) are still applicable to hospitals completing the Hospital and Health Care Complex Cost Report. The time required to address this revision will be subsumed in the total burden estimate for an entity to comply with all of the requirements in the cost report.
We did not receive any public comments regarding this information collection.
The Hospital IQR Program (formerly referred to as the Reporting Hospital Quality Data for Annual Payment (RHQDAPU) Program) was originally established to implement section 501(b) of the MMA, Public Law 108-173. This program expanded our voluntary Hospital Quality Initiative. The Hospital IQR Program originally consisted of a “starter set” of 10 quality measures. The collection of information associated with the original starter set of quality measures was previously approved under OMB control number 0938-0918. All of the information collection requirements previously approved under OMB control number 0938-0918 have been combined with the information collection request previously approved under OMB control number 0938-1022. We no longer use OMB control number 0938-0918.
We added additional quality measures to the Hospital IQR Program and submitted the information collection request to OMB for approval. This expansion of the Hospital IQR Program measures was part of our implementation of section 5001(a) of the DRA. Section 1886(b)(3)(B)(viii)(III) of the Act, added by section 5001(a) of the DRA, requires that the Secretary expand the “starter set” of 10 quality measures that were established by the Secretary as of November 1, 2003, to include measures that the Secretary determines to be appropriate for the measurement of the quality of care furnished by hospitals in inpatient settings. The burden associated with these reporting requirements is currently approved under OMB control number 0938-1022.
In section VIII.A.6. of the preamble of this final rule, we are finalizing modified versions of our proposed refinements to expand the measure cohorts for: (1) The Hospital 30-Day All-Cause, Risk-Standardized Mortality Rate (RSMR) following Pneumonia Hospitalization measure (NQF #0468); and (2) the Hospital 30-Day All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization measure (NQF #0506). Expanding the measure cohorts to include a broader population of patients adds a large number of patients, as well as additional hospitals, to these measures. However, this expansion will not affect the hospitals' burden because these measures are claims-based and, therefore, require no additional effort on hospitals' part to submit the required data.
In section VIII.A.7. of the preamble of this final rule, we are finalizing seven of the eight additional proposed measures to the Hospital IQR Program measure set. The seven new measures are: (1) Hospital Survey on Patient Safety Culture (structural); (2) Kidney/UTI Clinical Episode-Based Payment (claims-based); * (3) Cellulitis Clinical Episode-Based Payment (claims-based); * (4) Gastrointestinal Hemorrhage Clinical Episode-Based Payment (claims-based); * (5) Hospital-Level, Risk-Standardized Payment Associated with an Episode-of-Care for Primary Elective THA/TKA (claims-based); (6) Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (claims-based); and (7) Excess Days in Acute Care after Hospitalization for Heart Failure (claims-based). We are not finalizing our proposal to add the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment (claims-based) measure. Four of these seven measures are being finalized for the FY 2018 payment determination and subsequent years as proposed; however, the other three measures, addressing clinical episode-based payments and denoted with an (*), are being finalized for the FY 2019 payment determination and subsequent years—a modification to what was proposed.
One new measure is structural; the remaining six new measures are claims-based. The burden associated with collecting information on the structural measure we are finalizing, Hospital Survey on Patient Safety Culture, is expected to be minimal, as it involves filling out a one-time form to report on this measure for a given performance period; therefore, its addition will not result in a significant burden increase. In total, we estimate a burden of 15 minutes per hospital to complete other forms such as the ECE and Measure Exception form, and to report structural measures. The estimate of 15 minutes includes all previously finalized and newly required structural measures. Because the remaining measures we are finalizing are claims-based measures and can be calculated based on data that are already reported to the Medicare program for payment purposes, we believe no additional information collection will be required from the hospitals for the six newly finalized claims-based measures.
We also are finalizing our proposals to remove nine measures. We believe that there will be a reduction in collection of information burden for hospitals due to our removal of seven of these nine measures, which are chart-abstracted: (1) STK-01 Venous Thromboembolism
The remaining two of the nine measures finalized for removal have been previously suspended from the Hospital IQR Program. Therefore, their removal will not affect information collection burden to hospitals. These measures are: IMM-1 Pneumococcal Immunization (NQF #1653); and SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose (NQF #0300). The suspension of IMM-1 is currently reflected under OMB control number 0938-1022. The suspension of SCIP-Inf-4, which was formalized on January 9, 2015,
For the FY 2018 payment determination, we also are finalizing a modification of our proposals regarding electronic clinical quality measures. Instead of requiring hospitals to report 16 electronic clinical quality measures, we are requiring a minimum of 4 electronic clinical quality measures. Under this modified policy, no NQS domain distribution will be required. In addition, for the FY 2018 payment determination, instead of requiring two quarters of data, we are requiring that hospitals submit only one quarter of eCQM data (either Q3 or Q4) of CY 2016, by February 28, 2017. We also anticipate increasing the number of required electronic clinical quality measures in future rules to propose a 16 measure requirement. We believe that a full year should be enough time for hospitals to address their mapping issues and that it is important to continue to make progress towards electronic reporting.
Lastly, in response to comments suggesting that QRDA I be required and other comments requesting clarification on our QRDA requirement, we are finalizing a modification of our proposal modifying our electronic clinical quality measure reporting requirements to include the a policy requirement that hospitals must report via QRDA I. We believe the delayed reporting period and submission deadlines finalized will provide hospitals with adequate time to prepare to report using QRDA I.
We believe that the total information collection burden associated with the electronic clinical quality measure reporting proposal can be drawn from the burden outlined for hospitals in the EHR Incentive Program Stage 2 final rule (77 FR 54126 through 54133). In that final rule, the burden estimate for a hospital to attest and report 16 electronic clinical quality measures is 2 hours and 40 minutes per quarter (77 FR 54132). In total, we expect the burden associated with our finalized policy to require hospitals to report 4 electronic clinical quality measures for one quarter of data to be 40 minutes per hospital, and 2,200 hours total across the approximately 3,300 hospitals participating in the Hospital IQR Program. We do not anticipate any observed change in burden as it relates to the reporting via QRDA I.
We estimate that reporting these electronic clinical quality measures can be accomplished by staff with a mean hourly wage of $16.42 per hour.
We are finalizing our proposal to change the requirements for population and sampling such that hospitals will be required to submit population and sample size data only for those measures that a hospital submits as chart-abstracted measures under the Hospital IQR Program. We believe this finalized proposal will result in a minimal decrease in information collection burden as hospitals will not have to report population and sample size if they electronically report any of the measures that can be reported either as an electronic clinical quality measure or via chart-abstraction.
We also are finalizing our proposal to modify the existing processes for validation of chart-abstracted Hospital IQR Program data to remove one stratum. We anticipate that if there is any affect, it will be that this modification will minimally reduce hospital burden regarding the collection of information. For validation of chart-abstracted data for the FY 2018 payment determination and subsequent years, we require hospitals to provide 72 charts per hospital per year (with an average page length of 1,500), including 40 charts for HAI validation and 32 charts for clinical process of care validation, for a total of 108,000 pages per hospital per year. We reimburse hospitals at 12 cents per photocopied page (79 FR 50346) for a total per hospital cost of $12,960. For hospitals providing charts digitally via a re-writable disc, such as encrypted CD-ROMs, DVDs, or flash drives, we will reimburse hospitals at a rate of 40 cents per disc. We do not believe any additional burden is associated with data submitting this information via Web portal or PDF.
Under OMB number 0938-1022, we estimated that the total burden associated with collection of information and with other activities such as sampling and validation for the FY 2017 payment determination was 1,781 hours per hospital and 5.9 million hours across approximately 3,300 hospitals participating in the Hospital IQR Program. Using data on chart-abstracted measures from the 3rd quarter in 2013 through the 2nd quarter in 2014, we have revised our burden estimate to include updates to the number of records reported per measure set, as well as the time associated with
This burden estimate accounts for other activities such as population and sampling, reviewing reports for claims-based measure sets, HAI validation templates, as well as all other forms and structural measures. The estimate excludes the burden associated with the NHSN and HCAHPS measures, both of which are submitted under separate information collection requests and are approved under OMB control numbers 0920-0666 and 0938-0981, respectively. The burden estimates in this final rule are the estimates for which we are requesting OMB approval.
As discussed in sections VIII.B. of the preambles of the proposed rule (80 FR 24590) and this final rule, section 1866(k)(1) of the Act requires, for purposes of FY 2014 and each subsequent fiscal year, that a hospital described in section 1886(d)(1)(B)(v) of the Act (a PPS-exempt cancer hospital, or a PCH) submit data in accordance with section 1866(k)(2) of the Act with respect to such fiscal year.
In section VIII.B.3. of the preamble of this final rule, we are finalizing our policy that PCHs must submit data on three additional measures beginning with the FY 2018 program: (1) CDC NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant
With respect to finalizing our policy to add three measures beginning with the FY 2018 program, this estimate excludes the burden associated with two of these measures (the CDC NHSN MRSA measure and the CDC NHSN CDI measure), both of which are submitted under separate information collection requests and are approved under a separate OMB control number (0920-0666).
Our finalized policy to remove six SCIP measures will reduce the burden experienced by PCHs. We estimate a reduction in hourly burden of 6,468
In summary, as a result of our finalized policies, we estimate a reduction of 6,466.17
In sections IV.F. of the preamble of the proposed rule (80 FR 24498 through 24509) and this final rule, we discuss requirements for the Hospital VBP Program. Specifically, in this final rule, we are finalizing our proposal to adopt one new measure beginning with the FY 2018 program year, the 3-Item Care Transition Measure (CTM-3) (NQF #0228). We also are finalizing our proposal to adopt one new measure beginning with the FY 2021 program year, the Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Chronic Obstructive Pulmonary Disease (COPD) Hospitalization Measure (NQF #1893) (MORT-30-COPD).
As required under section 1886(o)(2)(A) of the Act, both of these additional measures are required for the Hospital IQR Program. Therefore, their inclusion in the Hospital VBP Program does not result in any additional burden because the Hospital VBP Program uses data that are required for the Hospital IQR Program.
As discussed in sections VIII.C.5.a and VIII.C.5.b. of the preamble of this final rule, we are retaining the following 12 previously finalized quality measures for use in the LTCH QRP:
As discussed in sections VIII.C.6.a. through c. of the preamble of this final rule, we are finalizing our proposal to use three previously finalized quality measures in the LTCH QRP for the FY 2018 payment determination and subsequent years. We are finalizing our proposal to use two of these measures in order to establish their use as cross-setting measures that satisfy the required addition of quality measures under the domains of skin integrity and incidence of major falls, as mandated by section 1899B of the Act, as added by the IMPACT Act: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), and an Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). We are finalizing our proposal to use a third previously finalized measure, All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge From LTCHs (NQF #2512), in order to establish the newly NQF-endorsed status of this measure.
Finally, as discussed in sections VIII.C.6.d. of the preamble of this final rule, for the FY 2018 payment determination and subsequent years, we are finalizing our proposal to add one new cross-setting functional status process measure quality measure to the LTCH QRP: An application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015). This measure satisfies the addition of a quality measure under the third initially
Six of the measures being retained in this FY 2016 IPPS/LTCH PPS final rule are currently collected via the CDC NHSN. The NHSN is a secure, Internet-based HAI tracking system maintained and managed by the CDC. NHSN data collection occurs via a Web-based tool hosted by the CDC and provided free of charge to facilities. In this final rule, we have not adopted any new quality measures that are collected via the CDC's NHSN. Therefore, at this time, there is no additional burden related to this submission method. Any burden related to NHSN-based quality measures we have retained in this final rule, has been previously discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445), and has been previously approved under OMB control number 0920-0666, with an expiration date of November, 31, 2016.
The All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512), which we have finalized in this final rule, is a Medicare FFS claims-based measure. Because claims-based measures can be calculated based on data that are already reported to the Medicare program for payment purposes, we believe no additional information collection will be required from the LTCHs.
The remaining 6 measures will be collected utilizing the LTCH CARE Data Set. The LTCH CARE Data Set, in its current form (version 2.01), has been approved under OMB control number 0938-1163. Version 2.01 of the LTCH CARE Data Set contains data elements related to patient demographic data, various voluntary questions, as well as data elements related to the following quality measures:
• Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678)
• Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (Short Stay) (NQF #0680)
The LTCH CARE Data Set Version 3.00 is available for download at
• Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) (previously finalized in the FY 2015 IPPS/LTCH PPS final rule)
• Application of Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015) (previously finalized in the FY 2015 IPPS/LTCH PPS final rule)
• Functional Status Outcome Measure: Change in Mobility Among LTCH Patients Requiring Ventilator Support (NQF #2632, endorsed on 07/23/2015) (previously finalized in the FY 2015 IPPS/LTCH PPS final rule)
Each time we add new data elements to the LTCH CARE Data Set related to newly proposed or finalized LTCH QRP quality measures, we are required by the Paperwork Reduction Act (PRA) to submit the expanded data collection instrument to OMB for review and approval. Section 1899B(m) of the Act, as added by IMPACT Act, provides that the PRA requirements do not apply to section 1899B of the Act and the sections referenced in subsection 1899B(a)(2)(B) of the Act that require modifications in order to achieve the standardization of patient assessment data. We believe that version 3.00 of the LTCH CARE Data Set falls under the PRA provisions in 1899B(m) of the Act. We believe that all additional data elements added to version 3.00 of the LTCH CARE Data Set are for the purpose of standardizing patient assessment data, as required under section 1899B(a)(1)(B) of the Act.
A comprehensive list of all data elements included in version 3.00 of the LTCH CARE Data Set will be made available in the LTCH QRP Manual, as will be a change table outlining the differences between version 2.01 and version 3.00 of the LTCH CARE Data Set. The LTCH QRP Manual is accessible on the following LTCH Quality Reporting Measures Information Web page:
While the reporting of quality measures is an information collection, the PRA does not apply in accordance with the amendments to the Act made by IMPACT Act. More specifically, section 1899B(m) of the Act provides that the PRA requirements do not apply to section 1899B of the Act and the sections referenced in subsection 1899B(a)(2)(B) of the Act that require modifications in order to achieve the standardization of patient assessment data.
We did not receive public comments specific to this section of the FY 2016 IPPS/LTCH PPS proposed rule. However, we did receive several public comments related to the burden associated with specific proposed quality measures. Those comments and our responses are found in sections VIII.C.6.a. through VIII.C.6.d. of the preamble of this final rule.
In section VIII.D. of the preamble of this final rule, we discuss our proposals to align the Medicare EHR Incentive Program reporting and submission timelines for electronically submitted clinical quality measures for eligible hospitals and CAHs with the Hospital IQR Program's reporting and submission timelines for 2016. Because these proposals for data collection which we are finalizing in this final rule will align with the reporting requirements in place for the Hospital IQR Program and eligible hospitals and CAHs still have the option to submit their clinical quality measures via attestation for the Medicare EHR Incentive Program, we do not believe there is any additional burden for this collection of information.
Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
For the reasons stated in the preamble, the Centers for Medicare & Medicaid Services is amending 42 CFR Chapter IV as set forth below:
Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), sec. 124 of Public Law 106-113 (113 Stat. 1501A-332), sec. 1206 of Public Law 113-67, and sec. 112 of Public Law 113-93.
The addition and revision reads as follows:
(e) * * *
(3) * * *
(vi) For cost reporting periods beginning on or after October 1, 2015, the Medicare inpatient days and discharges that are paid at the site neutral payment rate specified at § 412.522(c)(1) or paid under a Medicare Advantage plan (Medicare Part C) will not be included in the calculation of the Medicare inpatient average length of stay specified under paragraph (e)(2)(i) of this section. The provisions of this paragraph (e)(3)(vi) only apply to a hospital that is classified as of December 10, 2013, as a long-term care hospital (as defined in this section) for purposes of determining whether the requirements of paragraph (e)(2)(i) or (e)(2)(ii) of this section are met.
(6) * * *
(ii)
(d) * * *
(1) * * *
(vi) For fiscal years 2015 and 2016, the percentage increase in the market basket index (as defined in § 413.40(a)(3) of this chapter) for prospective payment hospitals, subject to the provisions of paragraphs (d)(2) and (3) of this section, less a multifactor productivity adjustment (as determined by CMS) and less 0.2 percentage point.
(h) * * *
(4) For discharges on or after October 1, 2004 and before October 1, 2016, CMS establishes a minimum wage index for each all-urban State, as defined in paragraph (h)(5) of this section. This minimum wage index value is computed using the following methodology:
(vi) For discharges on or after October 1, 2012 and before October 1, 2016, the minimum wage index value for the State is the higher of the value determined under paragraph (h)(4)(iv) of this section or the value computed using the following alternative methodology:
(b) * * *
(2) * * *
(i) For FY 2005 through FY 2010 and FY 2018 and subsequent fiscal years, a hospital must have fewer than 200 total discharges, which includes Medicare and non-Medicare discharges, during the fiscal year, based on the hospital's most recently submitted cost report, and be located more than 25 road miles (as defined in paragraph (a) of this section) from the nearest “subsection (d)” (section 1886(d) of the Act) hospital.
(ii) For FY 2011 through FY 2017, a hospital must have fewer than 1,600 Medicare discharges, as defined in paragraph (a) of this section, during the fiscal year, based on the hospital's Medicare discharges from the most recently available MedPAR data as determined by CMS, and be located more than 15 road miles, as defined in paragraph (a) of this section, from the nearest “subsection (d)” (section 1886(d) of the Act) hospital.
(c) * * *
(1) For FY 2005 through FY 2010 and FY 2018 and subsequent fiscal years, the adjustment is an additional 25 percent for each Medicare discharge.
(2) For FY 2011 through FY 2017, the adjustment is as follows:
(d)
(g) * * *
(1) * * *
(iii) * * *
(C) For fiscal years 2014 and 2015, CMS will base its estimates of the amount of hospital uncompensated care on the most recent available data on utilization for Medicaid and Medicare SSI patients, as determined by CMS in accordance with paragraphs (b)(2)(i) and (b)(4) of this section. For fiscal year 2016, CMS will base its estimates of the amount of hospital uncompensated care on utilization data for Medicaid and Medicare SSI patients, as determined by CMS in accordance with paragraphs (b)(2)(i) and (b)(4) of this section, using data on Medicaid utilization from 2012 or 2011 cost reports from the most recent HCRIS database extract, the 2012 cost report data submitted to CMS by IHS hospitals, and the most recent available data on Medicare SSI utilization.
(a)
(b)
(2) A long-term care hospital that receives a payment at less than the full LTCH prospective payment system standard Federal payment rate for a short-stay outlier case, in accordance with § 412.529 (which would not include any discharge paid at the site neutral payment rate), may only charge the Medicare beneficiary for the applicable deductible and coinsurance amounts under §§ 409.82, 409.83, and 409.87 of this chapter, for items and services as specified under § 489.20(a) of this chapter, and for services provided during the stay that were not the basis for the short-stay adjusted payment.
(c) Beginning in FY 2016, the annual recalibration of the weighting factors described in paragraph (a) of this section is determined using long-term care hospital discharges described in § 412.522(a)(2) (or that would have been described in such section had the application of the site neutral payment rate been in effect at the time of the discharge).
(a) * * *
(2) Except as provided for in § 412.526, the amount of payment under the prospective payment system is based on either the long-term care hospital prospective payment system standard Federal payment rate established in accordance with § 412.523, including adjustments described in § 412.525, or the site neutral payment rate established in accordance with § 412.522(c), or, if applicable during a transition period, the blend of the LTCH PPS standard Federal payment rate and the applicable site neutral payment rate described in § 412.522(c)(3).
(a)
(1) Except as provided for in paragraph (b) of this section, all discharges are paid based on the site neutral payment rate as determined under the provisions of paragraph (c) of this section.
(2) Discharges that meet the criteria for exclusion from site neutral payment rate specified in paragraph (b) of this section are paid based on the standard Federal prospective payment rate established under § 412.523.
(b)
(i) The discharge from the long-term care hospital does not have a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation based on the LTC-DRG assignment of the discharge under § 412.513; and
(ii) The admission to the long-term care hospital was immediately preceded by a discharge from a subsection (d) hospital and meets either the intensive care unit criterion specified in paragraph (b)(2) of this section or the ventilator criterion specified in paragraph (b)(3) of this section. In order for an admission to a long-term care hospital to be considered immediately preceded for purposes of this section, the patient discharged from the subsection (d) hospital must be directly admitted to the long-term care hospital.
(2)
(3)
(c)
(i) The inpatient hospital prospective payment system comparable per diem amount determined under § 412.529(d)(4), including any applicable outlier payments specified in § 412.525(a); or
(ii) 100 percent of the estimated cost of the case determined under the provisions of § 412.529(d)(2). The provisions for cost-to-charge ratios at § 412.529(f)(4)(i) through (iii) apply to the calculation of the estimated cost of the case under this paragraph.
(2)
(i) Outlier payments, by applying a reduction factor equal to the estimated proportion of outlier payments under § 412.525(a) payable for discharges from a long-term care hospital described in paragraph (a)(1) of this section to total estimated payments under the long-term care hospital prospective payment system to discharges from a long-term care hospital described in paragraph (a)(1) of this section. The adjustment under this paragraph (c)(2)(i) does not include the portion of the blended payment rate described in paragraph (c)(3)(ii) of this section.
(ii) A 3-day or less interruption of a stay and a greater than 3-day interruption of a stay, as provided for in § 412.531. For purposes of the application of the provisions of § 412.531 to discharges from a long-term care hospital described under paragraph (a)(1) of this section, the long-term care hospital prospective payment system
(iii) The special payment provisions for long-term care hospitals-within-hospitals and satellite facilities of long-term care hospitals specified in § 412.534.
(iv) The special payment provisions for long-term care hospitals and satellite facilities of long-term care hospitals that discharged Medicare patients admitted from a hospital not located in the same building or on the same campus as the long-term care hospital or satellite facility of the long-term care hospital, as provided in § 412.536.
(3)
(i) 50 percent of the site neutral payment rate amount for the discharge as determined under paragraph (c)(1) of this section; and
(ii) 50 percent of the standard Federal prospective payment rate amount for the discharge as determined under § 412.523.
(d)
(2) CMS will inform each long-term care hospital of its discharge payment percentage, as determined under paragraph (d)(1) of this section, for each cost reporting period beginning on or after October 1, 2015.
(c) * * *
(3) * * *
(xii)
(d) * * *
(1)
(a) * * *
(1) CMS provides for an additional payment to a long-term care hospital if its estimated costs for a patient exceed the applicable long-term care hospital prospective payment system payment plus an applicable fixed-loss amount. For each long-term care hospital prospective payment system payment year, CMS annually establishes a fixed-loss amount that is the maximum loss that a long-term care hospital would incur under the long-term care hospital prospective payment system for a case with unusually high costs before receiving an additional payment.
(2) The fixed-loss amount for discharges from a long-term care hospital described under § 412.522(a)(2) is determined for the long-term care hospital prospective payment system payment year, using the LTC-DRG relative weights that are in effect at the start of the applicable long-term care hospital prospective payment system payment year.
(3) The additional payment equals 80 percent of the difference between the estimated cost of the patient's care (determined by multiplying the hospital-specific cost-to-charge ratio by the Medicare allowable covered charge) and the sum of the applicable long-term care hospital prospective payment system payment and the applicable fixed-loss amount.
(5) For purposes of this paragraph (a)—
(i)
(A) The site neutral payment rate established under § 412.522(c) for long-term care hospital discharges described under § 412.522(a)(1);
(B) The standard Federal prospective payment rates established under § 412.523 for long-term care hospital discharges described under § 412.522(a)(2); or
(C) The standard Federal prospective payment rates established under § 412.523 for discharges occurring on or after October 1, 2015, in a long-term care hospital cost reporting period that begins before October 1, 2015.
(ii)
(A) For long-term care hospital discharges described under § 412.522(a)(1), the fixed-loss amount established for such cases as provided at § 412.522(c)(2)(i);
(B) For long-term care hospital discharges described under § 412.522(a)(2), the fixed-loss amount established for such cases as provided at § 412.523(e); or
(C) For discharges occurring on or after October 1, 2015 in a long-term care hospital cost reporting period that begins before October 1, 2015, the fixed-loss amount payable to discharges described under § 412.522(a)(2) as set forth in paragraph (a)(5)(ii)(B) of this section.
(a)
(b)
(2) A long-term care hospital that does not submit data in accordance with sections 1886(m)(5)(C) and 1886(m)(5)(F) of the Act with respect to a given fiscal year will have its annual update to the standard Federal rate for discharges for the long-term care hospital during the fiscal year reduced by 2 percentage points.
(c)
(1) A long-term care hospital that wishes to request an exception or extension with respect to quality data reporting requirements must submit its request to CMS within 30 days of the date that the extraordinary circumstances occurred.
(2) A long-term care hospital must submit its request for an exception or extension to CMS via email. Email is the only form that may be used to submit to CMS a request for an exception or an extension.
(3) The email request for an exception or extension must contain the following information:
(i) The CCN for the long-term care hospital.
(ii) The business name of the long-term care hospital.
(iii) The business address of the long-term care hospital.
(iv) Contact information for the long-term care hospital's chief executive officer or designated personnel, including the name, telephone number, title, email address, and physical mailing address. (The mailing address may not be a post office box.)
(v) A statement of the reason for the request for the exception or extension.
(vi) Evidence of the impact of the extraordinary circumstances, including, but not limited to, photographs, newspaper articles, and other media.
(vii) The date on which the long-term care hospital will be able to again submit quality data under the LTCHQR Program and a justification for the proposed date.
(4) CMS may grant an exception or extension to a long-term care hospital that has not been requested by the long-term care hospital if CMS determines that—
(i) An extraordinary circumstance affects an entire region or locale; or
(ii) A systemic problem with one of CMS' data collection systems directly affected the ability of the long-term care hospital to submit quality data.
(d)
(2)
(i) The CCN for the long-term care hospital.
(ii) The business name of the long-term care hospital.
(iii) The business address of the long-term care hospital.
(iv) Contact information for the long-term care hospital's chief executive officer or designated personnel, including each individual's name, title, email address, telephone number, and physical mailing address. (The physical address may not be a post office box.)
(v) CMS's identified reason(s) for the noncompliance decision from the written notification of noncompliance.
(vi) The reason for requesting reconsideration of CMS' noncompliance decision.
(vii) Accompanying documentation that demonstrates compliance of the long-term care hospital with the quality reporting requirements. This documentation must be submitted electronically at the same time as the reconsideration request as an attachment to the email. Any reconsideration request that fails to provide sufficient evidence of compliance will not be reviewed.
(3)
(e)
The following Addendum and Appendixes will not appear in the Code of Federal Regulations.
In this Addendum, we are setting forth a description of the methods and data we used to determine the prospective payment rates for Medicare hospital inpatient operating costs and Medicare hospital inpatient capital-related costs for FY 2016 for acute care hospitals. We also are setting forth the rate-of-increase percentage for updating the target amounts for certain hospitals excluded from the IPPS for FY 2016. We note that, because certain hospitals excluded from the IPPS are paid on a reasonable cost basis subject to a rate-of-increase ceiling (and not by the IPPS), these hospitals are not affected by the figures for the standardized amounts, offsets, and budget neutrality factors. Therefore, in this final rule, we are setting forth the rate-of-increase percentage for updating the target amounts for certain hospitals excluded from the IPPS that are effective for cost reporting periods beginning on or after October 1, 2015.
In addition, we are setting forth a description of the methods and data we used to determine the standard Federal rate that will be applicable to Medicare LTCHs for FY 2016.
In general, except for SCHs, MDHs, and hospitals located in Puerto Rico, for FY 2016, each hospital's payment per discharge under the IPPS is based on 100 percent of the Federal national rate, also known as the national adjusted standardized amount. This amount reflects the national average hospital cost per case from a base year, updated for inflation.
SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal national rate (including, as discussed in section IV.D. of the preamble of this final rule, uncompensated care payments under section 1886(r)(2) of the Act); the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; the updated hospital-specific rate based on FY 1996 costs per discharge; or the updated hospital-specific rate based on FY 2006 costs per discharge.
We note that section 205 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted on April 16,
Under section 1886(d)(5)(G) of the Act, MDHs historically were paid based on the Federal national rate or, if higher, the Federal national rate plus 50 percent of the difference between the Federal national rate and the updated hospital-specific rate based on FY 1982 or FY 1987 costs per discharge, whichever was higher. However, section 5003(a)(1) of Public Law 109-171 extended and modified the MDH special payment provision that was previously set to expire on October 1, 2006, to include discharges occurring on or after October 1, 2006, but before October 1, 2011. Under section 5003(b) of Public Law 109-171, if the change results in an increase to an MDH's target amount, we must rebase an MDH's hospital-specific rates based on its FY 2002 cost report. Section 5003(c) of Public Law 109-171 further required that MDHs be paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent of the difference between the Federal national rate and the updated hospital-specific rate. Further, based on the provisions of section 5003(d) of Public Law 109-171, MDHs are no longer subject to the 12-percent cap on their DSH payment adjustment factor.
For hospitals located in Puerto Rico, the payment per discharge is based on the sum of 25 percent of an updated Puerto Rico-specific rate based on average costs per case of Puerto Rico hospitals for the base year and 75 percent of the Federal national rate. (We refer readers to section II.D.2. of this Addendum for a complete description.)
As discussed in section II. of this Addendum, we are making changes in the determination of the prospective payment rates for Medicare inpatient operating costs for acute care hospitals for FY 2016. In section III. of this Addendum, we discuss our policy changes for determining the prospective payment rates for Medicare inpatient capital-related costs for FY 2016. In section IV. of this Addendum, we are setting forth the rate-of-increase percentage for determining the rate-of-increase limits for certain hospitals excluded from the IPPS for FY 2016. In section V. of this Addendum, we discuss policy changes for determining the standard Federal rate for LTCHs paid under the LTCH PPS for FY 2016. The tables to which we refer in the preamble of this final rule are listed in section VI. of this Addendum and are available via the Internet on the CMS Web site.
The basic methodology for determining prospective payment rates for hospital inpatient operating costs for acute care hospitals for FY 2005 and subsequent fiscal years is set forth under 42 CFR 412.64. The basic methodology for determining the prospective payment rates for hospital inpatient operating costs for hospitals located in Puerto Rico for FY 2005 and subsequent fiscal years is set forth under 42 CFR 412.211 and 412.212. Below we discuss the factors we are using for determining the prospective payment rates for FY 2016.
In summary, the standardized amounts set forth in Tables 1A, 1B, and 1C that are listed and published in section VI. of this Addendum (and available via the Internet on the CMS Web site) reflect—
• Equalization of the standardized amounts for urban and other areas at the level computed for large urban hospitals during FY 2004 and onward, as provided for under section 1886(d)(3)(A)(iv)(II) of the Act.
• The labor-related share that is applied to the standardized amounts and Puerto Rico-specific standardized amounts to give the hospital the highest payment, as provided for under sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act. For FY 2016, depending on whether a hospital submits quality data under the rules established in accordance with section 1886(b)(3)(B)(viii) of the Act (hereafter referred to as a hospital that submits quality data) and is a meaningful EHR user under section 1886(b)(3)(B)(ix) of the Act (hereafter referred to as a hospital that is a meaningful EHR user), there are four possible applicable percentage increases that can be applied to the national standardized amount. We refer readers to section IV.A. of the preamble of this final rule for a complete discussion on the FY 2016 inpatient hospital update. Below is a table with these four options:
• An update of 1.7 percent to the Puerto Rico-specific standardized amount (that is, the FY 2016 estimate of the market basket rate-of-increase of 2.4 percent less an adjustment of 0.5 percentage point for MFP and less 0.2 percentage point), in accordance with section 1886(d)(9)(C)(i) of the Act, as amended by section 401(c) of Public Law 108-173, which sets the update to the Puerto Rico-specific standardized amount equal to the applicable percentage increase set forth under section 1886(b)(3)(B)(i) of the Act.
• An adjustment to the standardized amount to ensure budget neutrality for DRG recalibration and reclassification, as provided for under section 1886(d)(4)(C)(iii) of the Act.
• An adjustment to ensure the wage index changes are budget neutral, as
• An adjustment to ensure the effects of geographic reclassification are budget neutral, as provided for under section 1886(d)(8)(D) of the Act, by removing the FY 2015 budget neutrality factor and applying a revised factor.
• As discussed below and in section III.G. of the preamble of this final rule, an adjustment to offset the cost of the 3-year hold harmless transitional wage index provisions provided by CMS as a result of the implementation of the new OMB labor market area delineations (beginning with FY 2015).
• An adjustment to ensure the effects of the rural community hospital demonstration program required under section 410A of Public Law 108-173, as amended by sections 3123 and 10313 of Public Law 111-148, which extended the demonstration program for an additional 5 years, are budget neutral as required under section 410A(c)(2) of Public Law 108-173.
• An adjustment to remove the FY 2015 outlier offset and apply an offset for FY 2016, as provided for under section 1886(d)(3)(B) of the Act.
• As discussed below and in section II.D. of the preamble of this final rule, a recoupment to meet the requirements of section 631 of the ATRA to adjust the standardized amount to offset the estimated amount of the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013.
For FY 2016, consistent with current law, we are applying the rural floor budget neutrality adjustment to hospital wage indexes. Also, consistent with section 3141 of the Affordable Care Act, instead of applying a State level rural floor budget neutrality adjustment to the wage index, we are applying a uniform, national budget neutrality adjustment to the FY 2016 wage index for the rural floor. We note that, in section III.G.2.b. of the preamble to this final rule, we are extending the imputed floor policy (both the original methodology and alternative methodology) for another year, through September 30, 2016. Therefore, for FY 2016, in this final rule, we are continuing to include the imputed floor (calculated under the original and alternative methodologies) in calculating the uniform, national rural floor budget neutrality adjustment, which are reflected in the FY 2016 wage index.
In general, the national standardized amount is based on per discharge averages of adjusted hospital costs from a base period (section 1886(d)(2)(A) of the Act), updated and otherwise adjusted in accordance with the provisions of section 1886(d) of the Act. For Puerto Rico hospitals, the Puerto Rico-specific standardized amount is based on per discharge averages of adjusted target amounts from a base period (section 1886(d)(9)(B)(i) of the Act), updated and otherwise adjusted in accordance with the provisions of section 1886(d)(9) of the Act. The September 1, 1983 interim final rule (48 FR 39763) contained a detailed explanation of how base-year cost data (from cost reporting periods ending during FY 1981) were established for urban and rural hospitals in the initial development of standardized amounts for the IPPS. The September 1, 1987 final rule (52 FR 33043 and 33066) contains a detailed explanation of how the target amounts were determined and how they are used in computing the Puerto Rico rates.
Sections 1886(d)(2)(B) and 1886(d)(2)(C) of the Act require us to update base-year per discharge costs for FY 1984 and then standardize the cost data in order to remove the effects of certain sources of cost variations among hospitals. These effects include case-mix, differences in area wage levels, cost-of-living adjustments for Alaska and Hawaii, IME costs, and costs to hospitals serving a disproportionate share of low-income patients.
For FY 2016, we are continuing to use the national and Puerto Rico-specific labor-related and nonlabor-related shares (which are based on the FY 2010-based hospital market basket) that were used in FY 2015. Specifically, under section 1886(d)(3)(E) of the Act, the Secretary estimates, from time to time, the proportion of payments that are labor-related and adjusts the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs of the DRG prospective payment rates. We refer to the proportion of hospitals' costs that are attributable to wages and wage-related costs as the “labor-related share.” For FY 2016, as discussed in section III. of the preamble of this final rule, we are continuing to use a labor-related share of 69.6 percent for the national standardized amounts, and 63.2 percent for the Puerto Rico-specific standardized amount, if the hospital has a wage index value that is greater than 1.0000. Consistent with section 1886(d)(3)(E) of the Act, we are applying the wage index to a labor-related share of 62 percent of the national standardized amount for all IPPS hospitals whose wage index values are less than or equal to 1.0000. For all IPPS hospitals whose wage indexes are greater than 1.0000, we are applying the wage index to a labor-related share of 69.6 percent of the national standardized amount.
For FY 2016, all Puerto Rico hospitals have a wage index value that is less than 1.0000 because the average hourly rate of every hospital in Puerto Rico divided by the national average hourly rate (the sum of all salaries and hours for all hospitals in the 50 United States and Puerto Rico) results in a wage index that is below 1.0000. However, when we divide the average hourly rate of every hospital located in Puerto Rico by the Puerto Rico-specific national average hourly rate (the sum of all salaries and hours for all hospitals located only in Puerto Rico), the result is a Puerto Rico-specific wage index value for some hospitals that is either above, or below 1.0000, depending on the hospital's location within Puerto Rico. Therefore, for hospitals located in Puerto Rico, we are applying a labor-related share of 63.2 percent if its Puerto Rico-specific wage index is greater than 1.0000. For hospitals located in Puerto Rico whose Puerto Rico-specific wage index values are less than or equal to 1.0000, we are applying a labor share of 62 percent.
The standardized amounts for operating costs appear in Tables 1A, 1B, and 1C that are listed and published in section VI. of the Addendum to this final rule and are available via the Internet on the CMS Web site.
Section 1886(d)(3)(A)(iv)(II) of the Act requires that, beginning with FY 2004 and thereafter, an equal standardized amount be computed for all hospitals at the level computed for large urban hospitals during FY 2003, updated by the applicable percentage update. Section 1886(d)(9)(A)(ii)(II) of the Act equalizes the Puerto Rico-specific urban and rural area rates. Accordingly, we are calculating the FY 2016 national average standardized amount and Puerto Rico-specific standardized amount irrespective of whether a hospital is located in an urban or rural location.
Section 1886(b)(3)(B) of the Act specifies the applicable percentage increase used to update the standardized amount for payment for inpatient hospital operating costs. We note that, in compliance with section 404 of the MMA, in this final rule, we are using the revised and rebased FY 2010-based IPPS operating and capital market baskets for FY 2016 (which replaced the FY 2006-based IPPS operating and capital market baskets in FY 2014). As discussed in section IV.A. of the preamble of this final rule, in accordance with section 1886(b)(3)(B) of the Act, as amended by section 3401(a) of the Affordable Care Act, we are reducing the FY 2016 applicable percentage increase (which is based on IHS Global Insight, Inc.'s (IGI's) second quarter 2015 forecast of the FY 2010-based IPPS market basket) by the MFP adjustment (the 10-year moving average of MFP for the period ending FY 2016) of 0.5 percentage point, which is calculated based on IGI's second quarter 2015 forecast.
In addition, in accordance with section 1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act, we are further updating the standardized amount for FY 2016 by the estimated market basket percentage increase less 0.2 percentage point for hospitals in all areas. Sections 1886(b)(3)(B)(xi) and (xii) of the Act, as added and amended by sections 3401(a) and 10319(a) of the Affordable Care Act, further state that these adjustments may result in the applicable percentage increase being less than zero. The percentage increase in the market basket reflects the average change in the price of goods and services comprising routine, ancillary, and special care unit hospital inpatient services.
Based on IGI's 2015 second quarter forecast of the hospital market basket increase (as discussed in Appendix B of this final rule), the most recent forecast of the hospital market basket increase for FY 2016 is 2.4 percent. As discussed above, for FY 2016, depending on whether a hospital submits quality data under the rules established in accordance with section 1886(b)(3)(B)(viii) of the Act and is a meaningful EHR user under section 1886(b)(3)(B)(ix) of the Act, there are four possible applicable percentage increases that could be applied to the standardized amount. We refer readers to section IV.A. of the preamble of this final rule for a complete discussion on the FY 2016 inpatient hospital update to the standardized amount. We also refer readers to the table above for the four possible applicable percentage increases that are applied to update the national standardized amount. The standardized amounts shown in Tables 1A through 1C that are published in section VI. of this Addendum and that are available via the Internet on the CMS Web site reflect these differential amounts.
Section 401(c) of Public Law 108-173 amended section 1886(d)(9)(C)(i) of the Act and states that, for discharges occurring in a fiscal year (beginning with FY 2004), the Secretary shall compute an average standardized amount for hospitals located in any area of Puerto Rico that is equal to the average standardized amount computed under subclause (I) for FY 2003 for hospitals in a large urban area (or, beginning with FY 2005, for all hospitals in the previous fiscal year) increased by the applicable percentage increase under subsection (b)(3)(B) for the fiscal year involved. Therefore, the update to the Puerto Rico-specific operating standardized amount is subject to the applicable percentage increase set forth under section 1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act (that is, the same update factor as for all other hospitals subject to the IPPS). Accordingly, we are establishing an applicable percentage increase to the Puerto Rico-specific standardized amount of 1.7 percent for FY 2016.
Although the update factors for FY 2016 are set by law, we are required by section 1886(e)(4) of the Act to recommend, taking into account MedPAC's recommendations, appropriate update factors for FY 2016 for both IPPS hospitals and hospitals and hospital units excluded from the IPPS. Section 1886(e)(5)(A) of the Act requires that we publish our proposed recommendations in the
As in the past, we are adjusting the FY 2016 standardized amount to remove the effects of the FY 2015 geographic reclassifications and outlier payments before applying the FY 2016 updates. We then apply budget neutrality offsets for outliers and geographic reclassifications to the standardized amount based on finalized FY 2016 payment policies.
We do not remove the prior year's budget neutrality adjustments for reclassification and recalibration of the DRG relative weights and for updated wage data because, in accordance with sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act, estimated aggregate payments after updates in the DRG relative weights and wage index should equal estimated aggregate payments prior to the changes. If we removed the prior year's adjustment, we would not satisfy these conditions.
Budget neutrality is determined by comparing aggregate IPPS payments before and after making changes that are required to be budget neutral (for example, changes to MS-DRG classifications, recalibration of the MS-DRG relative weights, updates to the wage index, and different geographic reclassifications). We include outlier payments in the simulations because they may be affected by changes in these parameters.
In order to appropriately estimate aggregate payments in our modeling, we make several inclusions and exclusions so that the appropriate universe of claims and charges are included. We discuss IME Medicare Advantage payment amounts, fee-for-service only claims, and charges for anti-hemophilic blood factor and organ acquisition below.
Consistent with our methodology established in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50422 through 50433), because IME Medicare Advantage payments are made to IPPS hospitals under section 1886(d) of the Act, we believe these payments must be part of these budget neutrality calculations. However, we note that it is not necessary to include Medicare Advantage IME payments in the outlier threshold calculation or the outlier offset to the standardized amount because the statute requires that outlier payments be not less than 5 percent nor more than 6 percent of total “operating DRG payments,” which does not include IME and DSH payments. We refer readers to the FY 2011 IPPS/LTCH PPS final rule for a complete discussion on our methodology of identifying and adding the total Medicare Advantage IME payment amount to the budget neutrality adjustments.
In addition, consistent with the methodology in the FY 2012 IPPS/LTCH PPS final rule, in order to ensure that we capture only fee-for-service claims, we are only including claims with a “Claim Type” of 60 (which is a field on the MedPAR file that indicates a claim is a fee-for-service claim).
Finally, consistent with our methodology established in the FY 2011
The Bundled Payments for Care Improvement (BPCI) initiative, developed under the authority of section 3021 of the Affordable Care Act (codified at section 1115A of the Act), is comprised of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care. Under the BPCI initiative, organizations enter into payment arrangements that include financial and performance accountability for episodes of care. On January 31, 2013, CMS announced the first set of health care organizations selected to participate in the BPCI initiative. Additional organizations were selected in 2014. For additional information on the BPCI initiative, we refer readers to the CMS Center for Medicare and Medicaid Innovation's Web site at:
In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53341 through 53343), for FY 2013 and subsequent fiscal years, we finalized a methodology to treat hospitals that participate in the BPCI initiative the same as prior fiscal years for the IPPS payment modeling and ratesetting process (which includes recalibration of the MS-DRG relative weights, ratesetting, calculation of the budget neutrality factors, and the impact analysis) without regard to a hospital's participation within these bundled payment models (that is, as if they are not participating in those models under the BPCI initiative). For FY 2016, we are continuing to include all applicable data from subsection (d) hospitals participating in BPCI Models 1, 2, and 4 in our IPPS payment modeling and ratesetting calculations.
The Affordable Care Act established the Hospital Readmissions Reduction Program and the Hospital VBP Program which adjust payments to certain IPPS hospitals beginning with discharges on or after October 1, 2012. Because the adjustments made under these programs affect the estimation of aggregate IPPS payments, in this final rule, consistent with our methodology established in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53687 through 53688), we believe that it is appropriate to include adjustments for these programs within our budget neutrality calculations. We discuss the treatment of these two programs in the context of budget neutrality adjustments below.
Section 1886(q) of the Act establishes the “Hospital Readmissions Reduction Program” effective for discharges from an “applicable hospital” beginning on or after October 1, 2012, under which payments to those hospitals under section 1886(d) of the Act are reduced to account for certain excess readmissions. Under the Hospital Readmissions Reduction Program, for discharges beginning on October 1, 2012 discharges from an “applicable hospital” are paid at an amount equal to the product of the “base operating DRG payment amount” and an “adjustment factor” that accounts for excess readmissions for the hospital for the fiscal year plus any applicable add-on payments. We refer readers to section IV.E. of the preamble of this final rule for full details of our FY 2016 policy changes to the Hospital Readmissions Reduction Program. We also note that the Hospital Readmissions Reduction Program provided for under section 1886(q) of the Act is not budget neutral.
Section 1886(o) of the Act requires the Secretary to establish a Hospital VBP Program under which, for discharges beginning on October 1, 2012, value-based incentive payments are made in a fiscal year to eligible subsection (d) hospitals based on their performance on measures established for a performance period for that fiscal year. As specified under section 1886(o)(7)(B)(i) of the Act, these value-based incentive payments are funded by a reduction applied to each eligible hospital's base-operating DRG payment amount, for each discharge occurring in the fiscal year. As required by section 1886(o)(7)(A) of the Act, the total amount of allocated funds available for value-based incentive payments with respect to a fiscal year is equal to the total amount of base-operating DRG payment reductions, as estimated by the Secretary. In a given fiscal year, hospitals may earn a value-based incentive payment amount for a fiscal year that is greater than, equal to, or less than the reduction amount, based on their performance on quality measures under the Hospital VBP Program. Thus, the Hospital VBP Program is estimated to have no net effect on overall payments. We refer readers to section IV.F. of the preamble of this final rule for details regarding the Hospital VBP Program.
Both the hospital readmissions payment adjustment (reduction) and the hospital VBP payment adjustment (redistribution) are applied on a claim-by-claim basis by adjusting, as applicable, the base-operating DRG payment amount for individual subsection (d) hospitals, which affects the overall sum of aggregate payments on each side of the comparison within the budget neutrality calculations. For example, when we calculate the budget neutrality factor for MS-DRG reclassification and recalibration of the relative weights, we compare aggregate payments estimated using the prior year's GROUPER and relative weights to estimated payments using the new GROUPER and relative weights. (We refer readers to section II.A.4.a. of this Addendum for details.) Other factors, such as the DSH and IME payment adjustments, are the same on both sides of the comparison because we are only seeking to ensure that aggregate payments do not increase or decrease as a result of the changes of MS-DRG reclassification and recalibration.
In order to properly determine aggregate payments on each side of the comparison, as we did for FY 2014 and FY 2015, for FY 2016 and subsequent years, we are continuing to apply the hospital readmissions payment adjustment and the hospital VBP payment adjustment on each side of the comparison, consistent with the methodology that we adopted in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53687 through 53688). That is, we are applying the readmissions payment adjustment factor and the hospital VBP payment adjustment factor on both sides of our comparison of aggregate payments when determining all budget neutrality factors described in section II.A.4. of this Addendum.
For the purpose of calculating the FY 2016 readmissions payment adjustment factors, we are using excess readmission ratios and aggregate payments for excess readmissions based on admissions from the prior fiscal year's applicable period because hospitals have had the opportunity to review and correct these data before the data were made public under the policy we adopted regarding the reporting of hospital-specific readmission rates, consistent with section 1886(q)(6) of the Act. For FY 2016, in this final rule, we are calculating the readmissions payment adjustment factors using excess readmission ratios and aggregate payments for excess readmissions based on admissions from the finalized applicable period for FY 2016 as hospitals have had the opportunity to review and correct these data under our
In addition, for FY 2016, in this final rule, for the purpose of modeling aggregate payments when determining all budget neutrality factors, we are using proxy hospital VBP payment adjustment factors for FY 2016 that are based on data from a historical period because hospitals have not yet had an opportunity to review and submit corrections for their data from the FY 2016 performance period. (For additional information on our policy regarding the review and correction of hospital-specific measure rates under the Hospital VBP Program, consistent with section 1886(o)(10)(A)(ii) of the Act, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53578 through 53581), the CY 2012 OPPS/ASC final rule with comment period (76 FR 74544 through 74547), and the Hospital Inpatient VBP final rule (76 FR 26534 through 26536).)
The Affordable Care Act also established section 1886(r) of the Act, which modifies the methodology for computing the Medicare DSH payment adjustment beginning in FY 2014. Beginning in FY 2014, IPPS hospitals receiving Medicare DSH payment adjustments will receive an empirically justified Medicare DSH payment equal to 25 percent of the amount that would previously have been received under the statutory formula set forth under section 1886(d)(5)(F) of the Act governing the Medicare DSH payment adjustment. In accordance with section 1886(r)(2) of the Act, the remaining amount, equal to an estimate of 75 percent of what otherwise would have been paid as Medicare DSH payments, reduced to reflect changes in the percentage of individuals under age 65 who are uninsured and an additional statutory adjustment, will be available to make additional payments to Medicare DSH hospitals based on their share of the total amount of uncompensated care reported by Medicare DSH hospitals for a given time period. In order to properly determine aggregate payments on each side of the comparison for budget neutrality, prior to FY 2014, we included estimated Medicare DSH payments on both sides of our comparison of aggregate payments when determining all budget neutrality factors described in section II.A.4. of this Addendum.
To do this for FY 2016 (as we did for FY 2014 and FY 2015), we are including estimated empirically justified Medicare DSH payments that will be paid in accordance with section 1886(r)(1) of the Act and estimates of the additional uncompensated care payments made to hospitals receiving Medicare DSH payment adjustments as described by section 1886(r)(2) of the Act. That is, we consider estimated empirically justified Medicare DSH payments at 25 percent of what would otherwise have been paid, and also the estimated additional uncompensated care payments for hospitals receiving Medicare DSH payment adjustments on both sides of our comparison of aggregate payments when determining all budget neutrality factors described in section II.A.4. of this Addendum.
We note that, when calculating total payments for budget neutrality, to determine total payments for SCHs, we model total hospital-specific rate payments and total Federal rate payments and then include whichever one of the total payments is greater. As discussed in section IV.D. of the preamble to this final rule and below, we are continuing the FY 2014 finalized methodology under which we take into consideration uncompensated care payments in the comparison of payments under the Federal rate and the hospital-specific rate for SCHs. Therefore, we include estimated uncompensated care payments in this comparison.
Similarly, for MDHs, as discussed in section IV. of the preamble to this final rule, when computing payments under the Federal national rate plus 75 percent of the difference between the payments under the Federal national rate and the payments under the updated hospital-specific rate, we are continuing to take into consideration uncompensated care payments in the computation of payments under the Federal rate and the hospital-specific rate for MDHs.
In addition, we are including an adjustment to the standardized amount for those hospitals that are not meaningful EHR users in our modeling of aggregate payments for budget neutrality for FY 2016. We did not include this adjustment for FY 2015 because that was the first year hospitals experienced a reduction to their applicable percentage increase due to whether they are meaningful EHR users and data were not available at that time. However, we believe it is appropriate to include this adjustment for FY 2016 because FY 2016 is the second year for which hospitals will experience this reduction and data on the prior year's performance are now available. Payments for hospitals are estimated based on the applicable standardized amount in Tables 1A and 1B for discharges occurring in FY 2016.
Section 1886(d)(4)(C)(iii) of the Act specifies that, beginning in FY 1991, the annual DRG reclassification and recalibration of the relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected. As discussed in section II.H. of the preamble of this final rule, we normalized the recalibrated MS-DRG relative weights by an adjustment factor so that the average case relative weight after recalibration is equal to the average case relative weight prior to recalibration. However, equating the average case relative weight after recalibration to the average case relative weight before recalibration does not necessarily achieve budget neutrality with respect to aggregate payments to hospitals because payments to hospitals are affected by factors other than average case relative weight. Therefore, as we have done in past years, we are making a budget neutrality adjustment to ensure that the requirement of section 1886(d)(4)(C)(iii) of the Act is met.
Section 1886(d)(3)(E)(i) of the Act requires us to update the hospital wage index on an annual basis beginning October 1, 1993. This provision also requires us to make any updates or adjustments to the wage index in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. Section 1886(d)(3)(E)(i) of the Act requires that we implement the wage index adjustment in a budget neutral manner. However, section 1886(d)(3)(E)(ii) of the Act sets the labor-related share at 62 percent for hospitals with a wage index less than or equal to 1.0000, and section 1886(d)(3)(E)(i) of the Act provides that the Secretary shall calculate the budget neutrality adjustment for the adjustments or updates made under that provision as if section 1886(d)(3)(E)(ii) of the Act had not been enacted. In other words, this section of the statute requires that we implement the updates to the wage index in a budget neutral manner, but that our budget neutrality adjustment should not take into account the requirement that we set the labor-related share for hospitals with wage
For FY 2016, to comply with the requirement that MS-DRG reclassification and recalibration of the relative weights be budget neutral for the Puerto Rico standardized amount and the hospital-specific rates, we used FY 2014 discharge data to simulate payments and compared the following:
• Aggregate payments using the FY 2015 labor-related share percentages, the FY 2015 relative weights, and the FY 2015 pre-reclassified wage data, and applied the FY 2016 hospital readmissions payment adjustments and estimated FY 2016 hospital VBP payment adjustments; and
• Aggregate payments using the FY 2015 labor-related share percentages, the FY 2016 relative weights, and the FY 2015 pre-reclassified wage data, and applied the same FY 2016 hospital readmissions payment adjustments and estimated FY 2016 hospital VBP payment adjustments applied above.
Based on this comparison, we computed a budget neutrality adjustment factor equal to 0.998399. As discussed in section IV. of this Addendum, we also are applying the MS-DRG reclassification and recalibration budget neutrality factor of 0.998399 to the hospital-specific rates that are effective for cost reporting periods beginning on or after October 1, 2015.
In order to meet the statutory requirements that we do not take into account the labor-related share of 62 percent when computing wage index budget neutrality adjustment factor, it was necessary to use a three-step process to comply with the requirements that MS-DRG reclassification and recalibration of the relative weights and the updated wage index and labor-related share have no effect on aggregate payments for IPPS hospitals. Under the first step, we determined an MS-DRG reclassification and recalibration budget neutrality adjustment factor of 0.998399 (by using the same methodology described above to determine the MS-DRG reclassification and recalibration budget neutrality factor for the Puerto Rico standardized amount and hospital-specific rates). Under the second step, to compute a budget neutrality adjustment factor for wage index and labor-related share percentage changes we used FY 2014 discharge data to simulate payments and compared the following:
• Aggregate payments using the FY 2016 relative weights and the FY 2015 pre-reclassified wage indexes, applied the FY 2015 labor-related share of 69.6 percent to all hospitals (regardless of whether the hospital's wage index was above or below 1.0000), and applied the FY 2016 hospital readmissions payment adjustment and the estimated FY 2016 hospital VBP payment adjustment; and
• Aggregate payments using the FY 2016 relative weights and the FY 2016 pre-reclassified wage indexes, applied the labor-related share for FY 2016 of 69.6 percent to all hospitals (regardless of whether the hospital's wage index was above or below 1.0000), and applied the same FY 2016 hospital readmissions payment adjustments and estimated FY 2016 hospital VBP payment adjustments applied above.
In addition, we applied the MS-DRG reclassification and recalibration budget neutrality adjustment factor (derived in the first step) to the payment rates that were used to simulate payments for this comparison of aggregate payments from FY 2015 to FY 2016. By applying this methodology, we determined a budget neutrality adjustment factor of 0.998749 for changes to the wage index. Finally, we multiplied the MS-DRG reclassification and recalibration budget neutrality adjustment factor of 0.998399 (derived in the first step) by the budget neutrality adjustment factor of 0.998749 for changes to the wage index (derived in the second step) to determine the MS-DRG reclassification and recalibration and updated wage index budget neutrality adjustment factor of 0.997150.
Section 1886(d)(8)(B) of the Act provides that certain rural hospitals are deemed urban. In addition, section 1886(d)(10) of the Act provides for the reclassification of hospitals based on determinations by the MGCRB. Under section 1886(d)(10) of the Act, a hospital may be reclassified for purposes of the wage index.
Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amount to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. We note that the wage index adjustments provided for under section 1886(d)(13) of the Act are not budget neutral. Section 1886(d)(13)(H) of the Act provides that any increase in a wage index under section 1886(d)(13) shall not be taken into account in applying any budget neutrality adjustment with respect to such index under section 1886(d)(8)(D) of the Act. To calculate the budget neutrality adjustment factor for FY 2016, we used FY 2014 discharge data to simulate payments and compared the following:
• Aggregate payments using the FY 2016 labor-related share percentages, FY 2016 relative weights, and FY 2016 wage data prior to any reclassifications under sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act, and applied the FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments; and
• Aggregate payments using the FY 2016 labor-related share percentages, FY 2016 relative weights, and FY 2016 wage data after such reclassifications, and applied the same FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments applied above.
We note that the reclassifications applied under the second simulation and comparison are those listed in Table 2 associated with this final rule, which is available via the Internet on the CMS Web site. This table reflects reclassification crosswalks for FY 2016, and applies the policies explained in section III. of the preamble to this final rule. Based on these simulations, we calculated a budget neutrality adjustment factor of 0.987905 to ensure that the effects of these provisions are budget neutral, consistent with the statute.
The FY 2016 budget neutrality adjustment factor was applied to the standardized amount after removing the effects of the FY 2015 budget neutrality adjustment factor. We note that the FY 2016 budget neutrality adjustment reflects FY 2016 wage index reclassifications approved by the MGCRB or the Administrator at the time of development of the final rule.
Under § 412.64(e)(4), we make an adjustment to the wage index to ensure that aggregate payments after implementation of the rural floor under section 4410 of the BBA (Pub. L. 105-33) and the imputed floor under § 412.64(h)(4) are equal to the aggregate prospective payments that would have
As noted above and as discussed in section III.H.2. of the preamble of this final rule, in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51594), we extended the imputed floor calculated under the original methodology through FY 2013. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53368 through 53369), we established an alternative methodology for calculating the imputed floor and established a policy that the minimum wage index value for an all-urban State would be the higher of the value determined under the original methodology or the value computed using the alternative methodology. Consistent with the methodology for treating the imputed floor, similar to the methodology we used in the FY 2013 IPPS/LTCH PPS final rule, we included this alternative methodology for computing the imputed floor index in the calculation of the uniform, national rural floor budget neutrality adjustment for FY 2014. For FY 2015, as discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49969 through 49971), we extended the imputed floor for another year using the higher of the value determined under the original methodology or the alternative methodology. As discussed in section III.H.2. of the preamble of this final rule, we are extending the imputed floor using the higher of the value determined under the original methodology or the alternative methodology for FY 2016. Therefore, in order to ensure that aggregate payments to hospitals are not affected, similar to prior years, we follow our policy of including the imputed floor in the rural floor budget neutrality adjustment to the wage index.
Under the new OMB labor market area delineations adopted beginning with the FY 2015 wage indexes, New Jersey, Rhode Island, and Delaware are all-urban States. Therefore, for FY 2016, the imputed floor was applied to the wage index for hospitals located in these three States.
Similar to our calculation in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50369 through 50370), for FY 2016, we are calculating a national rural Puerto Rico wage index (used to adjust the labor-related share of the national standardized amount for hospitals located in Puerto Rico which receive 75 percent of the national standardized amount) and a rural Puerto Rico-specific wage index (which is used to adjust the labor-related share of the Puerto Rico-specific standardized amount for hospitals located in Puerto Rico that receive 25 percent of the Puerto Rico-specific standardized amount). Because there are no rural Puerto Rico hospitals with established wage data, our calculation of the FY 2016 rural Puerto Rico wage index is based on the policy adopted in the FY 2008 IPPS final rule with comment period (72 FR 47323). That is, we use the unweighted average of the wage indexes from all CBSAs (urban areas) that are contiguous (share a border with) to the rural counties to compute the rural floor (72 FR 47323; 76 FR 51594). Under the new OMB labor market area delineations, except for Arecibo, Puerto Rico (CBSA 11640), all other Puerto Rico urban areas are contiguous to a rural area. Therefore, based on our existing policy, the FY 2016 rural Puerto Rico wage index is calculated based on the average of the FY 2016 wage indexes for the following urban areas: Aguadilla-Isabela, PR (CBSA 10380); Guayama, PR (CBSA 25020); Mayaguez, PR (CBSA 32420); Ponce, PR (CBSA 38660), San German, PR (CBSA 41900) and San Juan-Carolina-Caguas, PR (CBSA 41980).
To calculate the national rural floor and imputed floor budget neutrality adjustment factors and the Puerto Rico-specific rural floor budget neutrality adjustment factor, we used FY 2014 discharge data to simulate payments and the post-reclassified national and Puerto Rico-specific wage indexes and compared the following:
• The national and Puerto Rico-specific simulated payments without the national rural floor and imputed floor and Puerto Rico-specific rural floor applied; and
• The national and Puerto Rico-specific simulated payments with the national rural floor and imputed floor and Puerto Rico-specific rural floor applied.
Based on this comparison, we determined a national rural budget neutrality adjustment factor of 0.990298 and the Puerto Rico-specific budget neutrality adjustment factor of 0.987646. The national adjustment was applied to the national wage indexes to produce a national rural floor budget neutral wage index and the Puerto Rico-specific adjustment was applied to the Puerto Rico-specific wage indexes to produce a Puerto Rico-specific rural floor budget neutral wage index.
As discussed in section III.G. of the preamble of this final rule, in the past, we have provided for transition periods when adopting changes that have significant payment implications, particularly large negative impacts.
Similar to FY 2005, for FY 2015, we determined that the transition to using the new OMB labor market area delineations would have the largest impact on hospitals that were located in an urban county that became rural under the new OMB delineations or hospitals deemed urban where the urban area became rural under the new OMB delineations. To alleviate the decreased payments associated with having a rural wage index, in calculating the area wage index, similar to the transition provided in the FY 2005 IPPS final rule, we finalized a policy to generally assign these counties the urban wage index value of the CBSA to which they are physically located in for FY 2014 for FYs 2015, 2016, and 2017. Fiscal year 2016 is the second year of this 3-year transition policy. We note that the 1-year blended wage index transitional policy for all hospitals that would experience any decrease in their wage index value expires in FY 2015.
As discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50372 through 50373), in the past, CMS has budget neutralized transitional wage indexes. We stated that because we established a policy that allows for the application of a transitional wage index only when it benefits the hospital, we believe that it would be appropriate to ensure that such a transitional policy does not increase aggregate Medicare payments beyond the payments that would be made had we simply adopted the OMB delineations without any transitional provisions. Therefore, as we did for FY 2015, for FY 2016, we are using our exceptions and adjustments authority under section 1886(d)(5)(I)(i) of the Act to make an adjustment to the national and Puerto Rico-specific standardized amounts to ensure that total payments for the effect of the 3-year transitional wage index provisions will equal what payments would have been if we had fully adopted the new OMB delineations without providing these transitional provisions. To calculate the transitional wage index budget neutrality factor for FY 2016, we used FY 2014 discharge data to simulate payments and compared the following:
• Aggregate payments using the OMB delineations for FY 2016, the FY 2016 relative weights, the FY 2016 wage data after such reclassifications under
• Aggregate payments using the OMB delineations for FY 2016, the FY 2016 relative weights, the FY 2016 wage data after such reclassifications under sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act, application of the rural floor budget neutrality adjustment factor to the wage index, application of the 3-year transitional wage indexes, and application of the same FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments applied above.
Based on these simulations, we calculated a budget neutrality adjustment factor of 0.999996. Therefore, for FY 2016, we applied a transitional wage index budget neutrality adjustment factor of 0.999996 to the national average and Puerto Rico-specific standardized amounts to ensure that the effects of these transitional wage indexes are budget neutral.
We note that the budget neutrality adjustment factor calculated above is based on the increase in payments in FY 2016 that would result from the second year of the 3-year transitional wage index policies. Therefore, we applied this budget neutrality adjustment factor as a one-time adjustment to the FY 2016 national and Puerto Rico-specific standardized amounts in order to offset the increase in payments in FY 2016 as a result of this second year of the 3-year transitional wage index. For subsequent fiscal years, we will not take into consideration the adjustment factor applied to the national and Puerto Rico-specific standardized amounts in the previous fiscal year's update when calculating the current fiscal year transitional wage index budget neutrality adjustment factor (that is, this adjustment will not be applied cumulatively).
Below we summarize the recoupment adjustment to the FY 2016 payment rates, as required by section 631 of ATRA, to account for the increase in aggregate payments as a result of not completing the prospective adjustment authorized under section 7(b)(1)(A) of Public Law 110-90 until FY 2013. We refer readers to section II.D. of the preamble of this final rule for a complete discussion regarding our policies for FY 2016 in this final rule and previously finalized policies (including our historical adjustments to the payment rates) relating to the effect of changes in documentation and coding that do not reflect real changes in case-mix.
Section 631 of the ATRA amended section 7(b)(1)(B) of Public Law 110-90 to require the Secretary to make a recoupment adjustment totaling $11 billion by FY 2017. Our actuaries estimated that if CMS were to fully account for the $11 billion recoupment required by section 631 of the ATRA in FY 2014, a one-time −9.3 percent adjustment to the standardized amount would be necessary. It is often our practice to delay or phase-in payment rate adjustments over more than 1 year, in order to moderate the effect on payment rates in any 1 year. Therefore, consistent with the policies that we have adopted in many similar cases, for FY 2014 and FY 2015, we applied a −0.8 percent adjustment to the standardized amount. For FY 2016, as we proposed, we are applying a −0.8 percent adjustment to the standardized amount. We note that, as section 631 of the ATRA instructs the Secretary to make a recoupment adjustment only to the standardized amount, this adjustment does not apply to the Puerto Rico-specific standardized amount and hospital-specific payment rates.
As discussed in section IV.L. of the preamble of this final rule, section 410A of Public Law 108-173 originally required the Secretary to establish a demonstration program that modifies reimbursement for inpatient services for up to 15 small rural hospitals. Section 410A(c)(2) of Public Law 108-173 requires that, in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented.
Sections 3123 and 10313 of the Affordable Care Act extended the demonstration program for an additional 5-year period, and allowed up to 30 hospitals to participate in 20 States with low population densities determined by the Secretary. (In determining which States to include in the expansion, the Secretary is required to use the same criteria and data that the Secretary used to determine the States for purposes of the initial 5-year period.) In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50141 through 50145), in order to achieve budget neutrality, we adjusted the national IPPS payment rates by an amount sufficient to account for the added costs of this demonstration program as described in section IV.L. of that final rule. In other words, we applied budget neutrality across the payment system as a whole rather than merely across the participants of this demonstration program, consistent with past practice. We stated that we believe the language of the statutory budget neutrality requirement permits the agency to implement the budget neutrality provision in this manner. The statutory language requires that aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration was not implemented, but does not identify the range across which aggregate payments must be held equal.
For FY 2016, we are calculating a budget neutrality offset amount, according to the methodology set forth in section IV.I. of the preamble of this final rule, to account for the estimated additional costs of the demonstration program for FY 2016. In addition, as explained in section IV.I. of the preamble of this final rule, we are subtracting from this budget neutrality offset amount the following: (1) The amount by which the budget neutrality offset that was finalized in the FY 2009 IPPS final rule exceeded the actual costs of the demonstration for FY 2009 (as shown in finalized cost reports for hospitals that participated in FY 2009 and had cost reporting periods beginning in FY 2009), and (2) the amount by which the budget neutrality offset that was finalized for FY 2010 to account for the demonstration costs in FY 2010 (as set forth in the FY 2010 and 2011 IPPS final rules) exceeded the actual costs of the demonstration for FY 2010 (as shown in finalized cost reports for hospitals that participated in FY 2010 and had cost reporting periods beginning in FY 2010). The total budget neutrality offset amount for which the adjustment to the FY 2016 IPPS rates is calculated is $12,835,618. Accordingly, using the most recent data available to account for the estimated costs of the demonstration program, for FY 2016, we have computed a factor of 0.999861 for the rural community hospital
Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for “outlier” cases involving extraordinarily high costs. To qualify for outlier payments, a case must have costs greater than the sum of the prospective payment rate for the DRG, any IME and DSH payments, any new technology add-on payments, and the “outlier threshold” or “fixed-loss” amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for an outlier payment). We refer to the sum of the prospective payment rate for the DRG, any IME and DSH payments, any new technology add-on payments, and the outlier threshold as the outlier “fixed-loss cost threshold.” To determine whether the costs of a case exceed the fixed-loss cost threshold, a hospital's CCR is applied to the total covered charges for the case to convert the charges to estimated costs. Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the estimated costs above the fixed-loss cost threshold. The marginal cost factor for FY 2016 is 80 percent, the same marginal cost factor we have used since FY 1995 (59 FR 45367).
In accordance with section 1886(d)(5)(A)(iv) of the Act, outlier payments for any year are projected to be not less than 5 percent nor more than 6 percent of total operating DRG payments (which does not include IME and DSH payments) plus outlier payments. When setting the outlier threshold, we compute the 5.1 percent target by dividing the total operating outlier payments by the total operating DRG payments plus outlier payments. We do not include any other payments such as IME and DSH within the outlier target amount. Therefore, it is not necessary to include Medicare Advantage IME payments in the outlier threshold calculation. Section 1886(d)(3)(B) of the Act requires the Secretary to reduce the average standardized amount by a factor to account for the estimated proportion of total DRG payments made to outlier cases. Similarly, section 1886(d)(9)(B)(iv) of the Act requires the Secretary to reduce the average standardized amount applicable to hospitals located in Puerto Rico to account for the estimated proportion of total DRG payments made to outlier cases. More information on outlier payments may be found on the CMS Web site at:
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50977 through 50983), in response to public comments on the FY 2013 IPPS/LTCH PPS proposed rule, we made changes to our methodology for projecting the outlier fixed-loss cost threshold for FY 2014. We refer readers to the FY 2014 IPPS/LTCH PPS final rule for detailed discussion of the changes.
For FY 2016, we proposed to continue to use the same methodology that we used in FY 2015. As we have done in the past, to calculate the proposed FY 2016 outlier threshold, we simulated payments by applying proposed FY 2016 payment rates and policies using cases from the FY 2014 MedPAR file. Therefore, in order to determine the proposed FY 2016 outlier threshold, we inflated the charges on the MedPAR claims by 2 years, from FY 2014 to FY 2016. As discussed in the FY 2014 IPPS/LTCH PPS final rule, we believe a methodology that is based on 1-year of charge data will provide a more stable measure to project the average charge per case because our prior methodology used a 6-month measure, which inherently uses fewer claims than a 1-year measure and makes it more susceptible to fluctuations in the average charge per case as a result of any significant charge increases or decreases by hospitals.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50375), we stated that commenters were concerned that they were unable to replicate the calculation of the charge inflation factor that CMS used in the proposed rule. In response to those comments, we stated that, consistent with our longstanding policy since FY 2005, we continue to believe that it is optimal to use the most recent period of charge data available to measure charge inflation. We also stated we would consider how best to provide additional information on the charge inflation factor for future years. In response to those comments, in the proposed rule, we provided the following table that displays covered charges and cases by quarter in the periods used to calculate the charge inflation factor.
Under this new methodology, to compute the 1-year average annualized rate-of-change in charges per case for FY 2016, we proposed to compare the average covered charge per case of $48,129 ($480,353,415,324/9,980,633) from the second quarter of FY 2013 through the first quarter of FY 2014 (January 1, 2013, through December 31, 2013) to the average covered charge per case of $50,444 ($453,995,529,277/8,999,932) from the second quarter of FY 2014 through the first quarter of FY 2015 (January 1, 2014, through December 31, 2014). This rate-of-change was 4.8 percent (1.048116) or 9.8 percent (1.098547) over 2 years.
With respect to commenters who expressed concern that they were unable to replicate the calculation of the charge inflation factor that CMS used in the proposed rule, the information we provided in the proposed rule was sufficient for meaningful comment on our proposal and balances the commenter's requests that we use the latest claims data to compute the charge inflation factor with the current limitations of the LDS file. We note that we responded to similar comments on the replication of the charge inflation factor in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50375) and refer readers to that final rule.
Nevertheless, in response to the request for additional information, we are taking two actions. For the quarterly charge data table, we grouped claims data by quarter in order that the public would be able to replicate the claims summary for the claims with discharge dates through September 30, 2014, that are available under the current LDS structure. In order to provide even more information in response to the commenters' request, we will make available on the CMS Web site at
In response to the commenters who requested additional detail on our calculation, we note that section II.A.4. of this Addendum describes the inclusion and exclusion of claims and charges used in the outlier calculation and charge inflation calculation. As we have done in the past, in the FY 2016 IPPS/LTCH PPS proposed rule, we proposed to establish the FY 2016 outlier threshold using hospital CCRs from the December 2014 update to the Provider-Specific File (PSF)—the most recent available data at the time of the proposed rule. We also proposed that if more recent data became available, we would use that data to calculate the final FY 2016 outlier threshold. For FY 2016, we also proposed to continue to apply an adjustment factor to the CCRs to account for cost and charge inflation (as explained below).
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50979), we adopted a new methodology to adjust the CCRs. Specifically, we finalized a policy to compare the national average case-weighted operating and capital CCR from the most recent update of the PSF to the national average case-weighted operating and capital CCR from the same period of the prior year.
Therefore, as we did for FY 2014 and FY 2015, we proposed to adjust the CCRs from the December 2014 update of the PSF by comparing the percentage change in the national average case-weighted operating CCR and capital CCR from the December 2013 update of the PSF to the national average case-weighted operating CCR and capital CCR from the December 2014 update of the PSF. We note that, in the proposed rule, we used total transfer-adjusted cases from FY 2014 to determine the national average case-weighted CCRs for both sides of the comparison. As stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50979), we believe that it is appropriate to use the same case count on both sides of the comparison because this will produce the true percentage change in the average case-weighted operating and capital CCR from one year to the next without any effect from a change in case count on different sides of the comparison.
Using the proposed methodology above, for the proposed rule, we calculated a December 2013 operating national average case-weighted CCR of 0.288792 and a December 2014 operating national average case-weighted CCR of 0.280581. We then calculated the percentage change between the two national operating case-weighted CCRs by subtracting the December 2013 operating national average case-weighted CCR from the December 2014 operating national average case-weighted CCR and then dividing the result by the December 2013 national operating average case-weighted CCR. This resulted in a proposed national operating CCR adjustment factor of 0.971568.
We used the same methodology proposed above to adjust the capital CCRs. Specifically, for the proposed rule we calculated a December 2013 capital national average case-weighted CCR of 0.025014 and a December 2014 capital national average case-weighted CCR of 0.024500. We then calculated the percentage change between the two national capital case-weighted CCRs by subtracting the December 2013 capital national average case-weighted CCR from the December 2014 capital national average case-weighted CCR and then dividing the result by the December 2013 capital national average case-weighted CCR. This resulted in a proposed national capital CCR adjustment factor of 0.979474.
Consistent with our methodology used in the past and as stated in the FY 2009 IPPS final rule (73 FR 48763), we continue to believe that it is appropriate to apply only a 1-year adjustment factor to the CCRs. On average, it takes approximately 9 months for a MAC to tentatively settle a cost report from the fiscal year end of a hospital's cost reporting period. The average “age” of hospitals' CCRs from the time the fiscal intermediary or the MAC inserts the CCR in the PSF until the beginning of FY 2016 is approximately 1 year. Therefore, as stated above, we believe a 1-year adjustment factor to the CCRs is appropriate.
As stated above, for FY 2016, we applied the FY 2016 payment rates and
As discussed above, for FY 2016, we are applying the second year of the 3-year transitional wage index because of the adoption of the new OMB labor market area delineations. Also, as discussed in section III.B.3. of the preamble to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50160 and 50161) and in section III.H.3. of the preamble of this final rule, in accordance with section 10324(a) of the Affordable Care Act, we created a wage index floor of 1.0000 for all hospitals located in States determined to be frontier States. We note that the frontier State floor adjustments are calculated and applied after rural and imputed floor budget neutrality adjustments are calculated for all labor market areas, in order to ensure that no hospital in a frontier State receives a wage index less than 1.0000 due to the rural and imputed floor adjustment. In accordance with section 10324(a) of the Affordable Care Act, the frontier State adjustment will not be subject to budget neutrality, and will only be extended to hospitals geographically located within a frontier State. However, for purposes of estimating the proposed outlier threshold for FY 2016, it was necessary to apply the 3-year transitional wage indexes and adjust the wage index of those eligible hospitals in a frontier State when calculating the outlier threshold that results in outlier payments being 5.1 percent of total payments for FY 2016. If we did not take the above into account, our estimate of total FY 2016 payments would be too low, and, as a result, our proposed outlier threshold would be too high, such that estimated outlier payments would be less than our projected 5.1 percent of total payments.
As we did in establishing the FY 2009 outlier threshold (73 FR 57891), in our projection of FY 2016 outlier payments, we proposed not to make any adjustments for the possibility that hospitals' CCRs and outlier payments may be reconciled upon cost report settlement. We stated that we continue to believe that, due to the policy implemented in the June 9, 2003 Outlier final rule (68 FR 34494), CCRs will no longer fluctuate significantly and, therefore, few hospitals will actually have these ratios reconciled upon cost report settlement. In addition, it is difficult to predict the specific hospitals that will have CCRs and outlier payments reconciled in any given year. We note that we have instructed MACs to identify for CMS any instances where (1) a hospital's actual CCR for the cost reporting period fluctuates plus or minus 10 percentage points compared to the interim CCR used to calculate outlier payments when a bill is processed; and (2) the total outlier payments for the hospital exceeded $500,000.00 for that period. Our simulations assume that CCRs accurately measure hospital costs based on information available to us at the time we set the outlier threshold. For these reasons, we proposed not to make any assumptions regarding the effects of reconciliation on the outlier threshold calculation.
Another commenter submitted the same comment as last year and cited CMS' response from the FY 2015 IPPS/LTCH PPS final rule (79 FR 50377). The commenter questioned CMS' response with the following comments: The commenter asked what is the basis for CMS' claim “that the CCRs will reflect low costs and high charges that the commenter referred to, and when applied to the charges on the claim will result in less outlier payments for such cases because the costs of the case will be lower when compared to the total MS-DRG payments excluding outlier payments.” The commenter cited the 2013 OIG Report and stated that the report seems to state the opposite of CMS' position when it states that “high-outlier hospitals charged Medicare substantially more for the same MS-DRGs, yet had similar average lengths of stay and CCRs.” The commenter further cited the same 2013 OIG report which stated “that high-outlier hospitals had similar average CCRs, compared to all other hospitals, which means that the higher charges by the hospitals directly resulted in larger and more frequent outlier payments. As mentioned, Medicare applies a hospital's CCR to the covered charges on a claim to determine the estimated cost of services covered by the claim. The amount of the estimated cost determines whether Medicare makes an outlier payment and the amount received. In 2008, the average CCR at high-outlier hospitals was the same as the average CCR for all other hospitals, 0.35. CCRs declined, on average, during 2008-2011, to 0.30 at high-outlier hospitals and to 0.33 at all other hospitals. Although the high-outlier hospitals had higher charges, their CCR (that is, 0.30) was not significantly lower than the CCR of all other hospitals (that is, 0.33). Therefore, the higher charges led Medicare to calculate higher estimated costs for the high-outlier hospitals, and paying larger, more frequent outlier payments.”
The commenter concluded that it is neither consistent with the outlier statute nor reasonable for CMS, in modeling outlier payments for the upcoming fiscal year, to include outlier payments that were based on excessively high charges for particular MS-DRGs and not based on truly unusually high costs. The commenter suggested that, if CMS claims that such payments will not be recouped because they do not trigger reconciliation under current criteria, CMS explain how it plans to address the matter in setting the outlier fixed-loss cost threshold. The commenter suggested the following possibilities: Chapter 3, Section 20.1.2 of the Medicare Claims Processing Manual authorizes CMS to “direct Medicare contractors to use an alternative CCR if CMS believes this will result in a more accurate CCR” or a Medicare contractor “may specify an alternative CCR if it believes that the CCR being applied is inaccurate.”
As described in sections IV.H. and IV.I., respectively, of the preamble of this final rule, sections 1886(q) and 1886(o) of the Act establish the Hospital Readmissions Reduction Program and the Hospital VBP Program, respectively. We do not believe that it is appropriate to include the hospital VBP payment adjustments and the hospital readmissions payment adjustments in the outlier threshold calculation or the outlier offset to the standardized amount. Specifically, consistent with our definition of the base operating DRG payment amount for the Hospital Readmissions Reduction Program under § 412.152 and the Hospital VBP Program under § 412.160, outlier payments under section 1886(d)(5)(A) of the Act are not affected by these payment adjustments. Therefore, outlier payments will continue to be calculated based on the unadjusted base DRG payment amount (as opposed to using the base-operating DRG payment amount adjusted by the hospital readmissions payment adjustment and the hospital VBP payment adjustment). Consequently, we proposed to exclude the hospital VBP payment adjustments and the hospital readmissions payment adjustments from the calculation of the outlier fixed-loss cost threshold.
We noted that, to the extent section 1886(r) of the Act modifies the existing DSH payment methodology under section 1886(d)(5)(F) of the Act, the new uncompensated care payment under section 1886(r)(2) of the Act, like the empirically justified Medicare DSH payment under section 1886(r)(1) of the Act, may be considered an amount payable under section 1886(d)(5)(F) of the Act such that it would be reasonable to include the payment in the outlier determination under section 1886(d)(5)(A) of the Act. As we did for FY 2014 and FY 2015, for FY 2016, we proposed to allocate an estimated per-discharge uncompensated care payment amount to all cases for the hospitals eligible to receive the uncompensated care payment amount in the calculation of the outlier fixed-loss cost threshold methodology. We stated that we continue to believe that allocating an eligible hospital's estimated uncompensated care payment to all cases equally in the calculation of the outlier fixed-loss cost threshold would best approximate the amount we would pay in uncompensated care payments during the year because, when we make claim payments to a hospital eligible for such payments, we would be making estimated per-discharge uncompensated care payments to all cases equally. Furthermore, we stated that we continue to believe that using the estimated per-claim uncompensated care payment amount to determine outlier estimates provides predictability as to the amount of uncompensated care payments included in the calculation of outlier payments. Therefore, consistent with the methodology used in FY 2014 and FY 2015 to calculate the outlier fixed-loss cost threshold, for FY 2016, we proposed to include estimated FY 2016 uncompensated care payments in the computation of the proposed outlier fixed-loss cost threshold. Specifically, we proposed to use the estimated per-discharge uncompensated care payments to hospitals eligible for the uncompensated care payment for all cases in the calculation of the outlier fixed-loss cost threshold methodology.
Using this methodology, we proposed an outlier fixed-loss cost threshold for FY 2016 equal to the prospective payment rate for the MS-DRG, plus any IME, empirically justified Medicare DSH payments, estimated uncompensated care payment, and any add-on payments for new technology, plus $24,485.
In the proposed rule, we noted that the proposed FY 2016 fixed-loss cost threshold is lower than the FY 2015 final outlier fixed-loss cost threshold of $24,626. We stated that we believe that the decrease in the charge inflation factor (compared to the FY 2015 charge inflation factor) contributed to a lower outlier fixed-loss threshold for FY 2016. As charges decrease, so does the amount of outlier payments. As a result, it was necessary for us to lower the proposed outlier fixed-loss cost threshold to increase the amount of outlier payments expended in order to reach the 5.1 percent target.
The commenter stated that it was concerned that CMS believed it was over shooting its target amount for FY 2014 by 0.58 percent and this motivated CMS to dramatically increase the threshold for FY 2015, only to learn this year that its estimate was grossly overstated. The commenter concluded that it is critical that CMS not allow the use of incomplete data from prior years to affect its calculation of current period thresholds.
Another commenter noted that the final outlier threshold established by CMS is always significantly lower than the threshold set forth in the proposed rule. The commenter believed the decline is most likely due to the use of updated CCRs or other data in calculating the final threshold. The commenter stated that this emphasizes that CMS must use the most recent data available when it calculates the outlier threshold. The commenter cited as an example that, in the proposed rule, CMS used data from the December 2014 PSF file, but at the time the proposed rule was issued, the March 2015 PSF file was available.
Another commenter recommended that that threshold be maintained at the FY 2014 level of $21,748 until CMS develops a more reliable methodology for meeting the 5.1 percent target. One other commenter also noted that CMS' estimate of FY 2015 outlier payments in the proposed rule was 4.88 percent, which is below the 5.1 percent target. The commenter believed that the proposed FY 2016 threshold was understated. As a result, the commenter suggested that CMS apply the following formula to compute the FY 2016 outlier threshold: Step 1—FY 2015 Difference = (5.1 percent Target − 4.88 percent estimate from FY 2015 = 0.22 percent)/4.88 percent estimate from FY 2015 = 4.51 percent; Step 2—Suggested FY 2016 Threshold = Threshold from FY 2015 of $24,626 * (100 − 4.51 from Step 1 = 95.49 percent) = $23,515.
After consideration of the public comments we received, we are not making any changes to our methodology in this final rule for FY 2016. Therefore, we are using the same methodology we proposed to calculate the final outlier threshold.
As described above, we used the latest claims data from the MedPAR file to compute the charge inflation factor. Similar to the table provided in the proposed rule, for this final rule, we are providing the following table that displays covered charges and cases by quarter in the periods used to calculate the charge inflation factor.
Under our current methodology, to compute the 1-year average annualized rate-of-change in charges per case for FY 2016, based on the data from the table above, we compared the average covered charge per case of $48,927 ($480,593,255,007/9,822,564) from the third quarter of FY 2013 through the second quarter of FY 2014 (April 1, 2013, through March 31, 2014) to the average covered charge per case of $50,768 ($463,248,162,670/9,124,821)
As we have done in the past, we are establishing the FY 2016 outlier threshold using hospital CCRs from the March 2015 update to the Provider-Specific File (PSF)—the most recent available data at the time of development of this final rule. For FY 2016, we also are continuing to apply an adjustment factor to the CCRs to account for cost and charge inflation (as explained below). In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50979), we adopted a new methodology to adjust the CCRs. Specifically, we finalized a policy to compare the national average case-weighted operating and capital CCR from the most recent update of the PSF to the national average case-weighted operating and capital CCR from the same period of the prior year.
Therefore, as we did for FY 2014 and for FY 2015, we are adjusting the CCRs from the March 2015 update of the PSF by comparing the percentage change in the national average case-weighted operating CCR and capital CCR from the March 2014 update of the PSF to the national average case-weighted operating CCR and capital CCR from the March 2015 update of the PSF. We note that we used total transfer-adjusted cases from FY 2014 to determine the national average case-weighted CCRs for both sides of the comparison. As stated in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50979), we believe that it is appropriate to use the same case count on both sides of the comparison as this will produce the true percentage change in the average case-weighted operating and capital CCR from one year to the next without any effect from a change in case count on different sides of the comparison.
Using the methodology above, we calculated a March 2014 operating national average case-weighted CCR of 0.287139 and a March 2015 operating national average case-weighted CCR of 0.278565. We then calculated the percentage change between the two national operating case-weighted CCRs by subtracting the March 2014 operating national average case-weighted CCR from the March 2015 operating national average case-weighted CCR and then dividing the result by the March 2014 national operating average case-weighted CCR. This resulted in a national operating CCR adjustment factor of 0.970141.
We also used the same methodology above to adjust the capital CCRs. Specifically, we calculated a March 2014 capital national average case-weighted CCR of 0.024879 and a March 2015 capital national average case-weighted CCR of 0.024243. We then calculated the percentage change between the two national capital case-weighted CCRs by subtracting the March 2014 capital national average case-weighted CCR from the March 2015 capital national average case-weighted CCR and then dividing the result by the March 2014 capital national average case-weighted CCR. This resulted in a national capital CCR adjustment factor of 0.974442.
Consistent with our methodology in the past and as stated in the FY 2009 IPPS final rule (73 FR 48763), we continue to believe that it is appropriate to apply only a 1-year adjustment factor to the CCRs. On average, it takes approximately 9 months for a MAC to tentatively settle a cost report from the fiscal year end of a hospital's cost reporting period. The average “age” of hospitals' CCRs from the time the fiscal intermediary or the MAC inserts the CCR in the PSF until the beginning of FY 2016 is approximately 1 year. Therefore, as stated above, we believe a 1-year adjustment factor to the CCRs is appropriate.
As stated above, for FY 2016, we applied the FY 2016 payment rates and policies using cases from the FY 2014 MedPAR files in calculating the outlier threshold.
As discussed above, for FY 2016, we are applying the second year of the 3-year transitional wage index because of the adoption of the new OMB labor market area delineations. Also, as discussed in section III.B.3. of the preamble to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50160 and 50161) and in section III.H.3. of the preamble of this final rule, in accordance with section 10324(a) of the Affordable Care Act, we created a wage index floor of 1.0000 for all hospitals located in States determined to be frontier States. We note that the frontier State floor adjustments are calculated and applied after rural and imputed floor budget neutrality adjustments are calculated for all labor market areas, in order to ensure that no hospital in a frontier State receives a wage index less than 1.0000 due to the rural and imputed floor adjustment. In accordance with section 10324(a) of the Affordable Care Act, the frontier State adjustment will not be subject to budget neutrality, and will only be extended to hospitals geographically located within a frontier State. However, for purposes of estimating the outlier threshold for FY 2016, it was necessary to apply the 3-year transitional wage indexes and adjust the wage index of those eligible hospitals in a frontier State when calculating the outlier threshold that results in outlier payments being 5.1 percent of total payments for FY 2016. If we did not take the above into account, our estimate of total FY 2016 payments would be too low, and, as a result, our outlier threshold would be too high, such that estimated outlier payments would be less than our projected 5.1 percent of total payments.
As we did in establishing the FY 2009 outlier threshold (73 FR 57891), as we proposed and for the reasons discussed above, in our projection of FY 2016 outlier payments, we are not making any adjustments for the possibility that hospitals' CCRs and outlier payments may be reconciled upon cost report settlement.
As described in sections IV.E. and IV.F. respectively, of the preamble of this final rule, sections 1886(q) and 1886(o) of the Act establish the Hospital Readmissions Reduction Program and the Hospital VBP Program, respectively. We do not believe that it is appropriate to include the hospital VBP payment adjustments and the hospital readmissions payment adjustments in the outlier threshold calculation or the outlier offset to the standardized amount. Specifically, consistent with our definition of the base operating DRG payment amount for the Hospital Readmissions Reduction Program under § 412.152 and the Hospital VBP Program under § 412.160, outlier payments under section 1886(d)(5)(A) of the Act are not affected by these payment adjustments. Therefore, outlier payments will continue to be calculated based on the unadjusted base DRG payment amount (as opposed to using the base-operating DRG payment amount adjusted by the hospital readmissions payment adjustment and the hospital VBP payment adjustment). Consequently, we excluded the hospital VBP payment adjustments and the hospital readmissions payment adjustments from the calculation of the outlier fixed-loss cost threshold.
We note that, to the extent section 1886(r) of the Act modifies the DSH payment methodology under section 1886(d)(5)(F) of the Act, the new uncompensated care payment under section 1886(r)(2) of the Act, like the empirically justified Medicare DSH payment under section 1886(r)(1) of the Act, may be considered an amount payable under section 1886(d)(5)(F) of the Act such that it would be reasonable to include the payment in the outlier determination under section 1886(d)(5)(A) of the Act. As we did for
Using this methodology, we calculated a final outlier fixed-loss cost threshold for FY 2016 equal to the prospective payment rate for the MS-DRG, plus any IME, empirically justified Medicare DSH payments, estimated uncompensated care payments, and any add-on payments for new technology, plus $22,544.
As stated in the FY 1994 IPPS final rule (58 FR 46348), we establish an outlier threshold that is applicable to both hospital inpatient operating costs and hospital inpatient capital-related costs. When we modeled the combined operating and capital outlier payments, we found that using a common threshold resulted in a lower percentage of outlier payments for capital-related costs than for operating costs. We project that the thresholds for FY 2016 will result in outlier payments that will equal 5.1 percent of operating DRG payments and 6.35 percent of capital payments based on the Federal rate.
In accordance with section 1886(d)(3)(B) of the Act, we reduced the FY 2016 standardized amount by the same percentage to account for the projected proportion of payments paid as outliers.
The outlier adjustment factors that were applied to the standardized amount based on the FY 2016 outlier threshold are as follows:
We applied the outlier adjustment factors to the FY 2016 payment rates after removing the effects of the FY 2015 outlier adjustment factors on the standardized amount.
To determine whether a case qualifies for outlier payments, we apply hospital-specific CCRs to the total covered charges for the case. Estimated operating and capital costs for the case are calculated separately by applying separate operating and capital CCRs. These costs are then combined and compared with the outlier fixed-loss cost threshold.
Under our current policy at § 412.84, we calculate operating and capital CCR ceilings and assign a statewide average CCR for hospitals whose CCRs exceed 3.0 standard deviations from the mean of the log distribution of CCRs for all hospitals. Based on this calculation, for hospitals for which the MAC computes operating CCRs greater than 1.21 or capital CCRs greater than 0.175, or hospitals for which the MAC is unable to calculate a CCR (as described under § 412.84(i)(3) of our regulations), statewide average CCRs are used to determine whether a hospital qualifies for outlier payments. Table 8A listed in section VI. of this Addendum (and available only via the Internet on the CMS Web site) contains the statewide average operating CCRs for urban hospitals and for rural hospitals for which the MAC is unable to compute a hospital-specific CCR within the above range. Effective for discharges occurring on or after October 1, 2015, these statewide average ratios will replace the ratios posted on our Web site at
We finally note that we published a manual update (Change Request 3966) to our outlier policy on October 12, 2005, which updated Chapter 3, Section 20.1.2 of the Medicare Claims Processing Manual. The manual update covered an array of topics, including CCRs, reconciliation, and the time value of money. We encourage hospitals that are assigned the statewide average operating and/or capital CCRs to work with their MAC on a possible alternative operating and/or capital CCR as explained in Change Request 3966. Use of an alternative CCR developed by the hospital in conjunction with the MAC can avoid possible overpayments or underpayments at cost report settlement, thereby ensuring better accuracy when making outlier payments and negating the need for outlier reconciliation. We also note that a hospital may request an alternative operating or capital CCR ratio at any time as long as the guidelines of Change Request 3966 are followed. In addition, we published an additional manual update (Change Request 7192) to our outlier policy on December 3, 2010, which also updated Chapter 3, Section 20.1.2 of the Medicare Claims Processing Manual. The manual update outlines the outlier reconciliation process for hospitals and Medicare contractors. To download and view the manual instructions on outlier reconciliation, we refer readers to the CMS Web site:
In the FY 2015 IPPS/LTCH PPS final rule correction notice (79 FR 59681), we stated that, based on available data, we estimated that actual FY 2014 outlier payments would be approximately 5.68 percent of actual total MS-DRG payments. This estimate was computed based on simulations using the FY 2013 MedPAR file (discharge data for FY 2013 claims). That is, the estimate of actual outlier payments did not reflect actual FY 2014 claims, but instead reflected the application of FY 2014 payment rates and policies to available FY 2013 claims.
Our current estimate, using available FY 2014 claims data, is that actual outlier payments for FY 2014 were approximately 5.38 percent of actual total MS-DRG payments. Therefore, the data indicate that, for FY 2014, the percentage of actual outlier payments relative to actual total payments is higher than we projected for FY 2014. Consistent with the policy and statutory interpretation we have maintained since the inception of the IPPS, we do not make retroactive adjustments to outlier payments to ensure that total outlier payments for FY 2014 are equal to 5.1 percent of total MS-DRG payments.
We currently estimate that, using the latest CCRs from the March 2015 update of the PSF, actual outlier payments for FY 2015 will be approximately 4.65 percent of actual total MS-DRG payments, approximately 0.45 percentage point lower than the 5.1 percent we projected when setting the outlier policies for FY 2015. This estimate of 4.65 percent is based on simulations using the FY 2014 MedPAR file (discharge data for FY 2014 claims).
The commenter stated that actual outlier payment estimates should be objectively calculated independent of HHS's “modeling” methodology. The commenter further stated that, in setting the fixed-loss cost threshold, CMS considers prior fiscal years' outlier payments and therefore it is important to have an accurate tally of those payments. The commenter concluded that CMS' estimates are unreliable and commenters have demonstrated far more reliable methods.
The adjusted standardized amount is divided into labor-related and nonlabor-related portions. Tables 1A and 1B listed and published in section VI. of this Addendum (and available via the Internet on the CMS Web site) contain the national standardized amounts that we are applying to all hospitals, except hospitals located in Puerto Rico, for FY 2016. The Puerto Rico-specific amounts are shown in Table 1C listed and published in section VI. of this Addendum (and available via the Internet on the CMS Web site). The amounts shown in Tables 1A and 1B differ only in that the labor-related share applied to the standardized amounts in Table 1A is 69.6 percent, and the labor-related share applied to the standardized amounts in Table 1B is 62 percent. In accordance with sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act, we are applying a labor-related share of 62 percent, unless application of that percentage will result in lower payments to a hospital than would otherwise be made. In effect, the statutory provision means that we will apply a labor-related share of 62 percent for all hospitals whose wage indexes are less than or equal to 1.0000.
In addition, Tables 1A and 1B include the standardized amounts reflecting the applicable percentage increases for FY 2016.
Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico payment rate is based on the
The following table illustrates the changes from the FY 2015 national standardized amount to the FY 2016 national standardized amount. The second through fifth columns display the changes from the FY 2015 standardized amounts for each applicable FY 2016 standardized amount. The first row of the table shows the updated (through FY 2015) average standardized amount after restoring the FY 2015 offsets for outlier payments, demonstration budget neutrality, geographic reclassification budget neutrality, new labor market delineation wage Index transition budget neutrality and the retrospective documentation and coding adjustment under section 7(b)(1)(B) of Public Law 110-90. The MS-DRG reclassification and recalibration and wage index budget neutrality adjustment factors are cumulative. Therefore, those FY 2015 adjustment factors are not removed from this table.
The following table illustrates the changes from the FY 2015 Puerto Rico-specific payment rate for hospitals located in Puerto Rico. The second column shows the changes from the FY 2015 Puerto Rico specific payment rate for hospitals with a Puerto Rico-specific wage index greater than 1.0000. The third column shows the changes from the FY 2015 Puerto Rico specific payment rate for hospitals with a Puerto Rico-specific wage index less than or equal to 1.0000. The first row of the table shows the updated (through FY 2015) Puerto Rico-specific payment rate after restoring the FY 2015 offsets for Puerto Rico-specific outlier payments, rural community hospital demonstration program budget neutrality, and the geographic reclassification budget neutrality. The MS-DRG recalibration budget neutrality adjustment factor is cumulative and is not removed from this table.
Tables 1A through 1C, as published in section VI. of this Addendum (and available via the Internet on the CMS Web site), contain the labor-related and nonlabor-related shares that we used to calculate the prospective payment rates for hospitals located in the 50 States, the District of Columbia, and Puerto Rico for FY 2016. This section addresses two types of adjustments to the standardized amounts that are made in determining the prospective payment rates as described in this Addendum.
Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require that we make an adjustment to the labor-related portion of the national and Puerto Rico prospective payment rates, respectively, to account for area differences in hospital wage levels. This adjustment is made by multiplying the labor-related portion of the adjusted standardized amounts by the appropriate wage index for the area in which the hospital is located. In section III of the preamble of this final rule, we discuss the data and methodology for the FY 2016 wage index.
Section 1886(d)(5)(H) of the Act provides discretionary authority to the Secretary to make such adjustments as the Secretary deems appropriate to take into account the unique circumstances of hospitals located in Alaska and Hawaii. Higher labor-related costs for these two States are taken into account in the adjustment for area wages described above. To account for higher nonlabor-related costs for these two States, we multiply the nonlabor-related portion of the standardized amount for hospitals located in Alaska and Hawaii by an adjustment factor.
In the FY 2013 IPPS/LTCH PPS final rule, we established a methodology to update the COLA factors for Alaska and Hawaii that were published by the U.S. Office of Personnel Management (OPM) every 4 years (at the same time as the update to the labor-related share of the IPPS market basket), beginning in FY 2014. We refer readers to the FY 2013 IPPS/LTCH PPS proposed and final rules for additional background and a detailed description of this methodology
For FY 2014, in the FY 2014 IPPS/LTCH PPS final rule (78 FR 50985 through 50987), we updated the COLA factors published by OPM for 2009 (as these are the last COLA factors OPM published prior to transitioning from COLAs to locality pay) using the methodology that we finalized in the FY 2013 IPPS/LTCH PPS final rule.
Based on the policy finalized in the FY 2013 IPPS/LTCH PPS final rule, we are continuing to use the same COLA factors in FY 2016 that were used in FY 2015 to adjust the nonlabor-related portion of the standardized amount for hospitals located in Alaska and Hawaii. Below is a table listing the COLA factors for FY 2016.
Based on the policy finalized in the FY 2013 IPPS/LTCH PPS final rule, the next update to the COLA factors for Alaska and Hawaii will occur in FY 2018.
In general, the operating prospective payment rate for all hospitals paid under the IPPS located outside of Puerto Rico, except SCHs and MDHs, for FY 2016 equals the Federal rate (which includes uncompensated care payments).
We note that section 205 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted on April 16, 2015) extended the MDH program (which, under previous law, was to be in effect for discharges on or before March 31, 2015 only) for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017).
SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal national rate (which, as discussed in section IV.D. of the preamble of this final rule, includes uncompensated care payments); the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; the updated hospital-specific rate based on FY 1996 costs per discharge; or the updated hospital-specific rate based on FY 2006 costs per discharge to determine the rate that yields the greatest aggregate payment.
The prospective payment rate for SCHs for FY 2016 equals the higher of the applicable Federal rate, or the hospital-specific rate as described below. The prospective payment rate for MDHs for FY 2016 equals the higher of the Federal rate, or the Federal rate plus 75 percent of the difference between the Federal rate and the hospital-specific rate as described below. For MDHs, the updated hospital-specific rate is based on FY 1982, FY 1987 or FY 2002 costs per discharge, whichever yields the greatest aggregate payment.
The prospective payment rate for hospitals located in Puerto Rico for FY 2016 equals 25 percent of the Puerto Rico-specific payment rate plus 75 percent of the applicable national rate.
The Federal rate is determined as follows:
The Federal payment rate as determined in Step 5 may then be further adjusted if the hospital qualifies for either the IME or DSH adjustment. In addition, for hospitals that qualify for a low-volume payment adjustment under section 1886(d)(12) of the Act and 42 CFR 412.101(b), the payment in Step 5 would be increased by a specified formula. The base-operating DRG payment amount may be further adjusted by the hospital readmissions payment adjustment and the hospital VBP payment adjustment as described under sections 1886(q) and 1886(o) of the Act, respectively. Finally, we add the uncompensated care payment to the total claim payment amount. We note that, as discussed above, we take uncompensated care payments into consideration when calculating outlier payments.
Section 1886(b)(3)(C) of the Act provides that SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal rate (which, as discussed in section IV.D. of the preamble of this final rule, includes uncompensated care payments); the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per
As noted above, section 205 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted on April 16, 2015) extended the MDH program (which, under previous law, was to be in effect for discharges on or before March 31, 2015 only) for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017). As discussed previously, currently MDHs are paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent of the difference between the Federal national rate and the greater of the updated hospital-specific rates based on either FY 1982, FY 1987 or FY 2002 costs per discharge.
For a more detailed discussion of the calculation of the hospital-specific rates, we refer readers to the FY 1984 IPPS interim final rule (48 FR 39772); the April 20, 1990 final rule with comment period (55 FR 15150); the FY 1991 IPPS final rule (55 FR 35994); and the FY 2001 IPPS final rule (65 FR 47082). We also refer readers to section IV.D. of the preamble of this final rule for a complete discussion on empirically justified Medicare DSH and uncompensated care payments.
Section 1886(b)(3)(B)(iv) of the Act provides that the applicable percentage increase applicable to the hospital-specific rates for SCHs and MDHs equals the applicable percentage increase set forth in section 1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the IPPS). Because the Act sets the update factor for SCHs and MDHs equal to the update factor for all other IPPS hospitals, the update to the hospital-specific rates for SCHs and MDHs is subject to the amendments to section 1886(b)(3)(B) of the Act made by sections 3401(a) and 10319(a) of the Affordable Care Act. Accordingly, the applicable percentage increases to the hospital-specific rates applicable to SCHs and MDHs are the following:
For a complete discussion of the applicable percentage increase applied to the hospital-specific rates for SCHs and MDHs, we refer readers to section IV.A. of the preamble of this final rule.
In addition, because SCHs and MDHs use the same MS-DRGs as other hospitals when they are paid based in whole or in part on the hospital-specific rate, the hospital-specific rate is adjusted by a budget neutrality factor to ensure that changes to the MS-DRG classifications and the recalibration of the MS-DRG relative weights are made in a manner so that aggregate IPPS payments are unaffected. Therefore, a SCH's and MDH's hospital-specific rate is adjusted by the proposed MS-DRG reclassification and recalibration budget neutrality factor of 0.998399, as discussed in section III. of this Addendum. The resulting rate is used in determining the payment rate that an SCH and an MDH will receive for its discharges beginning on or after October 1, 2015. We note that, in this final rule, for FY 2016, we are not making a documentation and coding adjustment to the hospital-specific rate. We refer readers to section II.D. of the preamble of this final rule for a complete discussion regarding our finalized policies and previously finalized policies (including our historical adjustments to the payment rates) relating to the effect of changes in documentation and coding that do not reflect real changes in case-mix.
Section 1886(d)(9)(E)(iv) of the Act provides that, effective for discharges occurring on or after October 1, 2004, hospitals located in Puerto Rico are paid based on a blend of 75 percent of the national prospective payment rate and 25 percent of the Puerto Rico-specific rate.
The Puerto Rico-specific prospective payment rate is determined as follows:
The national prospective payment rate is determined as follows:
The sum of the Puerto Rico-specific rate and the national prospective payment rate computed above equals the prospective payment rate for a given discharge for a hospital located in Puerto Rico. This payment rate is then further adjusted if the hospital qualifies for either the IME or DSH adjustment.
Finally, we add the uncompensated care payment to the total claim payment amount. We note that, as discussed above, we take uncompensated care payments into consideration when calculating outlier payments.
The PPS for acute care hospital inpatient capital-related costs was implemented for cost reporting periods beginning on or after October 1, 1991. Effective with that cost reporting period, over a 10-year transition period (which extended through FY 2001) the payment methodology for Medicare acute care hospital inpatient capital-related costs changed from a reasonable cost-based methodology to a prospective methodology (based fully on the Federal rate).
The basic methodology for determining Federal capital prospective rates is set forth in the regulations at 42 CFR 412.308 through 412.352. Below we discuss the factors that we used to determine the capital Federal rate for FY 2016, which is effective for discharges occurring on or after October 1, 2015.
The 10-year transition period ended with hospital cost reporting periods beginning on or after October 1, 2001 (FY 2002). Therefore, for cost reporting periods beginning in FY 2002, all hospitals (except “new” hospitals under § 412.304(c)(2)) are paid based on the capital Federal rate. For FY 1992, we computed the standard Federal payment rate for capital-related costs under the IPPS by updating the FY 1989 Medicare inpatient capital cost per case by an actuarial estimate of the increase in Medicare inpatient capital costs per case. Each year after FY 1992, we update the capital standard Federal rate, as provided at § 412.308(c)(1), to account for capital input price increases and other factors. The regulations at § 412.308(c)(2) also provide that the capital Federal rate be adjusted annually by a factor equal to the estimated proportion of outlier payments under the capital Federal rate to total capital payments under the capital Federal rate. In addition, § 412.308(c)(3) requires that the capital Federal rate be reduced by an adjustment factor equal to the estimated proportion of payments for exceptions under § 412.348. (We note that, as discussed in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53705), there is generally no longer a need for an exceptions payment adjustment factor.) However, in limited circumstances, an additional payment exception for extraordinary circumstances is provided for under § 412.348(f) for qualifying hospitals. Therefore, in accordance with § 412.308(c)(3), an exceptions payment adjustment factor may need to be applied if such payments are made. Section 412.308(c)(4)(ii) requires that the capital standard Federal rate be adjusted so that the effects of the annual DRG reclassification and the recalibration of DRG weights and changes in the geographic adjustment factor (GAF) are budget neutral.
Section 412.374 provides for blended payments to hospitals located in Puerto Rico under the IPPS for acute care hospital inpatient capital-related costs. Accordingly, under the capital PPS, we compute a separate payment rate specific to hospitals located in Puerto Rico using the same methodology used to compute the national Federal rate for capital-related costs. In accordance with section 1886(d)(9)(A) of the Act, under the IPPS for acute care hospital operating costs, hospitals located in Puerto Rico are paid for operating costs under a special payment formula. Effective October 1, 2004, in accordance with section 504 of Public Law 108-173, the methodology for operating payments made to hospitals located in Puerto Rico under the IPPS was revised to make payments based on a blend of 25 percent of the applicable standardized amount specific to Puerto Rico hospitals and 75 percent of the applicable national average standardized amount. In conjunction with this change to the operating blend percentage, effective with discharges occurring on or after October 1, 2004, we also revised the methodology for computing capital payments made to hospitals located in Puerto Rico to be based on a blend of 25 percent of the Puerto Rico capital rate and 75 percent of the national capital Federal rate (69 FR 49185).
In the discussion that follows, we explain the factors that we used to determine the capital Federal rate for FY 2016. In particular, we explain why the FY 2016 capital Federal rate increases approximately 0.85 percent, compared to the FY 2015 capital Federal rate. As discussed in the impact analysis in Appendix A to this final rule, we estimate that capital payments per discharge will increase approximately 2.3 percent during that same period. Because capital payments constitute about 10 percent of hospital payments, a percent change in the capital Federal rate yields only about a 0.1 percent change in actual payments to hospitals.
Under § 412.308(c)(1), the capital standard Federal rate is updated on the basis of an analytical framework that takes into account changes in a capital input price index (CIPI) and several other policy adjustment factors. Specifically, we adjust the projected CIPI rate-of-increase as appropriate each year for case-mix index-related changes, for intensity, and for errors in previous CIPI forecasts. The update factor for FY 2016 under that framework is 1.3 percent based on the best data available at this time. The update factor under that framework is based on a projected 1.3 percent increase in the FY 2010-based CIPI, a 0.0 percentage point adjustment for intensity, a 0.0 percentage point adjustment for case-mix, a 0.0 percentage point adjustment for the DRG reclassification and recalibration, and a forecast error correction of 0.0 percentage point. As discussed below in section III.C. of this Addendum, we continue to believe that the CIPI is the most appropriate input price index for capital costs to measure capital price changes in a given year. We also explain the basis for the FY 2016 CIPI projection in that same section of this Addendum. Below we describe the policy adjustments that we are applying in the update framework for FY 2016.
The case-mix index is the measure of the average DRG weight for cases paid under the IPPS. Because the DRG weight determines the prospective payment for each case, any percentage increase in the case-mix index corresponds to an
The case-mix index can change for any of several reasons:
• The average resource use of Medicare patients changes (“real” case-mix change);
• Changes in hospital documentation and coding of patient records result in higher-weighted DRG assignments (“coding effects”); and
• The annual DRG reclassification and recalibration changes may not be budget neutral (“reclassification effect”).
We define real case-mix change as actual changes in the mix (and resource requirements) of Medicare patients as opposed to changes in documentation and coding behavior that result in assignment of cases to higher-weighted DRGs, but do not reflect higher resource requirements. The capital update framework includes the same case-mix index adjustment used in the former operating IPPS update framework (as discussed in the May 18, 2004 IPPS proposed rule for FY 2005 (69 FR 28816)). (We no longer use an update framework to make a recommendation for updating the operating IPPS standardized amounts as discussed in section II. of Appendix B to the FY 2006 IPPS final rule (70 FR 47707).)
For FY 2016, we are projecting a 0.5 percent total increase in the case-mix index. We estimated that the real case-mix increase will equal 0.5 percent for FY 2016. The net adjustment for change in case-mix is the difference between the projected real increase in case-mix and the projected total increase in case-mix. Therefore, as we proposed, the net adjustment for case-mix change in FY 2016 is 0.0 percentage point.
The capital update framework also contains an adjustment for the effects of DRG reclassification and recalibration. This adjustment is intended to remove the effect on total payments of prior year's changes to the DRG classifications and relative weights, in order to retain budget neutrality for all case-mix index-related changes other than those due to patient severity of illness. Due to the lag time in the availability of data, there is a 2-year lag in data used to determine the adjustment for the effects of DRG reclassification and recalibration. For example, we have data available to evaluate the effects of the FY 2014 DRG reclassification and recalibration as part of our update for FY 2016. We estimate that FY 2014 DRG reclassification and recalibration resulted in no change in the case-mix when compared with the case-mix index that would have resulted if we had not made the reclassification and recalibration changes to the DRGs. Therefore, as we proposed, we are making a 0.0 percentage point adjustment for reclassification and recalibration in the update framework for FY 2016.
The capital update framework also contains an adjustment for forecast error. The input price index forecast is based on historical trends and relationships ascertainable at the time the update factor is established for the upcoming year. In any given year, there may be unanticipated price fluctuations that may result in differences between the actual increase in prices and the forecast used in calculating the update factors. In setting a prospective payment rate under the framework, we make an adjustment for forecast error only if our estimate of the change in the capital input price index for any year is off by 0.25 percentage point or more. There is a 2-year lag between the forecast and the availability of data to develop a measurement of the forecast error. Historically, when a forecast error of the CIPI is greater than 0.25 percentage point in absolute terms, it is reflected in the update recommended under this framework. A forecast error of 0.0 percentage point was calculated for the FY 2014 update, for which there is historical data. That is, current historical data indicate that the forecasted FY 2014 CIPI (1.2 percent) used in calculating the FY 2014 update factor was equal to the actual realized price increases (also 1.2 percent). Therefore, as we proposed, we are not making an adjustment for a forecast error in the update for FY 2016.
Under the capital IPPS update framework, we also make an adjustment for changes in intensity. Historically, we calculated this adjustment using the same methodology and data that were used in the past under the framework for operating IPPS. The intensity factor for the operating update framework reflected how hospital services are utilized to produce the final product, that is, the discharge. This component accounts for changes in the use of quality-enhancing services, for changes within DRG severity, and for expected modification of practice patterns to remove noncost-effective services. Our intensity measure is based on a 5-year average.
We calculate case-mix constant intensity as the change in total cost per discharge, adjusted for price level changes (the CPI for hospital and related services) and changes in real case-mix. Without reliable estimates of the proportions of the overall annual intensity increases that are due, respectively, to ineffective practice patterns and the combination of quality-enhancing new technologies and complexity within the DRG system, we assume that one-half of the annual increase is due to each of these factors. The capital update framework thus provides an add-on to the input price index rate of increase of one-half of the estimated annual increase in intensity, to allow for increases within DRG severity and the adoption of quality-enhancing technology.
In this final rule, we are continuing to use a Medicare-specific intensity measure that is based on a 5-year adjusted average of cost per discharge for FY 2016 (we refer readers to the FY 2011 IPPS/LTCH PPS final rule (75 FR 50436) for a full description of our Medicare-specific intensity measure). Specifically, for FY 2016, we are using an intensity measure that is based on an average of cost per discharge data from the 5-year period beginning with FY 2009 and extending through FY 2013. Based on these data, we estimated that case-mix constant intensity declined during FYs 2009 through 2013. In the past, when we found intensity to be declining, we believed a zero (rather than a negative) intensity adjustment was appropriate. Consistent with this approach, because we estimate that intensity declined during that 5-year period, we believe it is appropriate to continue to apply a zero intensity adjustment for FY 2016. Therefore, as we proposed, we are making a 0.0 percentage point adjustment for intensity in the update for FY 2016.
Above, we described the basis of the components used to develop the 1.3 percent capital update factor under the capital update framework for FY 2016 as shown in the table below.
In its March 2015 Report to Congress, MedPAC did not make a specific update recommendation for capital IPPS
Section 412.312(c) establishes a unified outlier payment methodology for inpatient operating and inpatient capital-related costs. A single set of thresholds is used to identify outlier cases for both inpatient operating and inpatient capital-related payments. Section 412.308(c)(2) provides that the standard Federal rate for inpatient capital-related costs be reduced by an adjustment factor equal to the estimated proportion of capital-related outlier payments to total inpatient capital-related PPS payments. The outlier thresholds are set so that operating outlier payments are projected to be 5.1 percent of total operating IPPS DRG payments.
For FY 2015, we estimated that outlier payments for capital would equal 6.18 percent of inpatient capital-related payments based on the capital Federal rate in FY 2015. Based on the thresholds as set forth in section II.A. of this Addendum, we estimate that outlier payments for capital-related costs will equal 6.35 percent for inpatient capital-related payments based on the capital Federal rate in FY 2016. Therefore, we are applying an outlier adjustment factor of 0.9365 in determining the capital Federal rate for FY 2016. Thus, we estimate that the percentage of capital outlier payments to total capital Federal rate payments for FY 2016 will be higher than the percentage for FY 2015.
The outlier reduction factors are not built permanently into the capital rates; that is, they are not applied cumulatively in determining the capital Federal rate. The FY 2016 outlier adjustment of 0.9365 is a − 0.18 percent change from the FY 2015 outlier adjustment of 0.9382. Therefore, the net change in the outlier adjustment to the capital Federal rate for FY 2016 is 0.9982 (0.9365/0.9382). Thus, the outlier adjustment will decrease the FY 2016 capital Federal rate by 0.18 percent compared to the FY 2015 outlier adjustment.
Section 412.308(c)(4)(ii) requires that the capital Federal rate be adjusted so that aggregate payments for the fiscal year based on the capital Federal rate after any changes resulting from the annual DRG reclassification and recalibration and changes in the GAF are projected to equal aggregate payments that would have been made on the basis of the capital Federal rate without such changes. Because we implemented a separate GAF for Puerto Rico, we apply separate budget neutrality adjustments for the national GAF and the Puerto Rico GAF. We apply the same budget neutrality factor for DRG reclassifications and recalibration nationally and for Puerto Rico. Separate adjustments were unnecessary for FY 1998 and earlier because the GAF for Puerto Rico was implemented in FY 1998.
To determine the factors for FY 2016, we compared (separately for the national capital rate and the Puerto Rico capital rate) estimated aggregate capital Federal rate payments based on the FY 2015 MS-DRG classifications and relative weights and the FY 2015 GAF to estimated aggregate capital Federal rate payments based on the FY 2015 MS-DRG classifications and relative weights and the FY 2016 GAFs. To achieve budget neutrality for the changes in the national GAFs, based on calculations using updated data, we are applying an incremental budget neutrality adjustment factor of 0.9979 for FY 2016 to the previous cumulative FY 2015 adjustment factor of 0.9884, yielding an adjustment factor of 0.9864 through FY 2016. For the Puerto Rico GAFs, we are applying an incremental budget neutrality adjustment factor of 0.9993 for FY 2016 to the previous cumulative FY 2015 adjustment factor of 1.0082, yielding a cumulative adjustment factor of 1.0075 through FY 2016.
We then compared estimated aggregate capital Federal rate payments based on the FY 2015 MS-DRG relative weights and the FY 2016 GAFs to estimated aggregate capital Federal rate payments based on the cumulative effects of the FY 2016 MS-DRG classifications and relative weights and the FY 2016 GAFs. The incremental adjustment factor for DRG classifications and changes in relative weights is 0.9994 both nationally and for Puerto Rico. The cumulative adjustment factors for MS-DRG classifications and changes in relative weights and for changes in the GAFs through FY 2016 are 0.9858 nationally and 1.0069 for Puerto Rico. (We note that all the values are calculated with unrounded numbers.) The GAF/DRG budget neutrality adjustment factors are built permanently into the capital rates; that is, they are applied cumulatively in determining the capital Federal rate. This follows the requirement under § 412.308(c)(4)(ii) that estimated aggregate payments each year be no more or less than they would have been in the absence of the annual DRG reclassification and recalibration and changes in the GAFs.
The methodology used to determine the recalibration and geographic adjustment factor (GAF/DRG) budget neutrality adjustment is similar to the methodology used in establishing budget neutrality adjustments under the IPPS for operating costs. One difference is that, under the operating IPPS, the budget neutrality adjustments for the effect of geographic reclassifications are determined separately from the effects of other changes in the hospital wage index and the MS-DRG relative weights. Under the capital IPPS, there is a single GAF/DRG budget neutrality adjustment factor (the national capital rate and the Puerto Rico capital rate are determined separately) for changes in the GAF (including geographic reclassification) and the MS-DRG relative weights. In addition, there is no adjustment for the effects that geographic reclassification has on the other payment parameters, such as the payments for DSH or IME.
The cumulative adjustment factor of 0.9973 (the product of the incremental national GAF budget neutrality adjustment factor of 0.9979 and the incremental DRG budget neutrality adjustment factor of 0.9994) accounts for the MS-DRG reclassifications and recalibration and for changes in the GAFs. It also incorporates the effects on the GAFs of FY 2016 geographic reclassification decisions made by the MGCRB compared to FY 2015 decisions. However, it does not account for changes in payments due to changes in the DSH and IME adjustment factors.
For FY 2015, we established a capital Federal rate of $434.97 (79 FR 59684). We are establishing an update of 1.3 percent in determining the FY 2016 capital Federal rate for all hospitals. As a result of this update and the budget neutrality factors discussed above, we are establishing a national capital Federal rate of $438.65 for FY 2016. The national capital Federal rate for FY 2016 was calculated as follows:
• The FY 2016 update factor is 1.013, that is, the update is 1.3 percent.
• The FY 2016 budget neutrality adjustment factor that is applied to the capital Federal rate for changes in the MS-DRG classifications and relative weights and changes in the GAFs is 0.9973.
• The FY 2016 outlier adjustment factor is 0.9365.
(We note that, as discussed in section VI.C. of the preamble of this final rule,
Because the FY 2016 capital Federal rate has already been adjusted for differences in case-mix, wages, cost-of-living, indirect medical education costs, and payments to hospitals serving a disproportionate share of low-income patients, we are not making additional adjustments in the capital Federal rate for these factors, other than the budget neutrality factor for changes in the MS-DRG classifications and relative weights and for changes in the GAFs.
We are providing the following chart that shows how each of the factors and adjustments for FY 2016 affects the computation of the FY 2016 national capital Federal rate in comparison to the FY 2015 national capital Federal rate. The FY 2016 update factor has the effect of increasing the capital Federal rate by 1.3 percent compared to the FY 2015 capital Federal rate. The GAF/DRG budget neutrality adjustment factor has the effect of decreasing the capital Federal rate by 0.27 percent. The FY 2016 outlier adjustment factor has the effect of decreasing the capital Federal rate by 0.18 percent compared to the FY 2015 capital Federal rate. The combined effect of all the changes will increase the national capital Federal rate by approximately 0.85 percent compared to the FY 2015 national capital Federal rate.
In this final rule, we also are providing the following chart that shows how the final FY 2016 capital Federal rate differs from the proposed FY 2016 capital Federal rate as presented in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24640).
Section 412.374 provides for the use of a blended payment system for payments made to hospitals located in Puerto Rico under the PPS for acute care hospital inpatient capital-related costs. Accordingly, under the capital PPS, we compute a separate payment rate specific to hospitals located in Puerto Rico using the same methodology used to compute the national Federal rate for capital-related costs. Under the broad authority of section 1886(g) of the Act, beginning with discharges occurring on or after October 1, 2004, capital payments made to hospitals located in Puerto Rico are based on a blend of 25 percent of the Puerto Rico capital rate and 75 percent of the capital Federal rate. The Puerto Rico capital rate is derived from the costs of Puerto Rico hospitals only, while the capital Federal rate is derived from the costs of all acute care hospitals participating in the IPPS (including Puerto Rico).
To adjust hospitals' capital payments for geographic variations in capital costs, we apply a GAF to both portions of the blended capital rate. The GAF is calculated using the operating IPPS wage index, and varies depending on the labor market area or rural area in which the hospital is located. We use the Puerto Rico wage index to determine the GAF for the Puerto Rico part of the capital-blended rate and the national wage index to determine the GAF for the national part of the blended capital rate.
Because we implemented a separate GAF for Puerto Rico in FY 1998, we also apply separate budget neutrality adjustment factors for the national GAF and for the Puerto Rico GAF. However, we apply the same budget neutrality adjustment factor for MS-DRG reclassifications and recalibration nationally and for Puerto Rico. The budget neutrality adjustment factors for the national GAF and for the Puerto Rico GAF and the budget neutrality factor for MS-DRG reclassifications and recalibration (which is the same nationally and for Puerto Rico) are discussed in section III.A.3. of this Addendum.
In computing the payment for a particular Puerto Rico hospital, the Puerto Rico portion of the capital rate (25 percent) is multiplied by the Puerto Rico-specific GAF for the labor market area in which the hospital is located, and the national portion of the capital rate (75 percent) is multiplied by the national GAF for the labor market area in which the hospital is located (which is computed from national data for all hospitals in the United States and Puerto Rico).
For FY 2015, the special capital rate for hospitals located in Puerto Rico was $209.45 (79 FR 59683). With the changes we are making to the factors used to determine the capital Federal rate, the FY 2016 special capital rate for hospitals in Puerto Rico is $212.56.
For purposes of calculating payments for each discharge during FY 2016, the capital Federal rate is adjusted as follows: (Standard Federal Rate) × (DRG weight) × (GAF) × (COLA for hospitals located in Alaska and Hawaii) × (1 + DSH Adjustment Factor + IME Adjustment Factor, if applicable). The result is the adjusted capital Federal rate.
Hospitals also may receive outlier payments for those cases that qualify under the thresholds established for each fiscal year. Section 412.312(c) provides for a single set of thresholds to identify outlier cases for both inpatient operating and inpatient capital-related payments. The outlier thresholds for FY 2016 are in section II.A. of this Addendum. For FY 2016, a case would qualify as a cost outlier if the cost for the case plus the (operating) IME and DSH payments (including both the empirically justified Medicare DSH payment and the estimated uncompensated care payment, as discussed in section II.A.4.g.(1) of this Addendum) is greater than the prospective payment rate for the MS-DRG plus the fixed-loss amount of $22,544.
Currently, as provided under § 412.304(c)(2), we pay a new hospital 85 percent of its reasonable costs during the first 2 years of operation unless it elects to receive payment based on 100 percent of the capital Federal rate. Effective with the third year of operation, we pay the hospital based on 100 percent of the capital Federal rate (that is, the same methodology used to pay all other hospitals subject to the capital PPS).
Like the operating input price index, the capital input price index (CIPI) is a fixed-weight price index that measures the price changes associated with capital costs during a given year. The CIPI differs from the operating input price index in one important aspect—the CIPI reflects the vintage nature of capital, which is the acquisition and use of capital over time. Capital expenses in any given year are determined by the stock of capital in that year (that is, capital that remains on hand from all current and prior capital acquisitions). An index measuring capital price changes needs to reflect this vintage nature of capital. Therefore, the CIPI was developed to capture the vintage nature of capital by using a weighted-average of past capital purchase prices up to and including the current year.
We periodically update the base year for the operating and capital input price indexes to reflect the changing composition of inputs for operating and capital expenses. In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50603 through 50607), we rebased and revised the CIPI to a FY 2010 base year to reflect the more current structure of capital costs in hospitals. For a complete discussion of this rebasing, we refer readers to the FY 2014 IPPS/LTCH PPS final rule.
Based on the latest forecast by IHS Global Insight, Inc. (second quarter of 2015), we are forecasting the FY 2010-based CIPI to increase 1.3 percent in FY 2016. This reflects a projected 1.8 percent increase in vintage-weighted depreciation prices (building and fixed equipment, and movable equipment), and a projected 2.6 percent increase in other capital expense prices in FY 2016, partially offset by a projected 1.4 percent decline in vintage-weighted interest expense prices in FY 2016. The weighted average of these three factors produces the forecasted 1.3 percent increase for the FY 2010-based CIPI as a whole in FY 2016.
Payments for services furnished in children's hospitals, 11 cancer hospitals, and hospitals located outside the 50 States, the District of Columbia and Puerto Rico (that is, short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa) that are excluded from the IPPS are made on the basis of reasonable costs based on the hospital's own historical cost experience, subject to a rate-of-increase ceiling. A per discharge limit (the target amount as defined in § 413.40(a) of the regulations) is set for each hospital based on the hospital's own cost experience in its base year, and updated annually by a rate-of-increase percentage. (We note that, in accordance with § 403.752(a), RNHCIs are also subject to the rate-of-increase limits established under § 413.40 of the regulations.)
As discussed in the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24641), the FY 2016 rate-of-increase percentage for updating the target amounts for the 11 cancer hospitals, children's hospitals, the short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, and RNHCIs is the estimated percentage increase in the IPPS operating market basket for FY 2016, in accordance with applicable regulations at § 413.40. Based on IHS Global Insight, Inc.'s 2015 first quarter forecast, we estimated that the FY 2010-based IPPS operating market basket update for FY 2016 would be 2.7 percent (that is, the estimate of the market basket rate-of-increase). However, we proposed that if more recent data became available for the final rule, we would use them to calculate the IPPS operating market basket update for FY 2016. Therefore, based on IHS Global Insight, Inc.'s 2015 second quarter forecast, with historical data through the first quarter of 2015, we estimate that the FY 2010-based IPPS operating market basket update for FY 2016 is 2.4 percent (that is, the estimate of the market basket rate-of-increase). For children's hospitals, the 11 cancer hospitals, hospitals located outside the 50 States, the District of Columbia and Puerto Rico (that is, short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa), and RNHCIs, the FY 2016 rate-of-increase percentage that will be applied to the FY 2015 target amounts in order to determine the final FY 2016 target amounts is 2.4 percent.
The IRF PPS, the IPF PPS, and the LTCH PPS are updated annually. We refer readers to section VII. of the preamble of this final rule and section V. of the Addendum to this final rule for the update changes to the Federal payment rates for LTCHs under the LTCH PPS for FY 2016. The annual updates for the IRF PPS and the IPF PPS are issued by the agency in separate
In section VII. of the preamble of this final rule, we discuss our annual updates to the payment rates, factors, and specific policies under the LTCH PPS for FY 2016.
Under § 412.523(c)(3)(ii) of the regulations, for LTCH PPS rate years beginning RY 2004 through RY 2006, we
In determining the annual update to the standard Federal rate for RY 2007, based on our ongoing monitoring activity, we believed that, rather than solely using the most recent estimate of the LTCH PPS market basket update as the basis of the annual update factor, it was appropriate to adjust the standard Federal rate to account for the effect of documentation and coding in a prior period that was unrelated to patients' severity of illness (71 FR 27818). Accordingly, we established under § 412.523(c)(3)(iii) that the annual update to the standard Federal rate for RY 2007 was zero percent based on the most recent estimate of the LTCH PPS market basket at that time, offset by an adjustment to account for changes in case-mix in prior periods due to the effect of documentation and coding that were unrelated to patients' severity of illness. For RY 2008 through FY 2011, we also made an adjustment to account for the effect of documentation and coding that was unrelated to patients' severity of illness in establishing the annual update to the standard Federal rate as set forth in the regulations at §§ 412.523(c)(3)(iv) through (c)(3)(vii). For FYs 2012, 2013, 2014, and 2015, we updated the standard Federal rate by the most recent estimate of the LTCH PPS market basket at that time, including additional statutory adjustments required by section 1886(m)(3)(A) of the Act as set forth in the regulations at §§ 412.523(c)(3)(viii) through (c)(3)(ix).
Section 1886(m)(3)(A) of the Act, as added by section 3401(c) of the Affordable Care Act, specifies that, for rate year 2010 and each subsequent rate year, any annual update to the standard Federal rate shall be reduced:
• For rate year 2010 through 2019, by the other adjustment specified in section 1886(m)(3)(A)(ii) and (m)(4) of the Act; and
• For rate year 2012 and each subsequent year, by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act (which we refer to as “the multifactor productivity (MFP) adjustment”) as discussed in section VII.D.2. of the preamble of this final rule.
Section 1886(m)(3)(B) of the Act provides that the application of paragraph (3) of section 1886(m) of the Act may result in the annual update being less than zero for a rate year, and may result in payment rates for a rate year being less than such payment rates for the preceding rate year. (As noted in section VII.D.2.a. of the preamble of this final rule, the annual update to the LTCH PPS occurs on October 1 and we have adopted the term “fiscal year” (FY) rather than “rate year” (RY) under the LTCH PPS beginning October 1, 2010. Therefore, for purposes of clarity, when discussing the annual update for the LTCH PPS, including the provisions of the Affordable Care Act, we use the term “fiscal year” rather than “rate year” for 2011 and subsequent years.)
For FY 2015, consistent with our historical practice, we established an update to the LTCH PPS standard Federal rate based on the full estimated LTCH PPS market basket increase of 2.9 percent and the 0.7 percentage point reductions required by sections 1886(m)(3)(A)(i) and 1886(m)(3)(A)(ii) with 1886(m)(4)(E) of the Act. Accordingly, at § 412.523(c)(3)(xi) of the regulations, we established an annual update of 2.2 percent to the standard Federal rate for FY 2015 (79 FR 50391through 50392).
For FY 2016, as discussed in greater detail in section VII.D.2. of the preamble of this final rule, we are establishing an annual update to the LTCH PPS standard Federal payment rate based on the full estimated increase in the LTCH PPS market basket, less the MFP adjustment consistent with section 1886(m)(3)(A)(i) of the Act, and less the 0.2 percentage point required by sections 1886(m)(3)(A)(ii) and (m)(4)(E) of the Act. In addition, as discussed in greater detail in section VII.D.2. of the preamble of this final rule, the annual update is further reduced by 2.0 percentage points for LTCHs that fail to submit quality reporting data in accordance with the requirements of the LTCH QRP under section 1886(m)(5) of the Act.
Specifically, in this final rule, consistent with our proposal and based on the best available data, we are establishing an annual update to the LTCH PPS standard Federal payment rate of 1.7 percent, which is based on the full estimated increase in the LTCH PPS market basket of 2.4 percent, less the MFP adjustment of 0.5 percentage point consistent with section 1886(m)(3)(A)(i) of the Act, and less the 0.2 percentage point required by sections 1886(m)(3)(A)(ii) and (m)(4)(E) of the Act. For LTCHs that fail to submit the required quality reporting data for FY 2016 in accordance with the LTCH QRP, the annual update is further reduced by 2.0 percentage points as required by section 1886(m)(5) of the Act (as discussed in greater detail in section VII.D.2.c. of the preamble of this final rule). Accordingly, we are establishing an annual update to the LTCH PPS standard Federal payment rate of -0.3 percent for LTCHs that fail to submit the required quality reporting data for FY 2016. This -0.3 percent update was calculated based on the full estimated increase in the LTCH PPS market basket of 2.4 percent, less a MFP adjustment of 0.5 percentage point, less an additional adjustment of 0.2 percentage point required by the statute, and less 2.0 percentage points for failure to submit quality reporting data as required by section 1886(m)(5) of the Act.
We continue to believe that the annual update to the LTCH PPS standard Federal payment rate should be based on the most recent estimate of the increase in the LTCH PPS market basket, including any statutory adjustments. Consistent with our historical practice, for FY 2016, we are applying the annual update to the LTCH PPS standard Federal payment rate from the previous year. Furthermore, in determining the LTCH PPS standard Federal payment rate for FY 2016, we also are making certain regulatory adjustments, consistent with past practices. Specifically, in determining the FY 2016 LTCH PPS standard Federal payment rate, as we proposed, we are applying a budget neutrality adjustment factor for the changes related to the area wage adjustment (that is, changes to the wage data and labor-related share) in accordance with § 412.523(d)(4). We also, as proposed, used more recent data to determine the update to the LTCH PPS standard Federal payment rate for FY 2016 in this final rule.
For FY 2015, we established an annual update to the LTCH PPS standard Federal rate of 2.2 percent for FY 2015 based on the full estimated LTCH PPS market basket increase of 2.9 percent, less the MFP adjustment of 0.5 percentage point consistent with section 1886(m)(3)(A)(i) of the Act and less the 0.2 percentage point required by
In this final rule, we are establishing an annual update to the LTCH PPS standard Federal payment rate of 1.7 percent, which was determined consistent with our proposal and using the methodology previously described. Accordingly, under § 412.523(c)(3)(xii), we are applying a factor of 1.017 to the FY 2015 standard Federal rate of $41,043.71 to determine the FY 2016 LTCH PPS standard Federal payment rate. These factors are based on IGI's second quarter 2015 forecast, which are the best available data at this time. For LTCHs that fail to submit quality reporting data for FY 2016 under the LTCH QRP, under § 412.523(c)(3)(xii), applied in conjunction with the provisions of § 412.523(c)(4), we are reducing the annual update to the LTCH PPS standard Federal payment rate by an additional 2.0 percentage points consistent with section 1886(m)(5) of the Act. In those cases, the LTCH PPS standard Federal payment rate is updated by -0.3 percent (that is, a update factor of 0.997) for FY 2016 for LTCHs that fail to submit the required quality reporting data for FY 2016 as required under the LTCH QRP. Consistent with § 412.523(d)(4), we also are applying an area wage level budget neutrality factor to the FY 2016 LTCH PPS standard Federal payment rate of 1.000513, which was determined using the methodology previously described. We are applying this area wage level budget neutrality factor to the FY 2016 LTCH PPS standard Federal payment rate to ensure that any changes to the area wage level adjustment (that is, the annual update of the wage index values and labor-related share) will not result in any change (increase or decrease) in estimated aggregate LTCH PPS standard Federal payment rate payments. Accordingly, we are establishing a LTCH PPS standard Federal payment rate of $41,762.85 (calculated as $41,043.71 × 1.017 × 1.000513) for FY 2016. For LTCHs that fail to submit quality reporting data for FY 2016 in accordance with the requirements of the LTCHQRP under section 1886(m)(5) of the Act, we are establishing a LTCH PPS standard Federal payment rate of $40,941.55 (calculated as $41,043.71 × 0.997 × 1.000513) for FY 2016. We note, as discussed in section VII.B. of the preamble of this final rule, under our application of the site neutral payment rate required under section 1886(m)(6) of the Act, this LTCH PPS standard Federal payment rate will only be used to determine payments for LTCH PPS standard Federal payment rate cases (that is, those LTCH PPS cases that meet the statutory criteria to be excluded from the site neutral payment rate).
Under the authority of section 123 of the BBRA, as amended by section 307(b) of the BIPA, we established an adjustment to the LTCH PPS standard Federal rate to account for differences in LTCH area wage levels under § 412.525(c). The labor-related share of the LTCH PPS standard Federal rate is adjusted to account for geographic differences in area wage levels by applying the applicable LTCH PPS wage index. The applicable LTCH PPS wage index is computed using wage data from inpatient acute care hospitals without regard to reclassification under section 1886(d)(8) or section 1886(d)(10) of the Act.
When we implemented the LTCH PPS, we established a 5-year transition to the full area wage level adjustment. The area wage level adjustment was completely phased-in for cost reporting periods beginning in FY 2007. Therefore, for cost reporting periods beginning on or after October 1, 2006, the applicable LTCH area wage index values are the full LTCH PPS area wage index values calculated based on acute care hospital inpatient wage index data without taking into account geographic reclassification under section 1886(d)(8) and section 1886(d)(10) of the Act. For additional information on the phase-in of the area wage level adjustment under the LTCH PPS, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56015 through 56019) and the RY 2008 LTCH PPS final rule (72 FR 26891).
In adjusting for the differences in area wage levels under the LTCH PPS, the labor-related portion of an LTCH's Federal prospective payment is adjusted by using an appropriate area wage index based on the geographic classification (labor market area) in which the LTCH is located. Specifically, the application of the LTCH PPS area wage level adjustment under existing § 412.525(c) is made based on the location of the LTCH—either in an “urban area,” or a “rural area,” as defined in § 412.503. Under § 412.503, an “urban area” is defined as a Metropolitan Statistical Area (MSAs) (which includes a Metropolitan division, where applicable), as defined by the Executive OMB and a “rural area” is defined as any area outside of an urban area.
The CBSA-based geographic classifications (labor market area definitions) currently used under the LTCH PPS, effective for discharges occurring on or after October 1, 2014, are based on the new OMB labor market area delineations based on the 2010 Decennial Census data. We made these revisions because we believe that these OMB delineations are based on the best available data that reflect the local economies and area wage levels of the hospitals that are currently located in these geographic areas. We also believe that these OMB delineations will ensure that the LTCH PPS area wage level adjustment most appropriately accounts for and reflects the relative hospital wage levels in the geographic area of the hospital as compared to the national average hospital wage level. We noted that this policy was consistent with the IPPS policy adopted in FY 2015 under § 412.64(b)(1)(ii)(D) of the regulations (79 FR 49951 through 49963). (For additional information on the CBSA-based labor market area (geographic classification) delineations currently used under the LTCH PPS and the history of the labor market area definitions used under the LTCH PPS, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50180 through 50185).)
In general, it is our historical practice to update the CBSA-based labor market area delineations annually based on the most recent updates issued by OMB. At the time of the development of this proposed rule, OMB had not issued any further updates subsequent to OMB Bulletin No. 13-01, which was dated February 28, 2013, and established
Under the payment adjustment for the differences in area wage levels under § 412.525(c), the labor-related share of an LTCH's PPS Federal prospective payment is adjusted by the applicable wage index for the labor market area in which the LTCH is located. The LTCH PPS labor-related share currently represents the sum of the labor-related portion of operating costs (Wages and Salaries; Employee Benefits; Professional Fees Labor-Related, Administrative and Business Support Services; and All-Other: Labor-Related Services) and a labor-related portion of capital costs using the applicable LTCH PPS market basket. Additional background information on the historical development of the labor-related share under the LTCH PPS and the development of the RPL market basket can be found in the RY 2007 LTCH PPS final rule (71 FR 27810 through 27817 and 27829 through 27830) and the FY 2012 IPPS/LTCH PPS final rule (76 FR 51766 through 51769 and 51808).
For FY 2013, we revised and rebased the market basket used under the LTCH PPS by adopting the newly created FY 2009-based LTCH-specific market basket. In addition, we determined the labor-related share for FY 2013 as the sum of the FY 2013 relative importance of each labor-related cost category of the FY 2009-based LTCH-specific market basket. For more details, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53477 through 53479). Consistent with our historical practice, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50393 through 50394), we determined the LTCH PPS labor-related share for FY 2015 based on the FY 2015 relative importance of each labor-related cost category, which reflected the different rates of price change for these cost categories between the base year (FY 2009) and FY 2015. Specifically, based on IGI's second quarter 2014 forecast of the FY 2009-based LTCH-specific market basket, we established a labor-related share under the LTCH PPS for FY 2015 of 62.306 percent.
For FY 2016, we are establishing a labor-related share for the LTCH PPS standard Federal payment rate payments based on IGI's second quarter 2015 forecast of the FY 2009-based LTCH-specific market basket. Consistent with our historical practice, as proposed, we also are using more recent data to determine the final FY 2016 labor-related share. In addition, as proposed, we are specifying the labor-related share to one decimal place, which is consistent with the IPPS labor-related share and the LTCH market basket update. The following table shows the FY 2016 labor-related share relative importance using IGI's second quarter 2015 forecast of the FY 2009-based LTCH-specific market basket. The sum of the relative importance for FY 2016 for operating costs (Wages and Salaries; Employee Benefits; Professional Fees: Labor-Related, Administrative and Business Support Services; and All Other: Labor-Related Services) is 57.9 percent. We are establishing that the portion of capital-related costs that is influenced by the local labor market would continue to be estimated to be 46 percent. Because the relative importance for capital-related costs would be 9.0 percent of the FY 2009-based LTCH-specific market basket in FY 2016, we are taking 46 percent of 9.0 percent to determine the labor-related share of capital-related costs for FY 2016, which would result in 4.1 percent (0.46 × 9.0). We then added that 4.1 percent for the capital-related cost amount to the 57.9 percent for the operating cost amount to determine the total labor-related share for FY 2016. Therefore, under the broad authority of section 123 of the BBRA, as amended by section 307(b) of BIPA, to determine appropriate payment adjustments under the LTCH PPS, we are establishing a labor-related share under the LTCH PPS for FY 2016 of 62.0 percent. Consistent with our proposal, this labor-related share is determined using the same methodology as used in calculating all previous fiscal years LTCH labor-related shares.
Historically, we have established LTCH PPS area wage index values calculated from acute care IPPS hospital wage data without taking into account geographic reclassification under sections 1886(d)(8) and 1886(d)(10) of the Act (67 FR 56019). The area wage level adjustment established under the LTCH PPS is based on an LTCH's actual location without regard to the “urban” or “rural” designation of any related or affiliated provider.
In the FY 2015 LTCH PPS final rule (79 FR 50394 through 50396), we calculated the FY 2015 LTCH PPS area wage index values using the same data used for the FY 2015 acute care hospital IPPS (that is, data from cost reporting periods beginning during FY 2011), without taking into account geographic reclassification under sections 1886(d)(8) and 1886(d)(10) of the Act, as these were the most recent complete data available at that time. In that same final rule, we indicated that we computed the FY 2015 LTCH PPS area wage index values consistent with the urban and rural geographic classifications (labor market areas) that were in place at that time, and consistent with the pre-reclassified IPPS wage index policy (that is, our historical policy of not taking into account IPPS geographic reclassifications in determining payments under the LTCH PPS). As with the IPPS wage index, wage data for multicampus hospitals with campuses located in different labor market areas (CBSAs) are apportioned to each CBSA where the campus (or campuses) are located. We also continued to use our existing policy for determining area wage index values for
Consistent with our historical methodology, to determine the applicable area wage index values for the FY 2016 LTCH PPS standard Federal payment rate, under the broad authority of section 123 of the BBRA, as amended by section 307(b) of the BIPA, as we proposed, we are using wage data collected from cost reports submitted by IPPS hospitals for cost reporting periods beginning during FY 2012, without taking into account geographic reclassification under sections 1886(d)(8) and 1886(d)(10) of the Act. We are using FY 2012 wage data because these data are the most recent complete data available. We also note that these are the same data used to compute the FY 2016 acute care hospital inpatient wage index, as discussed in section III. of the preamble of this final rule. We are computing the FY 2016 LTCH PPS standard Federal payment rate area wage index values consistent with the “urban” and “rural” geographic classifications (that is, labor market area delineations, as previously discussed in section V.B.2. of this Addendum) and our historical policy of not taking into account IPPS geographic reclassifications under sections 1886(d)(8) and 1886(d)(10) of the Act in determining payments under the LTCH PPS, as we proposed. We also are, as we proposed, continuing to apportion wage data for multicampus hospitals with campuses located in different labor market areas to each CBSA where the campus or campuses are located, consistent with the IPPS policy. Lastly, under our methodology for determining the FY 2016 LTCH PPS standard Federal payment rate area wage index values, as we proposed, we are continuing to use our existing policy for determining area wage index values for areas where there are no IPPS wage data.
Under our existing methodology, the LTCH PPS wage index value for urban CBSAs with no IPPS wage data would be determined by using an average of all of the urban areas within the State and the LTCH PPS wage index value for rural areas with no IPPS wage data would be determined by using the unweighted average of the wage indices from all of the CBSAs that are contiguous to the rural counties of the State.
Based on the FY 2012 IPPS wage data that we are using to determine the FY 2016 LTCH PPS standard Federal payment rate area wage index values in this final rule, there are no IPPS wage data for the urban area of Hinesville, GA (CBSA 25980). Consistent with the methodology discussed above, we calculated the FY 2016 wage index value for CBSA 25980 as the average of the wage index values for all of the other urban areas within the State of Georgia (that is, CBSAs 10500, 12020, 12060, 12260, 15260, 16860, 17980, 19140, 23580, 31420, 40660, 42340, 46660 and 47580), as shown in Table 12A, which is listed in section VI. of the Addendum to this final rule and available via the Internet on the CMS Web site). We note that, as IPPS wage data are dynamic, it is possible that urban areas without IPPS wage data will vary in the future.
Based on the FY 2012 IPPS wage data that we are using to determine the FY 2016 LTCH PPS standard Federal payment rate area wage index values in this final rule, there are no rural areas without IPPS hospital wage data. Therefore, it is not necessary to use our established methodology to calculate a LTCH PPS standard Federal payment rate wage index value for rural areas with no IPPS wage data for FY 2016. We note that, as IPPS wage data are dynamic, it is possible that the number of rural areas without IPPS wage data will vary in the future. The FY 2016 LTCH PPS standard Federal payment rate wage index values that are applicable for LTCH PPS standard Federal payment rate discharges occurring on or after October 1, 2015, through September 30, 2016, are presented in Table 12A (for urban areas) and Table 12B (for rural areas), which are listed in section VI. of the Addendum of this final rule and available via the Internet on the CMS Web site.
Historically, the LTCH PPS wage index and labor-related share are updated annually based on the latest available data. Under § 412.525(c)(2), any changes to the area wage index values or labor-related share are to be made in a budget neutral manner such that estimated aggregate LTCH PPS payments are unaffected; that is, will be neither greater than nor less than estimated aggregate LTCH PPS payments without such changes to the area wage level adjustment. Under this policy, we determine an area wage-level adjustment budget neutrality factor that will be applied to the standard Federal rate to ensure that any changes to the area wage level adjustments are budget neutral such that any changes to the area wage index values or labor-related share would not result in any change (increase or decrease) in estimated aggregate LTCH PPS payments. Accordingly, under § 412.523(d)(4), we apply an area wage level adjustment budget neutrality factor in determining the standard Federal rate, and we also established a methodology for calculating an area wage level adjustment budget neutrality factor. (For additional information on the establishment of our budget neutrality policy for changes to the area wage level adjustment, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51771 through 51773 and 51809).)
In this final rule, for FY 2016 LTCH PPS standard Federal payment rate cases, in accordance with § 412.523(d)(4), as we proposed, we are applying an area wage level adjustment budget neutrality factor to adjust the standard Federal rate to account for the estimated effect of the adjustments or updates to the area wage level adjustment under § 412.525(c)(1) on estimated aggregate LTCH PPS payments using a methodology that is consistent with the methodology we established in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51773). Specifically, as we proposed, we are determining an area wage level adjustment budget neutrality factor that will be applied to the LTCH PPS standard Federal payment rate under § 412.523(d)(4) for FY 2016 using the following methodology:
We note that, with the exception of cases subject to the transitional blend payment rate provisions in the first 2 years, under the dual rate LTCH PPS payment structure, only LTCH PPS cases that meet the statutory criteria to be excluded from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) will be paid based on the LTCH PPS standard Federal payment rate. Because the area wage level adjustment under § 412.525(c) is an adjustment to the LTCH PPS standard Federal payment rate, we only used data from claims that would have qualified for payment at the LTCH PPS standard Federal payment rate if such rate were in effect at the time of discharge to calculate the FY 2016 LTCH PPS standard Federal payment rate area wage level adjustment budget neutrality factor described above. (For additional information on our application of site neutral payment rate required under section 1886(m)(6) of the Act, we refer readers to section VII.B. of the preamble of this final rule.)
For this final rule, using the steps in the methodology described above, we determined a FY 2016 LTCH PPS standard Federal payment rate area wage level adjustment budget neutrality factor of 1.000513. Accordingly, in section V.A.2. of the Addendum to this final rule, to determine the FY 2016 LTCH PPS standard Federal payment rate, we are applying an area wage level adjustment budget neutrality factor of 1.000513, in accordance with § 412.523(d)(4). The FY 2016 LTCH PPS standard Federal payment rate shown in Table 1E of the Addendum to this final rule reflects this adjustment factor.
Under § 412.525(b), a cost-of-living adjustment (COLA) is provided for LTCHs located in Alaska and Hawaii to account for the higher costs incurred in those States. Specifically, we apply a COLA to payments to LTCHs located in Alaska and Hawaii by multiplying the nonlabor-related portion of the standard Federal payment rate by the applicable COLA factors established annually by CMS. Higher labor-related costs for LTCHs located in Alaska and Hawaii are taken into account in the adjustment for area wage levels described above.
Under our current methodology, we update the COLA factors for Alaska and Hawaii every 4 years (at the same time as the update to the labor-related share of the IPPS market basket) (77 FR 53712 through 53713). This methodology is based on a comparison of the growth in the Consumer Price Indexes (CPIs) for Anchorage, Alaska, and Honolulu, Hawaii, relative to the growth in the CPI for the average U.S. city as published by the Bureau of Labor Statistics (BLS). It also includes a 25-percent cap on the CPI-updated COLA factors. (For additional details on our current methodology for updating the COLA factors for Alaska and Hawaii, we refer readers to section VII.D.3. of the preamble of the FY 2013 IPPS/LTCH PPS final rule (77 FR 53481 through 53482).)
We continue to believe that determining updated COLA factors using this methodology would appropriately adjust the nonlabor-related portion of the LTCH PPS standard Federal payment rate for LTCHs located in Alaska and Hawaii. Under our current policy, we update the COLA factors using the methodology described above every 4 years; the first year began in FY 2014 (77 FR 53482). Therefore, in this final rule, as we proposed, for FY 2016, under the broad authority conferred upon the Secretary by section 123 of the BBRA, as amended by section 307(b) of the BIPA, to determine appropriate payment adjustments under the LTCH PPS, we are continuing to use the COLA factors based on the 2009 OPM COLA factors updated through 2012 by the comparison of the growth in the CPIs for Anchorage, Alaska, and Honolulu, Hawaii, relative to the growth in the CPI for the average U.S. city as established in the FY 2014 IPPS/LTCH PPS final rule. (We refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50998) for a discussion of the FY 2014 COLA factors.) Consistent with our historical practice and as we proposed, we are establishing that the COLA factors shown in the following table will be used to adjust the nonlabor-related portion of the LTCH PPS standard Federal payment rate for LTCHs located in Alaska and Hawaii under § 412.525(b).
Under the broad authority conferred upon the Secretary by section 123 of the BBRA as amended by section 307(b) of the BIPA, in the regulations at § 412.525(a), we established an adjustment for additional payments for outlier cases that have extraordinarily high costs relative to the costs of most discharges. We refer to these cases as high cost outliers (HCOs). Providing additional payments for outliers strongly improves the accuracy of the LTCH PPS in determining resource costs at the patient and hospital level. These additional payments reduce the financial losses that would otherwise be incurred when treating patients who require more costly care and, therefore, reduce the incentives to underserve these patients. Under our current HCO policy at § 412.525(a), we set the outlier threshold before the beginning of the applicable rate year so that total estimated outlier payments are projected to equal 8 percent of total estimated payments under the LTCH PPS.
Under the current HCO policy, we make outlier payments for any discharges if the estimated cost of a case exceeds the adjusted payment under the LTCH PPS standard Federal payment rate plus a fixed-loss amount. Specifically, in accordance with existing § 412.525(a)(3), we make an additional payment for an HCO case that is equal to 80 percent of the difference between the estimated cost of the patient case and the outlier threshold, which is the sum of the adjusted payment under the
Under the current HCO policy at § 412.525(a), we determine a fixed-loss amount, that is, the maximum loss that an LTCH can incur under the LTCH PPS for a case with unusually high costs before the LTCH will receive any additional payments. We calculate the fixed-loss amount by estimating aggregate payments with and without an outlier policy. The fixed-loss amount results in estimated total outlier payments being projected to be equal to 8 percent of projected total LTCH PPS payments. Currently, MedPAR claims data and CCRs based on data from the most recent Provider-Specific File (PSF) (or from the applicable statewide average CCR if an LTCH's CCR data are faulty or unavailable) are used to establish a fixed-loss threshold amount under the LTCH PPS.
Section 1206 of Public Law 113-67 establishes a new dual rate LTCH PPS payment structure with two distinct payment rates for LTCH discharges, beginning in FY 2016. To implement this statutory change, as discussed in section VII.B. of the preamble of this final rule, we will pay hospitals for LTCH discharges that meet the criteria for exclusion from site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) based on the LTCH PPS standard Federal payment rate, which includes HCO payments determined under existing § 412.525(a). Furthermore, we are establishing that the site neutral payment rate is the lower of the IPPS comparable per diem amount as determined under § 412.529(d)(4) (including any applicable adjustments, such as outlier payments), or 100 percent of the estimated cost of the case as determined under existing § 412.529(d)(2), consistent with the statute.
Under the new dual rate LTCH PPS payment structure, as discussed in section VII.B.7.b. of the preamble of this final rule, as we proposed, we are establishing two separate HCO targets—one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases. We are revising the regulations by making changes to the HCO policy to account for the new dual rate LTCH PPS payment structure by revising paragraphs (a)(1), (a)(2), and (a)(3), and adding a new paragraph (a)(4) to existing § 412.525 of the regulations. Under our HCO policy revised in accordance with the new dual rate LTCH PPS payment structure, we are establishing a fixed-loss amount and target for LTCH PPS standard Federal payment rate cases using the current LTCH PPS HCO policy, but limiting the data used under that policy to LTCH cases that would have been LTCH PPS standard Federal payment rate cases if the statutory changes had been in effect at the time of those discharges. Therefore, we are not making any modifications to the HCO methodology as it applies to LTCH PPS standard Federal payment rate cases other than determining a fixed-loss amount using only data from LTCH PPS standard Federal payment rate cases. Specifically, under our finalized policy, LTCH PPS standard Federal payment rate cases will receive an additional payment for an HCO case that is equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold, which is the sum of the LTCH PPS payment for the LTCH PPS standard Federal payment rate case and the fixed-loss amount for such cases. The fixed-loss amount for LTCH PPS standard Federal payment rate cases will continue to be determined so that estimated HCO payments would be projected to be equal to 8 percent of estimated total LTCH PPS payments for LTCH PPS standard Federal payment rate cases.
Furthermore, as we proposed, we are revising the HCO policy under existing § 412.525(a) to provide for high-cost outlier payments under the site neutral payment rate. Specifically, we are establishing that site neutral payment rate cases will receive an additional payment for HCOs that is equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold for site neutral payment rate discharges, which we are establishing as the sum of site neutral payment rate for the case and the IPPS fixed-loss amount. In addition, in order to maintain budget neutrality, as we proposed and as discussed in section VII.B.7.b. of the preamble of this final rule, we are making the HCO payments for site neutral payment rate cases budget neutral by applying a budget neutrality factor to the LTCH PPS payments for those site neutral payment rate cases. (Additional details on the calculation of the budget neutrality adjustment for HCO payments to site neutral payment rate cases is discussed subsequently in section V.D.4. of this Addendum.)
The following is a discussion of CCRs that are used in determining payments for HCO cases under § 412.525(a), SSO cases paid under the LTCH PPS in accordance with § 412.529, and site neutral payment rate cases paid in accordance with proposed § 412.522(c) (as discussed in section VII.B.4. of the preamble of this final rule). Although this section is specific to HCO cases, because CCRs and the policies and methodologies pertaining to them are used in determining payments for HCO, SSO, and site neutral payment rate cases (to determine the estimated costs of these cases), we are discussing the determination of CCRs under the LTCH PPS for these three types of cases simultaneously in this section.
In determining HCO payments in accordance with § 412.525(a), SSO payments in accordance with § 412.529 and site neutral payment rate payments in accordance with § 412.522(c), we calculate the estimated cost of the case by multiplying the LTCH's overall CCR by the Medicare allowable charges for the case. In general, we use the LTCH's overall CCR, which is computed based on either the most recently settled cost report or the most recent tentatively settled cost report, whichever is from the latest cost reporting period, in accordance with § 412.525(a)(4)(iv)(B), for HCOs, § 412.529(f)(4)(ii) for SSOs, and § 412.522(c)(1)(ii) for site neutral payment rate cases. (We note that, in some instances under the provisions of the regulations at § 412.525(a)(4)(iv) and § 412.529(f)(4), and § 412.522(c)(1)(ii), we may use an alternative CCR, such as the statewide average CCR, a CCR that is specified by CMS, or that is requested by the hospital.) Under the LTCH PPS, a single prospective payment per discharge is made for both inpatient operating and capital-related costs. Therefore, we compute a single “overall” or “total” LTCH-specific CCR based on the sum of LTCH operating and capital costs (as described in
Generally, an LTCH is assigned the applicable statewide average CCR if, among other things, an LTCH's CCR is found to be in excess of the applicable maximum CCR threshold (that is, the LTCH CCR ceiling). This is because CCRs above this threshold are most likely due to faulty data reporting or entry, and CCRs based on erroneous data should not be used to identify and make payments for outlier cases. Therefore, under our established policy, generally, if an LTCH's calculated CCR is above the applicable ceiling, the applicable LTCH PPS statewide average CCR is assigned to the LTCH instead of the CCR computed from its most recent (settled or tentatively settled) cost report data.
In this final rule, using our established methodology for determining the LTCH total CCR ceiling, based on IPPS total CCR data from the March 2015 update of the PSF, we are establishing a total CCR ceiling of 1.335 under the LTCH PPS for FY 2016 in accordance with § 412.525(a)(4)(iv)(C)(
Our general methodology established for determining the statewide average CCRs used under the LTCH PPS is similar to our established methodology for determining the LTCH total CCR ceiling (described above) because it is based on “total” IPPS CCR data. Under the LTCH PPS HCO policy at § 412.525(a)(4)(iv)(C) the SSO policy at § 412.529(f)(4)(iii), and the site neutral payment rate policy at § 412.522(c)(1)(ii), the MAC may use a statewide average CCR, which is established annually by CMS, if it is unable to determine an accurate CCR for an LTCH in one of the following circumstances: (1) New LTCHs that have not yet submitted their first Medicare cost report (for this purpose, consistent with current policy, a new LTCH is defined as an entity that has not accepted assignment of an existing hospital's provider agreement in accordance with § 489.18); (2) LTCHs whose CCR is in excess of the LTCH CCR ceiling; and (3) other LTCHs for whom data with which to calculate a CCR are not available (for example, missing or faulty data). (Other sources of data that the MAC may consider in determining an LTCH's CCR include data from a different cost reporting period for the LTCH, data from the cost reporting period preceding the period in which the hospital began to be paid as an LTCH (that is, the period of at least 6 months that it was paid as a short-term, acute care hospital), or data from other comparable LTCHs, such as LTCHs in the same chain or in the same region.)
Consistent with our historical practice of using the best available data and as we proposed, in this final rule, using our established methodology for determining the LTCH statewide average CCRs, based on the most recent complete IPPS “total CCR” data from the March 2015 update of the PSF, we are establishing LTCH PPS statewide average total CCRs for urban and rural hospitals that will be effective for discharges occurring on or after October 1, 2015 through September 30, 2016, in Table 8C listed in section VI. of the Addendum to this final rule (and available via the Internet). We also, as proposed, are using more recent data to determine the LTCH PPS statewide average total CCRs for FY 2016.
Under the current LTCH PPS labor market areas, all areas in Delaware, the District of Columbia, New Jersey, and Rhode Island are classified as urban. Therefore, there are no rural statewide average total CCRs listed for those jurisdictions in Table 8C. This policy is consistent with the policy that we established when we revised our methodology for determining the applicable LTCH statewide average CCRs in the FY 2007 IPPS final rule (71 FR 48119 through 48121) and is the same as the policy applied under the IPPS. In addition, although Connecticut and Massachusetts have areas that are designated as rural, there are no short-term, acute care IPPS hospitals or LTCHs located in those areas as of March 2015. Therefore, consistent with our existing methodology and as we proposed, we are using the national average total CCR for rural IPPS hospitals for rural Connecticut and Massachusetts in Table 8C listed in section VI. of the Addendum to this final rule (and available via the Internet). In addition, consistent with our existing methodology as we proposed, in determining the urban and rural statewide average total CCRs for Maryland LTCHs paid under the LTCH PPS, we are continuing to use, as a proxy, the national average total CCR for urban IPPS hospitals and the national average total CCR for rural IPPS hospitals, respectively. We are using this proxy because we believe that the CCR data in the PSF for Maryland hospitals may not be entirely accurate (as discussed in greater detail in the FY 2007 IPPS final rule (71 FR 48120)).
Under the HCO policy at § 412.525(a)(4)(iv)(D) and the SSO policy at § 412.529(f)(4)(iv), the payments for HCO and SSO, cases are subject to reconciliation. Specifically, any reconciliation of payments is based on the CCR that is calculated based on a ratio of cost-to-charge data computed from the relevant cost report determined at the time the cost report coinciding with the discharge is settled. (As discussed section VII.B.4.a. of the preamble of this final rule, after consideration of public comments we received, we are not finalizing our proposal to establish a reconciliation process for site neutral payment rate payments. However, we are finalizing the portion of our proposal to apply the existing HCO reconciliation policy to the HCO payments made to site neutral payment rate cases. For additional information on the existing reconciliation policy, we refer readers to sections 150.26 through 150.28 of the Medicare Claims Processing Manual (Pub. 100-4) as added by Change Request 7192 (Transmittal 2111; December 3, 2010) and the RY 2009 LTCH PPS final rule (73 FR 26820 through 26821).
When we implemented the LTCH PPS, under the broad authority of section 123 of the BBRA as amended by section 307(b) of BIPA, we established a fixed-loss amount so that total estimated outlier payments are projected to equal 8 percent of total estimated payments under the LTCH PPS (67 FR 56022 through 56026). To determine the fixed-loss amount, we estimate outlier payments and total LTCH PPS payments for each case using claims data from the MedPAR files. Specifically, we estimate the cost of the
As noted above and as discussed in greater detail in section VII.B.7.b. of the preamble of this final rule, under the new dual rate LTCH PPS payment structure, we are establishing two separate HCO targets—one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases. Under this finalized policy, for LTCH PPS standard Federal payment rate cases, we are establishing a fixed-loss amount and target using the current LTCH PPS HCO policy, but to limit the data used under that policy to LTCH cases that would have been paid as LTCH PPS standard Federal payment rate cases, if that payment rate had been in effect at the time of those discharges. Therefore, as we proposed, we are not making any modifications to the existing LTCH PPS HCO payment methodology as it applies to LTCH PPS standard Federal payment rate cases, other than determining a fixed-loss amount using only data from LTCH PPS standard Federal payment rate cases (or cases that would have been LTCH PPS standard Federal payment rate cases had the new dual rate LTCH PPS payment structure been in effect at the time of those discharges). As such, LTCH PPS standard Federal payment rate cases will continue to receive an additional payment for any HCO case that is equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold, which is the sum of the LTCH PPS payment for the LTCH PPS standard Federal payment rate case and the fixed-loss amount. The fixed-loss amount for LTCH PPS standard Federal payment rate cases will continue to be determined so that estimated HCO payments would be projected to equal 8 percent of estimated total LTCH PPS standard Federal payment rate cases, and a budget neutrality factor will continue to be applied to LTCH PPS standard Federal payment rate cases to offset that 8 percent so that HCO payments for LTCH PPS standard Federal payment rate cases will be budget neutral. Below we present our calculation of the LTCH PPS fixed-loss amount for LTCH PPS standard Federal payment rate cases for FY 2016, which is consistent with the methodology used to establish the FY 2015 LTCH PPS fixed-loss amount. (Additional discussion of our HCO payment policy proposals for site neutral payment rate cases is discussed subsequently in section V.D.4. of this Addendum.)
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50399 through 50400), we presented our policies regarding the methodology and data we used to establish a fixed-loss amount of $14,972 for FY 2015, which was calculated using our existing methodology (based on the data and the rates and policies presented in that final rule) in order to maintain estimated HCO payments at the projected 8 percent of total estimated LTCH PPS payments. Consistent with our historical practice of using the best data available, in determining the fixed-loss amount for FY 2015, we used the most recent available LTCH claims data and CCR data, that is, LTCH claims data from the March 2014 update of the FY 2013 MedPAR file and CCRs from the March 2014 update of the PSF, as these data were the most recent complete LTCH data available at that time.
In this final rule, as we proposed, we are continuing to use our existing methodology to calculate a fixed-loss amount for LTCH PPS standard Federal payment rate cases for FY 2016 using the best available data that will maintain estimated HCO payments at the projected 8 percent of total estimated LTCH PPS payments for LTCH PPS standard Federal payment rate cases (based on the rates and policies for these cases presented in this final rule). Specifically, based on the most recent complete LTCH data available (that is, LTCH claims data from the March 2015 update of the FY 2014 MedPAR file and CCRs from the March 2015 update of the PSF), we determined a fixed-loss amount for LTCH PPS standard Federal payment rate cases for FY 2016 that will result in estimated outlier payments projected to be equal to 8 percent of estimated FY 2016 payments for such cases. Under the broad authority of section 123(a)(1) of the BBRA and section 307(b)(1) of the BIPA, we are establishing a fixed-loss amount of $16,423 for LTCH PPS standard Federal payment rate cases for FY 2016. We also will continue to make an additional HCO payment for the cost of an LTCH PPS standard Federal payment rate case that exceeds the HCO threshold amount that is equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold (the sum of the adjusted LTCH PPS standard Federal payment rate payment and the fixed-loss amount for LTCH PPS standard Federal payment rate cases of $16,423).
We note that the fixed-loss amount of $16,423 for FY 2016 for LTCH PPS standard Federal payment rate cases is lower than the proposed FY 2016 fixed-loss amount for LTCH PPS standard Federal payment rate cases of $18,768. This decrease is primarily a result of updated data used to calculate the fixed-loss amount in this final rule, such as the most recent available LTCH claims data in the MedPAR file, CCRs in the PSF, and the estimate of the LTCH market basket increase. We also note that the fixed-loss amount of $16,423 for LTCH PPS standard Federal payment rate cases for FY 2016 is higher than the FY 2015 fixed-loss amount of $14,792. This increase is largely attributable to the implementation of the new dual rate LTCH PPS payment structure, under which we have established separate HCO target amounts for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases. The FY 2015 fixed-loss amount was determined based on data from all LTCH cases—both those that would have been paid as site neutral payment rate cases and those that would have been paid as LTCH PPS standard Federal payment rate cases if the new dual rate LTCH PPS payment structure had been in effect at that time. However, under our finalized policy, the fixed-loss amount of $16,423 for FY 2016 will only be used to determine HCO payments made for LTCH PPS standard Federal payment rate cases. We currently estimate that the FY 2015 fixed-loss amount of $14,972 results in estimated HCO payments for LTCH PPS standard Federal payment rate cases of approximately 8.1 percent of total estimated FY 2015 LTCH PPS payments to those cases, which exceeds the 8 percent target. Therefore, we believe that it is necessary and appropriate to increase the fixed-loss amount to maintain that, for LTCH PPS standard Federal payment rate cases, estimated HCO payments would equal 8 percent of estimated total LTCH PPS payments for those cases as required under the revisions to § 412.525(a). (For further information on the existing 8 percent HCO “target” requirement, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56022 through 56024).) Maintaining the fixed-loss amount at the current level would result in HCO payments that are more than the current regulatory 8-percent target that we are applying to total payments for LTCH PPS standard Federal payment rate cases because a lower fixed-loss amount would result in more cases
Under our finalized policies to implement the new dual rate LTCH PPS payment structure required by statute, we are establishing that LTCH PPS standard Federal payment rate cases (that is, LTCH discharges that meet the criteria for exclusion from the site neutral payment rate) will continue to be paid based on the LTCH PPS standard Federal payment rate, and will include all of the existing payment adjustments under § 412.525(d), such as the adjustments for SSO cases under § 412.529. (For additional information on our payments for LTCH PPS standard Federal payment rate cases, we refer readers to section VII.B.4.c. of the preamble of this final rule.) Under some rare circumstances, an LTCH discharge can qualify as an SSO case (as defined in the regulations at § 412.529 in conjunction with § 412.503) and also as an HCO case, as discussed in the August 30, 2002 final rule (67 FR 56026). In this scenario, a patient could be hospitalized for less than five-sixths of the geometric average length of stay for the specific MS-LTC-DRG, and yet incur extraordinarily high treatment costs. If the estimated costs exceeded the HCO threshold (that is, the SSO payment plus the fixed-loss amount), the discharge is eligible for payment as an HCO. Therefore, for an SSO case in FY 2016, the HCO payment will be 80 percent of the difference between the estimated cost of the case and the outlier threshold (the sum of the fixed-loss amount of $16,423 and the amount paid under the SSO policy as specified in § 412.529).
Under the new dual rate LTCH PPS payment structure, the statute establishes two distinct payment rates for LTCH discharges beginning in FY 2016. Under this statutory change, as discussed in section VII.B. of the preamble of this final rule, we will pay for LTCH discharges that meet the criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) based on the LTCH PPS standard Federal payment rate. In addition, consistent with the statute, we are establishing that the site neutral payment rate is the lower of the IPPS comparable per diem amount as determined under § 412.529(d)(4), including any applicable outlier payments as specified in § 412.525(a); or 100 percent of the estimated cost of the case as determined under existing § 412.529(d)(2). Furthermore, we are establishing two separate HCO targets-one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases.
For site neutral payment rate cases, as we proposed, we are establishing that such cases will receive an additional HCO payment for costs that exceed the HCO threshold that is equal to 80 percent of the difference between the estimated cost of the case and the applicable HCO threshold. We are establishing that the applicable HCO threshold for site neutral payment rate cases is the sum of the site neutral payment rate for the case and the IPPS fixed-loss amount. As discussed in section II.A.4.g.(1) of this Addendum, we are establishing a fixed-loss amount of $22,544 under the IPPS for FY 2016. Accordingly, under our finalized policies, for FY 2016 we will calculate HCO payments for site neutral payment rate cases with costs that exceed the HCO threshold amount, which is equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold (the sum of site neutral payment rate payment and the fixed-loss amount for site neutral payment rate cases of $22,544). (We note that, as discussed in section VII.B.7.b. of the preamble of this final rule, in light of our HCO policies and in accordance with our implementation of the new dual rate LTCH PPS payment structure, any site neutral payment rate case that is paid 100 percent of the estimated cost of the case (because that amount is lower than the IPPS comparable per diem amount) will not be eligible to receive a HCO payment because, by definition, the estimated costs of such cases would never exceed the IPPS comparable per diem amount by any threshold.)
Furthermore, under our finalized policy, after consideration of public comments as discussed in section VII.B.7.b. of the preamble of this final rule, we are establishing that HCO payments for site neutral payment rate cases will be budget neutral, such that the site neutral payment rate HCO payments will not result in any change in estimated aggregate LTCH PPS payments (For additional details on our HCO policy for site neutral payment rate cases, we refer readers to section VII.B.7.b. of the preamble of this final rule.) In order to achieve this, in the proposed rule (80 FR 24648 through 24649), under proposed new § 412.522(c)(2)(i), we proposed to apply a budget neutrality factor to the payments for all site neutral payment rate cases, which would be established on an estimated basis. In addition, in order to estimate the magnitude a budget neutrality adjustment for HCO payments for site neutral payment rate cases, we relied on the assumption by our actuaries that site neutral payment rate cases would have lengths of stay and costs comparable to IPPS cases assigned to the same MS-DRG. Because site neutral payment rate cases are expected to have lengths of stay and costs comparable to IPPS cases assigned to the same MS DRG, we project that our policy to use the IPPS fixed-loss threshold for the site neutral payment rate cases will result in HCO payments for site neutral payment rate cases that are similar in proportion as is seen in IPPS cases assigned to the same MS-DRG; that is, 5.1 percent. Therefore, under new § 412.522(c)(2)(i), we proposed to adjust all payments for site neutral payment rate cases by a budget neutrality factor so that the estimated HCO payments payable for site neutral payment rate cases do not result in any increase in aggregate LTCH PPS payments. That is, for FY 2016 we proposed to apply a budget neutrality adjustment for estimated HCO payments for site neutral payment rate cases to
Under our proposed approach (summarized above and described in more detail in section V.D.4. of the Addendum of the proposed rule (80 FR 24649)) and based on the site neutral payment rate LTCH cases in our database from the FY 2014 MedPAR files (that is, cases that would have met
Furthermore, some commenters stated that the description of the calculation of the estimated percentage of site neutral payment rate case HCO payments for FY 2016 was too brief, and requested that CMS provide additional details on the steps used to calculate the budget neutrality adjustment for estimated HCO payments to site neutral payment rate cases. In addition, commenters believed that our proposed calculation of our estimate in the proposed rule of HCO payments to site neutral payment rate cases includes a technical error. That is, the commenters stated that the calculation of the percentage of estimated site neutral payment rate case HCO payments for FY 2016 of 2.3 percent appears to be based on estimated HCO payments for site neutral payment rate cases
This modification to our proposed approach for applying the budget neutrality adjustment to the site neutral payment rate portion of the transitional blended rate payment eliminates the need to perform any calculation of the site neutral payment rate cases HCO payment budget neutrality adjustment under our finalized policy. This is, as discussed above and in greater detail in section VII.B.7.b. of the preamble of this final rule, because based on our actuarial assumptions we project that our finalized policy to use the IPPS fixed-loss threshold for the site neutral payment rate cases will result in HCO payments for those cases that are similar in proportion as is seen in IPPS cases assigned to the same MS-DRG; that is, 5.1 percent. In other words, we estimated that HCO payments for site neutral payment rate cases will be 5.1 percent of the site neutral payment rate payments. As noted above, payments to site neutral payment rate cases in FY 2016 will be paid under the blended transitional rate. As such, estimated HCO payments for site neutral payment rate cases in FY 2016 under our finalized policies are equal to 5.1 percent of the portion of the blended rate payment that is based on the estimated site neutral payment rate payment amount (and does not include the LTCH PPS standard Federal payment rate payment amount, as we proposed). Therefore, to ensure that estimated HCO payments payable to site neutral payment rate cases in FY 2016 do not result any increase in estimated aggregate FY 2016 LTCH PPS payments, it is necessary to reduce the site neutral payment rate portion of the blended rate payment by 5.1 percent to account for the estimated additional HCO payments payable to those cases in FY 2016. In order to achieve this, under § 412.522(c)(2)(i) for FY 2016, we are applying a budget neutrality factor of 0.949 (that is, the decimal equivalent of a 5.1 percent reduction, determined as 1.0-5.1/100 = 0.949). (We note, because this adjustment is intended to ensure that estimated HCO payments payable to site neutral payment rate cases are budget neutral (that is, do not result in any increase in aggregate LTCH PPS payments), the magnitude of the reduction is larger than it would be under our proposed approach as the adjustment is now only being applied to half of the transitional blended rate payment (rather than the whole transitional blended rate payment as it was under our proposal).
Upon review of our calculation in the proposed rule of the estimated percentage of site neutral payment rate case HCO payments for FY 2016, we determined that our calculation of the proposed budget neutrality adjustment for estimated HCO payments for site neutral payment rate cases inadvertently contained the technical error pointed out by the commenters. We appreciate the commenters bringing that inadvertent error to our attention, and we have included the necessary correction in the calculation of our estimate of HCO payments for site neutral payment rate cases, which we discuss in the regulatory impact analyses presented in section I.J. of Appendix A of this final rule. (We note, as explained above, the modification to the proposed approach for applying the
We appreciate the commenters' support of our proposed approach to account for the fact that LTCHs whose cost reporting periods begin on or after October 1, 2015, will receive the LTCH PPS standard Federal payment rates for all of their LTCH PPS cases, including their cases that would be site neutral payment rate cases, until the start of their next cost reporting period when estimating site neutral payment rate payments in FY 2016. Because we are adopting a different, more direct approach in this final rule (as discussed above), in the applying the budget neutrality requirement for estimated HCO payments payable to site neutral payment rate cases in for FY 2016, it is no longer necessary to account for when LTCHs' first cost reporting period begins on or after October 1, 2015 (as we did to calculate the budget neutrality adjustment under our proposed approach). We note, however, for purposes of the impact analyses presented in section I.J. of Appendix A of this final rule, to estimate site neutral payment rate payments for FY 2016, it is still necessary to account for when LTCHs' first cost reporting period begins on or after October 1, 2015. Accordingly, in this final rule, when estimating total LTCH PPS site neutral payment rate payments in Federal FY 2016, as we proposed, we are applying an adjustment to account for the varying effective dates of the new dual rate LTCH PPS payment structure. We describe our application of this approach for purposes of the impact analyses presented in this final rule in section I.J. of Appendix A of this final rule. (For a description of our proposed approach to account for the statutory rolling effective date of the revisions to the LTCH PPS, we refer readers to section V.D.4. of the Addendum of the proposed rule (80 FR 24649).)
In summary, after consideration of public comments we received, for the reasons discussed above, we are modifying our proposed application of the site neutral payment rate HCO payment budget neutrality adjustment. In this final rule, we are adopting an approach under which the budget neutrality adjustment for estimated HCO payments to site neutral payment rate cases will be applied to the site neutral payment rate portion of the transitional blended rate payment in FY 2016 (and will not applied to the LTCH PPS standard Federal payment rate portion of the transitional blended rate payment). Accordingly, to ensure that estimated HCO payments payable to site neutral payment rate cases in FY 2016 do not result any increase in estimated aggregate FY 2016 LTCH PPS payments, we are reducing the site neutral payment rate portion of the blended rate payment in FY 2016 by 5.1 percent. In order to achieve this, we are applying a budget neutrality factor of 0.949 to the site neutral payment rate portion of the blended rate payment in FY 2016, in accordance with new § 412.522(c)(2)(i).
In the FY 2014 IPPS/LTCH PPS final rule, we established a policy for reflecting the changes to the Medicare IPPS DSH payment adjustment methodology provided for by section 3133 of the Affordable Care Act in the calculation of the “IPPS comparable amount” under the SSO policy at § 412.529 and the “IPPS equivalent amount” under the 25-percent threshold payment adjustment policy at § 412.534 and § 412.536. Historically, the determination of both the “IPPS comparable amount” and the “IPPS equivalent amount” includes an amount for inpatient operating costs “for the costs of serving a disproportionate share of low-income patients.” Under the statutory changes to the Medicare DSH payment adjustment methodology that began in FY 2014, in general, eligible IPPS hospitals receive an empirically justified Medicare DSH payment equal to 25 percent of the amount they otherwise would have received under the statutory formula for Medicare DSH payments prior to the amendments made by the Affordable Care Act. The remaining amount, equal to an estimate of 75 percent of the amount that otherwise would have been paid as Medicare DSH payments, reduced to reflect changes in the percentage of individuals under the age of 65 who are uninsured, is made available to make additional payments to each hospital that qualifies for Medicare DSH payments and that has uncompensated care. The additional uncompensated care payments are based on the hospital's amount of uncompensated care for a given time period relative to the total amount of uncompensated care for that same time period reported by all IPPS hospitals that receive Medicare DSH payments.
To reflect the statutory changes to the Medicare DSH payment adjustment methodology in the calculation of the “IPPS comparable amount” and the “IPPS equivalent amount” under the LTCH PPS, we stated that we will include a reduced Medicare DSH payment amount that reflects the projected percentage of the payment amount calculated based on the statutory Medicare DSH payment formula prior to the amendments made by the Affordable Care Act that will be paid to eligible IPPS hospitals as empirically justified Medicare DSH payments and uncompensated care payments in that year (that is, a percentage of the operating DSH payment amount that has historically been reflected in the LTCH PPS payments that is based on IPPS rates). We also stated that the projected percentage will be updated annually, consistent with the annual determination of the amount of uncompensated care payments that will be made to eligible IPPS hospitals. As explained in the FY 2014 IPPS/LTCH PPS final rule (79 FR 50766 through 50767), we believe that this approach results in appropriate payments under the LTCH PPS and is consistent with our intention that the “IPPS comparable amount” and the “IPPS equivalent amount” under the LTCH PPS closely resemble what an IPPS payment would have been for the same episode of care, while recognizing that some features of the IPPS cannot be translated directly into the LTCH PPS.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50400 through 50401), we discussed that, for FY 2015, based on the latest data available at that time, we projected that the reduction in the amount of Medicare DSH payments pursuant to section 1886(r)(1) of the Act, along with the proposed payments for uncompensated care under section 1886(r)(2) of the Act, would result in overall Medicare DSH payments equaling 85.26 percent of the amount of Medicare DSH payments that would otherwise have been made in the absence of amendments made by the Affordable Care Act. Therefore, the calculation of the “IPPS comparable amount” under § 412.529 and the “IPPS equivalent amount” under § 412.534 and § 412.536 for FY 2015 includes an applicable operating Medicare DSH payment amount that would be equal to 85.26 percent of the operating Medicare DSH payment amount based on the statutory Medicare DSH payment formula prior to the amendments made by the Affordable Care Act.
For FY 2016, as discussed in greater detail in section IV.D.3.d.(2) of the preamble of this final rule, based on the most recent data available, our estimate of 75 percent of the amount that would otherwise have been paid as Medicare
As we proposed and consistent with our historical practice of using the most recent data available, in this final rule, for FY 2016, we are establishing that the calculation of the “IPPS comparable amount” under § 412.529 and the “IPPS equivalent amount” under § 412.534 and § 412.536 will include an applicable operating Medicare DSH payment amount that is equal to 72.77 percent of the operating Medicare DSH payment amount that would have been paid based on the statutory Medicare DSH payment formula but for the amendments made by the Affordable Care Act.
Section 412.525 sets forth the adjustments to the LTCH PPS standard Federal payment rate. Under the new dual rate LTCH PPS payment structure that begins in FY 2016, only LTCH PPS cases that meet the statutory criteria to be excluded from the site neutral payment rate will be paid based on the LTCH PPS standard Federal payment rate (as discussed in section VII.B. of the preamble of this final rule). Under § 412.525(c), the LTCH PPS standard Federal payment rate is adjusted to account for differences in area wages by multiplying the labor-related share of the LTCH PPS standard Federal payment for a case by the applicable LTCH PPS wage index (FY 2016 values are shown in Tables 12A through 12B listed in section VI. of the Addendum of this final rule and are available via the Internet). The LTCH PPS standard Federal payment is also adjusted to account for the higher costs of LTCHs located in Alaska and Hawaii by the applicable COLA factors (the FY 2016 factors are shown in the chart in section V.D. of this Addendum) in accordance with § 412.525(b). In this final rule, we are establishing an LTCH PPS standard Federal payment rate for FY 2016 of $41,762.85, as discussed in section V.A.2. of the Addendum to this final rule. We illustrate the methodology to adjust the LTCH PPS standard Federal payment rate for FY 2016 in the following example:
During FY 2016, a Medicare discharge that meets the criteria to be excluded from the site neutral payment rate, that is an LTCH PPS standard Federal payment rate case, is from an LTCH that is located in Chicago, Illinois (CBSA 16974). The FY 2016 LTCH PPS wage index value for CBSA 16974 is 1.0401 (obtained from Table 12A listed in section VI. of the Addendum of this final rule and available via the Internet on the CMS Web site). The Medicare patient case is classified into MS-LTC-DRG 189 (Pulmonary Edema & Respiratory Failure), which has a relative weight for FY 2016 of 0.91548 (obtained from Table 11 listed in section VI. of the Addendum of this final rule and available via the Internet on the CMS Web site). The LTCH submitted quality reporting data for FY 2016 in accordance with the LTCHQRP under section 1886(m)(5) of the Act.
To calculate the LTCH's total adjusted Federal prospective payment for this Medicare patient case in FY 2016, we computed the wage-adjusted Federal prospective payment amount by multiplying the unadjusted FY 2016 LTCH PPS standard Federal payment rate ($41,762.85) by the labor-related share (62.0 percent) and the wage index value (1.0401). This wage-adjusted amount was then added to the nonlabor-related portion of the unadjusted LTCH PPS standard Federal payment rate (38.0 percent; adjusted for cost of living, if applicable) to determine the adjusted LTCH PPS standard Federal payment rate, which was then multiplied by the MS-LTC-DRG relative weight (0.9148) to calculate the total adjusted LTCH PPS standard Federal prospective payment for FY 2016 ($39,154.50). The table below illustrates the components of the calculations in this example.
This section lists the tables referred to throughout the preamble of this final rule and in this Addendum. In the past, a majority of these tables were published in the
As discussed in section III.I. of the preamble to this final rule, we proposed to streamline and consolidate the wage index tables for FY 2016 and subsequent fiscal years. In previous fiscal years, the wage index tables have consisted of the following 12 tables: Table 2 (acute care hospitals' case-mix indexes; hospital wage indexes; hospital average hourly wages, and 3-year average of hospital average hourly wages); Table 3A (relevant fiscal year and 3-year average hourly wage for acute care hospitals in urban areas by CBSA); Table 3B (relevant fiscal year and 3-year average hourly wage for acute care hospitals in rural areas by CBSA); Table 4A (wage index and capital geographic adjustment factor (GAF) for acute care hospitals in urban areas by CBSA and by State); Table 4B (wage index and capital GAF for acute care hospitals in rural areas by CBSA and by State); Table 4C (wage index and capital GAF for acute care hospitals that are reclassified by CBSA and by State); Table 4D (States designated as frontier, with acute care hospitals receiving at a minimum the frontier State floor wage index; urban areas with acute care hospitals receiving
We did not receive any public comments on our proposals for the tables. Therefore, we are finalizing our proposals to streamline and consolidate the wage index tables for FY 2016 and subsequent fiscal years by consolidating the information from the 11 tables listed above (excluding Table 4E) into 2 new tables. The new Table 2 contains information by CCN and information from the following tables that have been provided in previous fiscal years: Tables 2, 4J, 9A, and 9C. The new Table 3 contains information by CBSA and information from the following tables that have been provided in previous fiscal years: Tables 3A, 3B, 4A, 4B, 4C, 4D, and 4F. We are providing the data previously published as Table 4E for each annual proposed and final rule as one of our data files on the CMS Web page.
As discussed in sections II.G.3.e., II.G.10.a., II.G.11., and II.G.13. of the preamble of this final rule, we developed the following ICD-10-CM and ICD-10-PCS code tables for FY 2016: Table 6B—New Procedure Codes; Table 6I—Complete MCC List; Table 6J—Complete CC List; Table 6K—Complete List of CC Exclusions; Table 6L—Principal Diagnosis Is Its Own MCC List; Table 6M—Principal Diagnosis Is Its Own CC List; Table 6M.1—Additions to the Principal Diagnosis Is Its Own CC List; and Table 6P—ICD-10-PCS Code Translations for MS-DRG Changes. Table 6P contains multiple tables 6P.1a through 6P.2a that list the ICD-10-PCS code translations relating to specific MS-DRG changes. In addition, under the HAC Reduction Program established by section 3008 of the Affordable Care Act, a hospital's total payment may be reduced by 1 percent if it is in the lowest HAC performance quartile. However, as discussed in section IV.G. of the preamble of this final rule, we are not providing the hospital-level data as a table associated with this final rule. The hospital-level data for the FY 2016 HAC Reduction Program will be made publicly available once it has undergone the review and corrections process.
Finally, a hospital's Factor 3 is the proportion of the uncompensated care amount that a DSH eligible hospital will receive under section 3133 of the Affordable Care Act. Factor 3 is the hospital's estimated number of Medicaid days and Medicare SSI days relative to the estimate of all DSH hospitals' Medicaid days and Medicare SSI days. Table 18 associated with this final rule contains the FY 2016 Medicare DSH uncompensated care payment Factor 3 for all hospitals and identifies whether or not a hospital is projected to receive DSH and, therefore, eligible to receive the additional payment for uncompensated care for FY 2016.
Readers who experience any problems accessing any of the tables that are posted on the CMS Web sites identified below should contact Michael Treitel at (410) 786-4552.
The following IPPS tables for this FY 2016 final rule are available only through the Internet on the CMS Web site at:
The following LTCH PPS tables for this FY 2016 final rule are available only through the Internet on the CMS Web site at
We have examined the impacts of this final rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (February 2, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year).
We have determined that this final rule is a major rule as defined in 5 U.S.C. 804(2). We estimate that the final changes for FY 2016 acute care hospital operating and capital payments will redistribute amounts in excess of $100 million to acute care hospitals. The applicable percentage increase to the IPPS rates required by the statute, in conjunction with other payment changes in this final rule, will result in an estimated $378 million increase in FY 2016 operating payments (or 0.4 percent change) and an estimated $187 million increase in FY 2016 capital payments (or 2.3 percent change). These changes are
Our operating impact estimate includes the −0.8 percent documentation and coding adjustment applied to the IPPS standardized amount, which represents part of the recoupment required under section 631 of the ATRA. In addition, our operating payment impact estimate includes the 1.7 percent hospital update to the standardized amount (which includes the estimated 2.4 percent market basket update less 0.5 percentage point for the multifactor productivity adjustment and less 0.2 percentage point required under the Affordable Care Act). The estimates of IPPS operating payments to acute care hospitals do not reflect any changes in hospital admissions or real case-mix intensity, which will also affect overall payment changes.
The analysis in this Appendix, in conjunction with the remainder of this document, demonstrates that this final rule is consistent with the regulatory philosophy and principles identified in Executive Orders 12866 and 13563, the RFA, and section 1102(b) of the Act. This final rule will affect payments to a substantial number of small rural hospitals, as well as other classes of hospitals, and the effects on some hospitals may be significant. Finally, in accordance with the provisions of Executive Order 12866, the Executive Office of Management and Budget has reviewed this final rule.
This final rule is necessary in order to make payment and policy changes under the Medicare IPPS for Medicare acute care hospital inpatient services for operating and capital-related costs as well as for certain hospitals and hospital units excluded from the IPPS. This final rule also is necessary to make payment and policy changes for Medicare hospitals under the LTCH PPS payment system.
The primary objective of the IPPS is to create incentives for hospitals to operate efficiently and minimize unnecessary costs while at the same time ensuring that payments are sufficient to adequately compensate hospitals for their legitimate costs in delivering necessary care to Medicare beneficiaries. In addition, we share national goals of preserving the Medicare Hospital Insurance Trust Fund.
We believe that the changes in this final rule will further each of these goals while maintaining the financial viability of the hospital industry and ensuring access to high quality health care for Medicare beneficiaries. We expect that these changes will ensure that the outcomes of the prospective payment systems are reasonable and equitable while avoiding or minimizing unintended adverse consequences.
The following quantitative analysis presents the projected effects of our policy changes, as well as statutory changes effective for FY 2016, on various hospital groups. We estimate the effects of individual proposed policy changes by estimating payments per case while holding all other payment policies constant. We use the best data available, but, generally, we do not attempt to make adjustments for future changes in such variables as admissions, lengths of stay, or case-mix.
The prospective payment systems for hospital inpatient operating and capital-related costs of acute care hospitals encompass most general short-term, acute care hospitals that participate in the Medicare program. There were 32 Indian Health Service hospitals in our database, which we excluded from the analysis due to the special characteristics of the prospective payment methodology for these hospitals. Among other short-term, acute care hospitals, hospitals in Maryland are paid in accordance with the Maryland All-Payer Model, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, 5 short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa) receive payment for inpatient hospital services they furnish on the basis of reasonable costs, subject to a rate-of-increase ceiling.
As of July 2015, there were 3,369 IPPS acute care hospitals included in our analysis. This represents approximately 56 percent of all Medicare-participating hospitals. The majority of this impact analysis focuses on this set of hospitals. There also are approximately 1,334 CAHs. These small, limited service hospitals are paid on the basis of reasonable costs rather than under the IPPS. IPPS-excluded hospitals and units, which are paid under separate payment systems, include IPFs, IRFs, LTCHs, RNHCIs, children's hospitals, 11 cancer hospitals, and 5 short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. Changes in the prospective payment systems for IPFs and IRFs are made through separate rulemaking. Payment impacts for these IPPS-excluded hospitals and units are not included in this final rule. The impact of the update and policy changes to the LTCH PPS for FY 2016 is discussed in section I.J. of this Appendix.
As of July 2015, there were 98 children's hospitals, 11 cancer hospitals, 5 short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa, and 18 RNHCIs being paid on a reasonable cost basis subject to the rate-of-increase ceiling under § 413.40. (In accordance with § 403.752(a) of the regulation, RNHCIs are paid under § 413.40.) Among the remaining providers, 251 rehabilitation hospitals and 884 rehabilitation units, and approximately 429 LTCHs, are paid the Federal prospective per discharge rate under the IRF PPS and the LTCH PPS, respectively, and 495 psychiatric hospitals and 1,122 psychiatric units are paid the Federal per diem amount under the IPF PPS. As stated above, IRFs and IPFs are not affected by the rate updates discussed in this rule. The impacts of the changes on LTCHs are discussed in section I.J. of this Appendix.
For children's hospitals, the 11 cancer hospitals, the 5 short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, and RNHCIs, the update of the rate-of-increase limit (or target amount) is the estimated FY 2016 percentage increase in the IPPS operating market basket, consistent with section 1886(b)(3)(B)(ii) of the Act, and §§ 403.752(a) and 413.40 of the regulations. As discussed in section IV. of the preamble of the FY 2014 IPPS/LTCH PPS final rule, we rebased the IPPS operating market basket to a FY 2010 base year. Therefore, we are using the percentage increase in the FY 2010-based IPPS operating market basket to update the target amounts for FY 2016 and subsequent fiscal years for children's hospitals, the 11 cancer hospitals, the 5 short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, and RNHCIs that are paid based on reasonable costs subject to the rate-of-increase limits. Consistent with current law, based on IHS Global Insight, Inc.'s second quarter 2015 forecast of the FY 2010-based market basket increase, we are estimating that the FY 2016 update based on the IPPS operating market basket is 2.4 percent (that is, the current estimate of the market basket rate-of-increase). However, the Affordable Care Act requires an adjustment for multifactor productivity (currently estimated to be 0.5 percentage point for FY 2016) and a 0.2 percentage point reduction to the market basket update resulting in a 1.7 percent applicable percentage increase for IPPS hospitals that submit quality data and are meaningful EHR users, as discussed in section IV.A. of the preamble of this final rule. Children's hospitals, the 11 cancer hospitals, the 5 short-term acute care hospitals located in the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa, and RNCHIs that continue to be paid based on reasonable costs subject to rate-of-increase limits under § 413.40 of the regulations are not subject to the reductions in the applicable percentage increase required under the Affordable Care Act. Therefore, for those hospitals paid under § 413.40 of the regulations, the update is the percentage increase in the FY 2016 IPPS operating market basket, estimated at 2.4 percent, without the reductions described above under the Affordable Care Act.
The impact of the update in the rate-of-increase limit on those excluded hospitals depends on the cumulative cost increases experienced by each excluded hospital since its applicable base period. For excluded hospitals that have maintained their cost increases at a level below the rate-of-increase limits since their base period, the major effect is on the level of incentive payments these excluded hospitals receive. Conversely, for excluded hospitals with cost increases above the cumulative update in their rate-of-increase limits, the major effect is the amount of excess costs that will not be paid.
We note that, under § 413.40(d)(3), an excluded hospital that continues to be paid under the TEFRA system and whose costs exceed 110 percent of its rate-of-increase limit receives its rate-of-increase limit plus the lesser of: (1) 50 percent of its reasonable costs in excess of 110 percent of the limit, or (2) 10 percent of its limit. In addition, under the various provisions set forth in § 413.40, hospitals can obtain payment adjustments for justifiable increases in operating costs that exceed the limit.
In this final rule, we are announcing final policy changes and final payment rate updates for the IPPS for FY 2016 for operating costs of acute care hospitals. The FY 2016 updates to the capital payments to acute care hospitals are discussed in section I.I. of this Appendix.
Based on the overall percentage change in payments per case estimated using our payment simulation model, we estimate that total FY 2016 operating payments will increase by 0.4 percent compared to FY 2015. In addition to the applicable percentage increase, this amount reflects the FY 2016 recoupment adjustment for documentation and coding described in section II.D. of the preamble of this final rule of -0.8 percent to the IPPS national standardized amounts. The impacts do not reflect changes in the number of hospital admissions or real case-mix intensity, which will also affect overall payment changes.
We have prepared separate impact analyses of the changes to each system. This section deals with the changes to the operating inpatient prospective payment system for acute care hospitals. Our payment simulation model relies on the most recent available data to enable us to estimate the impacts on payments per case of certain changes in this final rule. However, there are other changes for which we do not have data available that will allow us to estimate the payment impacts using this model. For those changes, we have attempted to predict the payment impacts based upon our experience and other more limited data.
The data used in developing the quantitative analyses of changes in payments per case presented below are taken from the FY 2014 MedPAR file and the most current Provider-Specific File (PSF) that is used for payment purposes. Although the analyses of the changes to the operating PPS do not incorporate cost data, data from the most recently available hospital cost reports were used to categorize hospitals. Our analysis has several qualifications. First, in this analysis, we do not make adjustments for future changes in such variables as admissions, lengths of stay, or underlying growth in real case-mix. Second, due to the interdependent nature of the IPPS payment components, it is very difficult to precisely quantify the impact associated with each change. Third, we use various data sources to categorize hospitals in the tables. In some cases, particularly the number of beds, there is a fair degree of variation in the data from the different sources. We have attempted to construct these variables with the best available source overall. However, for individual hospitals, some miscategorizations are possible.
Using cases from the FY 2014 MedPAR file, we simulated payments under the operating IPPS given various combinations of payment parameters. As described above, Indian Health Service hospitals and hospitals in Maryland were excluded from the simulations. The impact of payments under the capital IPPS, or the impact of payments for costs other than inpatient operating costs, are not analyzed in this section. Estimated payment impacts of the capital IPPS for FY 2016 are discussed in section I.I. of this Appendix.
We discuss the following changes below:
• The effects of the application of the documentation and coding adjustment and the applicable percentage increase (including the market basket update, the multifactor productivity adjustment, and the applicable percentage reduction in accordance with the Affordable Care Act) to the standardized amount and hospital-specific rates.
• The effects of the changes to the relative weights and MS-DRG GROUPER.
• The effects of the changes in hospitals' wage index values reflecting updated wage data from hospitals' cost reporting periods beginning during FY 2012, compared to the FY 2011 wage data, to calculate the FY 2016 wage index.
• The combined effects of the recalibration of the MS-DRG relative weights as required by section 1886(d)(4)(C) of the Act and the wage index (including the updated wage data and the continued implementation of the new OMB labor market area delineations), including the wage and recalibration budget neutrality factors.
• The effects of the geographic reclassifications by the MGCRB (as of publication of this final rule) that will be effective for FY 2016.
• The effects of the rural floor and imputed floor with the application of the national budget neutrality factor to the wage index.
• The effects of the second year of the 3-year transition for urban hospitals that were located in an urban county that become rural under the new OMB delineations or hospitals deemed urban where the urban area became rural under the new OMB delineations.
• The effects of the frontier State wage index adjustment under the statutory provision that requires that hospitals located in States that qualify as frontier States to not have a wage index less than 1.0. This provision is not budget neutral.
• The effects of the implementation of section 1886(d)(13) of the Act, as added by section 505 of Public Law 108-173, which provides for an increase in a hospital's wage index if a threshold percentage of residents of the county where the hospital is located commute to work at hospitals in counties with higher wage indexes. This provision is not budget neutral.
• The total estimated change in payments based on the FY 2016 policies relative to payments based on FY 2015 policies that include the applicable percentage increase of 1.7 percent (or 2.4 percent market basket update with a reduction of 0.5 percentage point for the multifactor productivity adjustment, and a 0.2 percentage point reduction, as required under the Affordable Care Act).
To illustrate the impact of the FY 2016 changes, our analysis begins with a FY 2015 baseline simulation model using: The FY 2015 applicable percentage increase of 2.2 percent and the documentation and coding recoupment adjustment of −0.8 percent to the Federal standardized amount; the FY 2015 MS-DRG GROUPER (Version 32); the FY 2015 CBSA designations for hospitals based on the new OMB definitions; the FY 2015 wage index; and no MGCRB reclassifications. Outlier payments are set at 5.1 percent of total operating MS-DRG and outlier payments for modeling purposes.
Section 1886(b)(3)(B)(viii) of the Act, as added by section 5001(a) of Public Law 109-171, as amended by section 4102(b)(1)(A) of the ARRA (Pub. L. 111-5) and by section 3401(a)(2) of the Affordable Care Act (Pub. L. 111-148), provides that, for FY 2007 and each subsequent year through FY 2014, the update factor will include a reduction of 2.0 percentage points for any subsection (d) hospital that does not submit data on measures in a form and manner and at a time specified by the Secretary. Beginning in FY 2015, the reduction is one-quarter of such applicable percentage increase determined without regard to section 1886(b)(3)(B)(ix), (xi), or (xii) of the Act, or one-quarter of the market basket update. Therefore, for FY 2016, we are establishing that hospitals that do not submit quality information under rules established by the Secretary and that are meaningful EHR users under section 1886(b)(3)(B)(ix) of the Act will receive an applicable percentage increase of 1.1 percent. At the time that this impact was prepared, 26 hospitals are estimated to not receive the full market basket rate-of-increase for FY 2015 because they failed the quality data submission process or did not choose to participate. For purposes of the simulations shown below, we modeled the payment changes for FY 2016 using a reduced update for these 26 hospitals. However, we do not have enough information at this time to determine which hospitals will not receive the full update factor for FY 2016.
For FY 2016, in accordance with section 1886(b)(3)(B)(ix) of the Act, a hospital that has been identified as not an meaningful EHR user will be subject to a reduction of one-half of such applicable percentage increase determined without regard to section 1886(b)(3)(B)(ix), (xi), or (xii) of the Act. Therefore, for FY 2016, we are establishing that hospitals that are identified as not meaningful EHR users and do submit quality information under section 1886(b)(3)(B)(viii) of the Act will receive an applicable percentage increase of 0.5 percent. At the time that this impact analysis was prepared, 153 hospitals are estimated to not receive the full market basket rate-of-increase for FY 2015 because they are identified as not meaningful EHR users that do submit quality information under section 1886(b)(3)(B)(viii) of the Act. For purposes of the simulations shown below, we modeled the payment changes for FY 2016 using a reduced update for these 153 hospitals. We did not include these hospitals in the model for estimation
Hospitals that are identified as not meaningful EHR users under section 1886(b)(3)(B)(ix) of the Act and also do not submit quality data under section 1886(b)(3)(B)(viii) of the Act will receive an applicable percentage increase of −0.1 percent, which reflects a one-quarter reduction of the market basket update for failure to submit quality data and a one-half reduction of the market basket update for being identified as not a meaningful EHR user. At the time that this impact was prepared, 24 hospitals are estimated to not receive the full market basket rate-of-increase for FY 2016 because they are identified as not meaningful EHR users that do not submit quality data under section 1886(b)(3)(B)(viii) of the Act. We did not include these hospitals in the model for estimation purposes for FY 2015 because that was the first year hospitals experienced a reduction to their applicable percentage increase due to whether they are meaningful EHR users and data were not available at that time. However, we believe it is appropriate to include these 24 hospitals for estimation purposes in FY 2016 because FY 2016 will be the second year in which hospitals will experience this reduction and data on the prior year's performance are now available. For purposes of the simulations shown below, we modeled the payment changes for FY 2016 using a reduced update for these 24 hospitals. However, we do not have enough information at this time to determine which hospitals will not receive the full update increase for FY 2016.
Each policy change, statutory or otherwise, is then added incrementally to this baseline, finally arriving at an FY 2016 model incorporating all of the changes. This simulation allows us to isolate the effects of each change.
Our final comparison illustrates the percent change in payments per case from FY 2015 to FY 2016. Three factors not discussed separately have significant impacts here. The first factor is the update to the standardized amount. In accordance with section 1886(b)(3)(B)(i) of the Act, we are updating the standardized amounts for FY 2016 using an applicable percentage increase of 1.7 percent. This includes our forecasted IPPS operating hospital market basket increase of 2.4 percent with a reduction of 0.5 percentage point for the multifactor productivity adjustment and a 0.2 percentage point reduction as required under the Affordable Care Act. Hospitals that fail to comply with the quality data submission requirements and are meaningful EHR users will receive an update of 1.1 percent. This update includes a reduction of one-quarter of the market basket update for failure to submit these data. Hospitals that do comply with the quality data submission requirements but are not meaningful EHR users will receive an update of 0.5 percent, which includes a reduction of one-half of the market basket update. Furthermore, hospitals that do not comply with the quality data submission requirements and also are not meaningful EHR users will receive an update of −0.1 percent. Under section 1886(b)(3)(B)(iv) of the Act, the update to the hospital-specific amounts for SCHs and MDHs also are equal to the applicable percentage increase, or 1.7 percent if the hospital submits quality data and is a meaningful EHR user. In addition, we are updating the Puerto Rico-specific amount by an applicable percentage increase of 1.7 percent.
A second significant factor that affects the changes in hospitals' payments per case from FY 2015 to FY 2016 is the change in hospitals' geographic reclassification status from one year to the next. That is, payments may be reduced for hospitals reclassified in FY 2015 that are no longer reclassified in FY 2016. Conversely, payments may increase for hospitals not reclassified in FY 2015 that are reclassified in FY 2016.
A third significant factor is that we currently estimate that actual outlier payments during FY 2015 will be 4.6 percent of total MS-DRG payments. When the FY 2015 IPPS/LTCH PPS final rule was published, we projected FY 2015 outlier payments would be 5.1 percent of total MS-DRG plus outlier payments; the average standardized amounts were offset correspondingly. The effects of the lower than expected outlier payments during FY 2015 (as discussed in the Addendum to this final rule) are reflected in the analyses below comparing our current estimates of FY 2015 payments per case to estimated FY 2016 payments per case (with outlier payments projected to equal 5.1 percent of total MS-DRG payments).
Table I displays the results of our analysis of the changes for FY 2016. The table categorizes hospitals by various geographic and special payment consideration groups to illustrate the varying impacts on different types of hospitals. The top row of the table shows the overall impact on the 3,369 acute care hospitals included in the analysis.
The next four rows of Table I contain hospitals categorized according to their geographic location: all urban, which is further divided into large urban and other urban; and rural. There are 2,533 hospitals located in urban areas included in our analysis. Among these, there are 1,393 hospitals located in large urban areas (populations over 1 million), and 1,140 hospitals in other urban areas (populations of 1 million or fewer). In addition, there are 836 hospitals in rural areas. The next two groupings are by bed-size categories, shown separately for urban and rural hospitals. The final groupings by geographic location are by census divisions, also shown separately for urban and rural hospitals.
The second part of Table I shows hospital groups based on hospitals' FY 2016 payment classifications, including any reclassifications under section 1886(d)(10) of the Act. For example, the rows labeled urban, large urban, other urban, and rural show that the numbers of hospitals paid based on these categorizations after consideration of geographic reclassifications (including reclassifications under sections 1886(d)(8)(B) and 1886(d)(8)(E) of the Act that have implications for capital payments) are 2,476; 1,386; 1,090; and 893, respectively.
The next three groupings examine the impacts of the changes on hospitals grouped by whether or not they have GME residency programs (teaching hospitals that receive an IME adjustment) or receive Medicare DSH payments, or some combination of these two adjustments. There are 2,326 nonteaching hospitals in our analysis, 794 teaching hospitals with fewer than 100 residents, and 249 teaching hospitals with 100 or more residents.
In the DSH categories, hospitals are grouped according to their DSH payment status, and whether they are considered urban or rural for DSH purposes. The next category groups together hospitals considered urban or rural, in terms of whether they receive the IME adjustment, the DSH adjustment, both, or neither.
The next three rows examine the impacts of the changes on rural hospitals by special payment groups (SCHs, RRCs, and MDHs). There were 189 RRCs, 327 SCHs, 150 MDHs, 126 hospitals that are both SCHs and RRCs, and 13 hospitals that are both MDHs and RRCs.
The next series of groupings are based on the type of ownership and the hospital's Medicare utilization expressed as a percent of total patient days. These data were taken from the FY 2013 or FY 2012 Medicare cost reports.
The next two groupings concern the geographic reclassification status of hospitals. The first grouping displays all urban hospitals that were reclassified by the MGCRB for FY 2016. The second grouping shows the MGCRB rural reclassifications. The final category shows the impact of the policy changes on the 14 cardiac hospitals.
As discussed in section II.D. of the preamble of this final rule, this column includes the hospital update, including the 2.4 percent market basket update, the reduction of 0.5 percentage point for the multifactor productivity adjustment, and the 0.2 percentage point reduction in accordance with the Affordable Care Act. In addition, this column includes the FY 2016 documentation and coding recoupment adjustment of −0.8 percent on the national standardized amount as part of the recoupment required by section 631 of the ATRA. As a result, we are making a 0.9 percent update to the national standardized amount. This column also includes the 1.7 percent update to the hospital-specific rates which includes the 2.4 percent market basket update, the reduction of 0.5 percentage point for the multifactor productivity adjustment, and the 0.2 percentage point reduction in accordance with the Affordable Care Act.
Overall, hospitals will experience a 0.9 percent increase in payments primarily due to the combined effects of the hospital update and the documentation and coding adjustment on the national standardized amount and the hospital update to the hospital-specific rate. Hospitals that are paid under the hospital-specific rate, namely SCHs, will experience a 1.6 percent increase in payments; therefore, hospital categories with SCHs paid under the hospital-specific rate will experience increases in payments of more than 0.9 percent.
Column 2 shows the effects of the changes to the MS-DRGs and relative weights with the application of the recalibration budget neutrality factor to the standardized amounts. Section 1886(d)(4)(C)(i) of the Act requires us annually to make appropriate classification changes in order to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. Consistent with section 1886(d)(4)(C)(iii) of the Act, we are calculating a recalibration budget neutrality factor to account for the changes in MS-DRGs and relative weights to ensure that the overall payment impact is budget neutral.
As discussed in section II.E. of the preamble of this final rule, the FY 2016 MS-DRG relative weights will be 100 percent cost-based and 100 percent MS-DRGs. For FY 2016, the MS-DRGs are calculated using the FY 2014 MedPAR data grouped to the Version 33 (FY 2016) MS-DRGs. The methodology to calculate the relative weights and the reclassification changes to the GROUPER are described in more detail in section II.H. of the preamble of this final rule.
The “All Hospitals” line in Column 2 indicates that changes due to the MS-DRGs and relative weights will result in a 0.0 percent change in payments with the application of the recalibration budget neutrality factor of 0.998399 on to the standardized amount. Hospital categories that generally treat more surgical cases than medical cases will experience increases in their payments under the relative weights. Rural hospitals will experience a 0.2 percent decrease in payments because rural hospitals tend to treat fewer surgical cases than medical cases, while teaching hospitals with more than 100 residents will experience an increase in payments by 0.2 percent as those hospitals treat more surgical cases than medical cases.
Column 3 shows the impact of updated wage data using FY 2012 cost report data, with the application of the wage budget neutrality factor. The wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located. Under section 1886(d)(3)(E) of the Act, beginning with FY 2005, we delineate hospital labor market areas based on the Core Based Statistical Areas (CBSAs) established by OMB. The current statistical standards used in FY 2016 are based on OMB standards published on February 28, 2013 (75 FR 37246 and 37252), and 2010 Decennial Census data (OMB Bulletin No. 13-01). (We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49951 through 49963) for a full discussion on our adoption of the OMB labor market area delineations based on the 2010 Decennial Census data, effective beginning with the FY 2015 IPPS wage index).
Section 1886(d)(3)(E) of the Act requires that, beginning October 1, 1993, we annually update the wage data used to calculate the wage index. In accordance with this requirement, the wage index for acute care hospitals for FY 2016 is based on data submitted for hospital cost reporting periods beginning on or after October 1, 2011 and before October 1, 2012. The estimated impact of the updated wage data using the FY 2012 cost report data and the OMB labor market area delineations on hospital payments is isolated in Column 3 by holding the other payment parameters constant in this simulation. That is, Column 3 shows the percentage change in payments when going from a model using the FY 2015 wage index, based on FY 2011 wage data, the labor-related share of 69.6 percent, under the OMB delineations and having a 100-percent occupational mix adjustment applied, to a model using the FY 2016 pre-reclassification wage index based on FY 2012 wage data with the labor-related share of 69.6 percent, under the OMB delineations, also having a 100-percent occupational mix adjustment applied, while holding other payment parameters such as use of the Version 33 MS-DRG GROUPER constant. The FY 2016 occupational mix adjustment is based on the CY 2013 occupational mix survey.
In addition, the column shows the impact of the application of the wage budget neutrality to the national standardized amount. In FY 2010, we began calculating separate wage budget neutrality and recalibration budget neutrality factors, in accordance with section 1886(d)(3)(E) of the Act, which specifies that budget neutrality to account for wage index changes or updates made under that subparagraph must be made without regard to the 62 percent labor-related share guaranteed under section 1886(d)(3)(E)(ii) of the Act. Therefore, for FY 2016, we are calculating the wage budget neutrality factor to ensure that payments under updated wage data and the labor-related share of 69.6 percent are budget neutral without regard to the lower labor-related share of 62 percent applied to hospitals with a wage index less than or equal to 1.0. In other words, the wage budget neutrality is calculated under the assumption that all hospitals receive the higher labor-related share of the standardized amount. The FY 2016 wage budget neutrality factor is 0.998749, and the overall payment change is 0.0 percent.
Column 3 shows the impacts of updating the wage data using FY 2012 cost reports. Overall, the new wage data and the labor-related share, combined with the wage budget neutrality adjustment, will lead to no change for all hospitals as shown in Column 3.
In looking at the wage data itself, the national average hourly wage increased 1.03 percent compared to FY 2015. Therefore, the only manner in which to maintain or exceed the previous year's wage index was to match or exceed the national 1.03 percent increase in average hourly wage. Of the 3,328 hospitals with wage data for both FYs 2015 and 2016, 1.594 or 47.9 percent will experience an average hourly wage increase of 1.03 percent or more.
The following chart compares the shifts in wage index values for hospitals due to changes in the average hourly wage data for FY 2016 relative to FY 2015. Among urban hospitals, 5 will experience a decrease of 10 percent or more, and 13 urban hospitals will experience an increase of 10 percent or more. One hundred and forty-four urban hospitals will experience an increase or decrease of at least 5 percent or more but less than 10 percent. Among rural hospitals, 9 will experience a decrease of at least 5 percent but less than 10 percent, but no rural hospitals will experience an increase of greater than or equal to 5 percent but less than 10 percent. No rural hospital will experience increases or decreases of 10 percent or more. However, 809 rural hospitals will experience increases or decreases of less than 5 percent, while 2,341 urban hospitals will experience increases or decreases of less than 5 percent. Seven urban hospitals will not experience a change in their wage index, and all rural hospitals will experience a change in their wage indexes. These figures reflect changes in the “pre-reclassified, occupational mix-adjusted wage index,” that is, the wage index before the application of geographic reclassification, the rural and imputed floors, the out-migration adjustment, and other wage index exceptions and adjustments. (We refer readers to sections III.G.2. through III.I. of the preamble of this final rule for a complete discussion of the exceptions and adjustments to the wage index.) We note that the “post-reclassified wage index” or “payment wage index,” which is the wage index that includes all such exceptions and adjustments (as reflected in Tables 2 and 3 associated with this final rule, which are available via the Internet on the CMS Web site) is used to
The following chart shows the projected impact of changes in the area wage index values for urban and rural hospitals.
Section 1886(d)(4)(C)(iii) of the Act requires that changes to MS-DRG reclassifications and the relative weights cannot increase or decrease aggregate payments. In addition, section 1886(d)(3)(E) of the Act specifies that any updates or adjustments to the wage index are to be budget neutral. We computed a wage budget neutrality factor of 0.998749 and a recalibration budget neutrality factor of 0.998399 (which is also applied to the Puerto Rico-specific standardized amount and the hospital-specific rates). The product of the two budget neutrality factors is the cumulative wage and recalibration budget neutrality factor. The cumulative wage and recalibration budget neutrality adjustment is 0.997150, or approximately 0.3 percent, which is applied to the national standardized amounts. Because the wage budget neutrality and the recalibration budget neutrality are calculated under different methodologies according to the statute, when the two budget neutralities are combined and applied to the standardized amount, the overall payment impact is not necessarily budget neutral. However, in this final rule, we are estimating that the changes in the MS-DRG relative weights and updated wage data with wage and budget neutrality applied will result in a 0.0 percent change in payments.
Our impact analysis to this point has assumed acute care hospitals are paid on the basis of their actual geographic location (with the exception of ongoing policies that provide that certain hospitals receive payments on bases other than where they are geographically located). The changes in Column 5 reflect the per case payment impact of moving from this baseline to a simulation incorporating the MGCRB decisions for FY 2016.
By spring of each year, the MGCRB makes reclassification determinations that will be effective for the next fiscal year, which begins on October 1. The MGCRB may approve a hospital's reclassification request for the purpose of using another area's wage index value. Hospitals may appeal denials of MGCRB decisions to the CMS Administrator. Further, hospitals have 45 days from publication of the IPPS proposed rule in the
The overall effect of geographic reclassification is required by section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, for purposes of this impact analysis, we are applying an adjustment of 0.987905 to ensure that the effects of the reclassifications under section 1886(d)(10) of the Act are budget neutral (section II.A. of the Addendum to this final rule). Geographic reclassification generally benefits hospitals in rural areas. We estimate that the geographic reclassification will increase payments to rural hospitals by an average of 1.4 percent. By region, all the rural hospital categories will experience increases in payments due to MGCRB reclassifications.
New Table 2 listed in section VI. of the Addendum to this final rule and available via the Internet on the CMS Web site reflects the reclassifications for FY 2016.
As discussed in section III.B. of the preamble of the FY 2009 IPPS final rule, the FY 2010 IPPS/RY 2010 LTCH PPS final rule, the FYs 2011, 2012, 2013, 2014, and 2015 IPPS/LTCH PPS final rules, and this final rule, section 4410 of Public Law 105-33 established the rural floor by requiring that the wage index for a hospital in any urban area cannot be less than the wage index received by rural hospitals in the same State. We apply a uniform budget neutrality adjustment to the wage index. The imputed floor, which is also included in the calculation of the budget neutrality adjustment to the wage index, was extended in FY 2012 for 2 additional years and in FY 2014 and FY 2015 for 1 additional year. Prior to FY 2013, only urban hospitals in New Jersey received the imputed floor. As discussed in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53369), we established an alternative temporary methodology for the imputed floor, which resulted in an imputed floor for Rhode Island for FY 2013. For FY 2014 and FY 2015, we extended the imputed rural floor, as calculated under the original methodology and the alternative methodology. Due to the adoption of the new OMB labor market area delineations in FY 2015, the State of Delaware also became an all-urban state and thus eligible for an imputed floor. For FY 2016, we are extending the imputed rural floor for 1 year, as calculated under the original methodology and the alternative methodology. As a result, New Jersey, Rhode Island, and Delaware are able to receive an imputed floor. In New Jersey, 21 out of 64 hospitals will receive the imputed floor, and 4 out of 11 hospitals in Rhode Island will receive the imputed floor for FY 2016. For FY 2016, no hospitals will benefit from the imputed floor in Delaware because the CBSA wage index for each CBSA in Delaware under the new OMB delineations is equal to or higher than the imputed rural floor.
The Affordable Care Act requires that we apply one rural floor budget neutrality factor to the wage index nationally, and the imputed floor is part of the rural floor budget neutrality factor applied to the wage index nationally. We have calculated a FY 2016 rural floor budget neutrality factor to be applied to the wage index of 0.990298, which will reduce wage indexes by 0.99 percent.
Column 6 shows the projected impact of the rural floor and imputed floor with the national rural floor budget neutrality factor applied to the wage index based on the OMB labor market area delineations. The column compares the post-reclassification FY 2016 wage index of providers before the rural floor and imputed floor adjustment and the post-reclassification FY 2016 wage index of providers with the rural floor and imputed floor adjustment based on the OMB labor market area delineations. Only urban hospitals can benefit from the rural and imputed floors. Because the provision is budget neutral, all other hospitals (that is, all rural hospitals and those urban hospitals to which the adjustment is not made) will experience a decrease in payments due to the budget neutrality adjustment that is applied nationally to their wage index.
We estimate that 371 hospitals will benefit from the rural and imputed floors in FY 2016, while the remaining 2,998 IPPS hospitals in our model will have their wage index reduced by the rural floor budget neutrality adjustment of 0.990298 (or 0.99 percent). We project that, in aggregate, rural hospitals will experience a 0.2 percent decrease in payments as a result of the application of the rural floor budget neutrality because the rural hospitals do not benefit from the rural floor, but have their wage indexes downwardly adjusted to ensure that the application of the rural floor is
Urban Puerto Rico hospitals are expected to experience a 0.1 percent change in payments as a result of the application of the Puerto Rico rural floor with the application of the Puerto Rico rural floor budget neutrality adjustment. We are applying a rural floor budget neutrality factor to the Puerto Rico-specific wage index of 0.987646 or 1.2 percent. The Puerto Rico-specific wage index adjusts the Puerto Rico-specific standardized amount, which represents 25 percent of payments to Puerto Rico hospitals. The increases in payments experienced by the urban Puerto Rico hospitals that benefit from a rural floor are offset by the decreases in payments by the urban Puerto Rico hospitals that do not benefit from the rural floor that have their wage indexes downwardly adjusted by the rural floor budget neutrality adjustment. As a result, overall, urban Puerto Rico hospitals will experience a 0.1 percent change in payments due to the application of the rural floor with rural floor budget neutrality.
There are 21 hospitals out of the 64 hospitals in New Jersey that will benefit from the extension of the imputed floor and will receive the imputed floor wage index value under the OMB labor market area delineations, including the rural floor budget neutrality of 0.990298 which we estimate will increase payments to those imputed floor hospitals by $27 million (overall, the State will receive an increase of $9 million in payments due to the other hospitals in the State that will experience decreases in payments due to the rural floor budget neutrality adjustment). Four Rhode Island hospitals will benefit from the imputed rural floor calculated under the alternative methodology and will receive an additional $4.5 million (overall, the State will receive an additional $2.6 million). While some hospitals in Delaware are geographically located in CBSAs that are assigned the imputed floor, none of these hospitals benefit from the imputed floor since they are reclassifying to CBSAs with a higher wage index than the imputed floor.
Column 6 also shows the projected effects of the second year of the 3-year hold harmless provision for hospitals that were located in an urban county that became rural under the new OMB delineations or hospitals deemed urban where the urban area became rural under the new OMB delineations. As discussed in section III.G.2. of the preamble of this final rule, under this transition, hospitals that were located in an urban county that became rural under the new OMB delineations will generally be assigned the urban wage index value of the CBSA in which they are physically located in FY 2014 for a period of 3 fiscal years (that is, FYs 2015, 2016, and 2017). In addition, as discussed in section III.G.3. of the preamble of this final rule, under this transition, hospitals that were deemed urban where the urban area became rural under the new OMB delineations will generally be assigned the area wage index value of hospitals reclassified to the urban CBSA (that is, the attaching wage index, if applicable) to which they were designated in FY 2014. For FY 2016, we are applying the 3-year transition wage index adjustments in a budget neutral manner, with a budget neutrality factor of 0.999996.
In response to a public comment addressed in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51593), we are providing the payment impact of the rural floor and imputed floor with budget neutrality at the State level. Column 1 of the table below displays the number of IPPS hospitals located in each State. Column 2 displays the number of hospitals in each State that will receive the rural floor or imputed floor wage index for FY 2016. Column 3 displays the percentage of total payments each State will receive or contribute to fund the rural floor and imputed floor with national budget neutrality. The column compares the post-reclassification FY 2016 wage index of providers before the rural floor and imputed floor adjustment and the post-reclassification FY 2016 wage index of providers with the rural floor and imputed floor adjustment. Column 4 displays the estimated payment amount that each State will gain or lose due to the application of the rural floor and imputed floor with national budget neutrality.
This column shows the combined effects of the application of section 10324(a) of the Affordable Care Act, which requires that we establish a minimum post-reclassified wage-index of 1.00 for all hospitals located in “frontier States,” and the effects of section 1886(d)(13) of the Act, as added by section 505 of Public Law 108-173, which provides for an increase in the wage index for hospitals located in certain counties that have a relatively high percentage of hospital employees who reside in the county, but work in a different area with a higher wage index. These two wage index provisions are not budget neutral and increase payments overall by 0.1 percent compared to the provisions not being in effect.
The term “frontier States” is defined in the statute as States in which at least 50 percent of counties have a population density less than 6 persons per square mile. Based on these criteria, 4 States (Montana, North Dakota, South Dakota, and Wyoming) are considered frontier States and 48 hospitals located in those States will receive a frontier wage index of 1.0000. Nevada is also, by definition, a frontier State and was assigned a frontier floor value of 1.0000 for FY 2012, but since then and including in this final rule, its rural floor value has been greater than 1.0000 so it has not been subject to the frontier wage index. Overall, this provision is not budget neutral and is estimated to increase IPPS operating payments by approximately $60 million. Rural and urban hospitals located in the West North Central region will experience an increase in payments by 0.3 and 0.8 percent, respectively, because many of the hospitals located in this region are frontier State hospitals.
In addition, section 1886(d)(13) of the Act, as added by section 505 of Public Law 108-173, provides for an increase in the wage index for hospitals located in certain counties that have a relatively high percentage of hospital employees who reside in the county, but work in a different area with a higher wage index. Hospitals located in counties that qualify for the payment adjustment are to receive an increase in the wage index that is equal to a weighted average of the difference between the wage index of the resident county, post-reclassification and the higher wage index work area(s), weighted by the overall percentage of workers who are employed in an area with a higher wage index. There are an estimated 336 providers that will receive the out-migration wage adjustment in FY 2016. Rural hospitals generally qualify for the adjustment, resulting in a 0.1 percent increase in payments. This provision appears to benefit Section 401 hospitals and RRCs in that they will experience a 1.4 percent and 0.6 percent increase in payments, respectively. This out-migration wage adjustment also is not budget neutral, and we estimate the impact of these providers receiving the out-migration increase will be approximately $45 million.
Column 8 shows our estimate of the changes in payments per discharge from FY 2015 and FY 2016, resulting from all changes reflected in this final rule for FY 2016. It includes combined effects of the previous columns in the table.
The average increase in payments under the IPPS for all hospitals is approximately 0.4 percent for FY 2016 relative to FY 2015. As discussed in section II.D. of the preamble of this final rule, this column includes the FY 2016 documentation and coding recoupment adjustment of −0.8 percent on the national standardized amount as part of the recoupment required under section 631 of the ATRA. In addition, this column includes the annual hospital update of 1.7 percent to the national standardized amount. This annual hospital update includes the 2.4 percent market basket update, the reduction of 0.5 percentage point for the multifactor productivity adjustment, and the 0.2 percentage point reduction under section
Overall payments to hospitals paid under the IPPS due to the applicable percentage increase and changes to policies related to MS-DRGs, geographic adjustments, and outliers are estimated to increase by 0.4 percent for FY 2016. Hospitals in urban areas will experience a 0.4 percent increase in payments per discharge in FY 2016 compared to FY 2015. Hospital payments per discharge in rural areas are estimated to increase by 0.2 percent in FY 2016.
Table II presents the projected impact of the changes for FY 2016 for urban and rural hospitals and for the different categories of hospitals shown in Table I. It compares the estimated average payments per discharge for FY 2015 with the estimated average payments per discharge for FY 2016, as calculated under our models. Therefore, this table presents, in terms of the average dollar amounts paid per discharge, the combined effects of the changes presented in Table I. The estimated percentage changes shown in the last column of Table II equal the estimated percentage changes in average payments per discharge from Column 8 of Table I.
In addition to those policy changes discussed above that we are able to model using our IPPS payment simulation model, we are making various other changes in this final rule. Generally, we have limited or no specific data available with which to estimate the impacts of these changes. Our estimates of the likely impacts associated with these other changes are discussed below.
In section II.F. of the preamble of this final rule, we discuss our implementation of section 1886(d)(4)(D) of the Act, which requires the Secretary to identify conditions that are: (1) High cost, high volume, or both; (2) result in the assignment of a case to an MS-DRG that has a higher payment when present as a secondary diagnosis; and (3) could reasonably have been prevented through application of evidence-based guidelines. For discharges occurring on or after October 1, 2008, hospitals will not receive additional payment for cases in which one of the selected conditions was not present on admission, unless, based on data and clinical judgment, it cannot be determined at the time of admission whether a condition is present. That is, the case will be paid as though the secondary diagnosis were not present. However, the statute also requires the Secretary to continue counting the condition as a secondary diagnosis that results in a higher IPPS payment when doing the budget neutrality calculations for MS-DRG reclassifications and recalibration. Therefore, we will perform our budget neutrality calculations as though the payment provision did not apply, but Medicare will make a lower payment to the hospital for the specific case that includes the secondary diagnosis. Thus, the provision results in cost savings to the Medicare program.
We note that the provision will only apply when one or more of the selected conditions are the only secondary diagnosis or diagnoses present on the claim that will lead to higher payment. Medicare beneficiaries will generally have multiple secondary diagnoses during a hospital stay, such that beneficiaries having one MCC or CC will frequently have additional conditions that also will generate higher payment. Only a small percentage of the cases will have only one secondary diagnosis that would lead to a higher payment. Therefore, if at least one nonselected secondary diagnosis that leads to higher payment is on the claim, the case will continue to be assigned to the higher paying MS-DRG and there will be no Medicare savings from that case. In addition, as discussed in section II.F.3. of the preamble of this final rule, it is possible to have two
As discussed in section II.F. of the preamble of this final rule, for FY 2016, we are not adding or removing any categories of HACs for FY 2016.
The HAC payment provision went into effect on October 1, 2008. Our savings estimates for the next 5 fiscal years are shown below:
In section II.I. of the preamble to this final rule, we discuss six applications (Blinatumomab (BLINCYTO
As explained in the preamble to this final rule, add-on payments for new medical services and technologies under section 1886(d)(5)(K) of the Act are not required to be budget neutral. As discussed in section II.I.4. of the preamble of this final rule, we are approving two of the six applications (BLINCYTO
As discussed in section IV.D. of the preamble of this final rule, under section 3133 of the Affordable Care Act, hospitals that are eligible to receive Medicare DSH payments will receive 25 percent of the amount they previously would have received under the former statutory formula for Medicare DSH payments. The remainder, equal to an estimate of 75 percent of what formerly would have been paid as Medicare DSH payments (Factor 1), reduced to reflect changes in the percentage of individuals under age 65 who are uninsured and additional statutory adjustments (Factor 2), is available to make additional payments to each hospital that qualifies for Medicare DSH payments and that has uncompensated care. Each Medicare DSH hospital will receive an additional payment based on its estimated share of the total amount of uncompensated care for all Medicare DSH hospitals. The uncompensated care payment methodology has redistributive effects based on the proportion of a Medicare DSH hospital's low-income insured patient days (sum of Medicaid patient days and Medicare SSI patient days) relative to the low-income insured patient days for all Medicare DSH hospitals (Factor 3). The reduction to Medicare DSH payments under section 3133 of the Affordable Care Act is not budget neutral.
In this FY 2016 IPPS/LTCH PPS final rule, we are establishing the amount to be distributed as uncompensated care payments to DSH eligible hospitals, which for FY 2016 is $6,406,145,534.04, or 75 percent of what otherwise would have been paid for Medicare DSH payment adjustments adjusted by a Factor 2 of 63.69 percent; for FY 2015, the amount available to be distributed for uncompensated care was $7,647,644,885.18, or 75 percent of what otherwise would have been paid for Medicare DSH payment adjustments adjusted by a Factor 2 of 76.19 percent. To calculate Factor 3 for FY 2016, we are using Medicaid days from the more recent of hospitals' full year 2012 or full year 2011 cost reports from the March 2015 update of the HCRIS database (that is, we are holding constant the 2012 and 2011 cost report years used in the FY 2015 IPPS/LTCH PPS final rule, but using updated cost report data from a later extract of the HCRIS), Medicaid days from 2012 cost report data submitted to CMS by IHS hospitals, and SSI days from the 2013 SSI ratios. This is in contrast to FY 2015, when we used Medicaid days from the hospitals' full year 2012 or 2011 cost reports from the March 2014 update of the HCRIS database, Medicaid days from 2012 cost report data submitted to CMS by IHS hospitals, and SSI days from the 2012 SSI ratios to calculate Factor 3. The uncompensated care payment methodology is discussed in more detail in section IV.D. of the preamble of this final rule.
To estimate the impact of the combined effect of reductions in the percent of individuals under age 65 who are uninsured and additional statutory adjustments (Factor 2) and changes in Medicaid and SSI patient days (components of Factor 3) on the calculation of Medicare DSH payments, including both empirically justified Medicare DSH payments and uncompensated care payments, we compared total DSH payments estimated in the FY 2015 IPPS/LTCH PPS final rule and correction notice to total DSH payments estimated in this FY 2016 IPPS/LTCH PPS final rule. For FY 2015, for each hospital, we calculated the sum of (I) 25 percent of the estimated amount of what would have been paid as Medicare DSH in FY 2015 in the absence of section 3133 of the Affordable Care Act and (II) 75 percent of the estimated amount of what would have been paid as Medicare DSH payments in the absence of section 3133, adjusted by a Factor 2 of 76.19 percent and multiplied by a Factor 3 as stated in the FY 2015 IPPS/LTCH PPS final rule and correction notice. For FY 2016, we calculated the sum of (I) 25 percent of the estimated amount of what would be paid as Medicare DSH payments in FY 2016 absent
Our analysis included 2,418 hospitals that are projected to be eligible for DSH in FY 2016. It did not include hospitals in the Rural Community Hospital Demonstration, hospitals that departed the Medicare program as of July 7, 2015, Maryland hospitals, and SCHs that are expected to be paid based on their hospital-specific rates. In addition, low-income insured days from merged or acquired hospitals were combined into the surviving hospital's CCN, and the nonsurviving CCN was excluded from the analysis. The estimated impact of changes in Factors 1, 2, and 3 across all FY 2016 DSH eligible hospitals, by hospital characteristic, is presented in the table below.
The impact analysis found that changes from the FY 2015 IPPS/LTCH PPS final rule were primarily driven by three components: (1) A reduction in Factor 2 from 76.19 percent in the FY 2015 IPPS/LTCH PPS final rule to 63.69 percent in this FY 2016 IPPS/LTCH PPS final rule, (2) changes in the number of Medicaid days for 2012 (or 2011) obtained from the March 2014 HCRIS update of providers' Medicare cost report (used in the FY 2015 IPPS/LTCH PPS final rule) to the number of Medicaid days reported in the March 2015 HCRIS update of providers' Medicare cost report (used in this FY 2016 final rule); and (3) changes in SSI days from 2012 (used in the FY 2015 IPPS/LTCH PPS final rule and correction notice) to 2013 (used in this FY 2016 IPPS/LTCH PPS final rule). The change in the percentage of individuals who are uninsured is a national estimate affecting all hospitals equally, while the change in Medicaid days and SSI days is hospital-specific and drives the change in the Factor 3 computed for each hospital. Additionally, we note that several hospitals had a change in at least one of their payment or geographic characteristics from FY 2015 to FY 2016. Therefore, the number of hospitals within a given hospital characteristic may have changed from the FY 2015 final rule and correction notice. These changes also impact the distribution of Medicare DSH payments.
The impact analysis table above shows that across all DSH-eligible hospitals, FY 2016 DSH payments, including both empirically justified DSH payments and uncompensated care payments, are estimated at approximately $9.733 billion, or a decrease of approximately 11.5 percent from FY 2015 DSH payments ($10.993 billion). As a result, we project that payments for FY 2016 to hospitals paid under the IPPS will be reduced by 1.0 percent overall as compared to overall payments to hospitals paid under the IPPS in FY 2015.
Percent reductions greater than 11.5 percent in column 4 of the table above indicate that hospitals within the specified category are projected to experience a greater reduction in DSH payments, on average, relative to all of the FY 2016 DSH hospitals included in this analysis. Likewise, reductions less than 11.5 percent indicate that hospitals within each category, on average, are projected to receive a smaller reduction in DSH payments relative to all FY 2016 DSH hospitals. The variation in DSH payment reductions by hospital characteristic, as shown in column 4, is largely dependent on the change in a given hospital's number of SSI and Medicaid days, as well as variations in hospital characteristics or classification between FY 2015 and FY 2016 and the number of DSH-eligible hospitals. On average across all hospitals, the number of SSI days increased by 0.026 percent from FY 2015. On average across all hospitals, the number of Medicaid days increased by 0.621 percent from FY 2015. In conjunction with this FY 2016 IPPS/LTCH PPS final rule, we will publish an impact table as well as a supplemental data file that can be used to further analyze the distribution of DSH payments and variation in DSH payment reductions.
In section IV.E. of the preamble of this final rule, we discuss our policies for FY 2016 for the Hospital Readmissions Reduction Program (established under section 3025 of the Affordable Care Act), which requires a reduction to a hospital's base operating DRG payments to account for excess readmissions. For FY 2016, the reduction is based on a hospital's risk-adjusted readmission rate during a 3-year period for five applicable conditions: acute myocardial infarction, heart failure, pneumonia, total hip and total knee arthroplasty and chronic obstructive pulmonary disease. This provision is not budget neutral. A hospital's readmission adjustment is the higher of a ratio of the hospital's aggregate payments for excess readmissions to their aggregate payments for all discharges, or a floor, which has been defined in the statute as 0.97 (or a 3.0 percent reduction). A hospital's base operating DRG payment (that is, wage-adjusted DRG payment amount, as discussed in section IV.E. of the preamble of this final rule) is the portion of the IPPS payment subject to the readmissions payment adjustment (DSH, IME, outliers and low-volume add-on payments are not subject to the readmissions adjustment). In this final rule, we estimate that 2,666 hospitals will have their base operating DRG payments reduced by their proxy FY 2016 hospital-specific readmissions adjustment. As a result, we estimate that the Hospital Readmissions Reduction Program will save approximately $420 million in FY 2016, an increase of $6 million over the estimated FY 2015 savings.
In section IV.F. of the preamble of this final rule, we discuss the Hospital VBP Program under which the Secretary makes value-based incentive payments to hospitals based on their performance on measures during the performance period with respect to a fiscal year. These incentive payments will be funded for FY 2016 through a reduction to the FY 2016 base operating DRG payment for each discharge of 1.75 percent, as required by section 1886(o)(7)(B) of the Act. The applicable percentage for FY 2017 and subsequent years is 2 percent. The total amount available for value-based incentive payments must be equal to the total amount of reduced payments for all hospitals for the fiscal year, as estimated by the Secretary.
We estimate the available pool of funds for value-based incentive payments in the FY 2016 program year, which, in accordance with section 1886(o)(7)(C)(iv) of the Act, will be 1.75 percent of base operating DRG payments, or a total of approximately $1.50 billion. This estimated available pool for FY 2016 is based on the historical pool of hospitals that were eligible to participate in the FY 2015 program year and the payment information from the March 2015 update to the FY 2014 MedPAR file.
The estimated impacts of the FY 2016 program year by hospital characteristic, found in the table below, are based on historical TPSs. We used the FY 2015 program year's TPSs to calculate the proxy adjustment factors used for this impact analysis. These are the most recently available scores that hospitals were given an opportunity to review and correct. The proxy adjustment factors use estimated annual base operating DRG payment amounts derived from the March 2015 update to the FY 2014 MedPAR file. The proxy adjustment factors can be found in Table 16A associated with this final rule (available via the Internet on the CMS Web site).
The impact analysis shows that, for the FY 2016 program year, the number of hospitals that will receive an increase in base operating DRG payment amount is higher than the number of hospitals that will receive a decrease. Among urban hospitals, those in the New England, South Atlantic, East North Central, East South Central, West North Central, West South Central, Mountain, and Pacific regions will have an increase, on average, in the base operating DRG payment amount. Urban hospitals in the Middle Atlantic region will receive an average decrease in the base operating payment amount. Among rural hospitals, those in all regions will have an increase, on average, in base operating DRG payment amounts.
On average, hospitals that receive a higher percent of DSH payments will receive decreases in the base operating DRG payment amount. With respect to hospitals' Medicare utilization (MCR), those hospitals with an MCR above 65 percent will have the largest increase, on average, in base operating DRG payment amounts.
Nonteaching hospitals will have an average increase, and teaching hospitals will experience an average decrease, in the base operating DRG payment amount.
Actual FY 2016 program year's TPSs will not be reviewed and corrected by hospitals until after this FY 2016 IPPS/LTCH PPS final rule has been published. Therefore, the same historical universe of eligible hospitals and corresponding TPSs from the FY 2015 program year are used for the updated impact analysis in this final rule.
In section IV.G. of the preamble of this final rule, we discuss the changes to the HAC Reduction Program for FY 2016. We note that section 3008 of the Affordable Care Act added section 1886(p) to the Act to provide an incentive for certain hospitals to reduce the incidence of HACs. Section 1886(p) of the Act requires the Secretary to make an adjustment to payments to “applicable hospitals” effective beginning on October 1, 2014 and for subsequent program years. We refer readers to section V.I.1.a. of the FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through 50708) for a general overview of the HAC Reduction Program. For a further description of our policies for the HAC Reduction Program, we refer readers to the FY 2014 IPPS/LTCH PPS final rule (78 FR 50707 through 50729) and the FY 2015 IPPS/LTCH PPS final rule (79 FR 50087 through 50104). These policies describe The general framework for implementation of the HAC Reduction Program including: (a) The relevant definitions applicable to the program; (b) the payment adjustment under the program; (c) the measure selection and conditions for the program, including a risk-adjustment and scoring methodology; (d) performance scoring; (e) the process for making hospital-specific performance information available to the public, including the opportunity for a hospital to review the information and submit corrections; and (f) limitation of administrative and judicial review. We are not making any changes to these policies for the implementation of the FY 2016 HAC Reduction Program.
We note that hospitals received a payment reduction for the first time in FY 2015. The table and analysis that we are presenting
For FY 2016, we note that we finalized a Total HAC Score methodology in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50087 through 50104) that assigns weights for Domain 1 and Domain 2 at 25 percent and 75 percent, respectively. The table below presents data on the estimated proportion of hospitals in the worst-performing quartile of the Total HAC Score by hospital characteristic, based on this methodology.
To estimate the impact of the FY 2016 HAC Reduction Program, we used AHRQ Patient Safety Indicator (PSI) 90 measure results based on Medicare fee-for-service (FFS) discharges from July 2012 through June 2014 and version 4.5a of the AHRQ software. For CDC Central Line-Associated Bloodstream Infection (CLABSI), Catheter-Associated Urinary Tract Infection (CAUTI), and Surgical Site Infection (SSI) measure results, we used standardized infection ratios (SIRs) calculated with hospital surveillance data reported to the National Healthcare Safety Network (NHSN) for infections occurring between January 1, 2013 and December 31, 2014. To analyze the results by hospital characteristic, we used the FY 2016 Proposed Rule Impact File. Of the 3,272 hospitals included in this analysis, 3,269 hospitals had information for geographic location, region, bed size, DSH percent, and teaching status; 3,256 had information for ownership; and 3,137 had information for MCR percent. These differences in the number of hospitals listed for each characteristic are due to the source of the hospital characteristic data. Maryland hospitals and hospitals without a Total HAC score are not included in the identification of the worst-performing quartile for the HAC Reduction Program in FY 2016, and therefore are not represented in the table below. (For a discussion of the program's applicability to Maryland hospitals, we refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 50089.)
The third column in the table (Percent) indicates the percent of hospitals in each category of the specified characteristic. For example, within geographic location, 40.5 percent of hospitals (or 1,323 hospitals) are characterized as large urban, 33.9 percent of hospitals (or 1,109 hospitals) are characterized as other urban, and 25.6 percent of hospitals (or 837 hospitals) are characterized as rural. The fifth column in the table (Percent with characteristic) indicates the proportion of hospitals for each characteristic that we estimate will be in the worst-performing quartile of Total HAC Scores and will receive a payment reduction under the FY 2016 HAC Reduction Program. For example, with regards to geographic location, 27.4 percent of hospitals (or 362 hospitals) characterized as large urban will be subject to a payment reduction; 25.2 percent of hospitals (or 279 hospitals) characterized as other urban will be subject to a payment reduction; and 19.5 percent of hospitals (or 163 hospitals) characterized as rural will be subject to a payment reduction.
In section IV.H. of the preamble of this final rule, we discuss our modification of the simplified cost allocation methodology set forth in CMS Pub. 15-2, Chapter 40, Section 4020. In the FY 2016 IPPS/LTCH PPS proposed rule (80 FR 24514 through 24515), we had proposed to limit the election of the simplified cost allocation methodology to cost reporting periods beginning before October 1, 2015, because the allocation of the costs of capital-related movable equipment using this methodology yields less precise calculated CCRs. After consideration of the public comments we received, we are not finalizing the proposal to limit the election of the simplified cost allocation methodology. Instead, we are retaining the simplified cost allocation methodology with some modifications to afford hospitals using the simplified cost allocation methodology flexibility to obtain approval from their MACs to use dollar value as an alternative statistical basis to square footage for capital-related moveable equipment. Based on FY 2013 HCRIS data, less than 100 hospitals are using the simplified cost allocation methodology. Hospitals using the simplified cost allocation methodology (that is, hospitals using each and every statistical basis within the list of cost centers under the simplified cost allocation methodology) may continue their use of these statistical bases, with the added flexibility to request approval from their MACs to use the dollar value statistical basis for capital-related moveable equipment in accordance with the instructions set forth in CMS Pub. 15-1, Section 2313. In this regard, hospitals using the simplified cost allocation methodology will no longer be required to use the square footage statistical basis for capital-related moveable equipment but will be provided greater flexibility to request approval to use the statistical basis of dollar value, which may be better suited to their cost allocation needs. With this modification, we believe there will be no disruption of cost reporting practices for hospitals, regardless of whether or not they use the simplified cost allocation methodology. Hospitals using one or more, but not all, of the statistical bases under the simplified cost allocation methodology are not considered to be using the simplified cost allocation methodology. Rather, they are considered to be using the standard cost-finding methodology with approved alternative bases. These hospitals may continue to use these previously approved statistical bases, consistent with current manual instructions set forth in CMS Pub. 15-1, Section 2313. We believe that these finalized changes will not have a significant impact on the operations of a substantial number of small rural hospitals. We also do not believe that the finalized changes will affect beneficiary access to care, as affected hospitals will continue to be paid for services provided to Medicare beneficiaries.
In section IV.I. of the preamble of this final rule, for FY 2016, we discuss our
We are adjusting the national IPPS rates according to the methodology set forth in section IV.I.2. of the preamble of this final rule. We note that the phase-out of the demonstration has begun with the 7 “pre-expansion” participating hospitals that were selected for the demonstration during 2004 and 2008 concluding their participation during FY 2015. Therefore, we have not included the financial experience of these hospitals in the estimated demonstration cost for FY 2016. Of the 15 hospitals that entered the demonstration in 2011 and 2012 under the Affordable Care Act expansion, 11 hospitals are scheduled to end their participation in the demonstration during FY 2016. Eight of these 11 hospitals are scheduled to end their participation in the demonstration prior to September 30, 2016. For each of these 8 hospitals, we estimate the reasonable cost amount and the amount that would otherwise be paid without the demonstration for FY 2016 on a prorated basis, multiplying the estimated amounts for each hospital (as derived from “as submitted” cost reports for cost reporting periods ending in CY 2013) by the fraction of the number of months that it will participate in the demonstration during FY 2016 in relation to the total 12-month period. Accordingly, the budget neutrality offset amount used to determine the adjustment to the national IPPS rates to account for estimated demonstration costs for FY 2016 for these 15 hospitals is $26,044,620. In addition, in this final rule, we are subtracting from the budget neutrality offset amount for FY 2016 the following: (1) The amount by which the budget neutrality offset amount that was finalized in the FY 2009 IPPS/LTCH PPS final rule exceeded the actual costs of the demonstration for FY 2009 (as shown in the finalized cost reports for hospitals that participated in FY 2009 and had cost reporting periods beginning in FY 2009) ($8,457,452); and (2) the amount by which the budget neutrality offset amount that was finalized for FY 2010 to account for the demonstration costs in FY 2010 (as set forth in the FY 2010 and 2011 IPPS final rules) exceeded the actual costs of the demonstration during FY 2010 (similarly as shown in the finalized cost reports for hospitals that participated in FY 2010 and had for cost reporting periods beginning in 2010). This amount is $4,751,550. Therefore, the resulting total ($12,835,618) is the amount for which an adjustment to the IPPS rates for FY 2016 is calculated.
In section IV.J. of the preamble to this final rule, we discuss changes to the list of MS-DRGs subject to the postacute care transfer policy and the DRG special payment policy. As reflected in Table 5 listed in section VI. of the Addendum to this final rule (which is available via the Internet on the CMS Web site), using criteria set forth in regulations at § 412.4, we evaluated MS-DRG charge, discharge, and transfer data to determine which MS-DRGs qualify for the postacute care transfer and DRG special payment policies. We note that we are not making any changes in these payment policies in this FY 2016 final rule. We are including two new MS-DRGs on the list of MS-DRGs subject to the postacute care transfer policy and the DRG special payment policy as a result of our revisions of the MS-DRG classifications for FY 2016. Specifically, we are establishing that two new MS-DRGs will qualify for the postacute care transfer policy and the DRG special payment policy in FY 2016. Column 4 of Table I in this Appendix A shows the effects of the changes to the MS-DRGs and the relative payment weights and the application of the recalibration budget neutrality factor to the standardized amounts. Section 1886(d)(4)(C)(i) of the Act requires us annually to make appropriate DRG classification changes in order to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. The analysis and methods for determining the changes due to the MS-DRGs and relative payment weights account for and include changes in the status of MS-DRG postacute care transfer and special payment policies. We refer readers to section I.G. of this Appendix A for a detailed discussion of payment impacts due to MS-DRG reclassification policies.
For the impact analysis presented below, we used data from the March 2015 update of the FY 2014 MedPAR file and the March 2015 update of the Provider-Specific File (PSF) that is used for payment purposes. Although the analyses of the changes to the capital prospective payment system do not incorporate cost data, we used the March 2015 update of the most recently available hospital cost report data (FYs 2012 and 2013) to categorize hospitals. Our analysis has several qualifications. We use the best data available and make assumptions about case-mix and beneficiary enrollment as described below.
Due to the interdependent nature of the IPPS, it is very difficult to precisely quantify the impact associated with each change. In addition, we draw upon various sources for the data used to categorize hospitals in the tables. In some cases (for instance, the number of beds), there is a fair degree of variation in the data from different sources. We have attempted to construct these variables with the best available sources overall. However, it is possible that some individual hospitals are placed in the wrong category.
Using cases from the March 2015 update of the FY 2014 MedPAR file, we simulated payments under the capital IPPS for FY 2015 and FY 2016 for a comparison of total payments per case. Any short-term, acute care hospitals not paid under the general IPPS (for example, Indian Health Service hospitals and hospitals in Maryland) are excluded from the simulations.
The methodology for determining a capital IPPS payment is set forth at § 412.312. The basic methodology for calculating the capital IPPS payments in FY 2016 is as follows:
(Standard Federal Rate) × (DRG weight) × (GAF) × (COLA for hospitals located in Alaska and Hawaii) × (1 + DSH Adjustment Factor + IME adjustment factor, if applicable).
In addition to the other adjustments, hospitals may receive outlier payments for those cases that qualify under the threshold established for each fiscal year. We modeled payments for each hospital by multiplying the capital Federal rate by the GAF and the hospital's case-mix. We then added estimated payments for indirect medical education, disproportionate share, and outliers, if applicable. For purposes of this impact analysis, the model includes the following assumptions:
• We estimate that the Medicare case-mix index will increase by 0.5 percent in both FYs 2015 and 2016.
• We estimate that Medicare discharges will be approximately 11.3 million in FY 2015 and 11.2 million in FY 2016.
• The capital Federal rate was updated beginning in FY 1996 by an analytical framework that considers changes in the prices associated with capital-related costs and adjustments to account for forecast error, changes in the case-mix index, allowable changes in intensity, and other factors. As discussed in section III.A.1.a. of the Addendum to this final rule, the update is 1.3 percent for FY 2016.
• In addition to the FY 2016 update factor, the FY 2016 capital Federal rate was calculated based on a GAF/DRG budget neutrality adjustment factor of 0.9973 and an outlier adjustment factor of 0.9365. As discussed in section VI.C. of the preamble of this final rule, we are not making an additional MS-DRG documentation and coding adjustment to the capital IPPS Federal rates for FY 2016.
We used the actuarial model described above to estimate the potential impact of our changes for FY 2016 on total capital payments per case, using a universe of 3,369 hospitals. As described above, the individual hospital payment parameters are taken from the best available data, including the March 2015 update of the FY 2014 MedPAR file, the March 2015 update to the PSF, and the most recent cost report data from the March 2015 update of HCRIS. In Table III, we present a comparison of estimated total payments per case for FY 2015 and estimated total payments per case for FY 2016 based on the FY 2016 payment policies. Column 2 shows estimates of payments per case under our model for FY 2015. Column 3 shows estimates of payments per case under our model for FY 2016. Column 4 shows the total percentage change in payments from FY 2015 to FY 2016. The change represented in Column 4 includes the 1.3 percent update to the capital Federal rate and other changes in the adjustments to the capital Federal rate. The comparisons are provided by: (1) Geographic location; (2) region; and (3) payment classification.
The simulation results show that, on average, capital payments per case in FY 2016 are expected to increase as compared to capital payments per case in FY 2015. This expected increase is due to the approximately 0.85 percent increase in the capital Federal rate for FY 2016 as compared to the FY 2015 capital Federal rate and, to a lesser degree, changes to the MS-DRG reclassifications and recalibrations and changes in outlier payments. (For a discussion of the determination of the capital Federal rate, we refer readers to section III.A. of the Addendum to this final rule.) The increase in capital payments per case due to the effects of changes to the MS-DRG reclassifications and recalibrations is expected to be slightly greater for urban hospitals, as are the increases in capital payments per case due to changes in outlier payments. However, half of the urban areas and most of the rural areas are expected to experience a somewhat smaller projected increase in capital payments per case due to the effects of changes to the GAFs. These regional effects of the changes to the GAFs on capital payments are consistent with the projected changes in payments due to changes in the wage index (and policies affecting the wage index) as shown in Table I in section I.G. of this Appendix.
The net impact of these changes is an estimated 2.3 percent change in capital payments per case from FY 2015 to FY 2016 for all hospitals (as shown below in Table III).
The geographic comparison shows that, on average, hospitals in all classifications (urban and rural) will experience an increase in capital IPPS payments per case in FY 2016 as compared to FY 2015. Capital IPPS payments per case for hospitals in “large urban areas” have an estimated increase of 2.5 percent, while hospitals in rural areas, on average, are expected to experience a 1.4 percent increase in capital payments per case from FY 2015 to FY 2016. Capital IPPS payments per case for “other urban hospitals” are estimated to increase 2.1 percent. The primary factor contributing to the difference in the projected increase in capital IPPS payments per case for urban hospitals as compared to rural hospitals is the changes in the GAFs. Rural hospitals in all but two rural regions are projected to experience a decrease in capital payments due to the effect of changes in the GAFs, while hospitals in only half of the urban regions are projected to experience a decrease in capital payments due to the effect of the changes in the GAFs.
The comparisons by region show that the estimated increases in capital payments per case from FY 2015 to FY 2016 in urban areas range from a 3.1 percent increase for the Pacific urban region to a 1.1 percent increase for the New England urban region. For rural regions, the Pacific rural region is projected to experience the largest increase in capital IPPS payments per case of 3.0 percent; the West South Central rural region is projected to experience the smallest increase in capital IPPS payments per case of 0.1 percent. The change in the GAFs is the main factor for the West South Central rural region experiencing the smallest projected increase in capital IPPS payments among rural regions, and it is also the main contributor for the smallest projected increase in capital IPPS payments for the New England urban region. However, the changes in the GAFs have the opposite effect for both the Pacific urban and Pacific rural regions where they are a primary contributor to the expected larger than average increase in capital IPPS payments per case.
Hospitals of all types of ownership (that is, voluntary hospitals, government hospitals, and proprietary hospitals) are expected to experience an increase in capital payments per case from FY 2015 to FY 2016. The increase in capital payments for voluntary and proprietary hospitals is estimated to be 2.3 percent. For government hospitals, the increase is estimated to be 2.4 percent.
Section 1886(d)(10) of the Act established the MGCRB. Hospitals may apply for reclassification for purposes of the wage index for FY 2016. Reclassification for wage index purposes also affects the GAFs because that factor is constructed from the hospital wage index. To present the effects of the hospitals being reclassified as of the publication of this final rule for FY 2016, we show the average capital payments per case for reclassified hospitals for FY 2016. Urban reclassified hospitals are expected to experience an increase in capital payments of 2.8 percent; urban nonreclassified hospitals are expected to experience an increase in capital payments of 2.2 percent. The estimated percentage increase for rural reclassified hospitals is 1.8 percent, and for rural nonreclassified hospitals, the estimated percentage increase is 1.1 percent.
In section VII. of the preamble of this final rule and section V. of the Addendum to this final rule, we set forth the annual update to the payment rates for the LTCH PPS for FY 2016. In the preamble of this final rule, we specify the statutory authority for the provisions that are presented, identify those policies, and present rationales for our final decisions as well as alternatives that were considered. In this section of Appendix A to this final rule, we discuss the impact of the changes to the payment rate, factors, and other payment rate policies related to the LTCH PPS that are presented in the preamble of this final rule in terms of their estimated fiscal impact on the Medicare budget and on LTCHs.
There are 419 LTCHs included in this impacts analysis, which includes data for 78 nonprofit (voluntary ownership control) LTCHs, 326 proprietary LTCHs, and 15 LTCHs that are government-owned and operated. (We note that, although there are currently approximately 430 LTCHs, for purposes of this impact analysis, we excluded the data of all-inclusive rate providers consistent with the development of the FY 2016 MS-LTC-DRG relative weights (discussed in section VII.C.3.c. of the preamble of this final rule)). In the impact analysis, we used the payment rate, factors, and policies presented in this final rule, including the application of the new site neutral payment rate required by section 1886(m)(6)(A) of the Act (discussed in section VII.B. of the preamble of this final rule), the 1.7 percent annual update to the LTCH PPS standard Federal payment rate in accordance with section 1886(m)(5)(C) of the Act (which is based on the full estimated increase of the LTCH PPS market basket and the reductions required by sections 1886(m)(3) and (m)(4) of the Act), the update to the MS-LTC-DRG classifications and relative weights for the LTCH PPS standard Federal payment rate cases, the update to the wage index values and labor-related share for the LTCH PPS standard Federal payment rate cases, and the best available claims and CCR data to estimate the change in payments for FY 2016.
Under the new dual rate LTCH PPS payment structure, there will be two distinct payment rates for LTCH discharges beginning in FY 2016. Under this statutory change, as discussed in section VII.B. of the preamble of this final rule, we provide payment for LTCH discharges that meet the criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) based on the LTCH PPS standard Federal payment rate. In addition, consistent with the statute, we are establishing that the site neutral payment rate is the lower of the IPPS comparable per diem amount as determined under § 412.529(d)(4), including any applicable outlier payments as specified in § 412.525(a); or 100 percent of the estimated cost of the case as determined under existing § 412.529(d)(2). In addition, under our finalized policies, there are two separate HCO targets—one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases. The statute also establishes a transitional payment method for cases that will be paid the site neutral payment rate for LTCH discharges occurring in cost reporting periods beginning during FY 2016 or FY 2017. As discussed more fully in section VII.B.4.b. of the preamble of this final rule, the transitional payment amount for site neutral payment rate cases is a blended payment rate, which will be calculated as 50 percent of the applicable site neutral payment rate amount for the discharge as determined under new § 412.522(c)(1) and 50 percent of the applicable LTCH PPS standard Federal payment rate for the discharge determined under § 412.523.
Based on the best available data for the 419 LTCHs in our database that were considered in the analyses used for this final rule, we estimate that overall LTCH PPS payments in FY 2016 will decrease by approximately 4.6 percent (or approximately $250 million). This projection takes into account estimated payments for LTCH cases that would have met the new patient-level criteria and been paid the LTCH PPS standard Federal payment rate if that rate had been in effect at the time of the discharge, and estimated payments for LTCH cases that would not have met those new patient-level criteria and been paid under the site neutral payment rate if that rate had been in effect at the time of the discharge described below.
Because the statute specifies that the site neutral payment rate effective date for a given LTCH is determined based on the date on which that LTCH's cost reporting period begins on or after October 1, 2015, our estimate of FY 2016 LTCH PPS payments for site neutral payment rate cases includes an adjustment to account for this rolling effective date. Our approach, applied to the FY 2014 data that were used for the analyses in this final rule, accounts for the fact that LTCHs with cost reporting periods that begin after October 1, 2015, will continue to be paid for all discharges (including those that do not meet the patient-level criteria for exclusion from the site neutral payment rate) at the LTCH PPS standard Federal payment rate until the start of their first cost reporting period beginning after October 1, 2015. Therefore, in order to estimate total LTCH PPS payments for site neutral payment rate cases in FY 2016, we first identified LTCHs with cost reporting periods that would begin in the first quarter of FY 2016 (that is, October through December 2015), and modeled those LTCHs estimated FY 2016 site neutral payment rate payments based on the transitional blended payment rate. We then modeled the estimated first quarter FY 2016 payments to LTCHs with cost reporting periods that would begin after the first quarter of FY 2016 using the LTCH PPS standard Federal payment rate. We then identified the LTCHs with cost reporting periods that would begin in each of the remaining three quarters of FY 2016, and applied an analogous analysis to estimate payments in each respective quarter of FY 2016. (For full details on our method of estimating payments under our finalized policies for FY 2016, we refer readers to the description presented in section V.D.4. of the Addendum to the proposed rule.) We believe that this approach is a reasonable means of taking the rolling effective date into account when estimating FY 2016 payments. Based on the fiscal year start dates recorded in the March update of the Provider Specific File, of the 419 LTCHs in our database of LTCH claims from the March 2015 update of the FY 2014 MedPAR files used for this final rule, the following percentages apply in the approach described above: 11.24 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the first quarter of FY 2016; 29.88 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the second quarter of FY 2016; 10.73 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the third quarter of FY 2016; and 48.15 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the fourth quarter of FY 2016.
Based on the FY 2014 LTCH cases that were used for the analyses in this final rule, approximately 46 percent of LTCH cases would have been classified as site neutral payment rate cases if the site neutral payment rate had been in effect in FY 2014 (that is, 46 percent of such LTCH cases would not have met the patient-level criteria for exclusion from the site neutral payment rate). Our Office of the Actuary estimates that the percent of LTCH PPS cases that will be paid at the site neutral payment rate in FY 2016 will not change significantly from the historical data. Taking into account the transitional blended payment rate and other policies applicable to the site neutral payment rate cases in FY 2016, and our approach to account for the rolling effective date for the new site neutral payment rate, we estimate that aggregate LTCH PPS payments for these site neutral payment rate cases will decrease by approximately 14.8 percent (or approximately $300 million).
Approximately 54 percent of LTCH cases are expected to meet the patient-level criteria for exclusion from the site neutral payment rate in FY 2016, and will be paid based on the LTCH PPS standard Federal payment rate for the full year. We estimate that total LTCH PPS payments for these LTCH PPS standard Federal payment rate cases in FY 2016 will increase approximately 1.5 percent (or approximately $50 million). This estimated increase in LTCH PPS payments for LTCH PPS standard Federal payment rate cases in FY 2016 is primarily a result of the 1.7 percent annual update to the LTCH PPS standard Federal payment rate for FY 2016 (discussed in section V.A. of the Addendum to this final rule) and an estimated decrease in HCO payments for these cases.
Based on the 419 LTCHs that were represented in the FY 2014 LTCH cases that were used for the analyses in this final rule, we estimate that aggregate FY 2016 LTCH PPS payments will be approximately $5.150 billion, as compared to estimated aggregate FY 2015 LTCH PPS payments of approximately $5.400 billion, resulting in an estimated overall decrease in LTCH PPS payments of approximately $250 million. Because the combined distributional effects and estimated payment changes exceed $100
The LTCH PPS standard Federal payment rate for FY 2015 is $41,043.71. For FY 2016, we are establishing a LTCH PPS standard Federal payment rate of $41,762.85, which reflects the 1.7 percent annual update to the LTCH PPS standard Federal payment rate and the area wage budget neutrality factor of 1.000513 to ensure that the changes in the wage indexes and labor-related share do not influence aggregate payments. For LTCHs that fail to submit data for the LTCH QRP, in accordance with section 1886(m)(5)(C) of the Act, we are establishing an LTCH PPS standard Federal payment rate of $40,941.55. This reduced LTCH PPS standard Federal payment rate reflects the updates described above as well as the required 2.0 percentage point reduction to the annual update for failure to submit data to the LTCH QRP. We note that the factors described above to determine the FY 2016 LTCH PPS standard Federal payment rate are applied to the FY 2015 LTCH PPS standard Federal rate set forth under § 412.523(c)(3)(xi) (that is, $41,762.85).
Table IV (column 6) shows that the estimated change attributable solely to the annual update to the LTCH PPS standard Federal payment rate is projected to result in an increase of 1.4 percent in payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016, on average, for all LTCHs. In addition to the annual update to the LTCH PPS standard Federal payment rate for FY 2016, this estimated increase in aggregate LTCH PPS payments to LTCH PPS standard Federal payment rate cases of 1.4 percent shown in column 6 of Table IV also includes estimated payments for SSO cases that will be paid using special methodologies that are not affected by the annual update to the LTCH PPS standard Federal payment rate, as well as the penalty that is applied to the annual update of LTCHs that do not submit the required LTCH QRP data. Therefore, for all hospital categories, the projected increase in payments based on the LTCH PPS standard Federal payment rate to LTCH PPS standard Federal payment rate cases is somewhat less than the 1.7 percent annual update for FY 2016.
As discussed in section V.B. of the Addendum to this final rule, we are updating the wage index values for FY 2016 based on the most recent available data, and we are continuing to use labor market areas based on the OMB CBSA delineations. In addition, we are slightly lowering the labor-related share from 62.306 percent to 62.0 percent under the LTCH PPS for FY 2016, based on the most recent available data on the relative importance of the labor-related share of operating and capital costs based on the FY 2009-based LTCH-specific market basket. We also are applying an area wage level budget neutrality factor of 1.000513 to ensure that the changes to the wage data and labor-related share do not result in a change in estimated aggregate LTCH PPS payments to LTCH PPS standard Federal payment rate cases, which increases the LTCH PPS standard Federal payment rate by approximately 0.095 percent.
We currently estimate total HCO payments for LTCH PPS standard Federal payment rate cases are projected to decrease from FY 2015 to FY 2016. Using the FY 2014 LTCH cases that were used for the analyses in this final rule, we estimate that the FY 2015 HCO threshold of $14,972 (as established in the FY 2015 IPPS/LTCH PPS final rule) will result in estimated HCO payments for LTCH PPS standard Federal payment rate cases in FY 2015 that are above the estimated 8 percent target. Specifically, we currently estimate that HCO payments for LTCH PPS standard Federal payment rate cases will be approximately 8.1 percent of the estimated total LTCH PPS standard Federal payment rate payments in FY 2015. Combined with our estimate that FY 2016 HCO payments for LTCH PPS standard Federal payment rate cases would be 8.0 percent of estimated total LTCH PPS standard Federal payment rate payments in FY 2016, this results in the estimated decrease of approximately 0.1 percent between FY 2015 and FY 2016.
In calculating these estimated HCO payments we increased estimated costs by our actuaries' projected market basket percentage increase factor. This increase in estimated costs also results in a projected increase in SSO payments in FY 2016. We estimate that these increased SSO payments in FY 2016 will increase total payments for LTCH PPS standard Federal payment rate cases by 0.2 percent. (Payments for SSO cases represent approximately 13 percent of the estimated total payments for LTCH PPS standard Federal payment rate cases.)
Table IV below shows the estimated impact of the payment rate and policy changes on LTCH PPS payments for LTCH PPS standard Federal payment rate cases for FY 2016 by comparing estimated FY 2015 LTCH PPS payments to estimated FY 2016 LTCH PPS payments. (As noted earlier, our analysis does not reflect changes in LTCH admissions or case-mix intensity.) The projected increase in payments from FY 2015 to FY 2016 for LTCH PPS standard Federal payment rate cases of 1.5 percent is attributable to the impacts of the change to the LTCH PPS standard Federal payment rate (1.4 percent in Column 6) and the effect of the estimated decrease in HCO payments for LTCH PPS standard Federal payment cases (−0.1 percent), and the estimated increase in payments for SSO cases (0.2 percent).
As we discuss in detail throughout this final rule, based on the most recent available data, we believe that the provisions of this final rule relating to the LTCH PPS, which are projected to result in an overall decrease in estimated aggregate LTCH PPS payments, and the resulting LTCH PPS payment amounts will result in appropriate Medicare payments that are consistent with the statute.
For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of an urban area and has fewer than 100 beds. As shown in Table IV, we are projecting a 1.5 percent increase in estimated payments for LTCH PPS standard Federal payment rate cases. This estimated impact is based on the FY 2014 data for the 21 rural LTCHs (out of 419 LTCHs) that were used for the analyses in this final rule. We note that these impacts do not include LTCH PPS site neutral payment rate cases for the reasons discussed in section I.J.3. of this Appendix.
Section 123(a)(1) of the BBRA requires that the PPS developed for LTCHs “maintain budget neutrality.” We believe that the statute's mandate for budget neutrality applies only to the first year of the implementation of the LTCH PPS (that is, FY 2003). Therefore, in calculating the FY 2003 standard Federal rate under § 412.523(d)(2), we set total estimated payments for FY 2003 under the LTCH PPS so that estimated aggregate payments under the LTCH PPS were estimated to equal the amount that would have been paid if the LTCH PPS had not been implemented.
Section 1886(m)(6)(A) of the Act establishes a new dual rate LTCH PPS payment structure with two distinct payment rates for LTCH discharges beginning in FY 2016. As discussed in section VII.B. of the preamble of this final rule, under this statutory change, LTCH discharges that meet the patient-level criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases) will be paid based on the LTCH PPS standard Federal payment rate. LTCH discharges that will be paid at the site neutral payment rate will generally be paid the lower of the IPPS comparable per diem amount, including any applicable HCO payments or 100 percent of the estimated cost of the case. The statute also establishes a transitional payment method for cases that will be paid at the site neutral payment rate for LTCH discharges occurring in cost reporting periods beginning during FY 2016 or FY 2017, under which the site neutral payment rate cases will be paid a blended payment rate calculated as 50 percent of the applicable site neutral payment rate amount for the discharge and 50 percent of the applicable LTCH PPS standard Federal payment rate for the discharge. (For additional details on the application of the site neutral payment rate beginning in FY 2016, we refer readers to section VII.B. of the preamble of this final rule.)
As discussed above in section I.J.1. of this Appendix, we project a decrease in aggregate LTCH PPS payments in FY 2016 of approximately $250 million. This estimated decrease in payments reflects the projected increase in payments to LTCH PPS standard Federal payment rate cases of approximately $50 million and the projected decrease in payments to site neutral payment rate cases of approximately $300 million under the new dual rate LTCH PPS payment rate structure required by the statute beginning in FY 2016.
As discussed in section VII.B.7.b. of the preamble of this final rule, our actuaries
Under the new dual rate LTCH PPS payment structure, the statute establishes two distinct payment rates for LTCH discharges occurring in cost reporting periods beginning on or after October 1, 2015. Under that statute, any discharges that occur on or after October 1, 2015, but prior to the start of the LTCH's FY 2016 cost reporting period will be paid at the LTCH PPS standard Federal payment rate. On or after the start of an LTCH's FY 2016 cost reporting period, discharges are paid based on the nature of the case. As described previously, LTCH PPS standard Federal payment rate cases are defined as LTCH discharges that will meet the patient-level criteria to be excluded from the typically lower site neutral payment rate, and site neutral payment rate cases are defined as LTCH discharges that will not meet the patient-level criteria and will generally be paid the generally lower site neutral payment rate. For discharges occurring in cost reporting periods beginning in FY 2016 or 2017, however, the statute specifies that site neutral payment rate cases will be paid based on a transitional payment method that will be calculated as 50 percent of the applicable site neutral payment rate amount and 50 percent of the applicable LTCH PPS standard Federal payment rate.
The basic methodology for determining a per discharge payment for LTCH PPS standard Federal payment rate cases is set forth under § 412.515 through § 412.536. In addition to adjusting the LTCH PPS standard Federal payment rate by the MS-LTC-DRG relative weight, we make adjustments to account for area wage levels and SSOs. LTCHs located in Alaska and Hawaii also have their payments adjusted by a COLA. As explained previously, under our application of the new dual rate LTCH PPS payment structure required under section 1886(m)(6) of the Act, the LTCH PPS standard Federal payment rate would generally only be used to determine payments for LTCH PPS standard Federal payment rate cases (that is, those LTCH PPS cases that meet the statutory criteria to be excluded from the site neutral payment rate). Under the new statutory changes to the LTCH PPS, LTCH discharges that will not meet the patient-level criteria for exclusion will be paid the site neutral payment rate, which we are calculating as the lower of the IPPS comparable per diem amount as determined under § 412.529(d)(4), including any applicable outlier payments, or 100 percent of the estimated cost of the case as determined under existing § 412.529(d)(2). In addition, when certain thresholds are met, LTCHs also will be able to receive HCO payments for both LTCH PPS standard Federal payment rate cases and site neutral payment rate cases that are paid at the IPPS comparable per diem amount.
To understand the impact of the changes to the LTCH PPS payments for LTCH PPS standard Federal payment rate cases presented in this final rule on different categories of LTCHs for FY 2016, it is necessary to estimate payments per discharge for FY 2015 using the rates, factors, and the policies established in the FY 2015 IPPS/LTCH PPS final rule and estimate payments per discharge for FY 2016 using the rates, factors, and the policies finalized in this FY 2016 IPPS/LTCH PPS final rule (as discussed in section VII. of the preamble of this final rule and section V. of the Addendum to this final rule). As discussed elsewhere in this rule, these estimates are based on the best available LTCH claims data and other factors, such as the application of inflation factors to estimate costs for SSO and HCO cases in each year. The resulting analyses can then be used to compare how our finalized policies applicable to LTCH PPS standard Federal payment rate cases affect different groups of LTCHs.
For the following analysis, we group hospitals based on characteristics provided in the OSCAR data, FY 2012 through FY 2013 cost report data in HCRIS, and PSF data. Hospital groups included the following:
• Location: Large urban/other urban/rural.
• Participation date.
• Ownership control.
• Census region.
• Bed size.
For purposes of this impact analysis, to estimate the per discharge payment effects of our finalized policies on payments for LTCH PPS standard Federal payment rate cases, we simulated FYs 2015 and 2016 payments on a case-by-case basis using historical LTCH claims from the FY 2014 MedPAR files that would have met the criteria to be paid at the LTCH PPS standard Federal payment rate if the statutory patient-level criteria had been in effect at the time of discharge for those cases. For modeling FY 2015 LTCH PPS payments, we used the FY 2015 standard Federal rate of $41,043.71, or $40,240.51 for LTCHs that failed to submit quality data as required under the requirements of the LTCH QRP, which reflects the 2.0 percentage points reduction required by section 1886(m)(5)(C) of the Act. Similarly, for modeling FY 2016 LTCH PPS standard Federal payment rate payments, we used the FY 2016 standard Federal payment rate of $41,762.85, or $40,941.55 for LTCHs that failed to submit quality data as required under the requirements of the LTCH QRP, again, to reflect the 2.0 percentage points reduction required by section 1886(m)(5)(C) of the Act. In each case, we applied the applicable adjustments for area wage levels and the COLA for LTCHs located in Alaska and Hawaii. Specifically, for modeling FY 2015 LTCH PPS payments, we used the current FY 2015 labor-related share (62.306 percent); the wage index values established in the Tables 12A through 12D listed in the Addendum to the FY 2015 IPPS/LTCH PPS final rule (which are available via the Internet on the CMS Web site), including the transitional blended wage index for the implementation of the CBSA delineations in FY 2015; the FY 2015 fixed-loss amount for LTCH PPS standard Federal payment rate cases of $14,972 (as discussed in section V.D. of the Addendum to that final rule) and the FY 2015 COLA factors (shown in the table in section V.C. of the Addendum to that final rule) to adjust the FY 2015 nonlabor-related share (37.694 percent) for LTCHs located in Alaska and Hawaii. Similarly, for modeling FY 2016 LTCH PPS payments, we used the FY 2016 LTCH PPS labor-related share (62.0 percent), the FY 2016 wage index values from Tables 12A and 12B listed in section VI. of the Addendum to this final rule (which are also available via the Internet on the CMS Web site), the FY 2016 fixed-loss amount for LTCH PPS standard Federal payment rate cases of $16,423 (as discussed in section V.D.3. of the Addendum to this final rule), and the FY 2016 COLA factors (shown in the table in section V.C. of the Addendum to this final rule) to adjust the FY 2016 nonlabor-related share (38.0 percent) for LTCHs located in Alaska and Hawaii.
As discussed above, our impact analysis reflects an estimated change in payments for SSO cases, as well as an estimated decrease in HCO payments for LTCH PPS standard Federal payment rate cases (as described previously in section I.J.1. of this Appendix). In modeling payments for SSO and HCO cases for LTCH PPS standard Federal payment rate cases, we applied an inflation factor of 4.6 percent (determined by the Office of the Actuary) to update the 2014 costs of each case.
The impacts presented below reflect the estimated “losses” or “gains” among the various classifications of LTCHs from FY 2015 to FY 2016 based on the payment rates and policy changes applicable to LTCH PPS standard Federal payment rate cases presented in this final rule. Table IV illustrates the estimated aggregate impact of the change in LTCH PPS payments for LTCH PPS standard Federal payment rate cases among various classifications of LTCHs. (As discussed previously, these impacts do not include LTCH PPS site neutral payment rate cases.)
• The first column, LTCH Classification, identifies the type of LTCH.
• The second column lists the number of LTCHs of each classification type.
• The third column identifies the number of LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria.
• The fourth column shows the estimated FY 2015 payment per discharge for LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria (as described above).
• The fifth column shows the estimated FY 2016 payment per discharge for LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria (as described above).
• The sixth column shows the percentage change in estimated payments per discharge for LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria from FY 2015 to FY 2016 due to the annual update to the standard Federal rate (as discussed in section V.A.2. of the Addendum to this final rule).
• The seventh column shows the percentage change in estimated payments per discharge for LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria from FY 2015 to FY 2016 for changes to the area wage level adjustment (that is, the wage indexes and the labor-related share), including the application of an area wage level budget neutrality factor (as discussed in section V.B. of the Addendum to this final rule).
• The eighth column shows the percentage change in estimated payments per discharge for LTCH cases expected to meet the LTCH PPS standard Federal payment rate criteria from FY 2015 (Column 4) to FY 2016 (Column 5) for all changes (and includes the effect of estimated changes to HCO and SSO payments).
Based on the FY 2014 LTCH cases (from 419 LTCHs) that were used for the analyses in this final rule, we have prepared the following summary of the impact (as shown above in Table IV) of the LTCH PPS payment rate and finalized policy changes for LTCH PPS standard Federal payment rate cases presented in this final rule. The impact analysis in Table IV shows that estimated payments per discharge for LTCH PPS standard Federal payment rate cases are expected to increase 1.5 percent, on average, for all LTCHs from FY 2015 to FY 2016 as a result of the payment rate and policy changes applicable to LTCH PPS standard Federal payment rate cases presented in this final rule. This estimated 1.5 percent increase in LTCH PPS payments per discharge to LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016 for all LTCHs (as shown in Table IV) was determined by comparing estimated FY 2016 LTCH PPS payments (using the payment rates and factors discussed in this final rule) to estimated FY 2015 LTCH PPS payments for LTCH discharges which would be LTCH PPS standard Federal payment rate cases if the new dual rate LTCH PPS payment structure had been in effect at the time of the discharge (as described in section I.J.3. of this Appendix).
As stated previously, we are updating the LTCH PPS standard Federal payment rate for FY 2016 by 1.7 percent based on the latest estimate of the LTCH PPS market basket increase (2.4 percent), the reduction of 0.5 percentage point for the MFP adjustment, and the 0.2 percentage point reduction consistent with sections 1886(m)(3) and (m)(4) of the Act. For LTCHs that fail to submit quality data under the requirements of the LTCH QRP, as required by section 1886(m)(5)(C) of the Act, a 2.0 percentage point reduction would be applied to the annual update to the LTCH PPS standard Federal rate. As explained earlier in this section, for most categories of LTCHs (as shown in Table IV, Column 6), the payment increase due to the 1.7 percent annual update to the LTCH PPS standard Federal payment rate is projected to result in approximately a 1.4 percent increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases for all LTCHs from FY 2015 to FY 2016. This is because our estimate of the changes in payments due to the update to the LTCH PPS standard Federal payment rate also reflects estimated payments for SSO cases that will be paid using special methodologies that are not affected by the update to the LTCH PPS standard Federal payment rate. Consequently, we estimate that payments to LTCH PPS standard Federal payment rate cases may increase by less than 1.7 percent for certain hospital categories due to the annual update to the LTCH PPS standard Federal payment rate for FY 2016.
Based on the most recent available data, the vast majority of LTCHs are located in urban areas. Only approximately 5 percent of the LTCHs are identified as being located in a rural area, and approximately 3 percent of all LTCH PPS standard Federal payment rate cases are expected to be treated in these rural hospitals. The impact analysis presented in Table IV shows that the overall average percent increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016 for all hospitals is 1.5 percent. For rural LTCHs, the overall percent change for LTCH PPS standard Federal payment rate cases is estimated to be a 0.9 percent increase, while for urban LTCHs, we estimate the increase will be 1.5 percent. Large urban LTCHs are projected to experience an increase of 1.4 percent in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016, and other urban LTCHs are projected to experience an increase of 1.6 percent in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016, as shown in Table IV.
LTCHs are grouped by participation date into four categories: (1) Before October 1983; (2) between October 1983 and September 1993; (3) between October 1993 and September 2002; and (4) October 2002 and after. Based on the most recent available data, the categories of LTCHs with the largest expected percentage of LTCH PPS standard Federal payment rate cases (approximately 44 percent) are in LTCHs that began participating in the Medicare program between October 1993 and September 2002, and they are projected to experience a 1.6 percent increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016, as shown in Table IV.
Approximately 3 percent of LTCHs began participating in the Medicare program before October 1983, and these LTCHs are projected to experience a higher than average percent increase (2.6 percent) in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016, as shown in Table IV, which is primarily due to a projected larger than average increase in payments due to the changes to the area wage adjustment. Approximately 10 percent of LTCHs began participating in the Medicare program between October 1983 and September 1993. These LTCHs are projected to experience a 1.3 percent increase in estimated payments for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016. LTCHs that began participating in the Medicare program after October 1, 2002, which treat approximately 40 percent of all LTCH PPS standard Federal payment rate cases, are projected to experience a 1.3 percent increase in estimated payments from FY 2015 to FY 2016.
LTCHs are grouped into three categories based on ownership control type: Voluntary, proprietary, and government. Based on the most recent available data, approximately 18 percent of LTCHs are identified as voluntary (Table IV). The majority (nearly 78 percent) of LTCHs are identified as proprietary while government-owned and operated LTCHs represent approximately 4 percent of LTCHs. Based on ownership type, voluntary LTCHs are expected to experience an average increase in payments to LTCH PPS standard Federal payment rate cases of 1.6 percent; proprietary LTCHs are expected to experience an increase of 1.5 percent in payments to LTCH PPS standard Federal payment rate cases, while government-owned and operating LTCHs are expected to experience an increase in payments to LTCH PPS standard Federal payment rate cases of 1.8 percent from FY 2015 to FY 2016.
Estimated payments per discharge for LTCH PPS standard Federal payment rate cases for FY 2016 are projected to increase for LTCHs located in all regions in comparison to FY 2015. Of the 9 census regions, we project that the increase in estimated payments per discharge to LTCH PPS standard Federal payment rate cases would have the largest positive impact on LTCHs in the New England region (2.6 percent as shown in Table IV), which is largely attributable to the changes in the area wage level adjustment.
In contrast, LTCHs located in the Middle Atlantic region are projected to experience the smallest increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016. The lower than national average estimated increase in payments of 0.8 percent is primarily due to estimated decreases in payments associated with the changes to the area wage level adjustment.
LTCHs are grouped into six categories based on bed size: 0-24 beds; 25-49 beds; 50-74 beds; 75-124 beds; 125-199 beds; and greater than 200 beds. All bed size categories are projected to receive an increase in estimated payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016. We project that large LTCHs (200+ beds) will experience a 2.2 percent increase in payments for LTCH PPS standard Federal payment rate cases, which is higher than the national average mostly due to a larger than average increase from the area wage level adjustment. Similarly, we project that both small LTCHs (0-24 beds) and relatively large LTCHs (125-199 beds) will experience a 2.1 percent increase and 1.8 percent increase, respectively, in payments for LTCH PPS standard Federal payment rate cases, which is also higher than the national average mostly due to increases in the area wage level adjustment. LTCHs with 25 to 49 beds and 75 to 124 beds are expected to experience a nearly average increase in payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016 (1.4 percent and 1.5 percent, respectively), while LTCHs with between 50 and 74 beds are expected to experience a smaller than average increase in payments per discharge for LTCH PPS standard Federal payment rate cases from FY 2015 to FY 2016 (1.3 percent).
As stated previously, we project that the provisions of this final rule will result in an increase in estimated aggregate LTCH PPS payments to LTCH PPS standard Federal payment rate cases in FY 2016 relative to FY
Under the LTCH PPS, hospitals receive payment based on the average resources consumed by patients for each diagnosis. We do not expect any changes in the quality of care or access to services for Medicare beneficiaries as a result of this final rule, but we continue to expect that paying prospectively for LTCH services will enhance the efficiency of the Medicare program.
In section VIII.A. of the preamble of this final rule, we discuss our requirements for hospitals to report quality data under the Hospital IQR Program in order to receive the full annual percentage increase for the FY 2018 payment determination.
In this final rule, we are finalizing our proposals to remove nine measures from the Hospital IQR Program for the FY 2018 payment determination and subsequent years:
• STK-01 Venous Thromboembolism (VTE) Prophylaxis (NQF #0434);
• STK-06: Discharged on Statin Medication* (NQF #0439);
• STK-08: Stroke Education* (NQF endorsement removed);
• VTE-1: Venous Thromboembolism Prophylaxis* (NQF #0371);
• VTE-2: Intensive Care Unit Venous Thromboembolism Prophylaxis* (NQF #0372);
• VTE-3: Venous Thromboembolism Patients with Anticoagulation Overlap Therapy* (NQF #0373);
• AMI-7a Fibrinolytic Therapy Received Within 30 Minutes of Hospital Arrival* (NQF #0164);
• IMM-1 Pneumococcal Immunization (NQF #1653); and
• SCIP-Inf-4 Cardiac Surgery Patients with Controlled Postoperative Blood Glucose (NQF #0300).
(An asterisk (*) indicates that the measure is finalized for retention as an electronic clinical quality measure for the FY 2018 payment determination and subsequent years in section VIII.A.8. of the preamble of this final rule.)
The anticipated effect of removing these measures will be a reduction in the burden associated with the collection of chart-abstracted data. Due to the burden associated with the collection of chart-abstracted data, we estimate that the removal of AMI-7a will result in a burden reduction of approximately 219,000 hours across all hospitals. We estimate that the removal of the 6 VTE and STK chart-abstracted measures will result in a burden reduction of approximately 522,000 hours across all hospitals. The remaining two measures we are finalizing for removal have been previously suspended from the Hospital IQR Program. Therefore, their removal will not affect burden to hospitals. In total, we estimate that the removal of 9 measures will result in a total burden reduction of approximately 741,000 hours for the FY 2018 payment determination across all hospitals.
We are retaining six of the chart-abstracted measures finalized for removal as electronic clinical quality measures. We believe retaining some measures as electronic clinical quality measures will not affect the overall burden, as these measures were available for electronic reporting under previous requirements.
In this final rule, we are finalizing refinements, modified from what was proposed, to expand the measure cohorts for: (1) The Hospital 30-Day, All-Cause, Risk-Standardized Mortality Rate (RSMR) Following Pneumonia Hospitalization measure (NQF #0468); and (2) the Hospital 30-Day, All-Cause, Risk-Standardized Readmission Rate (RSRR) Following Pneumonia Hospitalization measure (NQF #0506). Expanding the measure cohorts to include a broader population of patients adds a large number of patients, as well as additional hospitals, to these measures. However, this expansion will not affect the burden on hospitals or hospital performance on the Hospital IQR Program because these measures are claims-based and, therefore, require no additional effort on hospitals' part to submit the required data.
We also are finalizing our proposal to add seven of the eight measures we proposed to the Hospital IQR Program measure set. Four of these seven measures are added beginning with the FY 2018 payment determination and for subsequent years; three of these measures, addressing clinical episode-based payments, are added beginning with the FY 2019 payment determination and for subsequent years. Six of these measures are claims-based, and one measure is structural. The seven new measures are:
• Hospital Survey on Patient Safety Culture (structural);
• Kidney/UTI Clinical Episode-Based Payment (claims-based);
• Cellulitis Clinical Episode-Based Payment (claims-based);
• Gastrointestinal Hemorrhage Clinical Episode-Based Payment (claims-based);
• Hospital-Level, Risk-Standardized Payment Associated with an Episode-of-Care for Primary Elective THA/TKA (claims-based);
• Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction (claims-based); and
• Excess Days in Acute Care after Hospitalization for Heart Failure (claims-based).
We are not finalizing our proposal to add the Lumbar Spine Fusion/Refusion Clinical Episode-Based Payment measure (claims-based).
We believe adopting the six claims-based measures above will have no effect on hospital burden because they do not require additional effort on the part of hospitals. We further believe adopting the Hospital Survey on Patient Safety Culture measure will have a minimal effect on hospital burden, as it involves filling out a one-time form to report on this measure for a given performance period. In total we estimate a burden of 15 minutes per hospital to complete other forms such as the ECE and Measure Exception form, and to report structural measures. The estimate of 15 minutes includes all previously finalized and newly required structural measures.
For the FY 2018 payment determination and subsequent years, we also are finalizing a modification of our proposal to require hospitals to report 16 electronic clinical quality measures to instead require hospitals to report a minimum of 4 electronic clinical quality measures. Under this modified policy, no NQS domain distribution will be required. We also are requiring that hospitals submit one quarter of data (either Q3 or Q4) for CY 2016/FY 2018 payment determination and subsequent years by February 28, 2017. We believe the finalized requirement will increase the burden associated with electronic clinical quality measure reporting because electronic reporting was previously voluntary. The total burden increase is estimated to be approximately 40 minutes per hospital to report 4 electronic clinical quality measures for one quarter. For hospitals choosing to submit more electronic clinical quality measures, the total burden increase for hospitals to report 16 electronic clinical quality measures would be approximately 2 hours and 40 minutes per hospital for one quarter.
We are finalizing our proposal to change the requirements for population and sampling such that hospitals will be required to submit population and sample size data only for those measures that a hospital submits as chart-abstracted measures under the Hospital IQR Program. We believe this finalized proposal will result in a minimal decrease in burden as hospitals will not have to report population and sample size if they electronically report any of the measures that can be reported either as an electronic clinical quality measure or via chart-abstraction.
We also are finalizing our proposal to modify the existing processes for validation of chart-abstracted Hospital IQR Program data to remove one stratum. This modification will not affect hospital burden. For validation of chart-abstracted data for the FY 2018 payment determination and subsequent years, we require hospitals to provide 72 charts per hospital per year (with an average page length of 1,500), including 40 charts for HAI validation and 32 charts for clinical process of care validation, for a total of 108,000 pages per hospital per year. We reimburse hospitals at 12 cents per photocopied page (79 FR 50346) for a total per hospital cost of $12,960. For hospitals providing charts digitally via a re-writable disc, such as encrypted CD-ROMs, DVDs, or flash drives, we will reimburse hospitals at a rate of 40 cents per disc. We do not believe
In addition to the activities described above, participation in the Hospital IQR Program requires hospitals to participate in a number of other activities, including: (1) Reviewing reports for claims-based measure sets; (2) completing HAI validation templates for CLABSI and CAUTI; (3) completing HAI validation templates for MRSA bacteremia and CDI; and (4) completing other forms and structural measures. The cumulative effects of these activities on facility burden are expected to be substantially similar to that stated for FY 2017. Considering the proposals finalized in this final rule, as well as our updated estimates for the number of records reported and the time associated with data reporting activities, we estimate a total burden of 2,289 hours per hospital and 7.6 million hours across approximately 3,300 hospitals participating in the Hospital IQR Program for the FY 2018 payment determination.
In general, however, we anticipate that, because of the new requirements we are finalizing for reporting for the FY 2018 payment determination, the number of hospitals not receiving the full annual percentage increase may be higher than average. Information is not available to determine the precise number of hospitals that will not meet the requirements to receive the full annual percentage increase for the FY 2018 payment determination. Historically, 100 hospitals, on average, of those participating in the Hospital IQR Program do not receive the full annual percentage increase in any fiscal year. The highest number of hospitals failing to meet program requirements was approximately 200 after the introduction of new NHSN reporting requirements. If the number of hospitals failing does increase because of the new requirements, we anticipate that, over the long run, this number will decline as hospitals gain more experience with these requirements.
Finally, under OMB Control Number 0938-1022, we estimated that the total burden for the FY 2017 payment determinations was 1,781 hours per hospital and 5.9 million hours across approximately 3,300 hospitals participating in the Hospital IQR Program. We estimate here that the total burden for the FY 2018 payment determination will increase to 2,289 hours per hospital and 7.6 million hours across approximately 3,300 hospitals due to the proposals discussed above and updates to the historical data used to determine the number of cases reported and time for reporting per measure set. The table below describes the hospital burden associated with the Hospital IQR Program requirements.
In implementing the Hospital IQR Program and other quality reporting programs, we have focused on measures that have high impact and support CMS and HHS priorities for improved quality and efficiency of care for Medicare beneficiaries.
In section VIII.B. of the preamble of this final rule, we discuss our policies for the quality data reporting program for PPS-exempt cancer hospitals (PCHs), which we refer to as the PPS-Exempt Cancer Hospital Quality Reporting (PCHQR) Program. The PCHQR Program is authorized under section 1866(k) of the Act, which was added by section 3005 of the Affordable Care Act.
In section VIII.B.3. of the preamble of this final rule, we are finalizing our proposal that PCHs must submit data on three additional measures beginning with the FY 2018 program: (1) The CDC NHSN Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant
The impact of the new requirements for the PCHQR Program is expected to be minimal overall because all 11 PCHs are already submitting quality measure data to the CDC NHSN and are familiar with this reporting process. Beginning with Q1 2013 events, PCHs have been submitting Central Line-associated Bloodstream Infection (CLABSI) and Catheter-Associated Urinary Tract Infection (CAUTI) data to the CDC NHSN (77 FR 53566). Similarly, beginning with Q1 2014 events, PCHs have been submitting Surgical Site Infections (SSI) data to the CDC NHSN (78 FR 50849). As a result, PCHs are familiar with the CDC NHSN IT infrastructure and programmatic operations. In addition to fostering transparency and facilitating public reporting, we believe our requirements uphold our goals in improving quality of care and achieving better health outcomes, which outweigh burden.
One expected effect of the PCHQR Program is to keep the public informed of the quality of care provided by PCHs. We will publicly display quality measure data collected under the PCHQR Program as required under the Act. These data will be displayed on the
In section VIII.C.1. of the preamble of this final rule, we discuss the implementation of section 1886(m)(5) of the Act, which was added by section 3004(a) of the Affordable Care Act. Section 1886(m)(5) of the Act provides that, for rate year 2014 and each subsequent year, any LTCH that does not submit data to the Secretary in accordance with section 1886(m)(5)(C) and (F) of the Act shall receive a two (2) percentage point reduction to the annual update to the standard Federal rate for discharges for the hospital during the applicable fiscal year.
In the FY 2015 IPPS/LTCH PPS final rule (76 FR 50443 through 50445), we estimated
We believe that a majority of LTCHs will continue to collect and submit data for the FY 2017 payment determination and subsequent years because they will continue to view the LTCH QRP as an important step in improving the quality of care patients receive in the LTCHs. We believe that the burden associated with the LTCH QRP is the time and effort associated with data collection.
In this FY 2016 IPPS/LTCH PPS final rule, we are retaining 12 previously finalized measures, 2 of which we are adopting in order to establish their use as cross-setting measures that satisfy the required addition of quality measures under the domains of skin integrity and incidence of major falls, as mandated by the section 1899B of the Act: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), and an Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). We are adopting a third previously finalized measure, All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512), in order to establish the newly NQF-endorsed status of this measure. Finally, we are finalizing an Application of Percent of LTCH Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015), which satisfies the addition of a quality measure under the third initially required domain of functional status, cognitive function, and changes in function and cognitive function, as mandated by section 1899B of the Act.
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445) we discussed burden estimates that were inclusive of the 12 previously finalized measures we are retaining in this final rule. We previously estimated the total cost for all 12 quality measures to be $17,410 per LTCH annually, or $7,695,423 for all LTCHs annually (79 FR 50443 through 50445); or $2,992,384 for all quality measures reported via the CDC's NHSN; and $4,703,039 for all quality measures reported to CMS using the LTCH CARE Data Set version 2.01. For a list of the 12 previously finalized measures included in the above burden estimate, we refer readers to the FY 2015 IPPS/LTCH PPS final rule.
The burden calculation discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445) accounts for any burden associated with newly finalized measures in this FY 2016 IPPS/LTCH PPS final rule. The measure, the Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) (NQF #0678), is currently being reported by LTCHs using version 2.01 of the LTCH CARE Data Set, which has burden approval under OMB control number 0938-1163. The burden associated with the application of the measure, the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674), is discussed at length in the FY 2015 IPPS/LTCH PPS final rule, and is included in the above total annual burden figures in that rule, as well as listed above.
The measure, All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512), is calculated based on CMS FFS claims data, and therefore does not have any associated data reporting burden for LTCH providers.
The new quality measure we are finalizing for inclusion in the LTCH QRP, the cross-setting functional status process measure: an Application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function, is not specifically discussed in the FY 2015 IPPS/LTCH PPS final rule. However, the data elements used to report this quality measure to CMS are included in that discussion and burden estimate in that final rule, because we are finalizing our proposal to use a subset of the same data elements that are used to report the previously finalized measure, the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function, which is included in that burden estimate. Therefore, the addition of this quality measure to the LTCH QRP does not increase burden on LTCHs.
Currently, LTCHs use two separate data collection mechanisms to report quality data to CMS: The CDC's NHSN, which is used to report all Healthcare Associated Infection (HAI) and vaccination data (used to calculate CAUTI, CLABSI, MRSA, CDI, VAE, and Healthcare Personnel Influenza vaccination measures); and the Quality Improvement and Evaluation System Assessment Submission and Processing (QIES ASAP) system, which is used by LTCHs to report quality data via the LTCH CARE Data Set.
The data collection burden associated with the reporting of the quality measures (HAI and vaccination) reported via the CDC's NHSN is discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445). However, we note that these measures are stewarded by the CDC, and the reporting burden is approved under OMB control number 0920-0666.
The remaining quality measures are reported to CMS by LTCHs using the LTCH CARE Data Set. Currently, LTCHs are using version 2.01 of the LTCH CARE Data Set (approved under OMB control number 0938-1163) which includes data elements related to two quality measures: Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (NQF #0678) and Percent of Residents or Patients Who Were Assessed and Appropriately Given the Seasonal Influenza Vaccine (NQF #0680).
We have developed a subsequent iteration of the LTCH CARE Data Set (version 3.00), which will also include data elements for the three quality measures we previously finalized in the FY 2015 IPPS/LTCH PPS final rule: Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674); Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015); and Functional Status Outcome Measure: Change in Mobility Among LTCH Patients Requiring Ventilator Support (NQF #2632; endorsed on 07/23/2015). We refer readers to section X.B.9. of the preamble of this final rule for a discussion of the additional data elements in version 3.00 of the LTCH CARE Data Set.
Version 3.00 of the LTCH CARE Data Set will also be used to report the newly finalized cross-setting functional status process measure, an Application of the Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015). However, the data items that will inform this measure are a subset of the data elements currently used to report the LTCH-specific measure, Percent of LTCH Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; endorsed on 07/23/2015). Therefore, this measure will not add any data collection burden beyond that discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445), in which NQF #2631 was finalized.
We discussed the LTCH burden related to the submission using the LTCH CARE Data Set version 3.00 in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445), and this burden is included in the total annual burden noted in that final rule, which is $17,410 per LTCH annually, or $7,695,423 for all LTCHs annually. We believe that this estimate remains unchanged as a result of the LTCH QRP proposals we are finalizing in this final rule. We received several comments on these proposals, which we summarize and respond to below.
Further, we are clarifying that there is no new burden associated with the additions to Section GG of the LTCH CARE Data Set, since the measures adopted through this final rule will utilize data elements that are collected under the LTCH CARE Data Set version 3.00. These data elements were previously finalized through rulemaking in order to inform quality measures that were previously finalized, and for which data collection will begin on April 1, 2016.
After consideration of the public comments we received, we are finalizing our estimates of the burden associated with the use of LTCH CARE Data Set version 3.00 for implementation starting April 1, 2016. Further, we are finalizing our use of CDC's burden estimates for using NHSN for data collection and submission of NHSN-based quality measures.
This final rule contains a range of policies. It also provides descriptions of the statutory provisions that are addressed, identifies the finalized policies, and presents rationales for our decisions and, where relevant, alternatives that were considered.
Table I of section I.G. of this Appendix demonstrates the estimated distributional impact of the IPPS budget neutrality requirements for the MS-DRG and wage index changes, and for the wage index reclassifications under the MGCRB. Table I also shows an overall increase of 0.4 percent in operating payments. As discussed in section I.G. of this Appendix, we estimate that operating payments will increase by approximately $378 million in FY 2016 relative to FY 2015. However, when we account for the impact of the changes in Medicare DSH payments and the impact of the new additional payments based on uncompensated care in accordance with section 3133 of the Affordable Care Act, based on estimates provided by the CMS Office of the Actuary, consistent with our policy discussed in section IV.D. of the preamble of this final rule, we estimate that operating payments will increase by approximately $75 million relative to FY 2015. We currently estimate that the changes in new technology add-on payments for FY 2016 will increase spending by approximately $9.5 million due to the expiration of three new technology add-on payments and the additional approval of two new technology add-on payments. This estimate, combined with our estimated increase in FY 2016 operating payment of $75 million, results in an estimated increase of approximately $85 million for FY 2016. We estimate that hospitals will experience a 2.3 percent increase in capital payments per case, as shown in Table III of section I.I. of this Appendix. We project that there will be a $187 million increase in capital payments in FY 2016 compared to FY 2015. The cumulative operating and capital payments will result in a net increase of approximately $272 million to IPPS providers. The discussions presented in the previous pages, in combination with the rest of this final rule, constitute a regulatory impact analysis.
Overall, LTCHs are projected to experience a decrease in estimated payments per discharge in FY 2016. In the impact analysis, we are using the rates, factors, and policies presented in this final rule, including updated wage index values and relative weights, and the best available claims and CCR data to estimate the change in payments under the LTCH PPS for FY 2016. Accordingly, based on the best available data for the 419 LTCHs in our database, we estimate that FY 2016 LTCH PPS payments will decrease approximately $250 million relative to FY 2015 as a result of the payment rates and factors presented in this final rule.
As required by OMB Circular A-4 (available at
The cost to the Federal Government associated with the policies in this final rule are estimated at $272 million.
As discussed in section I.J. of this Appendix, the impact analysis of the payment rates and factors presented in this final rule under the LTCH PPS, is projected to result in a decrease in estimated aggregate LTCH PPS payments in FY 2016 relative to FY 2015 of approximately $250 million based on the data for 419 LTCHs in our database that are subject to payment under the LTCH PPS. Therefore, as required by OMB Circular A-4 (available at
The savings to the Federal Government associated with the policies for LTCHs in this final rule are estimated at $250 million.
The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small government jurisdictions. We estimate that most hospitals and most other providers and suppliers are small entities as that term is used in the RFA. The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $7.5 million to $38.5 million in any 1 year). (For details on the latest standards for health care providers, we refer readers to page 36 of the Table of Small Business Size Standards for NAIC 622 found on the SBA Web site at:
For purposes of the RFA, all hospitals and other providers and suppliers are considered to be small entities. Individuals and States are not included in the definition of a small entity. We believe that the provisions of this final rule relating to acute care hospitals would have a significant impact on small entities as explained in this Appendix. Because we lack data on individual hospital receipts, we cannot determine the number of small proprietary LTCHs. Therefore, we are assuming that all LTCHs are considered small entities for the purpose of the analysis in section I.J. of this Appendix. MACs are not considered to be small entities. Because we acknowledge that many of the affected entities are small entities, the analysis discussed throughout the preamble of this final rule constitutes our regulatory flexibility analysis. In FY 2016 IPPS/LTCH PPS proposed rule, we solicited public comments on our estimates and analysis of the impact of our proposals on those small entities. Any public comments that we received and our responses are presented throughout this final rule.
Section 1102(b) of the Social Security Act requires us to prepare a regulatory impact analysis for any proposed or final rule that may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of an urban area and has fewer than 100 beds. Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent urban area. Thus, for purposes of the IPPS and the LTCH PPS, we continue to classify these hospitals as urban hospitals. (We refer readers to Table I in section I.G. of this Appendix for the quantitative effects of the policy changes under the IPPS for operating costs.)
Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2015, that threshold level is approximately $144 million. This final rule will not mandate any requirements for State, local, or tribal governments, nor will it affect private sector costs.
In accordance with the provisions of Executive Order 12866, the Executive Office of Management and Budget reviewed this final rule.
Section 1886(e)(4)(A) of the Act requires that the Secretary, taking into consideration the recommendations of MedPAC, recommend update factors for inpatient hospital services for each fiscal year that take into account the amounts necessary for the efficient and effective delivery of medically appropriate and necessary care of high quality. Under section 1886(e)(5) of the Act, we are required to publish update factors recommended by the Secretary in the proposed and final IPPS rules, respectively. Accordingly, this Appendix provides the recommendations for the update factors for the IPPS national standardized amount, the Puerto Rico-specific standardized amount, the hospital-specific rate for SCHs and MDHs, and the rate-of-increase limits for certain hospitals excluded from the IPPS, as well as LTCHs. In prior years, we have made a recommendation in the IPPS proposed rule and final rule for the update factors for the payment rates for IRFs and IPFs. However, for FY 2016, we plan to include the Secretary's recommendation for the update factors for IRFs and IPFs in separate
As discussed in section IV.A. of the preamble to this final rule, for FY 2016, consistent with section 1886(b)(3)(B) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act, we are setting the applicable percentage increase by applying the following adjustments in the following sequence. Specifically, the applicable percentage increase under the IPPS is equal to the rate-of-increase in the hospital market basket for IPPS hospitals in all areas, subject to a reduction of one-quarter of the applicable percentage increase (prior to the application of other statutory adjustments; also referred to as the market basket update or rate-of-increase (with no adjustments)) for hospitals that fail to submit quality information under rules established by the Secretary in accordance with section 1886(b)(3)(B)(viii) of the Act and a 66 2/3 percent reduction to three-fourths of the applicable percentage increase (prior to the application of other statutory adjustments; also referred to as the market basket update or rate-of-increase (with no adjustments)) for hospitals not considered to be meaningful electronic health record (EHR) users in accordance with section 1886(b)(3)(B)(ix) of the Act, and then subject to an adjustment based on changes in economy-wide productivity (the multifactor productivity (MFP) adjustment), and an additional reduction of 0.2 percentage point as required by section 1886(b)(3)(B)(xii) of the Act. Sections 1886(b)(3)(B)(xi) and (b)(3)(B)(xii) of the Act, as added by section 3401(a) of the Affordable Care Act, state that application of the MFP adjustment and the additional FY 2016 adjustment of 0.2 percentage point may result in the applicable percentage increase being less than zero.
In the FY 2016 IPPS/LTCH PPS proposed rule, based on the most recent data available at that time, in accordance with section 1886(b)(3)(B) of the Act, we proposed to establish the FY 2016 market basket update used to determine the applicable percentage increase for the IPPS based on IHS Global Insight, Inc.'s (IGI's) first quarter 2015 forecast of the FY 2010-based IPPS market basket rate-of-increase with historical data through fourth quarter 2014, which was estimated to be 2.7 percent. Based on the most recent data available for this FY 2016 final rule, in accordance with section 1886(b)(3)(B) of the Act, we are establishing the FY 2016 market basket update used to determine the applicable percentage increase for the IPPS based on IHS Global Insight, Inc.'s (IGI's) second quarter 2015 forecast of the FY 2010-based IPPS market basket rate-of-increase, which is estimated to be 2.4 percent.
In accordance with section 1886(b)(3)(B) of the Act, as amended by section 3401(a) of the Affordable Care Act, in section IV.A. of the preamble of the FY 2016 IPPS/LTCH PPS proposed rule, we proposed a multifactor productivity (MFP) adjustment (the 10-year moving average of MFP for the period ending FY 2016) of 0.6 percent. Therefore, based on IGI's first quarter 2015 forecast of the FY 2010-based IPPS market basket, depending on whether a hospital submits quality data under the rules established in accordance with section 1886(b)(3)(B)(viii) of the Act (hereafter referred to as a hospital that submits quality data) and is a meaningful EHR user under section 1886(b)(3)(B)(ix) of the Act (hereafter referred to as a hospital that is a meaningful EHR user), we presented in the proposed rule four possible applicable percentage increases that could be applied to the standardized amount. Based on the most recent data available for this FY 2016 IPPS/LTCH PPS final rule, in accordance with section 1886(b)(3)(B) of the Act, as amended by section 3401(a) of the Affordable Care Act, in section IV.A. of the preamble of this final rule, we are establishing a MFP adjustment (the 10-year moving average of MFP for the period ending FY 2016) of 0.5 percentage point.
In accordance with section 1886(b)(3)(B) of the Act, as amended by section 3401(a) of the Affordable Care Act, as discussed in section IV.A. of the preamble of this final rule, we are establishing the applicable percentages increases for the FY 2016 updates based on IGI's second quarter 2015 forecast of the FY 2010-based IPPS market basket, depending on whether a hospital submits quality data under the rules established in accordance with section 1886(b)(3)(B)(viii) of the Act and is a meaningful EHR user under section 1886(b)(3)(B)(ix) of the Act, as outlined in the table below.
Section 1886(b)(3)(B)(iv) of the Act provides that the FY 2016 applicable percentage increase in the hospital-specific rate for SCHs and MDHs equals the applicable percentage increase set forth in section 1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the IPPS).
As discussed in section IV.L. of the preamble of this final rule, section 205 of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) (Pub. L. 114-10, enacted on April 16, 2015) extended the MDH program (which, under previous law, was to be in effect for discharges on or before March 31, 2015 only) for discharges occurring on or after April 1, 2015, through FY 2017 (that is, for discharges occurring on or before September 30, 2017).
As mentioned above, the update to the hospital specific rate for SCHs and MDHs is subject to section 1886(b)(3)(B)(i) of the Act, as amended by sections 3401(a) and 10319(a) of the Affordable Care Act. Accordingly, depending on whether a hospital submits quality data and is a meaningful EHR user, we are establishing the same four applicable percentage increases in the table above for the hospital-specific rate applicable to SCHs and MDHs.
Section 401(c) of Public Law 108-173 amended section 1886(d)(9)(C)(i) of the Act and states that, for discharges occurring in a fiscal year (beginning with FY 2004), the Secretary shall compute an average standardized amount for hospitals located in any area of Puerto Rico that is equal to the average standardized amount computed under subclause (I) for FY 2003 for hospitals in a large urban area (or, beginning with FY 2005, for all hospitals in the previous fiscal year) increased by the applicable percentage increase under subsection (b)(3)(B) for the fiscal year involved. Therefore, the update to the Puerto Rico-specific operating standardized amount is subject to the applicable percentage increase set forth in section 1886(b)(3)(B)(i) of the Act as amended by sections 3401(a) and 10319(a) of the Affordable Care Act (that is, the same update factor as for all other hospitals subject to the IPPS). Accordingly, we are making an applicable percentage increase to the Puerto
Section 1886(b)(3)(B)(ii) of the Act is used for purposes of determining the percentage increase in the rate-of-increase limits for children's hospitals, cancer hospitals, and hospitals located outside the 50 States, the District of Columbia, and Puerto Rico (that is, short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and America Samoa). Section 1886(b)(3)(B)(ii) of the Act sets the percentage increase in the rate-of-increase limits equal to the market basket percentage increase. In accordance with § 403.752(a) of the regulations, RNHCIs are paid under the provisions of § 413.40, which also use section 1886(b)(3)(B)(ii) of the Act to update the percentage increase in the rate-of-increase limits.
Currently, children's hospitals, PPS-excluded cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa are among the remaining types of hospitals still paid under the reasonable cost methodology, subject to the rate-of-increase limits. We are applying the FY 2016 percentage increase in the IPPS operating market basket to the target amount for children's hospitals, PPS-excluded cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa. For this final rule, the current estimate of the FY 2016 IPPS operating market basket percentage increase is 2.4 percent.
As discussed in section V.A. of the Addendum to this final rule, we are establishing an update to the LTCH PPS standard Federal rate for FY 2016 based on the full LTCH PPS market basket increase estimate (for the proposed rule, we estimated this to be 2.7 percent; for this final rule, we estimate this to be 2.4 percent), subject to an adjustment based on changes in economy-wide productivity and an additional reduction required by sections 1886(m)(3)(A)(ii) and (m)(4)(E) of the Act. In accordance with the LTCH QRP under section 1886(m)(5) of the Act, we are reducing the annual update to the LTCH PPS standard Federal rate by 2.0 percentage points for failure of a LTCH to submit the required quality data. The MFP adjustment described under section 1886(b)(3)(B)(xi)(ii) of the Act is currently estimated to be 0.5 percent for FY 2016. In addition, section 1886(m)(3)(A)(ii) of the Act requires that any annual update for FY 2016 be reduced by the “other adjustment” at section 1886(m)(4)(E) of the Act, which is 0.2 percentage point. Therefore, based on more recent data from the proposed rule, that is, the IGI's second quarter 2015 forecast of the FY 2016 LTCH PPS market basket increase, we are establishing an annual update to the LTCH PPS standard Federal rate of 1.7 percent (that is, the current FY 2016 estimate of the market basket rate-of-increase of 2.4 percent less an adjustment of 0.5 percentage point for MFP and less 0.2 percentage point). Accordingly, we are applying an update factor of 1.7 percent in determining the LTCH PPS standard Federal rate for FY 2016. For LTCHs that fail to submit quality data for FY 2016, we are applying an annual update to the LTCH PPS standard Federal rate of -0.3 percent (that is, the annual update for FY 2016 of 1.7 percent less 2.0 percentage points for failure to submit the required quality data in accordance with section 1886(m)(5)(C) of the Act and our rules) by applying an update factor of −0.3 percent in determining the LTCH PPS standard Federal rate for FY 2016.
MedPAC is recommending an inpatient hospital update equal to 3.25 percent for FY 2016. MedPAC's rationale for this update recommendation is described in more detail below. As mentioned above, section 1886(e)(4)(A) of the Act requires that the Secretary, taking into consideration the recommendations of MedPAC, recommend update factors for inpatient hospital services for each fiscal year that take into account the amounts necessary for the efficient and effective delivery of medically appropriate and necessary care of high quality. Consistent with current law, depending on whether a hospital submits quality data and is a meaningful EHR user, we are recommending the four applicable percentage increases to the standardized amount listed in the table under section II. of this Appendix B. We are recommending that the same applicable percentage increases apply to SCHs and MDHs. For the Puerto Rico-specific standardized amount, we are recommending an update of 1.7 percent.
In addition to making a recommendation for IPPS hospitals, in accordance with section 1886(e)(4)(A) of the Act, we are recommending update factors for certain other types of hospitals excluded from the IPPS. Consistent with our policies for these facilities, we are recommending an update to the target amounts for children's hospitals, cancer hospitals, RNHCIs, and short-term acute care hospitals located in the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa of 2.4 percent.
For FY 2016, consistent with policy set forth in section VII. of the preamble of this final rule, for LTCHs that submit quality data, we are recommending an update of 1.7 percent to the LTCH PPS standard Federal rate. For LTCHs that fail to submit quality data for FY 2016, we are applying an annual update to the LTCH PPS standard Federal rate of −0.3 percent.
In its March 2015 Report to Congress, MedPAC assessed the adequacy of current payments and costs and the relationship between payments and an appropriate cost base. MedPAC recommended an update to the hospital inpatient rates equal to 3.25 percent concurrent with changes to the outpatient prospective payment system and with initiating change to the LTCH PPS. We refer the reader to the March 2015 MedPAC report, which is available on the Web site at
We note that, because the operating and capital prospective payment systems remain separate, we are continuing to use separate updates for operating and capital payments. The update to the capital rate is discussed in section III. of the Addendum to this final rule.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), designate critical habitat for
This rule is effective on September 16, 2015.
This final rule is available on the internet at
The coordinates or plot points or both from which the maps were generated are included in the administrative record for this critical habitat designation and are available at
Dana Hartley, Endangered Species Supervisor, U.S. Fish and Wildlife Service, South Florida Ecological Services Field Office, 1339 20th Street, Vero Beach, FL 32960; by telephone 772-562-3909; or by facsimile 772-562-4288. Persons who use a telecommunications device for the deaf (TDD) may call the Federal Information Relay Service (FIRS) at 800-877-8339.
We listed
The critical habitat areas we are designating in this rule constitute our current best assessment of the areas that meet the definition of critical habitat for
For more information on previous Federal actions concerning
We requested written comments from the public on the proposed designation of critical habitat for
During the first comment period, we received 10 comment letters directly addressing the proposed critical habitat designation. During the second comment period, we received six comment letters addressing the proposed critical habitat designation. We did not receive any requests for a public hearing during either comment period. All substantive information provided during the comment periods specifically relating to the proposed designation either has been incorporated directly into this final designation or is addressed below.
In accordance with our peer review policy published in the
We reviewed all comments we received from the peer reviewers for substantive issues and new information regarding critical habitat for
(1)
(2)
(3)
(4)
(5)
(6)
Section 4(i) of the Act (16 U.S.C. 1531
(7)
(8)
Based on our test revision, it seems apparent that a lower cut-off value for conservation quality would be needed to capture these high-quality areas and achieve adequate connectivity if the revised scoring was used. Therefore, we do not believe that the suggested scoring revision would result in a more appropriate set of habitat patches for
(9)
(10)
Based on information we received in comments regarding
(1)
(2)
(3)
(4)
(5)
(6)
(7)
These revisions have also been made in the critical habitat discussion as well as in the Regulation Promulgation section of this final rule.
We also made revisions and refinements of the proposed critical habitat designation, and described these amendments in our document making available the draft economic analysis and reopening the proposed rule's comment period (79 FR 41211; July 15, 2014). Please refer to that notice for details; those revisions, with the exception of the proposed additions on Department of Defense lands, are reflected in this final rule, and described below in
Since publishing the revised proposed critical habitat designation on July 15, 2014 (79 FR 41211), we have determined that three unoccupied areas on Department of Defense lands (Homestead Air Reserve Base and the Special Operations Command South Headquarters) meet the criteria for exemption from critical habitat designation under section 4(a)(3) of the Act (discussed under the Exemptions section, below), and we have removed these from this final designation. The exemptions result in the removal of one area (one subunit; approximately 5.2 ha (12.9 ac)) from the critical habitat designation for
Critical habitat is defined in section 3 of the Act as:
(1) The specific areas within the geographical area occupied by the species, at the time it is listed in accordance with the Act, on which are found those physical or biological features
(a) Essential to the conservation of the species, and
(b) Which may require special management considerations or protection; and
(2) Specific areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species.
Conservation, as defined under section 3 of the Act, means to use and the use of all methods and procedures that are necessary to bring an endangered or threatened species to the point at which the measures provided pursuant to the Act are no longer necessary. Such methods and procedures include, but are not limited to, all activities associated with scientific resources management such as research, census, law enforcement, habitat acquisition and maintenance, propagation, live trapping, and transplantation, and, in the extraordinary case where population pressures within a given ecosystem cannot be otherwise relieved, may include regulated taking.
Critical habitat receives protection under section 7 of the Act through the requirement that Federal agencies ensure, in consultation with the Service, that any action they authorize, fund, or carry out is not likely to result in the destruction or adverse modification of critical habitat. The designation of critical habitat does not affect land ownership or establish a refuge, wilderness, reserve, preserve, or other conservation area. Such designation does not allow the government or public to access private lands. Such designation does not require implementation of restoration, recovery, or enhancement measures by non-Federal landowners. Where a landowner requests Federal agency funding or authorization for an action that may affect a listed species or critical habitat, the consultation requirements of section 7(a)(2) of the Act would apply, but even in the event of a destruction or adverse modification finding, the obligation of the Federal action agency and the landowner is not to restore or recover the species, but to implement reasonable and prudent alternatives to avoid destruction or adverse modification of critical habitat.
Under the first prong of the Act's definition of critical habitat, areas within the geographical area occupied by the species at the time it was listed are included in a critical habitat designation if they contain physical or biological features (1) which are essential to the conservation of the species and (2) which may require special management considerations or protection. For these areas, critical habitat designations identify, to the extent known using the best scientific and commercial data available, those physical or biological features that are essential to the conservation of the species (such as space, food, cover, and protected habitat). In identifying those physical or biological features within an area, we focus on the principal biological or physical constituent elements (primary constituent elements such as roost sites, nesting grounds, seasonal wetlands, water quality, tide, soil type) that are essential to the conservation of the species. Primary constituent elements are those specific elements of the physical or biological features that provide for a species' life-history processes and are essential to the conservation of the species.
Under the second prong of the Act's definition of critical habitat, we can designate critical habitat in areas outside the geographical area occupied by the species at the time it is listed, upon a determination that such areas are essential for the conservation of the species. We designate critical habitat in areas outside the geographical area occupied by a species only when a designation limited to its range would be inadequate to ensure the conservation of the species.
Section 4 of the Act requires that we designate critical habitat on the basis of the best scientific and commercial data available. Further, our Policy on Information Standards Under the Endangered Species Act (published in the
When we are determining which areas should be designated as critical habitat, our primary source of information is generally the information developed during the listing process for the species. Additional information sources may include the recovery plan for the species, articles in peer-reviewed journals, conservation plans developed by States and counties, scientific status surveys and studies, biological assessments, other unpublished materials, or experts' opinions or personal knowledge.
Habitat is dynamic, and species may move from one area to another over time. We recognize that critical habitat designated at a particular point in time may not include all of the habitat areas that we may later determine are necessary for the recovery of the species. For these reasons, a critical habitat designation does not signal that habitat outside the designated area is unimportant or may not be needed for recovery of the species. Areas that are important to the conservation of the species, both inside and outside the critical habitat designation, will continue to be subject to: (1) Conservation actions implemented under section 7(a)(1) of the Act, (2) regulatory protections afforded by the requirement in section 7(a)(2) of the Act for Federal agencies to insure their actions are not likely to jeopardize the continued existence of any endangered or threatened species, and (3) section 9 of the Act's prohibitions on taking any individual of the species, including taking caused by actions that affect habitat. Federally funded or permitted projects affecting listed species outside their designated critical habitat areas may still result in jeopardy findings in some cases. These protections and conservation tools will continue to contribute to recovery of this species. Similarly, critical habitat designations made on the basis of the best available information at the time of designation will not control the direction and substance of future recovery plans, habitat conservation plans (HCPs), or other species conservation planning efforts if new information available at the time of these planning efforts calls for a different outcome.
In accordance with section 3(5)(A)(i) and 4(b)(1)(A) of the Act and regulations at 50 CFR 424.12, in determining which areas within the geographical area occupied by the species at the time of listing to designate as critical habitat, we consider the physical or biological features (PBFs) essential to the conservation of the species and which may require special management considerations or protection. These include, but are not limited to:
(1) Space for individual and population growth and for normal behavior;
(2) Food, water, air, light, minerals, or other nutritional or physiological requirements;
(3) Cover or shelter;
(4) Sites for breeding, reproduction, or rearing (or development) of offspring; and
(5) Habitats that are protected from disturbance or are representative of the historical, geographical, and ecological distributions of a species.
We derive the specific PBFs essential for
Pine rockland is characterized by an open canopy of
Reproduction is sexual (Bradley and Gann 1999, p. 12), but specific pollinators or dispersers are unknown. Flower morphology suggests the species may be pollinated by butterflies, bees, or both (Koptur 2013, pers. comm.). Wind is one likely dispersal vector (Gann 2013b, pers. comm.), as is seed dispersal by animals. Within pine rocklands, more than 50 species of butterflies have been observed that may act as pollinators for
Therefore, based on the information above, we identify habitat connectivity of sufficient size and suitability, or habitat that can be restored to these conditions that supports the species' growth, distribution, and population expansion, to be a PBF for
Therefore, given the uncertainty regarding specific pollinators and dispersal vectors, the importance of connectivity of pine rockland habitat discussed above for
Hurricanes and other significant weather events also create openings in the pine rockland canopy (FNAI 2010, p. 63), although these types of disturbances are more sporadic in nature and may pose a threat to small, isolated populations such as those that remain of
Therefore, based on the information above, we identify natural or prescribed fire, or other disturbance regimes that maintain the pine rockland habitat, to be a PBF for these plants.
Under the Act and its implementing regulations, we are required to identify the physical or biological features essential to the conservation of
Based on our current knowledge of the PBFs and habitat characteristics required to sustain the plants' life-history processes, we determine that the PCEs specific to
(1) Areas of pine rockland habitat that contain:
(a) Open canopy, semi-open subcanopy, and understory;
(b) Substrate of oolitic limestone rock; and
(c) A plant community of predominately native vegetation that may include, but is not limited to:
(i) Canopy vegetation dominated by
(ii) Subcanopy vegetation that may include, but is not limited to,
(iii) Short-statured shrubs that may include, but are not limited to,
(iv) Understory vegetation that may include, but is not limited to:
(2) A disturbance regime that naturally or artificially duplicates natural ecological processes (
(3) Habitats that are connected and of sufficient area to sustain viable populations of
When designating critical habitat, we assess whether the specific areas within the geographical area occupied by the species at the time of listing contain features that are essential to the conservation of the species and which may require special management considerations or protection. The features essential to the conservation of
As required by section 4(b)(2) of the Act, we use the best scientific data available to designate critical habitat. In accordance with the Act and our implementing regulations at 50 CFR 424.12(b) we review available information pertaining to the habitat requirements of the species and identify occupied areas at the time of listing that contain the features essential to the conservation of the species. If, after identifying areas occupied by the species at the time of listing, we determine that those areas are inadequate to ensure conservation of the species, in accordance with the Act and our implementing regulations at 50 CFR 424.12(e) we then consider whether designating additional areas—outside those occupied at the time of listing—are essential for the conservation of the species.
In this rule, we are designating as critical habitat habitat both within the geographical area occupied by these plants at the time of listing, and outside the geographical area occupied by these plants at the time of listing but within their historical range, because such areas are essential for the conservation of these plants. We used habitat and historical occurrence data, and applied general conservation design principles, to identify unoccupied habitat essential for the conservation of these plants.
To determine the general extent, location, and boundaries of critical habitat, the Service used the following sources of information:
(1) Historical and current records of
(2) FNAI, IRC, and FTBG GIS data showing the location and extent of documented occurrences of
(3) Reports and databases prepared by botanists with IRC and FTBG. Some of these were funded by the Service, while others were requested or volunteered by biologists with IRC or FTBG;
(4) ESRI ArcGIS online basemap aerial imagery (collected December 2010) and Digital Orthophoto Quarter Quadrangles (DOQQs; 1-m true color; collected 2004) of Miami-Dade County. Because pine rockland habitat has a recognizable signature in these aerial photographs, the presence of PCEs was partially determined through evaluation of this imagery; and
(5) GIS data depicting soils (Soil Service Geographic (SSURGO) dataset), land cover (South Florida Water Management District Land Use and Cover 2008-2009), and elevation (Dade County LiDAR 88—2003) within Miami-Dade County; these data were also used to determine the presence of PCEs.
Due to the lack of existing taxa-specific data or recommendations related to conservation design (
(1) Geographic spread—Species that are well distributed across their native ranges are less susceptible to extinction than are species confined to small portions of their ranges.
(2) Size—Large habitat patches are superior to small habitat patches, in that larger areas will support larger populations and will be less negatively impacted by edge effects. All else being equal, conservation design options that include greater areal extent are superior. When comparative circumstances are not otherwise equal, factors such as habitat quality, the presence of specific landscape features, and the spatial arrangement of habitat may offset a solely area-driven selection process.
(3) Connectivity—Habitat that occurs in less fragmented, contiguous patches is preferable to habitat that is fragmented or isolated by urban lands. Habitat patches close to one another serve species of concern better than patches situated far apart. Interconnected patches are better than isolated patches. Conservation design alternatives should seek, in order of priority:
(a) Continuity within habitat (minimize additional fragmentation);
(b) Connectedness (increase existing habitat patches); and
(c) Proximity (minimize distance between habitat patches).
Using these guiding principles, we evaluated the remaining unoccupied pine rockland habitat on the Miami Rock Ridge outside of ENP with the intent of identifying the largest patches and highest quality habitat available (patches of sufficient size and quality to support populations), in sufficient amount (
(1) Using primarily aerial imagery and GIS-based vegetation and soils data, we delineated pine rockland habitat in Miami Dade County outside of ENP. Pine rocklands were identified based on the presence of specific soil types (see “Food, Water, Air, Light, Minerals, or Other Nutritional or Physiological Requirements,”above), and presence of pine rockland vegetation. Fire-suppressed areas and areas where intergrading with rockland hammock occurs were also evaluated. Some former pine rockland habitat was considered too severely fire suppressed (
(2) To maximize geographic spread within the plants' historical ranges, we divided the extent of delineated habitat into five geographic areas (northeast to southwest).
(3) For each plant, we included occupied patches in final critical habitat (25 habitat patches for
(4) For each plant, for the remaining (unoccupied) habitat, we excluded patches below the estimated minimum size for each plant based on expert opinion—2 ha (5 ac) for
(5) For each plant, for the remaining habitat (unoccupied; 2 ha (5 ac) or greater than or equal to 0.4 ha (1 ac),
(a) Onsite habitat quality (intact, open pine rocklands scored higher than cleared patches or patches having a closed canopy);
(b) Patch size (larger patches scored higher);
(c) Surrounding landscape composition (pine rocklands surrounded by less development scored higher);
(d) Connectivity (within each geographic area, pine rockland patches in closer proximity to each other and with greater numbers of neighbors scored higher); and
(e) Vulnerability to sea level rise (pine rockland patches located at higher elevations scored higher).
(6) For each plant, within each geographic area, we used a consequence matrix to evaluate the performance of each unoccupied pine rockland patch across the objectives described above in (5). The resulting total score of each patch was a 0.0-1.0 value, summed across all criteria, where a score of 1.0 indicates the patch in each geographic area that has the highest conservation quality, based on the defined objectives.
Using the results of the consequence matrix for each plant, we evaluated potential “cut-off” values for patch total score by visually assessing and comparing habitat amounts and spatial arrangements between various cut-off values in order to identify the best conservation arrangement. Because taxa-specific data and recommendations were not available regarding how much area is needed for the conservation and recovery of
Based on our assessment, as described above, we determined that unoccupied pine rockland patches with a total score for conservation quality greater than 0.50 should be proposed for critical habitat designation. In addition, in the proposed critical habitat rule published in the
Revisions to the resulting set of habitat patches were proposed in the revised proposed rule and availability of the draft economic analysis published in the
We are designating seven critical habitat units for each plant. Five of the seven units were occupied by
Within each of these occupied units is also unoccupied habitat, which is included based on our determination that such areas are essential to the conservation of these plants, as discussed above. In addition to providing sufficient habitat (area, number of patches, connectivity), this unoccupied habitat allows for the dynamic nature of pine rockland habitat. Conditions within pine rockland patches, such as the openness of the canopy and understory and the accumulation of leaf litter over the limestone substrate, vary greatly across the landscape and across time. Only a portion of the delineated habitat is suitable for
The delineation of units (occupied plus unoccupied patches) also includes space to plan for the persistence of
In identifying unoccupied patches with these units, we considered the following additional criteria, which we incorporated into the consequence matrix described above:
(1)
(2)
(3)
(4)
(5)
A complete description regarding how these objectives were weighted and evaluated in our consequence matrix can be found in the supplemental materials provided with the proposed rule at
We are designating two critical habitat units that were unoccupied by
In summary, for occupied habitat within the geographic area occupied by
For unoccupied habitat within the geographic area occupied by
For habitat outside the geographic area occupied by the species at the time of listing, we delineated critical habitat unit boundaries based on the availability of remaining pine rockland habitat in the unit. All four available patches were included in the delineation in order to provide sufficient area for
When determining critical habitat boundaries within this final rule, we made every effort to avoid including developed areas such as lands covered by buildings, pavement, and other structures because such lands lack physical or biological features for
The critical habitat designation is defined by the map or maps, as modified by any accompanying regulatory text, presented at the end of this document in the Regulation Promulgation section. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. We will make the coordinates or plot points or both on which each map is based available to the public on
Units and subunits are designated based on sufficient elements of physical or biological features being present to support the life processes of
We are designating seven units, each, as critical habitat for
The seven units (all located in Miami-Dade County, Florida) we are designating as critical habitat for
We present brief descriptions of all units, and reasons why they meet the definition of critical habitat for
Unit BM1 consists of 18 ha (43 ac) in Miami-Dade County. Within Unit BM1, there are two subunits—BM1A (County-owned) and BM1B (combination of State, County, and privately owned lands). The unit is comprised of State lands within Trinity Pineland County Park (4 ha (10 ac)); County lands primarily within A. D. “Doug” Barnes Park (6 ha (14 ac)); and parcels in private ownership (8 ha (19 ac)). This unit is bordered on the north by SW 24 Street, on the south by the Snapper Creek Expressway (State Road (SR) 878), on the east by SW 67 Avenue, and on the west by SW 87 Avenue. The unit is within the historical range of
This unit was not occupied by
Unit BM2 consists of approximately 108 ha (267 ac) of habitat in Miami-Dade County. Within Unit BM2, there are seven subunits (BM2A-BM2G) comprising primarily conservation lands and including four larger areas plus three smaller areas. The unit is comprised of State lands within Camp Matecumbe, Tamiami Pineland Complex Addition, and Rockdale Pineland (49 ha (121 ac)); County/local lands primarily within Nixon Smiley Pineland Preserve, Tamiami #8 (Nixon Smiley Addition) Pineland, Pine Shore Pineland Preserve, Ron Ehman Park, and Rockdale Pineland Addition (59 ha (146 ac)); and small portions of parcels in private or other ownership (less than 1 ha (less than 1 ac)). This unit is bordered on the north by SW 104 Street, on the south by SW 152 Street (Coral Reef Drive), on the east by U.S. 1 (South Dixie Highway), and on the west by SW 177 Avenue (Krome Avenue).
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Some of the unoccupied habitat within this unit was historically occupied by
Unit BM3 consists of approximately 127 ha (315 ac) of habitat in Miami-Dade County. Within Unit BM3, there are eight subunits (BM3A-BM3H), including two larger areas (U.S. Department of Agriculture (USDA) Subtropical Horticultural Research Station, and Deering Estate at Cutler) plus six smaller areas surrounding these. The unit is comprised of Federal lands within the USDA Subtropical Horticultural Research Station (59 ha (145 ac)); State lands within the R. Hardy Matheson Preserve, Ludlam Pineland, Deering Estate at Cutler, and Deering Estate South Addition (45 ha (112 ac)); County/local lands within Coral Reef Park, Ned Glenn Nature Preserve, and Bill Sadowski Park (15 ha (38 ac)); and parcels in private ownership (8 ha (19 ac)). This unit is bordered on the north by SW 112 Street, on the south by the intersection of Old Cutler Road and Franjo Road (County Road (CR) 977), on the east by the Atlantic Ocean, and on the west by U.S. 1 (South Dixie Highway). The unit is within the historical range of
This unit was unoccupied by
Unit BM4 consists of approximately 395 ha (975 ac) in Miami-Dade County. Within Unit BM4, there are eight subunits (BM4A-BM4H), most within the Richmond Pinelands complex (made up of Federal and County-owned lands, as well as land owned by the University of Miami). The unit is comprised of Federal lands owned by the USCG (Homeland Security), U.S. Army Corps of Engineers (ACOE; Department of Defense), U.S. Prison Bureau (Department of Justice), and the U.S. Department of Commerce/National Oceanic and Atmospheric Administration (NOAA) (75 ha (185 ac)); County/local lands within and adjacent to Larry and Penny Thompson Park, Martinez Pineland, Zoo Miami, and Eachus Pineland (239 ha (590 ac)); and parcels in private or other ownership (81 ha (200 ac)). This unit is bordered on the north by SW 152 Street (Coral Reef Drive), on the south by SW 200 St (Quail Drive/SR 994), on the east by U.S. 1 (South Dixie Highway), and on the west by SW 177 Avenue (Krome Avenue).
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Some of the unoccupied habitat within this unit was historically occupied by
Unit BM5 consists of approximately 96 ha (238 ac) in Miami-Dade County. Within Unit BM5, there are 11 subunits (BM5A-BM5K), including 4 larger areas plus 7 smaller areas surrounding these. The unit is comprised of State lands within Quail Roost Pineland, Goulds Pineland and Addition, and Silver Palm Groves Pineland (39 ha (97 ac)); County/local lands including Black Creek Forest, Rock Pit #46, and lands owned by the School Board of Miami-Dade County (15 ha (37 ac)); and parcels in private ownership (42 ha (104 ac)), including Porter-Russell Pineland owned by the Tropical Audubon Society. This unit is bordered on the north by SW 200 St (Quail Drive/SR 994), on the south by SW 248 Street, on the east by the Florida Turnpike, and on the west by SW 194 Avenue.
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Unoccupied habitat in the unit is essential to the conservation of
Unit BM6 consists of approximately 112 ha (276 ac) of habitat in Miami-Dade County. Within Unit BM6, there are 12 subunits (BM6A-BM6L), composed of 1 larger area (Camp Owaissa Bauer and its addition) and 11 smaller areas to the south. The unit is comprised of State lands within Owaissa Bauer Pineland Addition, Ingram Pineland, West Biscayne Pineland, and Fuchs Hammock Addition (20 ha (50 ac)); County/local lands including Camp Owaissa Bauer, Pine Island Lake Park, Seminole Wayside Park, and Northrop Pineland
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Some of the unoccupied habitat within this unit was historically occupied by
Unit BM7 consists of approximately 206 ha (510 ac) of habitat in Miami-Dade County. Within Unit BM7, there are eight subunits (BM7A-BM7H), including one larger area (Navy Wells Pineland Preserve) and seven smaller outlying areas. The unit is comprised of State lands within Palm Drive Pineland, Navy Wells Pineland #39, Navy Wells Pineland Preserve (portion), and Florida City Pineland (53 ha (132 ac)); County/local lands including primarily Sunny Palms Pineland and Navy Wells Pineland Preserve (portion) (125 ha (309 ac)); and parcels in private ownership (28 ha (68 ac)). This unit is bordered on the north by SW 320 Street, on the south by SW 368 Street, on the east by U.S. 1 (South Dixie Highway), and on the west by SW 217 Avenue.
This unit is composed of both occupied and unoccupied habitat. Some habitat in the unit was occupied by
Some of the unoccupied habitat within this unit was historically occupied by
The seven units (all located in Miami-Dade County, Florida) we are designating as critical habitat for
We present brief descriptions of all units, and reasons why they meet the definition of critical habitat for
Unit LCC1 consists of 19 ac (48 ha) in Miami-Dade County. Within Unit LCC1, there are three subunits—LCC1A and LCC1B (primarily County-owned), and LCC1C (combination of State lands and private ownership). The unit is comprised of State lands within Trinity Pineland County Park (4 ac (10 ha)); County lands primarily within Tropical Park and A. D. “Doug” Barnes Park (7 ha (18 ac)); and parcels in private ownership (8 ha (19 ac)). This unit is bordered on the north by SW 24 Street, on the south by the Snapper Creek Expressway (State Road (SR) 878), on the east by SW 67 Avenue, and on the west by SW 87 Avenue. The unit is within the historical range of
This unit was unoccupied by
Unit LCC2 consists of approximately 113 ha (278 ac) of habitat in Miami-Dade County. Within Unit LCC2, there are six subunits (LCC2A-LCC2F) comprising primarily conservation lands and including four larger areas plus two smaller areas. The unit is comprised of State lands within Camp Matecumbe, Tamiami Pineland Complex Addition, and Rockdale Pineland (53 ha (131 ac); County/local lands within Nixon Smiley Pineland Preserve, Tamiami #8 (Nixon Smiley Addition) Pineland, Pine Shore Pineland Preserve, Ron Ehman Park, and Rockdale Pineland Addition (59 ha (147 ac)); and parcels in private or other ownership (<1 ha (<1 ac)). This unit is bordered on the north by SW 104 Street, on the south by SW 152 Street (Coral Reef Drive), on the east by U.S. 1 (South Dixie Highway), and on the west by SW 177 Avenue (Krome Avenue).
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Unoccupied habitat within the unit is essential to the conservation of
Unit LCC3 consists of approximately 128 ha (316 ac) of habitat in Miami-Dade County. Within Unit LCC3, there are nine subunits (LCC3A-LCC3I), including two larger areas (USDA and Deering Estate at Cutler) plus seven smaller areas surrounding these. The unit is comprised of Federal lands within the USDA Subtropical Horticultural Research Station (59 ha (145 ac)); State lands within the R. Hardy Matheson Preserve, Ludlam Pineland, Deering Estate at Cutler, and Deering Estate South Addition (45 ha (112 ac)); County/local lands within Coral Reef Park, Ned Glenn Nature Preserve, and Bill Sadowski Park (15 ha (38 ac)); and parcels in private ownership (8 ha (21 ac)). This unit is bordered on the north by SW 112 Street, on the south by the intersection of Old Cutler Road and Franjo Road (County Road (CR) 977), on the east by the Atlantic Ocean, and on the west by U.S. 1 (South Dixie Highway).
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Unoccupied habitat within the unit is essential to the conservation of
Unit LCC4 consists of approximately 386 ha (952 ac) in Miami-Dade County. Within Unit LCC4, there are four subunits (LCC4A-LCC4D), primarily within the Richmond Pinelands complex (made up of Federal and County-owned lands, as well as land owned by the University of Miami). The unit is comprised of Federal lands owned by USCG, ACOE, U.S. Prison Bureau, and NOAA (75 ha (185 ac)); County/local lands within and adjacent to Larry and Penny Thompson Park, Martinez Pineland, Zoo Miami, and Eachus Pineland (240 ha (592 ac)); and parcels in private or other ownership (71 ha (175 ac)). This unit is bordered on the north by SW 152 Street (Coral Reef Drive), on the south by SW 200 St (Quail Drive/SR 994), on the east by U.S. 1 (South Dixie Highway), and on the west by SW 177 Avenue (Krome Avenue).
This unit was unoccupied by
Unit LCC5 consists of approximately 98 ha (242 ac) in Miami-Dade County. Within Unit LCC5, there are 10 subunits (LCC5A-LCC5J), including 4 larger areas plus 6 smaller areas surrounding these. The unit is comprised of State lands within Quail Roost Pineland, Goulds Pineland and Addition, and Silver Palm Groves Pineland (39 ha (97 ac)); County/local lands including Medsouth Park, Black Creek Forest, Rock Pit #46, and lands owned by the School Board of Miami-Dade County (18 ha (44 ac)); and parcels in private ownership (41 ha (101 ac)), including Porter-Russell Pineland owned by the Tropical Audubon Society. This unit is bordered on the north by SW 200 St (Quail Drive/SR 994), on the south by SW 248 Street, on
This unit was unoccupied by
Unit LCC6 consists of approximately 128 ha (315 ac) of habitat in Miami-Dade County. Within Unit LCC6, there are 21 subunits (LCC6A-LCC6U), composed of 1 larger area (Camp Owaissa Bauer and its addition) and 20 smaller areas surrounding it. The unit is comprised of State lands within Owaissa Bauer Pineland Addition, Ingram Pineland, West Biscayne Pineland, and Fuchs Hammock Addition (20 ha (51 ac)); County/local lands including Camp Owaissa Bauer, Pine Island Lake Park, Seminole Wayside Park, and Northrop Pineland (63 ha (156 ac)); and parcels in private ownership (44 ha (109 ac)), including the private conservation area, Pine Ridge Sanctuary. This unit is bordered on the north by SW 248 Street, on the south by SW 312 Street, on the east by SW 112 Avenue, and on the west by SW 217 Avenue.
This unit is composed of both occupied and unoccupied habitat. Some habitat within the unit was occupied by
Unoccupied habitat within the unit is essential to the conservation of
Unit LCC7 consists of approximately 201 ha (497 ac) of habitat in Miami-Dade County. Within Unit LCC7, there are seven subunits (LCC7A-LCC7G), including one larger area (Navy Wells Pineland Preserve) and six smaller outlying areas. The unit is comprised of State lands within Palm Drive Pineland, Navy Wells Pineland #39, Navy Wells Pineland Preserve (portion), and Florida City Pineland (53 ha (132 ac)); County/local lands including primarily Sunny Palms Pineland and Navy Wells Pineland Preserve (portion) (125 ha (309 ac)); and parcels in private ownership (23 ha (56 ac)). This unit is bordered on the north by SW 320 Street, on the south by SW 368 Street, on the east by U.S. 1 (South Dixie Highway), and on the west by SW 217 Avenue.
This unit was unoccupied by
Section 7(a)(2) of the Act requires Federal agencies, including the Service, to ensure that any action they fund, authorize, or carry out is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of designated critical habitat of such species. In addition, section 7(a)(4) of the Act requires Federal agencies to confer with the Service on any agency action which is likely to jeopardize the continued existence of any species proposed to be listed under the Act or result in the destruction or adverse modification of proposed critical habitat.
Decisions by the 5th and 9th Circuit Courts of Appeal have invalidated our regulatory definition of “destruction or adverse modification” (50 CFR 402.02) (see
If a Federal action may affect a listed species or its critical habitat, the responsible Federal agency (action agency) must enter into consultation with us. Examples of actions that are subject to the section 7 consultation process are actions on State, tribal, local, or private lands that require a Federal permit (such as a permit from the U.S. Army Corps of Engineers under section 404 of the Clean Water Act (33 U.S.C. 1251
As a result of section 7 consultation, we document compliance with the requirements of section 7(a)(2) through our issuance of:
(1) A concurrence letter for Federal actions that may affect, but are not likely to adversely affect, listed species or critical habitat; or
(2) A biological opinion for Federal actions that may affect and are likely to adversely affect, listed species or critical habitat.
When we issue a biological opinion concluding that a project is likely to jeopardize the continued existence of a listed species and/or destroy or adversely modify critical habitat, we provide reasonable and prudent alternatives to the project, if any are identifiable, that would avoid the likelihood of jeopardy and/or destruction or adverse modification of critical habitat. We define “reasonable and prudent alternatives” (at 50 CFR 402.02) as alternative actions identified during consultation that:
(1) Can be implemented in a manner consistent with the intended purpose of the action,
(2) Can be implemented consistent with the scope of the Federal agency's legal authority and jurisdiction,
(3) Are economically and technologically feasible, and
(4) Would, in the Director's opinion, avoid the likelihood of jeopardizing the continued existence of the listed species and/or avoid the likelihood of destroying or adversely modifying critical habitat.
Reasonable and prudent alternatives can vary from slight project modifications to extensive redesign or relocation of the project. Costs associated with implementing a reasonable and prudent alternative are similarly variable.
Regulations at 50 CFR 402.16 require Federal agencies to reinitiate consultation on previously reviewed actions in instances where we have listed a new species or subsequently designated critical habitat that may be affected and the Federal agency has retained discretionary involvement or control over the action (or the agency's discretionary involvement or control is authorized by law). Consequently, Federal agencies sometimes may need to request reinitiation of consultation with us on actions for which formal consultation has been completed, if those actions with discretionary involvement or control may affect subsequently listed species or designated critical habitat.
The key factor related to the adverse modification determination is whether, with implementation of the proposed Federal action, the affected critical habitat would continue to serve its intended conservation role for the species. Activities that may destroy or adversely modify critical habitat are those that alter the physical or biological features to an extent that appreciably reduces the conservation value of critical habitat for
Section 4(b)(8) of the Act requires us to briefly evaluate and describe, in any proposed or final regulation that designates critical habitat, activities involving a Federal action that may destroy or adversely modify such habitat, or that may be affected by such designation.
Activities that may affect critical habitat, when carried out, funded, or authorized by a Federal agency, should result in consultation for
(1) Actions that would significantly alter the pine rockland ecosystem, including significant alterations to hydrology or substrate. Such activities may include, but are not limited to, residential, commercial, or recreational development, including associated infrastructure.
(2) Actions that would significantly alter vegetation structure or composition, such as suppression of natural fires or excessive prescribed burning, or clearing vegetation for construction of residential, commercial, or recreational development and associated infrastructure.
(3) Actions that would introduce nonnative plant species that would significantly alter vegetation structure or composition. Such activities may include, but are not limited to, residential and commercial development, and associated infrastructure.
The Sikes Act Improvement Act of 1997 (Sikes Act) (16 U.S.C. 670a) required each military installation that includes land and water suitable for the conservation and management of natural resources to complete an integrated natural resources management plan (INRMP) by November 17, 2001. An INRMP integrates implementation of the military mission of the installation with stewardship of the natural resources found on the base. Each INRMP includes:
(1) An assessment of the ecological needs on the installation, including the need to provide for the conservation of listed species;
(2) A statement of goals and priorities;
(3) A detailed description of management actions to be implemented to provide for these ecological needs; and
(4) A monitoring and adaptive management plan.
Among other things, each INRMP must, to the extent appropriate and applicable, provide for fish and wildlife management; fish and wildlife habitat enhancement or modification; wetland protection, enhancement, and restoration where necessary to support fish and wildlife; and enforcement of applicable natural resource laws.
The National Defense Authorization Act for Fiscal Year 2004 (Pub. L. 108-136) amended the Act to limit areas eligible for designation as critical habitat. Specifically, section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)) now provides: “The Secretary shall not designate as critical habitat any lands or other geographical areas owned or controlled by the Department of Defense, or designated for its use, that are subject to an INRMP prepared under section 101 of the Sikes Act (16 U.S.C. 670a), if the Secretary determines in writing that such plan provides a benefit to the species for which critical habitat is proposed for designation.”
We consulted with the military on the development and implementation of INRMPs for installations with listed species. We analyzed INRMPs developed by military installations located within the range of our proposed critical habitat designation for
The Homestead Air Reserve Base (HARB) has a current and completed INRMP, signed in July 2009. This INRMP identifies goals, objectives, and strategies for the management of HARB's natural resources for a 5-year period (
An updated INRMP has been drafted and is expected to be finalized by the time this final critical habitat rule publishes in the
The current HARB INRMP benefits
Based on the above considerations, and in accordance with section 4(a)(3)(B)(i) of the Act, we have determined that the identified lands are subject to the HARB INRMP and that conservation efforts identified in the INRMP will provide a benefit to
The U.S. Special Operations Command South Headquarters (SOCSO) has an INRMP that was finalized in December 2014. SOCSO is a 34.1-ha (84.2-ac) property that was formerly part of HARB and is now leased by SOCSO from Miami-Dade County. The SOCSO INRMP provides natural resource management for portions of this property for a 5-year period (2012-2017), focusing on the management of
The SOCSO INRMP benefits
Based on the above considerations, and in accordance with section 4(a)(3)(B)(i) of the Act, we have determined that the identified lands are subject to the SOCSO INRMP and that conservation efforts identified in the INRMP will provide a benefit to
Under Section 4(b)(2) of the Act, the Secretary may exclude an area from critical habitat if she determines that the benefits of such exclusion outweigh the benefits of specifying such area as part of the critical habitat, unless she determines, based on the best scientific data available, that the failure to designate such area as critical habitat will result in the extinction of the species. In making that determination, the statute on its face, as well as the legislative history, are clear that the Secretary has broad discretion regarding which factor(s) to use and how much weight to give to any factor.
Under section 4(b)(2) of the Act, we must consider the economic impacts of specifying any particular area as critical habitat. In order to consider economic impacts, we prepared an incremental effects memorandum (IEM) and screening analysis (Industrial Economics, Incorporated, 2014) which together with our narrative and interpretation of effects constitute our draft economic analysis (DEA) of the critical habitat designation and related factors. This analysis was made available for public review from July 15, 2014, through August 14, 2014. Following the close of the comment period, we reviewed and evaluated all
In our IEM, we attempted to clarify the distinction between the effects that will result from the species being listed and those attributable to the critical habitat designation (
In occupied areas, the economic impacts of implementing the rule through section 7 of the Act will most likely be limited to additional administrative effort to consider adverse modification. This finding is based on the following factors:
• Any activities with a Federal nexus occurring within occupied habitat will be subject to section 7 consultation requirements regardless of critical habitat designation, due to the presence of the listed species; and
• In most cases, project modifications requested to avoid adverse modification are likely to be the same as those needed to avoid jeopardy in occupied habitat.
In unoccupied areas, incremental section 7 costs will include both the administrative costs of consultation and the costs of developing and implementing conservation measures needed to avoid adverse modification of critical habitat. Therefore, this analysis focuses on the likely impacts to activities occurring in unoccupied areas of the critical habitat designation.
This analysis forecasts the total number and administrative cost of future consultations likely to occur for transportation and land management activities undertaken by or funded by Federal agencies within unoccupied habitat. In addition, the analysis forecasts costs associated with conservation efforts that may be recommended in consultation for those activities occurring in unoccupied areas. The total incremental section 7 costs associated with the designation are estimated to be $120,000 (2013 dollars) in a single year for both administrative and conservation effort costs.
The designation of critical habitat is unlikely to trigger additional requirements under State or local regulations. This assumption is based on the protective status currently afforded pine rocklands habitat. Additionally, the designation of critical habitat may cause developers to perceive that private lands will be subject to use restrictions, resulting in perceptional effects. Such costs, if they occur, are unlikely to result in costs reaching $100 million in any one year.
Our economic analysis did not identify any disproportionate costs that are likely to result from the designation. Consequently, the Secretary is not exercising her discretion to exclude any areas from this designation of critical habitat for
A copy of the IEM and screening analysis with supporting documents may be obtained by contacting the South Florida Ecological Services Field Office (see
As discussed above, we have already exempted from the designation of critical habitat under Section 4(a)(3) of the Act those Department of Defense lands with completed INRMPs determined to provide a benefit to
Under section 4(b)(2) of the Act, we also consider any other relevant impacts resulting from the designation of critical habitat. We consider a number of factors, including whether the landowners have developed any HCPs or other management plans for the area, or whether there are conservation partnerships that would be encouraged by designation of, or exclusion from, critical habitat. In addition, we look at any tribal issues and consider the government-to-government relationship of the United States with tribal entities.
In preparing this final rule, we have determined that there are currently no permitted HCPs or other approved management plans for
Executive Order 12866 provides that the Office of Information and Regulatory Affairs (OIRA) will review all significant rules. The Office of Information and Regulatory Affairs has determined that this rule is not significant.
Executive Order 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The executive order directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based
Under the Regulatory Flexibility Act (RFA; 5 U.S.C. 601
According to the Small Business Administration, small entities include small organizations such as independent nonprofit organizations; small governmental jurisdictions, including school boards and city and town governments that serve fewer than 50,000 residents; and small businesses (13 CFR 121.201). Small businesses include manufacturing and mining concerns with fewer than 500 employees, wholesale trade entities with fewer than 100 employees, retail and service businesses with less than $5 million in annual sales, general and heavy construction businesses with less than $27.5 million in annual business, special trade contractors doing less than $11.5 million in annual business, and agricultural businesses with annual sales less than $750,000. To determine if potential economic impacts to these small entities are significant, we considered the types of activities that might trigger regulatory impacts under this designation as well as types of project modifications that may result. In general, the term “significant economic impact” is meant to apply to a typical small business firm's business operations.
The Service's current understanding of the requirements under the RFA, as amended, and following recent court decisions, is that Federal agencies are only required to evaluate the potential incremental impacts of rulemaking on those entities directly regulated by the rulemaking itself, and therefore, not required to evaluate the potential impacts to indirectly regulated entities. The regulatory mechanism through which critical habitat protections are realized is section 7 of the Act, which requires Federal agencies, in consultation with the Service, to ensure that any action authorized, funded, or carried by the agency is not likely to destroy or adversely modify critical habitat. Therefore, under section 7 only Federal action agencies are directly subject to the specific regulatory requirement (avoiding destruction and adverse modification) imposed by critical habitat designation. Consequently, it is our position that only Federal action agencies will be directly regulated by this designation. There is no requirement under RFA to evaluate the potential impacts to entities not directly regulated. Moreover, Federal agencies are not small entities. Therefore, because no small entities are directly regulated by this rulemaking, the Service certifies that this final critical habitat designation will not have a significant economic impact on a substantial number of small entities. Therefore, a regulatory flexibility analysis is not required.
Executive Order 13211 (Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use) requires agencies to prepare Statements of Energy Effects when undertaking certain actions. Following our evaluation of the probable incremental economic impacts resulting from the designation of critical habitat for
In accordance with the Unfunded Mandates Reform Act (2 U.S.C. 1501
(1) This rule will not produce a Federal mandate. In general, a Federal mandate is a provision in legislation, statute, or regulation that would impose an enforceable duty upon State, local, or tribal governments, or the private sector, and includes both “Federal intergovernmental mandates” and “Federal private sector mandates.” These terms are defined in 2 U.S.C. 658(5)-(7). “Federal intergovernmental mandate” includes a regulation that “would impose an enforceable duty upon State, local, or tribal governments” with two exceptions. It excludes “a condition of Federal assistance.” It also excludes “a duty arising from participation in a voluntary Federal program,” unless the regulation “relates to a then-existing Federal program under which $500,000,000 or more is provided annually to State, local, and tribal governments under entitlement authority,” if the provision would “increase the stringency of conditions of assistance” or “place caps upon, or otherwise decrease, the Federal Government's responsibility to provide funding,” and the State, local, or tribal governments “lack authority” to adjust accordingly. At the time of enactment, these entitlement programs were: Medicaid; Aid to Families with Dependent Children work programs; Child Nutrition; Food Stamps; Social Services Block Grants; Vocational Rehabilitation State Grants; Foster Care, Adoption Assistance, and Independent Living; Family Support Welfare Services; and Child Support Enforcement. “Federal private sector mandate” includes a regulation that “would impose an enforceable duty upon the private sector, except (i) a condition of Federal assistance or (ii) a duty arising from participation in a voluntary Federal program.”
The designation of critical habitat does not impose a legally binding duty on non-Federal Government entities or private parties. Under the Act, the only regulatory effect is that Federal agencies must ensure that their actions do not destroy or adversely modify critical habitat under section 7. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency. Furthermore, to the extent that non-Federal entities are indirectly impacted because they receive Federal assistance or participate in a voluntary Federal aid program, the Unfunded Mandates Reform Act would not apply, nor would critical habitat shift the costs of the large entitlement programs listed above onto State governments.
(2) We do not believe that this rule will significantly or uniquely affect
In accordance with Executive Order 12630 (“Government Actions and Interference with Constitutionally Protected Private Property Rights”), we have analyzed the potential takings implications of designating critical habitat for
In accordance with E.O. 13132 (Federalism), this rule does not have significant Federalism effects. A federalism summary impact statement is not required. In keeping with Department of the Interior and Department of Commerce policy, we requested information from, and coordinated development of this critical habitat designation with, appropriate State resource agencies in Florida. We did not receive comments from the State of Florida. We note, however, that one peer reviewer was from the Florida Forest Service, Florida Department of Agriculture and Consumer Services, and we have addressed those comments in the Summary of Comments and Recommendations section of this rule. From a federalism perspective, the designation of critical habitat directly affects only the responsibilities of Federal agencies. The Act imposes no other duties with respect to critical habitat, either for States and local governments, or for anyone else. As a result, the rule does not have substantial direct effects either on the States, or on the relationship between the national government and the States, or on the distribution of powers and responsibilities among the various levels of government. The designation may have some benefit to these governments because the areas that contain the features essential to the conservation of the species are more clearly defined, and the physical and biological features of the habitat necessary to the conservation of the species are specifically identified. This information does not alter where and what federally sponsored activities may occur. However, it may assist these local governments in long-range planning (because these local governments no longer have to wait for case-by-case section 7 consultations to occur).
Where State and local governments require approval or authorization from a Federal agency for actions that may affect critical habitat, consultation under section 7(a)(2) would be required. While non-Federal entities that receive Federal funding, assistance, or permits, or that otherwise require approval or authorization from a Federal agency for an action, may be indirectly impacted by the designation of critical habitat, the legally binding duty to avoid destruction or adverse modification of critical habitat rests squarely on the Federal agency.
In accordance with Executive Order 12988 (Civil Justice Reform), the Office of the Solicitor has determined that the rule does not unduly burden the judicial system and that it meets the applicable standards set forth in sections 3(a) and 3(b)(2) of the Order. We are designating critical habitat in accordance with the provisions of the Act. To assist the public in understanding the habitat needs of these plants, the rule identifies the elements of physical or biological features essential to the conservation of
This rule does not contain any new collections of information that require approval by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
It is our position that, outside the jurisdiction of the U.S. Court of Appeals for the Tenth Circuit, we do not need to prepare environmental analyses pursuant to the National Environmental Policy Act in connection with designating critical habitat under the Act. We published a notice outlining our reasons for this determination in the
In accordance with the President's memorandum of April 29, 1994 (Government-to-Government Relations with Native American Tribal Governments; 59 FR 22951), Executive Order 13175 (Consultation and Coordination With Indian Tribal Governments), and the Department of the Interior's manual at 512 DM 2, we readily acknowledge our responsibility to communicate meaningfully with recognized Federal Tribes on a government-to-government basis. In accordance with Secretarial Order 3206 of June 5, 1997 (American Indian Tribal Rights, Federal-Tribal Trust Responsibilities, and the Endangered Species Act), we readily acknowledge our responsibilities to work directly with tribes in developing programs for healthy ecosystems, to acknowledge that
We have determined that there are no tribal lands occupied by
A complete list of all references cited is available on the Internet at
The primary authors of this rulemaking are the staff members of the South Florida Ecological Services Field Office.
Endangered and threatened species, Exports, Imports, Reporting and recordkeeping requirements, Transportation.
Accordingly, we amend part 17, subchapter B of chapter I, title 50 of the Code of Federal Regulations, as set forth below:
16 U.S.C. 1361-1407; 1531-1544; 4201-4245, unless otherwise noted.
(h) * * *
The additions read as follows:
(a)
Family Asteraceae:
(1) Critical habitat units for
(2) Within these areas, the primary constituent elements of the physical or biological features essential to the conservation of
(i) Areas of pine rockland habitat that contain:
(A) Open canopy, semi-open subcanopy, and understory;
(B) Substrate of oolitic limestone rock; and
(C) A plant community of predominately native vegetation that may include, but is not limited to:
(ii) A disturbance regime that naturally or artificially duplicates natural ecological processes (
(iii) Habitats that are connected and of sufficient area to sustain viable populations of
(3) Critical habitat does not include manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located exists within the legal boundaries on September 16, 2015.
(5) Index map follows:
(6) Unit BM1: Trinity Pineland and surrounding areas, Miami-Dade County, Florida. Map of Unit BM1 follows:
(7) Unit BM2: Nixon Smiley Pineland Preserve and surrounding areas, Miami-Dade County, Florida. Map of Unit BM2 follows:
(8) Unit BM3: USDA Subtropical Horticultural Research Station and surrounding areas, Miami-Dade County, Florida. Map of Unit BM3 follows:
(9) Unit BM4: Richmond Pinelands and surrounding areas, Miami-Dade County, Florida. Map of Unit BM4 follows:
(10) Unit BM5: Quail Roost Pineland and surrounding areas, Miami-Dade County, Florida. Map of Unit BM5 follows:
(11) Unit BM6: Camp Owaissa Bauer and surrounding areas, Miami-Dade County, Florida. Map of Unit BM6 follows:
(12) Unit BM7: Navy Wells Pineland Preserve and surrounding areas, Miami-Dade County, Florida. Map of Unit BM7 follows:
Family Linaceae:
(1) Critical habitat units for
(2) Within these areas, the primary constituent elements of the physical or biological features essential to the conservation of
(i) Areas of pine rockland habitat that contain:
(A) Open canopy, semi-open subcanopy, and understory;
(B) Substrate of oolitic limestone rock; and
(C) A plant community of predominately native vegetation that may include, but is not limited to:
(ii) A disturbance regime that naturally or artificially duplicates natural ecological processes (
(iii) Habitats that are connected and of sufficient area to sustain viable populations of
(3) Critical habitat does not include manmade structures (such as buildings, aqueducts, runways, roads, and other paved areas) and the land on which they are located exists within the legal boundaries on September 16, 2015.
(4)
(5) Index map follows:
(6) Unit LCC1: Trinity Pineland and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC1 follows:
(7) Unit LCC2: Nixon Smiley Pineland Preserve and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC2 follows:
(8) Unit LCC3: USDA Subtropical Horticultural Research Station and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC3 follows:
(9) Unit LCC4: Richmond Pinelands and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC4 follows:
(10) Unit LCC5: Quail Roost Pineland and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC5 follows:
(11) Unit LCC6: Camp Owaissa Bauer and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC6 follows:
(12) Unit LCC7: Navy Wells Pineland Preserve and surrounding areas, Miami-Dade County, Florida. Map of Unit LCC7 follows:
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration |