| Page Range | 24191-24778 | |
| FR Document |
| Page and Subject | |
|---|---|
| 80 FR 24777 - Workers Memorial Day, 2015 | |
| 80 FR 24287 - Sunshine Act Meeting | |
| 80 FR 24255 - Agency Information Collection Activities: Submission for OMB Review; Comment Request | |
| 80 FR 24304 - In the Matter of Jet Neko, Inc., Order of Suspension of Trading | |
| 80 FR 24253 - Medicare and Medicaid Programs; Application by the American Diabetes Association for Continued Deeming Authority for Diabetes Self-Management Training | |
| 80 FR 24210 - Special Regulations, Areas of the National Park System, Bryce Canyon National Park, Bicycling | |
| 80 FR 24222 - Medicare Program; FY 2015 Hospice Wage Index and Payment Rate Update; Hospice Quality Reporting Requirements and Process and Appeals for Part D Payment for Drugs for Beneficiaries Enrolled in Hospice; Correction | |
| 80 FR 24245 - Taking and Importing of Marine Mammals | |
| 80 FR 24231 - Foreign-Trade Zone (FTZ) 122-Corpus Christi, Texas; Notification of Proposed Production Activity; M & G Resins, LLC, (Polyethylene Terephthalate and Terephthalic Acid); Corpus Christi, Texas | |
| 80 FR 24249 - Taking and Importing of Marine Mammals | |
| 80 FR 24248 - Taking and Importing of Marine Mammals | |
| 80 FR 24250 - Taking and Importing of Marine Mammals | |
| 80 FR 24311 - Shipping Coordinating Committee; Notice of Committee Meeting | |
| 80 FR 24310 - Culturally Significant Objects Imported for Exhibition Determinations: “American Encounters: The Simple Pleasures of Still Life” | |
| 80 FR 24236 - New Mexico Institute of Mining and Technology, et al.; Notice of Decision on Application for Duty-Free Entry of Scientific Instruments | |
| 80 FR 24311 - Culturally Significant Object Imported for Exhibition Determinations: “North Cape” | |
| 80 FR 24312 - Culturally Significant Objects Imported for Exhibition Determinations: “Sargent: Portraits of Artists and Friends” Exhibition | |
| 80 FR 24310 - Culturally Significant Objects Imported for Exhibition Determinations: “FRIDA KAHLO: Art, Garden, Life” Exhibition | |
| 80 FR 24311 - Culturally Significant Objects Imported for Exhibition Determinations: “Frances Stark: Intimism” Exhibition | |
| 80 FR 24233 - Initiation of Antidumping and Countervailing Duty Administrative Reviews | |
| 80 FR 24232 - Commodity Matchbooks From India: Continuation of Antidumping Duty and Countervailing Duty Orders | |
| 80 FR 24236 - Harvard University, et al.; Notice of Consolidated Decision on Applications for Duty-Free Entry of Electron Microscope | |
| 80 FR 24290 - Refining and Characterizing Heat Release Rates From Electrical Enclosures During Fire (RACHELLE-FIRE) | |
| 80 FR 24294 - United Nuclear Corporation; Church Rock Facility | |
| 80 FR 24289 - Northwest Medical Isotopes, LLC | |
| 80 FR 24291 - Entergy Nuclear Operations, Inc.; Vermont Yankee Nuclear Power Station | |
| 80 FR 24246 - Presidential Task Force on Combating Illegal Unreported and Unregulated (IUU) Fishing and Seafood Fraud Action Plan Recommendations 14/15 Identifying Species “At Risk” of IUU Fishing and Seafood Fraud | |
| 80 FR 24213 - Approval and Promulgation of Implementation Plans; Texas; Revisions to the State Implementation Plan; Stage I Regulations | |
| 80 FR 24227 - Approval and Promulgation of Air Quality Implementation Plans; Texas; Revisions to the State Implementation Plan; Stage I Regulations | |
| 80 FR 24223 - Fisheries of the Exclusive Economic Zone Off Alaska; Pacific Ocean Perch in the Bering Sea and Aleutian Islands Management Area | |
| 80 FR 24218 - Reconsideration on the Mercury and Air Toxics Standards (MATS) and the Utility New Source Performance Standards; Final Action | |
| 80 FR 24237 - Takes of Marine Mammals Incidental to Specified Activities; Taking Marine Mammals Incidental to Russian River Estuary Management Activities | |
| 80 FR 24296 - National Science and Technology Council; National Space Weather Strategy | |
| 80 FR 24228 - National Vaccine Injury Compensation Program: Statement of Reasons for Not Conducting Rulemaking Proceedings | |
| 80 FR 24279 - Privacy Act of 1974; Systems of Records; Correction | |
| 80 FR 24280 - Privacy Act of 1974; System of Records | |
| 80 FR 24226 - Privacy Act of 1974; Implementation; Correction | |
| 80 FR 24319 - Proposed Information Collection (Notice of Disagreement) Activity: Comment Request | |
| 80 FR 24225 - Special Conditions: L-3 Communications Integrated Systems, Boeing Model 747-8 Series Airplanes; Therapeutic Oxygen for Medical Use | |
| 80 FR 24191 - Special Conditions: Bombardier Inc. Model BD-700-2A12 and BD-700-2A13 Airplanes; Design Roll-Maneuver Condition | |
| 80 FR 24321 - Agency Information Collection Educational/Vocational Counseling Application (VA Form 28-8832) Activity Under OMB Review | |
| 80 FR 24320 - Agency Information Collection (Appointment of Veterans Service Organization as Claimant's Representative and Appointment of Individual as Claimant's Representative) Activity Under OMB Review | |
| 80 FR 24231 - Notice of Public Meeting of the Alaska Advisory Committee for Members of the Committee To Receive Member Orientation and Discuss Civil Rights Issues in the State | |
| 80 FR 24193 - Special Conditions: Airbus Model A319-151n/171n, A320-251n/271n, and A321-251n/271n (SAneo) Series Airplanes; Transient Engine-Failure Loads | |
| 80 FR 24312 - Notice of a Land Release Affecting the Federal Grant Assurance Obligations at Ryan Field Airport, Tucson, Pima County, Arizona | |
| 80 FR 24320 - Agency Information Collection (Advertising, Sales, and Enrollment Materials, and Candidate Handbooks) Activity Under OMB Review | |
| 80 FR 24274 - Renewal of Agency Information Collection for Data Elements for Student Enrollment in Bureau-funded Schools | |
| 80 FR 24305 - Notice of Applications for Deregistration Under Section 8(f) of the Investment Company Act of 1940 | |
| 80 FR 24280 - Petitions for Modification of Application of Existing Mandatory Safety Standards | |
| 80 FR 24286 - Affirmative Decisions on Petitions for Modification Granted in Whole or in Part | |
| 80 FR 24315 - Submission for OMB Review; Comment Request | |
| 80 FR 24250 - Addendum to the 26 June 2014 Record of Decision for the Final Supplemental Environmental Impact Statement F-35 Beddown at Eglin Air Force Base, Florida | |
| 80 FR 24316 - Financial Research Advisory Committee | |
| 80 FR 24251 - State Energy Advisory Board (STEAB) | |
| 80 FR 24252 - Methane Hydrate Advisory Committee | |
| 80 FR 24252 - Biomass Research and Development Technical Advisory Committee | |
| 80 FR 24253 - Commission To Review the Effectiveness of the National Energy Laboratories | |
| 80 FR 24267 - Accreditation and Approval of SGS North America, Inc., as a Commercial Gauger and Laboratory | |
| 80 FR 24247 - New England Fishery Management Council; Public Meeting | |
| 80 FR 24246 - Pacific Fishery Management Council; Public Meeting | |
| 80 FR 24251 - Agency Information Collection Activities; Comment Request; Child Care Access Means Parents in School Program Annual Performance Report | |
| 80 FR 24317 - Submission for OMB Review; Comment Request | |
| 80 FR 24274 - Endangered Species; Recovery Permit Applications | |
| 80 FR 24293 - Net Positive Suction Head for Emergency Core Cooling and Containment Heat Removal System Pumps | |
| 80 FR 24288 - Notice of Intent To Seek Approval To Establish An Information Collection | |
| 80 FR 24313 - Qualification of Drivers; Exemption Applications; Diabetes Mellitus | |
| 80 FR 24259 - Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009; Guidance for Industry; Availability | |
| 80 FR 24257 - Guidance for Industry on Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product; Availability | |
| 80 FR 24258 - Scientific Considerations in Demonstrating Biosimilarity to a Reference Product; Guidance for Industry; Availability | |
| 80 FR 24268 - Agency Information Collection Activities: Ship's Store Declaration | |
| 80 FR 24307 - Agency Information Collection Activities: Proposed Request and Comment Request | |
| 80 FR 24230 - Tobacco Transition Program; Final Date To Request Payments; No Change to Final Assessment Procedures | |
| 80 FR 24191 - Agricultural Conservation Easement Program | |
| 80 FR 24280 - Public Availability of Department of Labor FY 2014 Service Contract Inventory | |
| 80 FR 24276 - Certain Polyethylene Terephthalate Resin From Canada, China, India, and Oman | |
| 80 FR 24220 - Approval and Promulgation of State Plans for Designated Facilities and Pollutants; Texas, Oklahoma, Arkansas, New Mexico, and the City of Albuquerque, New Mexico; Control of Emissions From Existing Sewage Sludge Incinerator Units | |
| 80 FR 24228 - Approval and Promulgation of State Plans for Designated Facilities and Pollutants; Texas, Oklahoma, Arkansas, New Mexico, and the City of Albuquerque, New Mexico; Control of Emissions From Existing Sewage Sludge Incinerator Units | |
| 80 FR 24297 - Self-Regulatory Organizations; Miami International Securities Exchange LLC; Notice of Filing of a Proposed Rule Change To Amend Exchange Rule 515 | |
| 80 FR 24302 - Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Delay the Implementation Date of Trade Reporting Amendments Approved Pursuant to SR-FINRA-2013-050 | |
| 80 FR 24300 - Self-Regulatory Organizations; International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the Schedule of Fees | |
| 80 FR 24305 - Order Regarding Review of FASB Accounting Support Fee For 2015 Under Section 109 of the Sarbanes-Oxley Act of 2002 | |
| 80 FR 24278 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Heterogeneous System Architecture Foundation | |
| 80 FR 24277 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Sematech, Inc. D/B/A International Sematech | |
| 80 FR 24278 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Halon Alternatives Research Corporation, Inc. | |
| 80 FR 24277 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Cooperative Research Group on Advanced Combustion Catalyst and Aftertreatment Technologies | |
| 80 FR 24279 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Cooperative Research Group on Automotive Consortium for Embedded SecurityTM | |
| 80 FR 24279 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-Open Platform for NFV Project, Inc. | |
| 80 FR 24261 - Risk Communications Advisory Committee; Notice of Meeting | |
| 80 FR 24256 - Endocrinologic and Metabolic Drugs Advisory Committee; Notice of Meeting | |
| 80 FR 24262 - Endocrinologic and Metabolic Drugs Advisory Committee; Notice of Meeting | |
| 80 FR 24278 - Notice Pursuant to the National Cooperative Research and Production Act of 1993-PXI Systems Alliance, Inc. | |
| 80 FR 24263 - Government-Owned Inventions; Availability for Licensing | |
| 80 FR 24314 - Reports, Forms, and Record Keeping Requirements | |
| 80 FR 24266 - Center for Scientific Review; Notice of Closed Meetings | |
| 80 FR 24265 - National Institute of Biomedical Imaging and Bioengineering; Notice of Closed Meeting | |
| 80 FR 24265 - Eunice Kennedy Shriver National Institute of Child Health and Human Development; Notice of Meeting | |
| 80 FR 24267 - Fogarty International Center; Notice of Meetings | |
| 80 FR 24265 - National Institute on Drug Abuse; Notice of Closed Meetings | |
| 80 FR 24276 - Certain Protective Cases for Electronic Devices and Components Thereof; Institution of Investigation | |
| 80 FR 24260 - Multicriteria-Based Ranking Model for Risk Management of Animal Drug Residues in Milk and Milk Products; Availability | |
| 80 FR 24216 - Approval and Promulgation of Implementation Plans; State of Arkansas; Revisions to the State Implementation Plan; Fee Regulations | |
| 80 FR 24227 - Approval and Promulgation of Implementation Plans; State of Arkansas; Revisions to the State Implementation Plan; Fee Regulations | |
| 80 FR 24275 - Notice of Temporary Closure of Public Land in Storey County, NV | |
| 80 FR 24198 - Airworthiness Directives; Bombardier, Inc. Airplanes | |
| 80 FR 24207 - Airworthiness Directives; Airbus Airplanes | |
| 80 FR 24195 - Airworthiness Directives; The Boeing Company Airplanes | |
| 80 FR 24223 - Health Insurance Issuer Standards Under the Affordable Care Act, Including Standards Related to Exchanges | |
| 80 FR 24269 - Privacy Act of 1974; Department of Homeland Security United States Immigration Customs and Enforcement-011 Immigration and Enforcement Operational Records System of Records | |
| 80 FR 24324 - 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 | |
| 80 FR 24692 - Endangered and Threatened Wildlife and Plants; Designation of Critical Habitat for Neosho Mucket and Rabbitsfoot | |
| 80 FR 24200 - Airworthiness Directives; Bombardier, Inc. Airplanes |
Commodity Credit Corporation
Foreign-Trade Zones Board
International Trade Administration
National Oceanic and Atmospheric Administration
Air Force Department
Centers for Medicare & Medicaid Services
Food and Drug Administration
National Institutes of Health
U.S. Customs and Border Protection
Fish and Wildlife Service
Indian Affairs Bureau
Land Management Bureau
National Park Service
Antitrust Division
Mine Safety and Health Administration
Federal Aviation Administration
Federal Motor Carrier Safety Administration
National Highway Traffic Safety Administration
Consult the Reader Aids section at the end of this page for phone numbers, online resources, finding aids, reminders, 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.
The Natural Resources Conservation Service (NRCS) and the Commodity Credit Corporation (CCC), United States Department of Agriculture (USDA).
Interim rule; reopening of comment period.
NRCS and CCC published an interim rule for the Agricultural Conservation Easement Program (ACEP) with a request for comments, and a comment period ending April 28, 2015. This document reopens the comment period.
The comment period for the interim rule for ACEP (80 FR 11032, Feb. 27, 2015) is hereby reopened and will end Thursday, May 28, 2015.
Comments may be submitted by one of the following methods:
•
•
NRCS will post all comments on
Kim Berns, Acting Deputy Chief for Programs, at 202-720-1882.
Persons with disabilities who require alternative means for communication (
In response to requests from the public, the comment period for this rule is being reopened to provide the public additional time to submit comments.
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for the Bombardier Inc. Model BD-700-2A12 and BD-700-2A13 airplanes. These airplanes will have a novel or unusual design feature associated with an electronic flight-control system that provides roll control of the airplanes through pilot inputs to the flight computers. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Bombardier Inc. on April 30, 2015. We must receive your comments by June 15, 2015.
Send comments identified by docket number FAA-2015-0757 using any of the following methods:
•
•
•
•
Mark Freisthler, FAA, Airframe and Cabin Safety Branch, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone 425-227-1119; facsimile 425-227-1232.
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is impracticable because these procedures would significantly delay issuance of the design approval and thus delivery of the affected airplane(s).
In addition, the substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On June 13, 2012, Bombardier Inc. applied for an amended type certificate for their new Model BD-700-2A12 and BD-700-2A13 airplanes. The BD-700-2A12 and BD-700-2A13 augment the existing BD-700 family of airplanes, and are marketed as the Bombardier Global 7000 and Global 8000, respectively. These are ultra-long-range, executive-interior business jets equipped with Rockwell Collins ProLine Fusion Integrated Avionics System. These airplanes have a maximum certified passenger capacity of 19.
The design of the Model BD-700-2A12 and BD-700-2A13 airplanes includes new high-speed transonic wings with improved aerodynamic efficiency, a pressurized cabin for luxury interiors, and they share an identical supplier base and significant common design elements. The current design roll-maneuver requirement in Title 14, Code of Federal Regulations (14 CFR) part 25 is inadequate for addressing an airplane with electronic flight controls that affect maneuvering. These special conditions adjust the current roll-maneuver requirement, § 25.349, to take into account the effects of an electronic flight-control system.
Under the provisions of 14 CFR 21.101, Bombardier Inc. must show that the Model BD-700-2A12 and BD-700-2A13 airplanes meet the applicable provisions of part 25 as amended by Amendments 25-1 through 25-136.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the Model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, or should any other model already included on the same type certificate be modified to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Model BD-700-2A12 and BD-700-2A13 airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.
The Model BD-700-2A12 and BD-700-2A13 airplanes will incorporate the following novel or unusual design features:
The airplanes are equipped with an electronic flight-control system that provides control through pilot inputs to the flight computer. Current part 25 airworthiness regulations account for control laws for which aileron deflection is proportional to control-stick deflection. They do not address nonlinearities or other effects on aileron actuation that electronic flight controls may cause. Because this type of system may affect flight loads, and therefore the structural capability of the airplanes, special conditions are needed to address these effects.
These special conditions differ from current requirements in that they require that the roll maneuver is based on defined actuation of the cockpit roll control as opposed to defined deflections of the aileron itself. Also, the special conditions require an additional load condition at V
These special conditions differ from similar special conditions applied on previous programs. These special conditions are limited to the roll axis only, whereas previous special conditions also included the pitch and yaw axes. Special conditions are no longer needed for the pitch or yaw axes, because Amendment 25-91 takes into account the effects of an electronic flight-control system in those axes (§ 25.331 for pitch and § 25.351 for yaw).
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions are applicable to the Model BD-700-2A12 and BD-700-2A13 airplanes. Should Bombardier Inc. apply at a later date for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on Bombardier Inc. Model BD-700-2A12 and BD-700-2A13 airplanes. It is not a rule of general applicability.
The substance of these special conditions has been subjected to the notice and comment period in several prior instances and has been derived without substantive change from those previously issued. It is unlikely that prior public comment would result in a significant change from the substance contained herein. Therefore, because a delay would significantly affect the certification of the airplane, the FAA has determined that prior public notice and comment are unnecessary and
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type-certification basis for the Bombardier Inc. Model BD-700-2A12 and BD-700-2A13 airplanes.
In lieu of compliance to § 25.349(a):
The following conditions, speeds, and cockpit roll-control motions (except as the motions may be limited by pilot effort) must be considered in combination with an airplane load factor of zero and of two-thirds of the positive maneuvering factor used in design. In determining the resulting control-surface deflections, the torsional flexibility of the wing must be considered in accordance with § 25.301(b):
1. Bombardier Inc. must investigate conditions corresponding to steady rolling velocities. In addition, conditions corresponding to maximum angular acceleration must be investigated for airplanes with engines or other weight concentrations outboard of the fuselage. For the angular acceleration conditions, zero rolling velocity may be assumed in the absence of a rational time-history investigation of the maneuver.
2. At V
3. At V
4. At V
Federal Aviation Administration (FAA), DOT.
Final special conditions; request for comments.
These special conditions are issued for Airbus Model A319-151n/171n, A320-251n/271n, and A321-251n/271n (collectively known as Single Aisle new engine option (SA neo)) series airplanes. These airplanes will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is a new generation of high-bypass engines, and the potential loads resulting from extreme engine-failure conditions.
The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
This action is effective on Airbus on April 30, 2015. We must receive your comments by June 15, 2015.
Send comments identified by docket number FAA-2014-1080 using any of the following methods:
•
•
•
•
Todd Martin, FAA, ANM-115, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington 98057-3356; telephone 425-227-1178; facsimile 425-227-1320.
The FAA has determined that notice of, and opportunity for prior public comment on, these special conditions is unnecessary.
The substance of these special conditions has been subject to the public comment process in several prior instances with no substantive comments received. The FAA therefore finds that good cause exists for making these special conditions effective upon publication in the
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for
On February 29, 2012, Airbus applied for amended type certificate no. A28NM for their new Model SAneo series airplanes. Later, Airbus requested, and the FAA approved, an extension to the application date for FAA type certification to June 30, 2012.
The Airbus Model SAneo series airplanes are derivatives of the A319-100, A320-200, and A321-200 series airplanes equipped with Sharklets
The existing regulations are inadequate because the new high-bypass fan engines of the Airbus Model SAneo series airplanes can cause more damage in a failure event than could the previous engines.
The certification basis for the SAneo series airplanes is the certification basis for the A319-100, A320-200 and A321-200 series airplanes with Sharklets, as defined in type-certificate data sheet A28NM for components or areas not affected by the SAneo change; and sections of 14 CFR part 25 as amended by Amendments 25-1 through 25-136 (
In addition, the certification basis includes certain special conditions, exemptions, or later amended sections of the applicable part that are not relevant to these special conditions.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the type certificate for that model be amended later to include any other model that incorporates the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Airbus Model SAneo series airplanes must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34, and the noise certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, under § 11.38, and they become part of the type certification basis under § 21.17(a)(2).
The Airbus Model SAneo series airplanes will incorporate the following novel or unusual design feature:
Engines with large, high-bypass fans capable of producing much higher failure loads than previous engine designs.
The Airbus Model SAneo series airplanes therefore require additional dynamic-load analyses to assess the most severe engine-failure events. The loads resulting from these conditions would be considered as ultimate loads, with an additional safety factor applied to the airframe-supporting structure.
The size, configuration, and failure modes of jet engines has changed considerably from those envisioned in § 25.361(b), when the engine-seizure requirement was first adopted. Engines have become larger and are now designed with large, high-bypass fans capable of producing much higher failure loads. Relative to the engine configurations that existed when the rule was developed in 1957, the present generation of engines are sufficiently different and novel to justify special conditions for Model SAneo series airplanes and related future airplane models. Service history has shown that the engine-failure events that tend to cause the most severe loads are fan-blade failures, and these events occur much less frequently than the typical “limit” load condition.
To maintain the level of safety envisioned by § 25.361(b), more comprehensive criteria are required for the new generation of high-bypass engines. These special conditions would distinguish between the more-common engine-failure event and those rare events resulting from structural failures. The more-common events would continue to be treated as static torque limit-load conditions. The more-severe events resulting from extreme engine-failure conditions (such as loss of a full fan blade at redline speed) would be treated as full dynamic-load conditions. These would be considered ultimate loads and include all transient loads associated with the event. An additional safety factor would be applied to the more-critical airframe supporting structure.
The regulatory authorities and industry developed a standardized requirement in the Aviation Rulemaking Advisory Committee (ARAC) forum. The technical aspects of this requirement have been agreed upon, and have been accepted by, the ARAC Loads and Dynamics Harmonization Working Group. These special conditions reflect the ARAC recommendation and are essentially harmonized with the corresponding EASA Certification Specifications (CS) 25. In addition, the ARAC recommendation includes corresponding advisory material that is incorporated into CS-25. This advisory material is considered an acceptable means of compliance to the special conditions.
These special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these special conditions apply to the Airbus Model SAneo series airplanes. Should Airbus apply later for a change to the type certificate to include another model incorporating the same novel or unusual design feature, these special conditions would apply to that model as well.
This action affects only certain novel or unusual design features on the Airbus Model SAneo series airplanes. It is not a rule of general applicability.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, pursuant to the authority delegated to me by the Administrator, the following special conditions are issued as part of the type certification basis for Airbus Model SAneo series airplanes.
In lieu of § 25.361(b), the following special conditions apply:
1. For turbine engine installations, the engine mounts, pylons, and adjacent supporting airframe structure must be designed to withstand 1g level flight loads acting simultaneously with the maximum torque limit loads imposed by each of the following:
a. Sudden engine deceleration due to a malfunction that could result in a temporary loss of power or thrust; and
b. the maximum acceleration of the engine.
2. For auxiliary power-unit installations, the power-unit mounts and adjacent supporting airframe structure must be designed to withstand 1g level flight loads acting simultaneously with the maximum torque limit loads imposed by each of the following:
a. Sudden auxiliary power-unit deceleration due to malfunction or structural failure; and
b. the maximum acceleration of the power unit.
3. For engine supporting structure, an ultimate loading condition must be considered that combines 1g flight loads with the transient dynamic loads resulting from:
a. The loss of any fan, compressor, or turbine blade; and separately,
b. where applicable to a specific engine design, any other engine structural failure that results in higher loads.
4. The ultimate loads developed from the conditions specified in Special Conditions 3.a. and 3.b., above, are to be multiplied by a factor of 1.0 when applied to engine mounts and pylons; and multiplied by a factor of 1.25 when applied to adjacent supporting airframe structure.
5. The airplane must be capable of continued safe flight considering the aerodynamic effects on controllability due to any permanent deformation that results from the conditions specified in Special Condition 3, above.
Federal Aviation Administration (FAA), DOT.
Final rule.
We are adopting a new airworthiness directive (AD) for certain The Boeing Company Model 737-600 and -700 series airplanes. This AD was prompted by reports of cracking in the body station (STA) 727 bulkhead lower frame. This AD requires a detailed and open hole high frequency eddy current (HFEC) inspection of the left- and right-side lower frame webs and inner chords for cracking, and corrective actions and preventative modifications if necessary. This AD also provides for optional terminating action of the repetitive inspections, under certain conditions. We are issuing this AD to detect and correct cracking in a bulkhead lower frame web and inner chord, which could result in a severed frame and induced skin cracks, and could lead to rapid decompression of the fuselage.
This AD is effective June 4, 2015.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of June 4, 2015.
For service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
You may examine the AD docket on the Internet at
Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain The Boeing Company Model 737-600 and -700 series airplanes. The NPRM published in the
We gave the public the opportunity to participate in developing this AD. Boeing and United Airlines stated that they support the NPRM (79 FR 30490, May 28, 2014). The following presents the comments received on the NPRM, and the FAA's response to each comment.
Southwest Airlines (SWA) requested that we clarify whether the preventative modifications and repairs of the lower frame webs and inner chords (if
SWA stated that paragraph (h) of the NPRM (79 FR 30490, May 28, 2014) reads, “Accomplishment of a modification or a repair, in accordance with Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, terminates the repetitive inspections in this AD for the repaired or modified side only.”
SWA stated that Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, provides that for each airplane group, if a repair is installed on one side, a preventative modification must be installed on the opposing side. SWA also stated that, for airplanes with no cracks, a preventative modification is optional, but that the service information specifies that in this situation, both sides must be modified.
We agree that clarification is necessary. Groups 2 and 3 airplanes are comprised of four airplanes on which a repair to the left side was installed prior to the issuance of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013. Therefore, SWA's comments are primarily for Group 1 airplanes.
As specified in Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, if a crack is found on one side, then that side must be repaired and the preventative modification concurrently installed on the other side, even if that other side is not cracked. We also agree that if no cracking is found on either side and the operator chooses to install the preventative modification, then both sides must be modified, as specified in paragraph 3.B., Part 2, Step 2 of the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013. Installing the preventative modification terminates the repetitive inspections. We have removed the wording “for the repaired or modified side only” from paragraph (h) of this AD.
Aviation Partners Boeing stated that accomplishing the supplemental type certificate (STC) ST00830SE (
We concur with the commenter. We have redesignated paragraph (c) of the NPRM (79 FR 30490, May 28, 2014) as paragraph (c)(1) and added new paragraph (c)(2) to this AD to state that installation of STC ST00830SE (
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously, and minor editorial changes. We have determined that these minor changes:
• Αre consistent with the intent that was proposed in the NPRM (79 FR 30490, May 28, 2014) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 30490, May 28, 2014).
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
We reviewed Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013. The service information describes procedures for a detailed and open hole HFEC inspection of the left- and right-side lower frame webs and inner chords for cracking, and corrective actions and preventative modifications if necessary. The service information also provides for an optional terminating action of the repetitive inspections, under certain conditions. This service information is reasonably available at
We estimate that this AD affects 489 airplanes of U.S. registry.
We estimate the following costs to comply with this AD:
We estimate the following costs to do any necessary repairs that would be required based on the results of the inspections. We have no way of determining the number of aircraft that might need these repairs:
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
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 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 AD is effective June 4, 2015.
None.
(1) This AD applies to The Boeing Company Model 737-600 and -700 series airplanes, certificated in any category, as identified in Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013.
(2) Installation of Supplemental Type Certificate (STC) ST00830SE (
Air Transport Association (ATA) of America Code 53, Fuselage.
This AD was prompted by reports of cracking in the body station 727 bulkhead lower frame. We are issuing this AD to detect and correct cracking in a bulkhead lower frame web and inner chord, which could result in a severed framed and induced skin cracks, and could lead to rapid decompression of the fuselage.
Comply with this AD within the compliance times specified, unless already done.
At the applicable times specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, except as provided by paragraph (i)(1) of this AD: Do a detailed and open hole high frequency eddy current (HFEC) inspection of the left- and right-side lower frame webs and inner chords for cracking, as applicable, and do all applicable corrective actions and preventative modifications, in accordance with the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, except as required by paragraph (i)(2) of this AD. Repeat the applicable inspections required by this paragraph thereafter at the applicable intervals specified in paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013. Do all applicable corrective actions and preventative modifications before further flight.
Accomplishment of a modification or a repair, in accordance with Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, terminates the repetitive inspections required by this AD.
(1) Where Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, specifies a compliance time “after the original issue date of this service bulletin,” this AD requires compliance within the specified compliance time after the effective date of this AD.
(2) Where Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, specifies to contact Boeing for appropriate action: Before further flight, accomplish the corresponding action using a method approved in accordance with the procedures specified in paragraph (k) of this AD.
The post-repair inspections specified in tables 4, 5, and 6 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, are not required by this AD.
The damage tolerance inspections specified in tables 4, 5, and 6 of paragraph 1.E., “Compliance,” of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, may be used in support of compliance with Section 121.1109(c)(2) or 129.109(b)(2) of the Federal Aviation Regulations (14 CFR 121.1109(c)(2) or 14 CFR 129.109(b)(2)). The corresponding actions specified in the Accomplishment Instructions of Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013, are not required by this AD.
(1) The Manager, Seattle Aircraft Certification Office (ACO), FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the manager of the ACO, send it to the attention of the person identified in paragraph (l) of this AD. Information may be emailed to:
(2) Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office.
(3) An AMOC that provides an acceptable level of safety may be used for any repair required by this AD if it is approved by the Boeing Commercial Airplanes Organization Designation Authorization (ODA) that has been authorized by the Manager, Seattle ACO, to make those findings. For a repair method to be approved, the repair must meet the certification basis of the airplane, and the approval must specifically refer to this AD.
For more information about this AD, contact Alan Pohl, Aerospace Engineer, Airframe Branch, ANM-120S, FAA, Seattle Aircraft Certification Office, 1601 Lind Avenue SW., Renton, WA 98057-3356; phone: 425-917-6450; fax: 425-917-6590; email:
(1) The Director of the Federal Register approved the incorporation by reference (IBR) of the service information listed in this
(2) You must use this service information as applicable to do the actions required by this AD, unless the AD specifies otherwise.
(i) Boeing Alert Service Bulletin 737-53A1325, dated December 3, 2013.
(ii) Reserved.
(3) For Boeing service information identified in this AD, contact Boeing Commercial Airplanes, Attention: Data & Services Management, P.O. Box 3707, MC 2H-65, Seattle, WA 98124-2207; telephone 206-544-5000, extension 1; fax 206-766-5680; Internet
(4) You may view this referenced service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(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 certain Bombardier, Inc. Model CL-600-2E25 (Regional Jet Series 1000) airplanes. This AD was prompted by a determination that without an effective maintenance task to maintain the airplane's inherent level of safety, there is a potential that a dormant failure of the alternate release system of the landing gear could occur. This AD requires revising the maintenance or inspection program, as applicable, to incorporate a maintenance task for an operational check of the electro-mechanical actuator and release mechanism of the alternate extension system for the nose landing gear and main landing gear. We are issuing this AD to prevent failure of the alternate release system of the landing gear, which could prevent the landing gear from extending during a failure of the normal landing gear extension system.
This AD becomes effective June 4, 2015.
The Director of the Federal Register approved the incorporation by reference of a certain publication listed in this AD as of June 4, 2015.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
Cesar Gomez, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7318; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model CL-600-2E25 (Regional Jet Series 1000) airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2014-16, dated June 11, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-2E25 (Regional Jet Series 1000) airplanes. The MCAI states:
During a design review, an error was identified which led to the development of a new certification maintenance requirement (CMR) task. Without an effective maintenance task to maintain the aeroplane's inherent level of safety, there is a potential that a dormant failure of the alternate release system of the landing gear could occur. Failure of the landing gear alternate release system could prevent the landing gear from extending in the case of a failure of the normal landing gear extension system.
This [Canadian] AD mandates the incorporation of a new maintenance task to ensure operation of the landing gear alternate extension system.
You may examine the MCAI 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 3498, January 23, 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 this 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 3498, January 23, 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 3498, January 23, 2015).
Bombardier, Inc. has issued Temporary Revision (TR) ALI-0472, dated February 27, 2014, to Section 1-32 of Part 2, Bombardier Airworthiness Limitations, of the CRJ Series Regional Jet Maintenance Requirements Manual, CSP B-053. This service information describes a maintenance task for an operational check of the electro-mechanical actuator and release mechanism of the alternate extension system for the nose landing gear and main landing gear. The actions described in this service information are intended to correct the unsafe condition identified in the MCAI. This service information is reasonably available at
We estimate that this AD affects 35 airplanes of U.S. registry.
We also estimate that it will take about 1 work-hour 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 this AD on U.S. operators to be $2,975, or $85 per product.
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.
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 AD becomes effective June 4, 2015.
None.
This AD applies to Bombardier, Inc. Model CL-600-2E25 (Regional Jet Series 1000) airplanes, certificated in any category, serial numbers 19002 and subsequent.
Air Transport Association (ATA) of America Code 32, Landing Gear.
This AD was prompted by a determination that without an effective maintenance task to maintain the airplane's inherent level of safety, there is a potential that a dormant failure of the alternate release system of the landing gear can occur. We are issuing this AD to prevent failure of the alternate release system of the landing gear, which could prevent the landing gear from extending during a failure of the normal landing gear extension system.
Comply with this AD within the compliance times specified, unless already done.
Within 30 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, to incorporate Task 32-01-00-101, “Operational Check of the MLG [Main Landing Gear] and NLG [Nose Landing Gear] AES [Alternate Extension System] EMA [Electro-mechanical Actuator] and Release Mechanism (CRJ1000),” for the operational check of the MLG and NLG AES EMA and release mechanism, as specified in Bombardier Temporary Revision (TR) ALI-0472, dated February 27, 2014, to Section 1-32 of Part 2, Airworthiness Limitations, of the Bombardier CRJ Series Regional Jet, Maintenance Requirements Manual, CSP B-053. The initial compliance time for the operational check is at the applicable time specified in paragraphs (g)(1) and (g)(2) of this AD.
(1) For airplanes that have accumulated 540 total flight hours or more as of the effective date of this AD: Within 660 flight hours after the effective date of this AD.
(2) For airplanes that have accumulated less than 540 total flight hours as of the effective date of this AD: Before the accumulation of 1,200 total flight hours.
After accomplishing the revision required by paragraph (g) of this AD, no alternative actions (
The following provisions also apply to this AD:
(1) Alternative Methods of Compliance (AMOCs): The Manager, New York Aircraft Certification Office (ACO), ANE-170, FAA, has the authority to approve AMOCs for this AD, if requested using the procedures found in 14 CFR 39.19. In accordance with 14 CFR 39.19, send your request to your principal inspector or local Flight Standards District Office, as appropriate. If sending information directly to the ACO, send it to ATTN: Program Manager, Continuing Operational Safety, FAA, New York ACO, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7300; fax 516-794-5531. Before using any approved AMOC, notify your appropriate principal inspector, or lacking a principal inspector, the manager of the local flight standards district office/certificate holding district office. The AMOC approval letter must specifically reference this AD.
(2) Contacting the Manufacturer: For any requirement in this AD to obtain corrective actions from a manufacturer, the action must be accomplished using a method approved by the Manager, New York ACO, ANE-170, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Organization Approval (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.
Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2014-16, dated June 11, 2014, for related information. This MCAI may 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 this AD specifies otherwise.
(i) Bombardier Temporary Revision ALI-0472, dated February 27, 2014, to Section 1-32 of Part 2, Airworthiness Limitations, of the Bombardier CRJ Series Regional Jet Maintenance Requirements Manual, CSP B-053.
(ii) Reserved.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(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 certain Bombardier, Inc. Model CL-600-1A11 (CL-600), CL-600-2A12 (CL-601), and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604 Variants) airplanes. This AD was prompted by a determination that the forward lugs of the flap hinge box might not conform to engineering drawings, which could result in premature fatigue cracking. This AD requires revising the maintenance or inspection program to include new airworthiness limitations tasks; and measuring the forward lug edge distance of each flap hinge box, inspecting for cracking and damage (
This AD becomes effective June 4, 2015.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 4, 2015.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
Ricardo Garcia, Aerospace Engineer, Airframe and Mechanical Systems Branch, ANE-171, FAA, New York Aircraft Certification Office, 1600 Stewart Avenue, Suite 410, Westbury, NY 11590; telephone 516-228-7331; fax 516-794-5531.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Bombardier, Inc. Model CL-600-1A11 (CL-600), CL-600-2A12 (CL-601), and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604 Variants) airplanes. The NPRM published in the
Transport Canada Civil Aviation (TCCA), which is the aviation authority for Canada, has issued Canadian Airworthiness Directive CF-2014-01, dated January 3, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition for certain Bombardier, Inc. Model CL-600-1A11 (CL-600), CL-600-2A12 (CL-601), and CL-600-2B16 (CL-601-3A, CL-601-3R, and CL-604 Variants) airplanes. The MCAI states:
The aeroplane manufacturer has determined that the flap hinge box forward lugs edge distance may not conform to the engineering drawings. Non-conforming flap hinge box forward lugs may result in premature fatigue cracking.
Failure of the lugs could lead to the detachment of the flap hinge box and consequently the detachment of the flap surface. The loss of a flap surface could adversely affect the continued safe operation of the aeroplane.
This [Canadian] AD mandates the incorporation of new Time Limits/Maintenance Checks (TLMC) Airworthiness Limitations (AWL) tasks, and the measurement [and inspection for cracking and damage] of the forward lug edge distance of each flap hinge-box and rectification as required.
Corrective actions include repairing damage and cracking. You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 45140, August 4, 2014) and the FAA's response to each comment.
Bombardier, Inc. requested that we revise the NPRM (79 FR 45140, August 4, 2014) to reflect the latest revisions of certain service information.
We agree to include the latest revisions of certain service information. Bombardier has issued Service Bulletin 604-57-007, Revision 01, dated November 12, 2014 (for Model CL-600-2B16 airplanes); and Service Bulletin 605-57-005, Revision 01, dated November 12, 2014 (for Model CL-600-2B16 airplanes). This new service information does not add new work for the affected airplanes and was revised to update labor hours needed to perform the work and clarify work instructions. We have changed this AD to reference Bombardier Service Bulletin 604-57-007, Revision 01, dated November 12, 2014; and Bombardier Service Bulletin 605-57-005, Revision 01, dated November 12, 2014, throughout. We have also added a new paragraph (k) to this AD to give credit for actions performed before the effective date of this AD using Bombardier Service Bulletin 604-57-007, dated September 26, 2013; and Bombardier Service Bulletin 605-57-005, dated September 26, 2013. We redesignated subsequent paragraphs accordingly.
Bombardier, Inc., and an FAA airframe and powerplant mechanic noted typographical errors in Table 1 of the NPRM (79 FR 45140, August 4, 2014) and requested they be corrected.
We agree that there are typographical errors. We have revised table 1 to paragraph (g) of this AD. The temporary revision (TR) number has been corrected to read “5-275,” in certain rows of table 1 to paragraph (g) of this AD, where in the NPRM (79 FR 45140, August 4, 2014) the previous TR number read “5-276.” The revision of Bombardier CL-604 Time Limits/Maintenance Checks Manual, dated July 8, 2013, was corrected from revision “8” to revision “20.”
We have removed Note 1 to paragraph (g) from this final rule. Instead, we have included that information in paragraph (g) of this AD.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (79 FR 45140, August 4, 2014) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 45140, August 4, 2014).
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
Bombardier has issued the following service information.
• Bombardier Service Bulletin 600-0762, dated September 26, 2013. This service information describes procedures for measuring the edge-to-edge distance of the forward lugs for the flap hinge boxes and contacting the manufacturer for corrective actions for Bombardier, Inc. Model CL-600-1A11 (CL-600) airplanes.
Bombardier Service Bulletin 601-0631, dated September 26, 2013. This service information describes procedures for measuring the edge-to-edge distance of the forward lugs for the flap hinge boxes and contacting the manufacturer for corrective actions for Bombardier, Inc. Model CL-600-2A12 (CL-601 Variant) and CL-600-2B16 (CL-601-3A and -3R Variant) airplanes.
• Bombardier Service Bulletin 604-57-007, Revision 01, dated November 12, 2014. This service information describes procedures for measuring the edge-to-edge distance of the forward lugs for the flap hinge boxes and contacting the manufacturer for corrective actions for Bombardier, Inc. Model CL-600-2B16 (CL-604 Variant) airplanes having serial numbers (S/Ns) 5301 through 5665 inclusive.
• Bombardier Service Bulletin 605-57-005, Revision 01, dated November 12, 2014. This service information describes procedures for measuring the edge-to-edge distance of the forward lugs for the flap hinge boxes and contacting the manufacturer for corrective actions for Bombardier, Inc. Model CL-600-2B16 (CL-604 Variant) airplanes having S/Ns 5701 through 5953 inclusive.
• Canadair Challenger Temporary Revision 5-157, dated July 8, 2013, to Outboard Flap—Hinge Box Forward Lugs, to Canadair Challenger Time Limits/Maintenance Checks Manual, PSP 605. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the outboard flap hinge box for Bombardier, Inc. Model CL-600-1A11 (CL-600) airplanes.
Canadair Challenger Temporary Revision 5-158, Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadair Challenger Time Limits/Maintenance Checks Manual, PSP 605. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the inboard flap hinge box for Bombardier, Inc. Model CL-600-1A11 (CL-600) airplanes.
• Canadair Challenger Temporary Revision 5-262, Outboard and Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601. This service information describes airworthiness limitations tasks and compliance times for inspecting the forward lugs of the outboard and inboard flap hinge boxes for Bombardier, Inc. Model CL-600-2A12 (CL-601) airplanes.
• Canadair Challenger Temporary Revision 5-275, Outboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601A-5. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the outboard flap hinge box for Bombardier, Inc. Model CL-600-2B16 (CL-601-3A Variants) airplanes.
• Canadair Challenger Temporary Revision 5-276, Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601A-5. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the inboard flap hinge box for Bombardier, Inc. Model CL-600-2B16 (CL-601-3A and CL-601-3R Variant) airplanes.
• Task 57-50-00-121, Special Detailed Inspection of the Forward Lugs of the Inboard Flap Hinge Box, of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of
• Task 57-50-00-121, Special Detailed Inspection of the Forward Lugs of the Inboard Flap Hinge Box, of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-604 Time Limits/Maintenance Checks Manual, Revision 20, dated July 8, 2013. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the inboard flap hinge box of Bombardier, Inc. Model CL-600-2B16 (CL-604 Variant) airplanes, having S/Ns 5301 through 5665 inclusive.
• Task 57-52-01-102, Special Detailed Inspection of the Hinge—Box Forward Lugs of the Outboard Flap, of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-605 Time Limits/Maintenance Checks Manual, Revision 8, dated July 8, 2013. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the outboard flap hinge box of Bombardier, Inc. Model CL-600-2B16 (CL-604 Variant) airplanes, having S/Ns 5701 through 5953 inclusive.
• Task 57-52-01-102, Special Detailed Inspection of the Hinge—Box Forward Lugs of the Outboard Flap, of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-604 Time Limits/Maintenance Checks Manual, Revision 20, dated July 8, 2013. This service information describes an airworthiness limitations task and compliance times for inspecting the forward lugs of the outboard flap hinge box of Bombardier, Inc. Model CL-600-2B16 (CL-604 Variant) airplanes, having S/Ns 5301 through 5665 inclusive.
This service information is reasonably available; see
We estimate that this AD affects 105 airplanes of U.S. registry.
We also estimate that it will take about 45 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 this AD on U.S. operators to be $401,625, or $3,825 per product.
We have received no definitive data that would enable us to provide cost estimates for the cost of parts or on-condition actions specified in this AD.
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.
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 AD becomes effective June 4, 2015.
None.
This AD applies to the airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category.
(1) Bombardier, Inc. Model CL-600-1A11 (CL-600) airplanes, serial numbers 1004 through 1085 inclusive.
(2) Bombardier, Inc. Model CL-600-2A12 (CL-601) airplanes, serial numbers 3001 through 3066 inclusive.
(3) Bombardier, Inc. Model CL-600-2B16 (CL-601-3A and CL-601-3R Variants) airplanes, serial numbers 5001 through 5194 inclusive.
(4) Bombardier, Inc. Model CL-600-2B16 (CL-604 Variants) airplanes, serial numbers 5301 through 5665 inclusive, and 5701 through 5953 inclusive.
Air Transport Association (ATA) of America Code 57, Wings.
This AD was prompted by a determination that the forward lugs of the flap hinge box might not conform to engineering drawings, which could result in premature fatigue cracking. We are issuing this AD to detect and correct non-conforming flap hinge box forward lugs, which could result in failure of the lugs and detachment of the flap hinge box and consequent detachment of the flap surface.
Comply with this AD within the compliance times specified, unless already done.
Within 60 days after the effective date of this AD, revise the maintenance or inspection program, as applicable, by incorporating the applicable airworthiness limitation (AWL) tasks as specified in table 1 to this paragraph. The initial compliance time for doing the task is at the applicable times specified in table 1 to this paragraph. For the incorporation of tasks specified in the temporary revisions (TRs) specified in table 1 to this paragraph of this AD that are a part of the maintenance or inspection program revision required by this paragraph, such incorporation may be done by inserting a copy of the applicable TRs specified in table 1 to this paragraph into the applicable “time limits/maintenance checks” (TLMC) manuals specified in table 1 to this paragraph. When the applicable TRs specified in table 1 to this paragraph have been included in general revisions of the applicable TLMC manual specified in table 1 to this paragraph, the general revisions may be inserted in the applicable TLMC manual specified in table 1 to this paragraph.
At the applicable times specified in table 2 to this paragraph and paragraph (i)(1) of this AD, measure the forward lug edge distance of all flap hinge boxes, and do a general visual inspection for cracking and damage (
(1) If, during the measurement required by paragraph (h) of this AD, the lug edge distance is equal to or greater than the limit specified in the applicable service bulletin specified in table 2 to paragraph (h) of this AD and this paragraph, no further action is required by this paragraph.
(2) If, during the measurement required by paragraph (h) of this AD, the lug edge distance is below the limit specified in the applicable service bulletin specified in table 2 to paragraphs (h) and (i)(1) of this AD, before further flight, repair using a method approved by the Manager, New York ACO, ANE-170, FAA; or Transport Canada Civil Aviation (TCCA); or Bombardier, Inc.'s TCCA Design Approval Organization (DAO). If approved by the DAO, the approval must include the DAO-authorized signature.
(3) If, during the inspection required by paragraph (h) of this AD, any cracking or damage is found, before further flight, repair using a method approved by the Manager, New York ACO, ANE-170, FAA; or TCCA; or Bombardier, Inc.'s TCCA DAO. If approved by the DAO, the approval must include the DAO-authorized signature.
After accomplishing the revision required by paragraph (g) of this AD, no alternative actions (
This paragraph provides credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using Bombardier Service Bulletin 604-57-007, dated September 26, 2013 (for Model CL-600-2B16 airplanes); or Bombardier Service Bulletin 605-57-005, dated September 26, 2013 (for Model CL-600-2B16 airplanes); which are not incorporated by reference in this AD.
The following provisions also apply to this AD:
(1)
(2)
(1) Refer to Mandatory Continuing Airworthiness Information (MCAI) Canadian Airworthiness Directive CF-2014-01, dated January 3, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (n)(3) and (n)(4) of this AD.
(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 this AD specifies otherwise.
(i) Bombardier Service Bulletin 600-0762, dated September 26, 2013.
(ii) Bombardier Service Bulletin 601-0631, dated September 26, 2013.
(iii) Bombardier Service Bulletin 604-57-007, Revision 01, dated November 12, 2014.
(iv) Bombardier Service Bulletin 605-57-005, Revision 01, dated November 12, 2014.
(v) Canadair Challenger Temporary Revision 5-157, Outboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadair Challenger Time Limits/Maintenance Checks Manual, PSP 605.
(vi) Canadair Challenger Temporary Revision 5-158, Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadair Challenger Time Limits/Maintenance Checks Manual, PSP 605.
(vii) Canadair Challenger Temporary Revision 5-262, Outboard and Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601.
(viii) Canadair Challenger Temporary Revision 5-275, Outboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601A-5.
(ix) Canadair Challenger Temporary Revision 5-276, Inboard Flap—Hinge Box Forward Lugs, dated July 8, 2013, to Canadian Challenger Time Limits/Maintenance Checks Manual PSP 601A-5.
(x) Task 57-50-00-121 Special Detailed Inspection of the Forward Lugs of the Inboard Flap Hinge Box of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-605 Time Limits/Maintenance Checks Manual, Revision 8, dated July 8, 2013.
(xi) Task 57-50-00-121 Special Detailed Inspection of the Forward Lugs of the Inboard Flap Hinge Box of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-604 Time Limits/Maintenance Checks Manual, Revision 20, dated July 8, 2013.
(xii) Task 57-52-01-102 Special Detailed Inspection of the Hinge—Box Forward Lugs of the Outboard Flap of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-605 Time Limits/Maintenance Checks Manual, Revision 8, dated July 8, 2013.
(xiii) Task 57-52-01-102 Special Detailed Inspection of the Hinge—Box Forward Lugs of the Outboard Flap of Section 5-10-30 of Part 2, “Airworthiness Limitations,” of Bombardier CL-604 Time Limits/Maintenance Checks Manual, Revision 20, dated July 8, 2013.
(3) For service information identified in this AD, contact Bombardier, Inc., 400 Côte-Vertu Road West, Dorval, Québec H4S 1Y9, Canada; telephone 514-855-5000; fax 514-855-7401; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(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 certain Airbus Model A318-111 and -112 airplanes and Model A319, A320, and A321 series airplanes. This AD was prompted by reports of cracks on the forward corner fittings of engine pylon aft secondary structures. This AD requires repetitive inspections of certain forward corner fittings of the pylon aft secondary structures, and corrective actions if necessary. This AD also provides optional terminating action for the repetitive inspections. We are issuing this AD to detect and correct detachment of the lower fairing attachment and/or loss of the aft fixed fairing with the movable fairing from the airplane in flight, which could result in damage to the airplane.
This AD becomes effective June 4, 2015.
The Director of the Federal Register approved the incorporation by reference of certain publications listed in this AD as of June 4, 2015.
You may examine the AD docket on the Internet at
For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
Sanjay Ralhan, Aerospace Engineer, International Branch, ANM-116, Transport Airplane Directorate, FAA, 1601 Lind Avenue SW., Renton, WA 98057-3356; telephone 425-227-1405; fax 425-227-1149.
We issued a notice of proposed rulemaking (NPRM) to amend 14 CFR part 39 by adding an AD that would apply to certain Airbus Model A318-111 and -112 airplanes and Model A319, A320, and A321 series airplanes. The NPRM published in the
The European Aviation Safety Agency (EASA), which is the Technical Agent for the Member States of the European Union, has issued EASA Airworthiness Directive 2014-0064, dated March 14, 2014 (referred to after this as the Mandatory Continuing Airworthiness Information, or “the MCAI”), to correct an unsafe condition. The MCAI states:
Several operators of A320 family aeroplanes have reported finding cracks on the forward corner fittings of engine pylon aft secondary structures, on the lateral face (lateral panel side). In some cases, these cracks had propagated onto the forward face (Rib 11 side). Investigation results have highlighted that these cracks are initiated by stress corrosion.
This condition, if not detected and corrected, could lead to loss (
For the reasons described above, this [EASA] AD requires repetitive detailed inspections (DI) of the right hand (RH) Part Number (P/N) D54530014201 and left hand (LH) P/N D54530014200 corner fittings of engine pylon aft secondary structures (pre-mod 38067 or pre-Airbus Service Bulletin (SB) A320-54-1019) to detect cracks or deformation in the splicing area with corner fitting between Ribs 11-12 and, depending on findings, replacement of the corner fittings.
This [EASA] AD also recognizes that replacement of the corner fittings with improved parts (as per Airbus SB A320-54-1019) constitutes a terminating action for the repetitive DI required by this [EASA] AD.
You may examine the MCAI in the AD docket on the Internet at
We gave the public the opportunity to participate in developing this AD. The following presents the comments received on the NPRM (79 FR 52267, September 3, 2014) and the FAA's response to each comment.
United Airlines and US Airways requested that we revise the NPRM (79 FR 52267, September 3, 2014) to reference Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014, in lieu of Airbus Service Bulletin A320-54-1019, Revision 01, dated April 10, 2008. United Airlines also requested that we revise the NPRM to reference Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014, in lieu of Airbus Service Bulletin A320-54-1022, Revision 02, dated July 12, 2013.
We agree with the commenters' requests to reference revised service bulletins. Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014, improves the test procedures, and Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014, specifies that certain actions in the Accomplishment Instructions are
We have redesignated paragraph (l) of the NPRM (79 FR 52267, September 3, 2014) as paragraph (l)(1) of this AD and revised it to give credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-54-1022, Revision 02, dated July 12, 2013. We have added new paragraph (l)(2) to this AD to give credit for actions required by paragraph (i) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-54-1019, Revision 01, dated April 10, 2008.
Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014, steps that are identified as RC must be done to comply with the AD. However, steps that are not identified as RC are recommended. We have added an explanation of RC steps in the preamble of this AD. We have also added new paragraph (m)(3) to this AD to specify compliance with RC steps.
We reviewed the relevant data, considered the comments received, and determined that air safety and the public interest require adopting this AD with the changes described previously and minor editorial changes. We have determined that these minor changes:
• Are consistent with the intent that was proposed in the NPRM (79 FR 52267, September 3, 2014) for correcting the unsafe condition; and
• Do not add any additional burden upon the public than was already proposed in the NPRM (79 FR 52267, September 3, 2014).
We also determined that these changes will not increase the economic burden on any operator or increase the scope of this AD.
The FAA worked in conjunction with industry, under the Airworthiness Directives Implementation Aviation Rulemaking Committee (ARC), to enhance the AD system. One enhancement was a new process for annotating which procedures and tests in the service information are required for compliance with an AD. Differentiating these procedures and tests from other tasks in the service information is expected to improve an owner's/operator's understanding of crucial AD requirements and help provide consistent judgment in AD compliance. The procedures and tests identified as RC (required for compliance) in any service information have a direct effect on detecting, preventing, resolving, or eliminating an identified unsafe condition.
Procedures and tests that are identified as RC in any service information must be done to comply with the AD. However, procedures and tests that are not identified as RC are recommended. Those procedures and tests that are not identified as RC may be deviated from using accepted methods in accordance with the operator's maintenance or inspection program without obtaining approval of an alternative method of compliance (AMOC), provided the procedures and tests identified as RC can be done and the airplane can be put back in a serviceable condition. Any substitutions or changes to procedures or tests identified as RC will require approval of an AMOC.
We reviewed Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014. This service information describes procedures for inspections of forward corner fittings of the engine pylon aft secondary structures, and corrective actions.
We also reviewed Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014. This service information describes procedures for replacement of the corner fittings on the engine pylons.
This service information is reasonably available at
We estimate that this AD affects 851 airplanes of U.S. registry.
We also estimate that it would take about 30 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 this AD on U.S. operators to be $2,170,050, or $2,550 per product.
In addition, we estimate the optional terminating modification would take about 60 work-hours and require parts costing about $932 per product, for a cost of $6,032 per product.
We have received no definitive data that would enable us to provide cost estimates for the on-condition actions specified in this AD.
According to the manufacturer, some of the costs of this AD may be covered under warranty, thereby reducing the cost impact on affected individuals. We do not control warranty coverage for affected individuals. As a result, we have included all costs in our cost estimate.
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.
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 AD becomes effective June 4, 2015.
None.
This AD applies to the Airbus airplanes identified in paragraphs (c)(1) through (c)(4) of this AD, certificated in any category, except for airplanes on which Airbus Modification 33844 or Modification 33847, as applicable, has been embodied in production.
(1) Airbus Model A318-111 and -112 airplanes.
(2) Airbus Model A319-111, -112, -113, -114, -115, -131, -132, and -133 airplanes.
(3) Airbus Model A320-211, -212, -214, -231, -232, and -233 airplanes.
(4) Airbus Model A321-111, -112, -131, -211, -212, -213, -231, and -232 airplanes.
Air Transport Association (ATA) of America Code 54, Nacelles/pylons.
This AD was prompted by reports of cracks on the forward corner fittings of engine pylon aft secondary structures. We are issuing this AD to detect and correct detachment of the lower fairing attachment and/or loss of the aft fixed fairing with the movable fairing from the airplane in flight, which could result in damage to the airplane.
Comply with this AD within the compliance times specified, unless already done.
At the latest of the times specified in paragraphs (g)(1), (g)(2), and (g)(3) of this AD: Do a detailed inspection for cracking of forward corner fittings having part number (P/N) D54530014201 (right-hand (RH)) and P/N D54530014200 (left-hand (LH)) of the pylon aft secondary structures, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014, except as provided by paragraph (j) of this AD. Repeat the inspection thereafter at intervals not to exceed 15,000 flight cycles or 22,500 flight hours, whichever occurs first. Accomplishment of the actions specified in paragraph (i) of this AD terminates the actions required by this paragraph.
(1) Within 15,000 flight cycles or 22,500 flight hours, whichever occurs first since first flight of the airplane.
(2) Within 5,000 flight cycles or 7,500 flight hours after the effective date of this AD, without exceeding 40,750 flight cycles or 60,750 flight hours, whichever occurs first since first flight of the airplane.
(3) Within 750 flight cycles or 750 flight hours, whichever occurs first after the effective date of this AD.
If any crack is found on the corner fittings of a pylon during any inspection required by paragraph (g) of this AD: Before further flight, do a detailed inspection for cracking of the lower and medium spars, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014.
(1) If any damage is found: Before further flight, repair using a method approved by the Manager, International Branch, ANM-116, Transport Airplane Directorate, FAA; or the European Aviation Safety Agency (EASA); or Airbus's EASA Design Organization Approval (DOA).
(2) If no damage is found: Within 5,000 flight cycles or 7,500 flight hours, whichever occurs first after the detailed inspection specified in the introductory text to paragraph (h) of this AD, modify the airplane, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014.
Modification of an airplane by installation of corner fittings having P/N D0041092120000 (RH) and P/N D0041092120100 (LH) on both pylons, in accordance with the Accomplishment Instructions of Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014, constitutes terminating action for the repetitive inspections required by paragraph (g) of this AD.
Airplanes on which Airbus Modification 38067 (installation of new corner fittings) has been embodied in production, and airplanes already modified in service as described in Airbus Service Bulletin A320-54-1019, are not affected by the requirements of paragraph (g) of this AD, provided that no corner fittings having P/N D54530014201 (RH) or P/N D54530014200 (LH) have been installed since first flight of the airplane, or since modification, as applicable.
(1) As of the effective date of this AD, for airplanes on which Airbus Modification 38067 has been embodied in production on both pylons, and for airplanes previously modified in service as described in Airbus Service Bulletin A320-54-1019: Do not install any corner fittings having P/N D54530014201 (RH) or P/N D54530014200 (LH).
(2) After modification as required by paragraph (h) of this AD, or after optional modification as specified in paragraph (i) of this AD, as applicable: Do not install any corner fittings having P/N D54530014201 (RH) or P/N D54530014200 (LH).
(1) This paragraph provides credit for actions required by paragraphs (g) and (h) of this AD, if those actions were performed before the effective date of this AD using a service bulletin identified in paragraph (l)(1)(i), (l)(1)(ii), or (l)(1)(iii) of this AD; this service information is not incorporated by reference in this AD.
(i) Airbus Service Bulletin A320-54-1022, dated July 7, 2009.
(ii) Airbus Service Bulletin A320-54-1022, Revision 01, dated September 29, 2011.
(iii) Airbus Service Bulletin A320-54-1022, Revision 02, dated July 12, 2013.
(2) This paragraph provides credit for actions required by paragraphs (h)(2) and (i) of this AD, if those actions were performed before the effective date of this AD using Airbus Service Bulletin A320-54-1019, Revision 01, dated April 10, 2008, which is not incorporated by reference in this AD.
The following provisions also apply to this AD:
(1) Refer to Mandatory Continuing Airworthiness Information EASA Airworthiness Directive 2014-0064, dated March 14, 2014, for related information. This MCAI may be found in the AD docket on the Internet at
(2) Service information identified in this AD that is not incorporated by reference is available at the addresses specified in paragraphs (o)(3) and (o)(4) of this AD.
(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 this AD specifies otherwise.
(i) Airbus Service Bulletin A320-54-1019, Revision 02, dated April 15, 2014.
(ii) Airbus Service Bulletin A320-54-1022, Revision 03, dated April 15, 2014.
(3) For service information identified in this AD, contact Airbus, Airworthiness Office—EIAS, 1 Rond Point Maurice Bellonte, 31707 Blagnac Cedex, France; telephone +33 5 61 93 36 96; fax +33 5 61 93 44 51; email
(4) You may view this service information at the FAA, Transport Airplane Directorate, 1601 Lind Avenue SW., Renton, WA. For information on the availability of this material at the FAA, call 425-227-1221.
(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:
National Park Service, Interior.
Final rule.
The National Park Service is planning to construct a paved, multi-use visitor path in Bryce Canyon National Park. The path will be approximately 6.2 miles long and be open to several uses, including running, walking, and bicycling. National Park Service regulations require promulgation of a special regulation to designate new routes for bicycle use off park roads and outside developed areas.
This rule is effective June 1, 2015.
Daniel J. Cloud, Chief of Facility Management, Bryce Canyon National Park, P.O. Box 640201, Bryce Canyon, UT 84764-0201. Phone: (435) 834-4720. Email:
Bryce Canyon National Park (BRCA or park) is in south-central Utah. The park encompasses approximately 35,835 acres and ranges between 6,600 and 9,100 feet in elevation. BRCA was originally established as a national monument by presidential proclamation in 1923. The park was renamed Utah National Park in 1924, and the name was changed to Bryce Canyon National Park in 1928.
The park's most noted feature is the eroded landscape below the east rim of the Paunsaugunt Plateau. The erosional force of frost-wedging and the dissolving power of rainwater have worn away the colorful and weak limestone rock into bizarre shapes, including slot canyons, windows, fins, and spires called “hoodoos.” Because the park transcends 2,500 feet of elevation, the park exists in three distinct climatic zones characterized by spruce/fir forest, ponderosa pine forest, and pinyon pine/juniper woodlands. The diversity of forest and meadow habitats provides a high degree of plant and animal diversity. BRCA is also one of the best places to experience a truly dark night sky.
The park's purpose statement, which provides the foundation for park management, administration, and use decisions, states that “Bryce Canyon National Park protects and conserves resources integral to a landscape of unusual scenic beauty exemplified by highly colored and fantastically eroded geological features, including rock fins and spires, for the benefit and enjoyment of the people.” (May 2014 Foundation Document). The park's Foundation Document identifies “increased use of alternative transportation (
The primary purpose of the multi-use path is to relieve safety problems for visitors of all ages who choose to use non-motorized transportation to experience the park and adjacent United States Forest Service (USFS) areas near Bryce Canyon City. Increases in visitation of the park (30% increase between 2008 and 2012) are leading to transportation system capacity problems and traffic congestion. Cyclists and pedestrians need a way to travel to and within the park that is safer, provides a better visitor experience, and promotes non-motorized travel between nearby communities and the park as well as between key destinations in the park.
The path will enhance the park's transportation system by connecting the park's gateway communities with high visitor use areas along the canyon rim in the Bryce Amphitheater and with other key features of the park. The proposed path will also connect to the existing transportation system, including visitor shuttle buses, hiking trails and walking paths, parking lots, and roads. This will link major visitor attractions and facilities with both non-motorized and motorized transportation modes. Visitor safety will be improved
The multi-use path will consist of two contiguous sections constructed in two phases. The first segment will be approximately 3.9 miles long. This segment will begin at the park boundary near the main park road to/from Bryce Canyon City. The path will roughly parallel the main park road and continue to the visitor center and North Campground area. The path will then run southeast toward the canyon rim, behind the General Store and Lodge area, and to the Sunset Point parking lot where it will turn back to parallel the main park road. The path will then leave the main park road and branch toward Inspiration Point parking area. The NPS intends to complete construction of the first segment by the fall 2015.
The second segment will be approximately 2.3 miles long and will mostly follow Bryce Point road to a terminus at a trailhead just below the Bryce Point parking area. The NPS will construct the second segment as resources become available.
In total, the path will be approximately 6.2 miles long within the boundary of the park. No portion of the proposed path will be constructed below the canyon rim on park lands, nor in proposed wilderness areas inside the park. For most locations, the path will consist of a 10-foot wide paved asphalt surface. The path will generally parallel the main park road to provide separation between users and vehicles to reduce the likelihood of related safety problems. Spurs from the main path alignment will be designed to provide visitor access to key viewpoints and other landscape features. The path will continue outside of the boundary of the park through Bryce Canyon City and Dixie National Forest. This will provide a safe, efficient, and family-friendly way to access these connected areas.
In September 2014, the NPS published the Multi-use Visitor Path Environmental Assessment (EA). On December 23, 2014, the Regional Director for the Intermountain Region signed a Finding of No Significant Impact (FONSI) that identified the preferred alternative (Alternative Alignment A) in the EA as the selected action. The rule implements the selected action as described in the EA and the FONSI. The EA and the FONSI, which contain a full description of the purpose and need for taking action, scoping, the alternatives considered, maps of the proposed multi-use path, and the environmental impacts associated with the project, may be viewed on the park's planning Web site at
The rule complies with the requirement of 36 CFR 4.30, which requires a special regulation to designate new bicycle routes off park roads and outside of developed areas. The EA and FONSI address bicycle use on the multi-use path and evaluate (i) the suitability of the trail surface for bicycle use; and (ii) life cycle maintenance costs, safety considerations, methods to prevent or minimize user conflict, methods to protect natural and cultural resources and mitigate impacts, and integration with commercial services and alternative transportation systems in compliance with 36 CFR 4.30(d)(1)-(2).
The rule adds a new section 7.94 to 36 CFR part 7—Special Regulations, Areas of the National Park Service for Bryce Canyon National Park. The rule authorizes the superintendent to designate all or a portion of two segments of the proposed 6.2-mile-long multi-use path as a route for bicycle use. The Superintendent will notify the public of any such designation through one or more of the methods outlined in 36 CFR 1.7, and place the designation on maps that are available in the office of the Superintendent and other places convenient to the public.
The rule also authorizes the superintendent to establish closures or restrictions for bicycle use on designated routes after considering public health and safety, resource protection, and other management activities and objectives, provided public notice is given under 36 CFR 1.7.
We published the proposed rule at 79 FR 70137 (November 25, 2014). We accepted comments through the mail, hand delivery, and through the Federal eRulemaking Portal at
Executive Order 12866 provides that the Office of Information and Regulatory Affairs in the Office of Management and Budget 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 Executive Order 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. Executive Order 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and
This rule will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:
(a) Does not have an annual effect on the economy of $100 million or more.
(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.
(c) Does not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.
This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does not have a significant or unique effect on State, local or tribal governments or the private sector. It addresses public use of national park lands, and imposes no requirements on other agencies or governments. A statement containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1531
This rule does not affect a taking of private property or otherwise have takings implications under Executive Order 12630. A takings implication assessment is not required.
Under the criteria in section 1 of Executive Order 13132, the rule does not have sufficient federalism implications to warrant the preparation of a Federalism summary impact statement. This rule only affects use of NPS administered lands and waters. It has no outside effects on other areas. A Federalism summary impact statement is not required.
This rule complies with the requirements of Executive Order 12988. Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.
The Department of the Interior strives to strengthen its government-to-government relationship with Indian Tribes through a commitment to consultation with Indian Tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in Executive Order 13175. During the environmental assessment process, we consulted with the 10 Native American groups associated with BRCA and determined that there are no substantial direct effects on federally recognized Indian tribes.
This rule does not contain information collection requirements, and a submission to the Office of Management and Budget under the Paperwork Reduction Act is not required. We may not conduct or sponsor and you are not required to respond to a collection of information unless it displays a currently valid OMB control number.
This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 is not required because we reached the FONSI. A copy of the EA and FONSI can be found online at
This rule is not a significant energy action under the definition in Executive Order 13211. A Statement of Energy Effects in not required.
National parks, Reporting and recordkeeping requirements.
In consideration of the foregoing, the National Park Service amends 36 CFR part 7 as set forth below:
16 U.S.C. 1, 3, 9a, 462(k); Sec. 7.96 also issued under 36 U.S.C. 501-511, D.C. Code 10-137 (2001) and D.C. Code 50-2201.07 (2001).
(a) The Superintendent may designate for bicycle use routes or portions of routes on the following sections of the park's multi-use recreational path:
(1) A section between the park boundary near Bryce Canyon City and Inspiration Point parking area (approximately 3.9 miles);
(2) A section between the intersection of Bryce Point road and Inspiration Point road, and a trailhead near Bryce Point parking area (approximately 2.3 miles).
(b) The Superintendent will provide notice of all bicycle route designations through one or more of the methods listed in § 1.7 of this chapter, and place the designations on maps that are available in the office of the Superintendent and other places convenient to the public.
(c) The Superintendent may open or close designated bicycle routes, or portions thereof, or establish conditions or restrictions for bicycle use after considering public health and safety, natural and cultural resource protection, carrying capacity, and other management activities and objectives.
(1) The Superintendent will provide public notice of all such actions through one or more of the methods listed in § 1.7 of this chapter.
(2) Violating a closure, condition, or restriction is prohibited.
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking a direct final action to approve revisions to the Texas State Implementation Plan (SIP) related to Stage I Regulations that were submitted by the State of Texas on November 12, 2014. The EPA evaluated the SIP submittal from Texas and determined these revisions are consistent with the requirements of the Clean Air Act (Act or CAA). The EPA is approving this action under the federal CAA.
This direct final rule is effective on June 29, 2015 without further notice, unless the EPA receives relevant adverse comment by June 1, 2015. If the EPA receives such comment, the EPA will publish a timely withdrawal in the
Submit your comments, identified by Docket ID No. EPA-R06-OAR-2014-0846, by one of the following methods:
(1)
(2)
(3)
Ms. Tracie Donaldson, (214) 665-6633,
Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.
Section 110 of the CAA requires states to develop and submit to the EPA a SIP to ensure that state air quality meets National Ambient Air Quality Standards (NAAQS). The NAAQS currently address six criteria pollutants: Carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide. Each federally-approved SIP protects air quality primarily by addressing air pollution at its point of origin through air pollution regulations and control strategies. The EPA-approved SIP provisions and control strategies are federally enforceable. States revise the SIP as needed and submit revisions to the EPA for review and approval.
Volatile Organic Compound is a term used to describe a class of chemicals that react in the atmosphere in the presence of sunlight to form ozone. Sources include vehicle exhaust, gasoline vapors, oil-based paints and industrial operations. A regulatory definition of Volatile Organic Compounds can be found at 40 CFR 51.100(s). The definition in Texas can be found in 30 TAC 115.10. Oxygen in the atmosphere reacts with VOCs and Oxides of Nitrogen to form ozone, a key component of urban smog. Inhaling even low levels of ozone can trigger a variety of health problems including chest pains, coughing, nausea, throat irritation, and congestion. It also can worsen bronchitis and asthma. Exposure to ozone can also reduce lung capacity in healthy adults.
Capturing the vapors from the gasoline station storage tanks as tank-trucks fill these tanks, and returning the vapors to the tank-truck is commonly known as Stage I vapor recovery. The tank-truck then carries the vapors back to the bulk gasoline plant or terminal. To insure the vapors are not lost in transit, the Texas rules also include requirements that the gasoline tank-trucks be tested for vapor tightness. We are approving the vapor recovery requirements and the vapor tightness requirements.
On September 10, 2014, Texas Commission on Environmental Quality (TCEQ) adopted revisions to 30 Texas Administrative Code (TAC) Chapter 115, Control of Air Pollution from Volatile Organic Compounds,
As detailed in the Technical Support Document (TSD) accompanying this action, the TCEQ submitted a SIP revision to the Stage I regulations found in 30 TAC 115, Subchapter A.
Previously, in separate actions, we found that Texas' Stage I regulations meet Reasonably Available Control Technology (RACT) requirements for the 1997 ozone standard in Dallas-Fort Worth area (January 14, 2009, 74 FR 1903) and for the Houston-Galveston-Brazoria area (April 2, 2013, 63 FR 19599). The current revisions update RACT where applicable for 1997 ozone nonattainment counties in Texas.
The revisions will enhance the EPA-approved SIP because they will not result in any loss in emission reductions, will become more enforceable with the test methods in place and will be more consistent with the federal Stage I testing requirements; therefore, we are approving them into the Texas SIP.
For the reasons stated above and in the TSD, the EPA is taking direct final action to approve revisions to the Texas SIP pertaining to Stage I regulations at 30 TAC, Chapter 115, Subchapter A:
We are approving the revisions to the Texas SIP under section 110 of the Act. We are publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no relevant adverse comments. However, in the proposed rules section of this
In this direct final rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Texas Stage I requirements described in the Final Action section above. The EPA has made, and will continue to make, these documents generally available electronically through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 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 Clean Air Act; 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).
The Congressional Review Act, 5 U.S.C. 801
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 June 29, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposed 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. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Incorporation by reference, Intergovernmental relations, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(c) * * *
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking a direct final action to approve revisions to the Arkansas State Implementation Plan (SIP) related to the Fee Regulations section of the Arkansas SIP that were submitted by the State of Arkansas on November 6, 2012. The EPA has evaluated the SIP submittal from Arkansas and determined these revisions are consistent with the requirements of the Clean Air Act (Act or CAA). The EPA is approving this action under section 110 of the Act.
This direct final rule is effective on June 29, 2015 without further notice, unless the EPA receives relevant adverse comment by June 1, 2015. If the EPA receives such comment, the EPA will publish a timely withdrawal in the
Submit your comments, identified by Docket ID No. EPA-R06-OAR-2015-0054, by one of the following methods:
(1)
(2)
(3)
Ms. Tracie Donaldson, (214) 665-6633,
Throughout this document wherever “we,” “us,” or “our” is used, we mean the EPA.
Section 110 of the CAA requires states to develop and submit to the EPA a SIP to ensure that state air quality meets National Ambient Air Quality Standards (NAAQS). The NAAQS currently address six criteria pollutants: carbon monoxide, nitrogen dioxide, ozone, lead, particulate matter, and sulfur dioxide. Each federally-approved SIP protects air quality primarily by addressing air pollution at its point of origin through air pollution regulations and control strategies. The EPA-approved SIP provisions and control strategies are federally enforceable. States revise the SIP as needed and submit revisions to the EPA for approval.
On June 22, 2012, the Arkansas Pollution Control and Ecology Commission (APC&EC) adopted revisions to Regulation 9—Permit Fee Regulations, Regulation 19—Regulations of the Arkansas Plan of Implementation for Air Pollution Control, and Regulation 26—Regulations of the Arkansas Operating Air Permit Program. On October 26, 2012, APC&EC adopted additional revisions to Regulation 19. Governor Beebe submitted these revised regulations as a revision to the Arkansas SIP in a letter dated November 6, 2012.
The November 6th, 2012, letter requested that the EPA repeal the current SIP-approved permit fee program provisions found in Regulation 9 and replace with the new provisions included in the submittal for Chapters 1, 2,
As detailed in the Technical Support Document (TSD) accompanying this action, the ADEQ
For the reasons stated above and in the TSD, the EPA is taking direct final action to approve revisions to the Arkansas SIP pertaining to title I fees. Specifically, the EPA is deleting the current SIP-approved fee program and approving in its place the revised Arkansas fee program at Regulation 9, Chapters 1, 2,
We are approving the revisions to the Arkansas SIP under section 110 of the Act. We are publishing this rule without prior proposal because we view this as a noncontroversial amendment and anticipate no relevant adverse comments. However, in the proposed rules section of this
In this direct final rule, the EPA is finalizing regulatory text that includes incorporation by reference. In accordance with requirements of 1 CFR 51.5, the EPA is finalizing the incorporation by reference of the Arkansas title I Permit Fees described in the Final Action section above. The EPA has made, and will continue to make, these documents generally available electronically through
Under the CAA, the Administrator is required to approve a SIP submission that complies with the provisions of the Act and applicable federal regulations. 42 U.S.C. 7410(k); 40 CFR 52.02(a). Thus, in reviewing SIP submissions, the EPA's role is to approve state choices, provided that they meet the criteria of the Clean Air Act. Accordingly, this action merely approves state law as meeting Federal requirements and does not impose additional requirements beyond those imposed by state law. For that reason, this action:
• Is not a “significant regulatory action” subject to review by the Office of Management and Budget under Executive Order 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 Clean Air Act; 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).
The Congressional Review Act, 5 U.S.C. 801
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 June 29, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this action for the purposed 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. This action may not be challenged later in proceedings to enforce its requirements. (See section 307(b)(2).)
Environmental protection, Air pollution control, Carbon monoxide, Incorporation by reference, Intergovernmental relations, Lead, Nitrogen dioxide, Ozone, Particulate matter, Reporting and recordkeeping requirements, Sulfur oxides, Volatile organic compounds.
40 CFR part 52 is amended as follows:
42 U.S.C. 7401
(c) * * *
Environmental Protection Agency (EPA).
Notice of final action denying petitions for reconsideration.
The U.S. Environmental Protection Agency (EPA) is providing notice that it has responded to 23 petitions for reconsideration of the final rules titled National Emission Standards for Hazardous Air Pollutants (NESHAP) From Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance (NSPS) for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units, published in the
Effective April 30, 2015.
Mr. Jim Eddinger, Sector Policies and Programs Division (D243-01), Office of Air Quality Planning and Standards, Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number: (919) 541-5426; fax number: (919) 541-5450; email address:
This
Section 307(b)(1) of the Clean Air Act (CAA) indicates which Federal Courts of Appeals have venue for petitions for review of final EPA actions. This section provides, in part, that the petitions for review must be filed in the Court of Appeals for the District of Columbia Circuit if: (i) The agency action consists of “nationally applicable regulations promulgated, or final action taken, by the Administrator,” or (ii) such actions are locally or regionally applicable, if “such action is based on a determination of nationwide scope or effect and if in taking such action the Administrator find and publishes that such action is based on such a determination.”
The EPA has determined that its actions denying the petitions for reconsideration are of nationwide scope and effect for purposes of section 307(d)(1) because the actions directly affect the “National Emission Standards for Hazardous Air Pollutants (NESHAP) From Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance (NSPS) for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units,” both of which were found to be of nationwide scope and effect. Thus, any petitions for review of the EPA's decisions denying petitioners' requests for reconsideration must be filed in the United States Court of Appeals for the District of Columbia Circuit by June 29, 2015.
On February 16, 2012, pursuant to sections 111 and 112 of the CAA, the EPA published the final rules titled “National Emission Standards for Hazardous Air Pollutants from Coal- and Oil-Fired Electric Utility Steam Generating Units and Standards of Performance for Fossil-Fuel-Fired Electric Utility, Industrial-Commercial-Institutional, and Small Industrial-Commercial-Institutional Steam Generating Units” (77 FR 9304). The NESHAP rule issued pursuant to CAA section 112 is referred to as the Mercury and Air Toxics Standards (MATS), and the NSPS rule issued pursuant to CAA section 111 is referred to as the Utility NSPS. Following promulgation of the final rules, the Administrator received petitions for reconsideration of numerous provisions of both MATS and the Utility NSPS pursuant to CAA section 307(d)(7)(B).
The EPA received 20 petitions for reconsideration of the MATS rule and 3 petitions for reconsideration of the Utility NSPS. The EPA received petitions for reconsideration of the MATS rule from the following organizations: American Public Power Association, ARIPPA, Babcock & Wilcox, Basin Electric Power Cooperative, Climate Policy Group, Coal Utilization Research Council, Earthjustice, East Kentucky Power Cooperative, Edgecombe/Spruance Genco, Edison Mission Energy, FirstEnergy, Hawaiian Electric Company, Institute of Clean Air Companies, International Brotherhood of Boilermakers, Power4Georgians, Puerto Rico Electric Power Authority, Southern Company, State of Texas (Texas Commission on Environmental Quality, Texas Public Utility Commission, Railroad Commission of Texas), Utility Air Regulatory Group (UARG), and Wolverine Power Supply Cooperative. The EPA received petitions for reconsideration of the Utility NSPS from the following organizations: Air Products, State of Texas (Texas Commission on Environmental Quality, Texas Public Utility Commission, Railroad Commission of Texas), and UARG.
CAA section 307(d)(7)(B) states that “[o]nly an objection to a rule or procedure which was raised with reasonable specificity during the period for public comment (including any public hearing) may be raised during judicial review. If the person raising an objection can demonstrate to the Administrator that it was impracticable to raise such objection within such time or if the grounds for such objection arose after the period for public comment (but within the time specified for judicial review) and if such objection is of central relevance to the outcome of the rule, the Administrator shall convene a proceeding for reconsideration of the rule and provide the same procedural rights as would have been afforded had the information been available at the time the rule was proposed. If the Administrator refuses to convene such a proceeding, such person may seek review of such refusal in the United States court of appeals for the appropriate circuit (as provided in subsection (b)).” Thus, the EPA is only required to grant a CAA section 307(d)(7)(B) petition for reconsideration if the petitioner demonstrates both: (1) That it was impractical to raise the objection during the public comment period, or that the grounds for such objection arose after the public comment period but within the time specified for judicial review (
On November 30, 2012, the EPA issued a proposed rule reconsidering certain new source MATS, the requirements applicable during periods of startup and shutdown for MATS and the Utility NSPS (for the PM standard only), certain definitional and monitoring issues in the Utility NSPS, and additional technical corrections to both MATS and the Utility NSPS (77 FR 71323). On April 24, 2013, the EPA issued the final action on reconsideration of the new source MATS, the definitional and monitoring provisions in the Utility NSPS, and the technical corrections in both rules (78 FR 24073). The EPA issued the final action on reconsideration of the startup and shutdown provisions in the MATS and Utility NSPS on November 19, 2014 (79 FR 68777). In addition, on February 17, 2015, the EPA proposed additional technical corrections to the final MATS rule and the Utility NSPS (80 FR 8442). These actions addressed many issues
On April 21, 2015, the Administrator, Gina McCarthy, signed letters to petitioners denying the remaining issues in the petitions for reconsideration. The EPA carefully reviewed the petitions and evaluated each issue raised in the petitions for reconsideration to determine if they meet the CAA section 307(d)(7)(B) criteria for reconsideration. The EPA denied the remaining issues in the petitions for reconsideration because they do not meet the criteria for reconsideration and/or are moot as explained in detail in the Reconsideration Response Document. That document articulates in detail the rationale for the EPA's final response to each of the remaining issues in the petitions for reconsideration received on the final MATS rule and the Utility NSPS.
As explained in the Reconsideration Response Document, a significant majority of the issues raised in the petitions for reconsideration were or could have been raised in comments on the proposed MATS and Utility NSPS. In addition, many of the parties that filed petitions for reconsideration of the final MATS and Utility NSPS also filed petitions for review of the final rules in the United States Court of Appeals for the District of Columbia Circuit (Court or D.C. Circuit). Many of the issues raised in the petitions for reconsideration were also raised in the D.C. Circuit litigation, and other reconsideration issues could have been raised in that litigation. On April 15, 2014, the Court denied all petitions for review of MATS and the Utility NSPS.
Environmental Protection Agency (EPA).
Direct final rule.
The Environmental Protection Agency (EPA) is taking direct final action to approve Clean Air Act (CAA) section 111(d)/129 negative declarations for the States of Texas, Oklahoma, Arkansas, New Mexico, and the City of Albuquerque, New Mexico, for existing sewage sludge incinerator (SSI) units. These negative declarations certify that existing SSI units subject to the requirements of sections 111(d) and 129 of the CAA do not exist within the jurisdictions of Texas, Oklahoma, Arkansas, and New Mexico (including the City of Albuquerque). EPA is accepting the negative declarations in accordance with the requirements of the CAA.
This rule is effective on June 29, 2015 without further notice, unless EPA receives relevant adverse comment by June 1, 2015. If EPA receives such comment, EPA will publish a timely withdrawal in the
Submit your comments, identified by Docket No. EPA-R06-OAR-2013-0763, by one of the following methods:
•
•
•
Mr. Kenneth Boyce, (214) 665-7259, email address
Throughout this document, “we” “us” and “our” means the EPA.
EPA's statutory authority for the regulation of new and existing solid waste incineration units is outlined in CAA sections 129 and 111. Section 129 of the CAA is specific to solid waste combustion and requires EPA to establish performance standards for each category of solid waste incineration units. These standards include new source performance standards (NSPS), applicable to new units, and emissions guidelines and other requirements applicable to
While section 129 of the CAA is specific to the combustion of solid waste, it also relies on CAA section 111 in promulgating the NSPS and emissions guidelines. Section 111 of the CAA gives EPA the statutory authority to promulgate an NSPS and/or emissions guideline for certain categories of stationary sources, and describes the procedural requirements for the development and implementation of these standards. More specifically, CAA section 111(d) requires EPA to establish procedures for States to submit a state plan to EPA for the regulation of existing sources whenever emissions guidelines are promulgated. The general provisions for the submittal and approval of state plans are codified in 40 CFR part 60, subpart B and 40 CFR part 62, subpart A. States have options other than submitting a state plan in order to fulfill their obligations under CAA sections 111(d) and 129. If a State does not have any existing solid waste incineration units for the relevant emissions guidelines, 40 CFR 60.23(b) and 62.06 provide that a letter may be submitted certifying that no such units exist within the State (
On March 21, 2011 (76 FR 15372), EPA promulgated new source performance standards (40 CFR part 60, subpart LLLL) for new SSI units, and emission guidelines (40 CRF part 60, subpart MMMM), for existing SSI units. Existing SSI units are units that commenced construction on or before October 14, 2010. The Texas Commission on Environmental Quality (TCEQ), Oklahoma Department of Environmental Quality (ODEQ), Arkansas Department of Environmental Quality (ADEQ), New Mexico Environment Department (NMED) and the City of Albuquerque, New Mexico have each determined that there are no existing SSI units subject to CAA sections 111(d) and 129 requirements in their individual air pollution control jurisdictions. In order to fulfill obligations under CAA sections 111(d) and 129, TCEQ, ODEQ, ADEQ, NMED and the City of Albuquerque, New Mexico submitted negative declaration letters to EPA on January 28, 2013, November 14, 2011, May 21, 2012, October 6, 2011 and September 12, 2011, respectively. The submittal of these declarations exempts TCEQ, ODEQ, ADEQ, NMED and the City of Albuquerque, New Mexico from the requirement to submit a state plan for existing SSI units.
In this Direct Final action, EPA is amending part 62 to reflect receipt of the negative declaration letters from the TCEQ, ODEQ, ADEQ, NMED and the City of Albuquerque, New Mexico, certifying that there are no existing SSI units subject to 40 CFR part 60, subpart MMMM, in their respective jurisdictions, in accordance with 40 CFR 60.5010, 40 CFR 62.06, and Section 111(d) of the CAA. If a designated facility (
Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. For this reason, this action is also not subject to Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001). This action merely notifies the public of EPA receipt of negative declarations from air pollution control agencies without any existing SSI units in their jurisdiction. This action imposes no requirements. Accordingly, EPA certifies 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
With regard to negative declarations for SSI units received by EPA from states, EPA's role is to notify the public of the receipt of such negative declarations and revise 40 CFR part 62 accordingly. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority
The Congressional Review Act, 5 U.S.C. 801
Under section 307(b)(1) of the CAA, petitions for judicial review of this action must be filed in the United States Court of Appeals for the appropriate circuit by June 29, 2015. Filing a petition for reconsideration by the Administrator of this final rule does not affect the finality of this rule 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 notice of proposed rulemaking for this action published in the proposed rules section of this
Environmental protection, Administrative practice and procedure, Air pollution control, Intergovernmental relations, Reporting and recordkeeping requirements, Waste treatment and disposal.
40 CFR part 62 is amended as follows:
42 U.S.C. 7401
Letter from the Arkansas Department of Environmental Quality, dated May 21, 2012, certifying that there are no known existing sewage sludge incineration (SSI) units subject to 40 CFR part 60, subpart MMMM, within its jurisdiction.
(a)
(b)
Letter from the Oklahoma Department of Environmental Quality, dated November 14, 2011, certifying that there are no known existing sewage sludge incineration (SSI) units subject to 40 CFR part 60, subpart MMMM, within its jurisdiction.
Letter from the Texas Commission on Environmental Quality, dated January 28, 2013, certifying that there are no existing sewage sludge incineration (SSI) units subject to the requirements of 40 CFR part 60, subpart MMMM, within its jurisdiction.
Centers for Medicare & Medicaid Services (CMS), HHS.
Final rule; correction.
This document corrects technical errors that appeared in the final rule published in the
Debra Dean-Whittaker, (410) 786-0848.
In FR Doc. 2014-18506 of August 22, 2014 (79 FR 50451), there were a number of technical errors that are identified and corrected in the Correction of Errors section below. The provisions in this correction document are effective as if they had been included in the document published on August 22, 2014. Accordingly, the corrections are effective October 1, 2014.
On page 50492, in Table 8, we omitted the description of a quality reporting measure “Providing Support for Religious and Spiritual Beliefs”. We are adding the omitted measure to the table.
On Page 50493, in Table 9, we listed an incorrect deadline for the “Monthly data collection April-June 2015 (Q2).” We inadvertently provided November 1, 2015 as the deadline. We are correcting this error to reflect the correct monthly data collection deadline date of November 11, 2015.
We ordinarily publish a notice of proposed rulemaking in the
Section 553(d) of the APA ordinarily requires a 30-day delay in effective date of final rules after the date of their publication in the
In FR Doc. 2014-18506 of August 22, 2014 (79 FR 50451), make the following corrections:
1. On page 50492, in Table 8—“Hospice Experience of Care Survey Quality Measures and Their Items”, after the quality measure description of “Getting help for Symptoms” and before the quality measure description of “Information Continuity” add the following quality measure description to read as follows:
(Support for religious or spiritual beliefs includes talking, praying, quiet time, or other ways of meeting your religious or spiritual needs.)
While your family member was in hospice care, how much support for your religious or spiritual beliefs did you get from the hospice team?
2. On page 50493, in Table 9—Data Submission Dates 2015-1016 For CAHPS® Hospice Survey, under the quarterly data submission deadline column the date “November 1, 2015” is corrected to read “November 11, 2015”.
In Title 45 of the Code of Federal Regulations, Parts 1 to 199, revised as of October 1, 2014, on page 933, in § 156.285, reinstate paragraph (d)(2) after paragraph (d)(1)(iii)(B) to read as follows:
(d) * * *
(2) If a qualified employer chooses to withdraw from participation in the SHOP, the QHP issuer must terminate coverage for all enrollees of the withdrawing qualified employer.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Temporary rule; closure.
NMFS is prohibiting directed fishing for Pacific ocean perch in the Western Aleutian district (WAI) of the Bering Sea and Aleutian Islands management area (BSAI) by vessels participating in the BSAI trawl limited access fishery. This action is necessary to prevent exceeding the 2015 total allowable catch (TAC) of Pacific ocean perch in this area allocated to vessels participating in the BSAI trawl limited access fishery.
Effective 1200 hrs, Alaska local time (A.l.t.), April 27, 2015, through 2400 hrs, A.l.t., December 31, 2015.
Steve Whitney, 907-586-7228.
NMFS manages the groundfish fishery in the BSAI exclusive economic zone according to the Fishery Management Plan for Groundfish of the Bering Sea and Aleutian Islands Management Area (FMP) prepared by the North Pacific Fishery Management Council under authority of the Magnuson-Stevens Fishery Conservation and Management Act. Regulations governing fishing by U.S. vessels in accordance with the FMP appear at subpart H of 50 CFR part 600 and 50 CFR part 679.
The 2015 TAC of Pacific ocean perch, in the WAI, allocated to vessels participating in the BSAI trawl limited access fishery was established as a directed fishing allowance of 164 metric tons by the final 2014 and 2015 harvest specifications for groundfish in the BSAI (79 FR 12108, March 4, 2014).
In accordance with § 679.20(d)(1)(iii), the Regional Administrator finds that this directed fishing allowance has been reached. Consequently, NMFS is prohibiting directed fishing for Pacific ocean perch in the WAI by vessels participating in the BSAI trawl limited access fishery.
After the effective dates of this closure, the maximum retainable amounts at § 679.20(e) and (f) apply at any time during a trip.
This action responds to the best available information recently obtained from the fishery. The Assistant Administrator for Fisheries, NOAA, (AA) finds good cause to waive the requirement to provide prior notice and opportunity for public comment pursuant to the authority set forth at 5 U.S.C. 553(b)(B) as such a requirement is impracticable and contrary to the public interest. This requirement is impracticable and contrary to the public interest as it would prevent NMFS from responding to the most recent fisheries data in a timely fashion and would delay the closure of the Pacific ocean perch directed fishery in the WAI for vessels participating in the BSAI trawl limited access fishery. NMFS was unable to publish a notice providing time for public comment because the most recent, relevant data only became available as of April 24, 2015. The AA also finds good cause to waive the 30-day delay in the effective date of this action under 5 U.S.C. 553(d)(3). This finding is based upon the reasons provided above for waiver of prior notice and opportunity for public comment.
This action is required by § 679.20 and is exempt from review under Executive Order 12866.
16 U.S.C. 1801
Federal Aviation Administration (FAA), DOT.
Notice of proposed special conditions.
This action proposes special conditions for the Boeing Model 747-8 series airplanes. This airplane, as modified by L-3 Communications Integrated Systems (L-3), will have a novel or unusual design feature when compared to the state of technology envisioned in the airworthiness standards for transport-category airplanes. This design feature is therapeutic oxygen for medical use installed in an executive-interior airplane. The applicable airworthiness regulations do not contain adequate or appropriate safety standards for this design feature. These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
Send your comments on or before May 20, 2015.
Send comments identified by docket number FAA-2015-0758 using any of the following methods:
•
•
•
•
Robert Hettman, FAA, Propulsion and Mechanical Systems, ANM-112, Transport Airplane Directorate, Aircraft Certification Service, 1601 Lind Avenue SW., Renton, Washington, 98057-3356; telephone 425-227-2683; facsimile 425-227-1320.
We invite interested people to take part in this rulemaking by sending written comments, data, or views. The most helpful comments reference a specific portion of the special conditions, explain the reason for any recommended change, and include supporting data.
We will consider all comments we receive by the closing date for comments. We may change these special conditions based on the comments we receive.
On May 10, 2011, L-3 applied for a supplemental type certificate (STC) for therapeutic oxygen for medical use in the Boeing Model 747-8 series airplanes equipped with executive interiors. The Boeing Model 747-8 series airplane, which is a derivative of the Boeing Model 747-400 airplane currently approved under Type Certificate No. A20WE, is a four-engine jet-transport airplane that will have a maximum takeoff weight of 970,000 lbs. The Model 747-8 airplane will have 153 seats approved for taxi, takeoff, and landing (19 crewmembers and 134 passengers).
Section 25.1445 includes standards for oxygen-distribution systems when oxygen is supplied to flightcrew and passengers. If a common source of supply is used, § 25.1445(a)(2) requires a means to separately reserve the minimum supply required by the flightcrew. This requirement was included in § 25.1445 when the regulations were codified, and was originally added to Civil Air Regulations 4b.831 at Amendment 4b-13, effective September 21, 1949.
It is apparent that the regulation is intended to protect the flightcrew by ensuring that an adequate supply of oxygen is available to complete a descent and landing following a loss of cabin pressure. When the regulation was written, the only passenger-oxygen system designs were supplemental-oxygen systems intended to protect passengers from hypoxia in the event of a decompression. Existing passenger-oxygen systems did not include design features that would allow the flightcrew to control oxygen to passengers during flight. There are no similar requirements when oxygen is supplied from the same source to passengers for use during a decompression and for discretionary/first-aid use any time during the flight. In the proposed design, the passenger and therapeutic-oxygen systems use the same source of oxygen. The flightcrew-oxygen emergency system uses a dedicated source of oxygen independent from the passenger-oxygen system. An oxygen-duration chart and operation procedures will be incorporated into the “Flight Crew Operating Manual” and “Flight Manual Supplement,” as part of the STC, to provide information to the flightcrew to determine when to cease operation of the therapeutic system as a
Under the provisions of § 21.101, L-3 must show that the Boeing Model 747-8 series airplane, as changed, continues to meet the applicable provisions of the regulations listed in Type Certificate No. A20WE, or the applicable regulations in effect on the date of application for the change, except for earlier amendments as agreed upon by the FAA.
If the Administrator finds that the applicable airworthiness regulations (
Special conditions are initially applicable to the model for which they are issued. Should the applicant apply for an STC to modify any other model included on the same type certificate to incorporate the same novel or unusual design feature, these special conditions would also apply to the other model under § 21.101.
In addition to the applicable airworthiness regulations and special conditions, the Boeing Model 747-8 series airplane must comply with the fuel-vent and exhaust-emission requirements of 14 CFR part 34; and the noise-certification requirements of 14 CFR part 36.
The FAA issues special conditions, as defined in 14 CFR 11.19, in accordance with § 11.38, and they become part of the type-certification basis under § 21.101.
L-3 is seeking certification of an interior modification to Boeing Model 747-8 series airplanes to include executive and medical-patient transport. As a part of the executive-interior installation, the airplane will be outfitted with a therapeutic-oxygen system. The therapeutic-oxygen system shares the same supply of oxygen with the existing passenger-oxygen system and consists of multiple constant-flow oxygen outlets located throughout the cabin. The flightcrew can turn the therapeutic-oxygen system on and off from the flight deck to allow use at any point during the flight, and to preserve a sufficient remaining oxygen reserve, in the event therapeutic oxygen is used for medical purposes, to accommodate the passengers in the event of an emergency-oxygen situation.
The gaseous passenger-oxygen system will be modified to accommodate additional supply cylinders and several therapeutic-oxygen outlets located throughout the cabin. Each therapeutic outlet will provide a constant flow of oxygen at either 2 or 4 liters per minute. The flightcrew will be able to control the flow of therapeutic oxygen at any time during flight. Therapeutic-oxygen systems previously have been certified, and were generally considered an extension of the passenger-oxygen system for the purpose of defining the applicable regulations. As a result, the applicable regulations included those that applied to oxygen systems in general, or supplemental-oxygen systems.
No specific regulations address the design and installation of oxygen systems used specifically for therapeutic applications. Existing requirements, such as §§ 25.1309, 25.1441(b) and (c), 25.1451, and 24.1453, in the Boeing Model 747-8 airplane certification basis applicable to this STC project, provide some design standards appropriate for oxygen-system installations. However, additional design standards for systems supplementing the existing oxygen system are needed to complement the existing applicable requirements. The addition of equipment involved in this installation, and the unsafe conditions that can exist when the oxygen content of an enclosed area becomes too high because of system leaks, malfunction, or damage from external sources, make it necessary to ensure that adequate safety standards are applied to the design and installation of the oxygen system in Boeing Model 747-8 series airplanes. These potential hazards also necessitate development and application of appropriate additional design and installation standards.
These proposed special conditions contain the additional safety standards that the Administrator considers necessary to establish a level of safety equivalent to that established by the existing airworthiness standards.
As discussed above, these proposed special conditions are applicable to the Boeing Model 747-8 series airplanes. Should L-3 apply at a later date for a supplemental type certificate to modify any other model included on Type Certificate No. A20WE to incorporate the same novel or unusual design feature, these special conditions would apply to that model as well.
Certification of these Boeing Model 747-8 series airplanes is currently scheduled for June 2015. Therefore, because a delay would significantly affect the applicant's installation of the system and the certification of the airplane, we are shortening the public-comment period to 20 days.
This action affects only certain novel or unusual design features on one model series of airplanes. It is not a rule of general applicability, and affects only the applicant who applied to the FAA for approval of these features on the airplane.
Aircraft, Aviation safety, Reporting and recordkeeping requirements.
The authority citation for these special conditions is as follows:
49 U.S.C. 106(g), 40113, 44701, 44702, 44704.
Accordingly, the Federal Aviation Administration (FAA) proposes the following special conditions as part of the type-certification basis for Boeing Model 747-8 series airplanes as modified by L-3 Communications Integrated Systems.
The distribution system for the therapeutic-oxygen system must be designed and installed as follows:
When oxygen is supplied to passengers for both supplemental and therapeutic purposes, the distribution system must be designed for either—
1. A source of supplemental supply for protection from hypoxia following a loss of cabin pressure, and a separate source for therapeutic purposes, or
2. A common source of supply, with means to separately reserve the minimum supply required by the passengers for supplemental use following a loss of cabin pressure.
Department of Justice.
Notice of proposed rulemaking; correction.
The Department of Justice (the Department or DOJ) published a proposed rule in the
This correction is effective on April 30, 2015.
Robin Moss, Privacy Analyst, 202-514-8568.
In the
[CPCLO Order No. 004-2015]
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve revisions to the Arkansas State Implementation Plan (SIP) related to the Fee Regulations section of the Arkansas SIP that were submitted by the State of Arkansas on November 6, 2012. The EPA has evaluated the SIP submittal from Arkansas and determined these revisions are consistent with the requirements of the Clean Air Act (Act or CAA). The EPA is approving this action under section 110 of the Act.
Written comments should be received on or before June 1, 2015.
Comments may be mailed to Ms. Tracie Donaldson, Air Permits Section (6PD-R), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733. Comments may also be submitted electronically or through hand delivery/courier by following the detailed instructions in the
Ms. Tracie Donaldson, (214) 665-6633; email address
In the final rules section of this
For additional information, see the direct final rule which is located in the rules section of this
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve revisions to the Texas State Implementation Plan (SIP) related to Stage I Regulations that were submitted by the State of Texas on November 12, 2014. The EPA evaluated the Texas SIP submittal and determined these revisions are consistent with the requirements of the Clean Air Act (Act or CAA). The EPA is approving this action under the federal CAA.
Written comments should be received on or before June 1, 2015.
Comments may be mailed to Ms. Mary Stanton, Chief, Air Grants Section (6PD-S), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733. Comments may also be submitted electronically or through hand delivery/courier by following the detailed instructions in the
Tracie Donaldson, (214) 665-6633,
In the final rules section of this
For additional information, see the direct final rule which is located in the rules section of this
Environmental Protection Agency (EPA).
Proposed rule.
The Environmental Protection Agency (EPA) is proposing to approve Clean Air Act (CAA) section 111(d)/129 negative declarations for the States of Texas, Oklahoma, Arkansas, New Mexico, and the City of Albuquerque, New Mexico, for existing sewage sludge incinerator (SSI) units. These negative declarations certify that existing SSI units subject to the requirements of sections 111(d) and 129 of the CAA do not exist within the jurisdictions of Texas, Oklahoma, Arkansas, and New Mexico (including the City of Albuquerque).
Written comments must be received on or before June 1, 2015.
Comments may be mailed to Mr. Guy Donaldson, Chief, Air Planning Section (6PD-L), Environmental Protection Agency, 1445 Ross Avenue, Suite 1200, Dallas, Texas 75202-2733. Comments may also be submitted electronically or through hand delivery/courier by following the detailed instructions in the
Mr. Kenneth Boyce, (214) 665-7259,
In the final rules section of this
For additional information, see the direct final rule, which is located in the rules section of this
Health Resources and Services Administration (HRSA), Department of Health and Human Services (HHS).
Denial of petition for rulemaking.
In accordance with section 2114(c)(2)(B) of the Public Health Service Act, 42 U.S.C. 300aa-14(c)(2)(B), notice is hereby given concerning the reasons for not conducting rulemaking proceedings to add diabetes mellitus as an injury associated with the measles-mumps-rubella vaccine to the Vaccine Injury Table.
Written comments are not being solicited.
Avril M. Houston, MD, MPH, Director, Division of Injury Compensation Programs, Healthcare Systems Bureau, HRSA, Parklawn Building, Room 11C-06, 5600 Fishers Lane, Rockville, Maryland 20857, or by telephone at (301) 443-6593.
The National Childhood Vaccine Injury Act of 1986, Title III of Public Law 99-660 (42 U.S.C. 300 aa-10
The statute authorizing the VICP provides for the inclusion of additional vaccines in the VICP when they are recommended by the Centers for Disease Control and Prevention (CDC) for routine administration to children.
(A) receipt of any recommendation of the Commission, or
(B) 180 days after the date of the referral to the Commission,
[w]hichever occurs first, the Secretary shall conduct a rulemaking proceeding on the matters proposed in the petition or publish in the
On April 9, 2014, a private citizen submitted an email inquiry to the Secretary of Health and Human Services (HHS) regarding the VICP. This email asked why the condition of diabetes mellitus (DM) is not a listed injury on the Vaccine Injury Table (Table) in association with the measles, mumps, and rubella (MMR) vaccination, explaining that it is identified by the manufacturer as a possible adverse result of the MMR vaccine. The email also asked whether the Secretary would consider amending the Table to add DM as an injury for MMR vaccines. As such, the email was considered to be a petition to the Secretary to propose regulations to amend the Table to add the injury of DM for the category of MMR vaccines. Accordingly, pursuant to the VICP statute, the petition was referred to the Commission on June 5, 2014. The Commission voted unanimously to recommend that the Secretary not proceed with rulemaking to amend the Table as requested in the petition.
DM is a chronic disease in which there is a high level of sugar in the blood. There are two types: Type 1 and Type 2. Type 1 Diabetes is one of the most common chronic diseases in childhood. It is caused by insulin deficiency following destruction of the insulin producing pancreatic beta cells, resulting in absolute insulin deficiency. Type 2 Diabetes is characterized by hyperglycemia and insulin resistance and relative impairment in insulin secretion. Through the years, there have been many studies evaluating the risk of Type 1 Diabetes after MMR vaccination. However, HRSA's search of published literature did not reveal any studies discussing a causal relationship between Type 2 Diabetes and the MMR vaccine. The Secretary notes that vaccine package inserts list adverse events reported to vaccine manufacturers during clinical trials even though they may not have been shown to have been caused by the vaccines.
In 2008, the Secretary contracted with the Institute of Medicine (IOM) to review the epidemiological, clinical, and biological evidence regarding adverse health events associated with specific vaccines covered by the VICP.
In 2012, the Cochrane Collaboration reviewed and assessed studies in the Cochrane Central Register of Controlled Trials.
In light of the literature discussed above, I have determined that there is no reliable scientific evidence of a causal association between MMR vaccine and DM. Therefore, I will not amend the Table to add DM as an injury associated with the MMR vaccine.
Commodity Credit Corporation, USDA.
Notice.
The Farm Service Agency (FSA), on behalf of the Commodity Credit Corporation (CCC), is announcing that the final date for holders of Tobacco Transition Payment Program (TTPP) contracts to request payments on their existing contracts is July 1, 2015. Through TTPP, eligible former tobacco quota holders and producers of quota tobacco received annual payments from funds that CCC collected through quarterly assessments on domestic manufacturers and importers of tobacco products under the Tobacco Transition Assessment Program (TTAP), as required by the Fair and Equitable Tobacco Reform Act of 2004 (FETRA). The authority to issue TTAP assessments ended with fiscal year 2014.
Submit claims for payment by July 1, 2015; no claims will be accepted after this date.
Any USDA FSA county office.
Kelly Dawson; telephone: (202) 720-0448. Persons with disabilities who require alternative means for communications (Braille, large print, audio tape, etc.) should contact the USDA Target Center at (202) 720-2600 (voice).
On behalf of CCC, FSA administers the Tobacco Transition Program (TTP), which includes TTPP and TTAP. The TTP regulations are located in 7 CFR part 1463, subpart B; TTAP regulations are located in subpart A. This notice does not change the regulations. TTPP was authorized by Title VI of the American Jobs Creation Act of 2004 (Pub. L. 108-357). Title VI is also known as FETRA (7 U.S.C. 518-519a). FETRA repealed the tobacco marketing quota and related price support programs authorized by Title III of the Agricultural Adjustment Act of 1938 and by the Agricultural Act of 1949, and provided for payments to persons who were owners of farms with tobacco quotas, or who were producers of quota tobacco. As specified in FETRA, TTPP used funds from assessments collected quarterly from domestic tobacco manufacturers and importers to make TTPP contract payments; those payments ended with fiscal year 2014. There will be no new TTPP contracts issued; the July 1, 2015 deadline is only for claims for payment under existing contracts.
FSA is clarifying a few final procedures and dates for both the orderly close-out of TTPP, and the effect of the former on the close-out of the TTAP. Accordingly, this notice clarifies how final payments will be handled after fiscal year 2014. Specifically, all claims for payments on existing contracts must be received in an FSA county office by July 1, 2015. This notice will also discuss the final “true-up” for TTAP.
FSA has already made every effort to pay in full existing TTPP contract holders. We believe that the only remaining pending payments are those that may be due to the surviving spouses, beneficiaries of an estate, or successors in interest of now-deceased contract holders.
In accordance with 7 CFR 1463.113, the TTPP payment can be transferred to the surviving spouse of a deceased TTPP contract holder upon presentation of a death certificate, without regard to any will or other document created on behalf of or by the deceased contract holder. If there is no surviving spouse of a deceased contract holder, the TTPP payment can be transferred to the estate of the deceased by any person authorized under State law to distribute assets of the deceased TTPP contract holder. The regulations for successor-in-interest contracts are found in 7 CFR 1463.112. This notice does not change those regulations. Evidence of authority to distribute assets of a deceased TTPP contract holder must be submitted to FSA by July 1, 2015.
Persons who are surviving spouses, beneficiaries of an estate, or successors in interest may not have received payment if contact information was not provided to FSA in a timely fashion, or if the right to receive such payments was not documented as required. Any such persons who wish to receive payments must provide contact information, present evidence of authority to distribute assets (if applicable), and submit a claim for payment, using form CCC-971, “Transfer of Tobacco Transition Payment Program Contracts Exempt From Maximum Discount Rate,” to a local FSA county office. The CCC-971 form must have an original signature. All of the above information and form CCC-971 must be submitted to any local FSA office either in person, or received by mail, no later than July 1, 2015. Form CCC-971 is available online at
This notice does not change the final dates or procedures for assessments that were specified in the most recent final rule for TTAP, published on April 9, 2014 (79 FR 19462-19464). As specified in the preamble of that final rule, FSA will make any necessary final “trued up” revisions to the assessments for all 10 fiscal years of the Tobacco Transition Program and issue revised assessments on or before December 1, 2015. The final “trued up” assessment will include any adjustments needed to cover payments made for final claims for payments on existing TTPP contracts received by July 1, 2015. After December 1, 2015, there will be no revised assessments issued for any fiscal years. The final date for appeals of assessments is January 16, 2016, as specified in 7 CFR 1463.11; that date is not changing with this notice.
U.S. Commission on Civil Rights.
Announcement of meeting.
Notice is hereby given, pursuant to the provisions of the rules and regulations of the U.S. Commission on Civil Rights (Commission) and the Federal Advisory Committee Act (FACA) that a meeting of the Alaska Advisory Committee (Committee) to the Commission will be held on Thursday, May 21, 2015, for the purpose of receiving an orientation on committee procedures and member responsibilities and to discuss possible civil rights issues in the state for examination by the Committee. The meeting will be held by teleconference.
This meeting is available to the public through the following toll-free call-in number: 888-430-8709 conference ID: 1833093. Any interested member of the public may call this number and listen to the meeting. An open comment period will be provided to allow members of the public to make a statement as time allows. The conference call operator will ask callers to identify themselves, the organization they are affiliated with (if any), and an email address prior to placing callers into the conference room. Callers can expect to incur charges for calls they initiate over wireless lines, and the Commission will not refund any incurred charges. Callers will incur no charge for calls they initiate over land-line connections to the toll-free telephone number. Persons with hearing impairments may also follow the proceedings by first calling the Federal Relay Service at 1-800-977-8339 and providing the Service with the conference call number and conference ID number.
Members of the public are also entitled to submit written comments. The comments must be received in the Western Regional Office of the Commission by June 21, 2015. The address is Western Regional Office, U.S. Commission on Civil Rights, 300 N. Los Angeles Street, Suite 2010, Los Angeles, CA 90012. Persons wishing to email their comments may do so by sending them to Angelica Trevino, Civil Rights Analyst, Western Regional Office, at
Records and documents discussed during the meeting will be available for public viewing prior to and after the meeting at
Thursday, May 21, 2015 from 2 p.m. to 3:00 p.m. AST
Peter Minarik, DFO, at (213) 894-3437 or
The Port of Corpus Christi Authority, grantee of FTZ 122, submitted a notification of proposed production activity to the FTZ Board on behalf of M & G Resins, LLC (M & G), located in Corpus Christi, Texas. The notification conforming to the requirements of the regulations of the FTZ Board (15 CFR 400.22) was received on April 17, 2015.
The M & G facility is located within Subzone 122S. The facility will be used for the manufacturing of polyethylene terephthalate and terephthalic acid. Pursuant to 15 CFR 400.14(b), FTZ activity 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 M & G from customs duty payments on the foreign status components used in export production. On its domestic sales, M & G would be able to choose the duty rates during customs entry procedures that apply to polyethylene terephthalate (PET) and terephthalic acid (PTA) (duty rate 6.5%) for the foreign status inputs noted below. Customs duties also could possibly be deferred or reduced on foreign status production equipment.
The components and materials sourced from abroad include: Ethylene glycol, para-xylene and acetic acid (duty rate ranges from duty-free to 5.5%).
Public comment is invited from interested parties. Submissions shall be addressed to the Board's Executive Secretary at the address below. The closing period for their receipt is June 9, 2015.
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 Board's Web site, which is accessible via
For further information, contact Elizabeth Whiteman at
Enforcement and Compliance, International Trade Administration, Department of Commerce.
As a result of the determinations by the Department of Commerce (the Department) and the International Trade Commission (the ITC) in their five year (sunset) reviews that revocation of the antidumping duty (AD) and countervailing duty (CVD) orders on commodity matchbooks from India would likely lead to a continuation or recurrence of dumping and a countervailable subsidy, as well as material injury to an industry in the United States, the Department is publishing a notice of continuation for the AD and CVD orders.
Effective Date: April 30, 2015.
David Crespo (AD), Office II, and Jacqueline Arrowsmith (CVD), Office VII, AD/CVD Operations, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230; telephone: (202) 482-3693 and (202) 482-5255, respectively.
On November 3, 2014, the Department initiated sunset reviews on the AD and CVD orders on commodity matchbooks from India pursuant to section 751(c) of the Tariff Act of 1930, as amended (the Act).
On April 17, 2015, the ITC published its determination, pursuant to sections 751(c) and 752(a) of the Act, that revocation of the AD and CVD orders on commodity matchbooks from India would be likely to lead to the continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time.
The scope of the orders covers commodity matchbooks, also known as commodity book matches, paper matches or booklet matches.
Commodity matchbooks included in the scope of these orders may or may not contain printing. For example, they may have no printing other than the identification of the manufacturer or importer. Commodity matchbooks may also be printed with a generic message such as “Thank You” or a generic image such as the American Flag, with store brands (
The scope of these orders excludes promotional matchbooks, often referred to as “not for resale,” or “specialty advertising” matchbooks, as they do not enter into retail channels and are sold to businesses that provide hospitality, dining, drinking or entertainment services to their customers, and are given away by these businesses as promotional items. Such promotional matchbooks are distinguished by the physical characteristic of having the name and/or logo of a bar, restaurant, resort, hotel, club, café/coffee shop, grill, pub, eatery, lounge, casino, barbecue or individual establishment printed prominently on the matchbook cover. Promotional matchbook cover printing also typically includes the address and the phone number of the business or establishment being promoted.
The merchandise subject to these orders is properly classified under subheading 3605.00.0060 of the Harmonized Tariff Schedule of the United States (HTSUS). Subject merchandise may also enter under subheading 3605.00.0030 of the HTSUS. Although the HTSUS subheadings are provided for convenience and customs purposes, the written description of the scope of these orders is dispositive.
As a result of the determinations by the Department and the ITC that revocation of these AD and CVD duty
The effective date of the continuation of these orders will be the date of publication in the
These sunset reviews and this notice are in accordance with sections 751(c) and 751(d)(2) of the Act, and published pursuant to 777(i) of the Act and 19 CFR 351.218(f)(4).
Enforcement and Compliance, International Trade Administration, Department of Commerce.
The Department of Commerce (“the Department”) has received requests to conduct administrative reviews of various antidumping and countervailing duty orders and findings with March anniversary dates. In accordance with the Department's regulations, we are initiating those administrative reviews.
Effective date April 30, 2015.
Brenda E. Waters, Office of AD/CVD Operations, Customs Liaison Unit, Enforcement and Compliance, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington, DC 20230, telephone: (202) 482-4735.
The Department has received timely requests, in accordance with 19 CFR 351.213(b), for administrative reviews of various antidumping and countervailing duty orders and findings with March anniversary dates.
All deadlines for the submission of various types of information, certifications, or comments or actions by the Department discussed below refer to the number of calendar days from the applicable starting time.
If a producer or exporter named in this notice of initiation had no exports, sales, or entries during the period of review (“POR”), it must notify the Department within 30 days of publication of this notice in the
In the event the Department limits the number of respondents for individual examination for administrative reviews, the Department intends to select respondents based on U.S. Customs and Border Protection (“CBP”) data for U.S. imports during the POR. We intend to release the CBP data under Administrative Protective Order (“APO”) to all parties having an APO within seven days of publication of this initiation notice and to make our decision regarding respondent selection within 21 days of publication of this
In the event the Department decides it is necessary to limit individual examination of respondents and conduct respondent selection under section 777A(c)(2) of the Act:
In general, the Department has found that determinations concerning whether particular companies should be “collapsed” (
Pursuant to 19 CFR 351.213(d)(1), a party that has requested a review may withdraw that request within 90 days of the date of publication of the notice of initiation of the requested review. The regulation provides that the Department may extend this time if it is reasonable to do so. In order to provide parties additional certainty with respect to when the Department will exercise its discretion to extend this 90-day deadline, interested parties are advised that the Department does not intend to extend the 90-day deadline unless the requestor demonstrates that an extraordinary circumstance has prevented it from submitting a timely withdrawal request. Determinations by the Department to extend the 90-day
In proceedings involving non-market economy (“NME”) countries, the Department begins with a rebuttable presumption that all companies within the country are subject to government control and, thus, should be assigned a single antidumping duty deposit rate. It is the Department's policy to assign all exporters of merchandise subject to an administrative review in an NME country this single rate unless an exporter can demonstrate that it is sufficiently independent so as to be entitled to a separate rate.
To establish whether a firm is sufficiently independent from government control of its export activities to be entitled to a separate rate, the Department analyzes each entity exporting the subject merchandise under a test arising from the
All firms listed below that wish to qualify for separate rate status in the administrative reviews involving NME countries must complete, as appropriate, either a separate rate application or certification, as described below. For these administrative reviews, in order to demonstrate separate rate eligibility, the Department requires entities for whom a review was requested, that were assigned a separate rate in the most recent segment of this proceeding in which they participated, to certify that they continue to meet the criteria for obtaining a separate rate. The Separate Rate Certification form will be available on the Department's Web site at
Entities that currently do not have a separate rate from a completed segment of the proceeding
For exporters and producers who submit a separate-rate status application or certification and subsequently are selected as mandatory respondents, these exporters and producers will no longer be eligible for separate rate status unless they respond to all parts of the questionnaire as mandatory respondents.
In accordance with 19 CFR 351.221(c)(1)(i), we are initiating administrative reviews of the following antidumping and countervailing duty orders and findings. We intend to issue the final results of these reviews not later than March 31, 2016.
During any administrative review covering all or part of a period falling between the first and second or third and fourth anniversary of the publication of an antidumping duty order under 19 CFR 351.211 or a determination under 19 CFR 351.218(f)(4) to continue an order or suspended investigation (after sunset review), the Secretary, if requested by a domestic interested party within 30 days of the date of publication of the notice of initiation of the review, will determine, consistent with
For the first administrative review of any order, there will be no assessment of antidumping or countervailing duties on entries of subject merchandise entered, or withdrawn from warehouse, for consumption during the relevant provisional-measures “gap” period, of the order, if such a gap period is applicable to the POR.
Interested parties must submit applications for disclosure under administrative protective orders in accordance with 19 CFR 351.305. On January 22, 2008, the Department published
On April 10, 2013, the Department published
Any party submitting factual information in an antidumping duty or countervailing duty proceeding must certify to the accuracy and completeness of that information.
On September 20, 2013, the Department modified its regulation concerning the extension of time limits for submissions in antidumping and countervailing duty proceedings:
These initiations and this notice are in accordance with section 751(a) of the Act (19 U.S.C. 1675(a)) and 19 CFR 351.221(c)(1)(i).
This is a decision consolidated pursuant to Section 6(c) of the Educational, Scientific, and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301). Related records can be viewed between 8:30 a.m. and 5:00 p.m. in Room 3720, U.S. Department of Commerce, 14th and Constitution Avenue NW., Washington, DC.
This is a decision pursuant to Section 6(c) of the Educational, Scientific, and Cultural Materials Importation Act of 1966 (Pub. L. 89-651, as amended by Pub. L. 106-36; 80 Stat. 897; 15 CFR part 301). Related records can be viewed between 8:30 a.m. and 5:00 p.m. in Room 3720, U.S. Department of Commerce, 14th and Constitution Ave. NW., Washington, DC.
Docket Number: 14-032. Applicant: New Mexico Institute of Mining and Technology, Socorro, NM 87801. Instrument: Delay Line Trolley (DLT). Manufacturer: University of Cambridge/Cavendish Lab, United Kingdom. Intended Use: See notice at 80 FR 2914-15, January 21, 2015. Comments: None received. Decision: Approved. We know of no instruments of equivalent scientific value to the foreign instruments described below, for such purposes as this is intended to be used, that was being manufactured in the United States at the time of order. Reasons: The instrument will be used within the Magdalena Ridge Observatory Interferometer (MROI) to equalize path lengths traveled by the light from a target object, via the telescopes, to the point where interference takes place, by acting as a continuously movable retro-reflector. Each trolley moves continuously within an evacuated pipe in order to introduce the optical path delay appropriate for the target, time of observation, and inter-telescope separations in use. For most of the sky to be accessible, a delay range approximately equal to the longest inter-telescope separation must be available, requiring an unprecedented monolithic delay line length of almost 200m. The instrument is essentially a cat's-eye assembly that is flexure-mounted and voice coil actuated on a motorized wheeled carriage, which runs directly on the inner surface of the delay line pipe, not on pre-installed rails. Its position is precisely measured by a laser metrology system and computer controlled so as to introduce the
Docket Number: 14-034. Applicant: National Institutes of Health, Bethesda, MD 20892-8025. Instrument: Falcon II Direct Detection Camera. Manufacturer: FEI Company, the Netherlands. Intended Use: See notice at 80 FR 2914-15, January 21, 2015. Comments: None received. Decision: Approved. We know of no instruments of equivalent scientific value to the foreign instruments described below, for such purposes as this is intended to be used, that was being manufactured in the United States at the time of order. Reasons: The instrument will be used in cryo-electron microscopy experiments, to visualize biological specimens suspended in vitreous ice involving recording electron micrographs of the highest possible quality and subjecting them to digital image analysis to elicit the maximum amount of structural information and interpretation, taking into account all pertinent complimentary data. Sensor specifications required for this research include a pixel size of ~14 μm which predicates a magnification of ~100 kx, optimal performance as measured by Detective Quantum Efficiency at a typical dose rate of 10-20 e/pixel/second, and protection of the sensor against accidental high-dose exposures to the microscope's electron beam.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; issuance of an incidental harassment authorization.
In accordance with the regulations implementing the Marine Mammal Protection Act (MMPA) as amended, notification is hereby given that NMFS has issued an incidental harassment authorization (IHA) to the Sonoma County Water Agency (SCWA) to incidentally harass, by Level B harassment only, three species of marine mammals during estuary management activities conducted at the mouth of the Russian River, Sonoma County, California.
This IHA is effective for the period of one year, from April 21, 2015, through April 20, 2016.
Ben Laws, Office of Protected Resources, NMFS, (301) 427-8401.
Electronic copies of SCWA's application and any supporting documents, as well as a list of the references cited in this document, may be obtained by visiting the Internet at:
Sections 101(a)(5)(A) and (D) of the MMPA (16 U.S.C. 1361,
The incidental taking of small numbers of marine mammals may be allowed only if NMFS (through authority delegated by the Secretary) finds that the total taking by the specified activity during the specified time period will (i) have a negligible impact on the species or stock(s) and (ii) not have an unmitigable adverse impact on the availability of the species or stock(s) for subsistence uses (where relevant). Further, the permissible methods of taking and requirements pertaining to the mitigation, monitoring and reporting of such taking must be set forth.
The allowance of such incidental taking under section 101(a)(5)(A), by harassment, serious injury, death, or a combination thereof, requires that regulations be established. Subsequently, a Letter of Authorization may be issued pursuant to the prescriptions established in such regulations, providing that the level of taking will be consistent with the findings made for the total taking allowable under the specific regulations. Under section 101(a)(5)(D), NMFS may authorize such incidental taking by harassment only, for periods of not more than one year, pursuant to requirements and conditions contained within an IHA. The establishment of these prescriptions requires notice and opportunity for public comment.
NMFS has defined “negligible impact” in 50 CFR 216.103 as “. . . an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as: “. . . any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].”
On January 21, 2015, we received an adequate and complete request from SCWA for authorization of the taking of marine mammals incidental to Russian River estuary management activities in
Breaching of naturally-formed barrier beach at the mouth of the Russian River requires the use of heavy equipment (
This is the sixth such IHA issued to SCWA. SCWA was first issued an IHA, valid for a period of one year, effective on April 1, 2010 (75 FR 17382), and was subsequently issued one-year IHAs for incidental take associated with the same activities, effective on April 21, 2011 (76 FR 23306), April 21, 2012 (77 FR 24471), April 21, 2013 (78 FR 23746), and April 21, 2014 (79 FR 20180).
Additional detail regarding the specified activity was provided in our
The planned action involves management of the estuary to prevent flooding while preventing adverse modification to critical habitat for ESA-listed salmonids. Requirements related to the ESA are described in further detail below. During the lagoon management period, this involves construction and maintenance of a lagoon outlet channel that would facilitate formation of a perched lagoon. A perched lagoon, which is an estuary closed to tidal influence in which water surface elevation is above mean high tide, reduces flooding while maintaining beneficial conditions for juvenile salmonids. Additional breaches of barrier beach may be conducted for the sole purpose of reducing flood risk. SCWA's planned activity was described in detail in our notice of proposed authorization prior to the 2011 IHA (76 FR 14924; March 18, 2011); please see that document for a detailed description of SCWA's estuary management activities. Aside from minor additions to SCWA's biological and physical estuary monitoring measures, the specified activity remains the same as that described in the 2011 document.
The specified activity may occur at any time during the one-year timeframe (April 21, 2015, through April 20, 2016) of the IHA, although construction and maintenance of a lagoon outlet channel will occur only during the lagoon management period. In addition, there are certain restrictions placed on SCWA during the harbor seal pupping season. These, as well as periodicity and frequency of the specified activities, are described in further detail below.
The estuary is located about 97 km (60 mi) northwest of San Francisco in Sonoma County, near Jenner, California (see Figure 1 of SCWA's application). The Russian River watershed encompasses 3,847 km
Within the Russian River watershed, the U.S. Army Corps of Engineers (Corps), SCWA and the Mendocino County Russian River Flood Control and Water Conservation Improvement District (District) operate and maintain federal facilities and conduct activities in addition to the estuary management, including flood control, water diversion and storage, instream flow releases, hydroelectric power generation, channel maintenance, and fish hatchery production. As described in the notice of proposed IHA, NMFS issued a 2008 Biological Opinion (BiOp) for Water Supply, Flood Control Operations, and Channel Maintenance conducted by the Corps, SCWA and the District in the Russian River watershed (NMFS, 2008). This BiOp found that the activities—including SCWA's estuary management activities prior to the BiOp—authorized by the Corps and undertaken by SCWA and the District, if continued in a manner similar to recent historic practices, were likely to jeopardize the continued existence of ESA-listed salmonids and were likely to adversely modify critical habitat. In part, therefore, the BiOp requires SCWA to collaborate with NMFS and modify their estuary water level management in order to reduce marine influence (
There are three components to SCWA's ongoing estuary management activities: (1) Lagoon outlet channel management, during the lagoon management period only, required to accomplish the dual purposes of flood risk abatement and maintenance of juvenile salmonid habitat; (2) traditional artificial breaching, with the sole objective of flood risk abatement; and (3) physical and biological monitoring in and near the estuary, required under the terms of the BiOp, to understand response to water surface elevation management in the estuary-lagoon system. The latter category (physical and biological monitoring) includes all ancillary beach and/or estuary monitoring activities, including topographic and geophysical beach surveys and biological and physical habitat monitoring in the estuary. Please see the previously referenced
We published a notice of receipt of SCWA's application and proposed IHA in the
The marine mammal species that may be harassed incidental to estuary management activities are the harbor seal, California sea lion, and the northern elephant seal. We presented a detailed discussion of the status of these stocks and their occurrence in the action area in the notice of the proposed IHA (80 FR 14073; March 18, 2015).
Ongoing monthly harbor seal counts at the Jenner haul-out were begun by J. Mortenson in January 1987, with additional nearby haul-outs added to the counts thereafter. In addition, local resident E. Twohy began daily observations of seals and people at the Jenner haul-out in November 1989. These datasets note whether the mouth at the Jenner haul-out was opened or closed at each observation, as well as various other daily and annual patterns of haul-out usage (Mortenson and Twohy, 1994). Recently, SCWA began regular baseline monitoring of the haul-out as a component of its estuary management activity. In the notice of proposed IHA, we presented average daily numbers of seals observed at the mouth of the Russian River from 1993-2005 and from 2009-14 (see Table 1; 80 FR 14073; March 18, 2015).
We provided a detailed discussion of the potential effects of the specified activity on marine mammals in the notice of the proposed IHA (79 FR 12472, March 5, 2013). A summary of anticipated effects is provided below.
A significant body of monitoring data exists for pinnipeds at the mouth of the Russian River. In addition, pinnipeds have co-existed with regular estuary management activity for decades as well as with regular human use activity at the beach, and are likely habituated to human presence and activity. Nevertheless, SCWA's estuary management activities have the potential to disturb pinnipeds present on the beach or at peripheral haul-outs in the estuary. During breaching operations, past monitoring has revealed that some or all of the seals present typically move or flush from the beach in response to the presence of crew and equipment, though some may remain hauled-out. No stampeding of seals—a potentially dangerous occurrence in which large numbers of animals succumb to mass panic and rush away from a stimulus—has been documented since SCWA developed protocols to prevent such events in 1999. While it is likely impossible to conduct required estuary management activities without provoking some response in hauled-out animals, precautionary mitigation measures, described later in this document, ensure that animals are gradually apprised of human approach. Under these conditions, seals typically exhibit a continuum of responses, beginning with alert movements (
California sea lions and northern elephant seals, which have been noted only infrequently in the action area, have been observed as less sensitive to stimulus than harbor seals during monitoring at numerous other sites. For example, monitoring of pinniped disturbance as a result of abalone research in the Channel Islands showed that while harbor seals flushed at a rate of 69 percent, California sea lions flushed at a rate of only 21 percent. The rate for elephant seals declined to 0.1 percent (VanBlaricom, 2011). In the event that either of these species is present during management activities, they would be expected to display a minimal reaction to maintenance activities—less than that expected of harbor seals.
Although the Jenner haul-out is not known as a primary pupping beach, harbor seal pups have been observed during the pupping season; therefore, we have evaluated the potential for injury, serious injury or mortality to pups. There is a lack of published data regarding pupping at the mouth of the Russian River, but SCWA monitors have observed pups on the beach. No births were observed during recent monitoring, but were inferred based on signs indicating pupping (
Similarly, the period of mother-pup bonding, critical time needed to ensure pup survival and maximize pup health, is not expected to be impacted by estuary management activities. Harbor seal pups are extremely precocious, swimming and diving immediately after birth and throughout the lactation period, unlike most other phocids which normally enter the sea only after weaning (Lawson and Renouf, 1985; Cottrell
In summary, and based on extensive monitoring data, we believe that impacts to hauled-out pinnipeds during estuary management activities would be behavioral harassment of limited duration (
We provided a detailed discussion of the potential effects of this action on marine mammal habitat in the notice of the proposed IHA (80 FR 14073; March 18, 2015). SCWA's estuary management activities will result in temporary physical alteration of the Jenner haul-out. With barrier beach closure, seal usage of the beach haul-out declines, and the three nearby river haul-outs may not be available for usage due to rising water surface elevations. Breaching of the barrier beach, subsequent to the temporary habitat disturbance, will likely increase suitability and availability of habitat for pinnipeds. Biological and water quality monitoring will not physically alter pinniped habitat.
In summary, there will be temporary physical alteration of the beach. However, natural opening and closure of the beach results in the same impacts to habitat; therefore, seals are likely adapted to this cycle. In addition, the increase in rearing habitat quality has the goal of increasing salmonid abundance, ultimately providing more food for seals present within the action area. Thus, any impacts to marine mammal habitat are not expected to cause significant or long-term consequences for individual marine mammals or their populations.
In order to issue an IHA under section 101(a)(5)(D) of the MMPA, NMFS must set forth the permissible methods of taking pursuant to such activity, and other means of effecting the least practicable impact on such species or stock and its habitat, paying particular attention to rookeries, mating grounds, and areas of similar significance, and on the availability of such species or stock for taking for certain subsistence uses.
SCWA will continue the following mitigation measures, as implemented during the previous IHAs, designed to minimize impact to affected species and stocks:
• SCWA crews will cautiously approach the haul-out ahead of heavy equipment to minimize the potential for sudden flushes, which may result in a stampede—a particular concern during pupping season.
• SCWA staff will avoid walking or driving equipment through the seal haul-out.
• Crews on foot will make an effort to be seen by seals from a distance, if possible, rather than appearing suddenly at the top of the sandbar, again preventing sudden flushes.
• During breaching events, all monitoring will be conducted from the overlook on the bluff along Highway 1 adjacent to the haul-out in order to minimize potential for harassment.
• A water level management event may not occur for more than two consecutive days unless flooding threats cannot be controlled.
In addition, SCWA will continue mitigation measures specific to pupping season (March 15-June 30), as implemented in the previous IHA:
• SCWA will maintain a one-week no-work period between water level management events (unless flooding is an immediate threat) to allow for an adequate disturbance recovery period. During the no-work period, equipment must be removed from the beach.
• If a pup less than one week old is on the beach where heavy machinery will be used or on the path used to access the work location, the management action will be delayed until the pup has left the site or the latest day possible to prevent flooding while still maintaining suitable fish rearing habitat. In the event that a pup remains present on the beach in the presence of flood risk, SCWA will consult with NMFS to determine the appropriate course of action. SCWA will coordinate with the locally established seal monitoring program (Stewards' Seal Watch) to determine if pups less than one week old are on the beach prior to a breaching event.
• Physical and biological monitoring (including topographic and geophysical beach surveys) will not be conducted if a pup less than one week old is present at the monitoring site or on a path to the site.
• Any jetty study activities in the vicinity of the harbor seal haul-out will not occur during the pupping season.
Equipment will be driven slowly on the beach and care will be taken to minimize the number of shutdowns and start-ups when the equipment is on the beach. All work will be completed as efficiently as possible, with the smallest amount of heavy equipment possible, to minimize disturbance of seals at the haul-out. Boats operating near river haul-outs during monitoring will be kept within posted speed limits and driven as far from the haul-outs as safely possible to minimize flushing seals.
We have carefully evaluated SCWA's planned mitigation measures and considered their effectiveness in past implementation to determine whether they are likely to effect the least practicable impact on the affected marine mammal species and stocks and their habitat. Our evaluation of potential measures included consideration of the following factors in relation to one another: (1) The manner in which, and the degree to which, the successful implementation of the measure is expected to minimize adverse impacts to marine mammals, (2) the proven or likely efficacy of the specific measure to minimize adverse impacts as planned; and (3) the practicability of the measure for applicant implementation.
Any mitigation measure(s) we prescribe should be able to accomplish, have a reasonable likelihood of accomplishing (based on current science), or contribute to the accomplishment of one or more of the general goals listed below:
• Avoidance or minimization of injury or death of marine mammals wherever possible (goals 2, 3, and 4 may contribute to this goal).
• A reduction in the number (total number or number at biologically important time or location) of individual marine mammals exposed to stimuli expected to result in incidental take (this goal may contribute to 1, above, or to reducing takes by behavioral harassment only).
• A reduction in the number (total number or number at biologically important time or location) of times any individual marine mammal would be exposed to stimuli expected to result in incidental take (this goal may contribute to 1, above, or to reducing takes by behavioral harassment only).
• A reduction in the intensity of exposure to stimuli expected to result in incidental take (this goal may contribute to 1, above, or to reducing the severity of behavioral harassment only).
• Avoidance or minimization of adverse effects to marine mammal habitat, paying particular attention to the prey base, blockage or limitation of passage to or from biologically important areas, permanent destruction of habitat, or temporary disturbance of habitat during a biologically important time.
• For monitoring directly related to mitigation, an increase in the probability of detecting marine mammals, thus allowing for more effective implementation of the mitigation.
Based on our evaluation of SCWA's planned measures and on SCWA's record of management at the mouth of the Russian River including information from monitoring of SCWA's implementation of the mitigation measures as prescribed under the previous IHAs, we have determined that the planned mitigation measures provide the means of effecting the least
In order to issue an IHA for an activity, section 101(a)(5)(D) of the MMPA states that NMFS must set forth “requirements pertaining to the monitoring and reporting of such taking”. The MMPA implementing regulations at 50 CFR 216.104(a)(13) indicate that requests for incidental take authorizations must include the suggested means of accomplishing the necessary monitoring and reporting that will result in increased knowledge of the species and of the level of taking or impacts on populations of marine mammals that are expected to be present in the proposed action area.
Any monitoring requirement we prescribe should accomplish one or more of the following general goals:
1. An increase in the probability of detecting marine mammals, both within defined zones of effect (thus allowing for more effective implementation of the mitigation) and in general to generate more data to contribute to the analyses mentioned below;
2. An increase in our understanding of how many marine mammals are likely to be exposed to stimuli that we associate with specific adverse effects, such as behavioral harassment or hearing threshold shifts;
3. An increase in our understanding of how marine mammals respond to stimuli expected to result in incidental take and how anticipated adverse effects on individuals may impact the population, stock, or species (specifically through effects on annual rates of recruitment or survival) through any of the following methods:
• Behavioral observations in the presence of stimuli compared to observations in the absence of stimuli (need to be able to accurately predict pertinent information,
• Physiological measurements in the presence of stimuli compared to observations in the absence of stimuli (need to be able to accurately predict pertinent information,
• Distribution and/or abundance comparisons in times or areas with concentrated stimuli versus times or areas without stimuli;
4. An increased knowledge of the affected species; or
5. An increase in our understanding of the effectiveness of certain mitigation and monitoring measures.
SCWA submitted a marine mammal monitoring plan as part of the IHA application. It can be found on the Internet at
1. Under what conditions do pinnipeds haul out at the Russian River estuary mouth at Jenner?
2. How do seals at the Jenner haul-out respond to activities associated with the construction and maintenance of the lagoon outlet channel and artificial breaching activities?
3. Does the number of seals at the Jenner haul-out significantly differ from historic averages with formation of a summer (May 15 to October 15) lagoon in the Russian River estuary?
4. Are seals at the Jenner haul-out displaced to nearby river and coastal haul-outs when the mouth remains closed in the summer?
In summary, monitoring includes the following:
In addition to the census data, disturbances of the haul-out are recorded. The method for recording disturbances follows those in Mortenson (1996). Disturbances will be recorded on a three-point scale that represents an increasing seal response to the disturbance. The time, source, and duration of the disturbance, as well as an estimated distance between the source and haul-out, are recorded. It should be noted that only responses falling into Mortenson's Levels 2 and 3 (
In an effort towards understanding possible relationships between use of the Jenner haul-out and nearby coastal and river haul-outs, several other haul-outs on the coast and in the Russian River estuary are monitored as well (see Figure 4 of SCWA's application). The peripheral haul-outs are visited for ten-minute counts twice during each baseline monitoring day. All pinnipeds hauled out were counted from the same vantage point(s) at each haul-out using a spotting scope or binoculars.
In an attempt to understand whether seals from the Jenner haul-out are displaced to coastal and river haul-outs
For all counts, the following information will be recorded in thirty-minute intervals: (1) Pinniped counts, by species; (2) behavior; (3) time, source and duration of any disturbance; (4) estimated distances between source of disturbance and pinnipeds; (5) weather conditions (
If, during monitoring, observers sight any pup that might be abandoned, SCWA will contact the NMFS stranding response network immediately and also report the incident to NMFS' West Coast Regional Office and Office of Protected Resources within 48 hours. Observers will not approach or move the pup. Potential indications that a pup may be abandoned are no observed contact with adult seals, no movement of the pup, and the pup's attempts to nurse are rebuffed.
SCWA is required to submit a report on all activities and marine mammal monitoring results to the Office of Protected Resources, NMFS, and the West Coast Regional Administrator, NMFS, 90 days prior to the expiration of the IHA if a renewal is sought, or within 90 days of the expiration of the permit otherwise. This annual report will also be distributed to California State Parks and Stewards, and would be available to the public on SCWA's Web site. This report will contain the following information:
• The number of pinnipeds taken, by species and age class (if possible);
• Behavior prior to and during water level management events;
• Start and end time of activity;
• Estimated distances between source and pinnipeds when disturbance occurs;
• Weather conditions (
• Haul-out reoccupation time of any pinnipeds based on post-activity monitoring;
• Tide levels and estuary water surface elevation; and
• Seal census from bi-monthly and nearby haul-out monitoring.
The annual report includes descriptions of monitoring methodology, tabulation of estuary management events, summary of monitoring results, and discussion of problems noted and proposed remedial measures. SCWA will report any injured or dead marine mammals to NMFS' West Coast Regional Office and Office of Protected Resources.
SCWA complied with the mitigation and monitoring required under all previous authorizations. In accordance with the 2014 IHA, SCWA submitted a Report of Activities and Monitoring Results, covering the period of January 1 through December 31, 2014. Previous monitoring reports (available at
Except with respect to certain activities not pertinent here, section 3(18) of the MMPA defines “harassment” as: “. . . any act of pursuit, torment, or annoyance which (i) has the potential to injure a marine mammal or marine mammal stock in the wild [Level A harassment]; or (ii) has the potential to disturb a marine mammal or marine mammal stock in the wild by causing disruption of behavioral patterns, including, but not limited to, migration, breathing, nursing, breeding, feeding, or sheltering [Level B harassment].”
We are authorizing SCWA to take harbor seals, California sea lions, and northern elephant seals, by Level B harassment only, incidental to estuary management activities. These activities, involving increased human presence and the use of heavy equipment and support vehicles, are expected to harass pinnipeds present at the haul-out through behavioral disturbance only. In addition, monitoring activities prescribed in the BiOp may result in harassment of additional individuals at the Jenner haul-out and at the three haul-outs located in the estuary. Estimates of the number of harbor seals, California sea lions, and northern elephant seals that may be harassed by the activities is based upon the number of potential events associated with Russian River estuary management activities and the average number of individuals of each species that are present during conditions appropriate to the activity. As described previously in this document, monitoring effort at the mouth of the Russian River has shown that the number of seals utilizing the haul-out declines during bar-closed conditions. Tables 1 and 2 detail the total number of authorized takes.
NMFS has defined “negligible impact” in 50 CFR 216.103 as “. . . an impact resulting from the specified activity that cannot be reasonably expected to, and is not reasonably likely to, adversely affect the species or stock through effects on annual rates of recruitment or survival.” A negligible impact finding is based on the lack of likely adverse effects on annual rates of recruitment or survival (
Although SCWA's estuary management activities may disturb pinnipeds hauled out at the mouth of the Russian River, as well as those hauled out at several locations in the estuary during recurring monitoring activities, impacts are occurring to a small, localized group of animals. While these impacts can occur year-round, they occur sporadically and for limited duration (
No injury, serious injury, or mortality is anticipated, nor is the proposed action likely to result in long-term impacts such as permanent abandonment of the haul-out. Injury, serious injury, or mortality to pinnipeds would likely result from startling animals inhabiting the haul-out into a stampede reaction, or from extended mother-pup separation as a result of such a stampede. Long-term impacts to pinniped usage of the haul-out could result from significantly increased presence of humans and equipment on the beach. To avoid these possibilities, we have worked with SCWA to develop the previously described mitigation measures. These are designed to reduce the possibility of startling pinnipeds, by gradually apprising them of the presence of humans and equipment on the beach, and to reduce the possibility of impacts to pups by eliminating or altering management activities on the beach when pups are present and by setting limits on the frequency and duration of events during pupping season. During the past fifteen years of flood control management, implementation of similar mitigation measures has resulted in no known stampede events and no known injury, serious injury, or mortality. Over the course of that time period, management events have generally been infrequent and of limited duration.
No pinniped stocks for which incidental take is authorized are listed as threatened or endangered under the ESA or determined to be strategic or depleted under the MMPA. Recent data suggests that harbor seal populations have reached carrying capacity; populations of California sea lions and northern elephant seals in California are
The authorized number of animals taken for each species of pinniped can be considered small relative to the population size. There are an estimated 30,968 harbor seals in the California stock, 296,750 California sea lions, and 179,000 northern elephant seals in the California breeding population. Based on extensive monitoring effort specific to the affected haul-out and historical data on the frequency of the specified activity, we are proposing to authorize take, by Level B harassment only, of 3,976 harbor seals, 34 California sea lions, and 34 northern elephant seals, representing 12.8, 0.01, and 0.02 percent of the populations, respectively. However, this represents an overestimate of the number of individuals harassed over the duration of the IHA, because these totals represent much smaller numbers of individuals that may be harassed multiple times. Based on the analysis contained herein of the likely effects of the specified activity on marine mammals and their habitat, and taking into consideration the implementation of the mitigation and monitoring measures, we find that small numbers of marine mammals will be taken relative to the populations of the affected species or stocks.
There are no relevant subsistence uses of marine mammals implicated by this action. Therefore, we have determined that the total taking of affected species or stocks would not have an unmitigable adverse impact on the availability of such species or stocks for taking for subsistence purposes.
No species listed under the ESA are expected to be affected by these activities. Therefore, we have determined that a section 7 consultation under the ESA is not required. As described elsewhere in this document, SCWA and the Corps consulted with NMFS under section 7 of the ESA regarding the potential effects of their operations and maintenance activities, including SCWA's estuary management program, on ESA-listed salmonids. As a result of this consultation, NMFS issued the Russian River Biological Opinion (NMFS, 2008), including Reasonable and Prudent Alternatives, which prescribes modifications to SCWA's estuary management activities. The effects of the proposed activities and authorized take would not cause additional effects for which section 7 consultation would be required.
In compliance with the National Environmental Policy Act of 1969 (42 U.S.C. 4321,
As a result of these determinations, we have issued an IHA to SCWA to conduct estuary management activities in the Russian River from the period of April 21, 2015, through April 20, 2016, provided the previously mentioned mitigation, monitoring, and reporting requirements are implemented.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; affirmative finding annual renewal.
The Assistant Administrator for Fisheries, NMFS, (Assistant Administrator) has issued an affirmative finding annual renewal for the Government of Spain under the Marine Mammal Protection Act (MMPA). This affirmative finding annual renewal will allow yellowfin tuna and yellowfin tuna products harvested in the eastern tropical Pacific Ocean (ETP) in compliance with the International Dolphin Conservation Program (IDCP) by Spanish-flag purse seine vessels or purse seine vessels operating under Spanish jurisdiction to be imported into the United States. The affirmative finding annual renewal was based on review of documentary evidence submitted by the Government of Spain and obtained from the Inter-American Tropical Tuna Commission (IATTC).
The affirmative finding annual renewal is effective from April 1, 2014, through March 31, 2015.
Justin Greenman, West Coast Region, National Marine Fisheries Service, 501 W. Ocean Blvd., Long Beach, CA 90802. Phone: 562-980-3264 Email:
The MMPA, 16 U.S.C. 1361
The affirmative finding process requires that the harvesting nation is meeting its obligations under the IDCP and obligations of membership in the IATTC. Every 5 years, the government of the harvesting nation must request a new affirmative finding and submit the required documentary evidence directly to the Assistant Administrator. On an annual basis, NMFS reviews the affirmative finding and determines whether the harvesting nation continues to meet the requirements. A nation may provide information related to compliance with IDCP and IATTC measures directly to NMFS on an annual basis or may authorize the IATTC to release the information to NMFS to annually renew an affirmative finding determination without an application from the harvesting nation.
An affirmative finding will be terminated, in consultation with the Secretary of State, if the Assistant Administrator determines that the requirements of 50 CFR 216.24(f) are no longer being met or that a nation is consistently failing to take enforcement actions on violations, thereby diminishing the effectiveness of the IDCP.
As a part of the affirmative finding process set forth in 50 CFR 216.24(f), the Assistant Administrator considered documentary evidence submitted by the Government of Spain and obtained from the IATTC and has determined that Spain has met the MMPA's requirements to receive an affirmative finding annual renewal.
After consultation with the Department of State, the Assistant Administrator issued an affirmative finding annual renewal to Spain, allowing the continued importation into the United States of yellowfin tuna and products derived from yellowfin tuna harvested in the ETP by Spanish-flag purse seine vessels or purse seine vessels operating under Spanish jurisdiction through March 31, 2015. Spain's 5-year affirmative finding will remain valid through March 31, 2015.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The Pacific Fishery Management Council's (Pacific Council) Groundfish Endangered Species Workgroup will hold a meeting, which is open to the public.
The meeting will occur May 19-21, 2015. The meeting will begin at 1 p.m. Tuesday, May 19 and at 9 a.m. on Wednesday and Thursday, May 20-21.
The meeting will be held at the Regional Administrator's Conference Room, Building 1, National Oceanic and Atmospheric Administration, Western Regional Center, 7600 Sand Point Way NE., Seattle, WA 98115-6349, telephone: (206) 526-6150.
Ms. Sarah Williams, NMFS,
The primary purpose of the meeting is to review information on take of species listed under the Endangered Species Act (ESA) in the Pacific Coast groundfish fishery (other than salmonids) and provide recommendations to the Pacific Council on any additional mitigation measures needed, if any, to meet the requirements of the ESA as implemented through the terms and conditions in the most recent biological opinion for the fishery.
You may also join this meeting by conference line and webinar. To join by phone, participants should dial 888-790-6085, passcode 1730793. To join by webinar, each day of the meeting requires a different Web address. On May 19, participants can join Meeting ID: 544-685-613 at
Although non-emergency issues not contained in the meeting agenda may be discussed, those issues may not be the subject of formal action during these meetings. 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 meetings are 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; request for comments.
The National Ocean Council Committee on IUU Fishing and Seafood
Comments must be received by June 8, 2015.
You may submit comments on this document, identified by NOAA-NMFS-2014-0090, by any of the following methods:
• Electronic Submission: Submit all electronic public comments via the Federal e-Rulemaking Portal. Go to
• Mail: Submit written comments to Danielle Rioux, 1315 East-West Highway; Silver Spring, Maryland 20910.
Instructions: Comments sent by any other method, to any other address or individual, or received after the end of the comment period, may not be considered by the NOC Committee. All comments received are a part of the public record and will generally be posted for public viewing on
Danielle Rioux, 301-427-8516.
According to NOAA, in 2013, U.S. fishers landed 9.9 billion pounds of fish and shellfish worth $5.5 billion. Globally, illegal, unreported, and unregulated (IUU) fishing and seafood fraud undermine the sustainability of U.S. and global seafood stocks and negatively impact general ecosystem health. At the same time, IUU fishing and fraudulent seafood products distort legal markets and unfairly compete with the products of law-abiding fishers and seafood industries.
On March 15, 2015, the Presidential Task Force on Combating IUU Fishing and Seafood Fraud (Task Force), co-chaired by the Departments of Commerce and State, took an historic step to address these issues and published its action plan to implement Task Force recommendations (
This plan articulates the aggressive steps that Federal agencies will take to implement the recommendations the Task Force made to the President in December 2014 on a comprehensive framework of integrated programs to combat IUU fishing and seafood fraud. The plan identifies actions that will strengthen enforcement, create and expand partnerships with state and local governments, industry, and non-governmental organizations, and create a risk-based traceability program to track seafood from harvest to entry into U.S. commerce, including the use of existing traceability mechanisms. The work the Task Force began will continue under the oversight of the NOC Committee.
This notice is the first step in implementing Task Force Recommendations 14 and 15, “Identifying current at risk species threatened by IUU fishing and seafood fraud.” Once “at-risk” species have been determined, the NOC Committee will transmit the list to agencies for appropriate action. This list will form the basis for the species addressed in the first phase of the risk-based seafood traceability program, as described in the Task Force Action Plan.
With this notice, the NOC Committee is soliciting comment on what principles should be used to determine the seafood species “at risk” for IUU fishing and seafood fraud. Recommended principles should be measurable (
For example, possible principles could include assessing the extent to which species are known to have:
• significant domestic or international enforcement-related concerns, such as substantial numbers of violations of relevant regulations or conservation and management measures, significant challenges or limitations in existing enforcement regimes, or repeated reports of IUU activity;
• catches that are mis-reported or not reported according to the reporting procedures of the relevant international regional fisheries management organizations or national authorities, particularly when they are of high economic value;
• a human health risk when substituted for other species; and
• instances of being substituted for other species in order to avoid tariffs or to sell a lower value fish at a higher price.
Following the public comment period, the NOC Committee will take the input received into consideration as it develops a draft list of principles to be used in determining species “at risk” for IUU fishing and seafood fraud. The draft list of principles will then be used to create a draft list of “at-risk” species. Both the draft list of principles and the draft list of “at-risk” species will be published in the
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; public meeting.
The New England Fishery Management Council (Council) is scheduling a public meeting of its Risk Policy Working Group to consider actions affecting New England fisheries in the exclusive economic zone (EEZ). Recommendations from this group will be brought to the full Council for formal consideration and action, if appropriate.
This meeting will be held on Tuesday, May 19, 2015 at 9:30 a.m.
The meeting will be held at the Four Points by Sheraton, 407 Squire Road, Revere, MA 02151; Phone: (781) 284-7200; Fax: (781) 289-3176.
Thomas A. Nies, Executive Director, New England Fishery Management Council; telephone: (978) 465-0492.
The items of discussion on the agenda are to discuss implementation of the Councils Risk Policy across all Council-managed species. The group will also continue work on development of the Risk Policy “operational handbook” to address the application of the Risk Policy. Additionally they will discuss the application of the Risk Policy in the Atlantic Herring FMP and develop related recommendations. The group
Although non-emergency issues not contained in this agenda may come before these groups for discussion, those issues may not be the subject of formal action during these meetings. 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 Act, provided the public has been notified of the Council's intent to take final action to address the emergency.
This meeting is physically accessible to people with disabilities. Requests for sign language interpretation or other auxiliary aids should be directed to Thomas A. Nies, Executive Director, at (978) 465-0492, 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; affirmative finding annual renewal.
The Assistant Administrator for Fisheries, NMFS, (Assistant Administrator) has issued an affirmative finding annual renewal for the Government of Guatemala under the Marine Mammal Protection Act (MMPA). This affirmative finding annual renewal will allow yellowfin tuna and yellowfin tuna products harvested in the eastern tropical Pacific Ocean (ETP) in compliance with the International Dolphin Conservation Program (IDCP) by Guatemalan-flag purse seine vessels or purse seine vessels operating under Guatemalan jurisdiction to be imported into the United States. The affirmative finding annual renewal was based on review of documentary evidence submitted by the Government of Guatemala and obtained from the Inter-American Tropical Tuna Commission (IATTC).
The affirmative finding annual renewal is effective from April 1, 2014, through March 31, 2015.
Justin Greenman, West Coast Region, National Marine Fisheries Service, 501 W. Ocean Blvd., Long Beach, CA 90802. Phone: 562-980-3264 Email:
The MMPA, 16 U.S.C. 1361
The affirmative finding process requires that the harvesting nation is meeting its obligations under the IDCP and obligations of membership in the IATTC. Every 5 years, the government of the harvesting nation must request a new affirmative finding and submit the required documentary evidence directly to the Assistant Administrator. On an annual basis, NMFS reviews the affirmative finding and determines whether the harvesting nation continues to meet the requirements. A nation may provide information related to compliance with IDCP and IATTC measures directly to NMFS on an annual basis or may authorize the IATTC to release the information to NMFS to annually renew an affirmative finding determination without an application from the harvesting nation.
An affirmative finding will be terminated, in consultation with the Secretary of State, if the Assistant Administrator determines that the requirements of 50 CFR 216.24(f) are no longer being met or that a nation is consistently failing to take enforcement actions on violations, thereby diminishing the effectiveness of the IDCP.
As a part of the affirmative finding process set forth in 50 CFR 216.24(f), the Assistant Administrator considered documentary evidence submitted by the Government of Guatemala and obtained from the IATTC and has determined that Guatemala has met the MMPA's requirements to receive an affirmative finding annual renewal.
After consultation with the Department of State, the Assistant Administrator issued an affirmative finding annual renewal to Guatemala, allowing the continued importation into the United States of yellowfin tuna and products derived from yellowfin tuna harvested in the ETP by Guatemalan-flag purse seine vessels or purse seine vessels operating under Guatemalan jurisdiction through March 31, 2015. Guatemala's 5-year affirmative finding will remain valid through March 31, 2015.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; affirmative finding annual renewal.
The Assistant Administrator for Fisheries, NMFS, (Assistant Administrator) has issued an affirmative finding annual renewal for the Government of El Salvador under the Marine Mammal Protection Act (MMPA). This affirmative finding annual renewal will allow yellowfin tuna and yellowfin tuna products harvested in the eastern tropical Pacific Ocean (ETP) in compliance with the International Dolphin Conservation Program (IDCP) by Salvadoran-flag purse seine vessels or purse seine vessels operating under Salvadoran jurisdiction to be imported into the United States. The affirmative finding annual renewal was based on review of documentary evidence submitted by the Government of El Salvador and obtained from the Inter-American Tropical Tuna Commission (IATTC).
The affirmative finding annual renewal is effective from April 1, 2014, through March 31, 2015.
Justin Greenman, West Coast Region, National Marine Fisheries Service, 501 W. Ocean Blvd., Long Beach, CA 90802. Phone: 562-980-3264 Email:
The MMPA, 16 U.S.C. 1361
The affirmative finding process requires that the harvesting nation is meeting its obligations under the IDCP and obligations of membership in the IATTC. Every 5 years, the government of the harvesting nation must request a new affirmative finding and submit the required documentary evidence directly to the Assistant Administrator. On an annual basis, NMFS reviews the affirmative finding and determines whether the harvesting nation continues to meet the requirements. A nation may provide information related to compliance with IDCP and IATTC measures directly to NMFS on an annual basis or may authorize the IATTC to release the information to NMFS to annually renew an affirmative finding determination without an application from the harvesting nation.
An affirmative finding will be terminated, in consultation with the Secretary of State, if the Assistant Administrator determines that the requirements of 50 CFR 216.24(f) are no longer being met or that a nation is consistently failing to take enforcement actions on violations, thereby diminishing the effectiveness of the IDCP.
As a part of the affirmative finding process set forth in 50 CFR 216.24(f), the Assistant Administrator considered documentary evidence submitted by the Government of El Salvador and obtained from the IATTC and has determined that El Salvador has met the MMPA's requirements to receive an affirmative finding annual renewal.
After consultation with the Department of State, the Assistant Administrator issued an affirmative finding annual renewal to El Salvador, allowing the continued importation into the United States of yellowfin tuna and products derived from yellowfin tuna harvested in the ETP by Salvadoran-flag purse seine vessels or purse seine vessels operating under Salvadoran jurisdiction through March 31, 2015. El Salvador's 5-year affirmative finding will remain valid through March 31, 2018, subject to subsequent annual reviews by NMFS.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; affirmative finding 2-year renewal.
The Assistant Administrator for Fisheries, NMFS, (Assistant Administrator) has issued an affirmative finding 2-year renewal for the Government of Mexico under the Marine Mammal Protection Act (MMPA). This affirmative finding 2-year renewal will allow yellowfin tuna and yellowfin tuna products harvested in the eastern tropical Pacific Ocean (ETP) in compliance with the International Dolphin Conservation Program (IDCP) by Mexican-flag purse seine vessels or purse seine vessels operating under Mexican jurisdiction to be imported into the United States. The affirmative finding 2-year renewal was based on review of documentary evidence submitted by the Government of Mexico and obtained from the Inter-American Tropical Tuna Commission (IATTC).
The affirmative finding 2-year renewal is effective for the 2-year period of April 1, 2013 (retroactive) through March 31, 2015.
Justin Greenman, West Coast Region, National Marine Fisheries Service, 501 W. Ocean Blvd., Long Beach, CA 90802. Phone: 562-980-3264. Email:
The MMPA, 16 U.S.C. 1361
The affirmative finding process requires that the harvesting nation is meeting its obligations under the IDCP and obligations of membership in the IATTC. Every 5 years, the government of the harvesting nation must request a new affirmative finding and submit the required documentary evidence directly to the Assistant Administrator. On an annual basis, NMFS reviews the affirmative finding and determines whether the harvesting nation continues to meet the requirements. A nation may provide information related to compliance with IDCP and IATTC measures directly to NMFS on an annual basis or may authorize the IATTC to release the information to NMFS to annually renew an affirmative finding determination without an application from the harvesting nation.
An affirmative finding will be terminated, in consultation with the Secretary of State, if the Assistant Administrator determines that the requirements of 50 CFR 216.24(f) are no longer being met or that a nation is consistently failing to take enforcement actions on violations, thereby diminishing the effectiveness of the IDCP.
As a part of the affirmative finding process set forth in 50 CFR 216.24(f), the Assistant Administrator considered documentary evidence submitted by the Government of Mexico and obtained from the IATTC and has determined that Mexico has met the MMPA's requirements to receive an affirmative finding 2-year renewal.
After consultation with the Department of State, the Assistant Administrator issued an affirmative finding 2-year renewal to Mexico, allowing the continued importation into the United States of yellowfin tuna and products derived from yellowfin tuna harvested in the ETP by Mexican-flag purse seine vessels or purse seine vessels operating under Mexican jurisdiction for the 2-year period of April 1, 2013 (retroactive) through March 31, 2015. Mexico's 5-year affirmative finding will remain valid through March 31, 2015.
National Marine Fisheries Service (NMFS), National Oceanic and Atmospheric Administration (NOAA), Commerce.
Notice; affirmative finding 2-year renewal.
The Assistant Administrator for Fisheries, NMFS, (Assistant Administrator) has issued an affirmative finding 2-year renewal for the Government of Ecuador under the Marine Mammal Protection Act (MMPA). This affirmative finding 2-year renewal will allow yellowfin tuna and yellowfin tuna products harvested in the eastern tropical Pacific Ocean (ETP) in compliance with the International Dolphin Conservation Program (IDCP) by Ecuadorian-flag purse seine vessels or purse seine vessels operating under Ecuadorian jurisdiction to be imported into the United States. The affirmative finding 2-year renewal was based on review of documentary evidence submitted by the Government of Ecuador and obtained from the Inter-American Tropical Tuna Commission (IATTC).
The affirmative finding 2-year renewal is effective for the 2-year period of April 1, 2013 (retroactive) through March 31, 2015.
Justin Greenman, West Coast Region, National Marine Fisheries Service, 501 W. Ocean Blvd., Long Beach, CA 90802. Phone: 562-980-3264 Email:
The MMPA, 16 U.S.C. 1361
The affirmative finding process requires that the harvesting nation is meeting its obligations under the IDCP and obligations of membership in the IATTC. Every 5 years, the government of the harvesting nation must request a new affirmative finding and submit the required documentary evidence directly to the Assistant Administrator. On an annual basis, NMFS reviews the affirmative finding and determines whether the harvesting nation continues to meet the requirements. A nation may provide information related to compliance with IDCP and IATTC measures directly to NMFS on an annual basis or may authorize the IATTC to release the information to NMFS to annually renew an affirmative finding determination without an application from the harvesting nation.
An affirmative finding will be terminated, in consultation with the Secretary of State, if the Assistant Administrator determines that the requirements of 50 CFR 216.24(f) are no longer being met or that a nation is consistently failing to take enforcement actions on violations, thereby diminishing the effectiveness of the IDCP.
As a part of the affirmative finding process set forth in 50 CFR 216.24(f), the Assistant Administrator considered documentary evidence submitted by the Government of Ecuador and obtained from the IATTC and has determined that Ecuador has met the MMPA's requirements to receive an affirmative finding 2-year renewal.
After consultation with the Department of State, the Assistant Administrator issued an affirmative finding 2-year renewal to Ecuador, allowing the continued importation into the United States of yellowfin tuna and products derived from yellowfin tuna harvested in the ETP by Ecuadorian-flag purse seine vessels or purse seine vessels operating under Ecuadorian jurisdiction for the 2-year period of April 1, 2013 (retroactive) through March 31, 2015. Ecuador's 5-year affirmative finding will remain valid through March 31, 2015.
Notice of Availability (NOA) of Addendum to 26 June 2014 Record of Decision (ROD).
On April 23, 2015, the United States Air Force signed an Addendum to the 26 June 2014 ROD for the Final F-35 Beddown Supplemental Environmental Impact Statement (SEIS). The Addendum to the 26 June 2014 Record of Decision (AROD) documents the Air Force's decisions to: (1) Temporarily shift the primary runway to Runway 01/19 (RW 01/19) and allow a temporary increase in previously limited F-35 operations for construction-related closure of Runway 12/30 (RW 12/30), and (2) approve the Department of the Navy's (DoN's) request to add fifteen (15) Backup Aircraft Inventory (BAI) F-35C aircraft at Eglin AFB.
The AROD augments the 26 June 2014 ROD by allowing a one-time, temporary increase in certain F-35 operations on Runway 01/19 (RW 01/19) due to required construction-related closure of Runway 12/30 (RW 12/30) for up to four months from approximately 1 May 2015 through 31 August 2015. During this up to four-month period of construction partially closing RW 12/30, but only after all mitigations measures have first been implemented and/or exhausted, limited additional F-35 operations up to the number and type of average daily operations analyzed in Alternative 1A (predominantly departures/take-offs on RW 01 and approaches/landings on RW 19) of the SEIS and published in Table E-16 at pages E-84 and E-85 in Appendix E, will be allowed on RW 01/19. The additional Navy F-35C BAI will not alter the number or type of F-35C operations analyzed in the SEIS and approved in the 26 June 2014 ROD.
The Final SEIS was made available to the public on February 28, 2014 through a NOA in the
Mr. Mike Spaits, 850-882-2836.
Office of Postsecondary Education (OPE), Department of Education (ED).
Notice.
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 3501
Interested persons are invited to submit comments on or before June 29, 2015.
Comments submitted in response to this notice should be submitted electronically through the Federal eRulemaking Portal at
For specific questions related to collection activities, please contact Josephine Hamilton, 202-502-7583.
The Department of Education (ED), in accordance with the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3506(c)(2)(A)), provides the general public and Federal agencies with an opportunity to comment on proposed, revised, and continuing collections of information. This helps the Department assess the impact of its information collection requirements and minimize the public's reporting burden. It also helps the public understand the Department's information collection requirements and provide the requested data in the desired format. ED is soliciting comments on the proposed information collection request (ICR) that is described below. The Department of Education is especially interested in public comment addressing the following issues: (1) Is this collection necessary to the proper functions of the Department; (2) will this information be processed and used in a timely manner; (3) is the estimate of burden accurate; (4) how might the Department enhance the quality, utility, and clarity of the information to be collected; and (5) how might the Department minimize the burden of this collection on the respondents, including through the use of information technology. Please note that written comments received in response to this notice will be considered public records.
Office of Energy Efficiency and Renewable Energy. Department of Energy.
Notice of open teleconference.
This notice announces a teleconference call of the State Energy Advisory Board (STEAB). The Federal Advisory Committee Act (Pub. L. 92-463; 86 Stat.770) requires that public notice of these meetings be announced in the
Thursday, May 21, 2015 from 3:30 p.m. to 4:00 p.m. (EDT). To receive the call-in number and passcode, please contact the Board's Designated Federal Officer at the address or phone number listed below.
Monica Neukomm, Policy Advisor, Office of Energy Efficiency and Renewable Energy, US Department of Energy, 1000 Independence Ave. SW., Washington, DC 20585. Phone number 202-287-5189, and email at:
Energy Efficiency and Renewable Energy, Department of Energy.
Notice of open meeting.
This notice announces an open meeting of the Biomass Research and Development Technical Advisory Committee under Section 9008(d) of the Food, Conservation, and Energy Act of 2008 amended by the Agricultural Act of 2014. The Federal Advisory Committee Act (Pub. L. 92-463, 86 Stat. 770) requires that agencies publish these notices in the
Marriott Marquis, 901 Massachusetts Ave NW., Washington, DC 20001.
Elliott Levine, Designated Federal Officer for the Committee, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy, 1000 Independence Avenue SW., Washington, DC 20585; (202) 586-1476; Email:
• Update on USDA Biomass R&D Activities
• Update on DOE Biomass R&D Activities
• Updated on the Biomass Research and Development Initiative
• Overview of the Biomass Interagency Working Groups
• Panel on International Bioenergy Activities
Office of Fossil Energy, Department of Energy.
Notice of open meeting.
This notice announces a meeting of the Methane Hydrate Advisory Committee. The Federal Advisory Committee Act (Public Law 92-463, 86 Stat.770) requires that notice of these meetings be announced in the
Thursday, May 15, 2014, 10:45 a.m. to 11:00 a.m. (EDT)—Registration, 11:00 a.m. to 12:30 p.m. (EDT)—Meeting.
U.S. Department of Energy, Forrestal Building, Room 3G-043, 1000 Independence Ave. SW., Washington, DC 20585.
Lou Capitanio, U.S. Department of Energy, Office of Oil and Natural Gas, 1000 Independence Avenue SW., Washington, DC 20585.
Public
Department of Energy.
Notice of open meeting.
This notice announces an open meeting of the Commission to Review the Effectiveness of the National Energy Laboratories (Commission). The Commission was created pursuant section 319 of the Consolidated Appropriations Act, 2014, Public Law 113-76, and in accordance with the provisions of the Federal Advisory Committee Act (FACA), as amended, 5 U.S.C. App. 2. This notice is provided in accordance with the Act.
Thursday, May 22, 2015—9:00 a.m.-2:00 p.m.
Stanford Linear Accelerator Laboratory (SLAC), Kavli Auditorium, Building 51 (Kavli Building), 2575 Sand Hill Road, Menlo Park, CA 94025-7015.
Karen Gibson, Designated Federal Officer, U.S. Department of Energy, 1000 Independence Avenue SW., Washington, DC 20585; telephone (202) 586-3787; email
Those not able to attend the meeting or who have insufficient time to address the committee are invited to send a written statement to Karen Gibson, U.S. Department of Energy, 1000 Independence Avenue SW., Washington DC 20585, or to email:
Centers for Medicare & Medicaid Services (CMS), HHS.
Proposed notice.
This proposed notice announces the receipt of an application from the American Diabetes Association for continued recognition as a national accreditation program for accrediting entities that wish to furnish outpatient diabetes self-management training to Medicare beneficiaries.
To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on June 1, 2015.
In commenting, refer to file code CMS-3316-PN. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
You may submit comments in one of four ways (please choose only one of the ways listed):
1.
2.
Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3316-PN, P.O. Box 8010, Baltimore, MD 21244-8010.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3.
Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-3316-PN, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
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.
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, call
Comments erroneously 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, see the beginning of the
Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951.
Under the Medicare program, eligible beneficiaries may receive outpatient Diabetes Self-Management Training (DSMT) when ordered by the physician (or qualified non-physician practitioner) treating the beneficiary's diabetes, provided certain requirements are met. Pursuant to our regulations at 42 CFR 410.141(e)(3), we use national accrediting organizations to assess whether provider entities meet Medicare requirements when providing services for which Medicare payment is made. If a provider entity is accredited by an approved accrediting organization, it is “deemed” to meet applicable Medicare requirements.
Under section 1865(a)(1)(B) of the Social Security Act (the Act), a national accrediting organization must have an agreement in effect with the Secretary of the Department of Health and Human Services (the Secretary) and meet the standards and requirements specified by the Secretary in 42 CFR part 410, subpart H, to qualify for deeming authority. The regulations pertaining to application procedures for the national accreditation organizations for DSMT are specified at § 410.142 (CMS process for approving national accreditation organizations).
A national accreditation organization applying for deeming authority must provide us with reasonable assurance that the accrediting organization requires accredited entities to meet requirements that are at least as stringent as our requirements.
We may approve and recognize a nonprofit organization with demonstrated experience in representing the interests of individuals with diabetes to accredit entities to furnish training. The accreditation organization, after being approved and recognized by us, may accredit an entity to meet one of the sets of quality standards in § 410.144 (Quality standards for deemed entities).
Section 1865(a)(2) of the Act further requires that we review the applying accreditation organization's requirements for accreditation, as follows:
• Survey procedures;
• Ability to provide adequate resources for conducting required surveys;
• Ability to supply information for use in enforcement activities;
• Monitoring procedures for providers found out of compliance with the conditions or requirements; and
• Ability to provide us with necessary data for validation.
We then examine the national accreditation organization's accreditation requirements to determine if they meet or exceed the Medicare conditions as we would have applied them. Section 1865(a)(3)(A) of the Act requires that we publish a notice identifying the national accreditation organization that is making the request for approval or renewal within 60 days of receipt of a completed application. The notice must describe the nature of the request and provide at least a 30-day public comment period. We have 210 days from receipt of the request to publish a finding of approval or denial of the application. If CMS recognizes an accreditation organization in this manner, any entity accredited by the national accreditation organization's program for that service will be “deemed” to meet the Medicare conditions for coverage.
The purpose of this notice is to notify the public of the American Diabetes Association (ADA) request for the Secretary's approval of its accreditation program for outpatient DSMT services. The ADA submitted all the necessary materials to enable us to make a determination concerning its request for re-approval as a deeming organization for DSMTs. ADA was initially accredited on October 27, 2009 for a period of 6 years. This application was determined to be complete on March 13, 2015. This notice also solicits public comments on the ability of the ADA to continue to develop standards that meet or exceed the Medicare conditions for coverage, and apply them to entities furnishing outpatient services.
The regulations specifying the Medicare conditions for coverage for outpatient diabetes self-management training services are located in 42 CFR parts 410, subpart H. These conditions implement section 1861(qq) of the Act, which provides for Medicare Part B coverage of outpatient DSMT services specified by the Secretary.
Under section 1865(a)(2) of the Act and our regulations at § 410.142 (CMS process for approving accreditation organizations) and § 410.143 (Requirements for approved accreditation organizations), we review and evaluate a national accreditation organization based on (but not necessarily limited to) the criteria set forth in § 410.142(b).
We may conduct on-site inspections of a national accreditation organization's operations and office to verify information in the organization's application and assess the organization's compliance with its own policies and procedures. The on-site inspection may include, but is not limited to, reviewing documents, auditing documentation of meetings concerning the accreditation process, evaluating accreditation results or the accreditation status decision making process, and interviewing the organization's staff.
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501
Because of the large number of public comments we normally receive on
Notice.
The Centers for Medicare & Medicaid Services (CMS) is announcing an opportunity for the public to comment on CMS' intention to collect information from the public. Under the Paperwork Reduction Act of 1995 (PRA), federal agencies are required to publish notice in the
Comments on the collection(s) of information must be received by the OMB desk officer by
When commenting on the proposed information collections, please reference the document identifier or OMB control number. To be assured consideration, comments and recommendations must be received by the OMB desk officer via one of the following transmissions: OMB, Office of Information and Regulatory Affairs, Attention: CMS Desk Officer, Fax Number: (202) 395-5806
To obtain copies of a supporting statement and any related forms for the proposed collection(s) summarized in this notice, you may make your request using one of following:
1. Access CMS' Web site address at
2. Email your request, including your address, phone number, OMB number, and CMS document identifier, to
3. Call the Reports Clearance Office at (410) 786-1326.
Reports Clearance Office at (410) 786-1326.
Under the Paperwork Reduction Act of 1995 (PRA) (44 U.S.C. 3501-3520), federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. The term “collection of information” is defined in 44 U.S.C. 3502(3) and 5 CFR 1320.3(c) and includes agency requests or requirements that members of the public submit reports, keep records, or provide information to a third party. Section 3506(c)(2)(A) of the PRA (44 U.S.C. 3506(c)(2)(A)) requires federal agencies to publish a 30-day notice in the
1.
The HITECH Act creates incentive programs for EPs and eligible hospitals, including CAHs, in the Medicare Fee-for-Service (FFS), MA, and Medicaid programs that successfully demonstrate meaningful use of certified EHR technology. In their first payment year, Medicaid EPs and eligible hospitals may adopt, implement or upgrade to certified EHR technology. It also, provides for payment adjustments in the Medicare FFS and MA programs starting in FY 2015 for EPs and eligible hospitals participating in Medicare that are not meaningful users of certified EHR technology. These payment adjustments do not pertain to Medicaid providers.
The first final rule for the Medicare and Medicaid EHR Incentive Program, which was published in the
The information collection requirements contained in this information collection request are needed to implement the HITECH Act. In order to avoid duplicate payments, all EPs are enumerated through their National Provider Identifier (NPI), while all eligible hospitals and CAHs are enumerated through their CMS Certification Number (CCN). State Medicaid agencies and CMS use the provider's tax identification number and NPI or CCN combination in order to make payment, validate payment eligibility and detect and prevent duplicate payments for EPs, eligible hospitals and CAHs.
Food and Drug Administration, HHS.
Notice.
This notice announces a forthcoming meeting of a public advisory committee of the Food and Drug Administration (FDA). The meeting will be open to the public.
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its Web site prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's Web site after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that the Agency is not responsible for providing access to electrical outlets.
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please contact Philip Bautista at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA) is announcing the availability of a guidance for industry entitled “Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product.” This guidance is intended to provide sponsors with an overview of analytical factors that are relevant to assessing whether a proposed product and the reference product are highly similar for the purpose of submitting a marketing application through an abbreviated licensure pathway. This guidance finalizes the draft guidance issued in February 2012.
Submit either electronic or written comments on Agency guidances at any time.
Submit written requests for single copies of this guidance to the Division of Drug Information, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 2201, Silver Spring, MD 20993-0002 or the Office of Communication, Outreach and Development (HFM-40), Center for Biologics Evaluation and Research (CBER), Food and 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 guidance to
Sandra Benton, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6340, Silver Spring, MD 20993-0002, 301-796-1042, 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 guidance for industry entitled “Quality Considerations in Demonstrating Biosimilarity of a Therapeutic Protein Product to a Reference Product.” This guidance is intended to provide sponsors with an overview of analytical factors that are relevant to assessing whether a proposed product and the reference product are highly similar for the purpose of submitting a marketing application through the abbreviated licensure pathway under section 351(k) of the Public Health Service Act (PHS Act) (42 U.S.C. 262(k)). Although the 351(k) pathway applies generally to biological products, this guidance focuses on therapeutic protein products.
The Biologics Price Competition and Innovation Act of 2009 was enacted as part of the Patient Protection and Affordable Care Act (Pub. L. 111-148) on March 23, 2010, created an abbreviated licensure pathway under section 351(k) of the PHS Act for biological products demonstrated to be biosimilar to or interchangeable with a reference product. Under this abbreviated licensure pathway, FDA will license a proposed biological product submitted under section 351(k) of the PHS Act if FDA “determines that the information submitted in the application . . . is sufficient to show that the biological product . . . is biosimilar to the reference product . . .” and the 351(k) applicant (or other appropriate person) consents to an inspection of the facility that is the subject of the application (
All product applications should contain a complete and thorough chemistry, manufacturing, and controls section that provides the necessary and appropriate information, including, but not limited to, characterization, adventitious agent safety, process controls, and specifications, for the product to be adequately reviewed.
• Expression System
• Manufacturing Process
• Assessment of Physiochemical Properties
• Functional Activities
• Receptor Binding and Immunochemical Properties
• Impurities
• Reference Product and Reference Standards
• Finished Drug Product
• Stability
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the Agency's current thinking on quality considerations in demonstrating biosimilarity of a therapeutic protein product to a reference product. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach 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, which are not expected to change as a result of the guidance. 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 related to the submission of: (1) An investigational new drug application, which is covered under 21 CFR part 312 and approved under OMB control number 0910-0014; (2) a new drug application, which is covered under 21 CFR 314.50 and approved under OMB control number 0910-0001; (3) a biologics license application (BLA) under section 351(a) of the PHS Act, which is covered under part 601 (21 CFR part 601) and approved under OMB control number 0910-0338; and (4) a BLA under section 351(k), which is covered under part 601 and approved under OMB control number 0910-0719.
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 a guidance for industry entitled “Scientific Considerations in Demonstrating Biosimilarity to a Reference Product.” This guidance is intended to assist sponsors in demonstrating that a proposed therapeutic protein product is biosimilar to a reference product for the purpose of submitting a marketing application through an abbreviated licensure pathway. This guidance gives an overview of FDA's approach to determining biosimilarity.
Submit either electronic or written comments on Agency guidances at any time.
Submit written requests for single copies of the 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 (CBER), 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 guidance to
Sandra Benton, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6340, Silver Spring, MD 20993-0002, 301-796-1042, 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 guidance for industry entitled “Scientific Considerations in Demonstrating Biosimilarity to a Reference Product.” This guidance is intended to assist sponsors in demonstrating that a proposed therapeutic protein product is “biosimilar”
The Biologics Price Competition and Innovation Act of 2009 (BPCI Act), enacted as part of the Affordable Care Act (Pub. L. 111-148) on March 23, 2010, created an abbreviated licensure pathway under section 351(k) of the PHS Act for biological products demonstrated to be biosimilar to, or interchangeable with, a reference product. Under this abbreviated licensure pathway, FDA will license a proposed biological product submitted under section 351(k) of the PHS Act if FDA “determines that the information submitted in the application . . . is sufficient to show that the biological product is biosimilar to the reference product. . . .” and the 351(k) applicant (or other appropriate person) consents to an inspection of the facility that is the subject of the application (
• A stepwise approach to demonstrating biosimilarity, which can include a comparison of the proposed product and the reference product with
• The
• General scientific principles in conducting comparative structural analyses, functional assays, animal testing, human PK and PD studies, clinical immunogenicity assessment, and comparative clinical trials (including clinical study design issues).
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the Agency's current thinking on scientific considerations in demonstrating biosimilarity to a reference product. It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.
Interested persons may submit either electronic comments regarding this document to
This guidance describes information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995 (the PRA) (44 U.S.C. 3501-3520). This guidance references information collections that are already approved by OMB and are not expected to change as a result of the guidance. This includes information collections related to the submission of: (1) An investigational new drug application, which is covered under 21 CFR part 312 and approved under OMB Control No. 0910-0014; (2) a new drug application, which is covered under 21 CFR 314.50 and approved under OMB control number 0910-0001; (3) a biologics license application under section 351(a) of the PHS Act, which is covered under 21 CFR part 601 and approved under OMB control number 0910-0338; and (4) a biologics license application under section 351(k) of the PHS Act, which is covered under 21 CFR part 601 and approved under OMB control number 0910-0719.
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 a guidance for industry entitled “Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009.” This guidance is intended to provide answers to common questions from sponsors interested in developing proposed biosimilar products, biologics license application (BLA) holders, and other interested parties regarding FDA's interpretation of the Biologics Price Competition and Innovation Act of 2009 (BPCI Act). This guidance finalizes several questions and answers (Q&As) from the draft guidance entitled “Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009” issued February 15, 2012.
Submit either electronic or written comments on Agency guidances at any time.
Submit written requests for single copies of this 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; or Office of Communication, Outreach and Development (HFM-40), Center for Biologics Evaluation and Research (CBER), Food and Drug Administration, 1401 Rockville Pike, Suite 200N, Rockville, MD 20852-1448. Send one self-addressed adhesive label to assist that office in processing your requests. See the
Submit electronic comments on the guidance to
Sandra Benton, Center for Drug Evaluation and Research, Food and Drug Administration, 10903 New Hampshire Ave., Bldg. 51, Rm. 6340, Silver Spring, MD 20993-0002, 301-796-1042; 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 guidance for industry entitled “Biosimilars: Questions and Answers Regarding Implementation of the
The BPCI Act, enacted as part of the Patient Protection and Affordable Care Act (Pub. L. 111-148) on March 23, 2010, created an abbreviated licensure pathway under section 351(k) of the Public Health Service Act (PHS Act) (42 U.S.C. 262(k)) for biological products demonstrated to be biosimilar to, or interchangeable with, an FDA-licensed reference product. This guidance describes FDA's current interpretation of certain statutory requirements added by the BPCI Act and includes Q&As in the following categories:
• Biosimilarity or Interchangeability
• Provisions Related to Requirement to Submit a BLA for a “Biological Product”
• Exclusivity
In the
This guidance is being issued consistent with FDA's good guidance practices regulation (21 CFR 10.115). The guidance represents the Agency's current thinking on “Biosimilars: Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009.” It does not create or confer any rights for or on any person and does not operate to bind FDA or the public. An alternative approach may be used if such approach satisfies the requirements of the applicable statutes and regulations.
Interested persons may submit either electronic comments regarding this document to
This guidance refers to information collection provisions that are subject to review by the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3520). The submission of an investigational new drug application is covered under 21 CFR part 312 and approved under OMB control number 0910-0014. The submission of an NDA is covered under 21 CFR 314.50 and approved under OMB control number 0910-0001. The submission of a BLA under section 351(a) of the PHS Act is covered under part 601 (21 CFR part 601) and approved under OMB control number 0910-0338. The submission of a BLA under section 351(k) of the PHS Act is covered under part 601 and approved under OMB control number 0910-0719. In the
Persons with access to the Internet may obtain the document at
Food and Drug Administration, HHS.
Notice.
The Food and Drug Administration (FDA or “we”) is announcing the availability of a risk assessment entitled “Multicriteria-Based Ranking Model for Risk Management of Animal Drug Residues in Milk and Milk Products.” The risk assessment is a tool to assist with reevaluating which animal drug residues should be included in milk testing programs. We undertook this project in response to a request from the National Conference on Interstate Milk Shipments (NCIMS).
Submit either electronic or written comments on the risk assessment by July 29, 2015.
Submit electronic comments to
Jane Van Doren, Center for Food Safety and Applied Nutrition (HFS-005), Food and Drug Administration, 5100 Paint Branch Pkwy., College Park, MD 20740, 240-402-2927.
The NCIMS is a voluntary coalition that includes representatives from
The muticriteria-based ranking model is based on four overarching criteria that collectively contribute to a drug's score and rank within the group of drugs evaluated: (1) The likelihood that the drug will be administered to lactating dairy cows; (2) the likelihood that, following administration, drug residues would be present in milk (bulk tank or bulk milk pickup tanker); (3) the relative extent to which consumers could be exposed to the drug residue via consumption of milk and milk products; and (4) the potential for a human health hazard given exposure to the drug residue. The risk assessment describes the ranking model structure, the scientific data and assumptions used to inform scoring in the model, and the ranking results. The risk assessment also identifies data gaps and research needs.
FDA invites comments that can help improve:
• The ranking model approach, including the specific criteria, scoring, and weighting scheme;
• the scientific data and assumptions used to inform scoring used in the model;
• the selection of animal drugs evaluated; and
• the clarity and the transparency of the risk assessment.
Interested persons may submit either electronic comments to
Persons with access to the Internet may obtain the risk assessment at either
The following references have been placed on display in the Division of Dockets Management (see
1. U.S. Food and Drug Administration (2015). “Multicriteria-Based Ranking Model for Risk Management of Animal Drug Residues in Milk and Milk Products.” Accessible at
2. U.S. Food and Drug Administration (2015). “Multicriteria-Based Ranking Model for Risk Management of Animal Drug Residues in Milk and Milk Products: Peer Review Report.” Accessible at
Food and Drug Administration, HHS.
Notice.
This notice announces a forthcoming meeting of a public advisory committee of the Food and Drug Administration (FDA). The meeting will be open to the public.
If you are unable to join us in person, we encourage you to watch the free Webcast. Visit the Risk Communication Advisory Committee Web site at
FDA intends to make background material available to the public no later
Persons attending FDA's advisory committee meetings are advised that the Agency is not responsible for providing access to electrical outlets.
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please contact Luis G. Bravo at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
Food and Drug Administration, HHS.
Notice.
This notice announces a forthcoming meeting of a public advisory committee of the Food and Drug Administration (FDA). The meeting will be open to the public.
FDA intends to make background material available to the public no later than 2 business days before the meeting. If FDA is unable to post the background material on its Web site prior to the meeting, the background material will be made publicly available at the location of the advisory committee meeting, and the background material will be posted on FDA's Web site after the meeting. Background material is available at
Persons attending FDA's advisory committee meetings are advised that the Agency is not responsible for providing access to electrical outlets.
FDA welcomes the attendance of the public at its advisory committee meetings and will make every effort to accommodate persons with physical disabilities or special needs. If you require special accommodations due to a disability, please contact Philip Bautista at least 7 days in advance of the meeting.
FDA is committed to the orderly conduct of its advisory committee meetings. Please visit our Web site at
Notice of this meeting is given under the Federal Advisory Committee Act (5 U.S.C. app. 2).
National Institutes of Health, HHS.
Notice.
The inventions listed below are owned by an agency of the U.S. Government and are available for licensing in the U.S. in accordance with 35 U.S.C. 209 and 37 CFR part 404 to achieve expeditious commercialization of results of federally-funded research and development. Foreign patent applications are filed on selected inventions to extend market coverage for companies and may also be available for licensing.
Licensing information and copies of the U.S. patent applications listed below may be obtained by writing to the indicated licensing contact at the Office of Technology Transfer, National Institutes of Health, 6011 Executive Boulevard, Suite 325, Rockville, Maryland 20852-3804; telephone: 301-496-7057; fax: 301-402-0220. A signed Confidential Disclosure Agreement will be required to receive copies of the patent applications.
Technology descriptions follow.
• Personalized immunotherapy with mutation-reactive T cells for mediating tumor regression in patients with immunogenic mutations.
• Mutation-reactive T cell therapy especially beneficial for cancer patients refractory to other therapies.
• A research tool to identify patient-specific immunogenic mutations in the tumor.
• This patient-specific therapy has the potential application to most epithelial cancers, which account for about 90% of cancer deaths in the United States.
• Personalized mutation-specific T cells recognize mutations harboring tumor cells only and spare normal tissues. This therapy has no tissue toxicities comparing to traditional chemotherapy and radiotherapy.
• The infusion of a highly pure population of these mutation-specific T cells may maximize therapy and result in regression of all target lesions.
• Early-stage
•
•
•
1. Tran E, et al. Cancer immunotherapy based on mutation-specific CD4+ T cells in a patient with epithelial cancer. Science. 2014 May 9; 344(6184):641-5. [PMID 24812403]
2. Robbins P, et al. Mining exomic sequencing data to identify mutated antigens recognized by adoptively transferred tumor-reactive T cells. Nat Med. 2013 Jun;19(6):747-52. [PMID 23644516]
3. Tran E, et al. T-cell therapy against cancer mutations. Oncotarget. 2014 Jul 15;5(13):4579-80. [PMID 25046408]
• Personalized immunotherapy to treat primary and recurrent epithelial cancer.
• A research tool to identify patient-specific immunogenic mutations in tumors.
• A research tool to identify and isolate mutation-specific T cell receptors.
• This patient-specific therapy has the potential application to most epithelial cancers, which account for about 90% of cancer deaths in the United States.
• Personalized TCR engineered T cells target tumor cells and spare normal tissues. This therapy has no tissue toxicities comparing to traditional chemotherapy and radiotherapy.
• The infusion of a highly pure population of these T cells expressing mutation-specific TCRs may maximize therapy and result in regression of all target lesions.
• Early-stage
•
•
1. Tran E, et al. Cancer immunotherapy based on mutation-specific CD4+ T cells in a patient with epithelial cancer. Science. 2014 May 9;344 (6184):641-5. [PMID 24812403].
2. Robbins P, et al. Mining exomic sequencing data to identify mutated antigens recognized by adoptively transferred tumor-reactive T cells. Nat Med. 2013 Jun;19(6):747-52. [PMID 23644516].
3. Tran E, et al. T-cell therapy against cancer mutations. Oncotarget. 2014 Jul 15;5(13):4579-80. [PMID 25046408].
4. Gros A, et al. PD-1 identifies the patient-specific CD8+ tumor-reactive repertoire infiltrating human tumors. J Clin Invest. 2014 May 1;124(5):2246-59. [PMID 24667641].
• RSV vaccine
• Paramyxovirus vaccines
• Prophylactic vaccines
• Multi-valence
• Immunogenicity
• Early-stage
•
(1) US Provisional Application 61/780,910 filed March 13, 2013;
(2) US Provisional Application 61/798,389 filed March 15, 2013;
(3) US Provisional Application 61/857,613 filed July 23, 2013; and
(4) US Provisional Application 61/863,909 filed August 9, 2013.
• Sample preparation
• Cell culturing
• High throughput
• Low labor
• Speed
• Reduced variability
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.
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 contract proposals and the discussions could disclose confidential trade secrets or commercial property such as patentable material, and personal information concerning individuals associated with the contract proposals, the disclosure of which would constitute a clearly unwarranted invasion of personal privacy.
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
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 Child Health and Human Development Council.
The meeting will be open to the public as indicated below, with attendance limited to space available. A portion of this 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 for the review and discussion of grant applications. 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.
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.
In order to facilitate public attendance at the open session of Council in the main meeting room, Conference Room 6, please contact Ms. Lisa Kaeser, Program and Public Liaison Office, NICHD, at 301-496-0536 to make your reservation, additional seating will be available in the meeting overflow rooms, Conference Rooms 7 and 8. Individuals will also be able to view the meeting via NIH Videocast. Please go to the following link for Videocast access instructions at:
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 Fogarty International Center Advisory Board.
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 materials, 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 taxicabs, 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/Center's home page:
This notice is being published less than 15 days prior to the meeting due to the timing limitations imposed by the review and funding cycle.
U.S. Customs and Border Protection, Department of Homeland Security.
Notice of accreditation and approval of SGS North America, Inc., as a commercial gauger and laboratory.
Notice is hereby given, pursuant to CBP regulations, that SGS North America, Inc., has been approved to gauge and accredited to test petroleum and petroleum products for customs purposes for the next three years as of November 19, 2014.
The accreditation and approval of SGS North America, Inc., as commercial gauger and laboratory became effective on November 19, 2014. The next triennial inspection date will be scheduled for November 2017.
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 SGS North America, Inc., 900 Milik St., Carteret, NJ 07008, has been approved to gauge and accredited to test petroleum and petroleum products for customs purposes, in accordance with the provisions of 19 CFR 151.12 and 19 CFR 151.13. SGS North America, Inc., is approved for the following gauging procedures for petroleum and certain petroleum products set forth by the American Petroleum Institute (API):
SGS North America, Inc., 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
60-Day Notice and request for comments; extension of an existing collection of information.
U.S. Customs and Border Protection (CBP) of the Department of Homeland Security 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: Ship's Stores Declaration (CBP Form 1303). CBP is proposing that this information collection be extended with no change to the burden hours or to the information collected on Form 1303. This document is published to obtain comments from the public and affected agencies.
Written comments should be received on or before June 29, 2015 to be assured of consideration.
Direct all written comments to U.S. Customs and Border Protection, Attn: Tracey Denning, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177.
Requests for additional information should be directed to Tracey Denning, U.S. Customs and Border Protection, Regulations and Rulings, Office of International Trade, 90 K Street NE., 10th Floor, Washington, DC 20229-1177, at 202-325-0265.
CBP invites the general public and other Federal agencies to comment on proposed and/or continuing information collections pursuant to the Paperwork Reduction Act of 1995 (Pub. L. 104-13). The comments should address: (a) Whether the 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 estimates of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden including the use of automated collection techniques or the use of other forms of information technology; and (e) the annual cost burden to respondents or record keepers from the collection of information (total capital/startup costs and operations and maintenance costs). The comments that are submitted will be summarized and included in the CBP request for OMB approval. All comments will become a matter of public record. In this document, CBP is soliciting comments concerning the following information collection:
Privacy Office, DHS.
Notice of amendment of Privacy Act system of records.
In accordance with the Privacy Act of 1974, the Department of Homeland Security U.S. Immigration and Customs Enforcement is updating and reissuing an existing system of records titled, “Department of Homeland Security/Immigration and Customs Enforcement—011 Immigration and Enforcement Operational Records System of Records (ENFORCE).” This system of records is being modified to propose a new routine use that supports ICE's sharing of information with domestic law enforcement agencies when an alien who has been convicted of a violent or serious crime is released from ICE custody or removed from the United States. The exemptions for the existing system of records notice will continue to be unchanged. This updated system will continue to be included in the Department of Homeland Security's inventory of record systems.
Submit comments on or before June 1, 2015. This amended system will be effective June 1, 2015.
You may submit comments, identified by docket number DHS-2015-0016 by one of the following methods:
•
•
•
Lyn Rahilly, Privacy Officer, U.S. Immigration and Customs Enforcement, 500 12th Street SW., Mail Stop 5004, Washington, DC 20536, phone: 202-732-3300, email:
In accordance with the Privacy Act of 1974, 5 U.S.C. 552a, the Department of Homeland Security (DHS) U.S. Immigration and Customs Enforcement (ICE) is updating and reissuing a current DHS system of records titled “DHS/ICE—011 Immigration and Enforcement Operational Records (ENFORCE) System of Records.” With this update, ICE is proposing new routine use II that will authorize disclosure of information from this system of records “to a domestic law enforcement agency for the purpose of providing notice of an individual's release from DHS custody or removal from the United States, when the individual has a conviction(s) for a violent or serious crime(s) and the agency receiving the notification has an interest in the individual due to: (1) A pending investigation or prosecution, (2) parole or other forms of supervision, or (3) the individual's intended residence or location of release falling within the agency's jurisdiction.”
ICE will share biographic and criminal history information as well as release conditions or restrictions with other domestic law enforcement agencies when an alien who has been convicted of a violent or serious crime is released from ICE custody or removed from the United States. Violent and serious crimes include certain firearms, national security, sex, and drug-related crimes that ICE has determined are most relevant to the safety of the community. For example, ICE will notify a local law enforcement agency of the release from ICE custody of an alien who has been convicted of aggravated assault with a deadly weapon and has parole requirements in the local jurisdiction. ICE will also notify a law enforcement agency when an alien who has been convicted of, for example, armed robbery and assault is released, to assist agency decisions concerning the allocation of public safety resources in the jurisdiction.
These notifications are intended as situational awareness messages to help inform agencies that have an interest in an alien for investigation, supervision, or public/officer safety purposes of the alien's whereabouts from the time the alien is released until the alien reaches his or her intended jurisdiction of residence or country of removal. Notifications also assist law enforcement agencies in narrowing the pool of potential suspects when a violent or serious crime is committed in their jurisdiction and there are few leads in the investigation, or if the particulars of a crime being investigated are similar to circumstances surrounding the violent or serious crime for which the individual was previously convicted. Notifications of removal of an alien from the United States will help ensure that law enforcement agencies with an interest in the alien do not deploy resources in an attempt to locate the alien.
The exemptions for the existing system of records notice will continue to be applicable for this system of records notice. This updated system will continue to be included in DHS's inventory of record systems.
The Privacy Act embodies fair information practice principles in a statutory framework governing the means by which the 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 individuals when systems of records maintain information on U.S. citizens, lawful permanent residents, and visitors.
Below is the description of the amended DHS/ICE-011 Immigration and Enforcement Operational Records (ENFORCE) System of Records.
In accordance with 5 U.S.C. 552a(r), DHS has provided a report of this system of records to the Office of Management and Budget and to Congress.
DHS/ICE-011
Immigration and Enforcement Operational Records (ENFORCE).
Unclassified; Controlled Unclassified Information (CUI).
Records are maintained at the U.S. Immigration Customs and Enforcement (ICE) Headquarters in Washington, DC, ICE field and attaché offices, and detention facilities operated by or on behalf of ICE, or that otherwise house individuals detained by ICE.
Categories of individuals covered by this system include:
1. Individuals arrested, detained, and/or removed for criminal and/or administrative violations of the Immigration and Nationality Act, or individuals who are the subject of an ICE immigration detainer issued to another custodial agency;
2. Individuals arrested by ICE law enforcement personnel for violations of federal criminal laws enforced by ICE or DHS;
3. Individuals who fail to leave the United States after receiving a final order of removal, deportation, or exclusion, or who fail to report to ICE for removal after receiving notice to do so (fugitive aliens);
4. Individuals who are granted parole into the United States under section 212(d)(5) of the Immigration and Nationality Act (parolees);
5. Other individuals whose information may be collected or obtained during the course of an immigration enforcement or criminal matter, such as witnesses, associates, and relatives;
6. Attorneys or representatives who represent individuals listed in categories (1)-(4) above;
7. Persons who post or arrange bond for the release of an individual from ICE detention, or receive custodial property of a detained alien;
8. Personnel of other agencies who assisted or participated in the arrest or investigation of an alien, or who are maintaining custody of an alien; and
9. Prisoners of the U.S. Marshals Service held in ICE detention facilities.
Categories of records in this system include:
1. Biographic, descriptive, historical and other identifying data, including but not limited to: Names; aliases; fingerprint identification number (FIN); date and place of birth; passport and other travel document information; nationality; aliases; Alien Registration Number (A-Number); Social Security number; contact or location information (
2. Biometric data: Fingerprints and photographs. DNA samples required by Department of Justice regulation (see 28 CFR part 28) to be collected and sent to the Federal Bureau of Investigation (FBI). DNA samples are not retained or analyzed by DHS.
3. Information pertaining to ICE's collection of DNA samples, limited to the date and time of a successful collection and confirmation from the FBI that the sample was able to be sequenced. ICE does not receive or maintain the results of the FBI's DNA analysis (
4. Case-related data, including: Case number, record number, and other data describing an event involving alleged violations of criminal or immigration law (location, date, time, event category, types of criminal or immigration law violations alleged, types of property involved, use of violence, weapons, or assault against DHS personnel or third parties, attempted escape and other related information; event categories describe broad categories of criminal law enforcement, such as immigration worksite enforcement, contraband smuggling, and human trafficking). ICE case management information, including: Case category, case agent, date initiated, and date completed.
5. Birth, marriage, education, employment, travel, and other information derived from affidavits, certificates, manifests, and other documents presented to or collected by ICE during immigration and law enforcement proceedings or activities. This data typically pertains to subjects, relatives, and witnesses.
6. Detention data on aliens, including immigration detainers issued; transportation information; detention-related identification numbers; custodial property; information about an alien's release from custody on bond, recognizance, or supervision; detention facility; security classification; book-in/book-out date and time; mandatory detention and criminal flags; aggravated felon status; and other alerts.
7. Detention data for U.S. Marshals Service prisoners, including: Prisoner's name, date of birth, country of birth, detainee identification number, FBI identification number, state identification number, book-in date, book-out date, and security classification;
8. Limited health information relevant to an individual's placement in an ICE detention facility or transportation requirements (
9. Progress, status, and final result of removal, prosecution, and other DHS processes and relating appeals, including: Information relating to criminal convictions, incarceration, travel documents, and other information pertaining to the actual removal of aliens from the United States.
10. Contact, biographical, and identifying data of relatives, attorneys or representatives, associates, or witnesses of an alien in proceedings initiated and/or conducted by DHS including, but not limited to: Name, date of birth, place of birth, telephone number, and business or agency name.
11. Data concerning personnel of other agencies that arrested, or assisted or participated in the arrest or investigation of, or are maintaining custody of an individual whose arrest record is contained in this system of records. This can include: Name, title, agency name, address, telephone number, and other information.
12. Data about persons who post or arrange an immigration bond for the release of an individual from ICE custody, or receive custodial property of an individual in ICE custody. This data may include: Name, address, telephone number, Social Security number, and other information.
8 U.S.C. 1103, 1225, 1226, 1324, 1357, 1360, and 1365(a)(b); Justice for All Act of 2004 (Pub. L. 108-405); DNA Fingerprint Act of 2005 (Public Law 109-162); Adam Walsh Child Protection and Safety Act of 2006 (Pub. L. 109-248); and 28 CFR part 28, “DNA-Sample Collection and Biological Evidence Preservation in the Federal Jurisdiction.”
The purposes of this system are:
1. To support the identification, apprehension, and removal of individuals unlawfully entering or present in the United States in violation of the Immigration and Nationality Act, including fugitive aliens.
2. To support the identification and arrest of individuals (both citizens and non-citizens) who commit violations of federal criminal laws enforced by DHS.
3. To track the process and results of administrative and criminal proceedings
4. To support the grant, denial, and tracking of individuals who seek or receive parole into the United States.
5. To provide criminal and immigration history information during DHS enforcement encounters, and background checks on applicants for DHS immigration benefits (
6. To identify potential criminal activity, immigration violations, and threats to homeland security; to uphold and enforce the law; and to ensure public safety.
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) or other federal agency conducting litigation or in proceedings before any court, adjudicative, or administrative body, or to a court, magistrate, administrative tribunal, opposing counsel, parties, and witnesses, in the course of a civil or criminal proceeding before a court or adjudicative body when it is 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 of DHS in his/her official capacity;
3. any employee of DHS in his/her individual capacity when DOJ or DHS has agreed to represent the employee; or
4. the U.S. or any agency thereof, is a party to the litigation or has an interest in such litigation, and DHS determines that the records are both relevant and necessary to the litigation and the use of such records is compatible with the purpose for which DHS collected the records.
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 or other federal government agencies pursuant to records management inspections being conducted under the authority of 44 U.S.C. 2904 and 2906.
D. To an agency, organization, or individual 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 harm to economic or property interests, identity theft or fraud, or harm to the security or integrity of this system or other systems or programs (whether maintained by DHS or another agency or entity) or harm to the individual who relies 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 an appropriate federal, state, tribal, local, international, or foreign law enforcement agency or other appropriate authority charged with investigating or prosecuting a violation or enforcing or implementing a law, rule, regulation, or order, when a record, either on its face or in conjunction with other information, indicates a violation or potential violation of law, which includes criminal, civil, or regulatory violations and such disclosure is proper and consistent with the official duties of the person making the disclosure.
H. 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, including to an actual or potential party or his or her attorney, or in connection with criminal law proceedings.
I. To other federal, state, local, or foreign government agencies, individuals, and organizations during the course of an investigation, proceeding, or activity within the purview of immigration and nationality laws to elicit information required by DHS/ICE to carry out its functions and statutory mandates.
J. To the appropriate foreign government agency charged with enforcing or implementing laws when there is an indication of a violation or potential violation of the law of another nation (whether civil or criminal), and to international organizations engaged in the collection and dissemination of intelligence concerning criminal activity.
K. To other federal agencies for the purpose of conducting national intelligence and security investigations.
L. To any federal agency, when appropriate, to enable such agency to make determinations regarding the payment of federal benefits to the record subject in accordance with that agency's statutory responsibilities.
M. To foreign governments for the purpose of coordinating and conducting the removal of aliens to other nations; and to international, foreign, and intergovernmental agencies, authorities, and organizations in accordance with law and formal or informal international arrangements.
N. To family members and attorneys or other agents acting on behalf of an alien, to assist those individuals in determining whether: (1) The alien has been arrested by DHS for immigration violations; (2) the location of the alien if in DHS custody; or (3) the alien has been removed from the United States, provided however, that the requesting individuals are able to verify the alien's date of birth or Alien Registration Number (A-Number), or can otherwise present adequate verification of a familial or agency relationship with the alien.
O. To the DOJ Executive Office of Immigration Review (EOIR) or their contractors, consultants, or others performing or working on a contract for EOIR, for the purpose of providing information about aliens who are or may be placed in removal proceedings so that EOIR may arrange for the provision of educational services to those aliens under EOIR's Legal Orientation Program.
P. To attorneys or legal representatives for the purpose of facilitating group presentations to aliens in detention that will provide the aliens with information about their rights under U.S. immigration law and procedures.
Q. To a federal, state, tribal, or local government agency to assist such agencies in collecting the repayment of
R. To the State Department in the processing of petitions or applications for immigration benefits and non-immigrant visas under the Immigration and Nationality Act, and all other immigration and nationality laws including treaties and reciprocal agreements; or when the State Department requires information to consider and/or provide an informed response to a request for information from a foreign, international, or intergovernmental agency, authority, or organization about an alien or an enforcement operation with transnational implications.
S. To the Office of Management and Budget (OMB) in connection with the review of private relief legislation as set forth in OMB Circular No. A-19 at any stage of the legislative coordination and clearance process as set forth in the Circular.
T. To the U.S. Senate Committee on the Judiciary or the U.S. House of Representatives Committee on the Judiciary when necessary to inform members of Congress about an alien who is being considered for private immigration relief.
U. To a criminal, civil, or regulatory law enforcement authority (whether federal, state, local, territorial, tribal, international, or foreign) when the information is necessary for collaboration, coordination, and de-confliction of investigative matters, to avoid duplicative or disruptive efforts, and for the safety of law enforcement officers who may be working on related investigations.
V. To the U.S. Marshals Service concerning Marshals Service prisoners that are or will be held in detention facilities operated by or on behalf of ICE in order to coordinate the transportation, custody, and care of these individuals.
W. To third parties to facilitate placement or release of an alien (
X. To an appropriate domestic government agency or other appropriate authority for the purpose of providing information about an alien who has been or is about to be released from ICE custody who, due to a condition such as mental illness, may pose a health or safety risk to himself/herself or to the community. ICE will only disclose information about the individual that is relevant to the health or safety risk they may pose and/or the means to mitigate that risk (
Y. To the DOJ Federal Bureau of Prisons (BOP) and other federal, state, local, territorial, tribal, and foreign law enforcement or custodial agencies for the purpose of placing an immigration detainer on an individual in that agency's custody, or to facilitate the transfer of custody of an individual from ICE to the other agency. This will include the transfer of information about unaccompanied minor children to the U.S. Department of Health and Human Services (HHS) to facilitate the custodial transfer of such children from ICE to HHS.
Z. To DOJ, disclosure of DNA samples and related information as required by 28 CFR part 28.
AA. To DOJ, disclosure of arrest and removal information for inclusion in relevant DOJ law enforcement databases and for use in the enforcement federal firearms laws (
BB. To federal, state, local, tribal, territorial, or foreign governmental or quasi-governmental agencies or courts to confirm the location, custodial status, removal, or voluntary departure of an alien from the United States, in order to facilitate the recipient agencies' exercise of responsibilities pertaining to the custody, care, or legal rights (including issuance of a U.S. passport) of the removed individual's minor children, or the adjudication or collection of child support payments or other debts owed by the removed individual.
CC. Disclosure to victims regarding custodial information, such as release on bond, order of supervision, removal from the United States, or death in custody, about an individual who is the subject of a criminal or immigration investigation, proceeding, or prosecution.
DD. To any person or entity to the extent necessary to prevent immediate loss of life or serious bodily injury, (
EE. To an individual or entity seeking to post or arrange, or who has already posted or arranged, an immigration bond for an alien to aid the individual or entity in (1) identifying the location of the alien, or (2) posting the bond, obtaining payments related to the bond, or conducting other administrative or financial management activities related to the bond.
FF. To appropriate federal, state, local, tribal, or foreign governmental agencies or multilateral governmental organizations when DHS is aware of a need to utilize relevant data for purposes of testing new technology and systems designed to enhance national security or identify other violations of law.
GG. To members of the public, disclosure of limited detainee biographical information for the purpose of (1) identifying whether the detainee is in ICE custody and the custodial location, and (2) facilitating the deposit of monies into detainees' accounts for telephone or commissary services in a detention facility.
HH. To a domestic law enforcement agency or other agency operating a sex offender registry for the purpose of providing notice of an individual's release from DHS custody or removal from the United States, when the individual is required to register as a sex offender, in order to assist those agencies in updating sex offender registries and otherwise carrying out the sex offender registration requirements within their jurisdictions.
II. To a domestic law enforcement agency for the purpose of providing notice of an individual's release from DHS custody or removal from the United States, when the individual has a conviction(s) for a violent or serious crime(s) and the agency receiving the notification has an interest in the individual due to: (1) A pending investigation or prosecution, (2) parole or other forms of supervision, or (3) the individual's intended residence or location of release falling within the agency's jurisdiction.
JJ. To federal, state, local, tribal, territorial, or foreign governmental agencies; multilateral governmental organizations; or other public health entities, for the purposes of protecting the vital interests of a data subject or other persons, including to assist such agencies or organizations during an epidemiological investigation, in facilitating continuity of care, preventing exposure to or transmission of a communicable or quarantinable disease of public health significance, or to combat other significant public health threats.
KK. 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
None.
Information can be stored in case file folders, cabinets, safes, or a variety of electronic or computer databases and storage media.
Records may be retrieved by name, identification numbers including, but not limited to, A-Number, fingerprint identification number, Social Security number, case or record number if applicable, case related data, and/or combination of other personal identifiers including, but not limited to, date of birth and nationality.
Records in this system are safeguarded in accordance with applicable rules and policies, including all applicable DHS automated systems security and access policies. Strict controls have been imposed 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.
ICE is in the process of drafting a proposed record retention schedule for the information maintained in the Enforcement Integrated Database (EID). ICE anticipates retaining records of arrests, detentions, and removals in EID for one-hundred (100) years; records concerning U.S. Marshals Service prisoners for ten (10) years; fingerprints and photographs collected using Mobile IDENT for up to seven (7) days in the cache of an encrypted government laptop; Enforcement Integrated Database Data Mart (EID-DM), ENFORCE Alien Removal Module Data Mart (EARM-DM), and ICE Integrated Decision Support (IIDS) records for seventy-five (75) years; user account management records (UAM) for ten (10) years following an individual's separation of employment from federal service; statistical records for ten (10) years; audit files for fifteen (15) years; and backup files for up to one (1) month.
ICE anticipates retaining records from the Fugitive Case Management System (FCMS) for ten (10) years after a fugitive alien has been arrested and removed from the United States; 75 years from the creation of the record for a criminal fugitive alien that has not been arrested and removed; ten (10) years after a fugitive alien reaches 70 years of age, provided the alien has not been arrested and removed and does not have a criminal history in the United States; ten (10) years after a fugitive alien has obtained legal status; ten (10) years after arrest and/or removal from the United States for a non-fugitive alien's information, whichever is later; audit files for 90 days; backup files for 30 days; and reports for ten (10) years or when no longer needed for administrative, legal, audit, or other operations purposes.
Unit Chief, Law Enforcement Systems/Data Management, U.S. Immigration and Customs Enforcement, Office of Investigations Law Enforcement Support and Information Management Division, Potomac Center North, 500 12th Street SW., Washington, DC 20536.
The Secretary of Homeland Security has exempted this system from the notification, access, and amendment procedures of the Privacy Act because it is a law enforcement system. However, ICE will consider individual requests to determine whether or not information may be released. Thus, 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 ICE's 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, meaning that you must provide your full name, current address, and date and place of birth. You must sign your request, and your signature must either be notarized or submitted under 28 U.S.C. 1746, a law that permits statements to be made under penalty of perjury as a substitute for notarization. While no specific form is required, you may obtain forms for this purpose from the Chief Privacy Officer and Chief Freedom of Information Act Officer,
• An explanation of 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;
• 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/her agreement for you to access his/her records.
Without this bulleted 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 in the system are supplied by several sources. In general, information is obtained from individuals covered by this system, and other federal, state, local, tribal, or foreign governments. More specifically, DHS/ICE-011 records derive from the following sources:
(a) Individuals covered by the system and other individuals (
(b) Other federal, state, local, tribal, or foreign governments and government information systems;
(c) Business records;
(d) Evidence, contraband, and other seized material; and
(e) Public and commercial sources.
The Secretary of Homeland Security has exempted portions of this system of records from subsections (c)(3) and (4); (d); (e)(1), (e)(2), (e)(3), (e)(4)(G), (e)(4)(H), (e)(5), and (e)(8); and (g) of the Privacy Act pursuant to 5 U.S.C. 552a(j)(2). In addition, the Secretary of Homeland Security has exempted portions of this system of records from subsections (c)(3); (d); (e)(1), (e)(4)(G), and (e)(4)(H) of the Privacy Act pursuant to 5 U.S.C. 552a(k)(2). These exemptions apply only to the extent that records in the system are subject to
In addition, to the extent a record contains information from other exempt systems of records, DHS will rely on the exemptions claimed for those systems.
Fish and Wildlife Service, Interior.
Notice of availability; request for comments.
We, the U.S. Fish and Wildlife Service, invite the public to comment on the following applications for recovery permits to conduct activities with the purpose of enhancing the survival of an endangered species. The Endangered Species Act of 1973, as amended (Act), prohibits certain activities with endangered species unless a Federal permit allows such activity. The Act also requires that we invite public comment before issuing such permits.
To ensure consideration, please send your written comments by June 1, 2015.
Program Manager, Restoration and Endangered Species Classification, Ecological Services, U.S. Fish and Wildlife Service, Pacific Regional Office, 911 NE. 11th Avenue, Portland, OR 97232-4181. Please refer to the permit number for the application when submitting comments.
Colleen Henson, Fish and Wildlife Biologist, at the above address, or by telephone (503-231-6131) or fax (503-231-6243).
The Act (16 U.S.C. 1531
A permit granted by us under section 10(a)(1)(A) of the Act authorizes the permittee to conduct activities (including take or interstate commerce) with respect to U.S. endangered or threatened species for scientific purposes or enhancement of propagation or survival. Our regulations implementing section 10(a)(1)(A) of the Act for these permits are found at 50 CFR 17.22 for endangered wildlife species, 50 CFR 17.32 for threatened wildlife species, 50 CFR 17.62 for endangered plant species, and 50 CFR 17.72 for threatened plant species.
We invite local, State, and Federal agencies and the public to comment on the following applications. Please refer to the permit number for the application when submitting comments.
Documents and other information submitted with these applications are available for review by request from the Program Manager for Restoration and Endangered Species Classification at the address listed in the
The permittee requests a permit amendment to take (harass through captive propagation at two additional enclosure sites) the Columbia Basin distinct population segment of the pygmy rabbit (
The applicant requests a new permit to take (survey, capture, handle, measure, mark, tag, weigh, collect biological samples, attach transmitters and accelerometers, photograph, release, monitor nests, inventory nests, excavate nests, and salvage) the green sea turtle (
All comments and materials we receive in response to this request will be available for public inspection, by appointment, during normal business hours at the address listed in the
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.
We provide this notice under section 10 of the Act (16 U.S.C. 1531
Bureau of Indian Affairs, Interior.
Notice of request for comments.
In compliance with the Paperwork Reduction Act of 1995, the Bureau of Indian Education (BIE) is seeking comments on the renewal of Office of Management and Budget (OMB) approval for the collection of information for Data Elements for Student Enrollment in Bureau-funded Schools, authorized by OMB Control Number 1076-0122. This information collection expires August 31, 2015.
Submit comments on or before June 29, 2015.
You may submit comments on the information collection to: Ms. Jacquelyn Cheek, Special Assistant to the Director, Bureau of Indian Education, 1849 C Street NW., Mailstop 4657-MIB, Washington, DC 20240; facsimile: (202) 208-3312; or email to:
Ms. Jacquelyn Cheek, phone: (202) 208-6983.
The BIE is requesting renewal of OMB approval for the admission forms for the Student Enrollment Application in Bureau-funded Schools. School registrars collect information on this form to determine the student's eligibility for enrollment in a Bureau-funded school, and if eligible, is shared with appropriate school officials to identify the student's base and supplemental educational and/or residential program needs. The BIE compiles the information into a national database to facilitate budget requests and the allocation of congressionally appropriated funds.
The BIE 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 displays 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 Land Management, Interior.
Notice.
As authorized under the provisions of the Federal Land Policy and Management Act of 1976 (FLPMA), as amended, the Bureau of Land Management (BLM) Carson City District Office will temporarily close certain public land surrounding and including the abandoned man-made structures and features, known as the American Flat Mill, in Storey County, Nevada, to all public use. This action would provide for public safety during demolition and reclamation activities occurring at the site.
The temporary closure will go into effect upon publication in the
Leon Thomas, 775-885-6000, email:
The American Flat Mill is an abandoned mining feature located within the Virginia City National Historic Landmark. At the time of its completion in 1922, it was the largest concrete mill structure in the world utilizing cyanide extraction to process silver ore. Following a substantial decrease in silver prices in 1924, the operation never recovered and the mill was dismantled in 1927. Only the deteriorated concrete skeleton of the mill remains today. The BLM plans on abating the substantial physical safety hazard posed by the American Flat Mill by demolishing the remaining buildings. Public land surrounding and including the American Flat Mill will be closed to public entry for the duration of demolition and reclamation activities. The public land affected by this closure is described as follows:
The area described contains 190 acres, more or less, in Storey County, Nevada.
The closure notice, communications plan and map of the closure area will be posted at the BLM Carson City District Office, 5665 Morgan Mill Road, Carson City, Nevada and on the BLM Web site:
U.S. International Trade Commission.
Notice.
Notice is hereby given that a complaint was filed with the U.S. International Trade Commission on March 11, 2015, under section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337, on behalf of Otter Products, LLC of Fort Collins, Colorado. An amended complaint was filed on March 25, 2015. The complaint, as amended, alleges violations of section 337 based upon the importation into the United States, the sale for importation, and the sale within the United States after importation of certain protective cases for electronic devices and components thereof by reason of infringement of certain claims of U.S. Patent No. 8,792,232 (“the ’232 patent”) and U.S. Patent No. 8,976,512 (“the ’512 patent”). The complaint further alleges that an industry in the United States exists or is in the process of being established as required by subsection (a)(2) of section 337.
The complainant requests that the Commission institute an investigation and, after the investigation, issue a limited exclusion order and cease and desist orders.
The complaint, except for any confidential information contained therein, is available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Room 112, Washington, DC 20436, telephone (202) 205-2000. Hearing impaired individuals are advised that information on this matter can be obtained 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 at
The Office of Unfair Import Investigations, U.S. International Trade Commission, telephone (202) 205-2560.
(1) Pursuant to subsection (b) of section 337 of the Tariff Act of 1930, as amended, an investigation be instituted to determine whether there is a violation of subsection (a)(1)(B) of section 337 in the importation into the United States, the sale for importation, or the sale within the United States after importation of certain protective cases for electronic devices and components thereof by reason of infringement of one or more of claims 9, 12, and 13 of the ’232 patent and claims 17 and 28 of the ’512 patent, and whether an industry in the United States exists or is in the process of being established as required by subsection (a)(2) of section 337;
(2) For the purpose of the investigation so instituted, the following are hereby named as parties upon which this notice of investigation shall be served:
(a) The complainant is:
(b) The respondents are the following entities alleged to be in violation of section 337, and are the parties upon which the complaint is to be served:
(3) For the investigation so instituted, the Chief Administrative Law Judge, U.S. International Trade Commission, shall designate the presiding Administrative Law Judge.
The Office of Unfair Import Investigations will not participate as a party in this investigation.
Responses to the complaint and the notice of investigation must be submitted by the named respondents in accordance with section 210.13 of the Commission's Rules of Practice and Procedure, 19 CFR 210.13. Pursuant to 19 CFR 201.16(e) and 210.13(a), such responses will be considered by the Commission if received not later than 20 days after the date of service by the Commission of the complaint and the notice of investigation. Extensions of time for submitting responses to the complaint and the notice of investigation will not be granted unless good cause therefor is shown.
Failure of a respondent to file a timely response to each allegation in the complaint and in this notice may be deemed to constitute a waiver of the right to appear and contest the allegations of the complaint and this notice, and to authorize the administrative law judge and the Commission, without further notice to the respondent, to find the facts to be as alleged in the complaint and this notice and to enter an initial determination and a final determination containing such findings, and may result in the issuance of an exclusion order or a cease and desist order or both directed against the respondent.
By order of the Commission.
On the basis of the record
Pursuant to section 207.18 of the Commission's rules, the Commission also gives notice of the commencement of the final phase of its investigations. The Commission will issue a final phase notice of scheduling, which will be published in the
On March 10, 2015, DAK Americas, LLC, Charlotte, NC; M&G Chemicals, Houston, TX; and Nan Ya Plastics Corporation, America, Lake City, SC, filed a petition with the Commission and Commerce, alleging that an industry in the United States is materially injured or threatened with material injury by reason of LTFV and subsidized imports of certain polyethylene terephthalate resin from China, India, and Oman and LTFV imports of certain polyethylene terephthalate resin from Canada. Accordingly, effective March 10, 2015, the Commission, pursuant to sections 703(a) and 733(a) of the Tariff Act of 1930 (19 U.S.C. 1671b(a) and 1673b(a)), instituted countervailing duty investigation Nos. 701-TA-531-533 and antidumping duty investigation Nos. 731-TA-1270-1273 (Preliminary).
Notice of the institution of the Commission's investigations and of a public conference to be held in connection therewith was given by posting copies of the notice in the Office of the Secretary, U.S. International Trade Commission, Washington, DC, and by publishing the notice in the
The Commission made these determinations pursuant to sections 703(a) and 733(a) of the Tariff Act of 1930 (19 U.S.C. 1671b(a) and 1673b(a)). It completed and filed its determinations in these investigations on April 24, 2015. The views of the Commission are contained in USITC Publication 4531 (May 2015), entitled
By order of the Commission.
Notice is hereby given that, on March 31, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Matheson Tri-Gas, Basking Ridge, NJ; Centrotherm Photovoltaics, Blaubeuren, GERMANY; Fujifilm Electronic Materials, Shizuoka, JAPAN; Solid State Equipment LLC (SSEC), Horsham, PA; Intermolecular, San Jose, CA; Morgan Advance Materials, Southampton, UNITED KINGDOM; TriQuint Semiconductors Inc., Richardson, TX; Disco, Tokyo, JAPAN; Cimetrix, Hingham, MA; SUSS, Microtec Photomask Equipment GmbH & Co. kg., Garching, GERMANY; and University College of London, London, UNITED KINGDOM, have withdrawn as parties to this venture.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and SEMATECH intends to file additional written notifications disclosing all changes in membership.
On April 22, 1988, SEMATECH filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 6, 2015. A notice was published in the
Notice is hereby given that, on March 20, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Pursuant to section 6(b) of the Act, the identities of the parties to the venture are: Cummins, Inc., Columbus, IN; Denso Corporation, Aichi-ken, JAPAN; John Deere, Waterloo, IA; Komatsu Ltd., Tochigi-ken, JAPAN; and Tenneco Automotive Operating Co., Inc., Grass Lake, MI. The general area of AC
Notice is hereby given that, on April 7, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, Beijing HWA-Tech Information System Co., Beijing, PEOPLE'S REPUBLIC OF CHINA; and MagiQ Technologies, Somerville, MA, has withdrawn as a party to this venture.
In addition, Aeroflex, Inc. has changed its name to Cobham, Wireless, Wichita, KS.
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and PXI Systems Alliance, Inc. intends to file additional written notifications disclosing all changes in membership.
On November 22, 2000, PXI Systems Alliance, Inc. filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 16, 2015. A notice was published in the
Notice is hereby given that, on March 11, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and HSA Foundation intends to file additional written notifications disclosing all changes in membership.
On August 31, 2012, HSA Foundation filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on December 19, 2014. A notice was published in the
Notice is hereby given that, on March 2, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Also, British Airways, Harmondsworth, UNITED KINGDOM; Chemtura Corporation, Middlebury, CT; DuPont Chemicals & Fluoroproducts, Wilmington, DE; Eurotunnel PLC, London, UNITED KINGDOM; Fire Protection Systems, Inc., Washington Crossing, PA; Gielli di Luigi Galantucci,
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and HARC intends to file additional written notifications disclosing all changes in membership.
On February 7, 1990, HARC filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 18, 2011. A notice was published in the
Notice is hereby given that, on March 20, 2015, pursuant to Section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
Pursuant to Section 6(b) of the Act, the identities of the parties to the venture are: Delphi Automotive Systems, LLC, Kokomo, IN; Denso International America, Inc., Southfield, MI; Ford Motor Company, Dearborn, MI; GM Global Technology Operations LLC, Detroit, MI; Honda R&D Americas, Inc., Raymond, OH; and Robert Bosch LLC, Farmington Hills, MI. The general area of ACES's planned activity is to provide pre-competitive and non-competitive research in automotive embedded systems security to protect the safety, reliability, brand image, trade secrets, and to provide privacy of members' future products. The objectives of ACES are to perform high-risk/high-reward pre-competitive and non-competitive research and development; serve as an independent verification and validation entity; develop understanding of industry problems and associated risk; monitor and share threats and industry research; keep abreast of and provide input for emerging safety and security regulations and standards; and provide members with relevant solutions and actionable results.
Notice is hereby given that, on April 2, 2015, pursuant to section 6(a) of the National Cooperative Research and Production Act of 1993, 15 U.S.C. 4301
No other changes have been made in either the membership or planned activity of the group research project. Membership in this group research project remains open, and Open Platform for NFV Project intends to file additional written notifications disclosing all changes in membership.
On October 17, 2014, Open Platform for NFV Project filed its original notification pursuant to section 6(a) of the Act. The Department of Justice published a notice in the
The last notification was filed with the Department on January 12, 2015. A notice was published in the
Office of Legal Counsel, Department of Justice.
Notice; correction.
The United States Department of Justice, Office of Legal Counsel, published a notice document in the
Robin Moss, 202-514-8568.
In the
Pursuant to the Privacy Act of 1974 (5 U.S.C. 552a), the United States Department of Justice, Office of Legal Counsel, is terminating the systems of records entitled “Office of Legal Counsel Attorney Assignment Reports,
Department of Justice.
Notice; correction.
The Department of Justice (the Department or DOJ) published a system of records notice in the
This correction is effective on April 30, 2015.
Robin Moss, Privacy Analyst, 202-514-8568.
In the
Office of the Assistant Secretary for Administration and Management, Labor.
Notice of public availability of FY 2014 Service Contract Inventories.
In accordance with Section 743 of Division C of the Consolidated Appropriations Act of 2010 (Pub. L. 111-117), the Department of Labor (DOL) is publishing this notice to advise the public of the availability of its FY 2014 Service Contract Inventory. This inventory provides information on service contract actions over $25,000 made in FY 2014. The information is organized by function to show how contracted resources are distributed throughout the agency. The inventory has been developed in accordance with guidance issued on November 5, 2010, by the Office of Management and Budget's Office of Federal Procurement Policy (OFPP). OFPP's guidance is available at
Questions regarding the service contract inventory should be directed to Ngozi Ofili in the DOL/Office of Acquisition Management Services at (202) 693-7247 or
Mine Safety and Health Administration, Labor.
Notice.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and Title 30 of the Code of Federal Regulations, 30 CFR part 44, govern the application, processing, and disposition of petitions for modification. This notice is a summary of petitions for modification submitted to the Mine Safety and Health Administration (MSHA) by the parties listed below.
All comments on the petitions must be received by the Office of Standards, Regulations, and Variances on or before June 1, 2015.
You may submit your comments, identified by “docket number” on the subject line, by any of the following methods:
1.
2.
3.
MSHA will consider only comments postmarked by the U.S. Postal Service or proof of delivery from another delivery service such as UPS or Federal Express on or before the deadline for comments.
Barbara Barron, Office of Standards, Regulations, and Variances at 202-693-9447 (Voice),
Section 101(c) of the Federal Mine Safety and Health Act of 1977 (Mine Act) allows the mine operator or representative of miners to file a petition to modify the application of any mandatory safety standard to a coal or other mine if the Secretary of Labor determines that:
1. An alternative method of achieving the result of such standard exists which will at all times guarantee no less than the same measure of protection afforded the miners of such mine by such standard; or
2. That the application of such standard to such mine will result in a diminution of safety to the miners in such mine.
In addition, the regulations at 30 CFR 44.10 and 44.11 establish the requirements and procedures for filing petitions for modification.
1. A safety barrier of 300 feet diameter (150 feet between any mined area and a well) will be maintained around all oil and gas wells, to include all active, inactive, abandoned, shut-in, and previously plugged wells and including water injection wells until approval to proceed has been obtained from the District Manager (DM).
2. The petitioner proposes, prior to mining through any oil or gas well at its White Oak Mine No. 1, to provide the DM a sworn affidavit or declaration stating that all mandatory procedures for cleaning out, preparing, and plugging each gas or oil well have been completed. The declaration will be accompanied by down-hole logs and any other information that the DM may request.
(a) The petitioner proposes to use the following procedures when cleaning out and preparing oil and gas wells prior to plugging or replugging:
(1) Clean out the well from the surface to at least 200 feet below the base of the lowest mineable coal seam. The DM will be provided with all information it possesses concerning the geological nature of the strata and the pressure of the well. All material will be removed from the entire diameter of the well, wall to wall.
(2) Prepare down-hole logs for each well. The logs will consist of a caliper survey and be suitable for determining the top, bottom, and thickness of all coal seams and potential hydrocarbon-producing strata and the location for the bridge plug. In addition a journal will be maintained describing the depth and nature of each material encountered; bit size and type used to drill each portion of the hole; length and type of each material used to plug the well; length of casing(s) removed, perforated, or ripped, or left in place, any sections where casing was cut or milled; and other pertinent information concerning cleaning and sealing the well. Invoices, work-orders, and other records relating to all work on the well will be maintained as part of this journal and provided to MSHA on request.
(3) When cleaning out the well, a diligent effort will be made to remove all of the casing in the well or, if it is not possible to remove all of the casing, fill the annulus between the casings and the well walls with expanding cement (minimum 0.5 percent expansion on setting) and ensure that these areas contain no voids. If the casing cannot be removed it will be cut or milled at all mineable coal seam levels. Any remaining casings will be perforated or ripped at least every 50 feet from at least 200 feet below the base of the lowest mineable coal seam up to 100 feet above the uppermost mineable coal seam. When multiple casing and tubing strings are present in the coal horizon(s), perforate or rip any casing that remains and fill with expanding cement. Keep an acceptable casing bond log for each casing and tubing string used in lieu of ripping or perforating multiple strings.
(4) Place a mechanical bridge plug in the well, if a cleaned-out well emits excessive amounts of gas. Place the mechanical bridge plug in a competent stratum at least 200 feet below the base of the lowest mineable coal seam, but above the top of the uppermost hydrocarbon-producing stratum.
(5) If the uppermost hydrocarbon-producing stratum is within 300 feet of the base of the lowest mineable coal seam, properly place mechanical bridge plugs to isolate the hydrocarbon-producing stratum from the expanding cement plug. Place a minimum of 200 feet of expanding cement below the lowest mineable coal seam.
(b) The petitioner proposes to use the following procedures for plugging or replugging oil or gas wells to the surface:
(1) Pump expanding cement slurry down the well to form a plug that runs from at least 200 feet below the base of the lowest mineable coal seam to the surface. Place the expanding cement in the well under a pressure of at least 200 pounds per square inch. Portland cement or a lightweight cement mixture may be used to fill the area from 100 feet above the top of the uppermost mineable coal seam.
(2) Embed steel turnings or other small magnetic particles in the top of the cement near the surface to serve as a permanent magnetic monument of the well. In the alternative, extend a 4
c. The petitioner proposes to use the following procedures for plugging or replugging oil and gas wells for subsequent use as degasification boreholes:
(1) Set a cement plug in the well by pumping expanding cement slurry down the tubing to provide at least 200 feet of expanding cement below the lowest mineable coal seam. Place the expanding cement in the well under a pressure of at least 200 pounds per square inch. Extend the top of the expanding cement at least 30 feet above the top of the coal seam being mined.
(2) Securely grout a suitable casing into the bedrock of the upper portion of the degasification well to protect it. The remainder of this well may be cased or uncased.
(3) Fit the top of the degasification casing with a wellhead, equipped as required by the DM in the approved ventilation plan. Such equipment may include check valves, shut-in valves, sampling ports, flame arrestor equipment, and security fencing.
(4) Operation of the degasification well will be addressed in the approved ventilation plan. This may include periodic tests of methane levels and limits on the minimum concentrations that may be extracted.
(5) After the area of the coal mine that is degassed by a well is sealed or the coal mine is abandoned, seal the degas holes using the following procedures:
(i) Insert a tube to the bottom of the drill hole or, if not possible, to at least 100 feet above the Herrin No. 6 coal seam. Remove any blockage to ensure that the tube is inserted to this depth.
(ii) Set a cement plug in the well by pumping Portland cement or a lightweight cement mixture down the tubing until the well is filled to the surface.
(iii) Embed steel turnings or other small magnetic particles in the top of the cement near the surface to serve as a permanent magnetic monument of the well. In the alternative, extend a 4
d. The petitioner proposes to use the following mandatory alternative procedures for preparing and plugging or replugging oil or gas wells that cannot be cleaned out:
(1) Drill a hole adjacent and parallel to the well to a depth of at least 200 feet below the lowest mineable coal seam.
(2) Locate any casing that may remain in the well using a geophysical sensing device.
(3) If the well contains casings, drill into the well from the parallel hole and perforate or rip all casings at intervals of at least 5 feet from 10 feet below the coal seam to 10 feet above the coal seam. Beyond that distance, perforate or rip all casings at least every 50 feet from at least 200 feet below the base of the lowest mineable coal seam up to 100 feet above the seam being mined. Fill the annulus between the casings and
(4) Use a horizontal hydraulic fracturing technique to intercept the original well. Fracture the original well in at least six places from at least 200 feet below the base of the lowest mineable coal seam to a point at least 50 feet above the seam being mined, at intervals to be agreed on by the petitioner and the DM after considering the geological strata and the pressure within the well. Pump expanding cement into the fractured well in sufficient quantities and in a manner that fills all intercepted voids.
(5) Prepare down-hole logs for each well. The logs will consist of a caliper survey and be suitable for determining the top, bottom, and thickness of all coal seams and potential hydrocarbon-producing strata and the location for the bridge plug. The operator may obtain the logs from the adjacent hole rather than the well if the condition of the well makes it impractical to insert the equipment necessary to obtain the log. Maintain a journal describing the depth of each material encountered; the nature of each material encountered; bit size and type used to drill each portion of the hole; length and type of each material used to plug the well; length of casing(s) removed, perforated, ripped, or left in place; and other pertinent information concerning sealing the well. Invoices, work orders, and other records relating to all work on the well will be maintained as part of the journal and provided to MSHA on request.
(6) After plugging the well, plug the open portions of both holes from the bottom to the surface with Portland cement or a lightweight cement mixture.
(7) Embed steel turnings or other small magnetic particles in the top of the cement near the surface to serve as a permanent magnetic monument of the well. In the alternative, extend a 4
(8) A combination of the methods outlined in subparagraphs (d)(3) and (d)(4) may have to be used in a single well depending on the conditions of the hole and the presence of casings. The petitioner and DM would discuss the nature of each hole. The DM may require that more than one method be used.
e. The petitioner proposes to use the following procedures after approval has been granted by the DM to mine through a plugged or replugged well:
(1) Prior to cutting-through a plugged well, notify the DM or designee, representative of the miners, and the appropriate State agency in sufficient time for them to have a representative present.
(2) When using continuous mining machines, install drivage sites at the last open crosscut near the place to be mined to ensure intersection of the well. The drivage sites will not be more than 50 feet from the well. When using longwall mining methods, install drivage sites on 10-foot centers for a distance of 50 feet in advance of the well. The drivage sites will be installed in the headgate and tailgate.
(3) Firefighting equipment, including fire extinguishers, rock dust, and sufficient fire hose to reach the working face area of the mine-through (when either the conventional or continuous mining method is used), will be available and operable during each well mine-through. Locate the fire hose in the last open crosscut of the entry or room. Maintain the water line to the belt conveyor tailpiece along with a sufficient amount of fire hose to reach the farthest point of penetration on the section. When the longwall mining method is used, a hose to the longwall water supply is sufficient. All fire hoses will be connected and ready for use, but do not have to be charged with water during the cut-through.
(4) Keep available at the last open crosscut a supply of roof support and ventilation materials sufficient to ventilate and support around the well on cut-through. In addition, keep emergency plugs and suitable sealing materials available in the immediate area of the well intersection.
(5) Maintain minimum air quantities in the working face during the period from when mining within 50 feet of the well location until the post cut-through inspection, or mining progresses at least 50 feet past the well location will be specified in the approved ventilation plan.
(6) On the shift prior to mining through the well, service all equipment and check for permissibility.
(7) Calibrate the methane monitors on the longwall, continuous mining machine, or cutting machine and loading machine on the shift prior to mining through the well.
(8) When mining is in progress, test methane levels with a hand-held methane detector at least every 10 minutes from the time that mining with the continuous mining machine is within 30 feet of the well until the well is intersected and immediately prior to mining through it. No individual is allowed on the return side during the actual cutting process until the mine-through has been completed and the area examined and declared safe. All workplace examinations will be conducted on the return side of the shearer while the shearer is idle.
(9) Keep the working place free from accumulations of coal dust and coal spillages, and place rock dust on the roof, rib, and floor to within 20 feet of the face when mining through the well when using continuous or conventional mining methods. Conduct rock dusting on longwall sections on the roof, rib, and floor up to both the headgate and tailgate gob.
(10) Deenergize all equipment when the wellbore is intersected and thoroughly examine the place and determine it safe before resuming mining. After a well has been intersected and the working place determined safe, mining will continue inby the well a sufficient distance to permit adequate ventilation around the area of the well.
(11) In rare instances, torches may be used for inadequately or inaccurately cut or milled casings at the coal seam level. No open flame is permitted in the area until adequate ventilation has been established around the wellbore and methane levels are less than 1.0 percent in all areas that will be exposed to flames and sparks from the torch. Apply a thick layer of rock dust to the roof, face, floor, ribs, and any exposed coal within 20 feet of the casing prior to any use of torches.
(12) Non-sparkling (brass) tools will be located on the working section and will be used to expose and examine cased wells.
(13) No person will be permitted in the area of the cut-through operation except those actually engaged in the mining operation, including mine management, representatives of miners, personnel from MSHA, and personnel from the appropriate State agency.
(14) A certified official will directly supervise the cut-through operation and only the certified official in charge will issue instructions concerning the cut-through operation.
(15) Within 60 days after this petition becomes final, the petitioner will submit proposed revisions for its approved part 48 training plan to the DM. These proposed revisions will include initial and refresher training regarding compliance with the terms and conditions stated in the Order. The operator will provide all miners involved in the mine-through of a well
(16) The responsible person required in 30 CFR 75.1501 will be responsible for well intersection emergencies. The responsible person will review the well intersection procedures prior to any planned intersection.
(17) Within 60 days after this petition becomes final, the petitioner will submit proposed revisions for its approved mine emergency evacuation and firefighting plan required in 30 CFR 75.1501. The plan will include the hazards and evacuation procedures to be used for well intersections. All underground miners will be trained in this revised plan within 60 days of submittal of the revised evacuation plan.
The petitioner asserts that the proposed alternative method will at all times guarantee no less than the same measure or protection afforded by the existing standard.
(1) The Shoemaker Mine operates in the Pittsburgh #8 coal seam. The seam thickness averages 84 inches. The overburden averages 850 feet. The continuous miner and longwall sections are used to mine this coal seam. The mine currently has 730 employees.
(2) Coal extraction from the mine is transported via conveyor belt to the coal processing plant located on the surface. Rock and other impurities are separated from the coal at this location. The separated rock and impurities are termed “refuse or refuse material”.
(3) The refuse material which has been separated from the coal is then loaded onto another conveyor belt, hereinafter known as the refuse belt, which carries the refuse material back into and through a small portion of the mine, before exiting to the surface again. The refuse is then trans-loaded onto rubber tired vehicles which distribute the refuse throughout the approved refuse disposal site.
(4) The belt consists of a 30-inch flame resistant material required in 30 CFR part 14. The belt travels from the preparation plant to the refuse site. The distance underground is approximately 4,000 feet.
(5) Removing the refuse belt from service due to a fan outage also prevents the coal processing plant from operating.
(6) The mine is ventilated with multiple main ventilation fans and the primary source of ventilation of the “refuse” belt is the Dupont main blowing fan. In the event of an outage of any or all ventilation fans, the Dupont fan will remain in operation to provide adequate ventilation to the petitioned area.
(7) The procedures below will be used to monitor the belt on the surface at manned locations.
(a) The following procedures will be used for operating the refuse belt during a fan outage:
(1) The refuse belt is ventilated by the Dupont main blowing fan. The air enters the mine and splits on the belt and exits the mine at the River Portal and top of the Refuse Slope at Browns Run. The blowing system provides positive pressure on the beltline and surrounding areas. Air measurements recorded at the two belt openings where air exits the mine will be monitored with a velometer. If at any time the Dupont main blowing fan becomes inoperative then the refuse belt will be deenergized by a remote system from a surface location.
(2) The beltline will be monitored on the surface at manned locations where audible and visual signals can be heard or seen. An intrinsically safe monitoring system capable of detection and monitoring of carbon monoxide, oxygen, methane and velocity will be installed and maintained along the refuse belt as indicated below:
(i) Carbon monoxide sensors will be installed near the center in the upper third of the entry, in a location that does not expose personnel working on the system to unsafe conditions. Sensors will not be located in abnormally high areas or in other locations where airflow patterns do not permit products of combustion to be carried to the sensors.
(ii) The carbon monoxide sensor location intervals will not exceed 1,000 feet along the belt entry and not more than 100 feet downwind of the belt tailpiece transfer.
(iii) Oxygen and methane sensors will be installed near the center of the entry, at least 12 inches from the roof, ribs, and floor, in a location that would not expose personnel working on the system to unsafe conditions. The sensor will be located where the ventilating current enters the refuse belt entry at Survey Station 12+50.
(iv) Velometers will be installed at the two locations where air used to ventilate the Refuse Belt exits the mine.
(v) The sensors will automatically provide visual and audible signals at the surface locations for any interruption of circuit continuity and any electrical malfunction of the system. These signals must be of sufficient magnitude to be seen or heard by the designated person at the surface locations.
(vi) The sensors will automatically provide visual and audible signals at the designated surface locations when carbon monoxide concentration levels reach alarm (10 PPM), (the Ambient CO Level for the entry will be zero); methane concentration levels reach alarm at 1.0 percent at any sensor; oxygen concentration levels drop below and reach alarm at 19.5 percent; or velocities drop under 50 FPM and reach alarm.
(vii) If at any time any segment of the monitoring system reaches alarm status the belt will be deenergized.
(8) The sensors will be installed and maintained by personnel trained in the installation and maintenance of the system. The system will be maintained in proper operating condition.
(9) Sensors used to monitor for carbon monoxide and methane will be of a type listed and installed in accordance with the recommendations of a nationally recognized testing laboratory approved by the Secretary, or will be of a type, and installed in a manner approved by the Secretary.
(10) At least once each shift when belts are operated as part of a production shift, sensors used to detect carbon monoxide will be visually examined.
(11) At least once every seven days alarms for the installed monitoring system will be functionally tested for proper operation.
(12) At intervals not to exceed 31 days, each carbon monoxide sensor will be calibrated in accordance with the manufacturer's calibration specifications. Calibration will be done with a known concentration of carbon monoxide in air sufficient to activate the alarm.
(13) Each methane sensor installed will be calibrated in accordance with
(14) If the alarm signals are activated during calibration of sensors, the designated person will be notified prior to and upon completion of calibration.
(15) Gases used for the testing and calibration of sensors will be traceable to the National Institute of Standards and Technology reference standard for the specific gas. When these reference standards are not available for a specific gas, calibration gases will be traceable to an analytical standard which is prepared using a method traceable to the National Institute of Standards and Technology. Calibration gases must be within ±2.0 percent of the indicated gas concentration.
(16) A record of the date, time, location and type of sensor, and the cause for the activation will be recorded if an alarm occurs.
(17) If a sensor malfunctions, the date, the extent and cause of the malfunction, and the corrective action taken to return the system to proper operation will be recorded.
(18) A record of the seven-day tests of alert and alarm signals, calibrations, and maintenance of the sensors will be made by the person(s) performing these tests.
(19) The person(s) entering the recordings will include their name, date, and signature in the record.
(20) The records required by this section will be kept either in a secure book that is not susceptible to alteration, or electronically in a computer system that is secure and not susceptible to alteration. These records will be maintained separately from other records and identifiable by a title, such as the “Sensor Log”.
(21) Records will be retained for at least one year at a surface location at the mine and made available for inspection by miners and authorized representatives of the Secretary.
(22) The Intrinsically Safe Fire Sensor and Warning System will be comprised of components from Conspec Controls, Inc., or equivalent parts or manufacture.
(23) The system will consist of intrinsically safe components. The following components will be the only electrical components present underground on the refuse belt:
(a) Belt Conveyor On/Off switches every 1,000 feet with an intrinsically safe system. A total of 6 switches are present along the beltline.
(b) The belt controls including belt switches and chute plug switch will be controlled by SMC C1570 IS Relays with diodes. The sequence switch will go through an IS barrier (BWI EAGLE 10-7072 IS Zenner Barrier) to an IS proximity switch (BWI EAGLE 10-7039 IS Prox Sensor).
(c) The refuse and slope belt drives and associated electrical components are located outside on the surface at Browns Run and the River Portal.
Within 60 days after this Petition is granted, the petitioner will submit proposed revisions for its approved part 48 training plan to the District Manager. The proposed revisions will specify initial and refresher training regarding the alternative method outlined in this petition and the terms and conditions stated in the Proposed Decision and Order.
(1) The Shoemaker Mine operates in the Pittsburgh #8 coal seam. The seam thickness averages 84 inches. The overburden averages 850 feet. The continuous miner and longwall sections are used to mine this coal seam. The mine currently has 730 employees.
(2) Coal extraction from the mine is transported via conveyor belt to the coal processing plant located on the surface. Rock and other impurities are separated from the coal at this location. The separated rock and impurities and termed “refuse or refuse material”.
(3) The refuse material which has been separated from the coal is them loaded onto another conveyor belt, hereinafter known as the refuse belt, which carries the refuse material back into and through a small portion of the mine, before exiting to the surface again. The refuse is then trans-loaded onto rubber tired vehicles which distribute the refuse throughout the approved refuse disposal site.
(4) The belt consists of a 30-inch flame resistant material required in 30 CFR part 14. The belt travels from the preparation plant to the refuse site. The distance underground is approximately 4,000 feet.
(5) Removing the refuse belt from service due to a fan outage also prevents the coal processing plant from operating.
(6) The mine is ventilated with multiple main ventilation fans and the primary source of ventilation of the “refuse” belt is the Dupont main blowing fan. In the event of an outage of any or all ventilation fans, the Dupont fan will remain in operation to provide adequate ventilation to the petitioned area.
(7) The procedures below will be used to monitor the belt on the surface at manned locations.
(a) The following procedures will be used for operating the refuse belt during a fan outage:
(1) The refuse belt is ventilated by the Dupont main blowing fan. The air enters the mine and splits on the belt and exits the mine at the River Portal and top of the refuse slope at Browns Run. The blowing system provides positive pressure on the beltline and surrounding areas. Air measurements recorded at the two belt openings where air exits the mine will be monitored with a velometer. If at any time the Dupont main blowing fan becomes inoperative then the refuse belt will be deenergized by a remote system from a surface location.
(2) The beltline will be monitored on the surface at manned locations where audible and visual signals can be heard or seen. An intrinsically safe monitoring system capable of detection and monitoring of carbon monoxide, oxygen, methane and velocity will be installed and maintained along the refuse belt as indicated below:
(i) Carbon monoxide sensors will be installed near the center in the upper third of the entry, in a location that does not expose personnel working on the system to unsafe conditions. Sensors will not be located in abnormally high areas or in other locations where airflow patterns do not permit products of combustion to be carried to the sensors.
(ii) The carbon monoxide sensor location intervals will not exceed 1,000 feet along the belt entry and not more than 100 feet downwind of the belt tailpiece transfer.
(iii) Oxygen and methane sensors will be installed near the center of the entry, at least 12 inches from the roof, ribs, and floor, in a location that would not expose personnel working on the system to unsafe conditions. The sensor will be located where the ventilating current enters the refuse belt entry at Survey Station 12+50.
(iv) Velometers will be installed at the two locations where air used to ventilate the refuse belt exits the mine.
(v) The sensors will automatically provide visual and audible signals at the surface locations for any interruption of circuit continuity and any electrical malfunction of the system. These signals must be of sufficient magnitude to be seen or heard by the designated person at the surface locations.
(vi) The sensors will automatically provide visual and audible signals at the designated surface locations when carbon monoxide concentration levels reach alarm (10 PPM), (the Ambient CO Level for the entry will be zero); methane concentration levels reach alarm at 1.0 percent at any sensor; oxygen concentration levels drop below and reach alarm at 19.5 percent; or velocities drop under 50 FPM and reach alarm.
(vii) If at any time any segment of the monitoring system reaches alarm status the belt will be deenergized.
(8) The sensors will be installed and maintained by personnel trained in the installation and maintenance of the system. The system will be maintained in proper operating condition.
(9) Sensors used to monitor for carbon monoxide and methane will be of a type listed and installed in accordance with the recommendations of a nationally recognized testing laboratory approved by the Secretary, or will be of a type, and installed in a manner approved by the Secretary.
(10) At least once each shift when belts are operated as part of a production shift, sensors used to detect carbon monoxide must be visually examined.
(11) At least once every seven days alarms for the installed monitoring system will be functionally tested for proper operation.
(12) At intervals not to exceed 31 days, each carbon monoxide sensor will be calibrated in accordance with the manufacturer's calibration specifications. Calibration will be done with a known concentration of carbon monoxide in air sufficient to activate the alarm.
(13) Each methane sensor installed will be calibrated in accordance with the manufacturer's calibration specifications. Calibration will be done with a known concentration of methane in air sufficient to activate an alarm.
(14) If the alarm signals are activated during calibration of sensors, the designated person will be notified prior to and upon completion of calibration.
(15) Gases used for the testing and calibration of sensors will be traceable to the National Institute of Standards and Technology reference standard for the specific gas. When these reference standards are not available for a specific gas, calibration gases will be traceable to an analytical standard which is prepared using a method traceable to the National Institute of Standards and Technology. Calibration gases must be within ±2.0 percent of the indicated gas concentration.
(16) A record of the date, time, location and type of sensor, and the cause for the activation will be recorded if an alarm occurs.
(17) If a sensor malfunctions, the date, the extent and cause of the malfunction, and the corrective action taken to return the system to proper operation will be recorded.
(18) A record of the seven-day tests of alert and alarm signals, calibrations, and maintenance of the sensors will be made by the person(s) performing these actions.
(19) The person(s) entering the record must include their name, date, and signature in the record.
(20) The records required by this section will be kept either in a secure book that is not susceptible to alteration, or electronically in a computer system that is secure and not susceptible to alteration. These records will be maintained separately from other records and identifiable by a title, such as the “Sensor Log”.
(21) Records will be retained for at least one year at a surface location at the mine and made available for inspection by miners and authorized representatives of the Secretary.
(22) The Intrinsically Safe Fire Sensor and Warning System will be comprised of components from Conspec Controls, Inc., or equivalent parts or manufacture.
(23) The system will consist of intrinsically safe components. The following components will be the only electrical components present underground on the refuse belt:
(a) Belt conveyor on/off switches every 1,000 feet with an intrinsically safe system. A total of 6 switches are present along the beltline.
(b) The belt controls including belt switches and chute plug switch will be controlled by SMC C1570 IS Relays with diodes. The sequence switch will go through an IS barrier (BWI EAGLE 10-7072 IS Zenner Barrier) to an IS proximity switch (BWI EAGLE 10-7039 IS Prox Sensor).
(c) The refuse and slope belt drives and associated electrical components are located outside on the surface at Browns Run and the River Portal.
Within 60 days after this Petition is granted, the petitioner will submit proposed revisions for its approved part 48 training plan to the District Manager. The proposed revisions will specify initial and refresher training regarding the alternative method outlined in this petition and the terms and conditions stated in the Proposed Decision and Order.
(1) Some stages of assembly/disassembly of draglines require special consideration when the boom/mast is raised/lowered into position.
(2) The boom is raised/lowered utilizing the on-board VFD hoist drive and AC drive motors. This process is critical because power to the machine must not be interrupted. Power loss conditions may result in the boom becoming uncontrolled, falling, and possible injuries to workers. To address this condition, the petitioner proposes to use the following guidelines to help prevent loss of power to the machine. This procedure only addresses raising/lowering the boom on draglines utilizing the machine's electrical onboard VFD hoist drive and AC drive motors. It does not replace other mechanical precautions or the requirements of 30 CFR 77.405(b) that are necessary to safely secure booms/masts during construction or maintenance procedures.
The petitioner proposes to use the following procedure for “boom raising” or “boom lowering” at the Coyote Creek Mine. During this period of construction and maintenance the machine will not be performing mining operations. This procedure will also be applicable in instances of disassembly or major maintenance that require the boom to be raised/lowered. The following guidelines will be used to minimize the potential for electrical power loss during this critical boom procedure:
(1) The petitioner proposes to initially use the procedure to raise the boom on the Marion 8400 dragline, which is currently being reconstructed, and would most likely only use this procedure during disassembly or major maintenance in the future.
(2) Major maintenance requiring the raising/lowering of the boom/mast would only be performed on an as needed basis, which could span long periods of time. Therefore, training and review of the procedure would only be conducted prior to this need. At such time, all persons involved in the process would be trained and retrained.
The petitioner states that:
(1) Coyote Creek employees, its contractors, and affected persons will be trained on the requirements of the procedure at the mine.
(2) The procedure will be coordinated by a Coyote Creek Mine maintenance supervisor and, if present, the contractor's representative will assist. At least two MSHA qualified electricians will be present at all times during the procedure.
(3) The number of persons required on board the machine will be limited. An MSHA qualified electrician, dragline operator, and the dragline oiler will be permitted on the machine. The Coyote Creek maintenance supervisor and contractor's representative may either be on board or at a location on the ground to assist in the coordination.
(4) The affected area under the boom will be secured to prevent persons from entering and/or contacting the frame of the machine during the “boom raising/lowering”. The area will be secured and only those persons identified in Item #3 will be permitted inside the secured area. At no time will anyone be permitted under the boom or close to the boom.
(5) Communication between the dragline operator, the MSHA qualified electrician at the dragline, the MSHA qualified electrician at the substation, the Coyote Creek maintenance supervisor, and the contractor's representative, if present, will be a dedicated channel on the company's two-way radio.
(6) An MSHA qualified electrician will complete an examination of all electrical components that will be energized. The examination will be done within two hours prior to the boom raising/lowering process. A record of this examination will be made available to interested parties. The machine will be deenergized to perform this examination.
(7) After the examination is completed, the electrical components necessary to complete the boom raising/lowering process will be energized to assure they are operating properly as determined by an MSHA qualified electrician. When completed, the machine will be deenergized and locked out.
(8) The ground fault and ground check circuits will be disabled provided:
(a) The internal grounding conductor of the trailing cable has been tested and is continuous from the frame of the dragline to the grounding resistor located at the substation. Utilizing the ground check circuit and disconnecting the pilot circuit at the machine frame, and verifying the circuit breaker cannot be closed, will be an acceptable test. Resistance measurements will also be used to assure the ground conductor is continuous. The grounding resistor will be tested to assure it is properly connected, is not open, or is not shorted.
(b) Normal short circuit protection will be provided at all times. The over current relay setting may be increased up to 100 percent above its normal setting.
(9) During the boom raising/lowering procedure an MSHA qualified electrician will be positioned at the substation dedicated to monitor the grounding circuit. The MSHA qualified electrician will be able to detect a grounded phase condition or an open ground wire condition. The MSHA qualified electrician at the substation will at all times maintain communications with an MSHA qualified electrician at the dragline. If a grounded phase condition or an open ground wire should occur during the process, the MSHA qualified electrician at the substation will notify the MSHA qualified electrician at the dragline. All persons on board the machine must be aware of the condition and must remain on board the machine. The boom must be lowered to the ground or controlled and electrical circuit deenergized, locked and tagged out. The circuit must remain deenergized until the condition is corrected. The ground fault and ground check circuits will be reinstalled prior to reenergizing and testing the machine. Once circuits have been tested and no adverse conditions are present, the boom raising/lowering procedure, as outlined above, will be resumed.
(10) During the construction/maintenance procedure, persons cannot get on or off the dragline while the ground check ground fault circuits are disabled unless the circuit is deenergized, locked and tagged out as verified by the MSHA qualified electrician at the substation.
(11) After the boom raising/lowering is completed, the MSHA qualified electrician at the substation will restore all the protective devices to their normal state. When this has been completed, the MSHA qualified electrician at the substation will notify the dragline that all circuits are in their normal state. At this time normal work procedures can begin.
The petitioner asserts that this proposed alternative method of the existing standard will not result in a diminution of safety to the miners affected.
Mine Safety and Health Administration (MSHA), Labor.
Notice.
Section 101(c) of the Federal Mine Safety and Health Act of 1977 and 30 CFR part 44 govern the application, processing, and disposition of petitions for modification. This
Copies of the final decisions are posted on MSHA's Web site at
Roslyn B. Fontaine, Office of Standards, Regulations, and Variances at 202-693-9475 (Voice),
Under section 101 of the Federal Mine Safety and Health Act of 1977, a mine operator may petition and the Secretary of Labor (Secretary) may modify the application of a mandatory safety standard to that mine if the Secretary determines that: (1) An alternative method exists that will guarantee no
MSHA bases the final decision on the petitioner's statements, any comments and information submitted by interested persons, and a field investigation of the conditions at the mine. In some instances, MSHA may approve a petition for modification on the condition that the mine operator complies with other requirements noted in the decision.
On the basis of the findings of MSHA's investigation, and as designee of the Secretary, MSHA has granted or partially granted the following petitions for modification:
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The National Science Board, pursuant to NSF regulations (45 CFR part 614), the National Science Foundation Act, as amended (42 U.S.C. 1862n-5), and the Government in the Sunshine Act (5 U.S.C. 552b), hereby gives notice of the scheduling of meetings for the transaction of National Science Board business, as follows:
National Science Board, NSF.
May 5, 2015 from 8:00 a.m. to 3:45 p.m. and May 6, 2015 from 8:00 a.m. to 3:00 p.m. (EDT).
These meetings will be held at the National Science Foundation, 4201 Wilson Blvd., Rooms 1235, Arlington, VA 22230. All visitors must contact the Board Office (call 703-292-7000 or send an email message to
Public meetings and public portions of meetings will be webcast. To view the meetings, go to
Please refer to the National Science Board Web site for additional information. Meeting information and schedule updates (time, place, subject matter or status of meeting) may be found at
Jennie L. Moehlmann,
Nadine Lymn,
Portions open; portions closed.
National Science Foundation.
Notice and request for comments.
The National Science Foundation (NSF) is announcing plans to request clearance of this collection. In accordance with the requirement of Section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 (Pub. L. 104-13), we are providing opportunity for public comment on this action. After obtaining and considering public comment, NSF will prepare the submission requesting that OMB approve clearance of this collection for no longer than three years.
Written comments on this notice must be received by June 29, 2015 to be assured of consideration. Comments received after that date will be considered to the extent practicable.
Suzanne Plimpton, Reports Clearance Officer, National Science Foundation, 4201 Wilson Boulevard, Suite 1265, Arlington, Virginia 22230; telephone (703) 292-7556; or send email to
The State Coordinator (SC) manages the PAEMST program within his or her state or jurisdiction. SCs recruit eligible nominees, select and assign mentors to nominees, coordinate the selection committee, and plan local recognition events within their State. They also carry out the responsibilities as noted in the “Operational Handbook for State-Level Science and Mathematics Coordinators.”
The purpose of this survey is to seek feedback from the 120 SCs regarding PAEMST management within their state or jurisdiction. The NSF, PAEMST support team will ask directed questions using the survey to gather information that may specifically address the methods and recruitment efforts that SCs use to support the attracting of
• Applicant Mentoring
• Mentor Training
• State selection Committee
• State selection Process
• Applicant and State Finalist Notification and Recognition
• In-kind contributions
The survey will evaluate the impact SCs have on attracting prospective award nominees to PAEMST. This will be conducted as a Web-based survey.
Nuclear Regulatory Commission.
Construction permit application; receipt.
The U.S. Nuclear Regulatory Commission (NRC) staff has received and is making available the first part of the application for a construction permit, submitted by Northwest Medical Isotopes, LLC (NWMI). NWMI proposes to build a medical radioisotope production facility located in Columbia, Missouri.
April 30, 2015.
Please refer to Docket ID NRC-2013-0235 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Michael Balazik, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001; telephone: 301-415-2856; email:
On November 7, 2014, NWMI filed with the NRC, pursuant to Section 103 of the Atomic Energy Act of 1954, as amended, and part 50 of Title 10 of the
An exemption from certain requirements of 10 CFR 2.101(a)(5) granted by the Commission on October 7, 2013 (ADAMS Accession No. ML13238A333), in response to a letter from NWMI dated August 9, 2013 (ADAMS Accession No. ML13227A295), allowed for NWMI to submit its construction permit application in two parts. Specifically, the exemption allowed NWMI to submit a portion of its application for a construction permit up to 6 months prior to the remainder of the application regardless of whether or not an environmental impact statement or a supplement to an environmental impact statement is prepared during the review of its application. On February 5, 2015, in accordance with 10 CFR 2.101(a)(5), NWMI submitted the following in part one of the construction permit application:
• the description and safety assessment of the site required by 10 CFR 50.34(a)(1),
• the environmental report required by 10 CFR 50.30(f),
• the filing fee information required by 10 CFR 50.30(e) and 10 CFR 170.21,
• the general information required by 10 CFR 50.33, and
• the agreement limiting access to classified information required by 10 CFR 50.37.
As stated in NWMI's February 5, 2015, letter, part two of NWMI's application for a construction permit will contain the remainder of the preliminary safety analysis report required by 10 CFR 50.34(a) and will be submitted in accordance with the requirements of 10 CFR 2.101(a)(5).
Subsequent
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft NUREG; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is issuing for public comment a draft NUREG, NUREG-2178 (EPRI 3002005578), “Refining and Characterizing Heat Release Rates from Electrical Enclosures During Fire (RACHELLE-FIRE), Volume 1: Peak Heat Release Rates and Effect of Obstructed Plume.”
Submit comments by June 15, 2015. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received 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):
• Federal Rulemaking Web site: Go to
• Mail comments to: Cindy Bladey, Office of Administration, Mail Stop: OWFN-12-H08, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001.
For additional direction on obtaining information and submitting comments, see “Obtaining Information and Submitting Comments” in the
David Stroup, Office of Nuclear Regulatory Research; telephone: 301-251-7609; email:
Please refer to Docket ID NRC-2015-0059 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:
• Federal Rulemaking Web site: Go to
• NRC's Agencywide Documents Access and Management System (ADAMS): You may obtain publicly-available documents online in the ADAMS Public Documents collection at
• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
Please include Docket ID NRC-2015-0059 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 publically 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.
The Refining and Characterizing Heat Release Rates From Electrical Enclosures During Fire (RACHELLE-FIRE) program involves a working group of experienced fire protection and fire probabilistic risk assessment researchers and practitioners focused on enhancing the methodology used to model electrical enclosure fires in nuclear power plants. This report documents the results from the working group's efforts to develop technical information in three areas: (1) Classification of electrical enclosures in terms of function, size, contents, and ventilation; (2) determination of peak heat release rate (HRR) probability distributions considering specific electrical enclosure characteristics;, and (3) development of a method to account for the impact of the enclosure on the vertical thermal zone of influence above the enclosure during fire. Electrical enclosures have been classified in groups based on their electrical function, contents, and size. Peak HRR distributions for the different classification groups have been developed. These distributions are based on the results of different experimental programs intended to measure the HRR associated with fires in electrical enclosures. In order to provide a comprehensive characterization of electrical enclosure fires, the working group evaluated the temperature characteristics of fire plumes associated with these events using the Fire Dynamics Simulator program. Computer simulations of various enclosure configurations were developed for evaluating the fire burning inside electrical enclosures and the fire plume temperature characteristics that would be generated. Based on this research, new fire plume temperature profiles reflecting the obstructed nature of fire plumes generated from fires inside electrical enclosures are provided. Finally, examples, consolidating the information described in this report, are provided to illustrate how to incorporate the information documented in this report into existing approaches for modeling fires in electrical enclosures.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Draft environmental assessment and finding of no significant impact; request for comment.
The U.S. Nuclear Regulatory Commission (NRC) is considering issuance of exemptions in response to a request from Entergy Nuclear Operations, Inc. (Entergy or the licensee) that would permit the licensee to reduce its emergency planning (EP) activities at the Vermont Yankee Nuclear Power Station (VY). The licensee is seeking exemptions that would eliminate the requirements for the licensee to maintain offsite radiological emergency plans and reduce some of the onsite EP activities based on the reduced risks at VY, which is permanently shutdown and defueled. However, requirements for certain onsite capabilities to communicate and coordinate with offsite response authorities would be retained. In addition, offsite EP provisions would still exist through State and local government use of a comprehensive emergency management plan process in accordance with the Federal Emergency Management Agency's (FEMA's) Comprehensive Preparedness Guide (CPG) 101, “Developing and Maintaining Emergency Operations Plans.” The NRC staff is issuing, for public comment, this draft environmental assessment (EA) and finding of no significant impact (FONSI) associated with the proposed exemptions.
Submit comments by June 1, 2015. Comments received after this date will be considered if it is practical to do so, but the Commission is able to ensure consideration only for comments received 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
James Kim, Office of Nuclear Reactor Regulation, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-4125; email:
Please refer to Docket ID NRC-2015-0111 when contacting the NRC about the availability of information regarding this this draft EA and FONSI. You may obtain publicly-available information related to this this draft EA and FONSI using any of the following methods:
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• NRC's PDR: You may examine and purchase copies of public documents at the NRC's PDR, Room O1-F21, One White Flint North, 11555 Rockville Pike, Rockville, Maryland 20852.
Please include Docket ID NRC-2015-0111 in 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.
VY is a permanently shutdown and defueled nuclear power plant that is in the process of decommissioning. VY is located in Windham County, Vermont, 5 miles south of Brattleboro, Vermont. Entergy is the holder of the Renewed Facility Operating License No. DPR-28 for VY. VY has been shut down since December 29, 2014, and the final removal of fuel from the VY reactor vessel was completed on January 12, 2015. By letter dated January 12, 2015, Entergy submitted to the NRC a certification of the permanent cessation of power operations at VY and the permanent removal of fuel from the VY reactor vessel. As a permanently shutdown and defueled facility, and pursuant to section 50.82(a)(2) of Title 10 of the
The licensee has requested exemptions for VY from certain EP requirements in 10 CFR part 50, “Domestic Licensing of Production and Utilization Facilities.” The NRC regulations concerning EP do not recognize the reduced risks after a reactor is permanently shut down and defueled. As such, a permanently shutdown and defueled reactor, such as VY, must continue to maintain the same EP requirements as an operating power reactor under the existing regulatory requirements. To establish a level of EP commensurate with the reduced risks of a permanently shutdown and defueled reactor, Entergy requires exemptions from certain EP regulatory requirements before it can change its emergency plans.
The NRC is considering issuing to Entergy exemptions from portions of 10 CFR 50.47, “Emergency plans,” and 10 CFR part 50, appendix E, “Emergency Planning and Preparedness for Production and Utilization Facilities,” which would eliminate the requirements for Entergy to maintain offsite radiological emergency plans and reduce some of the onsite EP activities based on the reduced risks at VY, due to its permanently shutdown and defueled status. Based on the decision of the United States Court of Appeals for the Second Circuit in
The proposed action would exempt Entergy from meeting certain requirements set forth in 10 CFR 50.47 and appendix E to 10 CFR part 50. More specifically, Entergy requested exemptions from: (1) Certain requirements in 10 CFR 50.47(b) regarding onsite and offsite emergency response plans for nuclear power reactors; (2) certain requirements in 10 CFR 50.47(c)(2) to establish plume exposure and ingestion pathway EP zones for nuclear power reactors; and (3) certain requirements in 10 CFR part 50, appendix E, section IV, which establishes the elements that make up the content of emergency plans. The proposed action of granting these exemptions would eliminate the requirements for Entergy to maintain offsite radiological emergency plans and reduce some of the onsite EP activities at VY, based on the reduced risks at the permanently shutdown and defueled reactor. However, requirements for certain onsite capabilities to communicate and coordinate with offsite response authorities would be retained. Additionally, if necessary, offsite protective actions could still be implemented using a comprehensive emergency management plan (CEMP) process. A CEMP in this context, also referred to as an emergency operations plan (EOP), is addressed in Federal Emergency Management Agency's (FEMA's) Comprehensive Preparedness Guide (CPG) 101. The CPG 101 is the foundation for State, territorial, tribal, and local EP in the United States. It promotes a common understanding of the fundamentals of risk-informed planning and decision making, and helps planners at all levels of government in their efforts to develop and maintain viable, all-hazards, all-threats emergency plans. An EOP is flexible enough for use in all emergencies. It describes how people and property will be protected; details who is responsible for carrying out specific actions; identifies the personnel, equipment, facilities, supplies, and other resources available; and outlines how all actions will be coordinated. A CEMP is often referred to as a synonym for “all-hazards” planning.
The proposed action is in accordance with the licensee's application dated March 14, 2014, as supplemented by letters dated August 29, 2014, and October 21, 2014. In its letters dated August 29, 2014, and October 21, 2014, Entergy provided responses to the NRC staff's requests for additional information concerning the proposed exemptions.
The proposed action is needed for Entergy to revise the VY emergency plan to reflect the permanently shutdown and defueled status of the facility. The EP requirements currently applicable to VY are for an operating power reactor. There are no explicit regulatory provisions distinguishing EP requirements for a power reactor that has been permanently shut down from those for an operating power reactor. Therefore, since the 10 CFR part 50 license for VY no longer authorizes operation of the reactor or emplacement or retention of fuel into the reactor vessel, as specified in 10 CFR 50.82(a)(2), the occurrence of postulated accidents associated with reactor operation is no longer credible.
In its exemption request, the licensee identified four possible radiological accidents at VY in its permanently shutdown and defueled condition. These are: (1) A fuel-handling accident; (2) a radioactive waste-handling accident; (3) a loss of SFP normal cooling (
Based on these analyses, the licensee states that complete application of the EP rule to VY, in its particular circumstances as a permanently shutdown and defueled reactor would not serve the underlying purpose of the rule or is not necessary to achieve the underlying purpose of the rule. Entergy also states that it would incur undue costs in the application of operating plant EP requirements for the maintenance of an emergency response organization in excess of that actually needed to respond to the diminished scope of credible accidents for a permanently shutdown and defueled reactor.
The NRC staff concluded that the exemptions, if granted, would not significantly increase the probability or consequences of accidents at VY in its permanently shutdown and defueled condition. There would be no significant change in the types of any effluents that may be released offsite. There would be no significant increase in the amounts of any effluents that may be released offsite. There would be no significant increase in individual or cumulative occupational or public radiation exposure. Therefore, there are no significant radiological environmental impacts associated with the proposed action.
With regard to potential non-radiological impacts, the proposed action does not have any foreseeable impacts to land, air, or water resources, including impacts to biota. In addition,
Accordingly, the NRC concludes that there are no significant environmental impacts associated with the proposed action.
As an alternative to the proposed action, the NRC staff considered the denial of the proposed action (
The proposed action does not involve the use of any different resources than those previously considered in the Final Environmental Statement for VY, dated July 1972, as supplemented by NUREG-1437, Supplement 30, “Generic Environmental Impact Statement for License Renewal of Nuclear Plants: Regarding Vermont Yankee Nuclear Power Station,” Volumes 1 and 2, published in August 2007.
The NRC staff did not enter into consultation with any other Federal agency or with the State of Vermont regarding the environmental impact of the proposed action. On April 24, 2015, the Vermont State representative was notified of this draft EA and FONSI.
The licensee has proposed exemptions from: (1) Certain requirements in 10 CFR 50.47(b) regarding onsite and offsite emergency response plans for nuclear power reactors; (2) certain requirements in 10 CFR 50.47(c)(2) to establish plume exposure and ingestion pathway EP zones for nuclear power reactors; and (3) certain requirements in 10 CFR part 50, appendix E, section IV, which establishes the elements that make up the content of emergency plans. The proposed action of granting these exemptions would eliminate the requirements for the licensee to maintain offsite radiological emergency plans and reduce some of the onsite EP activities at VY, based on the reduced risks at the permanently shutdown and defueled reactor. However, requirements for certain onsite capabilities to communicate and coordinate with offsite response authorities will be retained and offsite EP provisions will still exist through State and local government use of a CEMP.
Consistent with 10 CFR 51.21, the NRC conducted the EA for the proposed action included in Section III of this document, and incorporated by reference in this finding. On the basis of this EA, the NRC concludes that the proposed action will not have a significant effect on the quality of the human environment. Accordingly, the NRC has decided not to prepare an environmental impact statement for the proposed action.
The documents identified in the following table are available to interested persons through one or more of the following methods, as indicated.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
Regulatory guide; withdrawal.
The U.S. Nuclear Regulatory Commission (NRC) is withdrawing regulatory guide (RG), RG 1.1 “Net Positive Suction Head for Emergency Core Cooling and Containment Heat Removal System Pumps.” The guide is being withdrawn because the same guidance is provided with more detail by RG 1.82, “Water Sources for Long-Term Recirculation Cooling Following a Loss-of-Coolant Accident.”
Effective April 30, 2015, the NRC withdraws RG 1.1.
Please refer to Docket ID NRC-2015-0107 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Ahsan Sallman, Office of Nuclear Reactor Regulation, telephone: 310-415-2380 email:
The NRC is withdrawing RG 1.1 because its guidance has been incorporated into RG 1.82, “Water Sources for Long-Term Recirculation Cooling Following a Loss-of-Coolant Accident.”
The withdrawal of RG 1.1 does not alter any prior or existing licensing commitments based on its use. Although a regulatory guide is withdrawn, its use in existing licenses is still valid, and changes to the licenses can be accomplished using other regulatory products. Withdrawal of an RG means that the guide no longer provides useful information or has been superseded by other guidance, technological innovations, congressional actions, or other events. A withdrawn guide should not be used for future NRC licensing activities.
This RG 1.1 provides guidance on meeting the requirements in part 50, appendix A of Title 10 of the
The guidance from RG 1.1 pertaining to suction pressure and net positive suction head has been incorporated into RG 1.82, “Water Sources for Long-Term Recirculation Cooling Following a Loss-of-Coolant Accident,” which includes detailed guidance related to emergency cooling systems. The RG 1.1 is superseded by RG 1.82.
For the Nuclear Regulatory Commission.
Nuclear Regulatory Commission.
License amendment application; opportunity to request a hearing and to petition for leave to intervene.
The U.S. Nuclear Regulatory Commission (NRC) has received an application from United Nuclear Corporation for an amendment of Materials License No. SUA-1475. The amendment would change License Condition 30.A by adding two new monitoring wells that are already in service, and License Condition 30.C by removing requirements for work that has been completed. These changes are administrative in nature.
A request for a hearing or petition for leave to intervene must be filed by June 29, 2015.
Please refer to Docket ID NRC-2013-0036 when contacting the NRC about the availability of information regarding this document. You may obtain publicly-available information related to this document using any of the following methods:
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Thomas McLaughlin, Office of Nuclear Material Safety and Safeguards, U.S. Nuclear Regulatory Commission, Washington DC 20555-0001; telephone: 301-415-5869, email:
The NRC has received, by letter dated January 22, 2015 (ADAMS Accession No. ML15033A453), an application from United Nuclear Corporation to amend Materials License No. SUA-1475. The
Within 60 days after the date of publication of this notice, any person(s) whose interest may be affected by this action may file a request for a hearing and a petition to intervene with respect to issuance of the amendment to the subject facility operating license or combined license. Requests for a hearing and a petition for leave to intervene shall be filed in accordance with the Commission's “Agency Rules of Practice and Procedure” in 10 CFR part 2. Interested person(s) should consult a current copy of 10 CFR 2.309, which is available at the NRC's PDR, located in One White Flint North, Room O1-F21 (first floor), 11555 Rockville Pike, Rockville, Maryland 20852. The NRC's regulations are accessible electronically from the NRC Library on the NRC's Web site at
As required by 10 CFR 2.309, a petition for leave to intervene shall set forth, with particularity, the interest of the petitioner in the proceeding and how that interest may be affected by the results of the proceeding. The petition should specifically explain the reasons why intervention should be permitted, with particular reference to the following general requirements: (1) The name, address, and telephone number of the requestor or petitioner; (2) the nature of the requestor's/petitioner's right under the Act to be made a party to the proceeding; (3) the nature and extent of the requestor's/petitioner's property, financial, or other interest in the proceeding; and (4) the possible effect of any decision or order which may be entered in the proceeding on the requestor's/petitioner's interest. The petition must also set forth the specific contentions which the requestor/petitioner seeks to have litigated at the proceeding.
Each contention must consist of a specific statement of the issue of law or fact to be raised or controverted. In addition, the requestor/petitioner shall provide a brief explanation of the bases for the contention and a concise statement of the alleged facts or expert opinion that support the contention and on which the requestor/petitioner intends to rely in proving the contention at the hearing. The requestor/petitioner must also provide references to those specific sources and documents of which the petitioner is aware and on which the requestor/petitioner intends to rely to establish those facts or expert opinion. The petition must include sufficient information to show that a genuine dispute exists with the applicant on a material issue of law or fact. Contentions shall be limited to matters within the scope of the amendment under consideration. The contention must be one which, if proven, would entitle the requestor/petitioner to relief. A requestor/petitioner who fails to satisfy these requirements with respect to at least one contention will not be permitted to participate as a party.
Those permitted to intervene become parties to the proceeding, subject to any limitations in the order granting leave to intervene, and have the opportunity to participate fully in the conduct of the hearing with respect to resolution of that person's admitted contentions, including the opportunity to present evidence and to submit a cross-examination plan for cross-examination of witnesses, consistent with NRC regulations, policies, and procedures. The Atomic Safety and Licensing Board will set the time and place for any prehearing conferences and evidentiary hearings, and the appropriate notices will be provided.
Petitions for leave to intervene must be filed no later than 60 days from the date of publication of this notice. Requests for hearing, petitions for leave to intervene, and motions for leave to file new or amended contentions that are filed after the 60-day deadline will not be entertained absent a determination by the presiding officer that the filing demonstrates good cause by satisfying the three factors in 10 CFR 2.309(c)(1)(i)-(iii).
A State, local governmental body, Federally-recognized Indian tribe, or agency thereof, may submit a petition to the Commission to participate as a party under 10 CFR 2.309(h)(1). The petition should state the nature and extent of the petitioner's interest in the proceeding. The petition should be submitted to the Commission by June 29, 2015. The petition must be filed in accordance with the filing instructions in the “Electronic Submissions (E-Filing)” section of this document, and should meet the requirements for petitions for leave to intervene set forth in this section, except that under § 2.309(h)(2) a State, local governmental body, or Federally-recognized Indian tribe, or agency thereof does not need to address the standing requirements in 10 CFR 2.309(d) if the facility is located within its boundaries. A State, local governmental body, Federally-recognized Indian tribe, or agency thereof may also have the opportunity to participate under 10 CFR 2.315(c).
If a hearing is granted, any person who does not wish, or is not qualified, to become a party to the proceeding may, in the discretion of the presiding officer, be permitted to make a limited appearance pursuant to the provisions of 10 CFR 2.315(a). A person making a limited appearance may make an oral or written statement of position on the issues, but may not otherwise participate in the proceeding. A limited appearance may be made at any session of the hearing or at any prehearing conference, subject to the limits and conditions as may be imposed by the presiding officer. Persons desiring to make a limited appearance are requested to inform the Secretary of the Commission by June 29, 2015.
All documents filed in NRC adjudicatory proceedings, including a request for hearing, a petition for leave to intervene, any motion or other document filed in the proceeding prior to the submission of a request for hearing or petition to intervene, and documents filed by interested governmental entities participating under 10 CFR 2.315(c), must be filed in accordance with the NRC's E-Filing rule (72 FR 49139; August 28, 2007). The E-Filing process requires participants to submit and serve all adjudicatory documents over the internet, or in some cases to mail copies on electronic storage media. Participants may not submit paper copies of their filings unless they seek an exemption in
To comply with the procedural requirements of E-Filing, at least ten 10 days prior to the filing deadline, the participant should contact the Office of the Secretary by email at
Information about applying for a digital ID certificate is available on the NRC's public Web site at
If a participant is electronically submitting a document to the NRC in accordance with the E-Filing rule, the participant must file the document using the NRC's online, Web-based submission form. In order to serve documents through the Electronic Information Exchange System, users will be required to install a Web browser plug-in from the NRC's Web site. Further information on the Web-based submission form, including the installation of the Web browser plug-in, is available on the NRC's public Web site at
Once a participant has obtained a digital ID certificate and a docket has been created, the participant can then submit a request for hearing or petition for leave to intervene. Submissions should be in Portable Document Format (PDF) in accordance with NRC guidance available on the NRC's public Web site at
A person filing electronically using the NRC's adjudicatory E-Filing system may seek assistance by contacting the NRC Meta System Help Desk through the “Contact Us” link located on the NRC's public Web site at
Participants who believe that they have a good cause for not submitting documents electronically must file an exemption request, in accordance with 10 CFR 2.302(g), with their initial paper filing requesting authorization to continue to submit documents in paper format. Such filings must be submitted by: (1) First class mail addressed to the Office of the Secretary of the Commission, U.S. Nuclear Regulatory Commission, Washington, DC 20555-0001, Attention: Rulemaking and Adjudications Staff; or (2) courier, express mail, or expedited delivery service to the Office of the Secretary, Sixteenth Floor, One White Flint North, 11555 Rockville Pike, Rockville, Maryland, 20852, Attention: Rulemaking and Adjudications Staff. Participants filing a document in this manner are responsible for serving the document on all other participants. Filing is considered complete by first-class mail as of the time of deposit in the mail, or by courier, express mail, or expedited delivery service upon depositing the document with the provider of the service. A presiding officer, having granted an exemption request from using E-Filing, may require a participant or party to use E-Filing if the presiding officer subsequently determines that the reason for granting the exemption from use of E-Filing no longer exists.
Documents submitted in adjudicatory proceedings will appear in the NRC's electronic hearing docket which is available to the public at
For the Nuclear Regulatory Commission.
Notice for public comment.
The National Science and Technology Council; Committee on Environment, Natural Resources, and Sustainability; Subcommittee on Disaster Reduction requests public comments on the draft 2015 National Space Weather Strategy:
Responses must be received by May 29, 2015 to be considered.
You may submit comments by any of the following methods:
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William Murtagh, 202-456-4444,
Space weather refers to the dynamic conditions of the space environment that arise from interactions with emissions from the sun, including solar flares, solar energetic particles, and coronal mass ejections. These emissions can affect Earth and its surrounding space, potentially causing disruption to electric power transmission; satellite, aircraft, and spacecraft operations; telecommunications; position, navigation, timing services; and other technology and infrastructure. Given the growing importance and reliance of the Nation on these services and infrastructures, it is critical that the Nation prepare for the effects of space weather events.
In November 2014, the Space Weather Operations, Research, and Mitigation (SWORM) Task Force was established by the National Science and Technology Council (NSTC); Committee on Environment, Natural Resources, and Sustainability; Subcommittee on Disaster Reduction (SDR). The SWORM Charter directed the Task Force to develop a National Space Weather Strategy (NSWS) that will articulate high-level strategic goals for enhancing National preparedness to space weather events. This notice solicits public input to inform the development of this strategy.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),
The Exchange proposes to amend Exchange Rule 515.
The text of the proposed rule change is available on 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 aspects of such statements.
The Exchange has identified several additional enhancements to the functionality of two order types—Customer Cross Order
Rule 515(h)(1) provides that Customer Cross Orders are automatically executed upon entry provided that the execution (i) is at or between the best bid and offer on the Exchange; (ii) is not at the same price as a Priority Customer Order on the Exchange's Book; and (iii) will not trade at a price inferior to the NBBO. Customer Cross Orders will be automatically canceled if they cannot be executed. Customer Cross Orders may only be entered in the minimum trading increments applicable to the options class under Rule 510.
Although neither the Customer Cross Order nor the Qualified Contingent Cross Order may be executed at a price inferior to the NBBO, the Exchange notes that there are situations at the
The Exchange proposes to amend Rule 515(h)(1) and Rule 515(h)(2) to provide that the Customer Cross Order and Qualified Contingent Cross Order will be rejected if there is a timer or price improvement auction in progress when either of these orders are received. Specifically, the Exchange proposes to amend Rule 515(h)(1) to provide that if trading interest exists on the MIAX Book that is subject to the liquidity refresh pause or managed interest process pursuant to Rule 515(c), or a route timer pursuant to Rule 529 when the Exchange receives a Customer Cross Order, the System will reject the Customer Cross Order. If trading interest exists that is subject to a PRIME Auction or PRIME Solicitation Auction pursuant to Rule 515A when the Exchange receives a Customer Cross Order, the System will reject the Customer Cross Order. In addition, the Exchange proposes to amend Rule 515(h)(2) to provide that if trading interest exists on the MIAX Book that is subject to the liquidity refresh pause or managed interest process pursuant to Rule 515(c), or a route timer pursuant to Rule 529 when the Exchange receives a Qualified Contingent Cross Order, the System will reject the Qualified Contingent Cross Order. If trading interest exists that is subject to a PRIME Auction or PRIME Solicitation Auction pursuant to Rule 515A when the Exchange receives a Qualified Contingent Cross Order, the System will reject the Qualified Contingent Cross Order. The Exchange notes that the Exchange proposes no changes to the Customer Cross Order and the Qualified Contingent Cross Order order types themselves; both order types will continue to be subject to the same requirements as before.
The Exchange proposes to make these enhancements to ensure that both the Customer Cross Order and the Qualified Contingent Cross Order will work seamlessly with the Exchange's timers and auctions in a manner that would ensure a fair and orderly market by maintaining priority of orders and quotes that initiated a timer or auction prior to the receipt of a Customer Cross Order or Qualified Contingent Cross Order on the Exchange. The Exchange believes that by using such additional reasons for rejecting these two order types during a timer or auction will improve the interaction between the timers and auctions and the Exchange's Book and the national market system. Without such proposed changes, the Exchange believes that the deployment of the Customer Cross Order and Qualified Contingent Cross Order functionality would reduce the benefits of its timer and auction functionality that currently provides market participants with opportunities to obtain additional price improvement for their orders or access additional liquidity to trade against the order on the Exchange. While rejecting Customer Cross Orders and Qualified Contingent Cross Orders received during timers and auctions may cause a disruption to market participants sending such orders in such situations, the Exchange believes the benefits to market participants participating in timers and auctions and to the national market system, as a whole, outweigh the temporary opportunity costs of a Customer Cross Orders and Qualified Contingent Cross Orders rejection. The Exchange notes Customer Cross Orders and Qualified Contingent Cross Orders are readily available on other competing exchanges;
The Exchange notes that the proposed changes detailed above will likely result in fewer executions of Customer Cross Orders and Qualified Contingent Cross Orders on the Exchange. However, the Exchange notes that rejecting these orders may likely result in better opportunities for market participants with orders subject to timers and auctions for price improvement on the Exchange as more liquidity may be available to trade against trading interest in the timers and auctions. The Exchange believes that the proposed changes will reduce the potential of confusion and perceived disruption to market participants when a Customer Cross Order or Qualified Contingent Cross Order arrives during a timer or auction, potentially executing at a better price than their trading interest that subject to the timer or auction. The Exchange believes that the benefits to market participants (including those participating in timers/auctions and outside of timers/auctions) as a result of the new proposed enhancements to make both the Customer Cross Order and Qualified Contingent Cross Order more integrated with the Exchange's Book and the national market system, exceed any potential loss of opportunity for executions caused by the proposed changes.
MIAX believes that its proposed rule change is consistent with section 6(b) of the Act
The proposal to reject the Customer Cross Order and Qualified Contingent Cross Order if there is a timer or price improvement auction at the time of receipt of these order types is designed to facilitate transactions, to remove impediments to and perfect the mechanism of a free and open market to the benefit of market participants by promoting the use of timer and auction functionality on the Exchange which provide market participants with opportunities to obtain additional price improvement for their orders or access additional liquidity to trade against the orders. The proposed enhancements to the Rules are designed to further ensure that the Customer Cross Order and Qualified Contingent Cross Order types will work seamlessly with the auctions and timers on the Exchange in a manner that would ensure a fair and orderly market by maintaining priority of orders and quotes subject to timers and auctions on the Exchange.
The Exchange believes that the proposed changes to its Rules will provide clear notice to market participants that their Customer Cross Orders and Qualified Contingent Cross Orders may be rejected during auctions and timers in a manner that is designed to promote just and equitable principles of trade, to foster cooperation and coordination with persons engaged in facilitating transactions in securities, to remove impediments to and perfect the mechanisms of a free and open market and a national market system.
The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The proposed enhancements to reject Customer Cross Orders and Qualified Contingent Cross Orders during timers and price improvement auctions are designed to increase competition for order flow on the Exchange by promoting the use of timer and auction functionality on the Exchange which provide market participants with opportunities to obtain additional price improvement for their orders or access additional liquidity to trade against the orders in a manner intended to be beneficial to investors seeking to effect option orders with an opportunity to access additional liquidity and receive price improvement. The Exchange notes that it operates in a highly competitive market in which market participants can readily direct order flow to competing venues who offer similar functionality. The Exchange believes that the proposed changes to the order types are pro-competitive by providing market participants with functionality that would ensure a fair and orderly market by maintaining priority of orders and quotes that initiated a timer or auction prior to the receipt of a Customer Cross Order or Qualified Contingent Cross Order on the Exchange.
Written comments were neither solicited nor received.
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 Brent J. Fields, 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) of the Securities Exchange Act of 1934 (the “Act”),
The ISE proposes to amend the Schedule of Fees as described in more detail below. The text of the proposed rule change is available on the Exchange's Web site (
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 these statements may be examined at the places specified in Item IV below. The self-regulatory organization has prepared summaries, set forth in sections A, B and C below, of the most significant aspects of such statements.
The purpose of the proposed rule change is to amend the Schedule of Fees as described in more detail below.
The Exchange charges a taker fee for regular orders in Select Symbols
The Exchange also charges Market Makers a maker/taker fee and a fee for Crossing Orders
The Exchange also charges a maker/taker fee for regular orders in Non-Select Symbols as well as regular and complex orders in FX Option Symbols that is $0.30 per contract for Firm Proprietary/Broker-Dealer, and Professional Customer orders, and $0.45 per contract for Non-ISE Market Maker orders. The Exchange now proposes to increase fees for each of these market participants to $0.50 per contract.
The Exchange charges a maker fee for complex orders in Non-Select Symbols that is $0.10 per contract for Market Maker, Firm Proprietary/Broker-Dealer, and Professional Customer orders, and $0.20 per contract for Non-ISE Market Maker orders, in each case when trading against other non-Priority Customer orders. The Exchange now proposes to increase this maker fee to $0.20 per contract for Market Maker, Firm Proprietary/Broker-Dealer, and Professional Customer orders, in line with the current fees charged for Non-ISE Market Maker orders.
The Exchange also charges a uniform maker fee of $0.43 per contract for non-Priority Customer orders that trade against Priority Customer orders in Complex Quoting Symbols,
The Exchange charges all market participants a fee for responses to Crossing Orders that is $0.45 per contract for regular and complex orders in Select Symbols and FX Option Symbols,
The Exchange believes that the proposed rule change is consistent with the provisions of Section 6 of the Act,
The Exchange believes that it is reasonable and equitable to increase Market Maker fees (including applicable Market Maker Discount Tiers) as the proposed fees are designed to continue to be attractive to Market Makers that trade on ISE, and are within the range of fees charged by other options exchanges. Furthermore, the Exchange notes that while it is increasing Market Maker fees, Market Makers will continue to be charged fees that are generally lower than the fees applicable to other market participants, except for Priority Customers. The Exchange does not believe that it is unfairly discriminatory to provide lower fees to Market Maker orders as Market Makers are subject to additional requirements and obligations (such as quoting requirements) that other market participants are not.
The Exchange believes that it is reasonable and equitable to increase the fees charged to Firm Proprietary/Broker-Dealer, Non-ISE Market Maker, and Professional Customer orders as the proposed fees are designed to be attractive to market participants that choose to bring order flow to the ISE, and remain well within the range of fees charged by some of the Exchange's competitors. Furthermore, the Exchange does not believe that the proposed fees are unfairly discriminatory as the fees would apply to equally to Non-ISE Market Maker, Firm Proprietary/Broker-Dealer, and Professional Customer orders. In connection with this proposed change, the Exchange notes that fees charged to Market Maker orders are also increasing (see above) but will remain lower than the fees described here for Firm Proprietary/Broker-Dealer, Non-ISE Market Maker, and Professional Customer orders. The Exchange does not believe that this is unfairly discriminatory for the reasons already discussed.
The Exchange believes that the proposed change to increase complex order maker fees is reasonable and equitable as the proposed fees are set at levels that the Exchange believes will continue be attractive to market participants that provide liquidity in complex orders, and are within the range of fees charged by other options exchanges. Moreover, with the proposed change, Market Maker, Firm Proprietary/Broker-Dealer, and Professional Customer complex orders in Non-Select Symbols will now be charged the same maker fee as is currently applicable to Non-ISE Market Maker complex orders. As the proposed fees will be applied equally to all market participants that trade complex orders in these symbols, the Exchange further believes that this proposed change is not unfairly discriminatory. In addition, the Exchange believes that it is reasonable, equitable, and not unfairly discriminatory to eliminate special fees for Complex Quoting Symbols, as the Exchange believes that these fee discounts are no longer needed to attract liquidity in these symbols. Furthermore, the Exchange believes that it is not unfairly discriminatory to eliminate this distinction for Complex Quoting Symbols, as members will now be charged the standard maker fee for all complex orders in Select Symbols, including the Complex Quoting Symbols.
The Exchange believes that the proposed fees for responses to Crossing Orders, which are being increased slightly, are appropriate to attract price improvement for Crossing Orders submitted to ISE, and therefore qualify as reasonable and equitable. In this regard, the Exchange notes that other options exchanges charge various fees for responses to Crossing Orders, and the fees proposed here are within the range of fees charged by these competitor markets. Additionally, the Exchange believes that the proposed response fees are not unfairly discriminatory as the Exchange will continue to charge a uniform response fee that is applicable to all market participants that respond to Crossing Orders in affected symbols. As is the case today, responses to Crossing Orders will be charged a higher fee than contra-side orders submitted as part of a crossing transaction. The Exchange continues to believe that this is reasonable, equitable, and not unfairly discriminatory as contra-side orders guarantee the agency order, and are subject to market risk during the time period that the agency order is exposed to other market participants for potential price improvement. Finally, the Exchange notes that it will continue to charge a higher fee for responses to complex Crossing Orders in Non-Select symbols, which reflects the higher fees and rebates generally applicable to complex orders in these symbols.
In accordance with Section 6(b)(8) of the Act,
The Exchange has not solicited, and does not intend to solicit, comments on this proposed rule change. The Exchange has not received any unsolicited written comments from members or other interested parties.
The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Act
At any time within 60 days of the filing of such 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. If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule should be approved or disapproved.
Interested persons are invited to submit written data, views and arguments concerning the foregoing, including whether the proposal 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.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
Pursuant to section 19(b)(1) of the Securities Exchange Act of 1934 (“Act”)
FINRA is proposing to delay the implementation date of amendments to the trade reporting rules relating to the Alternative Display Facility (“ADF”) and the Trade Reporting Facilities (“TRFs”) approved pursuant to SR-FINRA-2013-050. The proposed rule change would not make any changes to FINRA rules.
The text of the proposed rule change is available on FINRA's Web site at
In its filing with the Commission, FINRA 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
On November 12, 2013, FINRA filed proposed rule change SR-FINRA-2013-050 to On November 12, 2013, FINRA filed proposed rule change SR-FINRA-2013-050, which among other things, proposed to amend FINRA rules governing the reporting of over-the-counter (“OTC”) transactions in NMS stocks to the ADF and TRFs. The proposed rule change was approved by the Commission on February 27, 2014.
Pursuant to proposed rule change SR-FINRA-2014-039,
Firms have requested additional time to make the systems changes necessary to comply with the new reporting requirements, and in particular, have indicated they need additional time to test the systems changes.
Some firms also have requested that they be permitted to report in accordance with the amendments to the ADF and TRF rules prior to the implementation date. The TRFs and the ADF are unable to make the necessary systems changes available in production prior to July 13, 2015 to accommodate voluntary reporting in accordance with the new reporting requirements by some firms, while other firms continue to report under the current reporting requirements. Therefore, all firms must begin reporting in accordance with the amendments on July 13, 2015. As noted above, however, firms will have ample opportunity to test their systems changes and new reporting processes prior to July 13, 2015.
FINRA has filed the proposed rule change for immediate effectiveness and has requested that the Commission waive the requirement that the proposed rule change not become operative for 30 days after the date of the filing. The operative date will be the date of filing of the proposed rule change.
FINRA believes that the proposed rule change is consistent with the provisions of section 15A(b)(6) of the Act,
FINRA 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. FINRA believes that providing adequate time
A copy of the request for a delay from FIF is attached to the filing submitted by the Exchange but not attached to the published notice of this filing. In response to FIF's request, as discussed above, FINRA is proposing to delay implementation of the amendments to the ADF and TRF rules approved under SR-FINRA-2013-050 to July 13, 2015. FINRA believes that the revised implementation date will provide members additional time to make the necessary system changes while balancing the need to implement the amendments without undue delay.
Because the foregoing proposed rule change does not: (i) Significantly affect the protection of investors or the public interest; (ii) impose any significant burden on competition; and (iii) become operative for 30 days from the date on which it was filed, or such shorter time as the Commission may designate, it has become effective pursuant to section 19(b)(3)(A) of the Act
A proposed rule change filed under Rule 19b-4(f)(6) normally does not become operative for 30 days after the date of filing.
The Commission believes that the waiver of the 30-day operative delay is consistent with the protection of investors and the public interest as it will allow FINRA to extend the implementation dates of certain changes approved pursuant to SR-FINRA-2013-050 in a timely manner. Therefore, the Commission designates the proposal operative upon filing.
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: (i) Necessary or appropriate in the public interest; (ii) for the protection of investors; or (iii) 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.
For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.
It appears to the Securities and Exchange Commission that there is a lack of current and accurate information concerning the securities of Jet Neko, Inc. (CIK No. 1541371), a void Delaware corporation with its principal place of business listed as Miyazaki, Japan with stock quoted on OTC Link (previously, “Pink Sheets”) operated by OTC Markets Group, Inc. (“OTC Link”) under the ticker symbol NEKO, because it has not filed any periodic reports since it filed a Form 10 registration statement on February 9, 2012. On February 5, 2015, a delinquency letter was sent by the Division of Corporation Finance to Jet Neko, Inc. requesting compliance with their periodic filing obligations, but Jet Neko, Inc. did not receive the delinquency letter due to its failure to maintain a valid address on file with the Commission as required by Commission rules (Rule 301 of Regulation S-T, 17 CFR 232.301 and Section 5.4 of EDGAR Filer Manual).
The Commission is of the opinion that the public interest and the protection of investors require a suspension of trading in the securities of Jet Neko, Inc.
Therefore, it is ordered, pursuant to Section 12(k) of the Securities Exchange Act of 1934, that trading in the
By the Commission.
The Sarbanes-Oxley Act of 2002 (the “Act”) provides that the Securities and Exchange Commission (the “Commission”) may recognize, as generally accepted for purposes of the securities laws, any accounting principles established by a standard setting body that meets certain criteria. Consequently, Section 109 of the Act provides that all of the budget of such a standard setting body shall be payable from an annual accounting support fee assessed and collected against each issuer, as may be necessary or appropriate to pay for the budget and provide for the expenses of the standard setting body, and to provide for an independent, stable source of funding, subject to review by the Commission. Under Section 109(f) of the Act, the amount of fees collected for a fiscal year shall not exceed the “recoverable budget expenses” of the standard setting body. Section 109(h) amends Section 13(b)(2) of the Securities Exchange Act of 1934 to require issuers to pay the allocable share of a reasonable annual accounting support fee or fees, determined in accordance with Section 109 of the Act.
On April 25, 2003, the Commission issued a policy statement concluding that the Financial Accounting Standards Board (“FASB”) and its parent organization, the Financial Accounting Foundation (“FAF”), satisfied the criteria for an accounting standard-setting body under the Act, and recognizing the FASB's financial accounting and reporting standards as “generally accepted” under Section 108 of the Act.
Section 109 of the Act also provides that the standard setting body can have additional sources of revenue for its activities, such as earnings from sales of publications, provided that each additional source of revenue shall not jeopardize, in the judgment of the Commission, the actual or perceived independence of the standard setter. In this regard, the Commission also considered the interrelation of the operating budgets of the FAF, the FASB, and the Governmental Accounting Standards Board (“GASB”), the FASB's sister organization, which sets accounting standards used by state and local government entities. The Commission has been advised by the FAF that neither the FAF, the FASB, nor the GASB accept contributions from the accounting profession.
The Commission understands that the Office of Management and Budget (“OMB”) has determined the FASB's spending of the 2015 accounting support fee is sequestrable under the Budget Control Act of 2011.
After its review, the Commission determined that the 2015 annual accounting support fee for the FASB is consistent with Section 109 of the Act. Accordingly,
By the Commission.
The following is a notice of applications for deregistration under section 8(f) of the Investment Company Act of 1940 for the month of April 2015. A copy of each 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
The Commission: Brent J. Fields, Secretary, U.S. Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.
Diane L. Titus at (202) 551-6810, SEC, Division of Investment Management, Chief Counsel's Office, 100 F Street NE., Washington, DC 20549-8010.
For the Commission, by the Division of Investment Management, pursuant to delegated authority.
The Social Security Administration (SSA) publishes a list of information collection packages requiring clearance by the Office of Management and Budget (OMB) in compliance with Public Law 104-13, the Paperwork Reduction Act of 1995, effective October 1, 1995. This notice includes revisions and an extension of OMB-approved information collections, and one new information collection.
SSA is soliciting comments on the accuracy of the agency's burden estimate; the need for the information; its practical utility; ways to enhance its quality, utility, and clarity; and ways to minimize burden on respondents, including the use of automated collection techniques or other forms of information technology. Mail, email, or fax your comments and recommendations on the information collection(s) to the OMB Desk Officer and SSA Reports Clearance Officer at the following addresses or fax numbers.
Or you may submit your comments online through
I. The information collections below are pending at SSA. SSA will submit them to OMB within 60 days from the date of this notice. To be sure we consider your comments, we must receive them no later than June 29, 2015. Individuals can obtain copies of the collection instruments by writing to the above email address.
1. Application for a Social Security Number Card, the Social Security Number Application Process (SSNAP), and Internet SSN Replacement Card (iSSNRC) Application—20 CFR 422.103-422.110—0960-0066. SSA collects information on the SS-5 (used in the United States) and SS-5-FS (used outside the United States) to issue original or replacement Social Security cards. SSA also enters the application data into the Social Security Number Application Process (SSNAP) when
A new iSSNRC modality included in the current clearance will allow certain applicants for an SSN replacement card to apply by completing an internet application and submitting the required evidence online rather than completing a paper Form SS-5, Application for a Social Security Card.
The respondents for this collection are applicants for original and replacement Social Security cards, or individuals who wish to change information in their SSN records, who use any of the modalities described above.
Type of Request: Revision of an OMB-approved information collection.
Cost Burden: The state BVSs incur costs of approximately $11 million for transmitting data to SSA's mainframe. However, SSA reimburses the states for these costs.
2. Third Party Liability Information Statement—42 CFR 433.136-433.139—0960-0323. To reduce Medicaid costs, Medicaid state agencies must identify third party insurers liable for medical care or services for Medicaid beneficiaries. Regulations at 42 CFR 433.136-433.139 require Medicaid state agencies to obtain this information on Medicaid applications and redeterminations as a condition of Medicaid eligibility. States may enter into agreements with the Commissioner of Social Security to make Medicaid eligibility determinations for aged, blind, and disabled beneficiaries in those states. Applications for and redeterminations of Supplemental Security Income (SSI) eligibility in jurisdictions with such agreements are applications and redeterminations of Medicaid eligibility. Under these agreements, SSA obtains third party liability information using Form SSA-8019, and provides that information to the Medicaid state agencies. The Medicaid state agencies use the information to bill third parties liable for medical care, support, or services for a beneficiary to guarantee that Medicaid remains the payer of last resort. The respondents are SSI claimants and recipients.
Type of Request: Revision of an OMB-approved information collection.
3. Request for Deceased Individual's Social Security Record—20 CFR 402.130—0960-0665. When a member of the public requests an individual's Social Security record, SSA needs the name and address of the requestor as well as a description of the requested record to process the request. SSA uses the information the respondent provides on Form SSA-711, or via an Internet request through SSA's electronic Freedom of Information Act (eFOIA) Web site, to (1) verify the wage earner is deceased and (2) access the correct Social Security record. Respondents are members of the public requesting deceased individuals' Social Security records.
Type of Request: Revision of an OMB-approved information collection.
Cost Burden *: In addition, SSA charges fees to the respondent for this information. The following chart shows the fees per transaction based on the information the respondent provides on the SSA-711 (or in eFOIA):
* As these costs are dependent on the respondent's provided information, we charge them on an as needed basis, and cannot provide a total annual estimate of the cost burden. We do not know whether the respondent provided the decedent's SSN until we manually review and process each SSA-711.
4. Function Report Adult—20 CFR 404.1512 & 416.912—0960-0681. Individuals receiving or applying for Social Security disability insurance (SSDI) or SSI must provide medical evidence and other proof SSA requires to prove their disability. SSA, and State disability determinations services on our behalf, collect the information using Form SSA-3373. We use the information to document how claimants' disabilities affect their ability to function, and to determine eligibility for SSI and SSDI claims. The respondents are Title II and Title XVI applicants (or current recipients undergoing redeterminations) for disability payments.
Type of Request: Revision of an OMB-approved information collection.
II. SSA submitted the information collections below to OMB for clearance. Your comments regarding the information collections would be most useful if OMB and SSA receive them 30 days from the date of this publication. To be sure we consider your comments, we must receive them no later than June 1, 2015. Individuals can obtain copies of the OMB clearance packages by writing to
1. Data Exchange Request Form—20 CFR 401.100—0960-NEW. SSA maintains approximately 3,000 data exchange agreements and regularly receives new requests from Federal, State, local, and foreign governments, as well as private organizations, to share data electronically. SSA engages in various forms of data exchanges from Social Security number verifications to computer matches for benefit eligibility, depending on the requestor's business needs. Section 1106 of the Social Security Act requires we consider the requestor's legal authority to receive the data, our disclosure policies, systems' feasibility, systems' security, and costs before entering into a data exchange agreement. We will use Form SSA-157, Data Exchange Request Form, for this purpose. Requesting agencies, governments, or private organizations will use the form when voluntarily initiating a request for data exchange from SSA. Respondents are Federal, State, local, and foreign governments, as well as private organizations seeking to share data electronically with SSA.
This is a correction notice: SSA published the incorrect burden information for this collection at 80 FR 9499, on February 23, 2015. We are correcting this error here.
Type of Request: This is a new information collection request.
2. Statement of Self-Employment Income—20 CFR 404.101, 404.110, 404.1096(a)-(d)—0960-0046. To qualify for insured status and thus collect Social Security benefits, self-employed individuals must demonstrate they have
Respondents are self-employed individuals who may be eligible for Social Security benefits.
Type of Request: Revision of an OMB-approved information collection.
3. Request for Workers' Compensation/Public Disability Benefit Information—20 CFR 404.408(e)—0960-0098. Claimants for Social Security disability payments who are also receiving Worker's Compensation/Public Disability Benefits (WC/PDB) must notify SSA about their WC/PDB, so the agency can reduce claimants' Social Security disability payments accordingly. If claimants provide necessary evidence, such as a copy of their award notice, benefit check, etc., that is sufficient verification. In cases where claimants cannot provide such evidence, SSA uses Form SSA-1709. The entity paying the WC/PDB benefits, its agent (such as an insurance carrier), or an administering public agency complete this form. The respondents are Federal, State, and local agencies, insurance carriers, and public or private self-insured companies administering WC/PDB benefits to disability claimants.
This is a correction notice. SSA published this information collection as a revision on February 23, 2015 at 80 FR 9500. Since we are not revising the Privacy Act Statement, this is now an extension of an OMB-approved information collection.
Type of Request: Extension of an OMB-approved information collection.
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), Executive Order 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 the Legal Adviser, U.S. Department of State, SA-5, L/PD, Fifth Floor (Suite 5H03), Washington, DC 20522-0505, telephone (202-632-6471), or email 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), Executive Order 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 exhibit 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:
The Shipping Coordinating Committee (SHC) will conduct an open meeting at 9:00 a.m. on Tuesday, May 26, 2015, Room 8, 9, 10 of the United States Department of Transportation, 1200 New Jersey Ave. SE., Washington, DC 20590. The primary purpose of the meeting is to prepare for the ninety fifth Session of the International Maritime Organization's (IMO) Maritime Safety Committee to be held at the IMO Headquarters, United Kingdom, from June 3 to June 12, 2015.
The agenda items to be considered include:
—Adoption of the agenda; report on credentials
—Decisions of other IMO bodies
—Consideration and adoption of amendments to mandatory instruments
—Measures to enhance maritime security
—Goal-based new ship construction standards
—Passenger ship safety
—Performance review and audit of LRIT Data Centres
—Carriage of cargoes and containers (report of the first session of the Sub-Committee)
—Human element, training and watch keeping (report of the second session of the Sub-Committee)
—Ship design and construction (report of the second session of the Sub-Committee)
—Navigation, communications and search and rescue (report of the second session of the Sub-Committee)
—Ship systems and equipment (urgent matters emanating from the second session of the Sub-Committee)
—Capacity building for the implementation of new measures
—Formal safety assessment, including general cargo ship safety
—Piracy and armed robbery against ships
—Implementation of instruments and related matters
—Relations with other organizations
—Application of the Committee's Guidelines
—Work programme
—Election of Chairman and Vice-Chairman for 2016
—Any other business
—Consideration of the report of the Committee on its ninety-fifth session
Members of the public may attend this meeting up to the seating capacity of the room. To facilitate the building security process, and to request reasonable accommodation, those who plan to attend should contact the meeting coordinator, LCDR Tiffany Duffy, by email 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), Executive Order 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 exhibit 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.
For further information, including a description of the imported object, 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), Executive Order 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 exhibit 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:
Federal Aviation Administration, DOT.
Notice of a Land Release.
The Federal Aviation Administration (FAA) proposes to rule and invites public comment on the application for a land release of approximately 5.12 acres of airport property, along with an easement over 2.09 acres, at Ryan Field Airport, Tucson, Pima County, Arizona from the airport use provisions of the Grant Agreement Assurances since the land is not needed for airport purposes. The property will be used by the Arizona Department of Transportation to widen State Route 86 that is located along the southern edge of the airport. The airport will be compensated for the fair market value of the released property. The use of the land for a roadway represents a compatible land use that will not interfere with the airport or its operation, thereby protecting the interests of civil aviation.
Comments must be received on or before June 1, 2015.
Comments on the request may be mailed or delivered to the FAA at the following address: Mike N. Williams, Manager, Airports District Office,
In accordance with the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), Public Law 106-181 (Apr. 5, 2000; 114 Stat. 61), this notice must be published in the
The following is a brief overview of the request:
The Tucson Airport Authority (TAA) requested a release from the provisions of the Grant Agreement Assurances to permit the disposal of approximately 5.12 acres of land at Ryan Field Airport, Tucson, Pima County, Arizona to permit the construction of highway improvements to State Route 86 by the Arizona Department of Transportation. The highway that traverses the southern boundary of the airport from east to west will be widened to accommodate four lanes, thereby providing two lanes in each direction. The release will allow 5.12 acres of land to be conveyed to the State of Arizona, along with an easement for 2.09 acres over land not being conveyed in fee simple. In return, TAA will be compensated for the fair market value of the property subject to the release. Continued use of the land as an improved highway represents a compatible land use that will not interfere with or impede the operations and development of the airport. Based on the benefits of fair compensation in exchange for the land, the interests of civil aviation will be properly served.
Federal Motor Carrier Safety Administration, DOT.
Notice of final disposition.
FMCSA confirms its decision to exempt 78 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 March 24, 2015. The exemptions expire on March 24, 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 February 19, 2015, FMCSA published a notice of receipt of Federal diabetes exemption applications from 78 individuals and requested comments from the public (80 FR 8629). The public comment period closed on March 23, 2015, and two comments were received.
FMCSA has evaluated the eligibility of the 78 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 78 applicants have had ITDM over a range of one to 45 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 February 19, 2015,
FMCSA received two comments in this proceeding. The comments are discussed below.
An anonymous commenter stated he or she believes that it is discriminatory for truck driving schools and employers to disqualify applicants due to insulin-dependent diabetes and other medications they may take.
Gabriel Villa stated she believes all of the drivers listed in this notices should be granted an exemption since they have received their endocrinologist's approval.
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
Based upon its evaluation of the 78 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.
National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).
Notice.
The National Highway Traffic Safety Administration (NHTSA) is announcing an opportunity for public comment on the proposed collection of certain information by the Agency. Under the Paperwork Reduction Act of 1995 (the PRA), Federal Agencies are required to publish a notice in the
Comments must be received on or before June 29, 2015.
You may submit comments using any of the following methods:
Elizabeth Mazzae, Applied Crash Avoidance Research Division, Vehicle Research and Test Center, NHTSA, 10820 State Route 347—Bldg. 60, East Liberty, Ohio 43319; Telephone (937) 666-4511; Facsimile: (937) 666-3590; email address:
Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), before an agency submits a proposed collection of information to OMB for approval, it must first publish a document in the
(i) 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;
(ii) 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;
(iii) how to enhance the quality, utility, and clarity of the information to be collected;
(iv) how to minimize the burden of the collection of information on those who are to respond, including the use of appropriate automated, electronic, mechanical, or other technological collection techniques or other forms of information technology,
44 U.S.C. 3506(c)(2)(A).
Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before June 1, 2015 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission may be obtained by emailing
Office of Financial Research, Treasury.
Financial Research Advisory Committee—Solicitation of Applications for Committee Membership.
The Office of Financial Research is soliciting applications for membership on its Financial Research Advisory Committee.
Andrea B. Ianniello, Designated Federal Officer, Office of Financial Research, Department of the Treasury, (202) 622-3002.
Pursuant to the Federal Advisory Committee Act, (Pub. L. 92-463, 5 U.S.C. App. 2 § 1-16, as amended), the Treasury Department established a Financial Research Advisory Committee (FRAC, or Committee) to provide advice and recommendations to the Office of Financial Research (OFR) and to assist the OFR in carrying out its duties and authorities.
The OFR was established under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Pub. L. 111-203, July 21, 2010). The purpose of the OFR is to support the Financial Stability Oversight Council (Council) in fulfilling the purposes and duties of the Council and to support the Council's member agencies by:
The FRAC was established to advise the OFR on issues related to the responsibilities of the office. It may provide its advice, recommendations, analysis, and information directly to the OFR and the OFR may share the Committee's advice and recommendations with the Secretary of the Treasury or other Treasury officials. The OFR will share information with the Committee as the Director determines will be helpful in allowing the FRAC to carry out its role.
The FRAC is an advisory committee that was established on April 6, 2012 and renewed on April 4, 2014. The OFR is currently soliciting applications for membership in order to provide for rotation of membership, as provided in its original and renewed charter, as well as to provide for a diverse and balanced body with a variety of interests, backgrounds, and viewpoints represented. Providing for such diversity enhances the views and advice offered by the FRAC.
Treasury seeks applications from individuals representative of a constituency within the fields of economics, financial institutions and markets, statistical analysis, financial markets analysis, econometrics, applied sciences, risk management, data management, information standards,
To apply, an applicant must submit an appropriately-detailed resume and a cover letter describing their interest, reasons for application, and qualifications. In accordance with Department of Treasury Directive 21-03, a clearance process includes fingerprints, tax checks, and a Federal Bureau of Investigation criminal check. Applicants must state in their application that they agree to submit to these pre-appointment checks.
The application period for interested candidates will extend to May 11, 2015. Applications should be submitted in sufficient time to be received by the close of business on the closing date and should be sent to
Department of the Treasury.
Notice.
The Department of the Treasury will submit the following information collection request to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, Public Law 104-13, on or after the date of publication of this notice.
Comments should be received on or before June 1, 2015 to be assured of consideration.
Send comments regarding the burden estimate, or any other aspect of the information collection, including suggestions for reducing the burden, to (1) Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: Desk Officer for Treasury, New Executive Office Building, Room 10235, Washington, DC 20503, or email at
Copies of the submission(s) may be obtained by calling (202) 927-5331, email at
Veterans Benefits Administration, VA.
Notice.
The Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), is announcing an opportunity for public comment on the proposed collection of certain information by the agency. Under the Paperwork Reduction Act (PRA) of 1995, Federal agencies are required to publish notice in the
VA Form 21-0958, will be used by the Veteran to initiate an appeal by indicating disagreement with a decision issued by a Regional Office (RO).
Written comments and recommendations on the proposed collection of information should be received on or before June 29, 2015.
Submit written comments on the collection of information through Federal Docket Management System (FDMS) at
Nancy J. Kessinger at (202) 632-8924 or FAX (202) 632-8925.
Under the PRA of 1995 (Pub. L. 104-13; 44 U.S.C. 3501-21), Federal agencies must obtain approval from the Office of Management and Budget (OMB) for each collection of information they conduct or sponsor. This request for comment is being made pursuant to Section 3506(c)(2)(A) of the PRA.
With respect to the following collection of information, VBA invites comments on: (1) Whether the proposed collection of information is necessary for the proper performance of VBA's functions, including whether the information will have practical utility; (2) the accuracy of VBA'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 respondents, including through the use of automated collection techniques or the use of other forms of information technology.
By direction of the Secretary:
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-21), this notice announces that the Veterans Benefits Administration, Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden and it includes the actual data collection instrument.
Comments must be submitted on or before June 1, 2015.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 632-7492 or email
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
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs, will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument.
Comments must be submitted on or before June 1, 2015.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 632-7492 or email
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
By direction of the Secretary.
Veterans Benefits Administration, Department of Veterans Affairs.
Notice.
In compliance with the Paperwork Reduction Act (PRA) of 1995 (44 U.S.C. 3501-3521), this notice announces that the Veterans Benefits Administration (VBA), Department of Veterans Affairs (VA), will submit the collection of information abstracted below to the Office of Management and Budget (OMB) for review and comment. The PRA submission describes the nature of the information collection and its expected cost and burden; it includes the actual data collection instrument.
Comments must be submitted on or before June 1, 2015.
Submit written comments on the collection of information through
Crystal Rennie, Enterprise Records Service (005R1B), Department of Veterans Affairs, 810 Vermont Avenue NW., Washington, DC 20420, (202) 632-7492 or email
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
By direction of the Secretary.
Centers for Medicare and Medicaid Services (CMS), HHS.
Proposed rule.
We are proposing to revise 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, 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.
We also are proposing to update 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 implement 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 proposing to establish new requirements or to revise existing requirements for quality reporting by specific providers (acute care hospitals, PPS-exempt cancer hospitals, and LTCHs) that are participating in Medicare, including related proposals for eligible hospitals and critical access hospitals participating in the Medicare Electronic Health Record (EHR) Incentive Program. We also are proposing to update 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-P. 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, and Medicare Disproportionate Share Hospital (DSH) Issues.
Michele Hudson, (410) 786-4487, Long-Term Care Hospital Prospective Payment System and MS-LTC-DRG Relative Weights Issues.
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 proposed rule would make 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 would make payment and policy changes for inpatient hospital services provided by long-term care hospitals (LTCHs) under the long-term care hospital prospective payment
Under various statutory authorities, we are proposing to make 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 now 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); and (3) a hospital's uncompensated care amount relative to the uncompensated care amount of all DSH hospitals expressed as a percentage.
• 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 patient criteria for payment under the LTCH PPS for 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)
• 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 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. We are proposing to make an additional −0.8 percent recoupment adjustment to the standardized amount in FY 2016.
We are proposing 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 proposed rule, we are proposing a refinement to the pneumonia readmissions measure, which would expand the measure cohort for the FY 2017 payment determination and subsequent years. In addition, we are proposing to adopt an extraordinary circumstance exception policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would 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 proposing to adopt one additional measure beginning with the FY 2018 program year and one measure beginning with the FY 2021 program year. We also are proposing to remove two measures beginning with the FY 2018 program year. In addition, we are proposing to move one measure to the Safety domain and to remove the Clinical Care—Process subdomain and rename the Clinical Care—Outcomes subdomain as the Clinical Care domain. Finally, we are signaling our intent to propose in future rulemaking to expand one measure and to update the standard population data we use to calculate several measures beginning with the FY 2019 program year.
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 proposed rule, we are proposing 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 would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would 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 current 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 proposed rule, we are proposing to update our estimates of the three factors used to determine uncompensated care payments for FY 2016. We are proposing to continue 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 proposing a change to 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 proposed rule, we are proposing to implement section 1206 of the Pathways for SGR Reform Act, which requires the establishment of an alternative site neutral payment rate for Medicare inpatient 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 proposals regarding the application of the site neutral payment rate and the criteria for exclusion from the site neutral payment rate, as well as proposals 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 proposing 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 proposing 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 proposed rule, we are proposing to update considerations for measure removal and retention. In addition, we are proposing to remove nine measures for the FY 2018 payment determination and subsequent years: Six of these measures are “topped-out” and two of the measures are suspended. However, we are retaining the electronic version of six of these measures. We also are proposing to refine two previously adopted measures as well as for the FY 2018 payment determination and subsequent years and add eight new measures: Seven new claims-based measures and one structural measure.
Further, for the FY 2018 payment determination, we are proposing to require hospitals to report 16 of the 28 electronic clinical quality measures under the Hospital IQR Program that align with the Medicare EHR Incentive Program and span 3 different NQS domains. We also are proposing to require that hospitals submit two quarters (Q3 and Q4) of data within 2 months following the last discharge date of the quarter. We are proposing to delay and footnote public reporting of electronic clinical quality measure data submitted by hospitals for the CY 2016/FY 2018 payment determination.
We are proposing to align the reporting and submission timelines for the electronic submission of clinical quality measures for the Medicare EHR Incentive Program for eligible hospitals and critical access hospitals (CAHs) with the reporting and submission timelines for the Hospital IQR Program. Lastly, ONC is proposing a 2015 Edition certification criterion for “CQMs—report” as part of the proposed 2015 Edition of certification criteria that would require a certified Health IT Module to enable a user to electronically create a data file for transmission of clinical quality measurement data. This proposed certification criterion would apply to eligible professionals, eligible hospitals, and CAHs.
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 proposed rule, we are proposing three previously finalized quality measures: One measure proposal establishes the newly NQF-endorsed status of that quality measure; two other
In addition, we are proposing to publicly report LTCH quality data beginning in fall 2016, on a CMS Web site, such as
Finally, we are proposing to lengthen 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 proposing 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 proposing to make 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 proposed 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 proposing to make a −0.8 percent recoupment adjustment to the standardized amount in FY 2016. Considering the −0.8 percent adjustments made in FY 2014 and FY 2015, we estimate that the combined impact of the proposed adjustment for FY 2016 and leaving the FY 2014 and FY 2015 adjustments in place would be to recover up to $3 billion in FY 2016. Combined with the effects of the −0.8 percent adjustments implemented in FY 2014 and FY 2015, we estimate that the proposed FY 2016 −0.8 percent adjustment would result in the recovery of a total of approximately $6 billion of the $11 billion in overpayments required to be recovered by section 631 of the ATRA.
• Proposed Changes to the Hospital Readmissions Reduction Program. We are proposing a refinement to the pneumonia readmissions measure, which would expand the measure cohort for the FY 2017 payment determination and subsequent years. In addition, we are proposing to adopt an extraordinary circumstance exception policy that would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would 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 proposed changes would not significantly impact the program in FY 2016, but could impact future years, depending on actual experience.
• Value-Based Incentive Payments under the Hospital VBP Program. We estimate that there would 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 2016 discharges is approximately $1.5 billion. We believe that the program benefits will be seen in improved patient outcomes, safety, and in the patient's experience of care. However, we cannot estimate these benefits in actual dollar and patient terms.
• Proposed Changes to the HAC Reduction Program for FY 2016. We are proposing 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 would align with existing extraordinary circumstance exception policies for other IPPS quality reporting and payment programs and would allow hospitals to request a waiver for use of data from the affected period. While hospitals in the top quartile of HAC scores will continue to have their HAC Reduction Program payment adjustment applied, as required by law, 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 proposed changes, including which hospitals receive the adjustment, would 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 proposing to provide 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,
• Proposed Update to the LTCH PPS Payment Rates and Other Payment Factors. Based on the best available data for the 418 LTCHs in our data base, we estimate that the proposed changes to the payment rates and factors that we are presenting in the preamble and Addendum of this proposed rule, including the proposed application of the new site neutral payment rate required by section 1886(m)(6)(A) of the Act, the proposed update to the LTCH PPS standard Federal rate for FY 2016, and the proposed changes to short-stay outlier and high-cost outlier payments would result in an estimated decrease in payments from FY 2015 of approximately $251 million (or 4.6 percent).
• Hospital Inpatient Quality Reporting (IQR) Program. In this proposed rule, we are proposing to remove nine measures for the FY 2018 payment determination and subsequent years. We are proposing to add eight measures to the hospital IQR Program for the FY 2018 payment determination and subsequent years. We also are proposing to require hospitals to report 16 of the 28 Hospital IQR Program electronic clinical quality measures that align with the Medicare EHR Incentive Program and span three different NQS domains. We estimate that our proposals 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 proposals in this proposed rule is zero. We refer readers to sections VIII.C. of the preamble of this proposed rule for detailed discussion of the proposals.
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 base payment rate is multiplied by the DRG relative weight.
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 provides for a new additional Medicare payment that considers the amount of uncompensated care beginning on October 1, 2013.
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. (We note that the statutory provision for Medicare payments to MDHs expired on March 31, 2015, under current law.) 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.
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
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 decreasing proportion based on reasonable cost principles. Effective for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the Federal rate. Section 1206(a) of Public Law 113-67 established the site neutral payment rate under the LTCH PPS. Under this statute, based on a rolling effective date that is linked to the date on which a given LTCH's Federal FY 2016 cost reporting period begins, LTCHs will be paid for LTCH discharges at the new site neutral payment rate unless the discharge meets the patient criteria for payment at the LTCH PPS standard Federal rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR part 412, subpart O. Beginning with FY 2009, annual updates to the LTCH PPS are published in the same documents that update the IPPS (73 FR 26797 through 26798).
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 Sustainable Growth Rate (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).
In this proposed rule, we are proposing to make 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 proposed rule, we are proposing to make policy changes to implement and discuss the need for future policy changes to carry out 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
• 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 proposed rule, we are proposing to make policy changes to implement, or making conforming changes to regulations in accordance with, 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 proposed rule, we are proposing to implement 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 proposed rule, we set forth proposed changes to the Medicare IPPS for operating costs and for capital-related costs of acute care hospitals for FY 2016. We also set forth proposed changes relating to payments to certain hospitals that continue to be excluded from the IPPS and paid on a reasonable cost basis. In addition, in this proposed rule, we set forth proposed changes to the payment rates, factors, and other payment rate policies under the LTCH PPS for FY 2016.
Below is a summary of the major changes that we are proposing to make:
In section II. of the preamble of this proposed rule, we include—
• 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 this proposed rule, we are proposing 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.
• Proposed application of the rural floor, the proposed imputed rural floor, and the proposed 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 are proposing 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 this proposed rule, we discuss 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
• 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 that will be published this summer.
In section V. of the preamble to this proposed rule, we discuss the proposed payment policy requirements for capital-related costs and capital payments to hospitals for FY 2016.
In section VI. of the preamble of this proposed rule, we discuss proposed changes to payments to certain excluded hospitals for FY 2016.
In section VII. of the preamble of this 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 make a technical revision to the regulations to more clearly reflect our established policies.
• 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 this proposed rule, we address—
• 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, including a proposal to establish in regulations an EHR technology certification criterion for reporting clinical quality measures.
In the Addendum to this 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 are proposing to establish the threshold amounts for outlier cases. In addition, we address 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 this 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 are proposing 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 this 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 this proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provide 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 address 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:
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
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 with comment period (72 FR 47140 through 47189).
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. (Currently, for FY 2015, there are 775 MS-DRGs.) 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
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 effects. Interested individuals may still order these files through the CMS Web site at:
Persons placing an order must send the following: A Letter of Request, the LDS Data Use Agreement and Research Protocol (refer to the Web site for further instructions), the LDS Form, and a check (refer to the Web site for the required payment amount) to:
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 adjustment to the standardized amount finalized for FY 2011 (76 FR 51489 and 51498). Because these adjustments, in effect, balanced out, there was no year-to-year change in the standardized amount due to this recoupment adjustment for FY 2012. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53276), we made a final +2.9 percent adjustment to the standardized amount, completing the recoupment portion of section 7(b)(1)(B) of Public Law 110-90. We note that with this positive adjustment, according to our estimates, all overpayments made in FY 2008 and FY 2009 have been fully recaptured with appropriate interest, and the standardized amount has been returned to the appropriate baseline.
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, any adjustment made to reduce payment rates in one year would eventually be offset by a positive adjustment, once the necessary amount of overpayment is recovered.
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, will 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, in this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing to implement a −0.8 percent recoupment adjustment to the standardized amount for FY 2016. Considering the −0.8 percent adjustments made in FY 2014 and FY 2015, we estimate that the combined impact of the proposed adjustment for FY 2016 and leaving the FY 2014 and FY 2015 adjustments in place would be to recover up to $3 billion in FY 2016. Combined with the effects of the −0.8 percent adjustments implemented in FY 2014 and FY 2015, we estimate that the proposed FY 2016 −0.8 percent adjustment would result in the recovery of a total of approximately $6 billion of the $11 billion in overpayments required to be recovered by section 631 of the ATRA.
As we explained in the FY 2014 IPPS/LTCH PPS final rule, estimates of any future adjustments are subject to slight variations in total 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 continue to believe that the proposed −0.8 percent adjustment for FY 2016 is a reasonable and fair approach that will help satisfy the requirements of the statute while mitigating extreme annual fluctuations in payment rates. In addition, we again note that this proposed −0.8 percent recoupment adjustment for FY 2016, the respective −0.8 percent adjustments made in FY 2014 and FY 2015, and any future adjustment made under this authority, will be eventually offset by an equivalent positive adjustment once the full $11 billion recoupment requirement has been realized.
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 FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs.
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
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 devices on the claims in the MedPAR file to create distinct CCRs for the respective cost centers for supplies and implantable devices, we hoped that we would also have data for an analysis of creating distinct CCRs for CT scans, MRIs, and cardiac catheterization, which could then be finalized through rulemaking. In the FY 2013 IPPS/LTCH PPS final rule (77 FR 53281), we stated that, prior to proposing to create these
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 proposed 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 proposed 19 CCRs and the proposed MS-DRG relative weights for FY 2016 is included in section II.H.3. of the preamble of this proposed 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. 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 standard cost center, its 5-digit code, and, separately, the nonstandard cost center descriptions and their 5-digit codes. While the nonstandard codes are categorized by General Service Cost Centers, Inpatient Routine Service Cost Centers, and Ancillary Service Cost Centers, among others, Table 5 does not map the nonstandard cost centers and codes to specific standard cost centers. In addition, the CMS-approved cost reporting software does not restrict the use of nonstandard codes to specific standard cost centers. Furthermore, the softwares do not prevent hospitals from manually entering in a name for a nonstandard cost center code that may
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 are 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.
We are highlighting 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 this proposed rule, the proposed FY 2016 CCR for Anesthesia is 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 roll 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). Some questions that arise are whether CMS' procedures for mapping and rolling up nonstandard cost centers to specific standard cost centers should be updated or whether hospital reporting practices are imprecise, or whether there is a combination of both. CMS' rollup procedures were developed many years ago based on historical analysis of hospitals' cost reporting practices and health care services furnished. It may be that it would be appropriate for CMS to reevaluate its rollup procedures based on hospitals' more current cost reporting practices and contemporary health care services provided. However, one factor complicating the determination of the most accurate standard cost centers to which each respective nonstandard cost center should be mapped is hospitals' own inconsistent reporting practices. For example, it may be determined that CMS should no longer be mapping and rolling up nonstandard cost center “Acupuncture” and its associated 5-digit codes 03020 through 03029 to standard cost center line 53, “Anesthesiology.” However, determining which other standard line
In summary, 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, we are interested in receiving public comments from stakeholders as to how to improve the use of nonstandard cost center codes. 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 softwares “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”). Some flexibility could be maintained, but within certain limits, in consideration of unique services that hospitals might provide.
In the interim, while we seek public comments on this issue, we have proposed 19 CCRs for FY 2016 (listed in section II.H.3. of the preamble of this proposed rule) that were calculated from the December 31, 2014 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 proposed 19 CCRs on the FY 2016 IPPS Proposed 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 11 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 proposed 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 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 proposed rule, we are proposing the HAC list translation from ICD-9-CM to ICD-10-CM/ICD-10-PCS in this FY 2016 IPPS/LTCH PPS proposed rule.
As discussed in section II.G. 1. a. of the preamble of this proposed rule, for FY 2016, we are proposing 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 are proposing that the ICD-10-CM/PCS Version 33 HAC list replace the ICD-9-CM Version 32 HAC list. We are soliciting public comments on how well the ICD-10-CM/PCS Version 32 HAC list replicates 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:
With respect to the current categories of the HACs, we are not proposing to add or remove any categories in this FY 2016 IPPS/LTCH PPS proposed rule. However, as described more fully in section III.F.7, of the preamble of this proposed 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. We also continue to encourage public dialogue about refinements to the HAC list through written stakeholder comments. We 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 also 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
In summary, we are proposing that the ICD-10-CM/PCS Version 33 HAC list replace the ICD-9-CM Version 32 HAC list and are seeking public comments on how well the ICD-10-CM/PCS Version 32 HAC list replicates the ICD-9-CM Version 32 HAC list.
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 MedPAR 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 MedPAR 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 2014 report and made it available to the public on the CMS Hospital-Acquired Conditions Web page in the “Downloads” section at:
Once we receive RTI's 2015 report in the late spring or early summer, we will make it available to the public at this same link as the 2014 report.
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
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. This presentation followed presentations on the creation of ICD-10 MS-DRGs Version 29. A summary report of this meeting can be found on the CMS Web site at:
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
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:
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 FY 2016 are discussed below in this section.
Following are the changes we are proposing to the MS-DRGs for FY 2016. We are inviting public comment 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 are proposing changes to the MS-DRG classifications based on our analysis of claims data. In other cases, we are proposing to maintain the existing MS-DRG classification based on our analysis of claims data. For this FY 2016 proposed rule, our MS-DRG analysis is 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 proposed 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 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. Further, 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
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 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 great, reflecting, for instance, the use of an operating suite versus interventional vascular catheterization lab 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 following endovascular embolization procedure codes would be assigned:
• 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 FY 2016 IPPS/LTCH PPS proposed rule request, we first examined claims data on all intracranial vascular procedure cases with a principal diagnosis of hemorrhage reported in MS-DRGs 020, 021, and 022 from 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 reported in 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. We believe that maintaining the current MS-DRG assignment for these types of procedures is appropriate. Our clinical advisors state 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 are not proposing 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 are inviting public comments on this proposal.
As discussed previously, 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 new requested 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. 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 expect some procedures within an MS-DRG to have higher average costs and other procedures to have lower average costs than the overall average costs. Cases within the MS-DRGs describing endovascular intracranial procedures are grouped together based on similar clinical and resource criteria. Some cases will have average costs that are higher than the overall average costs for cases in the MS-DRG, while other cases will have lower average costs. These differences in average costs are found within all MS-DRGs. The average length of stay of MS-DRG 027 cases with endovascular intracranial procedure without a diagnosis of hemorrhage is 1.66 days as compared to 3.15 days for all cases in MS-DRG 027. Therefore, while the average costs are higher for the cases with endovascular intracranial procedure without a diagnosis of hemorrhage than for all cases in MS-DRG 027, the length of stay is shorter.
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. We have 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 a endovascular intracranial procedure without a diagnosis of hemorrhage than for all cases in MS-DRG 027, the length of stay is shorter. We have 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 are not proposing 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 do 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
Based on the findings from our data analysis and the recommendations from our clinical advisors, we are not proposing to create the four new MS-DRGs for endovascular intracranial embolization and other endovascular procedures recommended by the requestor. We are proposing to maintain the current MS-DRG structure for MS-DRGs 020 through 027.
We are inviting public comments on these two proposals.
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 this FY 2016 IPPS/LTCH PPS proposed rule, we received a separate, but related, request involving most of these same MS-DRGs. Therefore, for this 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.
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 support 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 this 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 agree 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 are proposing to create two new MS-DRGs to classify percutaneous intracardiac procedures. Specifically, we are proposing 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 are proposing 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 are inviting public comments on our proposal to create the two new MS-DRGs for percutaneous intracardiac procedures for FY 2016. In addition, we are inviting 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.
As mentioned earlier in this section, we received a similar request in
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 this 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 are not proposing to further subdivide the severity levels for MS-DRGs 246 through 251. We are inviting 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 this 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 support creating a “with MCC” and a “without MCC” severity level split. 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 agree with our clinical advisors and note 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 do 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 severity levels for MS-DRG 245. Our clinical advisors also agree 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 payments. Therefore, we are not proposing to add severity levels for MS-DRG 245 for FY 2016. We are inviting public comments on the results of our analysis and our proposal not to create severity levels for MS-DRG 245.
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 this proposed rule. The second option was to establish a new family of MS-DRGs for 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 the drug-eluting peripheral stent procedures cases 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 show 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 have determined that the small number of cases (601) does 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 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, 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, we are not proposing to make any MS-DRG updates for peripheral angioplasty cases with a drug-eluting stent. We are proposing to maintain the current MS-DRG assignments for these cases in MS-DRGs 252, 253, and 254. We are inviting public comments on our proposal.
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 assign 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, for the proposed FY 2016 ICD-10 MS-DRGs Version 33, we are proposing to assign ICD-10-PCS procedure code 02UG3JZ to MS-DRGs 231 and 232 and MS-DRGs 246 through 251. We are inviting public comments on this proposal.
The new technology add-on payment 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
We received a request to reassign 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 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 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 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 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 ($3l,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 also note that the average length of stay for the 1,927 cases reporting procedure code 39.78 in MS-DRG 238 was 2.52 days in comparison to the average length of stay for all cases in MS-DRG 237 of 9.46 days. Our clinical advisors do not agree with moving cases reporting procedure code 39.78 to a higher severity level (with MCC) MS-DRG.
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 point 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 are not proposing to reassign all cases reporting procedure code 39.78 from MS-DRG 238 to MS-DRG 237, as the commenter requested.
However, we recognize that the results of the data analysis also demonstrated that the average costs for cases reporting 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
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 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 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 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 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 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-9-CM procedure codes are shown in the following table:
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 Proposed MS-DRG Changes) for this proposed rule (which
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 are proposing 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 are proposing 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 are proposing 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 are inviting public comments on this proposal and the ICD-10-PCS code translations for these procedures shown earlier in this section, which we also are proposing 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 are proposing 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 are proposing 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 believe 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 are inviting 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 are proposing to assign to proposed new MS-DRGs 270, 271, and 272.
In summary, for FY 2016, we are proposing 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 are proposing 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
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 joint revisions. One of the commenters requested that CMS change the MS-DRG structure for 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 revision cases coded with ICD-9-CM codes are assigned to MS-DRGs 466, 467, and 468, but similar cases reported with these 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 with the removal of a spacer and subsequent insertion of a new joint prosthesis should be assigned to 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 revisions that involve cemented and uncemented qualifiers should be assigned to 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 MS-DRGs would have the same logic as the ICD-9-CM MS-DRGs. We are proposing to add the following code combinations which capture the joint revisions to the Version 33 MS-DRG structure for ICD-10 MS-DRGs 466, 467, and 468 that we are proposing to implement effective October 1, 2015.
We are inviting public comments on our proposal to add the joint revision code combinations listed above to MS-DRGs 466, 467, and 468.
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, we are proposing new titles for these three MS-DRGs that would change the reference of “9+ Fusions” to “Extensive Fusions.” The proposed 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)
• MS-DRG 458 (Spinal Fusion Except Cervical with Spinal Curvature/Malignancy/Infection or Extensive Fusion without CC/MCC).
We are inviting public comments on our proposal.
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 code 3E0P7GC (Introduction of other therapeutic substance into female reproductive, via natural or artificial opening) describes this procedure.
We reviewed how this 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.) code affecting MS-DRG assignment. We agree with the requestor that the current logic for ICD-10-PCS procedure code 3E0P7GC does not result in the appropriate MS-DRG assignment. The result of our analysis suggests that this code should not be designated as an O.R. code. Our clinical advisors agree that this procedure does not require the intensity or complexity of service and resource utilization to merit an O.R. designation under ICD-10. Therefore, we are proposing 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 are inviting public comments on our proposal.
Our analysis of ICD-10-PCS 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 affecting 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 our clinical advisors' recommendation, we are proposing to designate the above listed ICD-10-PCS procedure codes as non-O.R. codes to ensure that these codes will group to the appropriate MS-DRG assignment.
We are inviting public comments on our proposal.
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 these MS-DRGs, we examined claims data from the December 2014 update of the FY 2014 MedPAR file for 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 injections for snake bites reported 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 of injections for snake bites reported in MS-DRG 918 only. 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 find 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 CroFab antivenom drug for snake bites because these cases are clinically similar to other poisoning cases currently assigned to
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 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 MedPAR file. The following table shows our findings.
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. The requested new severity level does 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 this 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 does not meet the criterion that there are at least 500 cases in the CC or MCC subgroup.
We also point 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 does not meet the criterion for the creation of an additional severity level, and the recommendations of our clinical advisors, we are not proposing to create a new severity level for MS-DRG 927. We are proposing to maintain the current MS-DRG 927 structure without additional severity levels. We are inviting public comments on our proposal.
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 this proposed 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 are proposing to add the ICD-10-PCS 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 are inviting 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.
We also are proposing 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
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 are proposing to make for FY 2016, as discussed in section II.G.3.e. of the preamble of this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing to revise the surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System). Specifically, we are proposing to delete MS-DRG 237 (Major Cardiovascular Procedures with MCC) and MS-DRG 238 (Major Cardiovascular Procedures without MCC) from the surgical hierarchy. We are proposing 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 are proposing 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 are proposing 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 are inviting public comments on our proposals.
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,
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 do 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, we are not proposing to reclassify conditions represented by diagnosis codes 414.2 and 414.4 to MCCs. We are proposing 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 are proposing to maintain ICD-10-CM diagnosis codes I25.82 and I25.84 as non-CCs. We are inviting public comments on our proposals.
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 N13.2) 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).
We agree 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 are proposing 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 32. We are inviting public comments on our proposal.
Under the IPPS MS-DRG classification system, we have developed a standard list of diagnoses that are considered CCs. Historically, we
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:
For FY 2016, we are not proposing any changes to the CC Exclusion List. Because we are not proposing 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 have 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 proposed 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 proposed rule and they are not published as part of this proposed 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 proposed revised or deleted procedure codes for FY 2016, we have not developed Table 6D (Invalid Procedure Codes) or Table 6F (Revised Procedure Codes).
We are not proposing 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. Therefore, for this proposed 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 proposed rule. We have developed Table 6M.1 (Additions to Principal Diagnosis Is Its Own CC) to show the two proposed additions to this list for the two principal diagnosis codes acting as their own CC.
The complete documentation of the ICD-10 MS-DRG Version 32 GROUPER logic, including the current CC
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 are not proposing to change the procedures assigned among these MS-DRGs.
We are inviting public comments on our proposal.
We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (Extensive O.R. procedure unrelated to principal diagnosis with MCC, with CC, and without CC/MCC, respectively) or MS-DRGs 987 through 989 (Nonextensive O.R. procedure unrelated to principal diagnosis with MCC, with CC, and without CC/MCC, respectively) on the basis of volume, by procedure, to see if it would be appropriate to move procedure codes out of these MS-DRGs into one of the surgical MS-DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in two ways for comparison purposes. We look at a frequency count of each major operative procedure code. We also compare procedures across MDCs by volume of procedure codes within each MDC.
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 are not proposing 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 are inviting public comments on our proposal.
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
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 are not proposing to move any procedure codes among these MS-DRGs.
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 room procedures that are unrelated to the principal diagnosis. Because there were so few cases reported, this does not appear to be a common procedure for epistaxis. There were not enough cases to base a change of MS-DRG assignment for these cases.
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, we are not proposing to create new MS-DRG assignments for epistaxis cases receiving endovascular embolization procedures. We are proposing to maintain the current MS-DRG structure for epistaxis cases receiving endovascular embolization procedures and are not proposing any updates to MS-DRGs 981, 982, and 983. We are inviting public comments on our proposal.
Based on the review of cases in the MDCs, as described above in sections II.G.2. through 7. of the preamble of this proposed rule, we are not proposing to add any diagnosis or procedure codes to MDCs for FY 2016. We are inviting public comments on our proposal.
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 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 indicated we would attempt to include proposals for procedure codes that would describe new technology discussed and approved at the Spring meeting as part of the code revisions effective the following October.
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 Committee and public comment was actively solicited. The Committee evaluated all comments from participants attending the Committee meetings as well as written comments that were received. The Committee also considered the delay in implementation of ICD-10 until October 1, 2014. There was an announcement at the September 19, 2012 ICD-9-CM Coordination and Maintenance Committee meeting that a partial freeze of both ICD-9-CM and ICD-10 codes will be implemented as follows:
• 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
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, we are proposing 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 this proposed rule, for FY 2016, we are proposing 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, if finalized, 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.
In summary, we are proposing to add 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 if the applicable proposed MS-DRG changes are finalized, to also remove existing MS-DRGs 237 and 238 and add proposed new MS-DRGs 268 through 272. The 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 is displayed below.
We are inviting 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. The final list will be included in the FY 2016 IPPS/LTCH PPS final rule and also will be issued to providers in the form of a Change Request (CR).
In developing the proposed 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 proposed rule include discharges occurring on October 1, 2013, through September 30, 2014, based on bills received by CMS through December 31, 2014, from all hospitals subject to the IPPS and short-term, acute care hospitals in Maryland (which at that time were under a waiver from the IPPS). The FY 2014 MedPAR file used in calculating the proposed relative weights includes data for approximately 9,638,230 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. These discharges are excluded when the MedPAR “GHO Paid” indicator field on the claim record is equal to “1” or when the MedPAR DRG payment field, which represents the total payment for the claim, is equal to the MedPAR “Indirect Medical Education (IME)” payment field, indicating that the claim was an “IME only” claim submitted by a teaching hospital on behalf of a beneficiary enrolled in a Medicare Advantage managed care plan. In addition, the December 31, 2014 update of the FY 2014 MedPAR file complies with version 5010 of the X12 HIPAA Transaction and Code Set Standards, and includes a variable called “claim type.” Claim type “60” indicates that the claim was an inpatient claim paid as fee-for-service. Claim types “61,” “62,” “63,” and “64” relate to encounter claims, Medicare Advantage IME claims, and HMO no-pay claims. Therefore, the calculation of the proposed relative weights for FY 2016 also excludes claims with claim type values not equal to “60.” The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. We note that the proposed FY 2016 relative weights are based on the ICD-9-CM diagnoses and procedures codes from the MedPAR claims data, grouped through the ICD-9-CM version of the FY 2016 GROUPER (Version 33). 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 December 31, 2014 update of the FY 2013 HCRIS for calculating the proposed FY 2016 cost-based relative weights.
As we explain in section II.E.3. of the preamble of this proposed 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 proposed 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 proposed FY 2016 MS-DRG classifications discussed in sections II.B. and II.G. of the preamble of this proposed 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
• 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. (We refer readers to the FY 2015 IPPS/LTCH PPS final rule (79 FR 49911) for the edit threshold related to FY 2015.)
• 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, we are proposing to continue 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 proposed 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
The proposed FY 2016 cost-based relative weights were then normalized by an adjustment factor of 1.678672 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 proposed 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. For FY 2016, we are proposing to use that same case threshold in recalibrating the MS-DRG relative weights for FY 2016. Using data from the FY 2014 MedPAR file, there were 8 MS-DRGs that contain fewer than 10 cases. Under the MS-DRGs, we have fewer low-volume DRGs than under the CMS DRGs because we no longer have separate DRGs for patients aged 0 to 17 years. With the exception of newborns, we previously separated some 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 DRGs are identical. The 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 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 these low-volume MS-DRGs, we are proposing to compute 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:
We are inviting public comments on this proposal.
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:
All four models in the BPCI initiative pay a discounted bundled payment for
Each of the four models in the BPCI initiative tests bundled payments for a different episode of care:
• Model 1 tests retrospective bundled payments for the acute care hospital stay only. All participants in this model are acute care hospitals, and the episode of care is defined as the inpatient stay in the acute care hospital. The hospital is paid a discounted amount based on the payment rates established under the IPPS used in the original Medicare program. Physicians are paid separately for their services under the Medicare Physician Fee Schedule (MPFS).
While Model 1 makes payments as described above for all MS-DRGs, Models 2, 3, and 4 of the BPCI initiative test 48 episodes (comprised of groupings of related MS-DRGs). These episodes and the groupings of related MS-DRGs that are included in these episodes are listed in the table below.
• In Model 2, the episode of care includes the inpatient stay in an acute care hospital and all related services during the episode, including postacute care services. The episode ends either 30, 60, or 90 days after a hospital discharge.
• Model 3 focuses on postacute care services. In this model, the episode of care is triggered by an acute care hospital stay for an MS-DRG included in the episode and begins at the initiation of postacute care services in a skilled nursing facility (SNF), inpatient rehabilitation facility (IRF), long-term care hospital (LTCH), or home health agency (HHA). The episode includes postacute care services, physicians' services, and related services provided during an inpatient hospital readmission, but does not include services provided during the episode-initiating acute care hospital stay. The postacute care services included in the episode must begin within 30 days of discharge from the inpatient hospital stay and may end either 30, 60, or 90 days after the initiation of the episode.
• Model 4 tests prospective single bundled payments for physicians' services and hospital services furnished during an acute care hospitalization and related readmissions. Under this model, a single, prospectively determined bundled payment is made to the participating hospital that encompasses all services furnished during the inpatient stay by the hospital, physicians, and other practitioners. Payments for services furnished in related readmissions for 30 days after the hospital discharge are included in the bundled payment amount.
Model 1 of the BPCI initiative began in April 2013. CMS has allowed for participation in two phases in Models 2, 3, and 4. The first phase is the preparatory phase. In the preparatory phase, participants in the BPCI initiative are provided claims data so that they may analyze patterns of care for episodes in preparation for improving care coordination and quality under bundled payments prior to participation in the second phase, the risk-bearing phase.
In the BPCI initiative, the term “risk-bearing” refers to the requirement that certain participants in the BPCI initiative bear financial risk for spending above the target price set by Medicare across the episodes of care in which they participate. By using this term, we do not connote any relationship to insurance; we narrowly define this term and use it only to highlight the following financial responsibilities: In the risk-bearing phase, awardees and awardee conveners in Models 2 and 3 are financially responsible to Medicare if FFS expenditures are higher than a target price established by Medicare for the episode(s) in which they are participating. Awardees assume risk on behalf of themselves; awardee conveners assume risk on behalf of others and, in some cases, themselves (as described below). Medicare will recoup the difference between the target price and the actual FFS expenditures from awardees and awardee conveners for all services included in the episode of care if the target price is exceeded. Medicare will pay awardees and awardee conveners the difference if actual FFS expenditures are below the target price. Awardees and awardee conveners in Model 4 who have assumed risk on behalf of themselves and/or others bear risk in that they assume financial responsibility if the bundled prospective payment from Medicare does not cover the services included in the episode of care. Awardees and all participants under awardee conveners in Models 2, 3, and 4 must move to the risk-bearing phase by July 1, 2015.
There are several entity types currently participating in the two phases included in the BPCI initiative's Models 2, 3, and 4. Episode initiators, defined as the entities that initiate episodes of care in Models 2, 3, and 4, are provided claims data in the preparatory phase so that they may establish a structure for bundled payments prior to participation in the risk-bearing phase of the initiative. The entities that initiate episodes of care vary by model: In Model 4, episode initiators are acute care hospitals only; in Model 2, episode initiators are acute care hospitals and physician group practices; and in Model 3, episode initiators are SNFs, HHAs, LTCHs, IRFs, and physician group practices.
To move into the risk-bearing phase, participants must be selected by CMS following a comprehensive review and enter into an agreement with CMS. In the risk-bearing phase, episode initiators participate through one of two options. The first option is that the episode initiator may be an awardee and sign an agreement directly with CMS containing a risk-bearing financial arrangement. While not required, risk-bearing episode initiators may be associated with a “facilitator convener,” an entity that convenes multiple health care providers and supports the episode initiators in implementing the BPCI initiative but does not itself bear any risk. Alternatively, through the second option, the episode initiator may participate in the BPCI initiative under an awardee convener, which is an organization that may or may not be a Medicare provider that assumes financial risk on behalf of the episode initiator. In the second option, the awardee convener signs an agreement with CMS containing the terms of participation in the model, including a risk-bearing financial arrangement. Participation through an awardee convener allows episode initiators to mitigate their financial risk, and participation through an awardee or facilitator convener allows episode initiators to benefit in many cases from the convener's resources, such as enhanced technology and administrative assistance.
As of April 2015, the participation in the risk-bearing phase of the BPCI initiative is as follows: Model 2 is testing 2,053 episodes among 345 episode initiators located in 45 States;
The episodes of care and the associated MS-DRGs that define the episodes that are being tested in Models 2, 3, and 4 of the BPCI initiative are listed in the table below. This table is based on FY 2015 IPPS MS-DRGs and does not account yet for proposed FY 2016 changes to the MS-DRGs.
In this FY 2016 IPPS/LTCH PPS proposed rule, we are soliciting 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
Evaluation of the BPCI initiative for expansion is expected to include analyses based on a combination of qualitative and quantitative sources, including Medicare claims, patient surveys, awardee reports, interviews, and site visits. Given that further evaluation of the BPCI initiative is needed to determine its impact on both Medicare cost and quality of care, at this time, we are not proposing an expansion of any models within the initiative or any policy changes associated with it. Instead, we are requesting public comments on issues surrounding a potential expansion of the BPCI initiative so that we can be prepared in the event that the Secretary determines that findings from the evaluation of the initiative demonstrate that it meets all criteria for expansion, consistent with the requirements of section 1115A(c) of the Act, and that, based on these findings and other pertinent factors, expansion is warranted.
CMS is committed to testing new payment and service delivery models, evaluating results and advancing best practices, and engaging stakeholders. These three priorities are crucial to the BPCI initiative. As we initiate discussions about potential expansion, we continue to value stakeholder engagement within the framework of CMS' priorities for the BPCI initiative. Consistent with its ongoing commitment to develop new models and refine existing models based on additional information and experience, CMS may modify existing models or test additional models under its testing authority under section 1115A of the Act. It may possibly do so, taking into consideration stakeholder input, including feedback received through the public comments submitted in response to the discussion in this section. However, the primary goal for this solicitation of public comments is to receive information about a potential expansion of the BPCI initiative. Therefore, we are requesting that public comments on the discussion in this section consider how expanded episode payment could continue to encourage high-quality, high-value care during Medicare beneficiaries' episodes of care, while allowing for accurate payments to providers, encouraging coordination of care among providers, and ensuring access to care and freedom of choice for all Medicare beneficiaries, regardless of their severity of illness. The following list is not an exhaustive list of issues on which we are requesting public comments, and the inclusion of the list of issues is not, in any way, meant to imply that any or all of these issues would be addressed in any expanded model. The solicitation of public comments is for planning purposes, and as mentioned above, we would use additional rulemaking if we decide to expand any of the models.
We are seeking public comments on the following issues:
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Consistent with our continuing commitment to engaging stakeholders in CMS' work, we are seeking public comments on these issues to broaden and deepen our understanding of the important issues and challenges regarding bundled payments in the current health care marketplace. These public comments also will assist us in planning for expansion if a decision is made to expand the BPCI initiative in the future.
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 technology must be new; (2) the medical service or technology must be costly such that the DRG rate otherwise applicable to discharges involving the medical service or technology is determined to be inadequate; and (3) the service or technology must demonstrate a substantial clinical improvement over existing services or technologies. Below we highlight some of the major statutory and regulatory provisions relevant to the new technology add-on payment criteria as well as other information. For a complete discussion on the new technology add-on payment criteria, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51572 through 51574).
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
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, 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. Table 10 that was released with the FY 2015 IPPS/LTCH PPS final rule contains the final thresholds that we use to evaluate applications for 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 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 (if the estimated costs for the case including the new technology 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.
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 also 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 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 achieve its goals, the CTI works to streamline and create a more transparent coding and payment process, improve the quality of medical decisions, and speed patient access to effective new treatments. It is also dedicated to supporting better decisions by patients and doctors in using Medicare-covered services through the promotion of better evidence development, which is critical for improving the quality of care for Medicare beneficiaries.
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 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 summarize these comments in the preamble of this proposed rule or, if applicable, indicate that there were no comments received, at the end of each discussion of the individual applications in this proposed rule.
One commenter provided comments that were unrelated to the “substantial clinical improvement” criterion. As explained above and in the
The commenter further stated that because superiority studies cannot be conducted for most serious infections, the most appropriate evaluation of superiority for many new antibiotics is a “noninferiority” clinical trial, which is designed to determine if the experimental drug is similar in efficacy to a standard drug currently available on the market. The commenter noted that, recently, the FDA has demonstrated increased willingness to consider approving new antibiotics if efficacy can be proven based on achieved, well-defined, and statistically validated noninferiority margins. The commenter encouraged CMS to consider the proven efficacy of these antibiotics based on these criteria when determining whether to approve a new antibiotic for new technology add-on payment. The commenter also urged CMS to consider carefully analyzed and peer-reviewed safety, utilization, and economics data when such data are available to support the approval of a new antibiotic for new technology add-on payment. The commenter believed that these considerations could increase the types of information that would be used to support the approval of new drugs for which superiority trials are inappropriate or not feasible or both.
The commenter also believed it is critical that CMS maintain an ongoing dialogue with the FDA as well as nongovernment experts in antibiotic resistance and antibiotic drug development in order to more fully understand the highly complex and unique issues regarding the type of data available for the study and approval of new antibiotics.
We note that the commenter provided comments that were unrelated to the substantial clinical improvement criterion. As noted above, the purpose of the new technology town hall meeting was specifically to discuss the substantial clinical improvement criterion in regard to pending new technology add-on payment applications for FY 2016. Therefore, we are not summarizing these comments in this proposed rule. The commenter is welcome to resubmit its comments in response to proposals presented in this proposed rule.
As discussed in section II.G.1.a. of the preamble of this proposed rule, health plans and providers 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 will continue to use ICD-9-CM coding practices and principles through September 30, 2015. We refer readers to section II.G.1.a. of the preamble of this proposed 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. An overview of Section “X” codes was provided at the March 18-19, 2015 ICD-10 Coordination and Maintenance Committee meeting. Further information regarding the new Section “X” codes and their use within the ICD-10-PCS can be found on the CMS Web site at:
The ICD-10-PCS includes a new section containing the new Section “X” codes, which will be used beginning FY 2016. 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 Section “X” codes will be posted in June 2015 on the Internet via the CMS Web site at:
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 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
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) occurs prior to the beginning of FY 2016. Therefore, we are proposing to discontinue new technology add-on payments for Voraxaze® for FY 2016. We are inviting public comments on this proposal.
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 do 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), new technology add-on payments are limited 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) occurs prior to the beginning of FY 2016. Therefore, we are proposing to discontinue new technology add-on payments for the Zenith® F. Graft for FY 2016. We are inviting public comments on this proposal.
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, as discussed in section II.G.1.a. of the preamble of this proposed rule, for FY 2016, we are proposing to identify and make new technology add-on payments for cases involving 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
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), new technology add-on payments are limited 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 are proposing to continue new technology add-on payments for this technology for FY 2016. We are inviting public comments on this proposal.
Because we are adopting the ICD-10 coding system, effective October 1, 2015, as discussed in section II.G.1.a. of the preamble of this proposed rule, for FY 2016, we are proposing 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). 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 are inviting public comments on this proposal.
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), new technology add-on payments are limited 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 are proposing to discontinue new technology add-on payments for the Zilver® PTX® for FY 2016. We are inviting public comments on this proposal.
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, effective October 1, 2015, as discussed in section II.G.1.a. of the preamble of this proposed rule, for FY 2016, we are proposing to identify and make new technology add-on payments for cases involving the CardioMEMS
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
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), new technology add-on payments are limited 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 are proposing to continue new technology add-on payments for this technology for FY 2016. We are inviting public comments on this proposal.
Because we are adopting the ICD-10 coding system, beginning October 1, 2015, as discussed in section II.G.1.a, of the preamble of this proposed rule, for FY 2016, we are proposing 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). The maximum payment for a case involving the MitraClip® System would remain at $15,000 for FY 2016. We are inviting public comments on this proposal.
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
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 are proposing to continue new technology add-on payments for this technology for FY 2016. We are inviting public comments on this proposal.
Because we are adopting the ICD-10 coding system effective October 1, 2015, as discussed in section II.G.1.a. of the preamble of this proposed rule, we are proposing 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). The maximum payment for a case involving the RNS® System would remain at $18,475 for FY 2016. We are inviting public comments on this proposal.
We received applications for nine new technology add-on payments for FY 2016. In accordance with the regulations under § 412.87(c), applicants for new technology add-on payments must have FDA approval by July 1 of each year prior to the beginning of the fiscal year that the application is being considered. A discussion of the applications is presented below.
Angel Medical Systems, Inc. submitted an application for new technology add-on payments for the Angel Medical Guardian® Ischemic Monitoring Device (hereinafter referred to as the Guardian®). The Guardian® implantable ischemia detection system is designed to provide early detection and patient alerts for ischemic and other cardiac events experienced by ambulatory patients. The device consists of an implantable monitoring device (IMD) that communicates with an external device (EXD) via telemetry. The IMD monitors the patient's current cardiac data and compares these data to the patient's historical baseline using thresholds that reflect the normal ischemic range for each individual. Upon detection of a cardiac anomaly, the implanted IMD vibrates and provides one of two distinguishable alerts, “emergency alarms” and “see doctor alerts,” which prompt the patient to initiate emergency and/or preventative actions. The system also includes a program that allows physicians to adjust the settings for event detection and subsequent alerts.
With respect to the newness criterion, the applicant anticipates FDA premarket approval during June 2015. The Guardian® technology is a Class III device that has obtained an investigational device exemption (IDE) from the FDA under IDE number G060259. Effective October 1, 2006 (FY 2007), ICD-9-CM procedure codes 00.56 (Insertion or replacement of implantable pressure sensor (lead) for intracardiac hemodynamic monitoring) and 00.57 (Implantation or replacement of subcutaneous device for intracardiac hemodynamic monitoring) were created to describe specific types of cardiac procedures. There have been minor revisions to each of the procedure codes' title and description over the years to better differentiate procedures being performed with various technologies. As of October 1, 2011 (FY 2012), these codes distinguish procedures using the Guardian® technology from other similar procedures that use various technologies. The current ICD-9-CM procedure code titles are as follows: 00.56 (Insertion or replacement of implantable pressure sensor with lead for intracardiac or great vessel hemodynamic monitoring), and 00.57 (Implantation or replacement of subcutaneous device for intracardiac or great vessel hemodynamic monitoring). As stated earlier in section II.G.1.a. of the preamble of this proposed rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. Under ICD-10, procedure code 02HK32Z (Insertion of monitoring device into right ventricle, percutaneous approach) is the comparable translation for ICD-9-CM procedure code 00.56, and procedure code 0JH602Z (Insertion of monitoring device into chest subcutaneous tissue and fascia, open approach) is the comparable translation for ICD-9-CM procedure code 00.57, which specifically describe procedures involving the Guardian® technology. We note that, in accordance with § 412.87(c), in order for a technology to be considered for new technology add-on payments for a particular fiscal year, the technology must be approved by the FDA by July 1 prior to the particular fiscal year for which add-on payments are requested. According to the applicant, there are no other treatment modalities that perform the same function as the Guardian® technology. Therefore, the applicant believed that the Guardian® technology is not substantially similar to any other currently approved technology. We are inviting public comments on whether the Guardian® technology meets the newness criterion.
With respect to the cost criterion, the applicant determined that cases involving the Guardian® technology map to MS-DRG 264 (Other Circulatory System O.R. Procedures). The applicant initially provided a sensitivity analysis performed using all of the cases assigned to MS-DRG 264, without isolating a subset of cases that would be eligible for treatment using the Guardian® technology. In follow up to our request for a more focused analysis that calculates an average case-weighted standardized charge per case for cases involving the Guardian® technology assigned to MS-DRG 264, the applicant submitted a revised analysis that used data from a subset of cases representing patients who received treatment involving the implantation of pacemakers that mapped to MS-DRG 243 (Pacemaker Implant with CC). The applicant searched the Healthcare Cost and Utilization Project (HCUP) database for patient profiles that indicated prior myocardial infarction with comorbidities such as malignant hypertension (reported using ICD-9-CM diagnosis code 401.0), other acute and subacute forms of ischemic disease (reported using ICD-9-CM diagnosis code 411.89), and intermediate coronary syndrome (that is, unstable angina reported using ICD-9-CM diagnosis code 411.1). According to the applicant, all of the patients enrolled in the ALERTS pivotal clinical study exhibited at least one or more of these comorbidities, similar to many of the patients represented by cases assigned to MS-DRG 243. The applicant asserted that the results from the revised search of the HCUP database revealed patient profiles that were similar to the patients who would have likely been recommended for treatment using the
The applicant used data from multiple sources to compute an average case-weighted standardized charge per case for procedures involving the Guardian® technology. The applicant began by determining the specific FY 2015 Medicare IPPS Federal rate for cases assigned to MS-DRG 243 that were treated by each hospital that participated in the Guardian® ALERTS clinical study. The applicant then adjusted this amount by a factor of 1.057, which was derived from the March 2014 MedPAC Report to Congress on Medicare payment policies, to convert the Medicare payment to actual costs incurred by each hospital for each case. Specifically, the applicant determined this adjustment factor by subtracting the average industry wide margin of −5.4 percent, or −0.054 percent, for hospitals during 2012, which was reflected in the March 2014 Report to Congress, from a factor of 1, which results in the percentage of inpatient costs that Medicare paid (1−0.054 = 94.6), and then divided this amount by 100 (100/94.6 = 1.057). To convert the adjusted Medicare payment amount to charges, the applicant applied hospital-specific CCRs found in the FY 2015 IPPS final rule impact file. The applicant computed an average case-weighted standardized charge per case by weighting the number of implants performed using the Guardian® technology performed by each hospital participating in the Guardian® ALERTS clinical study to the overall number of implants performed and represented by cases assigned to MS-DRG 243. This resulted in an average case-weighted standardized charge per case of $75,010. The applicant then deducted device-related charges for a pacemaker based on data obtained from the FY 2015 After Outliers Removed (AOR) File to determine the nonimplant resources used during these types of procedures, and added the device-related charges for the Guardian® technology, which resulted in an adjusted average case-weighted charge per case of $89,050. Because this adjusted average case-weighted standardized charge per case exceeds the average case-weighted threshold amount of $65,544 for MS-DRG 264 as displayed in Table 10 of the FY 2015 IPPS/LTCH PPS final rule, the applicant maintained that the Guardian® technology meets the cost criterion.
We have several concerns regarding the applicant's cost analysis. We do not believe that it is appropriate to convert Medicare payments for discharges to actual costs incurred by hospitals by applying a margin adjustment factor and hospital-specific CCRs to determine an average case-weighted standardized charge for specific cases. According to the regulations under 42 CFR 412.2(b)(1), the prospective payment amount paid for inpatient hospital services is the total Medicare payment for the inpatient operating costs and the inpatient capital-related costs incurred in furnishing services covered by the Medicare program. The prospective payment amount represents a payment amount for the total cost of inpatient hospital services incurred by hospitals participating in the Medicare program, but does not represent a measure of the actual costs per case. For example, two hospitals in the same CBSA will be paid the same prospective payment amount for a case assigned to the same MS-DRG. The fact that these hospitals are paid the same prospective payment amount does not imply that the hospitals incurred the same amount of costs per case. On the contrary, the hospitals probably incurred very different costs for each case and the prospective payment amount is simply a payment for the inpatient costs covered by Medicare. Therefore, we are concerned about the methodology used by the applicant to determine an average case-weighted standardized charge per case, and do not believe that the calculation of this amount determined by the applicant is accurate. Moreover, we are concerned that the applicant assumed that the patient profiles for patient treated with pacemaker implantations and patients treated using the Guardian® technology are similar enough to warrant the inclusion of cases assigned to MS-DRG 243 in the analysis and then to depend upon the results of that analysis as a basis to demonstrate that the technology meets the cost criterion. In addition, we do not believe that it is appropriate to assume that the resources used during procedures involving pacemaker implantations and procedures involving the Guardian® technology would be the same, and the applicant does not provide a rationale for assuming such similarities. Because of these concerns, we are unable to determine if the technology meets the cost criterion. We are inviting public comments on whether the Guardian® technology meets the cost criterion, particularly with respect to the concerns we have raised.
With respect to the substantial clinical improvement criterion, the applicant asserted that this technology provides a more rapid beneficial resolution to ischemic and other cardiac events in ambulatory patients that reduces mortality and morbidity, and facilitates a faster patient presentation time to initiate treatment for these types of disorders. The applicant also believed that this technology fulfills an unmet clinical need for early diagnoses and preventative treatment options for a patient population that experiences silent, asymptomatic ischemia. The applicant included data from its pivotal ALERTS clinical trial, a randomized study expanding over a 6-month period of patients who were treated using the Guardian® technology and with the alarm function turned on (which represented the treatment group) or the alarm function turned off (which represented the control group). The primary efficacy endpoint was a composite variable that considered cardiac or unexplained death, new death Q-wave MI, or delayed presentation (time to door >2 hours) for a documented coronary occlusion event. The primary safety outcome measure was device-related complications. According to the applicant, the following findings demonstrate that the Guardian® technology represents a substantial clinical improvement in regard to currently available treatment options for Medicare beneficiaries:
• The treatment group showed statistically significant clinical improvement over the control group using a composite outcome variable;
• 97 percent of patients treated with implantations using the Guardian® technology were free from system-related complications at 6 months post programming;
• A reduced proportion of patients having pre-hospital delays over 2 hours for a confirmed thrombotic coronary occlusive event;
• A reduction in the median time-to-door for patients treated using the Guardian® technology alert system turned on (51 minutes) versus patients treated using the Guardian® technology alert system turned off (1,808 minutes); and
• An improvement in the overall quality of life, and greater control over the condition, including feeling safer, for patients who were enrolled in the ALERTS trial and participated in a 2012 quality of life study that were treated with the Guardian® technology when the alarm system was activated.
We are concerned that the outcome measures, including the quality of life measures, are based on and reflective of factors other than the efficacy of the device. For instance, any benefit from using the Guardian® technology depends entirely upon the patient heeding the alarms and alerts and seeking emergency medical care without delay. Moreover, we are concerned that the ALERTS pivotal trial uses inherently different methods of ascertainment of “delayed presentation” for the treatment group and the control group after an ischemic event, which implies a serious bias in regard to the clinical trial results. We believe that this bias questions the validity of the primary efficacy endpoint. An additional concern is that the ALERTS pivotal trial uses a very broad definition of a “confirmed thrombotic event.” Although the pivotal trial used four different criteria to determine whether such an event occurred, only two of them are actually evidence of an acute coronary event for which timely patient presentation for medical care might improve outcomes. The applicant did indicate how many confirmed events met each of the four criteria.
We are inviting public comments on if, and how, the Guardian® technology meets the substantial clinical improvement criterion, particularly with respect to the concerns we have raised.
Below we summarize and respond to the comments submitted on the Guardian® technology at the Town Hall meeting.
One commenter, a principal investigator in the ALERTS study, further reported that treatment using the Guardian® device tended to reduce the incidence of Q waves, a primary clinical endpoint that has important ramifications in both morbidity and mortality rates. The commenter also noted that, based on the results of the ALERTS study, asymptomatic thrombotic events were recognized in 21 of 451 (4.6 percent) of patients in the Guardian® treatment arm, and that the vast majority of these patients arrived to a medical facility within an hour of the onset of the event. In contrast, patients in the control arm who experienced asymptomatic ischemic events recorded by the Guardian® device arrived to a medical facility between 10 and 77 days after the event. According to the commenter, many of these patients experienced a silent myocardial infarction, which occurs over time in a significant number of patients and can lead to higher mortality rates. The commenter believed that the Guardian® device provides a significant benefit to a patient population that experiences asymptomatic ischemic events and does not receive any physical warnings of their condition, and who would otherwise not seek treatment for a longer period of time than what is recommended in the medical community, if treatment is sought at all.
Another commenter provided additional information on the opportunity for improvement upon time to treatment for patients at high risk for a recurrent myocardial infarction, which would in turn lead to improved clinical outcomes, particularly for the patient population experiencing asymptomatic ischemia. According to the commenter, approximately 50 percent of patients experiencing myocardial infarction have no symptoms at all or symptoms that may not be recognized, and often do not receive any acute therapy to avert or mitigate the impact of the infarction. The commenter stated that the current standard of care requires patients to recognize symptoms of heart attack and seek medication immediately, and, for every 30 minute delay in treatment, there is an associated 8.5 percent increased risk of developing an ejection fraction of less than 30 percent, which is highly correlated with subsequent heart failure, and an associated 7.5 percent relative risk increase in 1 year mortality. Therefore, the commenter believed that the Guardian® device presents a significant opportunity to address improvement in the timing of treatment for patients at high risk for a recurrent myocardial infarction.
Amgen, Inc. submitted an application for new technology add-on payments for Blinatumomab (BLINCYTO
BLINCYTO
With respect to the newness criterion, the BLINCYTO
According to the applicant, the BLINCYTO
With regard to the first criterion, we are concerned that the mechanism of action of the BLINCYTO
With respect to the second criterion, 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, according to the applicant, the standard treatment for patients diagnosed with 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
We believe that the BLINCYTO
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 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
We have three concerns regarding the applicant's methodology and assumptions used in its cost analyses. We are concerned 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 are concerned that the applicant did not provide a basis for the hospital markup assumed when conducting its cost analyses. Unless the applicant provides this information, we are unable to determine whether the cost of the technology per case has been calculated appropriately. Moreover, we are concerned 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
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 R/R 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 are concerned 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 are inviting public comments on if, and how, the BLINCYTO
Cerexa, Inc., an affiliate of Actavis, Inc., submitted an application for new technology add-on payments for FY 2016 for Ceftazidime Avibactam (AVYCAZ). AVYCAZ is used for the treatment of adult patients who have been diagnosed with complicated urinary tract Infections (cUTIs), including pyelonephritis and complicated Intra-abdominal Infections (cIAIs), for which there are limited or no available treatment options. Although AVYCAZ is indicated for the treatment of patients who have been diagnosed with cUTIs and cIAIs, the applicant asserted that the product may also be used in the treatment of patients diagnosed with cUTIs and cIAIs caused by extended-spectrum β-lactamase (ESBL)-producing Gram-negative pathogens, carbapenem-resistant Enterobacteriaceae (CRE), and multidrug-resistant (MDR) Pseudomonas aeruginosa.
AVYCAZ is an intravenous β-lactam/β-lactamase inhibitor combination antibacterial drug, consisting of an anti-pseudomonal, Cephalosporin (also referred to as Ceftazidime), and a β-lactamase inhibitor, Avibactam. Ceftazidime is currently available and widely used as an extended spectrum of Cephalosporin. However, in recent years Cephalosporin has had diminishing effects because of increasing levels of antibiotic resistance in specific bacteria. Some species of bacteria produce ß-lactamase enzymes, which cleave the ß-lactam in antibiotics such as penicillin that have a ß-lactam ring in their structure. The ß-lactamase enzymes inactivate the antibiotic and cause the bacteria to become resistant to that antibiotic. To avoid development of resistance, in current practices ß-lactamase inhibitors are administered in combination with ß-lactam antibiotics to inhibit the action of ß-lactamase enzymes and prevent the development of antibiotic resistance because ß-lactamase inhibitors block the activity of ß-lactamase enzymes. This tends to widen the spectrum of antibacterial activity. For example, a commonly used β-lactamase inhibitor, Clavulanic acid or Clavulanate, is usually combined with Amoxicillin to create Augmentin or Ticarcillin (Timentin); Sulbactam (also a commonly used ß-lactamase inhibitor) is usually combined with Ampicillin to create Cefoperazone; and Tazobactam is usually combined with Piperacillin.
Ceftazidime is not combined with any β-lactamase inhibitors. Combining Ceftazidime with Avibactam prohibits bacteria from developing resistance to the antibiotic and protects Ceftazidime from being inactivated by β-lactamase enzymes. According to the applicant, unlike other inhibitors, Avibactam does not induce Class C enzymes that diminish the activity of Cephalosporin. Administering Ceftazidime in combination with Avibactam decreases the minimum inhibitory concentration (MIC) of Class A and Class C isolates, and some Class D isolates, thereby restoring the
AVYCAZ is administered as a treatment to patients 18 years of age, or older, who have been diagnosed with a cUTI and/or a cIAI in doses of 2.5g (2g of Ceftazidime and 0.5g of Avibactam), every 8 hours by intravenous infusion spanning over a 2-hour time period. The recommended duration of treatment with AVYCAZ for patients diagnosed with a cIAI (used in combination with Metronidazole) is 5 to 14 days as an inpatient. The recommended duration of treatment with AVYCAZ for patients diagnosed with a cUTI is 7 to 14 days as an inpatient. The FDA has authorized a randomized multi-center, active-controlled trial to evaluate the safety and tolerability of AVYCAZ in children who are at least 3 months of age, and in adults 18 years of age or older who have been diagnosed with a cUTI and/or cIAI
With regard to the newness criterion, AVYCAZ was approved by the FDA on February 25, 2015. As stated earlier in section II.G.1.a. of the preamble of this proposed rule, for FY 2016, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. We note that the applicant submitted a request and presented at the September 2014 Coordination and Maintenance Committee Meeting to apply for ICD-10-PCS codes that uniquely identify the administration of Ceftazidime-Avibactam Anti-infective. More information on this request can be found on the CMS Web site at:
Currently, ICD-10-PCS procedure codes 3E03329 (Introduction of other anti-infective into peripheral vein, percutaneous approach) and 3E04329 (Introduction of other anti-infective into central vein, percutaneous approach) describe the injection of an antibiotic. However, these ICD-10-PCS codes are not specific to the type of antibiotic used. We received public comments during and after the March 2015 ICD-10 Coordination and Maintenance Committee meeting that supported the creation of a unique code to identify the AVYCAZ antibiotic when it is used in the treatment of patients who have been diagnosed with cUTIs and cIAIs. As a result, the following ICD-10-PCS codes were created under the new Section X to describe the specific use of AVYCAZ and are effective October 1, 2015 (FY 2016): XW03321 (Introduction of ceftazidime-avibactam anti-infective into peripheral vein, percutaneous approach, new technology group 1); and XW04321 (Introduction of ceftazidime-avibactam anti-infective into central vein, percutaneous approach, new technology group 1). If the AVYCAZ technology is approved for new technology add-on payments, we believe that the newness period would begin on February 25, 2015, the date of FDA approval. At this time, the applicant has not submitted any information that suggests the technology was not available on the U.S. market as of the FDA approval date. The applicant maintained that AVYCAZ meets the newness criterion. We are inviting public comments on whether AVYCAZ meets the newness criterion.
According to the applicant, the most current guidelines recommend treatment for patients hospitalized because of a cUTI diagnosis using antibiotic drugs such as Cefepime, Ceftriaxone, and Piperacillin/Tazobactam.
As stated by the applicant, Ceftazidime is currently available and widely used in the treatment of these types of infections. In addition, the current treatment options available to Medicare beneficiaries and used to treat this patient population include antibiotics such as Polymyxins (for example, Colistin), Aminoglycosides (for example, Amikacin and Gentamicin), Carbapenems (for example, Meropenem and Imipenem/Cilastatin), or Tigecycline. The applicant maintained that the administration of Ceftazidime in combination with Avibactam broadens the spectrum of ß-lactamase inhibition when compared to administering Ceftazidime without Avibactam and other currently available therapies because Avibactam has inhibiting agents that restore the
With regard to the cost criterion, the applicant maintained that AVYCAZ meets the cost criterion. According to the applicant, there are 63 ICD-9-CM diagnosis codes that describe cUTIs and/or cIAIs. Cases representing patients who have been diagnosed with cUTIs and/or cIAIs may be reported on hospital claims using any 1 of 12 different ICD-9-CM diagnosis codes describing cUTIs, and any 1 of 51 ICD-9-CM diagnosis codes describing cIAIs. Therefore, cases representing patients diagnosed with either a cUTI or a cIAI may be assigned to multiple MS-DRGs. Of the 63 applicable ICD-9-CM diagnosis codes, the applicant used 35 ICD-9-CM codes to identify 2,482,157 cases from the FY 2013 MedPAR file, which mapped to 567 MS-DRGs. The top five MS-DRGs containing cases that may be eligible for AVYCAZ are: MS-DRG 689 (Kidney and Urinary Tract Infections with MCC); MS-DRG 690 (Kidney and Urinary Tract Infections
The applicant began its analysis by searching the FY 2013 MedPAR file and identifying 2,183,467 cases representing patients diagnosed with a cUTI across 544 MS-DRGs, and 298,690 cases representing patients diagnosed with a cIAI across 385 MS-DRGs. This resulted in the identification of 1,146,971 cases representing patients diagnosed with a cUTI across 205 MS-DRGs, and 39,080 cases representing patients diagnosed with a cIAI across 32 MS-DRGs. After searching the FY 2013 IPPS Impact File, the applicant focused its analysis on 1,067,111 cases representing patients diagnosed with a cUTI across 193 MS-DRGs and 36,181 cases representing patients diagnosed with a cIAI across 31 MS-DRGs. The applicant further modified a portion of its analysis to focus on 1,067,072 cases representing patients diagnosed with a cUTI across 192 MS-DRGs in accordance with the thresholds obtained from Table 10 of the FY 2015 IPPS/LTCH PPS final rule.
Based on these data, for this analysis, the applicant used 100 percent of all of the cases representing patients diagnosed with a cUTI (1,067,072 cases) across 192 MS-DRGs. The applicant determined an average case-weighted standardized charge per case of $42,736. The applicant then excluded the charges for the specific technology used from the average case-weighted standardized charge per case. To continue its analysis, the applicant used two different variables to exclude the charges for specific technologies used, that is, the charges for low-cost generic drugs and the charges for high-cost brand named drugs administered for a length of 5 and 8 treatment days. The applicant explained that, at a minimum, it is recommended that antibiotics be administered for at least 5 days to prevent the development of antibiotic-resistant bacteria.
The applicant conducted another analysis using the 80-percent variable for 846,897 cases representing patients diagnosed with a cUTI and/or a cIAI based on 3 of the ICD-9-CM diagnosis codes identified across 15 MS-DRGs. Depending on the amount of the charges excluded for the cost of the specific drugs and the charges related to the infusion of these drugs, the applicant determined a final inflated average case-weighted standardized charge per case that ranged from $37,086 to $41,459. Using the FY 2015 IPPS Table 10, the average case-weighted threshold amount across the 15 MS-DRGs used is $36,411 (all calculations above were performed using unrounded numbers). Because the final inflated average case-weighted standardized charge per case under all of these scenarios exceeds the average case-weighted threshold amount, the applicant maintained that AVYCAZ also meets the cost criterion under this analysis.
The applicant conducted another analysis using 100 percent of all of the cases representing patients who have been diagnosed with a cIAI (36,181 cases) across 31 MS-DRGs, and determined an average case-weighted standardized charge per case of $51,436.98. The applicant then excluded the charges for the specific technology used from the average case-weighted standardized charge per case. To continue its analysis, the applicant used two different variables to exclude the charges for the specific technologies used; that is, the charges for low-cost generic drugs and the charges for high-cost brand named drugs administered for a length of 5 and 8 treatment days. The applicant explained that, at a minimum, it is recommended that antibiotics be administered for at least 5 days to prevent the development of antibiotic-resistant bacteria. The applicant also noted that, according to the AMR, the average length of therapy for patients diagnosed with an UTI and/or an IAI that was successfully treated in less than 5 days only represents 0.28 percent of all cases representing these types of conditions. Therefore, a 5-day treatment regimen was selected as a basis to represent the most conservative
The applicant conducted another analysis using the 80-percent variable for 28,483 cases representing patients diagnosed with a cIAI based on 5 of the ICD-9-CM diagnosis codes identified across 4 MS-DRGs. Depending on the amount of the charges excluded for the specific drugs used and the charges related to the infusion of these drugs, the applicant determined a final inflated average case-weighted standardized charge per case that ranged from $50,435.54 to $54,809.30. Using the FY 2015 IPPS Table 10 thresholds, the average case-weighted threshold amount across all of the MS-DRGs used is $47,186 (all calculations above were performed using unrounded numbers). Because the final inflated average case-weighted standardized charge per case under all of these scenarios exceeds the average case-weighted threshold amount, the applicant maintained that AVYCAZ also meets the cost criterion under this analysis.
We are concerned that the applicant did not use the inflation factor of 10.4427 when calculating the average case-weighted standardized charge per case, which is the same inflation factor used by CMS to update the FY 2015 outlier threshold, and did not offer a rationale for its alternative inflation factor. We are inviting public comments on whether AVYCAZ meets the cost criterion, specifically with regard to our concerns.
The applicant maintained that AVYCAZ represents a substantial clinical improvement in the available treatment options for patients diagnosed with a cIAI and/or a cUTI, including cUTIs and cIAIs that are known or suspected to be caused by extended-spectrum β-lactamase (ESBL)-producing Gram-negative pathogens, carbapenem-resistant Enterobacteriaceae (CRE), and multidrug-resistant (MDR) Pseudomonas aeruginosa. According to the applicant, existing treatment options for these types of conditions are very limited and pose toxicity risks. The applicant stated that antibiotic-resistant infections are a serious problem for health care providers and patients. Among the bacteria resistant to all or nearly all of the antibiotics available today, CRE has developed rapidly and continues to proliferate. The applicant noted that, as of 2014, 49 States have reported confirmed CRE infections, an increase from 42 States that reported and confirmed CRE infections in 2013.
Rishi H, Dhillon P, Clark C. ESBLs: a clear and present danger?
Jacoby GA, Munoz-Price LS. The New β-Lactamases.
The applicant provided data from the REPRISE study, which compared AVYCAZ and Carbapenem, also used as a treatment option for patients diagnosed with cIAIs and cUTIs. This study was specifically designed to demonstrate the inhibiting activity of Avibactam to restore the clinical and microbiological efficacy of Ceftazidime verses Ceftazidime-resistant, β-lactamase-producing Gram-negative bacteria. According to the applicant, in the pooled cIAI and cUTI studies,
The applicant reported that the INFORM study
The applicant also provided conclusions and data from one of the Phase II clinical trials conducted for patients diagnosed with cIAIs and cUTIs, respectively. The applicant reported that the patients diagnosed
The applicant also provided data from the RECLAIM-1 and RECLAIM-2 trials. The applicant reported that these trials evaluated the safety and efficacy of AVYCAZ versus the control drug used to treat patients hospitalized for cIAIs. According to the applicant, AVYCAZ technology met the objective of statistical noninferiority when compared to the control drug. However, the applicant asserted, in a subgroup of patients diagnosed with moderate renal impairment at baseline (MRIB [defined as an estimated creatinine clearance (ClCr) of >30 mL/min and ≤50 mL/min]), AVYCAZ combined with Metronidazole had lower clinical cure rates when compared to the control group. In addition to the clinical response rate findings, although the number of deaths was minimal, they were numerically higher for patients diagnosed with MRIB who were treated with AVYCAZ in combination with Metronidazole when compared to patients treated with Meropenem. The applicant acknowledged that this result was not more favorable and reviewed the individual cases of failure or indeterminate (including all deaths) for the patients diagnosed with MRIB, and identified no predominant reason for the treatment difference observed in the subgroup analysis. However, the applicant maintained that AVYCAZ represents a substantial clinical improvement because of the adverse effects of other currently available treatment options such as nephrotoxicity. We are concerned that the findings cited by the applicant lack data regarding the adverse effects of nephrotoxicity because of treatment using other currently available treatment options.
The applicant stated that, in the Phase II trials, the Medicare-eligible population represented 9.2 percent of the total population of patients diagnosed with cIAIs, and 14.8 percent of the total population of patients diagnosed with cUTIs. We are concerned that a cohort that would reflect a Medicare population was not analyzed or predefined as a subgroup in the trials to better understand and quantify the substantial clinical improvement of AVYCAZ. Furthermore, we are unsure whether a possibility of a favorable safety and tolerability profile for AVYCAZ relative to other currently available treatment options for patients diagnosed with cUTIs and cIAIs implies a substantial clinical improvement.
The applicant maintained that AVYCAZ represents a substantial clinical improvement over treatment options currently available to Medicare beneficiaries. We do not believe that the applicant has substantiated this assertion. With regard to the data indicating the safety of the technology, we are concerned that the results for the trials could be interpreted to suggest that use of the technology may lead to increased mortality. We note that the composition of the treatment and control groups may make it difficult to isolate the degree to which AVYCAZ affects safety and health care outcomes because the patients in the treatment group were also treated with another drug administered in combination with AVYCAZ. Moreover, we are concerned that the median age of the participants enrolled in the studies of AVYCAZ was between 40 and 50 years. We believe that it would be indicative to use a subgroup that actually represents the eligible Medicare population (that is, patients who are 65 years of age or older, blind, disabled, or diagnosed with end-stage renal disease). The applicant stated that AVYCAZ had greater efficacy and safety measures for patients who have limited or no other available treatment options. However, we are concerned that the patient population enrolled in the applicant's trials were not eligible Medicare beneficiaries, nor was it definitive that these participants had limited or no other available treatment options. We are inviting public comments on whether AVYCAZ meets the substantial clinical improvement criterion, specifically with regard to our stated concerns.
We did not receive any written public comments in response to the New Technology Town Hall meeting regarding the application of AVYCAZ for new technology add-on payments.
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 this proposed rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. We note that the applicant submitted a request for a unique ICD-10-PCS code that was presented at the March 18, 2015 ICD-10 Coordination and Maintenance Committee meeting. If approved, the code(s) will be effective on October 1, 2015 (FY 2016). More information on this request 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
We are concerned 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, 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 are concerned that the applicant did not include with their 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 cannot determine if the device's mechanism of action is unique among atherectomy devices as the applicant claimed.
With respect to the second criterion, 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). We are concerned 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, the applicant maintained 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, we are concerned 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 are 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 are inviting public comments on if, and how, the DIAMONDBACK® Coronary OAS meets the newness criterion. In our subsequent discussion of the cost and substantial clinical improvement criteria, we limit our analysis of the new technology device to a patient population who has severely calcified coronary lesions for which the other devices are contraindicated for use.
With respect to the cost criterion, the applicant determined that cases representing patients who have been treated with transluminal coronary atherectomy for which the DIAMONDBACK® Coronary OAS technology is appropriate map to MS-DRGs 246 through 251 as noted earlier in this section. The applicant searched the claims data in the FY 2013 MedPAR file for cases assigned to these six MS-DRGs (which contained claims for inpatient hospital discharges from October 1, 2012 to September 30, 2013) and identified 5,443 claims for cases reporting ICD-9-CM procedure code 17.55. The applicant indicated that it further examined the claims data for the cases that also reported ICD-9-CM diagnosis code 414.4, and identified 250 claims for cases with a diagnosis of calcified coronary lesion. The applicant stated that it applied the standard trims used by CMS when selecting cases for IPPS rate calibration. Therefore, it included cases from IPPS hospitals, including hospitals located in Maryland, and excluded cases paid by Medicare Advantage plans, statistical outlier cases, and cases from hospitals that did not submit charges in a sufficiently broad range of revenue centers.
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 between approximately $6,000 to $15,000, depending on the results determined by using the combination of
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.
We question some of the assumptions underlying the four areas of uncertainty that were the basis for the applicant's sensitivity analyses. 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 are concerned 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 are inviting public comments on if, and how, the DIAMONDBACK® Coronary OAS meets the cost criterion.
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
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.
We are concerned that the ORBIT II study conducted by the applicant lacked a control arm. The applicant asserted 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 continue to be concerned that meaningful conclusions cannot be drawn from a study that did not include a comparator group. Moreover, we question 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 are inviting public comments on if, and how, DIAMONDBACK® Coronary OAS meets the substantial clinical improvement criterion.
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 and anticipates that the market availability on the U.S. market will start by the second week of April 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 isavuconazonium is administered at 200 mg of isavuconazole. The oral formulation of isavuconazonium is administered at 100 mg of isavuconazole. 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 13.4 days.
As stated in section II.G.1.a. of the preamble of this proposed rule, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. We note that the applicant submitted a request for unique ICD-10-PCS codes that was presented at the March 18, 2015 ICD-10 Coordination and Maintenance Committee meeting. If approved, the codes will be effective on October 1, 2015 (FY 2016). More information on this request can be found on the CMS Web site at:
If the technology were to be approved for a new technology add-on payment, we believe its newness period would begin on March 6, 2015, the date of FDA approval. At this time, the applicant has not submitted any specific information to establish that the technology was not available on the U.S. market as of the FDA approval date or to describe the reasons for a delay of availability until the second week of April 2015. The applicant maintained that CRESEMBA® meets the newness criterion.
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 antifungal drugs also used for the treatment of these patients include voriconazole, posaconazole, and itroconazole. The CDC Web site at
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 sometimes challenging to clinically distinguish the type of antifungal infection a patient may be experiencing. Therefore, the typical treatment of patients exhibiting symptoms of 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.
We are concerned that CRESEMBA® may be substantially similar to other currently approved antifungal drugs. We refer readers to the FY 2010 IPPS/RY 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. 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, we believe that CRESEMBA® has a similar mechanism of action as the other groups of antifungal drugs available for the treatment of patients 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, and amphotericin B is a polyene antifungal commonly used to treat patients diagnosed with mucormycosis. The applicant maintained that the availability of the drug in an oral formulation constitutes a different mechanism of action. We disagree 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
With respect to the second criterion for determining substantial similarity, 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 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. We are concerned that this technology is administered with the other currently available treatments, and therefore cannot be considered an alternative treatment option. Therefore, we believe that CRESEMBA® may be considered substantially similar to other available treatments and cannot be considered “new” for purposes of new technology add-on payments. We are inviting public comments on if, and how, CRESEMBA® meets the newness criterion and our concerns regarding how it is substantially similar to other treatments for serious fungal infections.
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
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.
We are 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 note 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 are concerned about the possibility of drug toxicity, poly pharmacy, and drug-to-drug interactions, especially among the Medicare population.
We are seeking public comment on whether CRESEMBA® meets the cost criterion, specifically with regard to our concerns regarding the applicant's analyses and methodology.
With regard to substantial clinical improvement, the applicant believed that CRESEMBA® represents a substantial clinical improvement over existing therapies for patients diagnosed with invasive aspergillus 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.
With regard to improved efficacy, the applicant made several assertions. 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. 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. In addition, the applicant 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.
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. We are 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 not be able to tolerate any food or medications orally. We are seeking public comments on whether or not CRESEMBA® meets the substantial clinical improvement criterion, specifically taking into consideration our concerns described above.
We did not receive any written public comments in response to the New Technology Town Hall Meeting regarding the application for CRESEMBA® for new technology add-on payments.
Boehringer Ingelheim Pharmaceuticals, Inc. submitted an application for new technology add-on payments for Idarucizumab, a product developed as an antidote to reverse the effects of PRADAXA® (Dabigatran), which is also manufactured by Boehringer Ingelheim Pharmaceuticals, Inc. Dabigatran is an oral direct thrombin inhibitor currently indicated to: (1) Reduce the risk of stroke and systemic embolism in patients who have been diagnosed with nonvalvular atrial fibrillation (NVAF); (2) treat deep venous thrombosis (DVT) and pulmonary embolism (PE) in patients who have been administered a parenteral anticoagulant for 5 to 10 days; and (3) reduce the risk of recurrence of DVT and PE in patients who have been previously diagnosed with NVAF. Currently, unlike the anticoagulant Warfarin, there is no specific way to reverse the anticoagulant effect of Dabigatran in the event of a major bleeding episode.
Idarucizumab is a humanized fragment antigen binding (Fab) molecule, which specifically binds to Dabigatran to deactivate the anticoagulant effect, thereby allowing thrombin to act in blood clot formation. The applicant stated that Idarucizumab represents a new pharmacologic approach to neutralizing the specific anticoagulant effect of Dabigatran in emergency situations. If FDA approval is granted, Idarucizumab would be the only FDA-approved therapy available to neutralize the anticoagulant effect of Dabigatran. The current approach for the management of the anticoagulant effect of Dabigatran prior to an invasive procedure is to withhold administration of Dabigatran, when possible, for a certain duration of time prior to the procedure to allow sufficient time for the patient's kidneys to flush out the medication. The duration of time needed to flush out the medication prior to the surgical procedure is based on the patient's kidney function. According to the applicant, if surgery cannot be
Based on the proposed FDA indication for Idarucuzimab, the product can be used in the treatment of patients who have been diagnosed with NVAF and administered Dabigatran to reverse life-threatening bleeding events, or who require emergency surgery or medical procedures and rapid reversal of the anticoagulant effects of Dabigatran is necessary and desired. As of this date, Idarucuzimab has not received approval from the FDA. However, in June 2014, the FDA granted Idarucizumab Breakthrough Therapy Designation. In addition, the applicant plans to seek Fast Track Designation from the FDA. Currently, there are no specific ICD-9-CM or ICD-10-PCS procedure codes that describe the use of Idarucizumab. As stated above, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. The applicant submitted a request for unique ICD-10-PCS codes that was presented at the March 18, 2015 ICD-10 Coordination and Maintenance Committee meeting. If approved, the codes will be effective on October 1, 2015 (FY 2016). More information on this request can be found on the CMS Web site at:
With regard to the cost criterion, the applicant conducted four analyses. The applicant began by researching the FY 2013 MedPAR file for cases that may be eligible for Idarucizumab using a combination of ICD-9-CM diagnosis and procedure codes. Specifically, the applicant searched the database for cases reporting anticoagulant therapy diagnosis codes E934.2 (Agents primarily affecting blood constituents, anticoagulants) or V58.61 (Long-term (current) use of anticoagulants) in combination with either current standard of care procedure codes 99.03 (Other transfusion of whole blood), 99.04 (Transfusion of packed cells), 99.05 (Transfusion of platelets), 99.06 (Transfusion of coagulation factors), 99.07 (Transfusion of other serum), or 39.95 (Hemodialysis), and Dabigatran indication diagnosis codes 427.31 (Atrial fibrillation), 453.40 (Acute venous embolism and thrombosis of unspecified deep vessels of lower extremity), 453.41 (Acute venous embolism and thrombosis of deep vessels of proximal lower extremity), 453.42 (Acute venous embolism and thrombosis of deep vessels of distal lower extremity), 453.50 (Chronic venous embolism and thrombosis of unspecified deep vessels of lower extremity), 453.51 (Chronic venous embolism and thrombosis of deep vessels of proximal lower extremity), 453.52 (Chronic venous embolism and thrombosis of deep vessels of distal lower extremity), 415.11 (Iatrogenic pulmonary embolism and infarction), 415.12 (Septic pulmonary embolism), 415.13 (Saddle embolus of pulmonary artery), 415.19 (Other pulmonary embolism and infarction), 416.2 (Chronic pulmonary embolism), V12.51 (Personal history of venous thrombosis and embolism), or V12.55 (Personal history of pulmonary embolism).
To further target potential cases that may be eligible for Idarucizumab, the applicant also excluded specific cases based on Dabigatran contraindications, including all cases representing patients who have been diagnosed with chronic kidney disease (CKD) stage V (diagnosis code 585.5), end-stage renal disease (diagnosis code 585.6), prosthetic heart valves (diagnosis code V43.3), and cases representing patients who have been diagnosed with both CKD stage IV (diagnosis code 585.4) and either DVT or PE (using the same ICD-9-CM diagnosis codes listed above). As a result, the applicant identified 103,752 cases that mapped to 694 MS-DRGs. The applicant standardized the charges and computed an average case-weighted standardized charge per case of $57,611.
The applicant then identified hospital charges potentially associated with the current treatments to reverse anticoagulation, specifically charges associated with pharmacy services, dialysis services, and laboratory services for blood work. Due to limitations associated with the claims data, the applicant was unable to determine the specific drugs used to reverse anticoagulation and if these cases represented patients who required laboratory services for blood work or dialysis services unrelated to the reversal of anticoagulation. Therefore, the applicant subtracted 40 percent of the charges related to these three categories from the standardized charge per case, based on the estimation that the full amount of charges associated with these services would not be incurred by hospitals if Idarucizumab is approved and available for use in the treatment of patients who have been diagnosed with NVAF and administered Dabigatran during treatment. The applicant then inflated the standardized charge per case by 10.4227 percent, the same inflation factor used by CMS to update the FY 2015 outlier threshold (79 FR 50379). This resulted in an inflated average case-weighted standardized charge per case of $59,582. Using the FY 2015 IPPS Table 10 thresholds, the average case-weighted threshold amount across all 694 MS-DRGs is $54,850 (all calculations above were performed using unrounded numbers). Because the inflated average case-weighted standardized charge per case exceeds the average case-weighted threshold amount, the applicant maintained that the technology meets the cost criterion under this analysis.
The applicant also performed a similar analysis by using the same data from the FY 2013 MedPAR file and subtracting 60 percent of the charges associated with pharmacy services, dialysis services, and laboratory services for blood work. This resulted in an inflated average case-weighted standardized charge per case of $57,560. Using the FY 2015 IPPS Table 10 thresholds, the average case-weighted threshold amount across all 694 MS-DRGs is $54,850 (all calculations above were performed using unrounded numbers). Because the inflated average case-weighted standardized charge per case for the applicable MS-DRGs exceeds the average case-weighted threshold amount, the applicant maintained that the technology also meets the cost criterion under this analysis.
Further, the applicant conducted two additional analyses using the same data from the FY 2013 MedPAR file and variables used in the previous analyses. However, instead of using potentially eligible cases that mapped to 100 percent of the 694 MS-DRGs identified, the applicant used potentially eligible cases that mapped to the top 75 percent of the 694 MS-DRGs identified. By applying this limitation, the applicant identified 77,667 cases that mapped to 92 MS-DRGs. Under the analysis' variable that subtracted 40 percent of the charges associated with the current treatments to reverse anticoagulation, the applicant computed an inflated average case-weighted standardized charge per case of $56,627. Under the analysis' variable that subtracted 60 percent of the charges associated with the current treatments to reverse anticoagulation, the applicant computed an inflated average case-weighted standardized charge per case of $54,677. Using the FY 2015 IPPS Table 10 thresholds, the average case-weighted threshold amount across all 92 MS-DRGs using both scenarios is $53,008 (all calculations above were performed using unrounded numbers). Because the inflated average case-weighted
The applicant noted that the inflated average case-weighted standardized charge per case computed using all four scenarios did not include any charges for Idarucizumab. Therefore, the applicant maintained that the technology would also meet the cost criterion if charges for Idarucizumab were included because the inflated average case-weighted standardized charge per case would increase and further exceed the average case-weighted threshold amount using the variables of all four analyses. We are inviting public comments regarding the applicant's analyses with respect to the cost criterion.
With regard to substantial clinical improvement, according to the applicant, there are currently no specific FDA-approved antidotes to reverse the anticoagulant effects of Dabigatran. Management of the treatment of patients who have been diagnosed with NVAF and administered Dabigatran and experience bleeding may often include supportive care such as Hemodialysis and the use of fresh frozen plasma, blood factor products such as prothrombin complex concentrates (PCC), activated prothrombin complex concentrates, and recombinant factor VIIa or delayed intervention. Protamine sulfate and Vitamin K are typically used to reverse the effects of Heparin and Warfarin, respectively. However, due to the mechanism of action in Dabigatran, the applicant maintained that the use of protamine sulfate and Vitamin K may not be effective to reverse the anticoagulant effect of Dabigatran.
The applicant provided information regarding the management of major bleeding events experienced by patients who were administered Dabigatran and Warfarin during the RE-LY trial.
The applicant reported that, currently, it is recommended that the administration of Dabigatran be discontinued 1 to 2 days (CrCl ≥50 ml/min) or 3 to 5 days (CrCl <50 ml/min), if possible, before invasive or surgical procedures because of the increased risk of bleeding.
The applicant noted that Idarucizumab was shown to neutralize the anticoagulant effect of Dabigatran in both animal models and healthy human volunteers.
With regard to the substantial clinical improvement criterion, we believe that Idarucizumab, if approved by the FDA, may represent a treatment option that is not currently available to Medicare beneficiaries and, therefore, represents a substantial clinical improvement. However, we are concerned that the clinical data are not sufficient. Specifically, the applicant provided data from an animal model. In addition, the primary clinical data in relation to human volunteers are based primarily on a trial to measure safety. While the applicant did provide clinical data on the effectiveness of Idarucizumab, we are concerned that the evidence presented does not support the substantial clinical improvement criterion. Specifically, the applicant provided data from a small sample used to demonstrate effectiveness. Usually during clinical studies, phase III of a clinical trial is typically used to gather data from a larger patient population to demonstrate effectiveness. We are inviting public comments on whether or not Idarucizumab meets the substantial
Two manufacturers, CR Bard Inc. and Medtronic, submitted applications for new technology add-on payments for FY 2016 for LUTONIX® Drug-Coated Balloon (DCB) Percutaneous Transluminal Angioplasty (PTA) Catheter (LUTONIX®) and IN.PACT
The applicants for LUTONIX® and IN.PACT
The applicants noted that drug-coated balloon catheters are designed to deliver an antiproliferative drug directly to the arterial segment being dilated. Rather than using a stent to deliver the drug slowly to the dilated area, the drug coating of a balloon is designed to transfer the drug to the arterial wall by direct contact over a few minutes. The applicant maintained that if the drug is absorbed into the arterial wall, rather than being washed away by blood flow once the balloon is deflated, the drug can exert its antiproliferative effects on the vessel with the goal of preventing restenosis.
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)
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
We received public comments during and after the ICD-10 Coordination and Maintenance Committee meeting that supported the creation of unique codes to identify the use of a drug-coated balloon in procedures performed for treating PAD. As a result, the following ICD-10-PCS codes listed in the table below were created and are effective October 1, 2015 (FY 2016):
As we discuss above, the approval of new technology add-on payments would extend to all technologies that are substantially similar. Otherwise, our payment policy would bestow an advantage to the first applicant to receive approval for a particular new technology (66 FR 46915). Moreover, as we discuss above, 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. However, 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
As we stated above, each applicant submitted separate analyses regarding the cost criterion for each of their devices and both applicants maintained that their device meets the cost criterion. We summarize each analysis below.
With regard to 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 maintained that the LUTONIX® meets the cost criterion for new technology add-on payments.
With regard to IN.PACT
We are concerned that both applicants excluded cases of patients that received stent implantations from their analysis because the applicants believed that their technology can be used instead of stenting. We are seeking public comments on whether LUTONIX® and IN.PACT
With regard to substantial clinical improvement, the applicant believed 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.
We are concerned that the results were not statistically significant with regard to the p-value documented. 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.
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.
We are concerned that the patient population studied may not reflect the Medicare population. In particular, we note that only 37 percent of the studied patients were female. For instance, 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.
With regard to substantial clinical improvement for the 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
We are concerned about the clinical meaningfulness of some of the endpoints measured by the trials conducted by the applicant. For example, there were no changes in functional measures such as walking distances. The applicant indicated that this may be because patients in the control group had additional procedures to the point their symptoms were controlled to the same extent as those of the drug-coated balloon group. We believe that this assertion could be better supported with data. Another related example is the higher ankle-brachial index in the drug-coated balloon catheter group. While this is also consistent with an enduring physiologic effect of the drug-coated balloon device, we are concerned that these ABI measurements appear to have been made by unblinded study personnel.
We are concerned that the IN.PACT
We are seeking public comment on whether LUTONIX® and IN.PACT
Below we summarize the written public comments on the LUTONIX® and IN.PACT
Another commenter supported the approval of new technology add-on payments for the LUTONIX® and IN.PACT
The commenter also noted that colleagues outside the United States have had access to this technology for over 5 years and the technology's use has shown positive results in different patient and lesion subgroups, which provides strong evidence that supports the wide use of drug-coated balloon catheters. The commenter stated that there are a number of publications that advocate that the reduced need for revascularization also results in significant cost savings for health care systems, and recommended that these additional savings and value to be shared with hospitals in the United States. The commenter stated that, although there is clear clinical evidence that supports the use of drug-coated balloon catheters, there are concerns that hospital administrators may limit the use of these catheters because of the added cost burden that would be completely imposed on hospitals in the current health care system.
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. These advancements resulted in additional FDA clearances on June 13, 2013, and October 14, 2013. The product's description was updated on January 28, 2014.
The applicant maintained that the VKS meets the newness criterion. The applicant analyzed the relative weights from 2010 to 2014 for the MS-DRGs that may contain cases that would be eligible for the advanced VKS technology (MS-DRGs 461 through 470). The applicant noted that there was no increase in the calculation of the FY 2014 or FY 2015 relative weights for these MS-DRGs to represent the additional cost of the advanced VKS technology.
We are concerned 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. We believe that the advanced VKS may be substantially similar to the first version of the VKS (that was first available on the U.S. market in late 2011) and, therefore, would not meet the newness criterion. In addition, the costs associated with the VKS should be reflected in the FY 2013 and subsequent relative payment weights for these MS-DRGs because the product has been available and used for the Medicare population since 2011.
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 the 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 the application under the substantial similarity criteria, 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, we believe that both the first version of the VKS and the advanced version of the VKS treat the same or similar disease and the same or similar patient population. Specifically, both of the VKS technologies are used in the treatment of patients undergoing TKA surgery. Because we believe that the technology meets all three 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. Therefore, the VKS may not 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, the 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). Further, after CMS has recalibrated the DRGs, based on available data, to reflect the costs of an otherwise new medical service or technology, the medical service or technology will no longer be considered “new” under the criterion of this section. Therefore, 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, 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.
As previously stated, 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. 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. Therefore, we do not believe that the VKS technology can be considered “new” for purposes of new technology add-on payments. We are inviting 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.
Currently, there are no ICD-9-CM or ICD-10-PCS procedure codes that uniquely identify the use of this technology. As stated above, effective October 1, 2015 (FY 2016), the ICD-10 coding system will be implemented. The applicant submitted a request for a unique ICD-10-PCS code that was presented at the March 18, 2015 ICD-10 Coordination and Maintenance Committee meeting. If approved, the code(s) will be effective on October 1, 2015 (FY 2016). More information on this request can be found on the CMS Web site located at the following link:
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
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 degrees of severity calculated for each MS-DRG). To determine the number of eligible cases reporting knee revision procedures assigned to MS-DRGs 466 through 468, the applicant first searched the NIS database for the total number of Medicare cases assigned to these MS-DRGs. This resulted in a total of 54,105 cases. The applicant noted that MS-DRGs 466 through 468 also include cases for hip and knee revision procedures. Therefore, to determine the number of cases representing knee revision procedures in each of these three MS-DRGs, the applicant first divided the number of Medicare cases for each MS-DRG (5,195 for MS-DRG 466, 28,650 for MS-DRG 467, and 20,260 for MS-DRG 468) by the total number of Medicare cases assigned to MS-DRGs 466, 467, and 468 (54,105). The applicant then multiplied the percentage for each MS-DRG (9.6 percent for MS-DRG 466, 52.9 percent for MS-DRG 467, and 37.4 percent for MS-DRG 468) by the total amount of cases assigned to each MS-DRG. Based on this calculation, the applicant approximated the following number of cases representing knee revision procedures assigned to each of these three MS-DRGs: 3,054 cases in MS-DRG 466; 16,842 in MS-DRG 467; and 11,910 in MS-DRG 468. We are concerned that the methodology the applicant used to determine the percentage of cases representing 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. Rather, the applicant used the percentage of Medicare cases assigned to each MS-DRG of the overall total cases for the three MS-DRGs, which includes knee and hip revisions, and multiplied by this percentage to further reduce the total number of cases. We do not believe that this further reduction to the total number of Medicare cases has sufficiently isolated cases representing knee revision procedures.
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). We are 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 maintained 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 care 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-
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. We are concerned 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 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 maintained 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 reflecting a zero value indicates that the hospital performed less than 10 procedures. The applicant found 533 cases assigned to MS-DRG 462. To determine the number of cases representing bilateral knee revision procedures in MS-DRG 462, similar to the first analysis, the applicant multiplied the total number of cases assigned to MS-DRG 462 by 4 percent, which resulted in 21 cases. Similar to our statement about the first analysis, we are concerned that 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 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, we are 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 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, we are concerned that the methodology 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 maintained 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 above, we are concerned 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, 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-
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, we are concerned that 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 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: 3,009 cases in MS-DRG 466; 16,747 in MS-DRG 467; and 12,049 in MS-DRG 468. Similar to our concerns stated earlier, we are concerned that the methodology the applicant used to determine the percentage of cases representing 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. Rather, the applicant used the percentage of Medicare cases for each MS-DRG of the overall total number of cases for the three MS-DRGs, which includes cases representing knee and hip revision procedures, and multiplied by this percentage to further reduce the number of cases. 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 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, we are 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 revision procedures.
Based on this analysis, the applicant maintained 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, we are concerned 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 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 $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 maintained that the VKS technology meets the cost criterion.
Based on the information provided by the applicant, combined with the weight of our concerns, we are unable to determine if and how the VKS technology meets the cost criterion. We are inviting public comments on whether or not the VKS technology meets the cost criterion, specifically with regard to the concerns raised.
With regard to substantial clinical improvement, the applicant maintained that the VKS technology represents a substantial clinical improvement. The applicant stated that the device offers a treatment option for a patient population unresponsive to, or ineligible for, currently available treatments. The applicant explained that the use of the VKS technology has improved patient outcomes, including rapid recovery of patients diagnosed with comorbidities, the early return to normal activities, and increased levels of activity and functionality. The applicant noted that patients treated using the VKS technology during TKA procedures did not experience readmission within 30 days, nor was it necessary for the treating physician (the surgeon) to complete a problem focused medical evaluation during the patient's recovery. The applicant further noted that patients having a more favorable immediate outcome with a stable TKA
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. Additionally, 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 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 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 disrupting the surgical flow the VKS technology has been viewed by surgeons to provide information enabling them to improve upon the balance of the knee, reduce the degree of rotation and only dissect the fine tissue as needed sparing the release of the ligaments. The applicant further stated that the VKS technology has been shown to enable reproducible, teachable surgical technique through quantifying surgeon “feel.”
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
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 felt 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.
We have a number of concerns regarding the applicant's assertions regarding substantial clinical improvement. First, we are concerned that during the trials, after using the device surgeons continued to make manual adjustments to the spacers to set the knee replacement. The applicant maintained that the VKS technology presents better accuracy for the surgeon when making adjustments to the spacers when implanting a knee replacement. However, we are concerned 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 are concerned that most of the clinical evidence is based on patient satisfaction surveys. While the survey data appeared to demonstrate that patient satisfaction improved, we do not believe that the data presented is sufficient to determine if the VKS technology represents a substantial clinical improvement over manual adjustment. Furthermore, the use of historical literature controls might be useful during early clinical development, but there are possible biases and limitations of this research design. Specifically, there could be multiple differences in the pre-procedure clinical characteristics of patients with “unbalanced” knees and those with “balanced” knees that could affect outcomes, such as more severe initial disease, more pre-operative misalignment, more obesity, or more comorbidity. These and other potential confounders were not documented or adjusted for in the analyses of outcomes in the literature provided by the applicant. Additionally, as discussed above, the applicant released a first version of the VKS technology in 2011
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 anticipated FDA premarket approval of the WATCHMAN® System in the first half of 2015. According to the applicant, the WATCHMAN® System is the first LAA closure device that would be approved by the FDA. Therefore, the applicant believed 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 this proposed 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.
We are inviting public comments on if, and how, the WATCHMAN® System meets the newness criterion.
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. We are inviting public comments on the whether the WATCHMAN® System meets the cost criterion based on 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 FR49910 through 49911), which resulted in 369 cases.
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
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 its 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 are addressing 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 this FY 2016 IPPS/LTCH PPS proposed rule.
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.
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
In the FY 2016 application, the applicant responded that, because the current intended use and indications for the WATCHMAN® System in the United States do not include patients who are ineligible for treatment using Warfarin therapy, the data from the ASAP study are irrelevant to the FY 2016 application. The applicant provided data from an imputed placebo analysis, a post-hoc analysis that compared the observed rate of ischemic strokes in patients treated with the WATCHMAN® System compared to no therapy, in order to address our concern that there was not strong evidence that the device prevented stroke.
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. We agree that the Bayesian methodology is a valid method of analysis. However, we were referencing the overall efficacy noninferiority in the PREVAIL trial.
We continue to be concerned that the data results from the PROTECT AF study are insufficient to show superiority of the WATCHMAN® System over Warfarin therapy. We note that the study was unblinded with a noninferiority design. 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 acknowledge 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 are concerned 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, 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 are concerned that the applicant has
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' postrandomization) 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, we are concerned that the results of the study did not show the overall efficacy of the technology to be noninferior.
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 in 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 CHADS2 and CHA2DS2-VASc scores. The applicant reported that this analysis showed the WATCHMAN® System device reduced stroke in the untreated patient population by 61 to 81 percent.
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 continue to have some concerns regarding whether the WATCHMAN® System device prevents strokes. The indication for the treatment of the WATCHMAN® System device is for patients who are eligible for Warfarin therapy as opposed to patients who are ineligible for Warfarin therapy. We are concerned that the results of the imputed placebo analysis are not sufficient to determine whether the WATCHMAN® System reduces the risk of stroke in patients who are eligible for Warfarin therapy. The applicant suggested that patients who are subtherapeutic or noncompliant with Warfarin therapy would have the same risk of stroke as patients who do not receive any therapy. However, the applicant but did not offer any evidence
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 group with the Warfarin therapy group 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 do not believe that the WATCHMAN® System meets the criteria for substantially improved clinical outcomes. We are inviting 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.
We did not receive any public comments in response to the New Technology Town Hall meeting held on February 13, 2015 in regard to the WATCHMAN® System technology.
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 proposed FY 2016 hospital wage index based on the statistical areas appears under sections III.A.2. and G. of the preamble of this proposed 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 proposed adjustment for FY 2016 is discussed in section II.B. of the Addendum to this proposed rule.
As discussed in section III.J. of the preamble of this proposed 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 proposed budget neutrality adjustment for FY 2016 is discussed in section II.A.4.b. of the Addendum to this proposed 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 proposing to apply, beginning October 1, 2015 (to the FY 2016 wage index), appears under sections III.E.3. and F. of the preamble of this proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed 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 proposed FY 2016 wage index were obtained from Worksheet S-3, Parts II and III of the Medicare cost report 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 for Form CMS-2552-10. The data file used to construct the proposed FY 2016 wage index includes FY 2012 data submitted to us as of February 25, 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 proposed wage index. If data elements for some of these providers with aberrant data are corrected, we intend to include data from those providers in the final FY 2016 wage index. 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 instructed MACs to complete their data verification of questionable data elements and to transmit any changes to the wage data no later than February 25, 2015. We intend to resolve all unresolved data elements by the date the FY 2016 IPPS/LTCH PPS final rule is issued. The revised data will be reflected in the FY 2016 IPPS/LTCH PPS final rule.
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 this 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 removing hospitals with aberrant data and hospitals that converted to CAH status, we calculated the proposed FY 2016 wage index based on 3,335 hospitals.
For the proposed FY 2016 wage index, we allotted the wages and hours data for a multicampus hospital among the different labor market areas where its campuses are located in the same manner that we allotted such hospitals' data in the FY 2015 wage index (79 FR 49964). Table 2, which contains the proposed FY 2016 wage index associated with this proposed rule (available via the Internet on the CMS Web site), includes separate wage data for the campuses of 7 multicampus hospitals.
The method used to compute the proposed 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, through April 15, 2013, for private industry hospital workers from the BLS'
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 proposed FY 2016 national average hourly wage (unadjusted for occupational mix) is $40.1203. The proposed FY 2016 Puerto Rico overall average hourly wage (unadjusted for occupational mix) is $16.718.
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 proposed FY 2016 wage index, we are proposing to use the occupational mix data collected on the new 2013 survey to compute the occupational mix adjustment for FY 2016, as discussed in section II.B.2. of the preamble of this proposed rule.
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.
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 cost report wage data, we asked our MACs to revise or verify data elements in hospitals' occupational mix surveys that resulted in certain edit failures. Certain surveys with aberrant data elements are 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 will be reflected in the FY 2016 IPPS/LTCH PPS final rule.
For FY 2016, we are proposing 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). As a result of applying this methodology, the proposed FY 2016 occupational mix adjusted national average hourly wage is $40.0853. The proposed FY 2016 occupational mix adjusted Puerto Rico-specific average hourly wage is $16.6329.
Because the occupational mix adjustment is required by statute, all hospitals that are subject to payments under the IPPS, or any hospital that would be subject to the IPPS if not granted a waiver, must complete the occupational mix survey, unless the hospital has no associated cost report wage data that are included in the FY 2016 wage index. For the proposed FY 2016 wage index, because we are using the Worksheet S-3, Parts II and III wage data of 3,335 hospitals, and we are using the occupational mix surveys of 3,039 hospitals for which we also have Worksheet S-3 wage data, that represents a “response” rate of 91.1
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.
As discussed in section III.E. of the preamble of this proposed rule, for FY 2016, we apply the occupational mix adjustment to 100 percent of the proposed FY 2016 wage index. We calculated the proposed 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 proposed FY 2016 wage index results in a proposed national average hourly wage of $40.0853 and a proposed Puerto-Rico specific average hourly wage of $16.6329. 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 proposed FY 2016 wage index, we calculated the proposed FY 2016 wage index using the occupational mix survey data from 3,039 hospitals. For the proposed FY 2016 wage index, because we are using the Worksheet S-3, Parts II and III wage data of 3,335 hospitals, and we are using the occupational mix survey data of 3,039 hospitals for which we also have Worksheet S-3 wage data, those data represent a “response” rate of 91.1 percent (3,039/3,335). The proposed 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 proposed national average hourly wage for the entire nurse category as computed in Step 5 of the occupational mix calculation is $32.783151666. 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 42.54 percent, and the national percentage of hospital employees in the all other occupations category is 57.46 percent. At the CBSA level, the percentage of hospital employees in the nurse category ranged from a low of 26.72 percent in one CBSA to a high of 80.55 percent in another CBSA.
The proposed 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 49.93 percent, and the Puerto Rico percentage of hospital employees in the all other occupations category is 50.07 percent.
We also compared the proposed FY 2016 wage data adjusted for occupational mix from the 2013 survey to the proposed 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 would 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 proposed FY 2016 wage index values for 183 (45.0 percent) urban areas and 20 (42.6 percent) rural areas would increase. Fifty-three (13.0 percent) urban areas would increase by greater than or equal to 1 percent but less than 5 percent, and 5 (1.2 percent) urban areas would increase by 5 percent or more. Four (8.5 percent) rural areas would increase by greater than or equal to 1 percent but less than 5 percent, and no rural areas would increase by 5 percent or more. However, the proposed wage index values for 220 (54.1 percent) urban areas and 27 (57.4 percent) rural areas would decrease using the 2013 survey data. Seventy-two (17.7 percent) urban areas would decrease by greater than or equal to 1 percent but less than 5 percent, and one (0.2 percent) urban area would decrease by 5 percent or more. Seven (14.9 percent) rural areas would decrease by greater than or equal to 1 percent but less than 5 percent, and no rural areas would decrease by 5 percent or more. The largest positive impacts using the 2013 survey data compared to the 2010 survey data are 15.0 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 1.9 percent for two rural areas. Four urban areas and no rural areas would be unaffected. These results indicate that the proposed wage indexes of more CBSAs overall (54.4 percent) would decrease due to application of the 2013 occupational mix survey data as compared to the 2010 occupational mix survey data to the wage index.
We compared the proposed FY 2016 occupational mix adjusted wage indexes for each CBSA to the proposed unadjusted wage indexes for each CBSA. As a result of applying the occupational mix adjustment to the wage data, the proposed wage index values for 222 (54.5 percent) urban areas and 24 (51.1 percent) rural areas would increase. One hundred one (24.8 percent) urban areas would increase by greater than or equal to 1 percent but less than 5 percent, and 6 (1.5 percent) urban areas would increase by 5 percent or more. Nine (19.1 percent) rural areas would increase by greater than or equal to 1 percent but less than 5 percent, and no rural areas would increase by 5 percent or more. However, the proposed wage index values for 185 (45.5 percent) urban areas and 23 (48.9 percent) rural areas would decrease. Ninety-three (22.9 percent) urban areas would decrease by greater than or equal to 1 percent but less than 5 percent, and no urban areas would decrease by 5 percent or more. Eight (17.0 percent) rural areas would decrease by greater than or equal to 1 percent but less than 5 percent, and no rural areas would decrease by 5 percent or more. The largest positive impacts would be 17.4 percent for an urban area and 2.7 percent for two rural areas. The largest negative impacts would be 4.7 percent for an urban area and 2.1 percent for a rural area. No urban or rural areas would remain unchanged by application of the proposed occupational mix adjustment. These results indicate that a larger percentage of urban areas (54.5 percent) would benefit from application of the proposed occupational mix adjustment than would rural areas (51.1 percent).
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 wage index under the new OMB delineations expires at the end of FY 2015 and does not apply in FY 2016.
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 are not proposing any changes to this policy in this 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
As we did for FY 2015 (79 FR 49959), with respect to the wage index computation for FY 2016, we will follow 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 will be 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 establish transitions for other IPPS payment policies that may be impacted by our adoption of the new OMB delineations.
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 are not proposing any changes to this policy and will continue 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, the attaching wage index) to which they were redesignated in FY 2014 (with the rural and imputed floors applied and with the rural floor budget neutrality adjustment applied). If the hospital cannot be assigned the reclassified wage index value of the CBSA to which it was redesignated in FY 2014 because that CBSA was 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, such hospitals are assigned the wage index of the hospitals reclassified to the urban labor market area that contains the urban county in their FY 2014 redesignated CBSA to which they are closest. We assign these hospitals the area wage index of hospitals reclassified to a CBSA because hospitals deemed urban under section 1886(d)(8)(B) of the Act are treated as reclassified under current policy, under which such hospitals receive an area wage index that includes wage data of all hospitals reclassified to the area. This wage index assignment will be forfeited if the hospital obtains any form of wage index reclassification or redesignation.
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 are not proposing 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 but, 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. 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 improves the accuracy and integrity of the hospital wage index system. Therefore, we believe it is necessary to allow this transition adjustment to expire.
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, we are proposing to apply the 3-year transition adjustments in a budget neutral manner. We are proposing 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 would not be providing for any transitional wage indexes under the new OMB delineations. For a complete discussion on the proposed budget neutrality adjustment for FY 2016, we refer readers to section II.A.4.b. of the Addendum to this proposed rule.
Section 4410(a) of Public 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 proposed FY 2016 wage index associated with this proposed rule, we estimated that 459 hospitals would receive an increase in their FY 2016 proposed 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 proposed 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 that final rule, we revised the regulations at § 412.64(h)(4) and (h)(4)(vi) to reflect the 1-year 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 are proposing to extend the imputed floor policy (both the original methodology and the
The wage index and impact tables associated with this FY 2016 IPPS/LTCH PPS proposed rule (which are available via the Internet on the CMS Web site) reflect the proposed continued application of the imputed floor policy at § 412.64(h)(4) and a proposed national budget neutrality adjustment for the imputed floor for FY 2016. There are 16 providers in New Jersey, and no providers in Delaware that would receive an increase in their proposed FY 2016 wage index due to the proposed continued application of the imputed floor policy under the original methodology and 4 hospitals in Rhode Island that would benefit under the alternative methodology.
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-seven hospitals would receive the frontier floor value of 1.0000 for their FY 2016 wage index in this proposed rule. These hospitals are located in Montana, North Dakota, South Dakota, and Wyoming. Although Nevada also is defined as a frontier State, its proposed FY 2016 rural floor value of 1.0300 is greater than 1.0000, and therefore, no Nevada hospitals would receive a frontier floor value for their FY 2016 wage index. We are not proposing any changes to the frontier floor policy for FY 2016.
The areas affected by the proposed rural, imputed, and frontier floor policies for the proposed FY 2016 wage index are identified in Table 2 (formerly Table 4D) associated with this proposed rule, which is available via the Internet on the CMS Web site.
We are proposing 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 are proposing to streamline and consolidate these 11 tables into 2 tables. We refer readers to section VI. of the Addendum to this proposed rule for a discussion of the proposed 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 are proposing for FY 2016, 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.
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 outlined in regulations under 42 CFR 412.230 through 412.280.
At the time this proposed rule was constructed, the MGCRB had completed its review of FY 2016 reclassification requests. Based on such reviews, there are 285 hospitals approved for wage index reclassifications by the MGCRB starting in FY 2016. 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 275 hospitals approved for wage index reclassifications in FY 2014 that continue for FY 2016, and 312 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 proposed rule, 872 hospitals are in a reclassification status for FY 2016.
Under the regulations at 42 CFR 412.273, hospitals that have been reclassified by the MGCRB are permitted to withdraw their applications 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 will be incorporated into the wage index values published in the 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, beginning in mid-July 2015, 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
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 proposed 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.
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 developed from the 2010 Census data beginning with FY 2016. We have reviewed and analyzed the alternative dataset from the Census Bureau and are proposing new out-migration adjustments in this FY 2016 proposed rule, as discussed below (as we indicated we would in the FY 2015 IPPS/LTCH PPS final rule (79 FR 49984 through 49985).
To determine the new out-migration adjustments and applicable counties that we are proposing 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
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 FY 2016 and subsequent years, until such time that CMS finalizes out-migration adjustments based on the next Census, we are proposing 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 this proposed 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 are proposing 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 proposed rule (which is available via the Internet on the CMS Web site) lists the proposed out-migration adjustments for the FY 2016 wage index.
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 would qualify in FY 2016 under the proposed 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 would be 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 proposed rule, 325 hospitals would 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, 5 hospitals are no longer eligible for the out-migration adjustment under the new data (3 hospitals in Alabama, 1 hospital in Missouri, and 1 hospital in Ohio). Of the 325 hospitals, the out-migration adjustment of 243 hospitals would be unaffected, as these hospitals would 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 243 hospitals, 8 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, and 4 hospitals in Pennsylvania) and 4 hospitals would have received a lower out-migration using the new data (1 hospital in Idaho, 2 hospitals in Oregon, and 1 hospital in South Carolina). Eighty-two hospitals would be newly eligible for the out-migration adjustment in FY 2016 using the new data. The following table shows the States and Territory in which the 82 affected hospitals are located:
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
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 should examine Table 2, which is listed in section VI. of the Addendum to this proposed rule and available via the Internet on the CMS Web site at:
We will release 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 will 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 believes that its wage or occupational mix data are incorrect due to a MAC or CMS error in the entry or tabulation of the final data, the hospital should notify both its MAC and CMS regarding why the hospital believes an error exists and provide all supporting information, including relevant dates (for example, when it first became aware of the error). The hospital is required to send its request to CMS and to the MAC no later than June 1, 2015. Similar to the April appeals, beginning with the FY 2015 wage index, in accordance with the FY 2016 wage index timeline posted on the CMS Web site at
Verified corrections to the wage index data received timely by CMS and the MACs (that is, by June 1, 2015) will be incorporated into the final wage index in the 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 do 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 have access to the final wage index data by May 1, 2015, they have 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
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: “The Secretary shall 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 share estimated from time to time by the Secretary, depending on which labor-related share resulted in a higher payment.
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 this proposed rule, for FY 2016, we are not proposing 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 are proposing 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 are published in section VI. of the Addendum to this proposed rule and available via the Internet on the CMS Web site, reflect this proposed labor-related share. For FY 2016, for all IPPS hospitals whose wage indexes are less than or equal to 1.0000, we are proposing 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 1.0000, for FY 2016, we are proposing to apply the wage index to a proposed labor-related share of 69.6 percent of the national standardized amount. We note that, for Puerto Rico
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.
For FY 2016, we are proposing 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 are proposing 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 proposed Puerto Rico-specific wage index greater than 1.000 for FY 2016, we are proposing 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 proposed 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. The proposed Puerto Rico labor-related share of 63.2 percent for FY 2016 is reflected in Table 1C, which is published in section VI. of the Addendum to this proposed 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 will be based on Medicare cost reporting periods beginning during Federal FY 2012, and will reflect 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).
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 this FY 2016 proposed rule, instead of the 3-year average being centered on the base cost reporting period for the wage index, we are proposing 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 will be based on Medicare cost reporting
For FY 2017 only, we are proposing 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 this rule. Therefore, we are proposing 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 are proposing an extension until early to mid-October for all hospitals to revise their pension data for FY 2017, we are proposing 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 are proposing 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 (7 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 allows 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.
For the reasons outlined above, we are proposing to revise the current policy used to compute the 3-year average for pension costs for the wage index, such that, beginning with the FY 2017 wage index, the 3-year average would be based on pension contributions made during the base cost reporting period plus the prior 2 cost reporting years.
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 for submitting pension data to the MACs for hospitals with fiscal year begin dates on or after August 15, which we are proposing to eliminate in this proposed rule. It also includes our proposal 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 are proposing the same timetable as in FY 2017, 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
As discussed in section III.N. of the preamble of this proposed 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 this FY 2016 IPPS/LTCH PPS proposed rule, we are clarifying 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
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, we are proposing 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.
Based on the most recent data available for this FY 2016 proposed rule, in accordance with section 1886(b)(3)(B) of the Act, we are proposing to base the proposed 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 is estimated to be 2.7 percent. We are proposing that if more recent data become 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 the final rule.
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 standardized amount (as displayed 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
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, 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 are proposing an MFP adjustment of 0.6 percentage point. Similar to the market basket update, for this proposed rule, we are using the most recent data available to compute the MFP adjustment. As noted above, we are proposing that if more recent data become subsequently available, we would use such data, if appropriate, to determine the FY 2016 market basket update and MFP adjustment in the FY 2016 IPPS/LTCH PPS final rule.
Based on the most recent data available for this proposed rule as described above, we have determined four proposed applicable percentage increases to the standardized amount for FY 2016, as specified in the table below:
We are proposing 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 are proposing to modify paragraph (vi) of § 412.64(d)(1) to include the applicable percentage increase to the FY 2016 operating standardized amount.
Section 1886(b)(3)(B)(iv) of the Act provides that the applicable percentage increase to the hospital-specific rates for SCHs 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 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. Accordingly, in this FY 2016 IPPS/LTCH PPS proposed rule, for FY 2016, we are proposing the following updates to the hospital-specific rates applicable to SCHs: A proposed update of 1.9 percent for a hospital that submits quality data and is a meaningful EHR user; a proposed update of 1.225 percent for a hospital that fails to submit quality data and is a meaningful EHR user; a proposed update of 0.55 percent for a hospital that submits quality data and is not a meaningful EHR user; a proposed update of −0.125 percent for a hospital that fails to submit quality data and is not a meaningful EHR user. As mentioned above, for this FY 2016 proposed rule, we used IGI's first quarter 2015 forecast of the FY 2010-based IPPS market basket update with historical data through fourth quarter 2014. Similarly, we used IGI's first quarter 2015 forecast of the MFP adjustment. We are proposing that if more recent data become 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 the final rule.
We note that the MDH program expired for discharges beginning on April 1, 2015 under current law.
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
Similarly, for this FY 2016 proposed rule, we used IGI's first quarter 2015 forecast of the MFP adjustment. We are proposing that if more recent data become subsequently available, we would use such data, if appropriate, to determine the MFP adjustment for the final rule.
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 proposed national median CMI value for FY 2016 is based on the CMI values of all urban hospitals nationwide, and the proposed 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 proposed values are based on discharges occurring during FY 2014 (October 1, 2013 through September 30, 2014), and include bills posted to CMS' records through December 2014.
We are proposing 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, 2015, they must have a CMI value for FY 2014 that is at least—
• 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. The proposed median CMI values by region are set forth in the following table.
We intend to update the preceding CMI values in the FY 2016 final rule to reflect the updated FY 2014 MedPAR file, which would contain data from additional bills received through March 2015.
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. For FY 2016, we are proposing 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 this proposed rule was developed.
We are proposing 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, as indicated in the following table.
We intend to update these numbers in the FY 2016 final rule based on the latest available cost report data.
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 proposed 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) of the Act states 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.
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 hospital's geographic designation, the number of beds in the hospital, and the level of the hospital's disproportionate patient percentage (DPP). A hospital's DPP is the sum of two fractions: The “Medicare fraction” and the “Medicaid fraction.” The Medicare fraction (also known as the “SSI fraction” or “SSI ratio”) is computed by dividing the number of the hospital's inpatient days that are furnished to patients who were entitled to both Medicare Part A and Supplemental Security Income (SSI) benefits by the hospital's total number of patient days furnished to patients entitled to benefits under Medicare Part A. The Medicaid fraction is computed by dividing the hospital's number of inpatient days furnished to patients who, for such days, were eligible for Medicaid, but were not entitled to benefits under Medicare Part A, by the hospital's total number of inpatient days in the same period.
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
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 proposed 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 are currently 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.
We note that we no longer make a distinction between the urban standardized amount and the rural standardized amount. Rather, hospitals receive the same standardized amount, regardless of their geographic designation. Accordingly, in the FY 2015 IPPS/LTCH PPS final rule, we revised the regulation at § 412.102 to remove references to the urban and rural standardized amounts.
The provisions of § 412.102 continue to apply with respect to the calculation of the DSH payments to hospitals that are currently located in urban counties that became rural under our adoption of the new OMB delineations. 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 otherwise 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 proposed rule, 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 will have its DSH payments modeled 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.
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 proposed 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 subsection (r) did not apply and the aggregate amount of payments that are made to subsection (d) hospitals under section 1886(r)(1) of the Act for each fiscal year. Therefore, this factor
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 on the cost report 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:
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•
If the MDH program were to be extended beyond its current expiration date of March 31, 2015, similar to how it was extended from October 1, 2013, to March 31, 2014, under the Pathway for SGR Reform Act (Pub. L. 113-67) and from April 1, 2014, to March 31, 2015, by the Protecting Access to Medicare Act of 2014 (Pub. L. 113-93), MDHs would continue to be paid based on the IPPS Federal rate or, if higher, the IPPS Federal rate plus 75 percent of the amount by which the Federal rate is exceeded by the updated hospital-specific rate from certain specified base years (76 FR 51684). Because MDHs are paid based on the IPPS Federal rate and, therefore, are eligible to receive Medicare DSH payments if their disproportionate patient percentage is at least 15 percent, if the MDH program is extended beyond its current expiration date of March 31, 2015, we would continue to 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). Our final determination on the hospital's eligibility for uncompensated care payments would be based on the hospital's actual DSH status on the cost report for that payment year. In addition, as we do for all IPPS hospitals, we would calculate a numerator for Factor 3 for all MDHs, regardless of whether they are projected to be eligible for Medicare DSH payments during the fiscal year, but the denominator for Factor 3 would be based on the uncompensated care data from the hospitals that we have projected to be eligible for Medicare DSH payments during the fiscal year.
These policies for MDHs would only apply in FY 2016 if the MDH program is extended, by statute, beyond its current expiration date of March 31, 2015.
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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 simply by revising the claims payment methodologies to 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 final rule that can be found 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
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 the precise aggregate Medicare DSH payment amount that would be paid for a Federal fiscal year until cost report settlement for all IPPS hospitals is completed, which occurs several years after the end of the Federal fiscal year. Therefore, section 1886(r)(2)(A)(i) of the Act provides authority to estimate this amount, by specifying that, for each fiscal year to which the provision applies, such amount is to be “estimated by the Secretary.” Similarly, section 1886(r)(2)(A)(ii) of the Act represents the estimated empirically justified Medicare DSH payments to be made in a fiscal year, as prescribed under section 1886(r)(1) of the Act. Again, section 1886(r)(2)(A)(ii) of the Act provides authority to estimate this amount.
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, we are proposing 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) of determining Factor 1 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 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 this FY 2016 IPPS/LTCH PPS proposed rule, 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 uses the most recently submitted Medicare cost report data to identify current Medicare DSH payments and the most recent DSH payment adjustments provided in the IPPS Impact File, and 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 Medicare DSH payments for FY 2016, without regard to the application of section 1886(r)(1) of the Act, is approximately $13.338 billion. This estimate excludes Maryland hospitals participating in the Maryland All-Payer Model, SCHs paid under their hospital-specific payment rate, and hospitals participating in the Rural Community Hospital Demonstration, as indicated earlier. 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, is $3.335 billion (25 percent of the total amount estimated). Under § 412.l06(g)(1)(i) of the regulations, Factor 1 is the difference between these two estimates of the Office of the Actuary. Therefore, in this proposed rule, we are proposing that Factor 1 for FY 2016 is $10,003,425,327.39 ($13,337,900,436.52 minus $3,334,475,109.13). We are inviting public comments on our proposed calculation of Factor 1 for FY 2016.
The Office of the Actuary's estimates for FY 2016 begin with a baseline of $11.632 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 Medicare Advantage (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 next 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 individuals under 65 without insurance in 2013 must be 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). The Health Care and Education Reconciliation Act (Pub. L. 111-152) was enacted on March 30, 2010. It was passed in the House of Representatives on March 21, 2010, and by the Senate on March 25, 2010. Because the House of Representatives was the first House to vote on the Health Care and Education Reconciliation Act of 2010 on March 21, 2010, we have determined that the most recent estimate available from the Director of the Congressional Budget Office “
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). In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50631), we used the first estimate that includes all residents, including
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 is available (as so calculated).” 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). Therefore, for this 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 calculation of the proposed Factor 2 for FY 2016, employing a weighted average of the CBO projections for CY 2015 and CY 2016, is as follows:
Therefore, the proposed Factor 2 for FY 2016 is 63.69 percent. Our proposal for Factor 2 is subject to change if more recent CBO estimates of the insurance rate become available at the time of the preparation of the final rule. We are inviting public comments on our proposed calculation of Factor 2 for FY 2016.
The FY 2016 Proposed Uncompensated Care Amount is: $10,003,425,327.39 × 0.6369 = $6,371,181,591.01.
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 is 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 requirements for this factor of the uncompensated care payment formula, it was necessary to determine: (1) The definition of uncompensated care or, in other words, the specific items that are to be included in the numerator (that is, the estimated uncompensated care amount for an individual hospital) and the denominator (that is, the estimated uncompensated care amount for all hospitals estimated to receive Medicare DSH payments in the applicable fiscal year); (2) the data source(s) for the estimated uncompensated care amount; and (3) the timing and manner of computing the quotient for each hospital estimated to receive Medicare DSH payments. The statute instructs the Secretary to estimate the amounts of uncompensated care for a period based on appropriate data. In addition, we note that the statute permits the Secretary to use alternative data in the case where the Secretary determines that such alternative data are available that are a better proxy for the costs of subsection (d) hospitals for treating individuals who are uninsured.
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
For FY 2016, we believe it remains premature to propose the use of Worksheet S-10 for purposes of determining Factor 3 and, therefore, are proposing 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 believe 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 are proposing that, for FY 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 § 412.106(b)(2)(i) and (b)(4). We still intend to propose through future rulemaking the use of the Worksheet S-10 data for purposes of determining Factor 3. We are inviting public comments on this proposal to continue to use insured low-income days (that is, to use data for Medicaid and Medicare SSI patient days determined in accordance with § 412.106(b)(2)(i) and (b)(4) as a proxy as permitted by statute) to determine Factor 3 for FY 2016.
As we did for the FY 2014 IPPS/LTCH PPS proposed rule and FY 2015 IPPS/LTCH proposed rule, we will publish on the CMS Web site a table listing Factor 3 for all hospitals that we estimate would receive empirically justified Medicare DSH payments in FY 2016 (that is, hospitals that we project 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 will have 60 days from the date of public display of this 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 has closed or converted to a CAH. 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 use 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
Therefore, for the computation of Factor 3 for FY 2016, we are proposing 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 is available at the time of this rulemaking, we are proposing that we continue to use the most recent HCRIS database extract available to us at the time of this annual rulemaking cycle. We note 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 reflected a longer amount of time. We are proposing to codify this change for FY 2016 by amending the regulations at § 412.106(g)(1)(iii)(C). We are inviting public comments on this proposal, which we describe more fully below.
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 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 contrast, under our proposal, for FY 2016, we would use the more recent of the full year 2012 or full year 2011 data from the March 2015 update of the hospital cost report data in the HCRIS database and the 2012 cost report data submitted to CMS by IHS hospitals to obtain the Medicaid days to calculate Factor 3. In addition, to calculate Factor 3 for FY 2016, we anticipate that, under our proposal discussed above, we would use the FY 2013 SSI ratios to be published on the following CMS Web site when they become available:
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 note 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. 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.
We are proposing 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 will 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 inaccuracies. After the publication of the IPPS/LTCH PPS final rule, hospitals will have until August 31 of that year (for FY 2016, the deadline is August 31, 2015) to review and submit comments on the accuracy of these tables for the applicable fiscal year. Comments can be submitted to our inbox at
Section 3025 of the Affordable Care Act, as amended by section 10309 of the Affordable Care Act, added a new
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 “applicable condition” (which is addressed in detail in section IV.C.3.a. of the FY 2012 IPPS/LTCH PPS final rule (76 FR 51665 through 51666)) is defined as a condition or procedure selected by the Secretary among conditions and procedures for which: (i) Readmissions represent conditions or procedures that are high volume or high expenditures and (ii) measures of such readmissions have been endorsed by the entity with a contract under section 1890(a) of the Act and such endorsed measures have exclusions for readmissions that are unrelated to the prior discharge (such as a planned readmission or transfer to another applicable hospital). Section 1886(q)(5)(B) of the Act also requires the Secretary, beginning in FY 2015, to the extent practicable, to expand the applicable conditions beyond the three conditions for which measures have been endorsed to the additional four conditions that have been identified by the MedPAC in its report to Congress in June 2007 and to other conditions and procedures as determined appropriate by the Secretary.
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 readmission 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 readmission payment
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 proposed rule, we are proposing to—
• Make 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 proposed rule); and
• Adopt 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 proposed rule).
In this proposed rule, for the FY 2017 payment determination and subsequent years, we are proposing a refinement of the currently National Quality Forum (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 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. This cohort is the set of hospitalizations that meet all of the inclusion and exclusion criteria, and we are proposing 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 currently implemented measure, we refer readers to the measure methodology report and measure risk adjustment statistical model on our Web site at:
This proposed measure refinement would expand 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. Including such patients would better represent the complete population of a hospital's patients who are receiving clinical management and treatment for pneumonia, as well as to 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 believe that measure results derived from refinement of the measure cohort in the manner we are proposing 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) is further described in section VIII.A.6.b. of the preamble of this proposed rule under our discussion of proposed refinements for the Hospital IQR Program.
The proposed measure refinement would expand 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 also have a secondary diagnosis of pneumonia that is coded as present on admission. The data sources, exclusion criteria, and assessment of the outcome of readmission remain unchanged.
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 sociodemographic status 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
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 will 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 are proposing 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 believe 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 are proposing will 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 remain 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. For the full measure specifications of the proposed refinement of the measure cohort, we refer readers to the CMS Web site at:
Using administrative claims data for FY 2015 (that is, discharges between July 2010 and June 2013), we analyzed and simulated the effect of the proposed measure cohort refinements on the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) as if these changes had been applied for the Hospital Readmissions Reduction Program FY 2015 payment determination. We note that these statistics are for illustrative purposes only, and we are not proposing to revise the measure calculations for FY 2015, nor for FY 2016. Rather, we are proposing to apply these changes to the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) for the FY 2017 payment determination and subsequent years. Based on our analysis, we anticipate that expanding the measure cohort to include a broader population of patients would add 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 (NQF #0506). In the FY 2012 IPPS/LTCH PPS final rule (76 FR 51672), we established that if a hospital has fewer than 25 eligible cases for a measure, we will assign the hospital to a separate category indicating that the number of cases is too small to reliably indicate 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 will not be publicly reported for the measure. The increase in the size of the measure cohort proposed in this proposed rule would change results for many hospitals and would change the number of hospitals that have greater than 25 cases.
The previously adopted pneumonia readmission measure cohort for the Hospital Readmissions Reduction Program included 976,471 patients and 3,137 hospitals for FY 2015. We noted the following effects for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) if the expanded cohort had been applied for FY 2015: (1) The expansion of the readmission cohort would include an additional 634,519 patients (representing a 65 percent increase, for a total measure cohort of 1,610,990 patients); (2) an additional 42 hospitals (representing a 1.3 percent increase) would 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 40 percent of the total expanded measure cohort; (4) the national observed readmission rate would increase by 0.9 absolute percentage points; and, (5) the proposed cohort refinement would affect the excess readmissions ratios for some hospitals. A detailed description of the refinement to the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) and the effects of the measure update are available on our Web site at:
The proposed refinement of the measure cohort for the CMS 30-Day Pneumonia Readmission Measure (NQF #0506) would use the same methodology and statistical modeling approach as the previously adopted 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 note that the set of hospitals for which this refined measure would be calculated for the Hospital Readmissions Reduction Program differs 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
In summary, we are proposing a refinement of the NQF endorsed CMS 30-Day Pneumonia Readmission Measure (NQF #0506), which expands the measure cohort, in the Hospital Readmissions Reduction Program for the FY 2017 payment determination and subsequent years.
We are inviting public comment on this proposal.
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 this proposed rule, for FY 2016, consistent with the definition specified at § 412.152, we are proposing 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 are proposing 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.
Under the Hospital Readmissions Reduction Program the “base operating DRG payment amount” defined at § 412.152 is used both to determine the readmission adjustment factor that accounts for excess readmissions under section 1886(q)(3) of the Act and to determine which payment amounts will be adjusted to account for excess readmissions under section 1886(q) of the Act. Consistent with section 1886(q)(2) of the Act, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53374 through 53383), under the regulations at § 412.152, we define the “base operating DRG payment amount” and specify that it does not include adjustments or add-on payments for IME, DSH, outliers and low-volume hospitals as required by section 1886(q)(2) of the Act. Furthermore, consistent with section 1886(q)(2)(B)(i) of the Act, for SCHs and for MDHs for FY 2013, the definition of “base operating DRG payment amount” at § 412.152 excludes the difference between the hospital's applicable hospital-specific payment rate and the Federal payment rate.
For FY 2015 and subsequent years, for purposes of calculating the payment adjustment factors and applying the payment methodology, in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50041 through 50048), we finalized our policy that the base operating DRG payment amount for MDHs includes the difference between the hospital-specific payment rate and the Federal payment rate (as applicable). 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
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). “Aggregate payments for excess readmissions” is the numerator of the ratio used to calculate the adjustment factor under the Hospital Readmissions Reduction Program (as described in further detail later in this section).
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.
For FY 2016, we are proposing 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.
For this FY 2016 proposed rule, we are proposing 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 note that, for the purpose of modeling the proposed FY 2016 readmissions payment adjustment factors for this proposed rule, we use excess readmissions ratios for applicable hospitals from the FY 2015 Hospital Readmissions Reduction Program applicable period. For the FY 2016 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 this proposed rule, for FY 2016, we are proposing to use MedPAR data from July 1, 2011 through June 30, 2014. Specifically, in this proposed rule, we are using 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
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 are proposing 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 are proposing to follow this same approach.
In this proposed rule, for FY 2016, we are proposing 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 readmissions ratio, we are proposing to identify admissions for the AMI, HF, PN, THA/TKA, COPD applicable conditions, for the purposes of calculating aggregate payments for excess readmissions as follows:
• 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 are proposing 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 are proposing 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 are proposing 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 are proposing 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 are proposing 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 are proposing 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 aggregate payments for excess readmissions (and therefore a payment reduction under the Hospital Readmissions Reduction Program). We note that we are not proposing any changes to our existing methodology to calculate “aggregate payments for all discharges” (the denominator of the ratio).
We are proposing the following methodology for FY 2016 as displayed in the chart below.
We are inviting public comment on these proposals.
In the FY 2015 IPPS/LTCH PPS proposed rule (79 FR 28117), 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 Hospital Readmissions
In developing this proposed extraordinary circumstance exception policy for the Hospital Readmissions 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 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.
We 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, the proposed policy 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.
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 would 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 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.
We are proposing 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 Hospital Readmissions 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 HAC Reduction Program (if the proposed extraordinary circumstance exception policy for the HAC Reduction Program as described in section IV.G.8. of the preamble of this proposed rule is adopted). 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 Hospital Readmissions 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, 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 our decision. Under the proposed policy, we would review each request for an extraordinary circumstance exception on a case-by-
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 notices on the QualityNet Web site. This provision also would align with the Hospital IQR Program's extraordinary circumstances extensions or exemptions policy.
We are inviting public comment on this proposal.
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 $1,489,397,095, 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 are publishing proxy value-based incentive payment adjustment factors in Table 16 of this proposed rule (which is available via the Internet on the CMS Web site). The proxy factors are based on the TPSs from the FY 2015 program year. These FY 2015 performance scores are the most recently available performance scores that hospitals have been given the opportunity to review and correct. The slope of the linear exchange function used to calculate those proxy value-based incentive payment adjustment factors is 2.5797595162. This slope, along with the estimated amount available for value-based incentive payments, is also published in Table 16.
We intend to update this table as Table 16A in the 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 intend 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 Hospital VBP Program 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 the 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.
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). We are not proposing to change our current policy of readopting measures from the prior program year for each successive program year.
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 this proposed rule, we are proposing 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 this proposed 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 are inviting public comment on this proposal.
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. We are proposing 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 this proposed rule, we also are proposing to remove this measure under the Hospital IQR Program.
We are inviting public comment on this proposal.
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:
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 Hospital VBP Program, 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 reendorsement 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:
We are proposing 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 are inviting public comment on this proposal.
We have previously adopted three measures for the Clinical Care—Process subdomain for the FY 2017 Hospital VBP Program (for example, 79 FR 50062 (Table on Previously Adopted and New Measures for the FY 2017 Hospital VBP Program)). However, as discussed above, we are proposing to remove the AMI-7a and IMM-2 measures from the Hospital VBP Program, and we are not proposing to adopt any additional measures for the Clinical Care—Process subdomain. If the proposals above are finalized, 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. For the reasons outlined below, and if we finalize the removal of the IMM-2 and AMI-7a measures, we are proposing 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, if we finalize our proposal to remove the Clinical Care—Process subdomain, we are proposing to rename the Clinical Care—Outcomes subdomain as simply the Clinical Care domain. We are also proposing to reweight the domains to reflect our proposals, which we detail in section IV.G.7.a. of the preamble of this proposed rule.
We are inviting public comments on these proposals.
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
For a discussion addressing the “new standard population data” in the Hospital IQR Program, we refer readers to section VIII.A.4.b. of the preamble of this proposed rule.
In summary, for the FY 2018 program, we are proposing 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). Below, we are signaling our intent to include additional data in certain NHSN measures beginning with the FY 2019 program year, proposing to adopt a new measure beginning with the FY 2021 program year, and summarizing 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
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). We intend 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 reendorsement 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 are inviting public comment on this plan to accommodate these measures' expansions in the Hospital VBP Program 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.”
We are proposing 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 are inviting public comment on this proposal.
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 through 50065), we also finalized our proposal to adopt the PSI-90 measure for the FY 2019 program year and subsequent years.
In this proposed rule, we are proposing 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 sought comment on measures that could potentially be used to expand the Efficiency and Cost Reduction domain in the future. We are again seeking comments on this issue. We are 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. We encourage comment on efficiency and cost reduction measures already included in the Hospital IQR Program as well as measures we are proposing in section VIII.A.7. of the preamble of this proposed rule for inclusion in the Hospital IQR Program beginning with the FY 2018 payment determination.
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 CMS and stakeholders. Therefore, for the FY 2018 program year, we are proposing to adopt a 12-month performance period of January 1, 2016 through December 31, 2016 for the PCCEC/CC domain. We also are proposing 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 are inviting public comment on these proposals.
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, for the FY 2018 program year, we are proposing 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 are proposing 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 are inviting public comment on these proposals.
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, for the FY 2018 program year, we are proposing 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 are proposing 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 are inviting public comments on these proposals.
The table below summarizes the proposed 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 have proposed 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. In the FY 2020 program year, we are proposing to adopt a performance period of July 1, 2016 to June 30, 2018 for the PSI-90 measure. We are proposing 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 are inviting comment on these proposals.
The table below summarizes the proposed baseline and performance periods for the FY 2021 program year. 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 are proposing to adopt for the Clinical Care domain for the FY
For the THA/TKA measure in the FY 2021 program year, we are proposing to adopt a 36-month performance period of April 1, 2016 through March 31, 2019. We also are proposing 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 are inviting public comment on these proposals.
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 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 are proposing to adopt the following additional performance standards for the FY 2018 program year. We note that the numerical values for the performance standards displayed below represent estimates based on the most recently available data, and we intend 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).
Based on public comments in the FY 2015 IPPS/LTCH PPS final rule, we are proposing 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,
We are inviting public comments on these proposed performance standards.
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 this proposed rule, we are proposing performance standards for the PSI-90 measure for the FY 2020 program year as set forth below:
We are proposing 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):
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:
For the FY 2018 program year, we are proposing to remove two “topped-out” measures from the Clinical Care—Process subdomain. In addition, we are proposing to move one measure (PC-01) from the Clinical Care—Process subdomain to the Safety domain and to remove the Clinical Care—Process subdomain.
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 are proposing 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 are proposing to increase the Safety domain's weight by 5 percentage points. We are proposing to adopt the following FY 2018 program year domain weighting for hospitals receiving a score on all proposed newly-aligned domains:
We are inviting public comments on the proposed domain weights.
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).
We are not proposing any changes to the minimum numbers of cases and measures that we have adopted above. However, because we are proposing 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. We are not proposing to change this requirement at this time. We welcome public comments on whether we should consider adopting a different policy on this topic. We will continue to proportionately reweight hospitals' TPSs when they have sufficient data on only three domains.
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, and submit corrections for, the information to be made public with respect to the HAC scores of the applicable hospital prior to such information being made public. Section 1886(p)(6)(C) of the Act requires that, once corrected, the HAC scores be posted on the
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 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 also have codified certain requirements of the HAC Reduction Program at 42 CFR 412.170 through 412.172.
We are not proposing any changes to the above described policies for the implementation of the HAC Reduction Program for FY 2016. However, we are reminding 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). We are not proposing to add or remove any measures for FY 2016.
We are providing 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. The PSI-90 Composite measure currently 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 Postoperative pulmonary embolism/Deep vein thrombosis rate; PSI-13 Postoperative sepsis rate; PSI-14 Wound dehiscence rate; and PSI-15 Accidental puncture and laceration rate.
As part of the NQF maintenance review process, AHRQ is considering the addition of PSI-9 Perioperative hemorrhage rate, PSI-10 Perioperative physiologic metabolic derangement rate, and PSI-11 Post-operative 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 this time, the AHRQ PSI-90 Composite measure is continuing to undergo NQF maintenance review. No changes have been finalized. Therefore, we are not proposing any changes to this measure at this time.
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
We also note that we anticipate 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
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50102), 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
For FY 2017, we are proposing 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.
For FY 2017, we are proposing 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 would 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 would use data from CYs 2014 and 2015.
We are seeking public comment on the proposal to use these updated time periods for calculation of measure results for the FY 2017 program.
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 was 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, we also are proposing 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 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. This means hospitals were notified of the impact that not reporting these data would have on their Total HAC Score before the FY 2017 reporting period began (that is, before January 1, 2014). Therefore, we are proposing 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 are inviting public comments on our proposal to implement the score calculations discussed above in FY 2017
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)).
For FY 2017, we are proposing 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 are proposing 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 needs to be adjusted to reflect the addition of the fifth and sixth measure in Domain 2. Second, among the public comments on the FY 2014 and FY 2015 IPPS/LTCH PPS final rules that were considered, MedPAC and other stakeholders recommended that Domain 2 should be weighted more than Domain 1 because they believed the CDC NHSN chart-abstracted measures were more reliable and actionable than claims-based measures. We are inviting public comments on this proposal to decrease the Domain 1 weight from 25 percent to 15 percent and increase the Domain 2 weight from 75 percent to 85 percent for FY 2017.
We are proposing 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 FY 2018. 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 were endorsed by the NQF in 2012. The MAP 2015 final recommendations indicated that the CLABSI and CAUTI measures with ICU and select ward locations be included in the HAC Reduction Program.
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, we are proposing 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 are inviting public comment on our proposal.
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.
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. We are not proposing any changes to this policy at this time.
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 rulemaking. After further consideration of commenters' support of CMS establishing an extraordinary circumstance exception policy for the HAC Reduction Program, we agree with commenters that it may be possible for a hospital to experience a certain period of time during which it is not able to accurately collect quality measure data and/or to report those data in a timely manner due to an extraordinary circumstance beyond its control, and that a policy for taking into account such a circumstance should be proposed.
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
We are proposing 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 this proposed rule). 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, 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 notices on the QualityNet Web site at:
We are inviting public comment on this proposal.
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 provider 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) (CMS Pub. 15-2), 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 and a diminished need for hospitals to use the simplified cost allocation methodology. 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
In this proposed rule, we are proposing to eliminate the simplified cost allocation methodology because, as discussed above, the allocation of the costs of capital-related movable equipment using this methodology yields less precise calculated CCRs. Currently, less than 1 percent of hospitals have elected to use the simplified cost allocation methodology. Based on FY 2013 data, only 9 of 1,269 CAHs and 23 of 4,389 hospitals other than CAHs used the simplified cost allocation methodology. Furthermore, we believe that advances in technology have reduced the cost of recordkeeping, which has allowed hospitals to maintain accurate statistical data and afforded 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 this proposed rule, we are proposing 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.
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-year period. Further, the Affordable Care Act requires, in the case of a rural community hospital that is participating in the demonstration program as of the last day of the initial 5-year period, the Secretary to provide for the continued participation of such rural hospital in the demonstration program during the 5-year extension period, unless the hospital makes an election to discontinue participation.
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. Further, 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
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 demonstration in an earlier given year from “as submitted” cost reports that were submitted by the hospitals prior to the inception of the demonstration.) We then updated the estimated cost described above to the current year by multiplying it by the market basket percentage increases applicable to the years involved and the applicable annual volume adjustment. For the FY 2010 IPPS/RY 2010 LTCH PPS final rule, data from finalized cost reports reflecting the participating hospitals' experience under the demonstration were available. Specifically, the finalized cost reports for the first 2 years of the demonstration, that is, cost reports for cost reporting years beginning in FYs 2005 and 2006 (CYs 2004, 2005, and 2006) were available. These data showed that the actual costs
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 estimated reasonable cost amount to be paid under the demonstration to the 22 participating hospitals in FY 2014 for covered inpatient hospital services, and the 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 the 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, $6,039,880, was derived from finalized cost reports for cost reporting periods beginning in FY 2007 for the 9 hospitals that participated in the demonstration during that year).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50141 through 50145), we stated the methodology for determining the budget neutrality adjustment factor to be applied to the FY 2015 national IPPS payment rates as follows.
Because section 410A of Public Law 108-173 stipulates swing-bed services are to be included among the covered inpatient hospital services for which the demonstration payment methodology applies, we included the cost of these services, as reported on the cost reports for the hospitals that provide swing-bed services, within the general total estimated FY 2012 reasonable cost amount for covered inpatient hospital services under the demonstration. As indicated above, we used “as submitted” cost reports for the hospital's cost reporting period ending in CY 2012 for this calculation.
We summed the two above-referenced amounts to calculate the general total estimated FY 2012 reasonable cost amount for covered inpatient hospital services for all participating hospitals.
We multiplied this sum (that is, the general total estimated FY 2012 reasonable cost amount for covered inpatient hospital services for all participating hospitals) by the FY 2013, FY 2014, and FY 2015 IPPS market basket percentage increases, which are formulated by the CMS Office of the Actuary. We then multiplied the product of the general total estimated FY 2012 reasonable cost amount for all participating hospitals and the market basket percentage increases applicable to the years involved by a 3-percent annual volume adjustment for FYs 2013 through 2015—the result was the general total estimated FY 2015 reasonable cost amount for covered inpatient hospital services for all participating hospitals.
We used 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 for the years involved. The 3-percent annual volume adjustment was stipulated by the CMS Office of the Actuary and was used because it is intended to reflect the tendency of hospitals' inpatient caseloads to increase. Because inpatient caseloads for small hospitals may fluctuate, we incorporated into the estimate of demonstration costs a factor to allow for a potential increase in inpatient hospital services.
We multiplied the above amount (that is, the estimated FY 2012 total payments that generally would otherwise be paid for covered inpatient hospital services for all participating hospitals without the demonstration) by the FYs 2013 through 2015 IPPS applicable percentage increases. This methodology differs from Step 1, in which we applied the market basket percentage increases to the sum of the hospitals' general total FY 2012 estimated reasonable cost amount for covered inpatient hospital services. We believe that the IPPS applicable percentage increases are appropriate factors to update the estimated amounts that generally would 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. Hospitals participating in the demonstration would be participating under the IPPS payment methodology if they were not in the demonstration. Then we multiplied the product of the estimated FY 2012 total payments that generally would otherwise be made without the demonstration and the IPPS applicable percentage increases for the years involved by a 3-percent annual volume adjustment for FYs 2013 through 2015. The result represented the general total estimated FY 2015 costs that would otherwise be paid without the demonstration for covered inpatient hospital services to the participating hospitals.
Also, in the FY 2015 IPPS/LTCH PPS final rule, we calculated the amount by which the actual costs of the demonstration in FY 2008 (that is, the costs of the demonstration for the 10 hospitals that participated in FY 2008, as shown in these hospitals' finalized cost reports for the cost report period beginning in that fiscal year), exceeded the budget neutrality offset amount that was finalized in the FY 2008 IPPS final rule. This amount, calculated for the FY 2015 final rule, was $10,389,771 (79 FR 50145).
Therefore, the total budget neutrality offset amount applied to the FY 2015 IPPS rates was $64,566,915. This was the sum of two separate components: (1) The 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 the participating hospitals in FY 2015 without the demonstration ($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) exceed the budget neutrality offset amount that was finalized in the FY 2008 IPPS final rule ($10,389,771).
In this FY 2016 IPPS/LTCH PPS proposed rule, in general, we are proposing to use the established methodology used in FY 2015 (as discussed earlier), 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 are proposing 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' rules, we believe that because these are the most recent available cost reports, they will be an accurate predictor of these amounts.
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 are proposing 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 following upon the Affordable Care Act amendments 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 inpatient hospital services under the demonstration, as well as the amounts that would otherwise be paid without the demonstration, would reflect the fact that some of the hospitals within this cohort will participate in the demonstration for only a fraction of the 12 months in FY 2016. Eleven of these 15 hospitals are scheduled to end the demonstration on or before September 30, 2016; eight of these 11 hospitals are scheduled to end the demonstration prior to September 30, 2016.
For each of these 8 hospitals, we are proposing 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
Similar to previous years, we are proposing 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 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 are proposing 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 are proposing 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 are proposing 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. For this proposed rule, the current estimate of the FY 2016 IPPS market basket percentage increase provided by the CMS Office of the Actuary is specified in section IV.A. of the preamble of this proposed rule. We are proposing to use the final FY 2016 IPPS market basket percentage increase in the final rule. We are proposing 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 is the proposed total estimated FY 2016 reasonable cost amount for covered inpatient hospital services for all hospitals participating in FY 2016.
We are proposing 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 are proposing 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 are proposing to incorporate into the estimate of demonstration costs a factor to allow for a potential increase in inpatient hospital services.
Similarly, as in Step 1, for the hospitals that provide swing-bed services, we are proposing to include the amount that would otherwise be paid for these services without the demonstration, as reported on the “as
Similar to the methodology applied in FY 2015, we are proposing to sum these two amounts and multiply the derived sum by the FYs 2014, 2015, and 2016 IPPS applicable percentage increases. For this proposed rule, the current estimate of the FY 2016 IPPS applicable percentage increase is specified in section IV.A. of the preamble of this proposed rule. (We are proposing to use the final FY 2016 applicable percentage increase in the final rule.) This methodology differs from Step 1, in which we are proposing 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 are proposing 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 this proposed rule, the resulting difference is $26,195,949. This estimated amount is based on the specific assumptions identified regarding the data sources used, that is, “as submitted” recently available cost reports. If updated data become 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, the estimated budget neutrality offset amount may change in the final rule, depending on the availability of updated data.
Therefore, in this proposed rule, we are identifying the difference between the total 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, and we are proposing to adjust the current year's budget neutrality offset amount by that difference. 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 revised and finalized cost reports and the amount that was included in the budget neutrality offset amount for FY 2009 as identified in the FY 2009 IPPS final rule (taking into account any amount already included in the finalized budget neutrality offset amount in the FY 2016 IPPS/LTCH PPS final rule that reflects an adjustment based on FY 2009 cost reports). If finalized cost reports for demonstration hospitals that participated in FY 2010 or FY 2011 are available prior to the FY 2016 IPPS/LTCH PPS final rule, we intend to adjust the budget neutrality offset amount for FY 2016 for any amounts by which the finalized costs of the demonstration for the year (FY 2010 or FY 2011) differ from the amounts included in the budget neutrality offset amount as finalized in the respective year's IPPS final rule that indicate the estimated cost of the demonstration for that fiscal year.
As further discussed below, we note that, for this proposed rule, 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 are proposing to include that component as a negative adjustment to the budget neutrality offset amount for the current fiscal year (as explained below).
Therefore, for this FY 2016 LTCH/LTCH PPS proposed rule, we are proposing 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 is $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 are proposing to apply is: 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 are proposing 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 are proposing to reduce the budget neutrality offset amount for FY 2016 by that amount.
If updated data become available prior to the 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, the amount of the budget neutrality offset may change in the FY 2016 IPPS/LTCH PPS final rule based on the availability of updated data. In addition, similar to previous years, we are proposing 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 are inviting public comments on our proposals discussed above.
Finally, we are 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 CMS 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 are inviting public comments on this issue.
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
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)).
Based on our annual review of MS-DRGs, we have identified two proposed new MS-DRGs that we are proposing to include on the list of MS-DRGs subject to the postacute care transfer policy. As we discuss in section II.G. of the preamble of this proposed rule, in response to public comments and based on our analysis of FY 2014 MedPAR claims data, we are proposing to make changes to MS-DRGs, effective for FY 2016.
As discussed in section II.G.3.b. of the preamble of this proposed rule, we are proposing 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 are proposing 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 current assignment in MS-DRGs 246 through 251 to the two proposed new MS-DRGs.
To improve clinical coherence for the various cardiovascular procedures currently 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 this proposed rule, we also are proposing 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 currently 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 currently 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 are proposing 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. Existing MS-DRGs 246 through 251 do not currently 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.
Finally, we have determined that proposed new MS-DRGs 273 and 274 also would meet the criteria for the special payment methodology. Therefore, we are proposing that the two proposed new MS-DRGs would be subject to the MS-DRG special payment methodology, effective FY 2016.
The proposed postacute care transfer status and special payment policy status of these MS-DRGs are reflected in Table 5 associated with this proposed rule, which is listed in section VI. of the Addendum to this proposed rule and available via the Internet on the CMS Web site.
Over the past few years, stakeholders have expressed a variety of concerns related to Medicare policies on short inpatient hospital stays, long outpatient stays that include observation services, and Medicare policies with respect to when payment for short hospital stays is appropriate under Medicare Part A. CMS has taken steps to address such concerns. As we announced on April 1, 2015, CMS recovery auditors are not permitted to conduct patient status reviews for claims with dates of admission of October 1, 2013 through April 30, 2015.
In addition, on December 30, 2014, we announced a number of changes to the Recovery Audit Program. Such modifications included changing the recovery auditor “look-back period” for patient status reviews to 6 months from the date of service in cases where a hospital submits the claim within 3 months of the date that it provides the service. Several other program improvements were included in this announcement. We have established limits on additional documentation requests (ADRs) that are based on a hospital's compliance with Medicare rules, incrementally applied ADR limits for providers that are new to recovery auditor reviews, and diversified ADR limits across all types of claims for a certain provider. We also have established a requirement that recovery auditors must complete complex reviews within 30 days, and failure to do so will result in the loss of the recovery auditor's contingency fee. In addition, we will require recovery auditors to wait 30 days before sending a claim to the MAC for adjustment. This 30-day period will allow the provider to submit a discussion period request before the MAC makes any payment adjustments. These changes will be effective with the next Recovery Audit Program contract awards.
Despite these planned alterations to the Recovery Audit Program, we note 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). Therefore, we are considering this feedback carefully, as well as recent MedPAC recommendations, and expect 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 that will be published this summer.
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
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 hospitals located in Puerto Rico. Accordingly, under the capital IPPS, we compute a separate payment rate specific to Puerto Rico hospitals using the same methodology used to compute the national Federal rate for capital-related costs. In general, hospitals located in Puerto Rico are paid a blend of the applicable capital IPPS Puerto Rico rate and the applicable capital IPPS Federal rate. Capital IPPS payments to hospitals located in Puerto Rico are computed based on a blend of 25 percent of the capital IPPS Puerto Rico rate and 75 percent of the capital IPPS Federal rate. For additional details on capital IPPS payments to hospitals located in Puerto Rico, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51725).
The proposed 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 proposed rule.
We note that, in section II.D. of the preamble of this proposed 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 proposing 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 proposing 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 reimbursement 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
For this FY 2016 proposed rule, based on IHS Global Insight, Inc.'s 2015 first quarter forecast, we estimate that the FY 2010-based IPPS operating market basket update for FY 2016 is 2.7 percent (that is, the estimate of the market basket rate-of-increase). Therefore, the FY 2016 rate-of-increase percentage that would be 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 2.7 percent, in accordance with the applicable regulations at 42 CFR 413.40. We are proposing that if more recent data become available for the final rule, we would use them to calculate the IPPS operating market basket update for FY 2016.
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 a 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 (LOS) (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 a 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 VII. of the preamble of this proposed rule, when we refer to discharges, we describe Medicare discharges.) The August 30, 2002 final rule further details the payment policy under the TEFRA system (67 FR 55954).
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, a 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 a 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 proposed 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
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 proposed implementation of section 1206(a) of Public Law 113-67, we now need to also 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 proposed rule, we are proposing to amend the existing regulations relating to the limitation on charges to address beneficiary charges under this 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 specific types of cases and may also waive such denial “in such unusual cases as the Secretary finds appropriate” (68 FR 48805). Section 3 of the ASCA operates in the context of the HIPAA regulations, which include, among other provisions, the transactions and code sets standards requirements codified under 45 CFR parts 160 and 162 (generally known as the Transactions Rule). The Transactions Rule requires covered entities, including covered health care providers, to conduct certain electronic health care transactions according to the applicable transactions and code sets standards.
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 proposed rule). More information on the ONC HIT Certification Program and efforts to
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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 a 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 proposed rule, and the phrase “site neutral payment rate case” refers to a 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 will be 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 proposed 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 proposed 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 proposed rule as the ventilator criterion).
In this section of the proposed rule, we discuss our proposals to implement the required changes to the LTCH PPS payment rate, as well as other related policy proposals 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, we are proposing to add a new section to the regulations under 42 CFR part 412 Subpart O (proposed 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 will be 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 proposed 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 proposing to implement the statutory criteria for excluding cases from the site neutral payment rate under proposed new § 412.522(b), as well as establish the requirements for determining the site neutral payment rate for a given LTCH discharge under proposed new § 412.522(c). In addition, we are proposing to make conforming changes to paragraph (a)(2) of § 412.521 to include the new site neutral payment rate established in accordance with proposed new § 412.522 as a method of payment under the LTCH PPS. We also are proposing a technical change to the language in § 412.521(a)(2) that currently refers to the Federal payment rate by changing the term from “Federal payment rate” to “standard Federal payment rate” in order to provide consistent terminology when referring to such a payment.
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 are paid according to 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; admission to the LTCH was immediately preceded by discharge from a subsection (d) hospital; and the immediately preceding stay in a subsection (d) hospital included at least 3 days in an intensive care unit (ICU) (referred to in this proposed 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 ventilator services of at least 96 hours (referred to in this proposed rule as the ventilator criterion). Below we present our proposals to implement the statutory criteria for exclusion from the site neutral payment rate under sections 1886(m)(6)(A)(ii)(I) and (II) of the Act. b. Proposed Implementation of the Criterion for a Principal Diagnosis Relating to a Psychiatric Diagnosis or to Rehabilitation
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)
As discussed in section VII.C.2. of the preamble of this proposed rule, the MS-LTC-DRG patient classifications are, by extension, the same as the MS-DRG patient classifications used under the IPPS. The process of developing the MS-DRGs, and by extension the MS-LTC-DRGs, began by dividing all possible principal diagnoses into mutually exclusive principal diagnosis areas, referred to as Major Diagnostic Categories (MDCs). In general, a case is assigned to an MDC based on the patient's principal diagnosis before the case is assigned to an MS-DRG. Once the MDCs were defined, each MDC was evaluated to identify which patient characteristics would be expected to result in similar hospital resource consumption. Because the presence of a surgical procedure that required the use of the operating room would have a significant effect on the type of hospital resources used to treat a patient, most MDCs were initially divided into surgical DRGs and medical DRGs. Some surgical and medical DRGs were further differentiated based on the presence or absence of a complication or comorbidity (CC) or a major complication or comorbidity (MCC). (For additional information and details on the development of the MS-DRG classifications, we refer readers to the FY 2010 IPPS/LTCH PPS final rule (74 FR 43764 through 43765).)
As such, Medicare LTCH discharges are classified into MS-LTC-DRGs based primarily on the patient's principal diagnosis, as well as up to 24 additional diagnoses, and up to 25 procedures performed during the LTCH stay. Within a small number of MS-LTC-DRGs, classification is also based on the patient's age, sex, and discharge status. The diagnosis and procedure information is currently reported by the hospital using codes from the ICD-9-CM coding system. For FY 2015, the MS-DRGs Version 32 are being used under the IPPS and the MS-LTC-DRGs Version 32 are being used under the LTCH PPS, which are based on ICD-9-CM codes. However, hospitals are required to use the ICD-10-CM/PCS coding system beginning October 1, 2015. As discussed in section II.G.1.a. of the preamble of this proposed rule, the anticipated transition to ICD-10 necessitated the development of an ICD-10-CM/PCS version of the MS-DRGs. To this end, CMS undertook a variety of activities, including a project to convert the ICD-9-based MS-DRGs to ICD-10 MS-DRGs using the General Equivalence Mappings (GEMs). The GEMs provide a map between ICD-9-CM and ICD-10 codes (78 FR 50549). For additional details on the various efforts taken by CMS in preparation for the transition from ICD-9-CM to ICD-10-CM/PCS, we refer readers to section II.G.1. of the preamble of this proposed rule or the CMS Web site at:
For FY 2016, we are proposing to use the ICD-10 MS-DRGs Version 33 under the IPPS and the ICD-10 MS-LTC-DRGs Version 33 under the LTCH PPS. Specifically, as discussed in section II.G.1.b. of the preamble of this proposed rule, we are proposing the ICD-10 MS-DRGs Version 33 as the replacement logic for the ICD-9-based MS-DRGs Version 32 as part of the proposed MS-DRG updates (and by extension the MS-LTC-DRG updates, as discussed in section VII.C.2. of the preamble of this proposed rule) for FY 2016. We are inviting public comments on how well the ICD-10 MS-DRGs Version 32 (and by extension MS-LTC-DRGs Version 32) replicates the logic of the MS-DRGs Version 32 (and by extension MS-LTC-DRGs Version 32) based on ICD-9-CM codes. In addition, we are inviting public comments on the translations from ICD-9-CM to ICD-10-CM/PCS with regard to our proposal to identify LTCH discharges with a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation using specific ICD-10 MS-LTC-DRGs that we believe indicate such principal diagnoses, particularly the validity of the specific MS-LTC-DRGs listed under this proposed approach discussed below in this section. (We note that, for the remainder of the section, when we refer to MS-DRGs Version 33 (or by extension MS-LTC-DRGs), we are referring to the ICD-10-based MS-DRGs Version 33 (and by extension MS-LTC-DRGs), unless otherwise stated. Similarly, when we refer to MS-DRGs Version 32 (or by extension MS-LTC-DRGs), we are referring to the ICD-9-based MS-DRGs Version 32 (and by extension MS-LTC-DRGs), unless otherwise stated).
In this proposed rule, we are proposing under proposed new § 412.522(b)(1)(i) to identify LTCH discharges with principal diagnoses relating to a psychiatric diagnosis or to rehabilitation based on the MS-LTC-DRG assignment in accordance with § 412.513 of the regulations. In developing this proposal, we began by examining which ICD-9-CM diagnosis codes appropriately identify a principal diagnosis related to a psychiatric diagnosis or to rehabilitation. Next, we determined which MS-DRGs (and by extension, MS-LTC-DRGs) those ICD-9-based diagnosis codes grouped to using Version 32 of the ICD-9-CM MS-DRG Definitions Manual, which shows the valid principal diagnoses for each MDC and the MS-DRG assignment for each of those principal diagnoses. We believe that the resulting list of MS-LTC-DRGs Version 32 are indicative of an LTCH discharge with a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation because the classification of a Medicare discharge into a MS-LTC-DRG is predominantly based on the patient's principal diagnosis.
As stated above and as discussed in greater detail in section II.G.1. of the preamble of this proposed rule, in preparation for the implementation of ICD-10, we have developed ICD-10-based MS-LTC-DRGs. Under the ICD-10 MS-DRGs Version 32 (and by extension the ICD-10 MS-LTC-DRGs Version 32), the same list of ICD-10 MS-LTC-DRGs are indicative of an LTCH discharge with a principal diagnosis relating to a psychiatric diagnosis or to rehabilitation. As stated earlier in this section, for FY 2016, we are proposing to use the ICD-10 MS DRGs Version 33 under the IPPS and the ICD-10 MS-LTC-DRGs Version 33 under the LTCH PPS. Therefore, for FY 2016, we are proposing that an LTCH discharge assigned to one of the following proposed ICD-10 MS-LTC-DRGs Version 33 would identify 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).
We also are proposing that, for FY 2016, an LTCH discharge assigned to one of the following proposed ICD-10 MS-LTC-DRGs Version 33 would identify 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 these proposals, for FY 2016, an LTCH discharge grouped to any of the proposed MS-LTC-DRGs listed above would not meet the criteria under proposed 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 and generally means a hospital located in 1 of the 50 States or the District of Columbia other than a psychiatric hospital, a rehabilitation hospital, a children's hospital, an LTCH, or a cancer hospital. Section 1886(m)(6)(D) of the Act, as added by section 1206(a)(1) of Public Law 113-67, also specifies that any reference in that paragraph to a “subsection (d) hospital” is deemed to include a “subsection (d) Puerto Rico hospital.” Section 1886(d)(9)(A) of the Act states that, as used in that section, 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.
As part of our proposed 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, we are proposing to add a definition of the term “subsection (d) hospital” under § 412.503 that would be applicable to the LTCH regulations under proposed new § 412.522. Specifically, we are proposing to define a “subsection (d) hospital” under § 412.503, for purposes of proposed new § 412.522, as a hospital defined in section 1886(d)(1)(B) of the Act, and includes any hospital that is located in Puerto Rico that would be defined as a subsection (d) hospital as defined in section 1886(d)(1)(B) of the Act if it were located in 1 of the 50 States. We believe that this proposed definition is consistent with definitions used in the statute, and would provide additional clarity in the proposed regulations presented in this proposed rule to implement the site neutral payment rate policies required by section 1206(a) of Public Law 113-67.
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, which are discussed in greater detail below. Both the ICU criterion and the ventilator criterion require that the LTCH admission be immediately preceded by a discharge from a subsection (d) hospital.
For purposes of the ICU criterion and the ventilator criterion at sections 1866(m)(6)(A)(iii) and (iv) of the Act, under the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, we are proposing that the phrase “immediately preceded” by a discharge from a subsection (d) hospital means a Medicare patient is discharge from the subsection (d) hospital immediately prior to the patient's admission to an LTCH. A Medicare patient discharge from the subsection (d) hospital to any other setting, including home, an IRF, an IPF, or a SNF would not be considered to be “immediately preceded” by a discharge from a subsection (d) hospital, nor fulfill the ICU criterion or the ventilator criterion in order to qualify for exclusion from the site neutral payment rate. We believe that this proposed policy, which would be codified at new proposed § 412.522(b)(1)(ii), would appropriately identify an LTCH admission that was immediately preceded by a discharge from a subsection (d) hospital. Under this proposal, we are proposing to determine an applicable Medicare patient discharge from a subsection (d) hospital (as defined at proposed § 412.503) by using the subsection (d) hospital's discharge date on the Medicare claim and the LTCH admission date on the Medicare claim for the LTCH's discharge. We also are proposing, for purposes of evaluation of the exclusion from the site neutral payment rate, that the discharge from a subsection (d) hospital must use Patient Discharge Status Code 63, which signifies a patient was discharged or transferred to an LTCH, or Patient Discharge Status Code 91, which signifies a patient was discharged/transferred to a Medicare-certified LTCH with a planned acute care hospital inpatient readmission on hospital claims submitted for the LTCH's discharge to be eligible for exclusion from the site neutral payment rate. We are proposing that a Medicare patient discharge that occurred on the same date as the LTCH admission (or, in certain rare circumstances, that occurred the date before the date of the LTCH admission) that has a patient discharge status code on the subsection (d) hospital claim that indicates discharge or transfer to an LTCH would fulfill the immediately preceded portion of the requirements to be excluded from the site neutral payment rate. Under this proposal, discharges from subsection (d) hospitals reporting a patient discharge status code other than 63 or 91 on the hospital's claim could not serve as a basis for a discharge meeting the immediately preceded by a subsection (d) hospital discharge requirement for exclusion from the site neutral payment rate. We believe that it is appropriate to include discharges from a subsection (d) hospital that occur on the date before the date of the LTCH admission (that is, essentially within 1 calendar day of the LTCH admission) under our proposed interpretation of the term “immediately preceded” in order to account 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. As we expect that the vast majority of LTCH admissions would occur on the same date as the discharge from the subsection (d) hospital, and only in rare instances would the LTCH admission occur on the date after the discharge date from the subsection (d) hospital, increased frequency in LTCH admissions on the date after the IPPS discharge date would raise concerns that could merit further scrutiny.
We note that this proposed interpretation of “immediately preceded” by a subsection (d) hospital would work in tandem with our existing interrupted stay policy at § 412.531.
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. Furthermore, section 1886(m)(6)(A)(iii)(II) of the Act states that, in determining ICU days, the Secretary shall use data from revenue center codes 020X or 021X (or such successor codes as the Secretary may establish). Revenue center codes are reported on the hospital claim (Form CMS-1450 that is also known as the UB-04), which is a uniform institutional provider bill suitable for use in billing multiple third party payers, that is developed and maintained by the National Uniform Billing Committee (NUBC). (We refer readers to Chapter 25, subsection 70.1 of the Medicare Claims Processing Manual (Pub. 100-4).) The revenue code description for revenue center code 020X is for intensive care, and the revenue code description for revenue center code 021X is for coronary care. Both 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. Both of these revenue code descriptions are further divided into subcategories that form a revenue center code series. For billing purposes, the “X” in the revenue code descriptions for revenue center codes 020X and 021X refers to one of the subcategories available for that revenue center code series. (For additional information on the use of revenue center codes 020X and 021X, we refer readers to Chapter 25, subsection 75.4 of the Medicare Claims Processing Manual (Pub. 100-4) and the NUBC's Web site at:
To implement the ICU criterion specified at section 1886(m)(6)(A)(iii) of the Act, we are proposing under proposed new § 412.522(b)(2) that the discharge from the subsection (d) hospital that immediately preceded (as previously discussed in section VII.B.3.d. of the preamble of this proposed rule) the admission to the LTCH includes at least 3 days in an ICU (as defined in § 413.53(d) of the regulations). Consistent with the broad authority under section 123(a)(1) of the BBRA, as amended by section 307(b) of the BIPA, we are proposing that at least 3 days must be reported on the hospital claim submitted by the subsection (d) hospital using revenue center codes 020X or 021X, the use of which must be consistent with our definition of an ICU under § 413.53(d) in order to fulfill the ICU criterion to be excluded from the site neutral payment rate. We believe that this proposal is consistent with the statute and appropriate because it would ensure that payment for discharges made under the LTCH PPS standard Federal payment rate are for services provided to critically ill beneficiaries who require long-term acute hospitalization.
In developing our proposal for the implementation of the ICU criterion at section 1886(m)(6)(A)(iii) of the Act, we examined current hospital coding practices and the use of revenue center codes 020X and 021X, including the subcategory codes, as reported on the Medicare claims for IPPS hospitals. We do not expect a change in general hospital coding practices regarding revenue center code categories 020X and 021X as a result of this proposal. However, we will continue to monitor such coding practices and may propose to revise the ICU criterion regulations in the future if data from revenue center code series for revenue center codes 020X and 021X indicate that any of the subcategories are not consistent with services provided by ICUs as defined under § 413.53(d).
As previously noted with regard to our proposed implementation of the “immediately preceded” requirement, our proposed implementation of the ICU criterion would also work in tandem with our existing interruption of stay policy. Again, we note that we are not proposing to make any changes to the existing interrupted stay policy, and we are referencing it only to illustrate the consistency between our proposed policy and our existing program policies. (For a description of our existing interrupted stay policy, we refer readers to the discussion in section VII.B.3.d. of the preamble of this proposed rule.) As previously noted, LTCH cases involving interrupted stays are treated as a single continuous LTCH stay. As such, under our proposal, the discharge from a subsection (d) hospital that immediately precedes the initial LTCH admission would determine whether the ICU criterion is met. Under our proposal, compliance with the ICU criterion would be based exclusively on the number of days the beneficiary spent in the immediately preceding subsection (d) hospital's ICU prior to being initially admitted to the LTCH. If, during the intervening period of an interrupted LTCH stay, a beneficiary spends any number of days in the ICU of a subsection (d) hospital, those days would not be considered in the evaluation of the LTCH discharge for purposes of meeting the ICU criterion because such care would not have immediately preceded the initial admission to the LTCH. Conversely, if the subsection (d) hospital discharge that immediately preceded the initial LTCH admission meets the ICU criterion (that is, includes at least 3 ICU days), and the period of time relating to an intervening interrupted stay does not include any days in a subsection (d)
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 proposed 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 section VII.B.3.b. of the preamble of this proposed rule, cases are assigned to MS-LTC-DRGs based, in part, on procedures performed during the beneficiary's LTCH stay, which are reported on a Medicare claim using procedure codes. We are proposing that, for the purposes of a discharge being excluded from the site neutral payment rate, 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 9672 (Continuous invasive mechanical ventilation for 96 consecutive hours or more) is used to describe such long-term mechanical ventilator services provided during a hospital stay, including an LTCH stay. As discussed in sections II.G.1.a. and VII.C. of the preamble of this proposed rule, the use of the ICD-10-CM/PCS coding system will be 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 provided during a hospital stay, including an LTCH stay. Therefore, we believe that it would be appropriate and consistent with the requirements at section 1886(m)(6)(A)(vi)(II) of the Act to require LTCHs, effective with discharges in cost reporting periods beginning on or after October 1, 2015, to report procedure code 5A1955Z on hospital claims to indicate that the beneficiary received at least 96 hours of ventilator services during the LTCH stay as a condition of the LTCH discharge being eligible for exclusion from the site neutral payment rate based on the ventilator criterion. Under the broad authority under 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 111-67, under proposed new § 412.522(b)(3), we are proposing to require LTCHs to report ICD-10-PCS procedure code 5A1955Z on their claims to indicate that the beneficiary received at least 96 hours of ventilator services during the LTCH stay as a condition of that discharge being eligible for exclusion from the site neutral payment rate based on the ventilator criterion.
Under this proposal, any LTCH discharges that do not report this procedure code on the claim submitted for payment would not meet the ventilator criterion. In developing this proposal, we recognized that many of the discharges reporting procedure code 5A1955Z (that is, those cases involving at least 96 hours of mechanical ventilation services) are grouped into one of six MS-LTC-DRGs. However, discharges grouped into these six MS-LTC-DRGs are not necessarily limited to cases involving beneficiaries who have received at least 96 hours of mechanical ventilation services. In addition, there are some cases that do involve at least 96 hours of mechanical ventilation that are correctly assigned to MS-LTC-DRGs other than the six MS-LTC-DRGs mentioned; for example, those cases grouped based on surgical hierarchy. Given the variance of possible MS-LTC-DRG assignments based on the procedure code indicating the receipt of at least 96 hours of mechanical ventilator services and the MS-LTC-DRG groupings, we believe that our proposal to determine eligibility for meeting the ventilator criterion under section 1886(m)(6)(A)(vi)(II) of the Act based on the procedure code used is more consistent with the language of the Act as added by Public Law 113-67.
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, we are proposing under proposed 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, proposed new § 412.522(c)(1)(i) would provide 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 are proposing 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 are proposing 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 are proposing that this amount would be further adjusted by the applicable COLA factors established annually during the rulemaking cycle. We also are proposing 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 are proposing that the IPPS comparable per
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 proposed new § 412.522(c)(1), we are proposing 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, as discussed in greater detail in section VII.B.7.b. of the preamble of this proposed rule, we also are proposing 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). We are proposing 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 are proposing that HCO payments for site neutral payment rate cases would be budget neutral and are proposing to apply a budget neutrality factor to the LTCH PPS payments for those cases to maintain budget neutrality. (For additional information on our proposed 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 proposed rule.)
Furthermore, under our proposed calculation of the site neutral payment rate, under proposed new § 412.522(c)(1)(ii), we are proposing 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 are proposing 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 a 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)).
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 a 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 claim is processed. We adopted this reconciliation policy for the LTCH PPS HCO and SSO cases because CCRs based on settled cost reports are not available when claims are processed unless significant delays are imposed on the payment of claims. (For additional information, we refer readers to the June 9, 2003 IPPS/LTCH PPS high-cost outlier final rule (68 FR 34507) and sections 150.26 through 150.28 of the Medicare Claims Processing Manual (Pub. 100-4).) Given the use of LTCH CCRs to calculate the estimated cost of cases under the proposed site neutral payment rate, we believe that it would be equally appropriate to apply the current CCR reconciliation policy principles to site neutral payment rate payments. Therefore, we are proposing under proposed new § 412.522(c)(4) to reconcile site neutral payment rate payments based on the CCR calculated using the settled cost report that coincides with the discharge. We also are proposing that, at the time of any such reconciliation of site neutral payment rate payments, such payments be adjusted to account for the time value of any underpayments or overpayments. Any adjustment would be based upon a widely available index to be established in advance by the Secretary and would be applied from the midpoint of the cost reporting period to the date of reconciliation. The index that would be used to calculate the time value of money is the monthly rate of return that the Medicare Trust Fund earns, which can be found at:
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 are proposing 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 are proposing 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 this proposed rule, would be the LTCH PPS Federal standard 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, we are proposing 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 FYs 2016 and 2017), the payment amount for site neutral payment rate cases would be a blended payment rate, which would be calculated as 50 percent of the applicable site neutral payment rate amount for the discharge as determined under proposed new § 412.522(c)(1) and 50 percent of the applicable LTCH PPS standard Federal payment rate determined under § 412.523. Under this proposal, the payment amounts determined under proposed new § 412.522(c)(1) (the site neutral payment rate) and under § 412.523 (the LTCH PPS standard Federal rate) would include any applicable adjustments, such as HCO payments, as applicable, consistent with the requirements under § 412.523(d). For example, the portion of the blended payment for the discharge that is based on proposed new § 412.522(c)(3) would include 50 percent of any applicable site neutral HCO payment under our proposed revised HCO payment policy (discussed in detail in section VII.B.7.b. of the preamble of this proposed rule), consistent with proposed new § 412.522(c)(1)(i), which provides for HCO payments under § 412.525(a). Similarly, the portion of the blended payment for the discharge that is based on the LTCH PPS standard Federal payment rate would include any applicable HCO payment under existing § 412.525(a).
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 proposals regarding the criteria for exclusion from the site neutral payment rate, we refer readers to section VII.B.3. of the preamble of this proposed 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, we are proposing under proposed new § 412.522(a)(2) that for LTCH discharges that meet the criteria for exclusion from site neutral payment rate under proposed new § 412.522(b), payment will be based on the LTCH PPS standard Federal payment rate as determined in § 412.523. That is, under proposed 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 proposal, 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 this proposed rule, we are proposing 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.
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, we are proposing 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). These adjustments include the interrupted stay policy and 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 are proposing 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
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 were 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 admission. (For a discussion of our implementation of the interrupted stay policy, we refer readers to the RY 2003 LTCH PPS final rule (67 FR 56002).) We continue to believe that the interrupted stay policy serves as an effective instrument to protect the Medicare Trust Fund from significant and inappropriate expenditures (78 FR 50768), and we do not believe that the site neutral payment rate will address these concerns unless the interrupted stay policy is applied to site neutral payment rate cases in the same manner as it is applied to standard Federal payment rate cases.
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).) We are proposing 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 are not proposing 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.
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 proposed 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 proposed 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, under proposed new § 412.522(d)(1), we are proposing 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.
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, we are proposing 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 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
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 2015 IPPS/LTCH PPS proposed rule (79 FR 28205 through 28206), we discussed several significant issues arising from the statutory changes to the LTCH PPS required by section 1206(a) of Public Law 113-67, which establishes two distinct payment groups for LTCH discharges under the revised system: Discharges meeting specified patient-level criteria that will be paid under the LTCH PPS standard Federal payment rate and all other patient discharges that will be paid under the site neutral payment rate. In that same proposed rule, we expressed our interest in receiving feedback from LTCH stakeholders on our plans to evaluate whether it would be appropriate to modify any of our historical policies or methodologies as we began to develop proposals to implement the statutory changes to the LTCH PPS. In particular, we solicited public feedback on the policies relating to the MS-LTC-DRG relative payment weights and high-cost outlier payments in preparation of developing proposals to implement the statutory changes to the LTCH PPS beginning in FY 2016. We explained that in setting the payment rates and factors under the LTCH PPS in accordance with requirements of section 1206(a) of Public Law 113-67, for certain LTCH PPS payment adjustments we planned to evaluate whether it would be appropriate to modify our historical methodology to account for the establishment of the two distinct payment rates for LTCH discharges. In particular, we stated our intent to examine whether, beginning in FY 2016, it would continue to be appropriate to include data for all LTCH PPS cases, including site neutral payment rate cases, in the methodology used to set the MS-LTC-DRGs relative payment weights. We also stated our intent to explore the possibility of changes to the current LTCH PPS high-cost outlier payment policy. Given the fact that, for a number of LTCH discharges, payment would be made based on the lower site neutral payment rate (that is, the lesser of an “IPPS comparable” payment amount or 100 percent of the estimated cost of the case), we believed that it would be appropriate to evaluate whether a single high-cost outlier threshold could be applied to all LTCH PPS cases (both LTCH PPS standard Federal payment rate and site neutral payment rate cases), or whether it may be more appropriate to have separate high-cost outlier thresholds for each of the two payment rates under the statutory revisions to the LTCH PPS.
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 this proposed rule, we considered the recommendations and information provided by those commenters. Below we discuss our policy proposals related to the MS-LTC-DRG payment relative weights and high-cost outlier policy in regard to our proposed 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 statutory LTCH PPS 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 this proposed rule, under proposed new § 412.522(a)(2), we are proposing to pay for LTCH discharges that meet the criteria for exclusion from site neutral payment rate using the LTCH PPS standard Federal payment rate described under § 412.523, as adjusted. In other words, LTCH discharges that meet the specified patient-level criteria would continue to be paid at what we refer to as the “LTCH PPS standard Federal payment rate.” In general, the LTCH PPS standard Federal payment rate is calculated by adjusting the LTCH PPS standard Federal payment rate by the applicable MS-LTC-DRG relative payment weight for that Medicare cases. Under proposed new § 412.522(c) (as discussed in greater detail in section VII.B.4.a. of the preamble of this proposed rule), consistent with section 1886(m)(6)((B)(ii) of the Act, we are proposing 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 proposal, the IPPS comparable per diem amount would be determined using the same method to determine SSO payments under the SSO policy at § 412.529(d)(4), and the estimated cost of the case would be determined using the same method to determine estimated costs under the SSO policy at § 412.529(d)(2). We note that the proposed methodology for determining payments for site neutral payment rate cases does not use the LTCH PPS standard Federal payment
As discussed above, in preparation for this 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. 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 (79 FR 50171). Our most recent discussion of the existing methodology for calculating the MS-LTC-DRG relative payment weights can be found in the FY 2015 IPPS/LTCH final rule (79 FR 50168 through 50176). Our proposed methodology for calculating the FY 2016 MS-LTC-DRG relative payment weights (including a proposal to use only data from the LTCH PPS standard Federal payment rate cases) is discussed in section VII.C.3. of the preamble of this proposed rule.
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 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 (that is, LTCH PPS standard Federal payment rate cases), without including data from cases paid the site neutral payment rate. 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.
We appreciate the commenters' detailed feedback and have taken 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. As part of our evaluation, 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) and approximately 46 percent of LTCH cases would be paid the site neutral payment rate. 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. 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 LTCH PPS standard Federal payment rate cases and site neutral payment rate cases). 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, as discussed in more detail in section VII.B.7.b. of the preamble of this proposed rule, where we present our proposals regarding outlier payments for site neutral payment rate cases, we believe 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). Therefore, even though the above analysis 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
Taking all of this information into account and given the comments 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 would have been (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) would result in the most appropriate payments under the new statutory structure. Therefore, in this proposed rule, we are proposing that, beginning with FY 2016, the annual recalibration of the MS-LTC-DRG relative payment weighting factors would be determined using only data from LTCH discharges that meet the criteria for exclusion from the site neutral payment rate (that is, LTCH PPS standard Federal payment rate cases). Under our proposal, the MS-LTC-DRG relative payment weights would not be used to determine the LTCH PPS payment for cases paid the site neutral payment rate, and (in general) site neutral payment rate cases would be paid an IPPS comparable per diem amount (or 100 percent of the estimated cost of the case, if lower), which in most instances would be lower than the LTCH PPS standard Federal payment rate.
As discussed above, several commenters also stated that payments for LTCH PPS standard Federal payment rate cases should be held at the same payment level that they would have been in the absence of the statutory changes. That is, any proposed changes in methodology should not result in any change (increase or decrease) in aggregate payments for LTCH PPS standard Federal payment rate cases under the new statutory LTCH PPS structure. As discussed in section VII.C.3. of the preamble of this proposed rule, under the existing LTCH PPS regulations at § 412.517(b), we already have a budget neutrality requirement for the annual changes to the MS-LTC-DRG classifications and relative payment weights, 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 are proposing to continue to apply that provision because 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 reasons discussed when the policy was originally adopted in the FY 2008 LTCH PPS final rule (72 FR 26880 through 26884). Therefore, we are not proposing any changes to the budget neutrality requirement at § 412.517(b). Furthermore, in light of our proposals regarding the MS-LTC-DRG relative payment weighting factors, we are proposing to add paragraph (c) to § 412.517 to specify that, beginning in FY 2016, the annual recalibration of the MS-LTC-DRG relative weighting factors are determined using data from LTCH discharges described under proposed new § 412.522(a)(2). As discussed above, we believe that computing the MS-LTC-DRG relative payment weights using only data from LTCH PPS standard Federal payment rate cases would result in the most appropriate payments under the new statutory structure required by section 1206(a) of Public Law 113-67, and would provide stability and predictability in MS LTC-DRG payments for LTCH PPS standard Federal payment rate cases compared to current LTCH PPS payments.
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 results 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, under proposed new § 412.522(a)(2), we are proposing 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 are proposing that the site neutral payment rate is the lower of the IPPS comparable per diem amount as determined under existing § 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). Below we discuss our proposals for determining HCO payments under the new statutory LTCH PPS payment structure.
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 rate
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.
We appreciate the commenters' detailed feedback and have 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 LTCH PPS dual-rate 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 versus 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 would generally be lower than the current payment made under the LTCH PPS for these types of cases.
In light of these projections and expectations, 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
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 cases. With that said, we agree with the commenters who recommended that we establish 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 what would have been LTCH PPS standard Federal payment rate cases if the statutory changes had been in effect at the time of those discharges. We agree with the commenters that believed that this policy would result in increased stability over time with respect to HCO payments for the LTCH PPS standard Federal payment rate cases. We also believe that this approach would meet the goals cited for our current HCO policy; that is, reducing financial risk, reducing incentives to underserve costly beneficiaries, and improving the overall fairness of the LTCH PPS (67 FR 56023). Therefore, we are not proposing 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 proposal, LTCH PPS standard Federal payment rate cases as described under proposed new § 412.522(a)(2) would 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 would be 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 would 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.
In this proposed rule, to codify our proposed changes to the HCO policy to account for the new statutory dual-rate LTCH PPS payment structure, we are proposing 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 are proposing 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 proposed new § 412.522(a)(1) and the standard Federal payment rate cases as described at proposed new § 412.522(a)(2)). Under the proposed added paragraph (a)(4) to § 412.524, we also are proposing to specify what the terms “applicable LTCH PPS prospective payment” and “applicable fixed-loss amount” mean for purposes of this paragraph. Specifically, we are proposing that, for purposes of § 412.525(a), “applicable LTCH PPS prospective payment” would mean either the site neutral payment rate under proposed new § 412.522(c) for LTCH discharges described under proposed new § 412.522(a)(1) or the standard Federal prospective payment rates under § 412.523 for LTCH discharges described under proposed new § 412.522(a)(2). Similarly, we are proposing that, for purposes of § 412.525(a), “applicable fixed-loss amount” would mean either, for LTCH described under proposed new § 412.522(a)(1), the fixed-loss amount established for such cases, or, for LTCH discharges described under proposed new § 412.522(a)(2), the fixed-loss amount established for such cases. In addition, we are proposing 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 are proposing to make this clarification to highlight that the additional payment under the 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).
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
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 would be 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 take effect. However, we must begin somewhere, and this proposed policy seems to be the best budget neutrality option at this time based on the information available to ensure LTCH PPS spending does not inappropriately increase under our proposal for site neutral payment rate HCO cases. As with all of our policies, we will continue to monitor HCOs payments under the LTCH PPS and, as necessary, propose modifications to this proposed method as needed based on what is observed during the implementation process.
Therefore, under proposed new § 412.522(c)(2)(i), we are proposing 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 this proposed rule, in estimating total LTCH PPS payments in Federal FY 2016, we are proposing 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.
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 are proposing 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).
In summary, in this proposed rule, we are proposing 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 LTCH PPS dual-rate 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 would result in the most appropriate payments under the LTCH PPS and achieve the stated goals of our HCO policy. In accordance with our proposed HCO policy for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases, we are proposing that, beginning with FY 2016, our current HCO policy would apply to LTCH PPS standard Federal payment rate cases, such that LTCH PPS standard Federal payment rate cases would 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 would be 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 would continue to be determined so that estimated HCO payments would 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 would continue to be adjusted by 8 percent to account for the estimated HCO payments to LTCH PPS standard Federal payment rate cases. Similarly, we are proposing that site neutral payment rate cases would 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 site neutral payment rate HCO threshold, which would be the sum of site neutral payment rate for the case and the fixed-loss amount for such cases. For site neutral payment rate cases, we are proposing to use the fixed-loss amount determined annually under the IPPS HCO policy, and we estimate that this would result in an estimated proportion of HCO payments to total LTCH PPS payments for site neutral payment rate cases of 5.1 percent. We are proposing that HCO payments to site neutral payment rate cases would be budget neutral, consistent with the current LTCH PPS HCO policy. To maintain budget neutrality, we are proposing to apply a budget neutrality factor to the LTCH PPS payments for
In accordance with existing regulations and for the consistency with other established hospital prospective payment systems polices, we are proposing 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 this proposed 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 would be 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 proposed 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, we are proposing to revise § 412.507 to limit allowable charges to beneficiaries. Specifically, we are proposing 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 are proposing 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 note 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 are not proposing 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 this proposed rule, we are not proposing to adopt any SSO payment adjustment policies for discharges paid under the site neutral payment rate at this time. 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.
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 (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 would be 758 MS-DRG groupings if we finalize all of the proposed changed discussed in section II.G. of the preamble of this proposed rule. Consistent with section 123 of the BBRA, as amended by section 307(b)(1) of the BIPA, and § 412.515 of the regulations, we use information derived from LTCH PPS patient records to classify LTCH discharges into distinct MS-LTC-DRGs based on clinical characteristics and estimated resource needs. We then assign an appropriate weight to the MS-LTC-DRGs to account for the difference in resource use by patients exhibiting the case complexity and multiple medical problems characteristic of LTCHs. Below we provide a general summary of our existing methodology for determining the proposed FY 2016 MS-LTC-DRG relative weights under the LTCH PPS.
In this proposed rule, in general, for FY 2016, we are proposing to use the same methodology and steps to determine the MS-LTC-DRG relative weights (as discussed in greater detail in section VII.C.3. of the preamble of this proposed rule). However, under the dual-rate LTCH PPS payment structure required by statute, we are proposing that, beginning with FY 2016, the annual recalibration of the MS-LTC-DRG relative weights would 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 statutory dual-rate LTCH PPS payment structure applies were
Under our proposal, the MS-LTC-DRG relative weights would 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 would not be used to develop the relative weights. (For details on our proposed application of the site neutral payment rate, we refer readers to section VII.B. of the preamble of this proposed rule. For additional information on our proposal to use data from applicable LTCH cases to determine the MS-LTC-DRG relative weights under the statutory dual-rate LTCH PPS payment structure, we refer readers to section VII.B.7.a. of the preamble of this proposed rule.)
Furthermore, for FY 2016, in using data from applicable LTCH cases to establish MS-LTC-DRG relative weights, we are proposing to 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 proposed 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, ASC X12N/005010X233A1 for the health care claims or equivalent encounter information transaction (45 CFR 162.1102).
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). Additional coding instructions and examples are published in the
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
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 proposing to update the MS-LTC-DRG classifications effective October 1, 2015, through September 30, 2016 (FY 2016) consistent with the proposed changes to specific MS-DRG classifications presented in section II.G. of the preamble of this proposed rule. Therefore, the proposed MS-LTC-DRGs for FY 2016 presented in this proposed rule are the same as the proposed MS-DRGs that are being proposed for use under the IPPS for FY 2016. Specifically, as discussed in section II.G.1.b. of this preamble of this proposed rule, we are proposing to use 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 proposed MS-DRG updates (and by extension the MS-LTC-DRG) updates for FY 2016. The proposed 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 section II.G.1. of the preamble of this proposed rule. We are inviting 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). (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 proposed MS-LTC-DRGs for FY 2016 are the same as the proposed MS-DRGs for FY 2016, the other proposed changes that affect MS-DRG (and by extension MS-LTC-DRG) assignments under proposed GROUPER Version 33, as discussed in section II.G. of the preamble of this proposed rule, including the proposed changes to the MCE software and the ICD-10 coding system, would 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 adjustments under the new dual-rate LTCH PPS payment structure required by the statute, as previously discussed in section VII.B.7.a. of the preamble of this proposed rule, we are proposing, beginning with FY 2016, to recalibrate the MS-LTC-DRG relative weighting factors annually using data from applicable LTCH cases. Under this proposal, the resulting MS-LTC-DRG relative weights would continue to be used to adjust the LTCH PPS standard Federal rate when calculating the payment for standard payment rate cases. However, the MS-LTC-DRG relative weights would not be used to determine the LTCH PPS payment for cases paid under the site neutral payment rate. (For details on our proposed application of the site neutral payment rate, we refer readers to section VII.B. of the preamble of this proposed rule.)
The basic methodology used to develop the MS-LTC-DRG relative weights is generally consistent with the general 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
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. The basic methodology we used to develop the FY 2015 MS-LTC-DRG relative weights was the same as the methodology we used to develop the FY 2014 MS-LTC-DRG relative weights in the FY 2014 IPPS/LTCH PPS final rule and was consistent with the general methodology established when the LTCH PPS was implemented in the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55991).
In this proposed rule, we are proposing to continue to use the same general methodology to determine the proposed MS-LTC-DRG relative weights for FY 2016, including the proposed application of established policies related to, the hospital-specific relative value methodology, the treatment of severity levels in the proposed MS-LTC-DRGs, proposed low-volume and no-volume MS-LTC-DRGs, proposed adjustments for nonmonotonicity, and the steps for calculating the proposed MS-LTC-DRG relative weights with a proposed budget neutrality factor. However, as previously noted and discussed in greater detail in section VII.B.7.a. of the preamble of this proposed rule, under the dual-rate LTCH PPS payment structure required by statute, we are proposing that the FY 2016 MS-LTC DRG relative weights would be determined based only on data from applicable LTCH cases. We discuss the effects of our proposal 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, we are proposing to apply 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 the methodology presented in the FY 2015 IPPS/LTCH PPS final rule, except for the proposed use of applicable LTCH data.
For this FY 2016 proposed rule, to calculate the proposed 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 December 2014 update of the FY 2014 MedPAR file, which are the best available data at this time, and the proposed Version 33 of the GROUPER to classify LTCH cases. Consistent with our historical practice, we are proposing that if more recent data become available, we would use those data and the finalized Version 33 of the GROUPER in establishing the FY 2016 MS-LTC-DRG relative weights in the final rule. To calculate the proposed FY 2016 MS-LTC-DRG relative weights under the new statutory dual-rate LTCH PPS payment structure that will be effective beginning October 1, 2015, as previously discussed in section VII.B.7.a. of the preamble of this proposed rule, beginning with the annual recalibration of the MS-LTC-DRG relative weights for FY 2016, we are proposing to use applicable LTCH data. Accordingly, we began by first evaluating the LTCH claims data in the December 2014 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 proposed § 412.522(b) (as discussed in greater detail in section VII.B.3. of the preamble of this proposed rule) had the new dual-rate LTCH PPS payment structure been in effect at the time those claims were processed. 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 proposals, would 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 proposed 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 proposed ICU criterion (discussed in section VII.B.3.e. of the preamble of this proposed 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 proposed ventilator criterion (discussed in section VII.B.3.f. of the preamble of this proposed rule). Claims data from December 2014 update of the FY 2014 MedPAR file that reported ICD-9-CM procedure code 96.72 were used to identify cases involving at least 96 hours of ventilator services in accordance with the proposed ventilator criterion. (We note that the corresponding ICD-10-PCS code for cases involving at least 94 hours of ventilation services is 5A1955Z, effective as of October 1, 2015.)
Then, consistent with our historical methodology, 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, 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
In summary, in identifying the claims data for the development of the proposed FY 2016 MS-LTC-DRG relative weights in this proposed rule, we are proposing to use claims data after we trim the claims data of 10 all-inclusive rate providers and the 1 LTCH that is paid in accordance with a demonstration project reported in the December 2014 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 proposed § 412.522(b) if the new dual-rate LTCH PPS payment structure were in effect at the time those claims were processed. We are proposing to use the remaining data (that is, the applicable LTCH data) to calculate the proposed relative weights for the LTCH PPS standard Federal payment rate payments for FY 2016.
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, we are proposing to continue to use a hospital-specific relative value (HSRV) methodology to calculate the proposed 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 proposing to reduce 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, we standardize 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 proposed 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 is 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 standardize 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.
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 least 25 applicable LTCH cases in the data used to calculate the relative weight, which are each assigned a unique relative weight; (2) low-volume MS-LTC-DRGs (that is, MS-LTC-DRGs that contain between 1 and 24 applicable LTCH cases that are grouped into quintiles (as described below) and assigned the relative weight of the quintile; and (3) no-volume MS-LTC-DRGs that are cross-walked to other MS-LTC-DRGs based on the clinical similarities and assigned the relative weight of the cross-walked MS-LTC-DRG (as described in greater detail below). We are proposing to use applicable LTCH cases to establish the same volume-based categories to calculate the FY 2016 relative weights for LLTCH PPS standard Federal payment rate payments. This approach is consistent with our policies regarding the continued use of our existing methodology related to the treatment of severity levels as presented in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50172).
We provide in-depth discussions of our proposed policy regarding weight-setting for proposed low-volume MS-LTC-DRGs in section VII.C.3.f. of the preamble of this proposed rule and for proposed no-volume MS-LTC-DRGs, under proposed Step 5 in section VII.C.3.g. of the preamble of this proposed rule.) Furthermore, in determining the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments, when necessary, we are proposing to make adjustments to account for nonmonotonicity, as discussed in greater detail below in proposed Step 6 of section VII.C.3.g. of the preamble of this proposed 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 proposed 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
We identified 250 proposed MS-LTC-DRGs that contained between 1 and 24 applicable LTCH cases. This list of proposed MS-LTC-DRGs was then divided into one of the proposed 5 low-volume quintiles, each containing 50 MS-LTC-DRGs (250/5 = 50). We assigned the proposed low-volume MS-LTC-DRGs to specific proposed low-volume quintiles by sorting the proposed low-volume MS-LTC-DRGs in ascending order by average charge in accordance with our established methodology. Based on the data available for this proposed rule, the number of proposed 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. If the number of MS-LTC-DRGs with less than 25 applicable LTCH cases from the most recent data available for the final rule does not divide evenly, we are proposing to use our historical methodology for determining which quintiles would contain the additional MS-LTC-DRGs. For this proposed rule, after organizing the MS-LTC-DRGs by ascending order by average charge, we assigned the first fifth (1st through 50th) of proposed low-volume MS-LTC-DRGs (with the lowest average charge) into proposed Quintile 1. The 50 proposed MS-LTC-DRGs with the highest average charge cases were assigned into proposed Quintile 5. Table 13A, listed in section VI. of the Addendum to this proposed rule and available via the Internet, lists the proposed composition of the proposed low-volume quintiles for MS-LTC-DRGs for FY 2016.
Accordingly, in order to determine the proposed FY 2016 relative weights for the proposed MS-LTC-DRGs with low-volume, we are proposing to use the five low-volume quintiles described above. We determined a proposed relative weight and (geometric) average length of stay for each of the five proposed low-volume quintiles using the proposed methodology described in section VII.C.3.g. of the preamble of this proposed rule. We are proposing to assign the same proposed relative weight and average length of stay to each of the proposed 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 would be grouped to proposed low-volume MS-LTC-DRGs and do not result in an unintended financial incentive for LTCHs to inappropriately admit these types of cases.
In this proposed rule, we are proposing to use the same steps from our existing methodology to determine the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments. (For additional information on the original development of the steps in this methodology, and modifications to it since the adoption of the MS-LTC-DRGs, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55995) and the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43951 through 43966).) As stated previously in this section, this approach is consistent with our policies regarding the continued use of our existing methodology, which was used to determine the FY 2015 MS-LTC-DRG relative weights as presented in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50173 through 50176). However, in doing so, we are proposing to use only applicable LTCH (as discussed in section VII.B.7.a. of the preamble of this proposed rule).
In summary, to determine the proposed FY 2016 MS-LTC-DRG relative weights, we are proposing to group applicable LTCH cases to the appropriate proposed MS-LTC-DRG, while taking into account the proposed low-volume quintiles (as described above) and cross-walking proposed no-volume MS-LTC-DRGs as described below. After establishing the appropriate proposed MS-LTC-DRG (or proposed low-volume quintile), we are proposing to calculate the FY 2016 relative weights for LTCH PPS standard Federal payment rate payments by first removing statistical outliers and cases with a length of stay of 7 days or less (Steps 1 and 2 below). Next, we are proposing to adjust the number of applicable LTCH cases in each proposed MS-LTC-DRG (or proposed low-volume quintile) for the effect of SSO cases (Step 3 below). After removing statistical outliers (Step 1 below) and applicable LTCH cases with a length of stay of 7 days or less (Step 2 below), which are the SSO-adjusted applicable LTCH cases and corresponding charges, we are proposing to calculate “relative adjusted weights” for each proposed MS-LTC-DRG (or proposed low-volume quintile) using the HSRV method. Below we discuss in detail the steps for calculating the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments.
The first step in our proposed calculation of the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments is to remove statistical outlier cases from applicable LTCH cases. Consistent with our historical relative weight methodology, we are proposing to continue 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 proposed 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 proposed 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.)
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
After removing statistical outliers and cases with a length of stay of 7 days or less, we are left with applicable LTCH cases that have a length of stay greater than or equal to 8 days. In this proposed rule, we refer to these cases as “trimmed applicable LTCH cases.” As the next step in the calculation of the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments, consistent with our historical approach, we are proposing to adjust each LTCH's charges per discharge for those remaining cases for the effects of SSOs (as defined in § 412.529(a) in conjunction with § 412.503). Specifically, we are proposing to make 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 proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments would lower the proposed FY 2016 MS-LTC-DRG relative weight for affected MS-LTC-DRGs because the relatively lower charges of the SSO cases would bring down the average charge for all cases within a MS-LTC-DRG. This would result in an “underpayment” for non-SSO cases and an “overpayment” for SSO cases. Therefore, we are proposing to continue 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 are proposing to then calculate 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 case, we calculate 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 is 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 is used for each LTCH.
For each proposed MS-LTC-DRG, we calculated the proposed 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 proposed 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 applicable LTCH cases (that is, its case-mix) is calculated by dividing the sum of all the LTCH's MS-LTC-DRG relative weights by its total number of applicable LTCH cases. The LTCHs' hospital-specific relative charge values (from above) are then multiplied by the hospital-specific case-mix indexes. The hospital-specific case-mix adjusted relative charge values are then used to calculate a new set of proposed MS-LTC-DRG relative weights across all LTCHs. This iterative process is continued until there is 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 proposing any changes to this step of our relative weight methodology in this proposed 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 proposed MS-LTC-DRGs for which there were no claims in the December 2014 update of the FY 2014 MedPAR file and, therefore, for which no charge data was available for these proposed MS-LTC-DRGs. Because patients with a number of the diagnoses under these proposed MS-LTC-DRGs may be treated at LTCHs, consistent with our historical methodology, we are generally proposing to assign a proposed relative weight to each of the proposed 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” proposed MS-LTC-DRGs, “error” proposed MS-LTC-DRGs, and proposed 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.)
We are proposing to cross-walk each proposed no-volume MS-LTC-DRG to another proposed MS-LTC-DRG for which we calculated a proposed relative weight (determined in accordance with the methodology described above). Then, the “no-volume” proposed MS-LTC-DRG would be assigned the same proposed relative weight (and average length of stay) of the proposed MS-LTC-DRG to which it was cross-walked (as described in greater detail below).
Of the 758 proposed MS-LTC-DRGs for FY 2016, we identified 368 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
We are proposing to cross-walk the no-volume proposed MS-LTC-DRG to a proposed MS-LTC-DRG for which we are able to propose relative weights based on the December 2014 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. (For more details on our process for evaluating relative costliness, we refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule (73 FR 48543).) We believe in the rare event that there would be a few LTCH cases grouped to one of the no-volume MS-LTC-DRGs in FY 2015, the relative weights assigned based on the cross-walked MS-LTC-DRGs would result in an appropriate LTCH PPS payment because the crosswalks, which are based on clinical similarity and relative costliness, would be expected to generally require equivalent relative resource use.
We then assigned the proposed relative weight of the cross-walked proposed MS-LTC-DRG as the proposed relative weight for the no-volume proposed MS-LTC-DRG such that both of these proposed MS-LTC-DRGs (that is, the no-volume proposed MS-LTC-DRG and the proposed cross-walked MS-LTC-DRG) have the same proposed relative weight (and average length of stay) for FY 2016. We note that, if the proposed cross-walked MS-LTC-DRG had 25 applicable LTCH cases or more, its proposed relative weight (calculated using the methodology described in Steps 1 through 4 above) is assigned to the no-volume proposed MS-LTC-DRG as well. Similarly, if the proposed MS-LTC-DRG to which the no-volume proposed MS-LTC-DRG was cross-walked had 24 or less cases and, therefore, is designated to one of the proposed low-volume quintiles for purposes of determining the proposed relative weights, we assigned the proposed relative weight of the applicable proposed low-volume quintile to the no-volume proposed MS-LTC-DRG such that both of these proposed MS-LTC-DRGs (that is, the no-volume proposed MS-LTC-DRG and the proposed cross-walked MS-LTC-DRG) have the same proposed relative weight for FY 2016. (As we noted above, in the infrequent case where nonmonotonicity involving a no-volume proposed MS-LTC-DRG resulted, additional adjustments as described in Step 6 were required in order to maintain monotonically increasing proposed relative weights.)
For this proposed rule, a list of the no-volume proposed MS-LTC-DRGs and the proposed MS-LTC-DRGs to which each was cross-walked (that is, the proposed cross-walked MS-LTC-DRGs) for FY 2016 is shown in Table 13B, which is listed in section VI. of the Addendum to this proposed rule and is available via the Internet.
To illustrate this methodology for determining the proposed relative weights for the proposed FY 2016 MS-LTC-DRGs with no applicable LTCH cases, we are providing the following example, which refers to the no-volume proposed 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. We are proposing to use the most recent available claims data to identify the trimmed applicable LTCH cases from which we will determine the proposed relative weights in this proposed rule.
For FY 2016, consistent with our historical relative weight methodology, we are proposing to establish 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, we are proposing to establish 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.
Furthermore, for FY 2016, we are proposing to establish a proposed relative weight equal to the respective FY 2015 relative weight of the MS-LTC-DRGs for the following “psychiatric or rehabilitation” proposed 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-
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 costs) than the “with CC/MCC” MS-LTC-DRG (in the case of a two-level split) or both the “with CC” and the “with MCC” MS-LTC-DRGs (in the case of a three-level split). That is, theoretically, cases that are more severe typically require greater expenditure of medical care resources and will result in higher average charges. Therefore, in the three severity levels, relative weights should increase by severity, from lowest to highest. If the relative weights decrease as severity increases (that is, if within a base MS-LTC-DRG, an MS-LTC-DRG with CC has a higher relative weight than one with MCC, or the MS-LTC-DRG “without CC/MCC” has a higher relative weight than either of the others), they are nonmonotonic. We continue to believe that utilizing nonmonotonic relative weights to adjust Medicare payments would result in inappropriate payments because the payment for the cases in the higher severity level in a base MS-LTC-DRG (which are generally expected to have higher resource use and costs) would be lower than the payment for cases in a lower severity level within the same base MS-LTC-DRG (which are generally expected to have lower resource use and costs). Therefore, in determining the proposed FY 2016 MS-LTC-DRG relative weights for LTCH PPS standard Federal payment rate payments in this proposed rule, consistent with our historical methodology, we are proposing to combine proposed MS-LTC-DRG severity levels within a base MS-LTC-DRG for the purpose of computing a relative weight when necessary to ensure that monotonicity is maintained. For a comprehensive description of our existing methodology to adjust for nonmonotonicity, we refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43964 through 43966). Any adjustments for nonmonotonicity that were made in determining the proposed FY 2016 MS-LTC-DRG relative weights in this proposed rule by applying this methodology are denoted in 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.
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
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 proposing to update the proposed FY 2016 MS-LTC-DRG classifications and relative weights for LTCH PPS standard payment rate payments based on the most recent available LTCH data for applicable LTCH cases, and to apply 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), we are proposing to continue 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 proposed rule, in the first step of our proposed MS-LTC-DRG budget neutrality methodology, for FY 2016, we are proposing to calculate and apply a normalization factor to the recalibrated proposed relative weights (the result of Steps 1 through 6 above) to ensure that estimated payments are not affected by changes in the composition of case types or the proposed changes to the classification system. That is, the normalization adjustment is intended to ensure that the recalibration of the proposed 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 proposed budget neutrality methodology), we are proposing to use the following three steps: (1.a.) We use the most recent available applicable LTCH cases from the most recent available data (that is, LTCH discharges from the FY 2014 MedPAR file) and group them using the proposed FY 2016 GROUPER (proposed Version 33) and the recalibrated proposed FY 2016 MS-LTC-DRG relative weights (determined in Steps 1 through 6 above) to calculate the average case-mix index; (1.b.) we group 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 compute 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 proposed MS-LTC-DRG relative weights for FY 2016, each recalibrated proposed MS-LTC-DRG relative weight is multiplied by 1.28176 (determined in Step 1.c.) in the first step of the proposed budget neutrality methodology, which produces “normalized relative weights.”
In the second step of our proposed MS-LTC-DRG budget neutrality methodology, we calculate a second proposed 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 proposed rule, for FY 2016, under the second step of the proposed budget neutrality methodology, we are proposing to determine the proposed budget neutrality adjustment factor using the following three steps: (2.a.) We simulate estimated total FY 2016 LTCH PPS standard Federal payment rate payments for applicable LTCH cases using the normalized proposed relative weights for FY 2016 and proposed GROUPER Version 33 (as described above); (2.b.) we simulate 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 Addendum to the FY 2015 IPPS/LTCH PPS final rule available on the Internet; and (2.c.) we calculate 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 proposed FY 2016 MS-LTC-DRG relative weights, each normalized proposed relative weight is then multiplied by a budget neutrality factor of 0.996599 (the value determined in Step 2.c.) in the second step of the proposed budget neutrality methodology to determine the proposed budget neutral FY 2016 relative weight for each proposed MS-LTC-DRG.
Accordingly, in determining the proposed FY 2016 MS-LTC-DRG relative weights in this proposed rule, consistent with our existing methodology, we are proposing to apply a normalization factor of 1.28176 and a budget neutrality factor of 0.996599 (computed as described above). Table 11, which is listed in section VI. of the Addendum to this proposed rule and is available via the Internet, lists the proposed MS-LTC-DRGs and their respective proposed 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 proposed normalization factor of 1.28176 and the proposed budget neutrality factor of 0.996599).
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 are proposing to use 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 proposing that, beginning with FY 2016, only LTCH discharges that meet the criteria for exclusion from the site neutral payment rate would be paid based on the LTCH PPS standard Federal payment rate specified at § 412.523. (For additional details on our proposals related to the dual-rate LTCH PPS payment structure required by statute, we refer readers to section VII.C. of the preamble of this proposed 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 proposed rule, we present our proposals related to the proposed annual update to the LTCH PPS standard Federal payment rate for FY 2016, which includes the proposed annual market basket update. Consistent with our historical practice of using the best data available, we also are proposing to use more recent data, if available, to determine the FY 2016 annual market basket update to the LTCH PPS standard Federal payment rate in the final rule.
The application of the proposed update to the LTCH PPS standard Federal payment rate for FY 2016 is presented in section V.A. of the Addendum to this proposed rule. The components of the proposed 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 proposed rule). In addition, as discussed in section V.A. of the Addendum of this proposed rule, we are proposing to make 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 proposed rule for more information on the proposed 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
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, we are proposing to continue 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).
Consistent with our historical practice, 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 first quarter 2015 forecast, the proposed FY 2016 full market basket estimate for the LTCH PPS using the FY 2009-based LTCH-specific market basket is 2.7 percent. The current estimate of the MFP adjustment for FY 2016 based on IGI's first quarter 2015 forecast is 0.6 percent, as discussed in section IV.A. of the preamble of this proposed rule. In addition, consistent with our historical practice, we are proposing that if more recent data become 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 the 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 proposing to reduce the full proposed FY 2016 market basket update by the proposed FY 2016 MFP adjustment. To determine the proposed market basket update for LTCHs for FY 2016, as reduced by the MFP adjustment, consistent with our established methodology, we subtract the proposed FY 2016 MFP adjustment from the proposed 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, we are further proposing to reduce the adjusted proposed market basket update (that is, the full proposed market basket increase less the proposed 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 proposed 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 proposed 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 proposed rule, in accordance with the statute, we are reducing the proposed FY 2016 full market basket estimate of 2.7 percent (based on IGI's first quarter 2015 forecast of the FY 2009-based LTCH-specific market basket) by the proposed FY 2016 MFP adjustment of 0.6 percentage point (based on IGI's first quarter 2015 forecast). Following application of the productivity adjustment, the adjusted proposed market basket update of 2.1 percent (2.7 percent minus 0.6 percentage point) is 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 proposed rule, under the authority of section 123 of the BBRA as amended by section 307(b) of the BIPA, we are proposing to establish a proposed annual market basket update under to the LTCH PPS standard Federal payment rate for FY 2016 of 1.9 percent (that is, the most recent estimate of the LTCH PPS market basket proposed update of 2.7 percent, less the proposed MFP adjustment of 0.6 percentage point, and less the 0.2 percentage point required under section 1886(m)(4)(E) of the Act). Accordingly, consistent with our proposal, we are proposing to revise § 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
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.
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 exception to the moratorium was also indicated in our proposal to implement the initial application of the moratorium during the FY 2009 rulemaking cycle. (We refer readers to the FY 2009 IPPS/LTCH PPS final rule (73 FR 29705).)
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, we are proposing to revise the regulations under § 412.23(e)(6)(ii) to more accurately convey the established policy that only one of the statutory conditions, as applicable, 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 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 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 addition, we are taking this opportunity to provide additional clarification on our policy concerning
We are proposing to revise § 412.23 to implement the statutory changes to the calculation of the average length of stay for an LTCH under section 1206(a)(3) of Public Law 113-67. As required by section 1861(ccc) of the Act, in order for a hospital to be classified as an LTCH, it must maintain an average length of stay of greater than 25 days as calculated by the Secretary (or meet the requirements of clause (II) of section 1886(d)(1)(B)(iv) of the Act). Currently, the Medicare average length of stay is calculated, in accordance with § 412.23(e)(3) of the regulations, by dividing the total number of covered and noncovered Medicare inpatient days by the total number of Medicare discharges. This calculation currently includes Medicare inpatient days and discharges that are paid under a Medicare Advantage (MA) plan. (For a full discussion of the inclusion of MA days in the average length of stay calculation, we refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51774).)
Section 1206(a)(3)(A) of Public Law 113-67 specifies 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 this proposed rule), 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. In addition, section 1206(a)(3)(B) of Public Law 113-67 further requires that the exclusion of these inpatient days and discharges from the average length of stay calculation shall not apply to an LTCH that was classified as a subsection (d) hospital (as defined in section 1886(d)(1)(B) the Act) as of December 10, 2013. Therefore, under the broad authority conferred upon the Secretary under 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 proposing to revise § 412.23 of the regulations to incorporate the statutory changes to the average length of stay calculation required by section 1206(a) of Public Law 113-67. Specifically, we are proposing to revise § 412.23 by adding a new paragraph (e)(3)(vi) to specify that Medicare inpatient days and discharges paid at the site neutral payment rate or under an MA plan will not be included in the calculation of an LTCH's average length of stay. Furthermore, we proposing to add new paragraph (e)(3)(vii) to § 412.23 to specify that the provisions of the proposed new paragraph (vi) will not apply to an LTCH that was classified as a subsection (d) hospital (as defined in section 1886(d)(1)(B) the Act) as of December 10, 2013, consistent with the statute.
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. Given that 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 this proposed rule, we are proposing changes to the following Medicare quality reporting systems:
• In section VIII.A., the Hospital IQR Program.
• In section VIII.B., the PCHQR Program.
• In section VIII.C., the LTCH QRP.
In addition, in section VIII.D. of the preamble of this proposed rule, we are proposing 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 subregulatory process to make non-substantive updates to measures used for the Hospital IQR Program. We recognize that some changes made to NQF-endorsed measures undergoing
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 are not proposing 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.
We are not proposing 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.” We are not proposing 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, we are proposing additional factors to consider for measure removal and also include factors to consider in order to retain measures.
Specifically, we are proposing to take into consideration the following additional factors in determining whether a measure should be removed:
• Feasibility to implement the measure specifications.
In addition, we are proposing 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 are also proposing 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 are inviting public comments on our proposal.
We are proposing 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 are proposing 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 are proposing 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 above in section VIII.A.3.a. of the preamble of this proposed 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, indicating the value of variety. 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. Therefore, 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 6 measures at this time.
We are inviting public comment on our proposals.
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
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 September 2014.
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 proposed 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, we are proposing 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 are inviting 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.
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 measure have less than the required number of cases to be publicly reported. In determining whether to remove AMI-7a as a chart-abstracted measure, we considered the factors stated in section VIII.A.3.a. of the preamble of this proposed rule in our discussion of considerations for the removal and retention of quality measures from the Hospital IQR Program. We are proposing to remove AMI-7a as a chart-abstracted measure beginning in CY 2016 for the FY 2018 payment determination and subsequent years because performance on this measure does not result in better patient outcomes. Specifically, measure data are infrequently reported, as most acute myocardial infarction patients receive percutaneous coronary intervention instead of fibrinolytic therapy. In addition, we believe that the burden of requiring all hospitals to report data on this measure, when only a minority of facilities report enough cases to be publicly reported, outweighs the benefits of retaining the chart-abstracted version of this measure.
However, we are proposing 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 in section VIII.A.3.a. of the preamble of this proposed 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
We are inviting 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.
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 administration; and (4) undetected hypoglycemic events caused by using multiple forms of insulin administration since the measure does not assess blood glucose levels past 24 hours. Multiple stakeholders also indicate that the Society of Thoracic Surgeons' guidelines
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 this proposed rule, we are proposing 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 are inviting public comments on our proposal to remove SCIP-Inf-4 from the Hospital IQR Program for the FY 2018 payment determination and subsequent years.
The table below lists the measures we are proposing for removal for the FY 2018 payment determination and subsequent years.
We are inviting public comment on our proposals.
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 63 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 proposed rule.
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, please refer to the QualityNet Web page on HAI measures at:
We would like to notify 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, we are still inviting 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 considerations we use to expand and update quality measures under the Hospital IQR Program. We are not proposing any changes to these considerations.
We are proposing 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.
We are proposing 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-
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 expand 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 anticipate that this refined measure will first be publicly reported on
This refinement to the CMS 30-Day Pneumonia Mortality Measure is being 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. We believe that measure results derived from refinement of the measure cohort in the manner we are proposing, which will include additional pneumonia patients that are not being included under the current measure specifications, will improve the fidelity of the measure's assessment of quality and outcome for pneumonia.
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 pending NQF endorsement of the measure update, as detailed in the “Spreadsheet of MAP 2015 Final Recommendations” available at:
The proposed measure refinement would expand 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 remain unchanged.
The statistical modeling approach as well as the measure calculation remain 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 refer readers to the AMI, HF, PN, COPD,
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 are not proposing to revise the measure calculations for the FY 2015 payment determination.
Expanding the measure cohort to include a broader population of patients adds a large number of patients, as well as additional hospitals (which would now meet the minimum threshold of 25 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 proposed rule. The increase in the size of the measure cohort proposed in this rule would change 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 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 are inviting 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.
In this proposed rule, we are proposing 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 are proposing 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 expand 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. We anticipate that this measure will first be publicly reported with the proposed cohort change in CY 2016.
This refinement to the CMS 30-Day Pneumonia Readmission Measure is 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 will 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 socio-demographic 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 expand 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 remain unchanged.
The statistical modeling approach as well as the measure calculation remain 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 refer 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 only, and we are not proposing to revise the measure calculations for the FY 2015 payment determination. We anticipate that this measure will first be publicly reported with the proposed cohort change in CY 2016.
Based on our analysis, we anticipate that expanding the measure cohort to include a broader population of patients would add a large number of patients, as well as additional hospitals (which would now meet the minimum threshold of 25 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.13. of the preamble of this proposed rule. The increase in the size of the measure cohort proposed in this measure cohort would change 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 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
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 are inviting public comment on our proposal to refine the previously adopted Hospital 30-day, All-Cause, Risk-Standardized Readmission Rate (RSRR) following Pneumonia Hospitalization (NQF #0506) measure, which expands the measure cohort.
We are proposing to add eight new measures to the Hospital IQR Program for the FY 2018 payment determination and subsequent years. We are proposing 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.
For the FY 2018 payment determination and subsequent years, we are proposing 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 are proposing 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 are inviting public comment on our proposal to adopt the Hospital Survey on Patient Safety Culture measure for the FY 2018 payment determination and subsequent years.
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:
We are proposing 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 are proposing 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
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 are proposing 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 this episode can be linked to the care provided during the hospitalization; (3) episodes of care for the condition are comprised of a substantial proportion of payments and potential savings for postacute care, indicating episode payment differences are driven by utilization outside of the MS-DRG payment; (4) episodes of care for the condition reflect high variation in post-discharge payments, enabling differentiation among hospitals; and (5) the medical condition is managed by general medicine physicians or hospitalists and the surgical conditions are managed by surgical subspecialists, enabling comparison between similar practitioners.
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. Risk adjustment is described in section VIII.A.7.b.(7)(B) of the preamble of this proposed rule. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement.
We are proposing 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 proposed 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, 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 as described later in section VIII.A.7.b.(7)(B) of the preamble of this proposed rule. The period of performance for the measure is one 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 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.
(E) Cohort
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 proposed rule.
We are inviting 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.
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 are proposing 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 proposed 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 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 as described in section VIII.A.7.b.(7)(B) of the preamble of this proposed rule. The period of performance is one 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 cellulitis 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 cellulitis. Additional details including the exclusion criteria are described in section VIII.A.7.b.(6) of the preamble of this proposed rule.
We are inviting public comment on our proposal to adopt the Cellulitis Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
Inpatient hospital stays and associated services assessed by the GI Hemorrhage Clinical Episode-Based Payment measure have high costs with
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. Risk adjustment is described in section VIII.A.7.b.(7)(B) of the preamble of this proposed rule. Once the call for measures for the Cost and Resource Use project at NQF is announced, this measure will be submitted for endorsement.
We are proposing 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 proposed 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 GI hemorrhage. We also are not aware of any other measures that assess GI hemorrhage treatment efficiency, and found no other feasible and practical measures on this topic.
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 as described in section VIII.A.7.b.(7) of the preamble of this proposed rule. 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 proposed rule.
We are inviting public comment on our proposal to adopt the Gastrointestinal Hemorrhage Clinical Episode-Based Payment measure for the FY 2018 payment determination and subsequent years.
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. Also, the episode is risk-adjusted to account for differences in patient characteristics, including the presence of cancer in the patient's history, which may affect costs but are outside of providers' control. Risk adjustment is described in section VIII.A.7.b.(7)(B) of the preamble of this proposed rule.
We are proposing 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 proposed 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 as described in section VIII.A.7.b.(7) of the preamble of this proposed rule. 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 proposed rule.
We are inviting 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.
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 MSPB measure 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
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 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 are inviting public comment on our proposals.
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
We are proposing 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 proposed 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 harmonizing and determining the most parsimonious approach to measures the costs of hip and knee replacements to minimize the burden and confusion of competing methodologies.
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
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 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 hospitals, so including these patients would cause payments to be underestimated; (4) admissions for patients with more than two THA/TKA procedure codes during the index hospitalization because, although clinically possible, it is highly unlikely that patients would receive more than two elective THA/TKA procedures in one hospitalization, and this may reflect a coding error; (5) admissions that could not be matched to admissions in the THA/TKA complication measure because, as part of our data processing, we matched our index THA/TKA admissions to the THA/TKA complication measure cohort to obtain the risk-adjustment variables; and (6) admissions without a DRG weight and the provider received no payment because, without either DRG weight or payment data, we cannot calculate a payment for the patient's index admission.
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
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 are inviting 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.
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 #0698). The improved measure (now called Excess Days in Acute Care after Hospitalization for Acute Myocardial Infarction) is a risk-adjusted outcome measure for AMI 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 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.
We are proposing 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 proposed 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
• 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 are inviting 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.
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.
We are proposing 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 proposed 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. We note that this measure was entitled
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 readmissions, observation stays, and ED visits) after discharge from a hospital for heart failure, compared to the days expected at an average hospital, 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 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
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 health care 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-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 are inviting public comment on our proposal to adopt the Excess Days in Acute Care after Hospitalization for Heart Failure measure for the FY 2018 payment determination and subsequent years.
The table below outlines the Hospital IQR Program measure set for the FY 2018 payment determination and subsequent years and includes both previously adopted and proposed measures.
In this proposed rule, we are clarifying our policy for one previously adopted voluntarily reported electronic clinical quality measure for the FY 2017 payment determination. Specifically, we are clarifying our requirements for the submission of STK-01 for CY 2015/FY 2017 payment determination. In addition, we are proposing 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 this proposed rule, we are proposing 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 are clarifying 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 proposed rule for more details.
We are inviting public comment on this proposal.
In this proposed rule, we are proposing 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 are proposing 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 are proposing 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
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, 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 choose to report these 6 measures electronically, the measures can 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 must 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 proposed 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 proposed 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 this 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 3 domains.
We believe that our proposals will ultimately decrease reporting burden to hospitals. Once capture is possible within EHR, the time and resources needed to submit quality measures data are significantly less compared to manual abstraction. Electronic clinical quality measure collection does not require hospital staff time to find and pull paper medical records and manually review them to abstract data elements used in measure calculation. We acknowledge that there are initial costs, but believe that long-term benefits associated with electronic data capture outweigh those costs.
We welcome 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 proposed rule for detail on reporting periods and submission deadlines for electronic clinical quality measures.
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
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 Acute Myocardial Infarction (AMI) Mortality eMeasure (NQF #2473); and (2) a hybrid hospital-wide 30-day readmission measure, which has not yet undergone NQF endorsement proceedings. However, the latter measure's development was encouraged by the MAP.
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
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 medical conditions: AMI; congestive heart failure; pneumonia; acute cerebrovascular disease; septicemia (except during labor); diabetes mellitus with complications; coronary atherosclerosis; and cardiac dysrhythmias.
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
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 EHR technology should be required to be certified under the ONC Health IT Certification Program
In summary, we are seeking 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.
a. Background
Sections 1886(b)(3)(B)(viii)(I) and (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. We note that, in accordance with the statute, the FY 2015 payment determination begins the
In order to participate in the Hospital IQR Program, hospitals must meet specific procedural, data collection, submission, and validation requirements. For each Hospital IQR Program year, we require that hospitals submit data on each measure in accordance with the measure's specifications for a particular period of time. The data submission requirements, Specifications Manual, and submission deadlines are posted on the QualityNet Web site at:
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 are not proposing 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 this proposed rule, we are proposing 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.
We are proposing to continue the requirement for hospitals to use CEHRT 2014 Edition
We are inviting public comments on this proposal.
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 this proposed rule, for the FY 2018 payment determination, we are proposing changes to both the reporting periods and the submission deadlines.
For the FY 2018 payment determination, we are proposing that hospitals must submit both Q3 and Q4 of 2016 data for 16 measures reported as electronic clinical quality measures. We also are proposing 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,” below.
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 our 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 proposed rule where the EHR Incentive Program discusses its proposals to further align with the Hospital IQR Program.
We are inviting public comments on our proposals to continue the CEHRT 2014 Edition requirement and update our electronic clinical quality measure data reporting and submission periods for the FY 2018 payment determination.
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. We are making one proposal regarding our population and sampling policy. However, we are not proposing any changes to case thresholds.
Currently, hospitals must submit to CMS quarterly aggregate population and sample size counts for Medicare and nonMedicare 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 this proposed rule, we are proposing 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 for those measures that a hospital submits as chart-abstracted measures under the Hospital IQR Program. This differs from the current policy in that there may be instances where a hospital chooses to electronically submit a measure that can be submitted either via chart-abstraction or as an electronic clinical quality measure and under the proposed policy, we would not require population and sample size data in this case. Under the proposed policy, if a hospital submits a measure as an electronic clinical quality measure, or if a measure becomes voluntary or suspended, the population and sample data would not be required.
We are inviting public comments on this proposal.
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 are not proposing 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 are not proposing 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
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 are not proposing any changes to our validation pilot test.
However, in this proposed rule, we are proposing 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 Hospital VBP Program. The finalized validation process for chart-abstracted measures included three separate validation strata: HAI, Immunization, and Other/Clinical Process of Care (79 FR 50265 through 50273). The Immunization stratum includes only one measure, Immunization for Influenza (NQF #1659). This Immunization measure was included in its own stratum because it is used in the Hospital VBP Program and we wanted to ensure that every hospital selected for validation would be validated in this topic area.
As discussed in section IV.F.2.b.(1) of the preamble of this proposed rule, we are proposing to remove the IMM-2 Influenza Immunization measure from the Hospital VBP Program. Given this proposed removal of the Influenza Immunization measure from the Hospital VBP Program, it is no longer necessary to ensure validation of this topic area by including a separate stratum for the Influenza measure. As a result, in this proposed rule, for the Hospital IQR Program beginning with the FY 2018 payment determination and for subsequent years, we are proposing 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 proposed rule for more detail on that proposal.
We note that although this proposal includes an adjustment to the composition of the clinical process of care validation stratum, we are not proposing 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 are inviting 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.
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 are not proposing 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
We note that for the Mortality, Readmission, Complication, Payment and AHRQ measures, we will continue to replace publically reported data with
We refer readers to section VIII.A.8.b. of the preamble of this proposed rule, where we are proposing 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
We are inviting public comments on our proposal.
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 are not proposing 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 noted 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 are not proposing any changes to the Hospital IQR Program's extraordinary circumstances extensions or exemptions policy.
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).
We are proposing 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:
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 are proposing 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 are proposing 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 are inviting public comments on these proposals.
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 this proposed rule, we are not proposing any changes to the principles we consider when
For the FY 2018 PCHQR Program, we are proposing 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:
The proposed measures were included on a publicly available document entitled “List of Measures Under Consideration (MUC) for December 1, 2014,”
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 the three measures we are proposing.
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 healthcare 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 are inviting public comments on 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 are inviting public comments on 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 percent 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 healthcare 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 are inviting public comments on our proposal to add the CDC NHSN HCP Measure to the PCHQR Program beginning with the FY 2018 program.
In summary, we are proposing three new measures for reporting beginning with the FY 2018 program. In conjunction with our proposal to remove the six SCIP measures from the PCHQR Program beginning with Q4 2015 discharges, the PCHQR measure set would consist of 16 measures beginning with the FY 2018 program. Our proposed 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 proposed rule.
The table below lists all previously adopted measures as well as the proposed new measures for the PCHQR Program beginning with the FY 2018 program. It does not include the measures we are proposing to remove.
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, we welcome 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 used for the PCHQR Program. We are not proposing any changes to this policy in this proposed rule.
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
We are proposing to publicly display six additional PCHQR measures beginning in 2016 and for subsequent years:
We are inviting public comment on these proposals.
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:
We are proposing 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 are proposing 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 are proposing 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 are inviting public comments on these proposals.
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 clarity 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) for a detailed discussion of the Functional Outcome Measure: Change in Mobility among Long-Term Care Hospital Patients Requiring Ventilator Support, 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 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.
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 measures that relate to at least five stated quality domains and three stated resource use and other measure domains. Section 1899B(c)(1) of the Act provides that the quality measures on which PAC providers, including LTCHs, are required to submit standardized patient assessment data and other necessary data specified by the Secretary must be with respect to at least the following domains:
• 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 of 2014 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
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 (CoPs) 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 of 2014 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 of 2014 adds a new section 1899B to the Act that imposes new data reporting requirements for certain post-acute care (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 measures with respect to certain domains not later than the specified application date that applies to each measure domain and PAC provider setting. Section 1899B(a)(2)(E) of the Act delineates the specified application dates for each measure domain and PAC provider. The IMPACT Act of 2014 also amends various other sections of the Act, including section 1886(m)(5) of the Act, to require the Secretary to reduce the otherwise applicable PPS payment to a PAC provider that does not report the new data in a form and manner, and at a time, specified by the Secretary. For LTCHs, amended section 1886(m)(5)(A)(i) of the Act would require the Secretary to reduce the payment update for any LTCH that does not satisfactorily submit the new required data.
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 of 2014 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 are proposing 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 of 2014 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 of 2014 for the rate year that begins two years after we adopt requirements that would govern the submission of that data.
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 this proposed rule, we apply 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 are proposing 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 of 2014 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
• 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 proposed 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, 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 of 2014, and which must be specified by October 1, 2016. The List of Measures under Consideration (MUC List) under the IMPACT Act of 2014 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 proposed rule, above, 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 technical expert panel (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 are proposing in reaction to the IMPACT Act of 2014; and (4) we sought public comment as part of our NQF measure maintenance submissions. In addition, we implemented a public mail box 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 are proposing 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 proposed 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.
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 this proposed rule, we are not proposing 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. We are not proposing 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 Health 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
In the FY 2014 IPPS/LTCH PPS final rule (78 FR 50861 through 50863), we adopted the NQF-endorsed version of the Pressure Ulcer measure, Percent of Residents or Patients with Pressure Ulcers That Are New or Worsened (Short Stay) measure (NQF #0678), 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) measure (NQF #0680).
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 for the FY 2017 payment determination and subsequent years (78 FR 50863 through 50874) and one additional measure for the FY 2018 payment determination and subsequent years (78 FR 50874 through 50877).
In the FY 2015 IPPS/LTCH PPS final rule (79 FR 50289 through 50305), we: (1) Revised the data collection and submission period for the application of the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) measure (NQF #0674); and (2) adopted three new quality measures for the FY 2018 payment determination and subsequent years.
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 proposed rule, we are proposing four quality measures to reflect the NQF endorsement of one measure and to meet the requirements of the IMPACT Act of 2014. These proposed measures are: (a) All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge from LTCHs (NQF #2512) to reflect NQF endorsement; (b) Percent of
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). We are proposing 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 are proposing 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 Measure (NQF #1789) that is currently in use in the Hospital IQR Program, continues to use the CMS Planned Readmission Algorithm as the main component for identifying planned readmissions. This algorithm was refined in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50211 through 50216). The All-Cause Unplanned Readmission Measure for 30 Days Post Discharge from LTCHs (NQF #2512) for the LTCH QRP will utilize the most recently updated version of the algorithm. A complete description of the CMS Planned Readmission Algorithm, which includes lists of planned diagnoses and procedures, can be found on the CMS Web site at:
We are inviting public comments in response to (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.
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 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, 2017. To satisfy these requirements, we are proposing to adopt the Percent of Residents or Patients with Pressure Ulcers that are New or Worsened (Short-Stay) (NQF #0678) measure, that we have already adopted for the LTCH QRP, as a cross-setting quality measure that satisfies the domain of skin integrity and changes in skin integrity. The reporting of data for this measure would affect the payment determination for the FY 2018 payment determination and subsequent years. In the LTCH setting, the measure assesses the percent of patients with Stage 2 through Stage 4 pressure ulcers that are new or worsened since admission.
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 of 2014 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 that “to understand the impact of pressure ulcers across settings, quality measures addressing prevention, incidence, and prevalence of pressure ulcers must be harmonized
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 Quality Reporting Program (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 post-acute care settings, including the LTCH setting, to meet the requirements of the IMPACT Act of 2014. The TEP supported the applicability of this measure as a cross-setting measure across post-acute care 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, the MAP met on February 9, 2015, and provided 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 are proposing 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 are proposing 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 (Worsening in Pressure Ulcer Status Since Prior Assessment, Stage 2); M0800B (Worsening in Pressure Ulcer Status Since Prior Assessment, Stage 3); and M0800C (Worsening in Pressure Ulcer Status Since Prior Assessment, Stage 4). In addition, we are proposing to continue to use items from the LTCH CARE Data Set to risk-adjust this quality measure. These items consist of: GG0160C
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 are inviting 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 of 2014.
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, we are proposing 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 is 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 of 2014. Data collection would start on April 1, 2016. The reporting of data for this measure would affect the
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 of 2014 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 2011. In addition, the measure is currently reported on the CMS
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 post-acute care 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 are proposing 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 post-acute care settings, including the LTCH setting. The TEP supported the implementation of this measure across post-acute care 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 are proposing 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, Number of Falls with Major Injury Since Admission. The measure specifications for the Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674) measure are available at:
We are inviting 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 of 2014.
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, we are proposing 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
The National Committee on Vital and Health Statistics, Subcommittee on Health,
The majority of patients who receive post-acute care 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
Given the variation in patient and resident populations across the post-acute care settings, the functional activities that are typically assessed by clinicians for each type of post-acute care 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 ill. Managing a full flight of stairs may be assessed for higher functioning patients or residents. However, certain functional activities, such as eating, oral hygiene, lying down in to sitting on the side of the bed, toilet transfers, and walking or wheelchair mobility are important activities for patients in each post-acute care setting.
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 post-acute care 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 Continuity Assessment Record and Evaluation (CARE) Item Set: Final Report on the Development of the CARE Item Set: Volume 1 of 3.”
The cross-setting function quality measure we are proposing to adopt for the FY 2018 payment determination and subsequent years to meet the IMPACT Act of 2014 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 measure (NQF #2631; under NQF review). 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 are proposing 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 measure (NQF #2631; under NQF review) 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 measure (NQF #2631; under NQF review) 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 measure (NQF #2631; under NQF review) 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 measure (NQF #2631; under NQF review), 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 of 2014 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 post-acute care settings, including the LTCH setting. The TEP supported the implementation of this measure across post-acute care 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 measure (NQF #2631; under NQF review) for use in the LTCH QRP as the cross-setting measure. The conditions stated by the MAP included that the measure should be endorsed by the NQF. Finally, the MAP reiterated its support for adding measures addressing function, noting the group's special interest in this PAC/LTC core concept. More information about the MAP's recommendations for this measure is discussed in The MAP Off-Cycle Deliberations 2015: Measures under Consideration to Implement Provisions of the IMPACT Act: Final Report which is available at:
The measure we are proposing 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), which is under NQF review for consideration of endorsement. The proposed measure is derived from the Percent of Long-Term Care Hospital 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 post-acute care 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 are proposing 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 are proposing 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; under NQF review) 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 measure calculation algorithm is:
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 proposed 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 Post-Acute Care Payment Reform Demonstration 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 are inviting 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 measure (NQF #2631; under NQF review) 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 of 2014, with data collection starting on April 1, 2016 for the FY 2018 payment determination and subsequent years. Further, we are inviting 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 measure (NQF #2631; under NQF review) 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 of 2014.
Lastly, in alignment with the requirements of the IMPACT Act of 2014 to develop quality measures and standardize data for comparative purposes, we believe that evaluating outcomes across the post-acute settings using standardized data is an important priority. Therefore, in addition to proposing a process-based measure for the domain in the IMPACT Act of 2014 of “Functional status, cognitive function, and changes in function and cognitive function,” which is included in this year's proposed rule, we also intend to develop outcomes-based quality measures, including functional status and other quality outcome measures to further satisfy this domain. These measures will be proposed in future rulemaking in order to assess functional change for each care setting as well as across care settings.
At this time, we are not proposing 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 proposed rule, we will retain all previously adopted quality measures and, if finalized, the additional measures proposed in this rule for the FY 2019 payment determination and subsequent years.
We are inviting 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 are inviting 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.
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
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.
Beginning with the FY 2017 payment determination, we are proposing 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 CMS Certification Number (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 proposed rule, below, as it will vary depending upon the timing of the CY quarter identified as a start date. We also are proposing 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 are inviting 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.
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-month post-CY quarter submission deadlines, to 1.5 month (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 of 2014, we are proposing 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 are proposing 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 are proposing data collection and data submission timelines for quality measures that we are proposing for the FY 2018 payment determination and subsequent years. Further, for the measures proposed in this proposed 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)—we are proposing 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 Discharge from LTCHs (NQF #2512) is a Medicare FFS claims-based measure, the data collection and submission timelines are not applicable to this measure.
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 are inviting public comments on our proposals.
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; 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. We are not proposing 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 this proposed rule, we are not proposing any new policies related to data accuracy validation, but we plan to do so in future rulemaking cycles.
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. We are proposing 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 are proposing 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), we are proposing 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. An 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 measure application (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 characteristics measured by the covariates). Then, an average of all resident- or patient-level expected QM scores for the facility is calculated to create a facility-level expected QM score. The final facility-level adjusted QM score is based on a calculation which combines the facility-level expected score and the facility level observed score. Additional information about the covariates can be found at:
Finally, calculation for performance on the measure All-Cause Unplanned Readmission Measure for 30 Days Post Discharge from IRFs (NQF #2502) 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 are proposing a process to give providers an opportunity to review and correct data submitted to the QIES ASAP system or to the CDC's NHSN system 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 or CDC NHSN system. We believe that the submission deadline timeframe,
We are inviting public comment on this proposal.
In addition to our proposal to publicly display LTCH performance data on the required quality measures under the LTCH QRP, we are also are proposing 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 are inviting comment on our proposal to begin publicly reporting LTCH QRP data on quality measures required by the LTCH QRP, beginning in fall 2016.
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 wish to clarify 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:
We are proposing 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 are proposing 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 are proposing the QIES 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 system in order to report on required LTCH QRP measures since October 1, 2012. Therefore, we are proposing that all Medicare-certified LTCH compliance letters be uploaded into the QIES for each LTCH to access. Instructions to download files from QIES 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 are proposing that the notifications of our decision regarding received reconsideration requests will be made available through the QIES. We are not proposing 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 are proposing 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 are proposing to codify the LTCH QRP reconsideration and appeal procedures at new proposed § 412.560(d) and (e).
We are inviting public comment on the proposals to change the communication mechanism to the QIES for the dissemination of compliance notifications and reconsideration decisions, to publish a list of compliant LTCHs on the LTCH QRP Web site, and
14. Previously Adopted and Proposed LTCH QRP Submission Exception and Extension Requirements for the FY 2017 Payment Determination and Subsequent Years
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. For the FY 2017 payment determination and subsequent years, we are not proposing any changes to the LTCH QRP requirements that we adopted in these final rules. However, we are proposing 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 are inviting public comments on our proposal to codify the LTCH QRP submission exception and extension requirements.
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).
Section 1886(n)(3)(B)(iii) of the Act requires that, in selecting measures for eligible hospitals and CAHs for the Medicare EHR Incentive Program, and establishing the form and manner for reporting measures, the Secretary shall seek to avoid redundant or duplicative reporting with reporting otherwise required, including reporting under section 1886(b)(3)(B)(viii) of the Act, the Hospital IQR Program.
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 this proposed rule, for CQM reporting for the EHR Incentive Programs in 2016, we are proposing to maintain the existing requirements established in earlier rulemaking for the reporting of CQMs, unless indicated otherwise in this 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
In the EHR Incentive Program Stage 3 proposed rule, 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, we are proposing that the reporting period for CQMs in 2016 for eligible hospitals and CAHs for the Medicare and Medicaid EHR Incentive Programs would also be based on the calendar year. 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.
For 2016 (FY 2018 payment determination), the Hospital IQR Program is proposing to require quarterly reporting and submission periods for eCQMs for the 3rd and 4th CY quarters. We refer readers to section VIII.A.8.b. of the preamble of this proposed rule for further discussion of the proposals for the Hospital IQR Program. We believe it is important for us to maintain our goal of alignment between the Hospital IQR and EHR Incentive Programs. Therefore, we are proposing 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 eCQMs in the 3rd and 4th CY quarters.
In addition, in this proposed rule, the Hospital IQR Program is proposing to change its submission period for eCQMs from annual to quarterly submission, and proposing 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 proposed rule for more information about these proposals. Therefore, to coincide with the submission period in the Hospital IQR Program, we also are proposing to align the Medicare EHR Incentive Program submission period for CY 2016 with the submission period proposed for the Hospital IQR Program.
We are proposing 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 are proposing 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 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 are inviting public comment on these proposals.
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).
We are proposing 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 are proposing to continue our policy that electronic submission of CQMs would 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 is 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 are inviting public comments on this proposal.
As previously stated in the Medicare and Medicaid EHR Incentive Programs Stage 2 final rule (77 FR 54051 through 54053), CQM data submitted by eligible hospitals and CAHs are required to be captured, calculated, and reported using CEHRT. In accordance with this policy, for CQM reporting for the Medicare and Medicaid EHR Incentive Programs in 2016, eligible hospitals and CAHs must use EHR technology certified to at least the 2014 Edition certification criteria for CQMs, which are defined at 45 CFR 170.314(c)(1) for the capture of data elements, 45 CFR 170.314(c)(2) for the calculation of CQMs, and 45 CFR 170.314(c)(3) for the submission of CQM data electronically.
However, in the 2015 Edition proposed rule (80 FR 16810 through 16872, 16900), ONC has proposed a new Edition of certification criteria for EHR technology, which may be available for some providers as early as 2016. The 2015 Edition proposed rule (80 FR 16842 through 16846) would establish three certification criteria for CQMs and set a placeholder for a fourth certification criterion. These three criteria are:
• Proposed new § 170.315(c)(1) “CQMs—record and export”—to record and export data which aligns with the prior capture criteria.
• Proposed new § 170.315(c)(2) “CQMs—import and calculate”—to import and calculate data which aligns with the prior calculate criteria.
• Proposed new § 170.315(c)(4) “CQMs—filter”—to filter data which is a new function for CQM criteria in the 2015 Edition and is not currently proposed to be required by the EHR Incentive Programs.
ONC proposed (80 FR 16844) to reserve § 170.315(c)(3) “CQMs—report”—to report data electronically, including submission testing, to be proposed in or with annual IPPS and/or PFS rulemaking. ONC believes that, going forward, proposing a 2015 Edition certification criterion for CQM reporting with CMS' annual payment rules would allow better alignment of ONC's certification policy and standards for electronically specified CQM, known as eCQMs, with reporting with other CMS programs that include eCQMs, such as the PQRS and Hospital IQR Programs, which update their measure specifications on an annual basis through rulemaking. Therefore, ONC is proposing a 2015 Edition certification criterion for “CQMs—report” in section VIII.D.3.b. of the preamble of this proposed rule.
As described previously in section VIII.D.3.a. of the preamble of this proposed rule, ONC reserved the 2015 Edition certification criterion for “CQMs—report” (at proposed new § 170.315(c)(3)) to be proposed in conjunction with IPPS and/or PFS rulemaking. The 2014 Edition certification criterion for CQMs—electronic submission (at § 170.314(c)(3)) requires CEHRT to enable a user to electronically create a data file for transmission of clinical quality measurement data using the Quality Reporting Document Architecture (QRDA) Category I and Category III standards, and which can be electronically accepted by CMS. The QRDA standard provides a document format and standard structure to electronically report clinical quality measure data.
Building off of the 2014 Edition criterion for submission of CQMs, ONC is proposing a 2015 Edition certification criterion for “CQMs—report”
CMS anticipates proposing to require EPs, eligible hospitals, and CAHs seeking to report CQMs electronically (if using proposed new § 170.315(c)(3)) as part of meaningful use under the EHR Incentive Programs for 2016 to adhere to the additional standards and constraints on the QRDA standards for electronic reporting as described in the CMS QRDA Implementation Guide. CMS anticipates proposing to revise the definition of “certified electronic health record technology (CEHRT)” at 42 CFR 495.4 to require certification to the optional portion of the 2015 Edition CQM reporting criterion (proposed at § 170.315(c)(3)) in the CY 2016 Medicare Physician Fee Schedule proposed rule later this year.
As noted previously, ONC proposed standards for proposed new § 170.315(c)(1) and § 170.315(c)(2) in the 2015 Edition proposed rule (80 FR 16844), but retained a placeholder for proposed new § 170.315(c)(3) so that this certification criterion for reporting could be proposed in conjunction with the proposals for CMS quality reporting
• 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.
The standard specified in § 170.205(h) is the HL7 Implementation Guide (IG) for CDA Release 2: Quality Reporting Document Architecture—Category I, Draft Standard for Trial Use (DSTU) Release 2 (July 2012).
ONC previously adopted the July 2012 version of the QRDA Category I IG and the November 2012 version of the QRDA Category III IG in its 2014 Edition (77 FR 54232). Given the timing of this proposed rule and the expected deliverables for harmonized CQM and clinical decision support (CDS) standards (described further in the 2015 Edition proposed rule at 80 FR 16842 through 16843), ONC is soliciting comment on a series of three options to determine if the version of QRDA Category I or the QRDA-like standards it should adopt for the certification criterion should be a more recent update to the standard. Specifically, ONC is soliciting comment on the following options for individual patient-level quality reports (QRDA Category I):
(1) The July 2012 QRDA Category I IG;
(2) The July 2012 QRDA Category I IG with the September 2014 Errata;
(3) QRDA-like standards for individual patient-level quality reports based on the anticipated Quality Improvement and Clinical Knowledge (QUICK)
Option 1 includes the same version of the QRDA Category I standard ONC adopted in the 2014 Edition. Option 2 includes this same version with the September 2014 Errata, which provides guidance on implementing QRDA Category I based on a new version of the underlying information model for representing quality measures (that is, the Quality Data Model based-Health Quality Measures Format Release 2.1
ONC is also soliciting comment on a fourth option of QRDA Category I standard it could consider adopting for this proposed certification criterion:
(4) The next release of the QRDA Category I IG (Release 3).
While this option was not discussed in the 2015 Edition proposed rule, stakeholders have recently made ONC aware that the industry is in the process of updating the QRDA Category I to the next Release 3. ONC understands that Release 3 is expected to be balloted in May 2015. Release 3 would include major updates to align with the Quality Data Model, address comments from Release 2, and better align with the Consolidated CDA Release 2 used for transitions of care/summary care records.
While not discussed in the 2015 Edition proposed rule, ONC in this proposed rule is also soliciting comment on three options for aggregate-level quality reports (QRDA Category III) it could adopt for this certification criterion:
(1) The November 2012 QRDA Category III IG;
(2) The November 2012 QRDA Category III IG with the September 2014 Errata;
(3) QRDA-like standards for aggregate-level quality reports based on the anticipated Quality Improvement and Clinical Knowledge (QUICK)
Option 1 includes the same version of the QRDA Category III standard which ONC adopted in the 2014 Edition. Option 2 includes this same version with the September 2014 Errata, which provides guidance on implementing QRDA Category III based on a new version of the underlying information model for representing quality measures (that is, the Quality Data Model based-Health Quality Measures Format Release 2.1
In connection with ONC, we are inviting public comment on these options and this proposal.
We stated in the 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 are soliciting comment 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
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 proposed policies set forth in this proposed rule. MedPAC recommendations for the IPPS for FY 2016 are addressed in Appendix B to this proposed 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:
This file contains the hospital hours and salaries from Worksheet S-3, Parts II and III from FY 2012 Medicare cost reports used to create the proposed FY 2016 prospective payment system wage index. Multiple versions of this file are created each year. For a complete schedule on the release of different versions of this file, we refer readers to the wage index schedule in section III.L. of the preamble of this proposed rule.
This file contains the CY 2013 occupational mix survey data to be used to compute the occupational mix adjustment wage indexes. Multiple versions of this file are created each year. For a complete schedule on the release of different versions of this file, we refer readers to the wage index schedule in section III.L. of the preamble of this proposed rule.
This file contains each hospital's occupational mix adjustment factors by occupational category. Two versions of these files are created each year to support the rulemaking.
CMS releases other wage index analysis files after each proposed and final rule.
This file contains a crosswalk of State and county codes used by the Social Security Administration (SSA) and the Federal Information Processing Standards (FIPS), county name, and a list of Core-Based Statistical Areas (CBSAs).
The data included in this file contain cost reports with fiscal years ending on or after September 30, 1996. These data files contain the highest level of cost report status.
There are no longer data offered on a CD. All of the data collected are now available on the following Web site free for download:
This file is a component of the PRICER program used in the MAC's system to compute DRG/MS-DRG payments for individual bills. The file contains records for all prospective payment system eligible hospitals, including hospitals in waiver States, and data elements used in the prospective payment system recalibration processes and related activities. Beginning with December 1988, the individual records were enlarged to include pass-through per diems and other elements.
This file contains the Medicare case-mix index by provider number as published in each year's update of the Medicare hospital inpatient prospective payment system. The case-mix index is a measure of the costliness of cases treated by a hospital relative to the cost of the national average of all Medicare hospital cases, using DRG/MS-DRG weights as a measure of relative costliness of cases. Two versions of this file are created each year to support the rulemaking.
This file contains a listing of MS-DRGs, MS-DRG narrative descriptions, relative weights, and geometric and arithmetic mean lengths of stay for each fiscal year. Two versions of this file are created each year to support the rulemaking.
This file contains data used to estimate payments under Medicare's hospital impatient prospective payment systems for operating and capital-related costs. The data are taken from various sources, including the Provider-Specific File, HCRIS Cost Report Data, MedPAR Limited Data Sets, and prior impact files. The data set is abstracted from an internal file used for the impact analysis of the changes to the prospective payment systems published in the
This file contains data used to develop the MS-DRG relative weights. It contains mean, maximum, minimum, standard deviation, and coefficient of variation statistics by MS-DRG for length of stay and standardized charges. The BOR tables are “Before Outliers Removed” and the AOR is “After Outliers Removed.” (Outliers refer to statistical outliers, not payment outliers.)
Two versions of this file are created each year to support the rulemaking.
This file contains information that standardizes the charges used to calculate relative weights to determine payments under the hospital inpatient operating and capital prospective payment systems. Variables include wage index, cost-of-living adjustment (COLA), case-mix index, indirect medical education (IME) adjustment, disproportionate share, and the Core-Based Statistical Area (CBSA). The file supports the rulemaking.
This file contains information on the calculation of the Hospital Readmissions Reduction Program payment adjustment. Variables include the proxy excess readmission ratios for acute myocardial infarction (AMI), pneumonia (PN) and heart failure (HF), coronary obstruction pulmonary disease (COPD), and total hip arthroplasty (THA)/total knee arthroplasty (TKA) and the proxy readmissions payment adjustment for each provider included in the program. In addition, the file contains information on the number of cases for each of the applicable conditions excluded in the calculation of the readmission payment adjustment factors, and it contains MS-DRG relative weight information to estimate the payment adjustment factors. The file supports the rulemaking.
For further information concerning these data tapes, contact the CMS Public Use Files Hotline at (410) 786-3691.
This file contains information on the calculation of the uncompensated care payments for FY 2016. Variables include a hospital's SSI days and Medicaid days used to determine a hospital's share of uncompensated care payments, total uncompensated care payments and estimated per claim uncompensated care payment amounts. The file supports the rulemaking.
Media: Internet at:
Period Available: FY 2016 IPPS Update.
Commenters interested in discussing any data used in constructing this proposed 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 this proposed rule, we are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements (ICRs).
Section II.I.1. of the preamble of the proposed rule discusses 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,
Section III.F. of the preamble of this proposed rule discusses the proposed occupational mix adjustment to the proposed FY 2016 wage index, respectively. While the preamble of this proposed rule does 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.
Section III.J.2. of the preamble of this proposed rule discusses proposed changes to the wage index based on hospital reclassifications. As stated in that section, 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 index and to issue decisions on these requests by hospitals for geographic reclassification for purposes of payment under the IPPS.
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.
In section IV.H. of the preamble of this proposed rule, we are proposing 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. We are proposing to limit the election of the simplified cost allocation methodology because the allocation of the costs of capital-related movable equipment using this methodology yields less precise calculated CCRs. Currently, less than 1 percent of hospitals have elected to use the simplified cost allocation methodology. Based on FY 2013 data, only 9 of 1,269 CAHs and 23 of 4,389 hospitals other than CAHs used the simplified cost allocation methodology. Furthermore, we believe that advances in technology have reduced the cost of recordkeeping, which has allowed hospitals to maintain accurate statistical data and afforded them the flexibility to change to a more precise allocation methodology.
Although we are proposing to eliminate the simplified cost allocation methodology for hospitals, 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 proposed revision would be subsumed in the total burden estimate for an entity to comply with all of the requirements in the cost report.
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 measures was part of our implementation of section 5001(a) of the Deficit Reduction Act of 2005 (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 this proposed rule, we are proposing refinements to 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). We also are proposing eight additional measures to be added to the Hospital IQR Program measure set beginning with the FY 2018 payment determination and for subsequent years. Seven of these measures are claims-based, and one measure is structural. The eight 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) Lumbar Spine Fusion/Re-Fusion Clinical Episode-Based Payment (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).
Because these 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 hospitals for the seven proposed claims-based measures. In addition, the burden associated with the structural measure we are proposing, Hospital Survey on Patient Safety Culture, is expected to be negligible; therefore, its proposed addition will not result in a significant burden increase.
We also are proposing nine measures for removal. We believe that there will be a reduction in burden for hospitals due to our proposed removal of seven of
Two of the nine measures proposed for removal have been previously suspended from the Hospital IQR Program. Therefore, their proposed removal would not affect 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 and subsequent years, we also are proposing to require hospitals to submit 16 measures electronically for the Hospital IQR Program in a manner that would permit eligible hospitals to partially align Hospital IQR Program requirements with some requirements under the Medicare EHR Incentive Program. We believe that the total burden associated with the electronic clinical quality measure reporting proposal will be similar to 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 all 16 electronic clinical quality measures is 2 hours and 40 minutes per submission (77 FR 54132). We believe that this estimate is accurate and appropriate to also apply to the Hospital IQR Program, given the alignment between the electronic clinical quality measure reporting requirements for both programs. In total, we expect the burden associated with our proposal to require hospitals to report electronic clinical quality measures to be 5 hours and 20 minutes per hospital for two quarters of data submission, and 17,600 hours total for two quarters of data submission across the approximately 3,300 hospitals participating in the Hospital IQR Program. We estimate that reporting these electronic clinical quality measures can be accomplished by staff with a mean hourly wage of $16.42 per hour.
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.
Under OMB number 0938-1022, we estimated that the total burden 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 data collection. Considering the proposals described in this proposed 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 2,293 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. This burden estimate includes the full measure set proposed for the Hospital IQR Program FY 2018 payment determination and accounts for burden changes associated with all newly proposed measures as well as measures proposed for removal, as discussed above in this section.
In addition, 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 proposed rule are the estimates for which we are requesting OMB approval.
As discussed in section VIII.B. of the preamble of this proposed 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.5 of the preamble of this proposed rule, we are proposing that PCHs will submit data on three additional measures beginning with the FY 2018 program: (1) CDCNHSN Facility-Wide Inpatient Hospital-Onset Methicillin-Resistant
With respect to our proposal 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 numbers (0920-0666).
Our proposal to remove six SCIP measures would reduce the burden experienced by PCHs. We estimate a reduction in hourly burden of 6,468
In summary, as a result of our proposals, we estimate a reduction of 6,466.17
In section IV.F. of the preamble of the proposed rule, we discuss proposed requirements for the Hospital VBP Program. Specifically, in this proposed rule, we are proposing 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 proposing 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 proposed 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 proposed rule, we are proposing three previously finalized quality measures for use in the LTCH QRP for the FY 2018 payment determination and subsequent years. We are proposing 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 of 2014: Patients or Residents with Pressure Ulcers that are New or Worsened (NQF #0678), and an Application of Percent of Residents Experiencing One or More Falls with Major Injury (Long Stay) (NQF #0674). We are proposing a third previously finalized measure, All-Cause Unplanned Readmission Measure for 30 Days Post-Discharge From Long-Term Care Hospitals (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 proposed rule, for the FY 2018 payment determination and subsequent years we are proposing the addition of one new quality measure to the LTCHQR Program: Cross-Setting Functional Status Process Measure: an application of Percent of Patients or Residents with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function (NQF #2631; under review). This measure satisfies the addition of a quality measure under the third initially required domain of functional status, as mandated by section 1899B of the Act as added by the IMPACT Act of 2014.
Six of the measures being retained in this FY 2016 IPPS/LTCH PPS proposed rule are currently collected via the CDC NHSN. The NHSN is a secure, Internet-based HAI tracking system maintained and managed by the CDC. The NHSN enables healthcare facilities to collect and use data about HAIs, adherence to clinical practices known to prevent HAIs, and other adverse events within their organizations. NHSN data collection occurs via a Web-based tool hosted by the CDC and provided free of charge to facilities. In this proposed rule, we have not proposed to adopt 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 proposed 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 proposed in this proposed 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 (LCDS). The LCDS, in its current form (version 2.0), has been approved under OMB control number 0938-1163. Version 2.0 of the LCDS contains data elements related to patient demographic data, various voluntary questions, as well as data elements related to the following quality measures:
Version 3.0 of the LCDS is under development and will contain those data elements included in version 2.0, as well as additional data elements in order to allow for the collection of data associated with the following quality measures:
Each time we add new data elements to the LCDS related to newly proposed or finalized LTCH QRP quality measures, we are required by the PRA to submit the expanded data collection instrument to OMB for review and
A comprehensive list of all data elements included in version 3.0 of the LCDS is available in the LTCH QRP Manual, as is a crosswalk outlining the differences between version 2.0 and 3.0 of the LCDS. The Manual 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 of 2014. 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.
In section VIII.D. of the preamble of this proposed 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 would 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.
If you comment on these information collection and recordkeeping requirements, please do either of the following:
1. Submit your comments electronically as specified in the
2. Submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: CMS Desk Officer, CMS-1632-P; Fax: (202) 395-6974; or Email:
Because of the large number of public comments we normally receive on
Administrative practice and procedure, Health facilities, Medicare, Puerto Rico, Reporting and recordkeeping requirements.
Computer technology, Electronic health record, Electronic information system, Electronic transactions, Health, Health care, Health information technology, Health insurance, Health records, Hospitals, Incorporation by reference, Laboratories, Medicaid, Medicare, Privacy, Reporting and recordkeeping requirements, Public Health, Security.
For the reasons stated in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 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 Pub. L. 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) do not apply to a hospital classified as a subsection (d) hospital (as defined in section 1886(d)(1)(B) the Act) as of December 10, 2013.
(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,
(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:
(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.
(d) * * *
(4) For cost reporting periods beginning before October 1, 2015, hospitals may elect the simplified cost allocation methodology under the terms and conditions provided in the instructions for CMS Form 2552.
(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).
(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.
(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 standard Federal 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 paragraph (c) of this section.
(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.
(4)
(i) Any reconciliation of payments under the site neutral payment rate is based on the cost-to-charge ratio calculated based on a ratio of costs to charges computed from the relevant cost report and charge data determined at the time the cost report coinciding with the discharge is settled.
(ii) At the time of any reconciliation under paragraph (c)(4)(i) of this section, payments under the site neutral payment rate may be adjusted to account for the time value of any underpayments or overpayments. Any adjustment is based upon a widely available index to be established in advance by the Secretary, and is applied from the midpoint of the cost reporting period to the date of reconciliation.
(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
(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); or
(B) The standard Federal prospective payment rates established under § 412.523 for long-term care hospital discharges described under § 412.522(a)(2).
(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).
(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)
For the reasons stated in the preamble, the Department of Health and Human Services proposes to further amend 45 CFR part 170 as previously proposed to be amended on March 30, 2015 (80 FR 16902) as follows:
42 U.S.C. 300jj-11; 42 U.S.C.300jj-14; 5 U.S.C. 552.
(c) * * *
(3)
(i)
(ii)
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 proposed 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 proposed figures for the standardized amounts, offsets, and budget neutrality factors. Therefore, in this proposed 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 proposed standard Federal rate that would be applicable to Medicare LTCHs for FY 2016.
In general, except for SCHs 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 proposed 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 the MDH program expired for discharges beginning on April 1, 2015 under current law.
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 proposing to make 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 proposed 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 proposed 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 proposed 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 § 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 §§ 412.211 and 412.212. Below we discuss the factors we are proposing to use for determining the proposed prospective payment rates for FY 2016.
In summary, the proposed 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) 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 proposed rule for a complete discussion on the proposed FY 2016 inpatient hospital update. Below is a table with these four options:
• A proposed update of 1.9 percent to the Puerto Rico-specific standardized amount (that is, the proposed FY 2016 estimate of the market basket rate-of-increase of 2.7 percent less a proposed adjustment of 0.6 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 provided for under section 1886(d)(3)(E)(i) of the Act. We note that section 1886(d)(3)(E)(i) of the Act requires that when we compute such budget neutrality, we assume that the provisions of section 1886(d)(3)(E)(ii) of the Act (requiring a 62 percent labor-related share in certain circumstances) had not been enacted.
• 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 proposed 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 proposed rule, a recoupment to meet the requirements of section 631 of 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 proposed rule, we are proposing to extend the imputed floor policy (both the original methodology and alternative methodology) for another year, through September 30, 2016. Therefore, for FY 2016, in this proposed rule, we are proposing to continue to include the imputed floor (calculated under the original and alternative methodologies) in calculating the uniform, national rural floor budget neutrality adjustment, which would be 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 requires 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 proposing to continue 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 proposed rule, we are proposing to continue 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 proposing to apply 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 proposing to apply 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 proposed wage index value that is less than 1.0000 because the proposed average hourly rate of every hospital in Puerto Rico divided by the proposed 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 proposed average hourly rate of every hospital located in Puerto Rico by the proposed 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 proposed Puerto Rico-specific wage index value for some hospitals that is either above, or below
The proposed 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 proposed 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 proposing to calculate 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 proposed rule, we are proposing to use 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 proposed 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 proposing to reduce the FY 2016 applicable percentage increase (which is based on IHS Global Insight, Inc.'s (IGI's) first 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 0.6 percentage point, which is calculated based on IGI's first 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 proposing to further update 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 first quarter forecast of the hospital market basket increase (as discussed in Appendix B of this proposed rule), the most recent forecast of the hospital market basket increase for FY 2016 is 2.7 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 proposed rule for a complete discussion on the proposed 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 would be applied to update the national standardized amount. The proposed 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 proposing to establish an applicable percentage increase to the Puerto Rico-specific standardized amount of 1.9 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 proposing to adjust 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 proposed 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 IPPS/LTCH PPS final rule (75 FR 50422 through 50423), we examined the MedPAR file and removed pharmacy charges for anti-hemophilic blood factor (which are paid separately under the IPPS) with an indicator of “3” for blood clotting with a revenue code of “0636” from the covered charge field for the budget neutrality adjustments. We also removed organ acquisition charges from the covered charge field for the budget neutrality adjustments because organ acquisition is a pass-through payment not paid under the IPPS.
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 proposing to continue 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 proposed 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 proposed rule for full details of our proposed 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 proposed 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 proposing to continue to apply the proposed hospital readmissions payment adjustment and the proposed 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 proposing to apply the proposed readmissions payment adjustment factor and the proposed 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 proposed FY 2016 readmissions payment adjustment factors, we are proposing to use 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 proposed rule, we are proposing to calculate 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 policy regarding the reporting of hospital-specific readmission rates consistent with section 1886(q)(6) of the Act. We discuss our proposed policy regarding the reporting of hospital-specific readmission rates for FY 2016 in section IV.E.3.f of the preamble of this proposed rule. (For additional information on our general policy for the reporting of hospital-specific readmission rates, consistent with section 1886(q)(6) of the Act, we refer readers to the FY 2013 IPPS/LTCH PPS final rule (77 FR 53399 through 53400).)
In addition, for FY 2016, in this proposed rule, for the purpose of modeling aggregate payments when determining all budget neutrality factors, we are proposing to use 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
To do this for FY 2016 (as we did for FY 2014 and FY 2015), we are proposing to include 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 are proposing to 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 proposed rule and below, we are proposing to continue the FY 2014 finalized methodology under which we would take into consideration uncompensated care payments in the comparison of payments under the Federal rate and the hospital-specific rate for SCHs. Therefore, we are proposing to include estimated uncompensated care payments in this comparison.
In addition, we are proposing to include 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 will be the second year for which hospitals will experience this reduction and data on the prior year's performance are now available. Payments for hospitals would be estimated based on the proposed 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 proposed 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 proposing to make 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 indexes less than or equal to 1.0000 at the more advantageous level of 62 percent. Therefore, for purposes of this budget neutrality adjustment, section 1886(d)(3)(E)(i) of the Act prohibits us from taking into account the fact that hospitals with a wage index less than or equal to 1.0000 are paid using a labor-related share of 62 percent. Consistent with current policy, for FY 2016, we are proposing to adjust 100 percent of the wage index factor for occupational mix. We describe the occupational mix adjustment in section III.E. of the preamble of this proposed rule.
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 proposed 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 proposed FY 2016 relative weights, and the FY 2015 pre-reclassified wage data, and applied the same proposed FY 2016 hospital readmissions payment adjustments and estimated FY 2016 hospital VBP payment adjustments applied above.
Based on this comparison, we computed a proposed budget neutrality adjustment factor equal to 0.998335. As discussed in section IV. of this Addendum, we also are proposing to apply the MS-DRG reclassification and recalibration budget neutrality factor of 0.998335 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 a proposed MS-DRG reclassification and recalibration budget neutrality adjustment factor of 0.998335 (by using the same methodology described above to determine the proposed 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 proposed 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 proposed 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 proposed FY 2016 hospital readmissions payment adjustment and the estimated FY 2016 hospital VBP payment adjustment; and
• Aggregate payments using the proposed FY 2016 relative weights and the proposed FY 2016 pre-reclassified wage indexes, applied the proposed 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 proposed FY 2016 hospital readmissions payment adjustments and estimated FY 2016 hospital VBP payment adjustments applied above.
In addition, we applied the proposed 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 proposed budget neutrality adjustment factor of 0.998681 for proposed changes to the wage index. Finally, we multiplied the proposed MS-DRG reclassification and recalibration budget neutrality adjustment factor of 0.998335 (derived in the first step) by the proposed
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 proposed budget neutrality adjustment factor for FY 2016, we used FY 2014 discharge data to simulate payments and compared the following:
• Aggregate payments using the proposed FY 2016 labor-related share percentages, proposed FY 2016 relative weights and proposed 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 proposed FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments; and
• Aggregate payments using the proposed FY 2016 labor-related share percentages, proposed FY 2016 relative weights, and proposed FY 2016 wage data after such reclassifications, and applied the same proposed 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 proposed, which is available via the Internet on the CMS Web site. This table reflects reclassification crosswalks proposed for FY 2016, and apply the proposed policies explained in section III. of the preamble to this proposed rule. Based on these simulations, we calculated a proposed budget neutrality adjustment factor of 0.988486 to ensure that the effects of these provisions are budget neutral, consistent with the statute.
The proposed 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 proposed 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 proposed 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 been made in the absence of such provisions. Consistent with section 3141 of the Affordable Care Act and as discussed in section III.H. of the preamble of this proposed rule and codified at § 412.64(e)(4)(ii), the budget neutrality adjustment for the rural and imputed floor is a national adjustment to the wage index.
As noted above and as discussed in section III.H.2. of the preamble of this proposed rule, in the FY 2012 IPPS/LTCH PPS final rule, we extended the imputed floor calculated under the original methodology through FY 2013 (76 FR 51594). In the FY 2013 IPPS/LTCH PPS final rule, 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 (77 FR 53368 through 53369). Consistent with the methodology for treating the imputed floor, similar to the methodology we used in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53368 through 53369), 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 proposed rule, we are proposing to extend 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 would follow our policy of including the proposed imputed floor in the proposed 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 proposed 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 proposing to calculate 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 proposed 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 will 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 proposed FY 2016 rural Puerto Rico wage index is calculated based on the average of the proposed 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 are proposing to use FY 2014 discharge data to simulate payments and the proposed post-reclassified national and Puerto Rico-specific wage indexes and compared the following:
• The national and Puerto Rico-specific simulated payments without the proposed national rural floor and proposed imputed floor and proposed Puerto Rico-specific rural floor applied; and
• The national and Puerto Rico-specific simulated payments with the proposed national rural floor and proposed imputed floor and proposed Puerto Rico-specific rural floor applied.
Based on this comparison, we determined a proposed national rural budget neutrality adjustment factor of 0.990135 and the proposed Puerto Rico-specific budget neutrality adjustment factor of 0.987626. The national adjustment was applied to the national wage indexes to produce a proposed national rural floor budget neutral wage index and the proposed Puerto Rico-specific adjustment was applied to the Puerto Rico-specific wage indexes to produce a proposed Puerto Rico-specific rural floor budget neutral wage index.
As discussed in section III.G. of the preamble of this proposed 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
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 proposing to use 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 would equal what payments would have been if we had fully adopted the new OMB delineations without providing these transitional provisions. To calculate the proposed 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 proposed FY 2016 relative weights, proposed 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 proposed rural floor budget neutrality adjustment factor to the wage index, and application of the proposed FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments; and
• Aggregate payments using the OMB delineations for FY 2016, the proposed FY 2016 relative weights, proposed 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 proposed rural floor budget neutrality adjustment factor to the wage index, application of the 3-year transitional wage indexes, and application of the same proposed FY 2016 hospital readmissions payment adjustments and the estimated FY 2016 hospital VBP payment adjustments applied above.
Based on these simulations, we calculated a proposed budget neutrality adjustment factor of 0.999995. Therefore, for FY 2016, we are proposing to apply a transitional wage index budget neutrality adjustment factor of 0.999995 to the national average and Puerto Rico-specific standardized amounts to ensure that the effects of these proposed transitional wage indexes are budget neutral.
We note that the proposed 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 are proposing to apply this proposed 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 would 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 proposed 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 proposed rule for a complete discussion regarding our proposed policies for FY 2016 in this proposed 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. (2) Recoupment or Repayment Adjustment Authorized by Section 631 of the American Taxpayer Relief Act of 2012 (ATRA) to the National Standardized Amount
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 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, we are proposing to apply 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 would not apply to the Puerto Rico-specific standardized amount and hospital-specific payment rates.
As discussed in section IV.I. of the preamble of this proposed 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 previous final rules, we have adjusted the national IPPS payment rates by an amount sufficient to account for the added costs of this demonstration program. In other words, we have applied budget neutrality across the payment system as a whole rather than merely across the participants of this demonstration program. 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 proposing to adjust the national IPPS payment rates according to the proposed methodology set forth in section IV.I. of the preamble of this proposed rule, to account for the estimated additional costs of the demonstration program for FY 2016. In addition, we are proposing to subtract from the budget neutrality offset amount for FY 2016 the amount by which the budget neutrality offset amount that was finalized in the FY 2009 IPPS final rule exceeds the actual costs of the demonstration for FY 2009 (as shown in the finalized cost reports for cost reporting periods beginning in FY 2009). The proposed total budget neutrality offset amount that we are proposing to be applied to the FY 2016 IPPS rates is $17,738,497. Accordingly, using the most recent data available to account for the estimated costs of the demonstration program, for FY 2016, we computed a proposed factor of 0.999808 for the rural community hospital demonstration program budget neutrality adjustment that will be applied to the IPPS standard Federal payment rate.
Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for “outlier” cases
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 are proposing to continue to use the same methodology that we used in FY 2014 and 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 2015 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 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, below we are providing a table that provides 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 are proposing 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 is 4.8 percent (1.048116) or 9.8 percent (1.098547) over 2 years.
As we have done in the past, in this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing to establish the proposed 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 development of this proposed rule. In the following instances, we substituted and used the proposed FY 2016 statewide average operating and/or capital CCR instead of the operating and/or capital CCR from the PSF if a hospital's operating and/or capital CCR is 0 or blank, if a hospital's operating and/or capital CCR is above the ceilings described below. For FY 2016, we also are proposing to continue to apply an adjustment factor to the CCRs to account for cost and charge inflation (as explained below). We are proposing that, if more recent data became available, we would use that data to calculate the final FY 2016 outlier threshold.
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, for FY 2016, we are proposing 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 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, we calculated a proposed December 2013 operating national average case-weighted CCR of 0.288792 and a proposed December 2014 operating national average case-
We used the same methodology proposed above to adjust the capital CCRs. Specifically, 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 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 discussed above, for FY 2016, we are proposing to apply 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 proposed 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 would be 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 would receive a wage index less than 1.0000 due to the proposed 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 proposed 3-year transitional wage indexes and adjust the proposed wage index of those eligible hospitals in a frontier State when calculating the proposed 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 are proposing not to make any adjustments for the possibility that hospitals' CCRs and outlier payments may be reconciled upon cost report settlement. 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 are proposing not to make any assumptions regarding the effects of reconciliation on the outlier threshold calculation.
As described in sections IV.E. and IV.F. respectively, of the preamble of this proposed 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 proposed outlier threshold calculation or the proposed 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 would 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 are proposing to exclude the hospital VBP payment adjustments and the hospital readmissions payment adjustments from the calculation of the proposed 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), the new uncompensated care payment under section 1886(r)(2), like the empirically justified Medicare DSH payment under section 1886(r)(1), 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). As we did for FYs 2014 and 2015, we also are proposing for FY 2016 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 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 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 FYs 2014 and 2015 to calculate the outlier fixed-loss cost threshold, for FY 2016, we are proposing to include estimated FY 2016 uncompensated care payments in the computation of the proposed outlier fixed-loss cost threshold. Specifically, we are proposing 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 proposed outlier fixed-loss cost threshold methodology.
Using this methodology, we are proposing 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.
We note 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 believe that the decrease in the charge inflation factor (compared to the FY 2015 charge inflation factor) contributed to a lower proposed 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.
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
In accordance with section 1886(d)(3)(B) of the Act, we are proposing to reduce the FY 2016 standardized amount by the same percentage to account for the projected proportion of payments paid as outliers.
The proposed outlier adjustment factors that would be applied to the standardized amount based on the proposed FY 2016 outlier threshold are as follows:
We are proposing to apply the outlier adjustment factors to the proposed 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 fiscal intermediary or MAC computes operating CCRs greater than 1.22 or capital CCRs greater than 0.173, or hospitals for which the fiscal intermediary or 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 proposed statewide average operating CCRs for urban hospitals and for rural hospitals for which the fiscal intermediary or 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 would 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 fiscal intermediary or 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 fiscal intermediary or 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, as mentioned above, 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 5.34 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 December 2014 update of the PSF, actual outlier payments for FY 2015 will be approximately 4.88 percent of actual total MS-DRG payments, approximately 0.22 percentage point lower than the 5.1 percent we projected when setting the outlier policies for FY 2015. This estimate of 4.88 percent is based on simulations using the FY 2014 MedPAR file (discharge data for FY 2014 claims).
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) contain the national standardized amounts that we are proposing to apply to all hospitals, except hospitals located in Puerto Rico, for FY 2016. The proposed 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 proposed 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 proposing to apply a labor-related share of 62 percent, unless application of that percentage would 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 proposed standardized amounts reflecting the proposed 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 discharge-weighted average of the national large urban standardized amount (this amount is set forth in Table 1A). The proposed labor-related and nonlabor-related portions of the national average standardized amounts for Puerto Rico hospitals for FY 2016 are set forth in Table 1C listed and published in section VI. of this Addendum (and available via the Internet on the CMS Web site). This table also includes the proposed Puerto Rico-specific standardized amounts. The labor-related share applied to the proposed Puerto Rico-specific standardized amount is the proposed labor-related share of 63.2 percent, or 62 percent, depending on which provides higher payments to the hospital. (Section 1886(d)(9)(C)(iv) of the Act, as amended by
The following table illustrates the changes from the FY 2015 national standardized amount to the proposed FY 2016 national standardized amount. The second through fifth columns display the proposed 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 proposed changes from the FY 2015 Puerto Rico-specific payment rate for hospitals located in Puerto Rico. The second column shows the proposed 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 proposed 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), contain the proposed labor-related and nonlabor-related shares that we are proposing to use 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 proposed 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 proposed rule, we discuss the data and methodology for the proposed 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 (77 FR 28145 through 28146 and 77 FR 53700 through 53701, respectively).
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 proposing to continue 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 proposed 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 would 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, for FY 2016 equals the Federal rate (which includes uncompensated care payments). We note that the MDH program expired for discharges beginning on April 1, 2015 under current law.
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 proposed 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 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:
Step 1—Select the applicable average standardized amount depending on whether the hospital submitted qualifying quality data and is a meaningful EHR user, as described above.
Step 2—Multiply the labor-related portion of the standardized amount by the applicable wage index for the geographic area in which the hospital is located or the area to which the hospital is reclassified.
Step 3—For hospitals located in Alaska and Hawaii, multiply the nonlabor-related portion of the standardized amount by the applicable cost-of-living adjustment factor.
Step 4—Add the amount from Step 2 and the nonlabor-related portion of the standardized amount (adjusted, if applicable, under Step 3).
Step 5—Multiply the final amount from Step 4 by the relative weight corresponding to the applicable MS-DRG (Table 5 listed in section VI. of this Addendum and available via the Internet).
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 proposed 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.
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 proposed 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 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 equal to the update factor for all other IPPS hospitals, the update to the hospital-specific rates for SCHs 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 proposed applicable percentage increases to the hospital-specific rates applicable to SCHs are the following:
For a complete discussion of the applicable percentage increase applied to the hospital-specific rates for SCHs, we refer readers to section IV.A. of the preamble of this proposed rule.
In addition, because SCHs 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 hospital-specific rate is adjusted by the proposed MS-DRG reclassification and recalibration budget neutrality factor of 0.998335, as discussed in section III. of this Addendum. The resulting rate is used in determining the proposed payment rate that an SCH would receive for its discharges beginning on or after October 1, 2015. We note that, in this proposed rule, for FY 2016, we are not proposing to make a documentation and coding adjustment to the hospital-specific rate. We refer readers to section II.D. of the preamble of this proposed rule for a complete discussion regarding our proposed 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:
Step 1—Select the applicable average standardized amount considering the applicable wage index (obtained from Table 1C published in section VI. of this Addendum and available via the Internet).
Step 2—Multiply the labor-related portion of the standardized amount by the applicable Puerto Rico-specific wage index.
Step 3—Add the amount from Step 2 and the nonlabor-related portion of the standardized amount.
Step 4—Multiply the amount from Step 3 by the applicable MS-DRG relative weight (obtained from Table 5 listed in section VI. of this Addendum and available via the Internet).
Step 5—Multiply the result in Step 4 by 25 percent.
The national prospective payment rate is determined as follows:
Step 1—Select the applicable national average standardized amount.
Step 2—Multiply the labor-related portion of the national average standardized amount by the applicable wage index for the geographic area in which the hospital is located or the area to which the hospital is reclassified.
Step 3—Add the amount from Step 2 and the nonlabor-related portion of the national average standardized amount.
Step 4—Multiply the amount from Step 3 by the applicable MS-DRG relative weight (obtained from Table 5 listed in section VI. of this Addendum and available via the Internet on the CMS Web site).
Step 5—Multiply the result in Step 4 by 75 percent.
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 proposed capital Federal rate for FY 2016, which would be 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 proposed capital Federal rate for FY 2016. In particular, we explain why the proposed FY 2016 capital Federal rate increases approximately 0.8 percent, compared to the FY 2015 capital Federal rate. As discussed in the impact analysis in Appendix A to this proposed rule, we estimate that capital payments per discharge would increase approximately 2.0 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 proposed update factor for FY 2016 under that framework is 1.3 percent based on the best data available at this time. The proposed 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 proposing to apply 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 equal percentage increase in hospital payments.
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 also equal 0.5 percent for FY 2016. The proposed net adjustment for change in case-mix is the difference between the projected real increase in case-mix and the projected
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, we are proposing to make 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. A forecast error of 0.0 percentage point is calculated for the proposed FY 2016 update. 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. 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, we are not proposing to make 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 CIPI 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 proposed rule, we are proposing to continue 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 proposing to use 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 propose to continue to apply a zero intensity adjustment for FY 2016. Therefore, we are proposing to make 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 proposed 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 payments for FY 2016. (We refer readers to MedPAC's Report to the Congress: Medicare Payment Policy, March 2015, Chapter 3, available on the Web site at:
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 will equal 6.18 percent of inpatient capital-related payments based on the capital Federal rate in FY 2015. Based on the proposed thresholds as set forth in section II.A. of this Addendum, we estimate that outlier payments for capital-related costs would equal 6.43 percent for inpatient capital-related payments based on the proposed capital Federal rate in FY 2016. Therefore, we are proposing to apply an outlier adjustment factor of 0.9357 in determining the proposed 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 proposed FY 2016 outlier adjustment of 0.9357 is a −0.27 percent change from the FY 2015 outlier adjustment of 0.9382. Therefore, the proposed net change in the outlier adjustment to the capital Federal rate for FY 2016 is 0.9973 (0.9357/0.9382). Thus, the outlier adjustment would decrease the proposed FY 2016 capital Federal rate by 0.27 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 proposed 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 proposed FY 2016 GAFs. To achieve budget neutrality for the changes in the national GAFs, based on calculations using updated data, we are proposing to apply an incremental budget neutrality adjustment factor of 0.9982 for FY 2016 to the previous cumulative FY 2015 adjustment factor of 0.9884, yielding a proposed adjustment factor of 0.9867 through FY 2016. For the Puerto Rico GAFs, we are proposing to apply an incremental budget neutrality adjustment factor of 0.9980 for FY 2016 to the previous cumulative FY 2015 adjustment factor of 1.0082, yielding a proposed cumulative adjustment factor of 1.0062 through FY 2016.
We then compared estimated aggregate capital Federal rate payments based on the FY 2015 MS-DRG relative weights and the proposed FY 2016 GAFs to estimated aggregate capital Federal rate payments based on the cumulative effects of the proposed FY 2016 MS-DRG classifications and relative weights and the proposed FY 2016 GAFs. The proposed incremental adjustment factor for DRG classifications and changes in relative weights is 0.9994 both nationally and for Puerto Rico. The proposed cumulative adjustment factors for MS-DRG classifications and changes in relative weights and for changes in the GAFs through FY 2016 are 0.9861 nationally and 1.0056 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 proposed cumulative adjustment factor accounts for the proposed MS-DRG reclassifications and recalibration and for proposed changes in the GAFs. It also incorporates the effects on the proposed GAFs of FY 2016 geographic reclassification decisions made by the MGCRB compared to FY 2015 decisions. However, it does not account for proposed 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 proposing to establish an update of 1.3 percent in determining the FY 2016 capital Federal rate for all hospitals. As a result of this proposed update and the proposed budget neutrality factors discussed above, we are proposing to establish a national capital Federal rate of $438.40 for FY 2016. The proposed national capital Federal rate for FY 2016 was calculated as follows:
• The proposed FY 2016 update factor is 1.0013, that is, the proposed update is 1.3 percent.
• The proposed FY 2016 budget neutrality adjustment factor that is applied to the proposed capital Federal rate for proposed changes in the MS-DRG classifications and relative weights and changes in the GAFs is 0.9976.
• The proposed FY 2016 outlier adjustment factor is 0.9357.
(We note that, as discussed in section VI.C. of the preamble of this proposed rule, we are not proposing to make an additional MS-DRG documentation and coding adjustment to the capital IPPS Federal rates for FY 2016.)
Because the proposed 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 proposing to make additional adjustments in the capital Federal rate for these factors, other than the proposed budget neutrality factor for proposed changes in the MS-DRG classifications and relative weights and for proposed changes in the GAFs.
We are providing the following chart that shows how each of the proposed factors and adjustments for FY 2016 affects the computation of the proposed FY 2016 national capital Federal rate in comparison to the FY 2015 national capital Federal rate. The proposed 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 proposed GAF/DRG budget neutrality adjustment factor has the effect of decreasing the capital Federal rate by 0.24 percent. The proposed FY 2016 outlier adjustment factor has the effect of decreasing the capital Federal rate by 0.27 percent compared to the FY 2015 capital Federal rate. The combined effect of all the proposed changes would increase the proposed national capital Federal rate by 0.79 percent compared to the FY 2015 national capital Federal rate.
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
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 proposed budget neutrality adjustment factors for the national GAF and for the Puerto Rico GAF and the proposed 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 proposing to make to the factors used to determine the proposed capital Federal rate, the proposed FY 2016 special capital rate for hospitals in Puerto Rico is $213.77.
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 proposed 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 proposed fixed-loss amount of $24,485.
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. (first 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 1.2 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.)
In this proposed rule, 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 FY 2016 IPPS operating market basket, in accordance with applicable regulations at § 413.40. Based on IHS Global Insight, Inc.'s 2015 first quarter forecast, we estimate that the FY 2010-based IPPS operating market basket update for FY 2016 is 2.7 percent (that is, the estimate of the market basket rate-of-increase). However, we are proposing that if more recent data become available for the final rule, we would use them to calculate the IPPS operating market basket update for FY 2016.
The IRF PPS, the IPF PPS, and the LTCH PPS are updated annually. We refer readers to section VII. of the preamble of this proposed rule and section V. of the Addendum to this proposed rule for the proposed 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 proposed rule, we discuss our proposed 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 updated the standard Federal rate annually by a factor to adjust for the most recent estimate of the increases in prices of an appropriate market basket of goods and services for LTCHs. We established this policy of annually updating the standard Federal rate because, at that time, we believed that was the most appropriate method for updating the LTCH PPS standard Federal rate for years after the initial implementation of the LTCH PPS in FY 2003. Therefore, under § 412.523(c)(3)(ii), for RYs 2004 through 2006, the annual update to the LTCH PPS standard Federal rate was equal to the previous rate year's Federal rate updated by the most recent estimate of increases in the appropriate market basket of goods and services included in covered inpatient LTCH services.
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 proposed 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 proposed 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 proposed rule, we are proposing to establish 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 proposed rule, the annual update will be 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 proposed rule, based on the best available data, we are proposing to establish an annual update to the standard Federal rate of 1.9 percent, which is based on the full estimated increase in the LTCH PPS market basket of 2.7 percent, less the proposed MFP adjustment of 0.6 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 proposed 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 proposed rule). Accordingly, we are proposing to establish an annual update to the LTCH PPS standard Federal rate of −0.1 percent for LTCHs that fail to submit the required quality reporting data for FY 2016. This proposed −0.1 percent update is calculated based on the full estimated increase in the LTCH PPS market basket of 2.7 percent, less a proposed MFP adjustment of 0.6 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 proposing to apply the annual update to the LTCH PPS standard Federal rate from the previous year. Furthermore, in determining the proposed LTCH PPS standard Federal payment rate for FY 2016, we also are proposing to make certain regulatory adjustments, consistent with past practices. Specifically, in determining the proposed FY 2016 LTCH PPS standard Federal payment rate, we are proposing to apply a budget neutrality adjustment factor for the proposed changes related to the proposed area wage adjustment (that is, proposed changes to the wage data and proposed labor-related share) in accordance with § 412.523(d)(4). We also are proposing that if more recent data become available, we would use that data, if appropriate, to determine the update to the LTCH PPS standard Federal payment rate for FY 2016 in the 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 sections 1886(m)(3)(A)(ii) and (m)(4)(E) of the Act. Accordingly, at § 412.523(c)(3)(xi), we established an annual update to the standard Federal rate for FY 2015 of 2.2 percent. That is, we applied an update factor of 1.022 to the FY 2014 Federal rate of $40,607.31 to determine the FY 2015 standard Federal rate. The standard Federal rate for FY 2015 was further adjusted by an adjustment factor of 0.98734 for FY 2015 under the final year of the 3-year phase-in of the one-time prospective adjustment at § 412.523(d)(3)(ii). We also applied an area wage level budget neutrality factor for FY 2015 of 1.0016703 to the standard Federal rate to ensure that any changes to the area wage level adjustment would not result in any change in estimated aggregate LTCH PPS payments. Consequently, we established a standard Federal rate for FY 2015 of $41,043.71 (calculated as $40,607.31 × 1.022 × 0.98734 × 1.001670) (79 FR 50392).
In this proposed rule, we are proposing to establish an annual update to the LTCH PPS standard Federal payment rate of 1.9 percent, which was determined using the methodology previously described. Therefore, consistent with our proposal, under proposed § 412.523(c)(3)(xii), we are proposing to apply a factor of 1.019 to the FY 2015 standard Federal rate of $41,043.71 to determine the proposed FY 2016 LTCH PPS standard Federal payment rate. These proposed factors are based on IGI's first 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, consistent with our proposal, under proposed § 412.523(c)(3)(xii), applied in conjunction with the provisions of § 412.523(c)(4), we are proposing to reduce 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 would be updated by −0.1 percent (that is, a proposed update factor of 0.999) 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 proposing to apply a proposed area wage level budget neutrality factor to the FY 2016 standard Federal rate of 1.001444, which was determined using the methodology previously described. We are proposing to apply 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
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 revised delineations based on 2010 Census Bureau data that were subsequently adopted in the FY 2015 IPPS/LTCH PPS final rule. (The OMB bulletins are available on the OMB Web site at:
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 50393through 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 proposing to establish a labor-related share for the LTCH PPS standard Federal payment rate payments based on IGI's first quarter 2015 forecast of the FY 2009-based LTCH-specific market basket. Consistent with our historical practice, we also are proposing that if more recent data become available, we would use such data, if appropriate, to determine the final FY 2016 labor-related share. In addition, we are proposing to specify 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 proposed FY 2016 labor-related share relative importance using IGI's first 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 58.1 percent. We are proposing to establish that the portion of capital-related costs that is influenced by the
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 50394through 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 areas where there are no IPPS wage data.
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, we are proposing to use 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 proposing to use FY 2012 wage data because these data are the most recent complete data available. We also noted that these are the same data used to compute the proposed FY 2016 acute care hospital inpatient wage index, as discussed in section III. of the preamble of this proposed rule. We are proposing to compute the proposed 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. We also are proposing to continue 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 proposed methodology for determining the FY 2016 LTCH PPS standard Federal payment rate area wage index values, we are proposing to continue 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 proposing to use to determine the proposed FY 2016 LTCH PPS standard Federal payment rate area wage index values in this proposed 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 proposed 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 proposed 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 proposing to use to determine the proposed FY 2016 LTCH PPS standard Federal payment rate area wage index values in this proposed rule, there are no rural areas without IPPS hospital wage data. Therefore, it is not necessary to use our established methodology to calculate a proposed LTCH PPS standard Federal payment rate wage index value for proposed 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 proposed FY 2016 LTCH PPS standard Federal payment rate wage index values that would be 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 proposed 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 proposed rule, for FY 2016 LTCH PPS standard Federal payment rate cases, in accordance with § 412.523(d)(4), we are proposing to apply an area wage level adjustment budget neutrality factor to adjust the standard Federal rate to account for the estimated effect of the proposed 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, we are proposing to determine an area wage level adjustment budget neutrality factor that would 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, under the statutory 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) would 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 proposed FY 2016 LTCH PPS standard Federal payment rate area wage level adjustment budget neutrality factor described above. (For additional information on our proposed 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 proposed rule.)
For this proposed rule, using the steps in the methodology described above, we determined a proposed FY 2016 LTCH PPS standard Federal payment rate area wage level adjustment budget neutrality factor of 1.001444. Accordingly, in section V.A.2. of the Addendum to this proposed rule, to determine the proposed FY 2016 LTCH PPS standard Federal payment rate, we are proposing to apply an area wage level adjustment budget neutrality factor of 1.001444, in accordance with § 412.523(d)(4). The proposed FY 2016 LTCH PPS standard Federal payment rate shown in Table 1E of the Addendum to this proposed 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 finalized 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 proposed rule, 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 proposing to continue 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, we are proposing to establish that the COLA factors shown in the following table would 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 LTCH PPS standard Federal payment rate and the fixed-loss amount. The fixed-loss amount is the amount used to limit the loss that a hospital incurs under the outlier policy for a case with unusually high costs before the LTCH will receive any additional payments. This results in Medicare and the LTCH sharing financial risk in the treatment of extraordinarily costly cases. Under the current LTCH PPS HCO policy, the LTCH's loss is limited to the fixed-loss amount and a fixed percentage of costs above the outlier threshold (the adjusted LTCH PPS standard Federal payment rate payment plus the fixed-loss amount). The fixed percentage of costs is called the marginal cost factor. We calculate the estimated cost of a case by multiplying the Medicare allowable covered charge by the hospital's overall hospital cost-to-charge ratio (CCR).
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 proposed rule, we are proposing to 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 proposing 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 statutory dual-rate LTCH PPS payment structure, as discussed in section VII.B.7.b. of the preamble of this proposed rule, we are proposing to establish two separate HCO targets—one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases. We are proposing to revise the regulations by making the proposed changes to the HCO policy to account for the new statutory 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 proposed HCO policy revised in accordance with the new statutory LTCH PPS payment structure, we are proposing to establish 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 proposing 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 proposal, LTCH PPS standard Federal payment rate cases would 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 would be 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 would 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
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 proposed 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 proposed 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 proposed 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 proposed site neutral payment rate payments in accordance with proposed § 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 proposed § 412.522(c)(1)(ii) for proposed 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 proposed § 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 Section 150.24, Chapter 3, of the Medicare Claims Processing Manual (Pub. 100-4)) as compared to total charges.
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 proposed rule, using our established methodology for determining the LTCH total CCR ceiling, based on IPPS total CCR data from the December 2014 update of the PSF, we are proposing to establish a total CCR ceiling of 1.345 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 proposed site neutral payment rate policy at proposed § 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, in this proposed rule, using our established methodology for determining the LTCH statewide average CCRs, based on the most recent complete IPPS “total CCR” data from the December 2014 update of the PSF, we are proposing to establish proposed LTCH PPS statewide average total CCRs for urban and rural hospitals that would 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 proposed rule (and available via the Internet). We also are proposing that if more recent data become available, we would use that 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 December 2014. Therefore, consistent with our existing methodology, we are proposing to use 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 proposed rule (and available via the Internet). In addition, consistent with our existing methodology, in determining the urban and rural statewide average total CCRs for Maryland LTCHs paid under the LTCH PPS, we are proposing to continue 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), the SSO policy at § 412.529(f)(4)(iv), and as proposed for site neutral payment rate cases at proposed § 412.522(c)(4), the payments for HCO, SSO, and site neutral payment rate 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. Our proposal to establish a reconciliation process for payments made to LTCHs for site neutral payment rate cases is discussed in section VII.B.4.a. of the preamble of this proposed rule. 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 case by multiplying the Medicare covered charges from the claim by the LTCH's CCR. Under the HCO policy at § 412.525(a), if the estimated cost of the case exceeds the outlier threshold, we make an outlier payment equal to 80 percent of the difference between the estimated cost of the case and the outlier threshold (that is, the sum of the adjusted standard Federal rate payment and the fixed-loss amount).
As noted above and as discussed in greater detail in section VII.B.7.b. of the preamble of this proposed rule, under the new statutory dual-rate LTCH PPS payment structure, we are proposing to establish two separate HCO targets—one for LTCH PPS standard Federal payment rate cases and one for site neutral payment rate cases. Under this proposal, for LTCH PPS standard Federal payment rate cases, we are proposing to establish 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, we are not proposing to make 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. As such, LTCH PPS standard Federal payment rate cases would continue to receive an additional payment for any HCO case that would be equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold, which would be 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 would 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
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 proposed rule, we are proposing to continue 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 would 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 proposed rates and policies for these cases presented in this proposed rule). Specifically, based on the most recent complete LTCH data available (that is, LTCH claims data from the December 2014 update of the FY 2014 MedPAR file and CCRs from the December 2014 update of the PSF), we are proposing to determine a fixed-loss amount for LTCH PPS standard Federal payment rate cases for FY 2016 that would result in estimated outlier payments projected to be equal to 8 percent of total estimated payments for these cases in FY 2016. Under the broad authority of section 123(a)(1) of the BBRA and section 307(b)(1) of the BIPA, we are proposing a fixed-loss amount of $18,768 for LTCH PPS standard Federal payment rate cases for FY 2016, and also to 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 proposed fixed-loss amount for LTCH PPS standard Federal payment rate cases of $18,768).
We note that the proposed fixed-loss amount of $18,768 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 statutory dual-rate LTCH PPS payment structure, under which we have proposed to have 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 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 statutory changes had been in effect at that time. However, under our proposal, the proposed fixed-loss amount of $18,768 for FY 2016 would 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 8.6 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 proposed 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 proposing would apply to total payments for LTCH PPS standard Federal payment rate cases because a lower fixed-loss amount would result in more cases qualifying as outlier cases, as well as higher outlier payments for qualifying HCO cases because the maximum loss that an LTCH must incur before receiving an HCO payment (that is, the fixed-loss amount) would be smaller. Consistent with our historical practice, we are proposing that if more recent data is available, we would use such data to calculate the FY 2016 fixed-loss amount for LTCH PPS standard Federal payment rate cases in the final rule.
Under our proposals to implement the dual-rate LTCH PPS payment structure required by statute, we are proposing that LTCH PPS standard Federal payment rate cases (that is, LTCH discharges that meet the criteria for exclusion from the site neutral payment rate) would continue to be paid based on the LTCH PPS standard Federal payment rate, and would 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 proposed payments for LTCH standard payment rate cases, we refer readers to section VII.B.4.c. of the preamble of this proposed 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 would be 80 percent of the difference between the estimated cost of the case and the outlier threshold (the sum of the proposed fixed-loss amount of $18,768 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 proposed rule, we are proposing to 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 proposing 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 proposing have 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, we are proposing that such cases would receive an additional HCO payment for costs that exceed the HCO threshold that would be equal to 80 percent of the difference between the estimated cost of the case and the HCO threshold. We are proposing that the HCO threshold for site neutral payment rate cases would be the sum of the site neutral payment rate for the case and the IPPS fixed-loss amount. (We note that, as discussed in section VII.B.7.b. of the preamble of this proposed rule, in light of our HCO proposals in accordance with our implementation of the new statutory 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) would not be eligible to receive a HCO payment because, by definition, the estimated costs of such cases would never exceed the IPPS comparable amount by any threshold.) Under this proposal, we are proposing that HCO payments for site neutral payment rate cases would be budget neutral, such that the proposed site neutral payment rate HCO payments would not result in any change in estimated aggregate LTCH PPS payments. In order to achieve this, under proposed new § 412.522(c)(2)(i), we are proposing to apply a budget neutrality factor to the payments for all site neutral payment rate cases, which would be established on an estimated basis. (For additional details on our HCO policy
As we discussed in section VII.B.7.b. of the preamble of this proposed rule, in order to estimate the magnitude a proposed 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 proposal to use the IPPS fixed-loss threshold for the site neutral payment rate cases would 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 proposed new § 412.522(c)(2)(i), we are proposing 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.
The statutory LTCH PPS payment changes required by section 1886(m)(6) of the Act (that is, the application of the site neutral payment rate) are effective for LTCH PPS discharges occurring in cost reporting periods beginning on or after October 1, 2015. In this proposed rule, to estimate total LTCH PPS site neutral payment rate payments in Federal FY 2016, we are proposing an adjustment to account for the varying effective dates of the statutory dual-rate LTCH PPS payment structure. In order to estimate FY 2016 LTCH PPS payments based on site neutral payment rate cases, it is necessary to account for the fact that LTCHs whose cost reporting periods begin 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. For purposes of estimating site neutral payment rate payments in FY 2016, we examined LTCHs whose cost reporting periods begin in the first quarter of FY 2016 (that is, October through December 2015). We modeled that all of the FY 2016 site neutral payment rate cases associated with these LTCHs would be paid at the proposed transitional blended payment rate (that is, 50 percent of the applicable site neutral payment rate amount for the discharge as determined under proposed new § 412.522(c)(1) and 50 percent of the applicable LTCH PPS standard Federal payment rate determined under § 412.523). All of the first quarter FY 2016 site neutral payment rate cases for LTCHs whose cost reporting periods begin after the start of the first quarter of FY 2016 were modeled as being paid at the LTCH PPS standard Federal payment rate for all discharges in that quarter. We then examined LTCHs whose cost reporting periods begin in the second quarter of FY 2016 (that is, January through March 2016). We modeled that all of the second, third, and fourth quarter FY 2016 site neutral payment rate cases associated with these LTCHs would be paid at the transitional blended payment rate. All of the second quarter FY 2016 site neutral payment rate cases for LTCHs whose cost reporting periods begin after the start of the second quarter of FY 2016 were modeled as being paid at the LTCH PPS standard Federal payment rate for all discharges in that quarter. Similarly, we examined LTCHs whose cost reporting periods begin in the third quarter of FY 2016 (that is, April through June 2016). We modeled that all of the third and fourth quarter FY 2016 site neutral payment rate cases associated with these LTCHs would be paid at the transitional blended payment rate. For all of the third quarter FY 2016 site neutral payment rate cases for LTCHs whose cost reporting periods begin after the start of the third quarter of FY 2016, we modeled as being paid at the LTCH PPS standard Federal payment rate. Finally, we examined LTCHs whose cost reporting periods begin in the fourth quarter of FY 2016 (that is, July through September of 2016). We modeled all of the fourth quarter FY 2016 site neutral payment rate cases associated with these LTCHs as being paid at the transitional blended payment rate. We believe that this approach is reasonable for the purpose of taking into account in our FY 2016 payment estimates given the fact that LTCHs whose cost reporting periods begin after October 1, 2015 will receive the LTCH PPS standard Federal payment rate as payment for all of their LTCH PPS cases, including their cases that would be categorized as site neutral payment rate cases, until the start of their next cost reporting period. Based on the fiscal year start dates recorded in the December update of the Provider Specific File, of the 418 LTCHs in our database of LTCH claims from the December 2014 update of the FY 2014 MedPAR files used for this proposed rule, the following percentages apply in the approach described above: 10.85 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the first quarter of FY 2016; 31.41 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the second quarter of FY 2016; 10.83 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the third quarter of FY 2016; and 46.91 percent of site neutral payment rate cases are from LTCHs whose cost reporting periods begin in the fourth quarter of FY 2016.
Using the approach described above to account for when LTCHs' first cost reporting period begins on or after October 1, 2015, and based on the applicable LTCH claims in our database from the December 2014 update of the FY 2014 MedPAR files, we estimate that site neutral payment rate HCO payments would be approximately 2.3 percent of total LTCH PPS payments for site neutral payment rate cases in FY 2016. Therefore, we are proposing to apply a budget neutrality factor of 0.976996 to all payments for site neutral payment rate cases in FY 2016 so that the estimated HCO payments payable to those cases do not result any increase in aggregate LTCH PPS payments, in accordance with proposed 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
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 proposed rule, based on the most recent data available, our estimate of 75 percent of the amount that would otherwise have been paid as Medicare DSH payments (under the methodology outlined in section 1886(r)(2) of the Act) would be adjusted to 63.69 percent of that amount to reflect the change in the percentage of individuals who are uninsured. The resulting amount would then be used to determine the amount of uncompensated care payments that will be made to eligible IPPS hospitals in FY 2016. In other words, Medicare DSH payments prior to the amendments made by the Affordable Care Act would be adjusted to 47.77 percent (the product of 75 percent and 63.69 percent) and the resulting amount would be used to calculate the uncompensated care payments to eligible hospitals. As a result, for FY 2016, we project that the reduction in the amount of Medicare DSH payments pursuant to section 1886(r)(1) of the Act, along with the payments for uncompensated care under section 1886(r)(2) of the Act, would result in overall Medicare DSH payments of 72.77 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 (that is, 25 percent + 47.77 percent = 72.77 percent).
We also are proposing that, consistent with our historical practice of using the most recent data available, if more recent data become available for the final rule, we would use such data to determine the percentage 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 used in the calculation of the “IPPS comparable amount” under § 412.529 and the “IPPS equivalent amount” under § 412.534 and § 412.536 for FY 2016. In this proposed rule, for FY 2016, we are proposing to establish that the calculation of the “IPPS comparable amount” under § 412.529 and the “IPPS equivalent amount” under § 412.534 and § 412.536 would include an applicable operating Medicare DSH payment amount that will be equal to 72.77 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.
Section 412.525 sets forth the adjustments to the LTCH PPS standard Federal rate. Under the new statutory 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 would be paid based on the LTCH PPS standard Federal payment rate (as discussed in section VII.B. of the preamble of this proposed rule). Under § 412.525(c), the proposed LTCH PPS standard Federal rate is adjusted to account for differences in area wages by multiplying the proposed 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 proposed rule and are available via the Internet). The proposed 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 proposed FY 2016 factors are shown in the chart in section V.D. of this Addendum) in accordance with § 412.525(b). In this proposed rule, we are proposing to establish an LTCH PPS standard Federal payment rate for FY 2016 of $41,883.93, as discussed in section V.A.2. of the Addendum to this proposed rule. We illustrate the methodology to adjust the proposed LTCH PPS standard Federal rate for FY 2016 in the following example:
To calculate the LTCH's total adjusted Federal prospective payment for this Medicare patient case in FY 2016, we computed the wage-adjusted proposed Federal prospective payment amount by multiplying the unadjusted proposed FY 2016 LTCH PPS standard Federal payment rate ($41,883.93) by the proposed labor-related share (62.2 percent) and the proposed wage index value (1.0295). This wage-adjusted amount was then added to the proposed nonlabor-related portion of the unadjusted proposed LTCH PPS standard Federal payment rate (37.8 percent; adjusted for cost of living, if applicable) to determine the adjusted proposed LTCH PPS standard Federal payment rate, which is then multiplied by the proposed MS-LTC-DRG relative weight (0.9071) to calculate the total adjusted proposed LTCH PPS standard Federal prospective payment for FY 2016 ($38,690.05). The table below illustrates the components of the calculations in this example.
This section lists the tables referred to throughout the preamble of this proposed 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 proposed rule, we are proposing 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
As discussed in sections II.G.3.e., II.G.10.a., II.G.11., and II.G.13. of the preamble of this proposed 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 Proposed 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 proposals. 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 proposed rule, we are not providing the hospital-level data as a table associated with this proposed 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 proposed 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 proposed rule are available only through the Internet on the CMS Web site at:
The following LTCH PPS tables for this FY 2016 proposed rule are available only through the Internet on the CMS Web site at
We have examined the impacts of this proposed 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 proposed rule is a major rule as defined in 5 U.S.C. 804(2). We estimate that the proposed 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 proposed payment changes in this proposed rule, would result in an estimated
Our operating impact estimate includes the proposed −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 proposed 1.9 percent hospital update to the standardized amount (which includes the estimated 2.7 percent market basket update less 0.6 percentage point for the proposed multifactor productivity adjustment and less 0.2 percentage point required under the Affordable Care Act). The estimates of proposed 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 proposed payment changes.
The analysis in this Appendix, in conjunction with the remainder of this document, demonstrates that this proposed 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 proposed rule would 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 proposed rule.
This proposed 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 proposed 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 proposed rule would 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 proposed 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 proposed 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 March 2015, there were 3,366 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 1,329 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 proposed rule. The impact of the proposed update and proposed policy changes to the LTCH PPS for FY 2016 is discussed in section I.J. of this Appendix.
As of March 2015, there were 99 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, 248 rehabilitation hospitals and 884 rehabilitation units, and approximately 430 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 proposed rule. The impacts of the proposed 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 first 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 2.7 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 0.6 percentage point for FY 2016) and a 0.2 percentage point reduction to the market basket update resulting in a proposed 1.9 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 proposed 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 2.7 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
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 proposed rule, we are announcing proposed policy changes and proposed payment rate updates for the IPPS for FY 2016 for operating costs of acute care hospitals. The proposed 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 0.3 percent compared to FY 2015. In addition to the applicable percentage increase, this amount reflects the proposed FY 2016 recoupment adjustment for documentation and coding described in section II.D. of the preamble of this proposed 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 proposed changes to each system. This section deals with the proposed 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 proposed rule. However, there are other proposed changes for which we do not have data available that will allow us to estimate the payment impacts using this model. For those proposed 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 proposed 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 proposed 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 proposed 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 proposed impact of payments under the capital IPPS, or the proposed 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 proposed application of the documentation and coding adjustment and the applicable percentage increase (including the proposed market basket update, the proposed 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 proposed changes to the relative weights and MS-DRG GROUPER.
• The effects of the proposed 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 proposed FY 2016 wage index.
• The combined effects of the proposed recalibration of the MS-DRG relative weights as required by section 1886(d)(4)(C) of the Act and the proposed wage index (including the updated wage data and the continued implementation of the new OMB labor market area delineations), including the proposed wage and recalibration budget neutrality factors.
• The effects of the geographic reclassifications by the MGCRB (as of publication of this proposed rule) that would be effective for FY 2016.
• The effects of the proposed rural floor and imputed floor with the application of the proposed 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 proposed 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 proposed FY 2016 policies relative to payments based on FY 2015 policies that include the applicable percentage increase of 1.9 percent (or 2.7 percent market basket update with a proposed reduction of 0.6 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 proposed 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 proposing 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 would receive an applicable percentage increase of 1.225 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 proposed payment changes for FY 2016 using a proposed 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.
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 would receive an applicable percentage increase of −0.125 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 proposed payment changes for FY 2016 using a proposed 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 proposed policy change, statutory or otherwise, is then added incrementally to this baseline, finally arriving at an FY 2016 model incorporating all of the proposed changes. This simulation allows us to isolate the effects of each proposed 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 proposed update to the standardized amount. In accordance with section 1886(b)(3)(B)(i) of the Act, we are proposing to update the standardized amounts for FY 2016 using a proposed applicable percentage increase of 1.9 percent. This includes our forecasted IPPS operating hospital market basket increase of 2.7 percent with a proposed reduction of 0.6 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 would receive a proposed update of 1.225 percent. This proposed 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 would receive an update of 0.55 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 would receive an update of −0.125 percent. Under section 1886(b)(3)(B)(iv) of the Act, the update to the hospital-specific amounts for SCHs also are equal to the applicable percentage increase, or 1.9 percent if the hospital submits quality data and is a meaningful EHR user. In addition, we are proposing to update the Puerto Rico-specific amount by an applicable percentage increase of 1.9 percent.
A second significant factor that affects the proposed 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 4.9 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 proposed rule) are reflected in the analyses below comparing our current estimates of FY 2015 payments per case to estimated proposed 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 proposed 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 3,366 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 2,530 hospitals located in urban areas included in our analysis. Among these, there are 1,390 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' proposed 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 2,479; 1,383; 1,096; and 887, respectively.
The next three groupings examine the impacts of the proposed 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 2,325 nonteaching hospitals in our analysis, 794 teaching hospitals with fewer than 100 residents, and 247 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 proposed changes on rural hospitals by special payment groups (SCHs, RRCs). There were 211 RRCs, 327 SCHs, and 125 hospitals that are both SCHs 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.
As discussed in section II.D. of the preamble of this proposed rule, this column includes the proposed hospital update, including the proposed 2.7 percent market basket update, the proposed reduction of 0.6 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 proposed 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 proposing to make a 1.1 percent update to the national standardized amount. This column also includes the proposed 1.9 percent update to the hospital-specific rates which includes the proposed 2.7 percent market basket update, the proposed reduction of 0.6 percentage point for the multifactor productivity adjustment, and the 0.2 percentage point reduction in accordance with the Affordable Care Act.
Overall, hospitals would experience a 1.1 percent increase in payments primarily due to the combined effects of the proposed hospital update and the proposed documentation and coding adjustment on the national standardized amount and the proposed hospital update to the hospital-specific rate. Hospitals that are paid under the hospital-specific rate, namely SCHs, would experience a 1.9 percent increase in payments; therefore, hospital categories with SCHs paid under the hospital-specific rate would experience increases in payments of more than 1.1 percent.
Column 3 shows the effects of the proposed 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 proposed 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 proposed rule.
The “All Hospitals” line in Column 3 indicates that proposed changes due to the MS-DRGs and relative weights would result in a 0.0 percent change in payments with the application of the proposed recalibration budget neutrality factor of 0.998335 on to the standardized amount. Hospital categories that generally treat more surgical cases than medical cases would experience increases in their payments under the proposed relative weights. Rural hospitals would 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 would experience an increase in payments by 0.1 percent as those hospitals treat more surgical cases than medical cases.
Column 4 shows the impact of proposed updated wage data using FY 2012 cost report data, with the application of the proposed 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 proposed 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 proposed updated wage data using the FY 2012 cost report data and the OMB labor market area delineations on hospital payments is isolated in Column 4 by holding the other payment parameters constant in this simulation. That is, Column 4 shows the proposed 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 new OMB delineations, also having a 100-percent occupational mix adjustment applied, while holding other proposed payment parameters such as use of the Version 33 MS-DRG GROUPER constant. The proposed 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 proposed 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 proposed FY 2016 wage budget neutrality factor is 0.998681, and the proposed overall payment change is 0.0 percent.
Column 4 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 proposed wage budget neutrality adjustment, would lead to no change for all hospitals as shown in Column 4.
In looking at the wage data itself, the proposed national average hourly wage increased 1.02 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 1.02 percent increase in average hourly wage. Of the 3,302 hospitals with wage data for both FYs 2015 and 2016, 1,673 or 50.7 percent would experience an average hourly wage increase of 1.02 percent or more.
The following chart compares the shifts in wage index values for hospitals due to proposed changes in the average hourly wage data for FY 2016 relative to FY 2015. Among urban hospitals, 9 would experience a decrease of 10 percent or more, and 13 urban hospitals would experience an increase of 10 percent or more. One hundred and fifty-four urban hospitals would experience an increase or decrease of at least 5 percent or more but less than 10 percent. Among rural hospitals, 9 would experience a decrease of at least 5 percent but less than 10 percent, but no rural hospitals would experience an increase of greater than or equal to 5 percent but less than 10 percent. No rural hospital would experience increases or decreases of 10 percent or more. However, 806 rural hospitals would experience increases or decreases of less than 5 percent, while 2,305 urban hospitals would experience increases or decreases of less than 5 percent. Six urban hospitals would not experience a change in their wage index, and all rural hospitals would experience a change in their proposed wage indexes. These figures reflect proposed changes in the “pre-reclassified, occupational mix-adjusted wage index,” that is, the proposed wage index before the application of proposed geographic reclassification, the proposed rural and imputed floors, the proposed out-migration adjustment, and other proposed wage index exceptions and adjustments. (We refer readers to sections
The following chart shows the projected impact of proposed 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 proposed wage budget neutrality factor of 0.998681 and a proposed recalibration budget neutrality factor of 0.998335 (which is also applied to the proposed Puerto Rico-specific standardized amount and the proposed hospital-specific rates). The product of the two proposed budget neutrality factors is the proposed cumulative wage and recalibration budget neutrality factor. The proposed cumulative wage and recalibration budget neutrality adjustment is 0.997018, 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 proposed rule, we are estimating that the proposed changes in the MS-DRG relative weights and proposed updated wage data with wage and budget neutrality applied would 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 proposed changes in Column 6 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 proposing to apply an adjustment of 0.988486 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 proposed rule). Geographic reclassification generally benefits hospitals in rural areas. We estimate that the geographic reclassification would increase payments to rural hospitals by an average of 1.4 percent. By region, all the rural hospital categories would experience increases in payments due to MGCRB reclassifications.
New Table 2 listed in section VI. of the Addendum to this proposed rule and available via the Internet on the CMS Web site reflects the proposed 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 proposed 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 proposing to extend 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 would be able to receive an imputed floor. In New Jersey, 16 out of 64 hospitals would receive the imputed floor, and 4 out of 11 hospitals in Rhode Island would receive the imputed floor for FY 2016. For FY 2016, no hospitals would 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 proposed FY 2016 rural floor budget neutrality factor to be applied to the wage index of 0.990135, which would reduce proposed wage indexes by 0.99 percent.
Column 7 shows the projected impact of the proposed 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 proposed post-reclassification FY 2016 wage index of providers before the proposed rural floor and imputed floor adjustment and the proposed post-reclassification FY 2016 wage index of providers with the proposed 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) would experience a decrease in payments due to the
We estimate that 383 hospitals would benefit from the rural and imputed floors in FY 2016, while the remaining 2,983 IPPS hospitals in our model would have their wage index reduced by the proposed rural floor budget neutrality adjustment of 0.990135 (or 0.99 percent). We project that, in aggregate, rural hospitals would experience a 0.3 percent decrease in payments as a result of the application of the proposed 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 budget neutral overall. We project hospitals located in urban areas would experience no change in payments because increases in payments by hospitals benefitting from the rural floor offset decreases in payments by nonrural floor urban hospitals whose wage index is downwardly adjusted by the rural floor budget neutrality factor. Urban hospitals in the New England region would experience a 1.6 percent increase in payments primarily due to the application of the proposed rural floor in Massachusetts. Thirty-nine urban providers in Massachusetts are expected to receive the rural floor wage index value, including the proposed rural floor budget neutrality of 0.990135, increasing payments overall to Massachusetts by an estimated $98 million. We estimate that Massachusetts hospitals would receive approximately a 3.1 percent increase in IPPS payments due to the application of the proposed rural floor in FY 2016.
Urban Puerto Rico hospitals are expected to experience a 0.1 percent change in payments as a result of the application of the proposed Puerto Rico rural floor with the application of the proposed Puerto Rico rural floor budget neutrality adjustment. We are proposing to apply a rural floor budget neutrality factor to the Puerto Rico-specific wage index of 0.987626 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 would experience a 0.1 percent change in payments due to the application of the proposed rural floor with rural floor budget neutrality.
There are 16 hospitals out of the 64 hospitals in New Jersey that would benefit from the proposed extension of the imputed floor and would receive the proposed imputed floor wage index value under the OMB labor market area delineations, including the proposed rural floor budget neutrality of 0.990135 which we estimate would increase payments to those imputed floor hospitals by $20 million (overall, the State would not see an increase in payments due to the other hospitals in the State that would experience decreases in payments due to the proposed rural floor budget neutrality adjustment). Four Rhode Island hospitals would benefit from the proposed imputed rural floor calculated under the alternative methodology and would receive an additional $4.5 million (overall, the State would receive an additional $2.6 million). No hospitals would benefit from the proposed 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 proposed imputed rural floor.
Column 7 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 proposed 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 proposed 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 0.999995.
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 proposed 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 would receive the proposed rural floor or imputed floor wage index for FY 2016. Column 3 displays the percentage of total payments each State would receive or contribute to fund the rural floor and imputed floor with national budget neutrality. The column compares the proposed post-reclassification FY 2016 wage index of providers before the proposed rural floor and imputed floor adjustment and the proposed post-reclassification FY 2016 wage index of providers with the proposed rural floor and imputed floor adjustment. Column 4 displays the estimated payment amount that each State would gain or lose due to the application of the proposed 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 47 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 proposed 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 $58 million. Rural and urban hospitals located in the West North Central region would 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 325 providers that would 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 would experience a 1.4 percent and 0.5 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 would be approximately $39 million.
Column 9 shows our estimate of the proposed changes in payments per discharge from FY 2015 and FY 2016, resulting from all proposed changes reflected in this proposed rule for FY 2016. It includes combined effects of the previous columns in the table.
The proposed average increase in payments under the IPPS for all hospitals is approximately 0.3 percent for FY 2016 relative to FY 2015. As discussed in section II.D. of the preamble of this proposed rule, this column includes the proposed 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 proposed annual hospital update of 1.9 percent to the national standardized amount. This proposed annual hospital update includes the 2.7 percent market basket update, the proposed reduction of 0.6 percentage point for the multifactor productivity adjustment, and the 0.2 percentage point reduction under section 3401 of the Affordable Care Act. Hospitals paid under the hospital-specific rate would receive a 1.9 percent hospital update described above. As described in Column 2, the proposed annual hospital update with the proposed documentation and coding recoupment adjustment for hospitals paid under the national standardized amount combined with the proposed annual hospital update for hospitals paid under the hospital-specific rate would result in a 1.1 percent increase in payments in FY 2016 relative to FY 2015. The impact of moving from our estimate of FY 2015 outlier payments, 4.9 percent, to the proposed estimate of FY 2016 outlier payments, 5.1 percent, would result in an increase of 0.2 percent in FY 2016 payments relative to FY 2015. There also might be interactive effects among the various factors comprising the payment system that we are not able to isolate. For these reasons, the proposed values in Column 9 may not equal the sum of the proposed estimated percentage changes described above.
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 0.3 percent for FY 2016. Hospitals in urban areas would experience a 0.3 percent increase in payments per discharge in FY 2016 compared to FY 2015. Hospital payments per discharge in rural areas are estimated to decrease by 0.3 percent in FY 2016.
Table II presents the projected impact of the proposed 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 proposed 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 proposed changes presented in Table I. The proposed estimated percentage changes shown in the last column of Table II equal the proposed estimated percentage changes in average payments per discharge from Column 9 of Table I.
In addition to those proposed policy changes discussed above that we are able to model using our IPPS payment simulation model, we are proposing to make various other changes in this proposed rule. Generally, we have limited or no specific data available with which to estimate the impacts of these proposed changes. Our estimates of the likely impacts associated with these other proposed changes are discussed below.
In section II.F. of the preamble of this proposed 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
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 proposed rule, it is possible to have two severity levels where the HAC does not affect the MS-DRG assignment or for an MS-DRG not to have severity levels. In either of these circumstances, the case will continue to be assigned to the higher paying MS-DRG and there will be no Medicare savings from that case.
As discussed in section II.F. of the preamble of this proposed rule, for FY 2016, we are not proposing to add or remove 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 proposed rule, we discuss the nine technologies for which we received applications for add-on payments for new medical services and technologies for FY 2016, as well as the status of the new technologies that were approved to receive new technology add-on payments in FY 2015. As explained in the preamble to this proposed 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.5. of the preamble of this proposed rule, we have not yet determined whether any of the nine technologies for which we received applications for consideration for new technology add-on payments for FY 2016 will meet the specified criteria. Consequently, it is premature to estimate the potential payment impact of these nine technologies for any potential new technology add-on payments for FY 2016. We note that if any of the nine technologies are found to be eligible for new technology add-on payments for FY 2016, in the FY 2016 IPPS/LTCH PPS final rule, we would discuss the estimated payment impact for FY 2016.
In section II.I.4. of the preamble of this proposed rule, we are proposing to discontinue new technology add-on payments for Voraxaze®, the Zenith® F.Graft, and the Zilver® PTX® Drug Eluting Peripheral Stent for FY 2016 because these technologies will have been on the U.S. market for 3 years. We also are proposing to continue making new technology add-on payments for Kcentra
As discussed in section IV.D. of the preamble of this proposed 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 otherwise formerly would have been paid as Medicare DSH payments that is reduced to reflect changes in the percentage of individuals under age 65 who are uninsured and additional statutory adjustments, is available to make additional payments to each hospital that qualifies for Medicare DSH payments. 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'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 (that is, Factor 3). The reduction to Medicare DSH payments due to the uncompensated care payment methodology is not budget neutral.
In this FY 2016 IPPS/LTCH PPS proposed rule, the amount to be distributed as uncompensated care payments to DSH eligible hospitals is 75 percent of what otherwise would have been paid for Medicare DSH payment adjustments adjusted by a proposed Factor 2 of 63.69 percent; for FY 2015, the uncompensated care payment was 75 percent of what otherwise would have been paid for Medicare DSH payment adjustments adjusted by a Factor 2 of 76.19 percent. In addition, for FY 2016, we are proposing to use data from the more recent of hospitals' full year 2012 or full year 2011 cost reports from the March 2015 update of the HCRIS database, 2012 cost report data submitted to CMS by IHS hospitals, and the most recent data (which we anticipate to be 2013 data at the time we are developing the final rule) on SSI ratios to calculate Factor 3. That is, we are proposing to hold constant the 2012 and 2011 cost report years used to obtain Medicaid days in the FY 2015 IPPS/LTCH PPS final rule but to use updated cost report data from a later extract of the HCRIS, to continue to use the 2012 cost report data submitted to CMS by IHS hospitals, and to use the most recent SSI ratios to calculate Factor 3 for FY 2016.
To estimate the impact of the combined effect of proposed changes to reductions in the uninsured and additional statutory adjustments (Factor 2) and Medicaid patient days (a component of Factor 3) on the calculation of Medicare DSH payments, we compared DSH payments estimated in the FY 2015 IPPS/LTCH PPS final rule to proposed DSH payments based on proposals in this FY 2016 IPPS/LTCH PPS proposed rule.
For FY 2015, for each hospital, we calculated the sum of (a) 25 percent of the estimated amount of what would have been paid as Medicare DSH in FY 2015 in the
For FY 2016, we calculated the sum of (a) 25 percent of the estimated amount of what would be paid as Medicare DSH payments in FY 2016 absent section 3133 and (b) 75 percent of the estimated amount of what would have been paid as Medicare DSH payments absent section 3133, adjusted by a Factor 2 of 63.69 percent, as proposed, and multiplied by a Factor 3 calculated using the more recent of the hospitals' full year 2012 or full year 2011 cost report from the December 2014 update of the HCRIS database, 2012 cost report data submitted to CMS by IHS hospitals, and 2012 SSI ratios. We note that we used the most recent data available to estimate Factor 3 for FY 2016, as some of the data sources to be used under our proposed changes are not yet available.
Our analysis included 2,234 hospitals projected to receive Medicare DSH payments in FY 2016 and did not include hospitals in the Rural Community Hospital Demonstration, hospitals that departed the Medicare program as of December 31, 2014, Maryland hospitals, SCHs that are expected to be paid based on their hospital-specific rates, and hospitals that are not included in 2010 MedPAR file (for example, new hospitals). 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 these proposed changes across a consistent universe of estimated FY 2016 DSHs, 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 two components: (1) A reduction in the percentage of individuals who are uninsured, from 13.75 percent in the FY 2015 IPPS/LTCH PPS final rule to 11.5 percent in this FY 2016 proposed rule; and (2) changes in the number of Medicaid days for 2012 (or 2011) obtained from each hospitals' March 2014 HCRIS update of their Medicare cost report (used in the FY 2015 IPPS/LTCH PPS final rule) to the Medicaid days reported in the December 2014 HCRIS update (used in this FY 2016 proposed 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 is hospital-specific. For purposes of this proposed rule, the SSI ratios used in this analysis are the same 2012 SSI ratios used in the FY 2015 IPPS/LTCH PPS final rule and correction notice because the 2013 ratios are not yet available.
The impact analysis table above shows that across all projected disproportionate share hospitals, FY 2016 DSH payments, including both empirically justified DSH payments and uncompensated care payments, are estimated at approximately $9.738 billion, or a decrease of 11.4 percent from FY 2015 DSH payments ($10.993 billion). This is solely the result of a proposed reduction in Factor 2. As a result, we project that proposed payments for FY 2016 to hospitals paid under the IPPS would be reduced overall by 1.0 percent as compared to overall payments to hospitals paid under the IPPS in FY 2015.
Differences in the percent reduction in DSH payments were relatively small across most hospital categories because the overall average percent change in Medicaid days was relatively small compared to the overall percent reduction in the estimate of the percentage of individuals who are uninsured. Variation in the reductions in DSH payments were influenced by the change in the number of Medicaid days (the number of Medicaid days increased by 0.453 percent for all included hospitals from the FY 2015 IPPS/LTCH PPS final rule to this FY 2016 IPPS/LTCH PPS proposed rule) and each hospital characteristic group's relative proportion of Medicaid to SSI days. We note that SSI days used in this analysis have not changed since the FY 2015 IPPS/LTCH PPS final rule; however, we anticipate using 2013 SSI days for the FY 2016 IPPS/LTCH PPS final rule. Rural hospitals are expected to experience a slightly larger decrease compared to urban hospitals, as defined by geographic location or payment classification. Among rural and urban hospitals, small hospitals (0 to 99 beds) are expected to receive greater reductions in DSH payments compared to their larger counterparts, respectively. By region, urban hospitals located in Puerto Rico are expected to receive disproportionately larger reductions in DSH payments, while Pacific urban hospitals are expected to receive disproportionately smaller reductions in DSH payments. Rural hospitals located in the Mountain region also are projected to receive larger reductions in DSH payments, while rural hospitals in the Pacific region are projected to receive smaller reductions relative to the universe of projected FY 2016 DSHs. Although urban hospitals in Puerto Rico are projected to receive disproportionately larger reductions in DSH payments, they are still expected to receive more in Medicare DSH and uncompensated care payments under section 3133 than if they were paid the amount they previously would have received under the former statutory formula for Medicare DSH payments. Nonteaching hospitals are projected to receive a larger reduction in DSH payments than both small and large teaching hospitals. Government hospitals are projected to receive larger reductions in DSH payments than not-for-profit hospitals, but smaller reductions compared to for-profit hospitals. In addition, hospitals with higher Medicare utilization are projected to receive smaller reductions in DSH payments relative to hospitals with lower Medicare utilization.
In section IV.E. of the preamble of this proposed rule, we discuss our proposals 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 proposed 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 proposed rule, we estimate that 2,655 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
In section IV.F. of the preamble of this proposed 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 $1.49 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 December 2014 update to the FY 2014 MedPAR file.
The proposed 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 December 2014 update to the FY 2014 MedPAR file. The proxy adjustment factors can be found in Table 16 associated with this proposed 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 would receive an increase in base operating DRG payment amount is slightly higher than the number of hospitals that would 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 would have an increase, on average, in the base operating DRG payment amount. Urban hospitals in the Middle Atlantic region would receive an average decrease in the base operating payment amount. Among rural hospitals, those in all regions would have an increase, on average, in base operating DRG payment amounts.
On average, hospitals that receive a higher percent of DSH payments would receive decreases in the base operating DRG payment amount. With respect to hospitals' Medicare utilization (MCR), those hospitals with an MCR above 65 percent would have the largest increase, on average, in base operating DRG payment amounts.
Nonteaching hospitals would have an average increase, and teaching hospitals would 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 the 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 will be used for the updated impact analysis in that final rule.
In section IV.G. of the preamble of this proposed rule, we discuss the proposed 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 proposing 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 below are a simulation of the proposed FY 2016 HAC Reduction Program using historical data. This table and analysis will be revised with updated available data in the FY 2016 IPPS/LTCH PPS final rule. We note that, as described earlier in this proposed rule, because scores will undergo 30-day review and correction by the hospitals that will not conclude until after the publication of the final rule, we will not provide hospital-level data or a hospital-level payment impact in conjunction with the FY 2016 IPPS/LTCH PPS proposed or final rule.
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 the following: the AHRQ Patient Safety Indicator (PSI) 90 measure results based on Medicare 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 Colon and Abdominal Hysterectomy Surgical Site Infection (SSI) measure results, the following was used: The standardized infection ratios (SIRs) calculated with hospital surveillance data reported to the National Healthcare Safety Network (NHSN) for infections occurring between January 2012 and December 2013. We used the FY 2015 Final Impact File to analyze the results by hospital characteristic.
Of the 3,317 hospitals included in this analysis, 3,277 hospitals had information for geographic location, region, bed size, DSH percent, and teaching status; 3,233 had information for ownership; and 3,159 had information for Medicare days as a percent of total inpatient days (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 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.
The third column in the table indicates the percent of hospitals in each category of the specified characteristic. For example, within geographic region, 40.6 percent of hospitals (or 1,329 hospitals) are characterized as large urban, 33.9 percent of hospitals (or 1,110 hospitals) are characterized as other urban, and 25.6 percent of hospitals (or 838 hospitals) are characterized as rural. The fifth column in the table 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 regard to geographic location, we estimate 20.8 percent of hospitals (or 277 hospitals) characterized as large urban would be subject to a payment reduction; 20.1 percent of hospitals (or 223 hospitals) characterized as other urban would be subject to a payment reduction; and 15.9 percent of hospitals (or 133 hospitals) characterized as rural would be subject to a payment reduction.
With regard to geographic location of urban hospitals by bed size, 17.4 percent of hospitals (or 108 hospitals) characterized as urban hospitals with bed size of 1-99 beds would be subject to a payment adjustment; 17.5 percent of hospitals (or 129 hospitals) characterized as urban hospitals with bed size of 100-199 beds would be subject to a payment adjustment; 19.1 percent of hospitals (or 85 hospitals) characterized as urban hospitals with bed size of 200-299 beds would be subject to a payment adjustment; 22.9 percent of hospitals (or 62 hospitals) characterized as urban hospitals with bed size of 300-399 beds would be subject to a payment adjustment; 33.1 percent of hospitals (or 51 hospitals) characterized as urban hospitals with bed size of 400-499 beds would be subject to a payment adjustment; and 30.8 percent of hospitals (or 65 hospitals) characterized as urban hospitals with bed size of 500 or more beds would be subject to a payment adjustment.
With regard to geographical location of rural hospitals by bed size, 19.6 percent of hospitals (or 64 hospitals) characterized as rural hospitals with bed size of 1-49 beds would be subject to a payment adjustment; 14.0 percent of hospitals (or 42 hospitals)
With regard to region of urban hospitals, 29.6 percent of hospitals (or 34 hospitals) characterized as urban in the New England region would be subject to a payment adjustment; 27.8 percent of hospitals (or 88 hospitals) characterized as urban in the Mid-Atlantic region would be subject to a payment adjustment; 18.7 percent of hospitals (or 75 hospitals) characterized as urban in the South Atlantic region would be subject to a payment adjustment; 17.0 percent of hospitals (or 66 hospitals) characterized as urban in the East North Central region would be subject to a payment adjustment; 15.5 percent of hospitals (or 23 hospitals) characterized as urban in the East South Central region would be subject to a payment adjustment; 19.9 percent of hospitals (or 32 hospitals) characterized as urban in the West North Central region would be subject to a payment adjustment; 15.4 percent of hospitals (or 57 hospitals) characterized as urban in the West South Central region would be subject to a payment adjustment; 25.6 percent of hospitals (or 42 hospitals) characterized as urban in the Mountain region would be subject to a payment adjustment; and 22.2 percent of hospitals (or 83 hospitals) characterized as urban in the Pacific region would be subject to a payment adjustment.
With regard to region of rural hospitals, 40.0 percent of hospitals (or 8 hospitals) characterized as rural in the New England region would be subject to a payment adjustment; 16.4 percent of hospitals (or 9 hospitals) characterized as rural in the Mid-Atlantic region would be subject to a payment adjustment; 12.6 percent of hospitals (or 16 hospitals) characterized as rural in the South Atlantic region would be subject to a payment adjustment; 14.9 percent of hospitals (or 17 hospitals) characterized as rural in the East North Central region would be subject to a payment adjustment; 8.9 percent of hospitals (or 14 hospitals) characterized as rural in the East South Central region would be subject to a payment adjustment; 23.1 percent of hospitals (or 24 hospitals) characterized as rural in the West North Central region would be subject to a payment adjustment; 16.5 percent of hospitals (or 27 hospitals) characterized as rural in the West South Central region would be subject to a payment adjustment; 18.6 percent of hospitals (or 13 hospitals) characterized as rural in the Mountain region would be subject to a payment adjustment; and 19.2 percent of hospitals (or 5 hospital) characterized as rural in the Pacific region would be subject to a payment adjustment.
With regard to the DSH percent characteristic, 18.2 percent of hospitals (or 289 hospitals) characterized in the 0-24 DSH percent would be subject to a payment adjustment; 18.8 percent of hospitals (or 258 hospitals) characterized in the 25-49 DSH percent would be subject to a payment adjustment; 26.8 percent of hospitals (or 41 hospitals) characterized in the 50-64 DSH percent would be subject to a payment adjustment; and 27.4 percent of hospitals (or 45 hospitals) characterized in the 65 and over DSH percent would be subject to a payment adjustment.
With regard to the teaching status characteristic, 16.2 percent of hospitals (or 366 hospitals) characterized as nonteaching would be subject to a payment adjustment; 21.4 percent of hospitals (or 165 hospitals) characterized as fewer than 100 residents would be subject to a payment adjustment; and 42.3 percent of hospitals (or 102 hospitals) characterized as 100 or more residents would be subject to a payment adjustment.
With regard to the urban teaching and DSH characteristic, 28.4 percent of hospitals (or 235 hospitals) characterized as teaching and DSH would be subject to a payment adjustment; 18.9 percent of hospitals (or 24 hospitals) characterized as teaching and no DSH would be subject to a payment adjustment; 15.2 percent of hospitals (or 161 hospitals) characterized as no teaching and DSH would be subject to a payment adjustment; 18.7 percent of hospitals (or 80 hospitals) characterized as no teaching and no DSH would be subject to a payment adjustment; and 15.9 percent of hospitals (or 133 hospitals) characterized as nonurban would be subject to a payment adjustment.
With regard to the type of ownership characteristic, 19.8 percent of hospitals (or 371 hospitals) characterized as voluntary would be subject to a payment adjustment; 15.1 percent of hospitals (or 128 hospitals) characterized as proprietary would be subject to a payment adjustment; and 22.4 percent of hospitals (or 115 hospitals) characterized as government would be subject to a payment adjustment.
With regard to the MCR percent characteristic, 27.4 percent of hospitals (or 119 hospitals) characterized in the 0-24 MCR percent would be subject to a payment adjustment; 19.1 percent of hospitals (or 386 hospitals) characterized in the 25-49 MCR percent would be subject to a payment adjustment; 14.4 percent of hospitals (or 84 hospitals) characterized in the 50-64 MCR percent would be subject to a payment adjustment; and 7.0 percent of hospitals (or 8 hospitals) characterized in the 65 and over MCR percent would be subject to a payment adjustment.
In section IV.H. of the preamble of this proposed rule, we discuss 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. We are proposing to limit the election of the simplified cost allocation methodology because the allocation of the costs of capital-related movable equipment using this methodology yields less precise calculated CCRs. Furthermore, we believe that advances in technology have reduced the cost of recordkeeping, which has allowed hospitals to maintain accurate statistical data and afforded them the flexibility to change to a more precise allocation methodology. Although these proposed changes would impact some small rural hospitals, including CAHs, the vast majority of hospitals do not use the simplified cost allocation methodology. Based on FY 2013 data, only 9 of 1,269 CAHs and 23 of 4,389 hospitals other than CAHs used the simplified cost allocation methodology. In addition, when the simplified cost allocation methodology was implemented in 1996, it was expected that it also would likely result in reduced Medicare payments to hospitals. We believe that the proposed changes would not have a significant impact on the operations of a substantial number of small rural hospitals. We also do not believe that the proposed changes would affect beneficiary access to care, as affected hospitals will continue to be paid for services provided to Medicare beneficiaries.
We are inviting public comments on this analysis of impact.
In section IV.I. of the preamble of this proposed rule, for FY 2016, we discuss our implementation of section 410A of Public Law 108-173, as amended, which requires the Secretary to conduct a demonstration that would modify reimbursement for inpatient services for up to 30 rural community hospitals. Section 410A(c)(2) 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. As discussed in section IV.I. of the preamble of this proposed rule, in the IPPS final rules for each of the previous 11 fiscal years, we have estimated the additional payments made by the program for each of the participating hospitals as a result of the demonstration. In order to achieve budget neutrality, we are proposing to adjust the national IPPS rates by an amount sufficient to account for the added costs of this demonstration. In other words, we are proposing to apply budget neutrality across the payment system as a whole rather than across the participants of this demonstration. 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.
We are proposing to adjust the national IPPS rates according to the methodology set forth in section IV.I.2. of the preamble of this proposed 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 are proposing that the financial experience of these hospitals not be included in the estimated demonstration cost for FY 2016. Of the 15 hospitals that were selected in 2011 as a result of the expansion of the demonstration under the Affordable Care Act, 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 are proposing to 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 proposed budget neutrality offset amount used to determine the proposed adjustment to the national IPPS rates to account for estimated demonstration costs for FY 2016 for these 15 hospitals is $26,195,949. In addition, in this proposed rule, we are proposing to subtract from the budget neutrality offset amount for FY 2016 the amount by which the budget neutrality offset amount that was finalized in the FY 2009 IPPS/LTCH PPS final rule exceeds the actual costs of the demonstration for FY 2009 (as shown in the finalized cost reports for cost reporting periods beginning in FY 2009) ($8,457,452). Therefore, the resulting total ($17,738,497) is the amount for which a proposed adjustment to the IPPS rates for FY 2016 would be calculated.
In section IV.J. of the preamble to this proposed rule, we discuss proposed 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 proposed 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 proposing to make any changes in these payment policies in this FY 2016 proposed rule. We are proposing to include two proposed 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 proposals to revise the MS-DRG classifications for FY 2016. Specifically, we are proposing that two proposed new MS-DRGs would 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 proposed 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 proposed 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 December 2014 update of the FY 2014 MedPAR file and the December 2014 update of the Provider-Specific File (PSF) that is used for payment purposes. Although the analyses of the proposed changes to the capital prospective payment system do not incorporate cost data, we used the December 2014 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 proposed 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 December 2014 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
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 11.2 million in FY 2015 and 11.3 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 proposed rule, the proposed update is 1.3 percent for FY 2016.
• In addition to the proposed FY 2016 update factor, the proposed FY 2016 capital Federal rate was calculated based on a proposed GAF/DRG budget neutrality adjustment factor of 0.9976 and a proposed outlier adjustment factor of 0.9357. As discussed in section VI.C. of the preamble of this proposed rule, we are not proposing to make 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 proposed changes for FY 2016 on total capital payments per case, using a universe of 3,366 hospitals. As described above, the individual hospital payment parameters are taken from the best available data, including the December 2014 update of the FY 2014 MedPAR file, the December 2014 update to the PSF, and the most recent cost report data from the December 2014 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 proposed 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 proposed total percentage change in payments from FY 2015 to FY 2016. The proposed change represented in Column 4 includes the proposed 1.3 percent update to the capital Federal rate and other proposed 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, proposed 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 proposed approximately 0.8 percent increase in the capital Federal rate for FY 2016 as compared to the FY 2015 capital Federal rate and, to a lesser degree, proposed changes to the MS-DRG reclassifications and recalibrations and proposed 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 proposed rule.) Overall, across all hospitals, the proposed changes to the GAFs are expected to slightly increase capital payments. However, regionally, the effects of the proposed changes to the GAFs on capital payments are consistent with the projected changes in payments due to proposed changes in the wage index (and proposed policies affecting the wage index) as shown in Table I in section I.G. of this Appendix.
The increase in capital payments per case due to the effects of proposed 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 proposed changes in outlier payments. However, most of the urban and rural areas would experience an offset to the projected increase in capital payments per case due to the effects of proposed changes to the GAFs.
The net impact of these proposed changes is an estimated 2.0 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) would 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 2.2 percent, while hospitals in rural areas, on average, are expected to experience a 0.9 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 1.9 percent. The primary factor contributing to the difference in the proposed projected increase in capital IPPS payments per case for urban hospitals as compared to rural hospitals is the proposed 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 proposed 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 proposed 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 2.7 percent increase for the Pacific urban region to a 1.5 percent increase for the East South Central and New England urban regions, and a 0.5 percent increase for Puerto Rico. For rural regions, the Pacific rural region is projected to experience the largest increase in capital IPPS payments per case of 1.8 percent; the Middle Atlantic rural region is projected to experience the smallest increase in capital IPPS payments per case of 0.3 percent; and the West South Central rural region is projected to have no change in capital payments per case in FY 2016 compared to FY 2015 payments per case. In most urban and rural regions, proposed changes in the GAFs contribute to only a small projected increase in capital payments, for example, proposed changes in the GAFs are a major factor for the West South Central rural region, which is not expected to experience any increase in capital payments per case in FY 2016 compared to FY 2015. However, the proposed changes in the GAFs have the opposite effect for the Pacific urban and 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 proposed increase in capital payments for voluntary and proprietary hospitals is estimated to be 1.9 percent. For government hospitals, the proposed increase is estimated to be 2.1 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 proposed rule for FY 2016, we show the proposed average capital payments per case for reclassified hospitals for FY 2016. Urban reclassified hospitals are expected experience an increase in capital payments of 2.4 percent; urban nonreclassified hospitals are expected to experience an increase in capital payments of 1.9 percent. The estimated percentage increase for rural reclassified hospitals is 1.3 percent, and for rural nonreclassified hospitals, the estimated percentage increase is 0.8 percent.
In section VII. of the preamble of this proposed rule and section V. of the Addendum to this proposed rule, we set forth the proposed annual update to the payment rates for the LTCH PPS for FY 2016. In the preamble of this proposed rule, we specify the statutory authority for the proposed provisions that are presented, identify those proposed policies, and present rationales for our proposed decisions as well as alternatives that were considered. In this section of Appendix A to this proposed rule, we discuss the impact of the proposed changes to the payment rate, factors, and other payment rate policies related to the LTCH PPS that are presented in the preamble of this proposed rule in terms of their estimated fiscal impact on the Medicare budget and on LTCHs.
There are 418 LTCHs included in this impacts analysis, which includes data for 78 nonprofit (voluntary ownership control) LTCHs, 326 proprietary LTCHs, and 14 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 and the LTCHs that are paid in accordance with demonstration projects, consistent with the development of the proposed FY 2016 MS-LTC-DRG relative weights (discussed in section VII.C.3.c. of the preamble of this proposed rule)). In the impact analysis, we used the proposed payment rate, factors, and policies presented in this proposed rule, including the proposed 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 proposed rule), the proposed 1.9 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 proposed LTCH PPS market basket and the reductions required by sections 1886(m)(3) and (m)(4) of the Act), the proposed update to the MS-LTC-DRG classifications and relative weights for the LTCH PPS standard Federal payment rate cases, the proposed 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 proposed change in payments for FY 2016.
Under the new statutory dual-rate LTCH PPS 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 proposed rule, we are proposing to provide payment 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. In addition, consistent with the statute, we are proposing 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 proposals, there would be 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 proposed rule, the transitional payment amount for site neutral payment rate cases is a blended payment rate, which would be calculated as 50 percent of the applicable site neutral payment rate amount for the discharge as determined under proposed 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 418 LTCHs in our database that were considered in the analyses used for this proposed rule, we estimate that overall LTCH PPS payments in FY 2016 would decrease by approximately 4.6 percent (or about $251 million). This projection takes into account estimated payments for LTCH cases that would have met the new statutory 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 statutory 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 proposed approach, applied to the FY 2014 data that were used for the analyses in this proposed 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 proposed transitional blended payment rate.
Based on the FY 2014 LTCH cases that were used for the analyses in this proposed 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 proposed transitional blended payment rate and other proposed 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 14.3 percent (or about $293 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 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 would increase approximately 1.2 percent (or approximately $42 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 proposed 1.9 percent annual update to the LTCH PPS standard Federal payment rate for FY 2016 (discussed in section V.A. of the Addendum to this proposed rule) and an estimated decrease in HCO payments for these cases.
Based on the 418 LTCHs that were represented in the FY 2014 LTCH cases that were used for the analyses in this proposed rule, we estimate that aggregate FY 2016 LTCH PPS payments would be approximately $5.169 billion, as compared to estimated aggregate FY 2015 LTCH PPS payments of approximately $5.420 billion, resulting in an estimated overall decrease in LTCH PPS payments of approximately $251 million. Because the combined distributional effects and estimated payment changes exceed $100 million, this proposed rule is a major economic rule. We note that this estimated $251 million decrease in LTCH PPS payments in FY 2016 (which includes estimated payments for LTCH PPS standard Federal payment rate cases and site neutral payment rate cases) does not reflect changes in LTCH admissions or case-mix intensity, which would also affect the overall payment effects of what is proposed in this rule.
The LTCH PPS standard Federal payment rate for FY 2015 is $41,043.71. For FY 2016, we are proposing to establish a LTCH PPS standard Federal payment rate of $41,883.93, which reflects the proposed 1.9 percent annual update to the LTCH PPS standard Federal payment rate and the proposed area wage budget neutrality factor of 1.001444 to ensure that the proposed 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 proposing to establish a LTCH PPS standard Federal payment rate of $41,061.87. This proposed reduced LTCH PPS standard Federal payment rate reflects the proposed 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 proposed 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, $41,034.71).
Table IV (column 6) shows that the estimated change attributable solely to the proposed annual update to the LTCH PPS standard Federal payment rate is projected to result in an increase of 1.6 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 proposed LTCH PPS payments to LTCH PPS standard Federal payment rate cases of 1.6 percent shown in column 6 of Table IV also includes estimated payments for SSO cases that are 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 proposed 1.9 percent annual update for FY 2016.
As discussed in section V.B. of the Addendum to this proposed rule, we are proposing to update the wage index values for FY 2016 based on the most recent available data, and we are proposing to continue to use labor market areas based on the OMB CBSA delineations. In addition, we are proposing to slightly lower the labor-related share from 62.306 percent to 62.2 percent under the LTCH PPS for FY 2016, based on the most recent available data on the relative importance of the proposed labor-related share of operating and capital costs based on the FY 2009-based LTCH-specific market basket. We also are proposing to apply an area wage level budget neutrality factor of 1.001444 to ensure that the proposed 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 proposed LTCH PPS standard Federal payment rate by approximately 0.14 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 proposed rule, we estimate that the FY 2015 HCO threshold of $14,972 (as established in the FY 2015 IPPS/LTCH PPS final rule) would 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 8.6 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 rate payments in FY 2016, this results in the estimated decrease of approximately 0.6 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 would increase total payments for LTCH PPS standard Federal rate payment cases by 0.2 percent. (Payments for SSO cases represent approximately 12.5 percent of the estimated total LTCH PPS payments for standard Federal payment rate cases.)
Table IV below shows the estimated impact of the proposed 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 1.2 percent is attributable to the impacts of the proposed change to the LTCH PPS standard Federal payment rate (1.6 percent in Column 6) and the effect of the estimated decrease in HCO payments for LTCH PPS standard Federal payment cases (−0.6 percent), and the estimated increase in proposed payments for SSO cases (0.2 percent).
As we discuss in detail throughout this proposed rule, based on the most recent available data, we believe that the provisions of this proposed 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 would 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 1.2 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 418 LTCHs) that were used for the analyses in this proposed rule. We note that these impacts do not include LTCH PPS site neutral payment rate cases for the reasons discussed in section 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 proposed 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) would be paid based on the LTCH PPS standard Federal payment rate. LTCH discharges that would be paid at the site neutral payment rate would 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 would 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 proposed application of the site neutral payment rate beginning in FY 2016, we refer readers to section VII.B. of the preamble of this proposed 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 $251 million. This estimated decrease in payments reflects the projected increase in payments to LTCH PPS standard Federal payment rate cases of approximately $42 million and the projected decrease in payments to site neutral payment rate cases of approximately $293 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 proposed rule, our actuaries project cost and resource changes for site neutral payment rate cases due to the site neutral payment rates required under the statute. Specifically, our actuaries 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. While we are able to incorporate this projection at an aggregate level into our payment modeling, because the historical claims data that we are using in this proposed rule to project estimated FY 2016 LTCH PPS payments (that is, FY 2014 LTCH claims data) do not reflect this actuarial projection, we are unable to model the impact of the change in LTCH PPS payments for site neutral payment rate cases at the same level of detail with which we are able to model the impacts of the changes to LTCH PPS payments for LTCH PPS standard Federal payment rate cases. Therefore, Table IV below only reflects changes in LTCH PPS payments for LTCH PPS standard Federal payment rate cases and, unless otherwise noted, the remaining discussion in section J.3 refers only to the impact on LTCH PPS payments for LTCH PPS standard Federal payment rate cases. Below we present our provider impact analysis for the proposed changes that affect LTCH PPS payments for LTCH PPS standard Federal payment rate cases.
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 would meet the proposed 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 would not meet the proposed patient-level criteria and would 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 would 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 proposed 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 would not meet the statutory patient-level criteria for exclusion would be paid the site neutral payment rate, which we are proposing to calculate 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 would 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 proposed 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 proposed in this FY 2016 IPPS/LTCH PPS proposed rule (as discussed in section VII. of the preamble of this proposed rule and section V. of the Addendum to this proposed 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 proposals 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 proposed policies on payments for LTCH PPS standard Federal payment rate cases, we simulated FYs 2015 and 2016 payments on
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 J.1. of this Appendix). In modeling proposed payments for SSO and HCO cases for LTCH PPS standard Federal payment rate cases, we applied an inflation factor of 5.0 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 proposed payment rates and policy changes applicable to LTCH PPS standard Federal payment rate cases presented in this proposed 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 proposed annual update to the standard Federal rate (as discussed in section V.A.2. of the Addendum to this proposed 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 proposed changes to the area wage level adjustment (that is, the proposed wage indexes and the proposed labor-related share), including the application of a proposed area wage level budget neutrality factor (as discussed in section V.B. of the Addendum to this proposed 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 proposed changes (and includes the effect of estimated changes to HCO and SSO payments).
Based on the FY 2014 LTCH cases (from 418 LTCHs) that were used for the analyses in this proposed rule, we have prepared the following summary of the impact (as shown above in Table IV) of the proposed LTCH PPS payment rate and proposed policy changes for LTCH PPS standard Federal payment rate cases presented in this proposed 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 1.2 percent, on average, for all LTCHs from FY 2015 to FY 2016 as a result of the proposed payment rate and policy changes applicable to LTCH PPS standard Federal payment rate cases presented in this proposed rule. This estimated 1.2 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 proposed payment rates and factors discussed in this proposed rule) to estimated FY 2015 LTCH PPS payments for LTCH discharges which would be LTCH PPS standard Federal payment rate cases if the new statutory 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 proposing to update the LTCH PPS standard Federal payment rate for FY 2016 by 1.9 percent based on the latest estimate of the LTCH PPS market basket increase (2.7 percent), the proposed reduction of 0.6 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 proposed annual update to the standard Federal rate. As explained earlier in this section, for most categories of LTCHs (as shown in Table IV, Column 6), the proposed payment increase due to the proposed 1.9 percent annual update to the LTCH PPS standard Federal payment rate is projected to result in approximately a 1.6 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 proposed changes in payments due to the proposed 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 proposed payments to LTCH PPS standard Federal payment rate cases may increase by less than 1.9 percent for certain hospital categories due to the proposed 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 1.2 percent. For rural LTCHs, the overall percent change for LTCH PPS standard Federal payment rate cases is estimated to be a 0.4 percent increase, while for urban LTCHs, we estimate the increase would be 1.2 percent. Both large urban and other urban LTCHs are projected to experience an increase of 1.2 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 1.4 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 proposed 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 1.1 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 0.9 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 19 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 3 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 1.1 percent; proprietary LTCHs are expected to experience an increase of 1.2 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 1.0 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 (2.5 percent as shown in Table IV), which is largely attributable to the proposed changes in the area wage level adjustment.
In contrast, LTCHs located in the Middle Atlantic, East South Central, and Pacific regions 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 0.7 percent for the Middle Atlantic regions and 0.8 percent for the East South Central and Pacific regions is primarily due to estimated decreases in payments associated with the proposed 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) would experience a 2.0 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 proposed area wage level adjustment. Similarly, we project that both small LTCHs (0-24 beds) and relatively large LTCHs (125-199 beds) would experience a 1.5 percent increase in payments for LTCH PPS standard Federal payment rate cases, which is also higher than the national average mostly due to increases in the proposed 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 (1.1 percent and 1.3 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 (0.8 percent).
As stated previously, we project that the provisions of this proposed rule would result
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 proposed 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 proposed rule, we discuss our proposed 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 proposed rule, we are proposing 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 proposed for retention as an electronic clinical quality measure for the FY 2018 payment determination in section VIII.A.8. of the preamble of this proposed rule.)
The anticipated effect of removing these measures would 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 proposed removal of AMI-7a would result in a burden reduction of approximately 219,000 hours across all hospitals. We estimate that the proposed removal of the 6 VTE and STK chart-abstracted measures would result in a burden reduction of approximately 522,000 hours across all hospitals. The remaining two measures proposed for removal have been previously suspended from the Hospital IQR Program. Therefore, their proposed removal would not affect burden to hospitals. In total, we estimate that the removal of 6 measures would 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 proposed for removal as electronic clinical quality measures. We believe that retaining a variety of electronic clinical quality measures would result in increased hospital familiarity with electronic reporting. We further believe retaining some measures as electronic clinical quality measures would not affect the overall burden, as these measures were available for electronic reporting under previous requirements.
In this proposed rule, we are proposing refinements to 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 cohort to include a broader population of patients adds a large number of patients, as well as additional hospitals, to the CMS 30-day Pneumonia RSMR and RSRR measures. However, this expansion would 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 proposing to add eight additional measures to the Hospital IQR Program measure set beginning with the FY 2018 payment determination and for subsequent years. Seven of these measures are claims-based, and one measure is structural. The eight proposed 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);
• (Lumbar Spine Fusion/Re-Fusion 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 believe adopting the seven claims-based measures above would 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 would have a negligible effect on hospital burden, but may result in hospital staff spending time to respond to the Survey.
For the FY 2018 payment determination and subsequent years, we also are proposing to require hospitals to submit 16 measures electronically using CEHRT 2014 for the Hospital IQR Program in a manner that would permit eligible hospitals to partially align Hospital IQR Program requirements with some requirements under the Medicare EHR Incentive Program. We believe this proposal would increase the burden associated with electronic clinical quality measure reporting because electronic reporting was previously voluntary. The total burden increase is estimated to be 5 hours and 20 minutes per hospital.
We note that we are proposing to change the requirements for population and sampling such that hospitals would 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 proposal would result in a minimal decrease in burden as hospitals would 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 note that we are proposing to modify the existing processes for validation of chart-abstracted Hospital IQR Program data to remove one stratum. This proposal would not affect hospital burden. Detailed information on the estimated burden specifically associated with information collection for the Hospital IQR Program for the FY 2018 payment determination is included in section X.B.6 of the preamble of this proposed rule.
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.
In general, however, we anticipate that, because of the new requirements we are proposing for reporting for the FY 2018 payment determination (if finalized), 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 would not meet the proposed requirements to receive the full annual percentage increase for the FY 2018 payment determination. Historically, 100 hospitals, on average, that participate in the Hospital IQR Program do not receive the full annual
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 would increase to 2,293 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 proposed rule, we discuss our proposed 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 proposed rule, we are proposing that PCHs will 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 proposed 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 outweighs 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 proposed 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 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 that only a few LTCHs would not receive the full annual percentage increase in any fiscal year as a result of failure to submit data under the LTCH QRP. There are approximately 442 LTCHs currently reporting quality data to CMS. At the time that this analysis was prepared, 47, or approximately 10 percent, of these LTCHs did not receive the full annual percentage increase for the FY 2015 annual payment update determination. Information is not available to determine the precise number of LTCHs that will not meet the requirements to receive the full annual percentage increase for the FY 2016 payment determination.
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 proposed rule, we are retaining 12 previously finalized measures, two of which we are proposing 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 proposing 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 proposing the application of Percent of LTCH Patients With an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631; under review), which satisfies the addition of a quality measure under the third initially required domain of functional status, 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 proposed 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 2.0. 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 proposed measures in this FY 2016 IPPS/LTCH PPS proposed rule. The measure 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 proposed application of the measure 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 proposing to include in the LTCH QRP, Cross-Setting Functional Status Process Measure: Percent of Patients or Residents 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 proposing to use a subset of the same data elements that are used to report the previously finalized measure Percent of Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function, which is included in that burden estimate. Therefore, the proposed 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 (LCDS). Currently, LTCHs are using version 2.01 of the LCDS (approved under OMB control number 0938-1163) which includes data elements related to two quality measures: Percent of Patients or Residents 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 LCDS (version 3.0), 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 Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631—under NQF review); and Functional Status Outcome Measure: Change in Mobility Among Long-Term Care Hospital Patients Requiring Ventilator Support (NQF #2632—under NQF review). We refer readers to section X.B.9. of the preamble of this proposed rule for a discussion of the additional data elements in Version 3.0 of the LCDS.
Version 3.0 of the LTCH CARE Data Set will also be used to report the newly proposed measure Cross-Setting Functional Status Process Measure: Percent of Patients or Residents with an Admission and Discharge Functional Assessment and a Care Plan that Addresses Function. 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 Long-Term Care Hospital Patients with an Admission and Discharge Functional Assessment and a Care Plan That Addresses Function (NQF #2631—under review by NQF). Therefore this proposed measure would 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.
LTCH burden related to the submission of version 3.0 of the LCDS, has been previously discussed in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50443 through 50445), and is included in the total annual burden noted in that 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 in this proposed rule.
In section VIII.D. of the preamble of this proposed rule, we discuss proposed requirements for the EHR Incentive Program. We are proposing CQM reporting requirements, including reporting periods and submission periods, as well as CQMs required and information about CQM specifications' updates, for the Medicare EHR Incentive Program for eligible hospitals and CAHs for 2016. We note that these proposals would only apply for eligible hospitals and CAHs submitting CQMs electronically in CY 2016. Because these proposals for data collection would 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 these proposals would have a significant impact.
This proposed rule contains a range of proposed policies. It also provides descriptions of the statutory provisions that are addressed, identifies the proposed 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 proposed MS-DRG and wage index changes, and for the wage index reclassifications under the MGCRB. Table I also shows an overall increase of 0.3 percent in operating payments. As discussed in section I.G. of this Appendix, we estimate that proposed operating payments will increase by approximately $278 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
Overall, LTCHs are projected to experience a decrease in estimated payments per discharge in FY 2016. In the impact analysis, we are using the proposed rates, factors, and policies presented in this proposed rule, including proposed 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 418 LTCHs in our database, we estimate that FY 2016 LTCH PPS payments will decrease approximately $251 million relative to FY 2015 as a result of the proposed payment rates and factors presented in this proposed rule.
As required by OMB Circular A-4 (available at
The costs to the Federal Government associated with the policies in this proposed rule are estimated at $143 million.
As discussed in section I.J. of this Appendix, the impact analysis of the payment rates and factors presented in this proposed 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 −$251 million based on the data for 418 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 proposed policies for LTCHs in this proposed rule are estimated at $251 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 proposed 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 proposed rule constitutes our regulatory flexibility analysis. In this proposed rule, we are soliciting public comments on our estimates and analysis of the impact of our proposals on those small entities. Any public comments that we receive and our responses will be presented in the 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.
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 proposed 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 proposed 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 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.B of the preamble to this proposed rule, 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
Based on the most recent data available for this FY 2016 IPPS/LTCH PPS proposed rule, in accordance with section 1886(b)(3)(B) of the Act, we are proposing to base the proposed FY 2016 market basket update used to determine the applicable percentage increase for the IPPS on the IHS Global Insight, Inc. (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 is estimated to be 2.7 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.1. of the preamble of this FY 2016 IPPS/LTCH PPS proposed rule, we are proposing an MFP adjustment of 0.6 percent for FY 2016. 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), there are four possible applicable percentage increases that can be applied to the standardized amount. Below we provide a table summarizing the four proposed applicable percentage increases.
Section 1886(b)(3)(B)(iv) of the Act provides that the FY 2016 applicable percentage increase in the hospital-specific rate for SCHs 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). We note that the MDH program expired for discharges beginning on April 1, 2015 under current law.
As mentioned above, the update to the hospital specific rate for SCHs 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 proposing the same four possible applicable percentage increases in the table above to the hospital-specific rate applicable to SCHs.
Section 401(c) of Public Laws 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 proposing an applicable percentage increase to the Puerto Rico-specific standardized amount of 1.9 percent.
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 American 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. As we finalized in the FY 2015 IPPS/LTCH PPS final rule (79 FR 50156 through 50157), the FY 2016 rate-of-increase percentage to be applied 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 would be the percentage increase in the IPPS operating market basket. For this proposed rule, the current estimate of the FY 2016 IPPS operating market basket percentage increase is 2.7 percent.
Section 123 of Public Laws 106-113, as amended by section 307(b) of Public Laws 106-554 (and codified at section 1886(m)(1) of the Act), provides the statutory authority for updating payment rates under the LTCH PPS. Under section 1886(m)(6)(A) of the Act as added by section 1206(a) of Public Laws 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 will be 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. (For additional details on the change to LTCH PPS payments under section 1886(m)(6)(A) of the Act, specifically the establishment of the site neutral payment rate, we refer readers to section VII.B.3. of the preamble of this proposed rule.)
As discussed in section V.A. of the Addendum to this proposed rule, we are proposing to establish an update to the LTCH PPS standard Federal rate for FY 2016 based on the full LTCH PPS market basket increase estimate (for this proposed rule, estimated to be 2.7 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 LTCHQRP under section 1886(m)(5) of the Act, we are proposing to reduce 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 0.6 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 IGI's first quarter 2015 forecast of the FY 2016 LTCH PPS market basket increase, we are proposing to establish an annual update to the LTCH PPS standard Federal rate of 1.9 percent (that is, the current FY 2016 estimate of the market basket rate-of-increase of 2.7 percent less a proposed adjustment of 0.6 percentage point for MFP and less 0.2 percentage point). Accordingly, we are proposing to apply an update factor of 1.9 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 proposing to apply an annual update to the LTCH PPS standard Federal rate of -0.1 percent (that is, the proposed annual update for FY 2016 of 1.9 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 a proposed update factor of −0.1 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 possible 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. For the Puerto Rico-specific standardized amount, we are recommending an update of 1.9 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 2.7 percent.
For FY 2016, consistent with policy set forth in section VII. of the preamble of this proposed rule, for LTCHs that submit quality data, we are recommending an update of 1.9 percent to the LTCH PPS standard Federal rate. For LTCHs that fail to submit quality data for FY 2016, we are proposing to apply an annual update to the LTCH PPS standard Federal rate of −0.1 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 proposed rule.
Fish and Wildlife Service, Interior.
Final rule.
We, the U.S. Fish and Wildlife Service (Service), designate critical habitat for two species of mussels, the Neosho mucket (
This rule is effective on June 1, 2015.
This final rule is available on the Internet at
The coordinates, plot points, or both from which the maps are generated are included in the administrative record for this critical habitat designation and are available at
For general information about this rule, and information about the final designation in Arkansas, contact Melvin Tobin, Acting Field Supervisor, U.S. Fish and Wildlife Service, Arkansas Ecological Services Field Office, 110 South Amity Road, Suite 300, Conway, AR 72032; telephone 501-513-4470; facsimile 501-513-4480. If you use a telecommunications device for the deaf (TDD), call the Federal Information Relay Service (FIRS) at 800-877-8339.
For information about the final designation in Alabama, contact Bill Pearson, Field Supervisor, U.S. Fish and Wildlife Service, Alabama Ecological Services Field Office, 1208 Main Street, Daphne, AL 36526; telephone 251-441-5181; facsimile 251-441-6222.
For information about the final designation in Illinois, contact Richard C. Nelson, Field Supervisor, U.S. Fish and Wildlife Service, Rock Island Ecological Services Field Office, 1511 47th Avenue, Moline, IL 61265; telephone 309-757-5800; facsimile 309-757-5807.
For information about the final designation in Indiana, contact Scott Pruitt, Field Supervisor, U.S. Fish and Wildlife Service, Bloomington Ecological Services Field Office, 602 South Walker Street, Bloomington, IN 47403-2121; telephone 812-334-4261; facsimile 812-334-4273.
For information about the final designation in Kansas, contact Heather Whitlaw, Field Supervisor, U.S. Fish and Wildlife Service, Kansas Ecological Services Field Office, 2609 Anderson Avenue, Manhattan, KS 66502; telephone 785-539-3474; facsimile 785-839-8567.
For information about the final designation in Kentucky, contact Lee Andrews, Field Supervisor, U.S. Fish and Wildlife Service, Kentucky Ecological Services Field Office, 330 West Broadway, Suite 265, Frankfort, KY 40601; telephone 502-695-0468; facsimile 502-695-1024.
For information about the final designation in Mississippi, contact Stephen Ricks, Field Supervisor, U.S. Fish and Wildlife Service, Mississippi Ecological Services Field Office, 6578 Dogwood View Parkway, Suite A, Jackson, MS 39123; telephone 601-965-4900; facsimile 601-965-4340.
For information about the final designation in Missouri, contact Amy Salveter, Field Supervisor, U.S. Fish and Wildlife Service, Columbia Ecological Services Field Office, 101 Park DeVille Drive, Suite A, Columbia, MO 65203-0057; telephone 573-234-2132; facsimile 573-234-2181.
For information about the final designation in Ohio, contact Dan Everson, Field Supervisor, U.S. Fish and Wildlife Service, 4625 Morse Road, Suite 104, Columbus, OH 43230; telephone 614-416-8993; facsimile 614-416-8994.
For information about the final designation in Oklahoma, contact Jontie Aldrich, Acting Field Supervisor, U.S. Fish and Wildlife Service, Oklahoma Ecological Services Field Office, 9014 East 21st Street, Tulsa, OK 74129-1428; telephone 918-382-4500; facsimile 918-581-7467.
For information about the final designation in Pennsylvania, contact Lora Zimmerman, Field Supervisor, U.S. Fish and Wildlife Service, Pennsylvania Ecological Services Field Office, 315 South Allen Street, Suite 322, State College, PA 16801; telephone 814-234-4090; facsimile 814-234-0748.
For information about the final designation in Tennessee, contact Mary Jennings, Field Supervisor, U.S. Fish and Wildlife Service, Tennessee Ecological Services Field Office, 446 Neal Street, Cookeville, TN 38501; telephone 931-528-6481; facsimile 931-528-7075.
On October 16, 2012, we published in the
The critical habitat units we are designating in this rule constitute our current best assessment of the areas that meet the definition of critical habitat for
• For the Neosho mucket, in total, approximately 777 river kilometers (rkm) (483 river miles (rmi)) in 7 units in the Elk, Fall, Illinois, Neosho, Shoal, Spring, North Fork Spring, and Verdigris Rivers as critical habitat in Benton and Washington Counties, Arkansas; Allen, Cherokee, Coffey, Elk, Greenwood, Labette, Montgomery, Neosho, Wilson, and Woodson Counties, Kansas; Jasper, Lawrence, McDonald, and Newton Counties, Missouri; and Adair, Cherokee, and Delaware Counties, Oklahoma.
• For the rabbitsfoot, in total, approximately 2,312 rkm (1,437 rmi) in 31 units (3 with 2 subunits each) in the Neosho, Spring (Arkansas River system), Verdigris, Black, Buffalo, Little, Ouachita, Saline, Middle Fork Little Red, Spring (White River system), South Fork Spring, Strawberry, White, St. Francis, Big Sunflower, Big Black, Paint Rock, Duck, Tennessee, Red, Ohio, Allegheny, Green, Tippecanoe, Walhonding, Middle Branch North Fork Vermilion, and North Fork Vermilion Rivers and Bear, French, Muddy, Little Darby, and Fish Creeks as critical habitat in Colbert, Jackson, Madison, and Marshall Counties, Alabama; Arkansas, Ashley, Bradley, Clark, Cleburne, Cleveland, Drew, Fulton, Hot Spring, Independence, Izard, Jackson, Lawrence, Little River, Marion, Monroe, Newton, Ouachita, Randolph, Searcy, Sevier, Sharp, Van Buren, White, and Woodruff Counties, Arkansas; Massac, Pulaski, and Vermilion Counties, Illinois; Carroll, Pulaski, Tippecanoe, and White Counties, Indiana; Allen and Cherokee Counties, Kansas; Ballard, Edmonson, Green, Hart, Livingston, Logan, Marshall, McCracken, and Taylor Counties, Kentucky; Hinds, Sunflower, Tishomingo, and Warren Counties, Mississippi; Jasper, Madison, and Wayne Counties, Missouri; Coshocton, Madison, Union, and Williams Counties, Ohio; McCurtain and Rogers Counties, Oklahoma; Crawford, Erie, Mercer, and Venango Counties, Pennsylvania; and Hardin, Hickman, Humphreys, Marshall, Maury, Montgomery, Perry, and Robertson Counties, Tennessee.
• Compared to the proposed rule, this rule results in a net decrease of approximately 3 rkm (2 rmi) for the Neosho mucket and a net decrease of approximately 349 rkm (217 rmi) for the rabbitsfoot.
Additionally, we have prepared an environmental assessment pursuant to the National Environmental Policy Act (NEPA). Based on the review and evaluation of the information contained in the environmental assessment, we determined that the designation of critical habitat for the Neosho mucket and rabbitsfoot does not constitute a major Federal action having a significant impact on the human environment under the meaning of section 102(2)(c) of NEPA.
Please refer to the proposed listing and critical habitat rule for the Neosho mucket and rabbitsfoot published in the
We requested written comments from the public on the proposed designation of critical habitat for the Neosho mucket and rabbitsfoot during four comment periods. The first comment period opened with the publication of the proposed rule on October 16, 2012, and closed on December 17, 2012 (77 FR 63440). Second, we requested comments on the proposed critical habitat designation and associated DEA and draft environmental assessment during a comment period that opened May 9, 2013, and closed on June 10, 2013 (78 FR 27171). Third, we re-opened the comment period for another 60 days from August 27, 2013, through October 28, 2013 (78 FR 52894). Based on continued significant interest in Arkansas regarding the proposed rule, we announced an additional reopening of the comment period for 60 days from May 14, 2014, through July 14, 2014 (79 FR 27547). We held public information meetings in Joplin, Missouri, on May 21, 2013; Greenville, Missouri, on May 23, 2013; Batesville, Arkansas, on June 4, 2014; and Benton, Arkansas, on June 5, 2014. The dates, times, and locations of these meetings were coordinated with interested stakeholders and noticed in newspapers and other media outlets. We also contacted appropriate Federal, State, and local agencies; tribes; scientific organizations; and other interested parties and invited them to comment on the proposed rule, DEA, and draft environmental assessment. In addition, we published a total of 27 legal public notices in the affected States at the beginning of the comment period for the proposed rule published on October 16, 2012.
During the first comment period, we received 10 comment letters directly addressing the proposed listing and critical habitat designation. During the second, third, and fourth comment periods, we received 11, 6, and 68 comment letters, respectively, addressing the proposed critical habitat designation, DEA, or draft environmental assessment. All substantive information provided during the comment periods has either been incorporated directly into this final determination or is addressed below. Comments are addressed in the following summary and incorporated into the final rule as appropriate.
In accordance with our peer review policy published on July 1, 1994 (59 FR 34270), we solicited expert opinions from three knowledgeable individuals with scientific expertise on freshwater mussel conservation and biology, with familiarity of Neosho mucket and rabbitsfoot, the geographic region and river basins in which they occur, and conservation biology principles associated with these species. We received responses from all of the peer reviewers we contacted, but only one peer reviewer commented on the proposed critical habitat designation.
We reviewed all comments we received from the peer reviewer for substantive issues and new information regarding critical habitat for the Neosho mucket and rabbitsfoot. The peer reviewer generally concurred with our methods and conclusions, and provided additional information, clarifications, and suggestions to improve the final critical habitat rule. The peer reviewer's comments on the designation of critical habitat for these mussels are addressed in the following summary and incorporated into the final rule as appropriate.
(1)
(2)
In occupied critical habitat, consultation for potential impacts to the species and potential impacts to critical habitat occur at the same time. The health of both mussels is closely tied to the health of their habitat. Therefore, the Service does not expect to recommend additional conservation efforts for projects to avoid adverse modification of critical habitat above and beyond what would already be required to avoid jeopardizing the continued existence of the listed species. In addition, other federally listed mussels occur in the same reaches as certain areas of designated critical habitat for Neosho mucket or rabbitsfoot; the conservation efforts already required for these listed mussels through consultation will provide the same conservation for Neosho mucket or rabbitsfoot.
As a result, we conclude that additional (incremental) project modification costs are unlikely from this designation of critical habitat. Any incremental costs, as predicted in our final economic analysis (FEA), are primarily a result of the additional requirement of considering impacts to critical habitat during these section 7 consultations. These costs are borne by the Service, the Federal action agency, and the third-party participants (generally the project proponents), including State and local governments and private parties. For a summary of the parties involved in section 7 consultations and their respective unit costs, see Exhibit 2-1 of the FEA. Chapter 3 of the FEA provides a detailed discussion of the types of third parties participating in consultations.
(3)
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Section 3.3.1 of the FEA has been amended to add information about the presence of the dam in the study area of proposed Unit RF27; however, the Service does not expect to recommend additional conservation efforts for the dam, above and beyond what would be required to protect against jeopardy of the species, to protect against adverse modification of critical habitat.
(6)
Section 4(i) of the Act states, “the Secretary shall submit to the State agency a written justification for [her] failure to adopt regulations consistent with the agency's comments or petition.” The designation of critical habitat for Neosho mucket includes streams in Arkansas, Kansas, Missouri, and Oklahoma, and for rabbitsfoot includes streams in Alabama, Arkansas, Illinois, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, and Tennessee. We received comments from the States of Illinois, Kansas, Pennsylvania, Ohio, and Oklahoma regarding the proposal and address them below.
(7)
This does not mean, however, that this reach will be without protection if the rabbitsfoot is later found to occupy that reach. The protections of the Act brought about by the species' listing are in effect wherever the species is found. In addition, the reach upstream of Porter Road will continue to be protected through the conservation actions implemented for the other listed mussels (
(8)
(a) Unoccupied habitats are isolated from occupied habitats due to reservoir construction and dam operations;
(b) Unoccupied areas exhibit limited habitat availability, degraded habitat, or low potential value for management;
(c) Collection records for both species indicate that these species have been extirpated from unoccupied areas for several decades or more, and, in some cases, reintroduction efforts have not been successful at re-establishing populations; or
(d) There are no historical records of occurrence within the stream reach for Neosho mucket, rabbitsfoot, or both.
While we recognize the importance of unoccupied habitat to recovery of listed species, in this case unoccupied habitat does not at this time provide habitat for reintroduction or reduce the level of stochastic and human-induced threats (see
(9)
The designation of critical habitat does not change the time frames required to complete consultation under section 7 of the Act and its implementing regulations at 50 CFR part 402, subpart B. As previously stated, conservation measures required to avoid jeopardizing the continued existence of the species are expected to be similar to those required to avoid adversely modifying critical habitat (that is, we foresee no conservation actions specifically due to critical habitat). We do not expect the designation of critical habitat to lengthen the consultation process. Thus, the best available economic data do not support ODOT's assertion.
(10)
Section 7(a)(2) of the Act defines the consultation process, which is further developed in regulations set forth at 50 CFR part 402 and in the Service's section 7 handbook (guidance). The handbook ensures consistent implementation of consultation procedures by Service field offices responsible for carrying out section 7 activities throughout the range of rabbitsfoot. Furthermore, the Service and the Federal action agency are required to use the best available science in conducting the consultations (see our response to Comment 2).
On May 12, 2014, we published a proposed rule in the
(11)
This area is not subject to exclusion based on impacts to national security or other relevant impacts, such as the presence of a conservation plan (for example, a habitat conservation plan (HCP)), status as a tribal land, or an existing partnership. In evaluating whether it should be excluded due to economic impacts, we concluded that no change in economic activity levels or the management of economic activities is expected to result from the critical habitat designation (see our response to Comment 2). Some additional costs reflect additional administrative effort as part of future section 7 consultations in order to consider the potential for activities to result in adverse modification of critical habitat. Section 7 consultation is required in occupied habitat with or without a critical habitat
(12)
(a) The presence of Neosho mucket or rabbitsfoot in a stream segment already is a trigger for section 7 consultation and the designation of critical habitat does not change this requirement;
(b) The focusing of conservation activities on the most essential features and area for each mussel species should be addressed through development and implementation of a recovery plan, and the designation of critical habitat is not essential to this prioritization process and can be articulated just as effectively in the recovery plan;
(c) The educational benefits derived from critical habitat can be conveyed through Federal, State, and private entities more effectively with an informative, detailed, and publicly accessible Web site; and
(d) It is not clear how designation of critical habitat prevents “people from causing inadvertent harm to the species” as the designation only applies to Federal actions and not those of the general public.
ODWC further concluded, based on these four arguments, that there is no unique added value to the designation of critical habitat.
(a) We acknowledge that presence of Neosho mucket or rabbitsfoot is a trigger for section 7 consultation with or without the designation of occupied critical habitat. We also acknowledge occupied areas outside the final critical habitat designation will continue to be subject to conservation actions implemented under section 7(a)(1) of the Act, regulatory protections afforded by the section 7(a)(2) jeopardy standard, and the prohibitions of section 9 of the Act. However, if designated critical habitat should become unoccupied at some point in the future, the designation of critical habitat ensures regulatory protections afforded by section 7(a)(2).
(b) We acknowledge that critical habitat designation is not essential to establish recovery criteria and prioritize recovery actions during development and implementation of recovery plans. However, critical habitat designations identify, to the extent known using the best scientific data available, those physical or biological features that are essential to the conservation of the species (such as space, food, cover, and protected habitat), which can be very beneficial both in focusing conservation efforts on specific activities, areas, or features and in establishing future recovery efforts. Designation can often help to focus recovery efforts and ensure these features, areas, and activities receive priority during section 7 consultations and the planning efforts of both the Service and its partners.
(c) We agree that the Internet and social media are effective venues to convey the benefits of designating critical habitat. We also agree there are many misperceptions by entities and individuals regarding designation of critical habitat. The Service maintains a publicly accessible Internet site, social media, and other educational materials related to critical habitat and the Act, in general, to inform the public and abate concerns. In outlining benefits of designating critical habitat for Neosho mucket and rabbitsfoot, our intent was not to imply that designation of critical habitat is only an educational tool for the recovery of Neosho mucket and rabbitsfoot. To the contrary, critical habitat is a tool within the Act which identifies areas essential to the conservation of endangered and threatened species and that may require special management considerations. Through identification of physical or biological features essential to the conservation of Neosho mucket and rabbitsfoot, critical habitat informs agencies, entities, and individuals about habitats and specific features of these habitats essential to the conservation of Neosho mucket and rabbitsfoot and helps focus efforts. Accordingly, even though designation is not the sole educational tool in the recovery process, it may still provide educational benefits.
(d) Federal agencies must consult with the Service to ensure that any action authorized, funded, or carried out will not destroy or adversely modify critical habitat for listed species. This rule identifies the primary constituent elements of the physical or biological features essential to the conservation of Neosho mucket and rabbitsfoot. These primary constituent elements will help Federal agencies (and those for which they are providing funding, providing authorization, or completing activities) in planning or evaluating projects. In addition, it may be beneficial to those who wish to conserve this species to know which areas have been determined to be essential to the conservation of the species through this designation. The maps in the designation spatially depict the areas we have identified as critical habitat, assisting with these efforts.
(13)
These types of activities would require section 7 consultation only in cases where there is Federal involvement (see response to Comment 2). The FEA examined the Service's section 7 consultation record as a means to project future consultations. The FEA also accounts for projected increases in section 7 consultations, by activity category, based on communication with Service field offices and Federal agencies. Additional supporting information and documentation for the FEA is contained within our administrative record. The ACOE, Bureau of Land Management, U.S. Department of Energy, Federal Energy Regulatory Commission, U.S. Department of Transportation (DOT), U.S. Department of Agriculture (USDA) Forest Service, Environmental Protection Agency (EPA), and Tennessee Valley Authority are Federal agencies who may fund, permit, or conduct actions that may potentially affect designated critical habitat for Neosho mucket or rabbitsfoot and are expected to consult with the Service under section 7 of the Act. Recovery of these mussels will not be attained without the valuable contribution of our Federal partners, in accordance with section 7(a)(1) of the Act, as well as our State and nongovernmental partners.
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One of the main conclusions of the FEA is that the Service does not expect critical habitat designation to result in project modification costs beyond what would be requested to avoid jeopardy to the species. As a result, we expect incremental economic impacts of considering critical habitat as part of the forecast section 7 consultations will be limited to additional administrative costs to the Service, Federal agencies, and third parties. Future section 7 consultations concerning transportation and utilities are expected to occur in 34 critical habitat units, including French Creek, the Allegheny River, and Muddy Creek (Units RF22, RF23, and RF24 in this rule) that occur in Pennsylvania. Collectively, transportation and utilities consultations in these three critical habitat units are forecast to cost $196,000 over the next 20 years or $12,500 annually. For comparison, the total transportation and utilities cost for all critical habitat units are forecast to cost $1,400,000 over the next 20 years or $93,000 annually (Exhibit 3-9 in the FEA; IEc 2014a, p. 1). As outlined in the FEA, these costs are the incremental costs of the critical habitat designation (that is, those costs, such as expenditures related to consultation, which can be attributed solely to critical habitat).
(18)
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PDOT also identified the DOT's Federal Motor Carrier Safety Administration and Pipeline and Hazardous Material Safety Administration as the regulatory agencies with oversight for transportation of hazardous materials on main traffic routes. PDOT concluded that a section 7 consultation is required for each load in response to the designation of critical habitat and each tanker truck is subject to those consultation procedures or detour routes around critical habitat (for example, to avoid crossing designated critical habitat in French Creek).
(21)
(22)
(23)
The designation of critical habitat is not anticipated to generate additional conservation measures for the two mussels beyond those that would be generated by the species being listed.
(24)
(25)
The Secretary may authorize the establishment of an experimental population (including offspring arising solely therefrom) by regulation under section 10(j) of the Act if the location of that population is wholly separate geographically from nonexperimental populations of the same species. However, the Cottonwood River is not outside the current range of Neosho mucket, so such a regulation is not appropriate. If any of the released Neosho mucket individuals are found to have survived, they are protected by the provisions of the Act as an endangered species.
If determined to be appropriate for the landowner and conservation of the mussel, the Service will work with interested property owners to develop a safe harbor agreement and to apply for an enhancement of survival permit pursuant to section 10(a)(1)(A) of the Act. The Service will also assist property owners in identifying actions they can voluntarily undertake or forego to benefit species covered by the safe harbor agreement and permit.
(26)
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Further, Federal listing and designation of critical habitat affords opportunity for funding of recovery actions from Federal sources, and may include cost share grants for non-Federal landowners, the academic community, and nongovernmental organizations.
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(31)
The Service's Missouri field office held two public informational meetings in the area affected by this rule during the second comment period. The first meeting was held in Joplin, Missouri, on May 21, 2013, and the second meeting was held in Greenville, Missouri, on May 23, 2013. Information pertaining to both meetings was disseminated through typical media outlets in the region where the meetings were held, which is predominately agricultural.
At the request of the Kansas Farm Bureau, the Service's Kansas field office scheduled public informational meetings for October 9 and 10, 2013, in Parsons and Strong City, Kansas, respectively, during the third comment period. These meetings were cancelled due to a lapse in appropriations and partial government shutdown. The Service's Kansas field office attempted to reschedule the meetings with the Kansas Farm Bureau during the week of October 22, 2013, but was unable to reschedule the meetings prior to the comment period closing. As an alternative, the Service responded via email on October 22, 2013, to a list of Kansas Farm Bureau questions related to the proposed rule and draft economic analysis.
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(a) Ouachita River (proposed Unit RF4a): Remove entire designation because occurrence of rabbitsfoot is only reported from Arkansas Highway 379 and 298.
(b) Ouachita River (proposed Unit RF4b): Restrict designation to the confluence of Little Missouri River downstream to U.S. Highway 79.
(c) Saline River (proposed Unit RF5): Restrict designation to 2 miles upstream of Arkansas Highway 15 to the Snake Creek confluence north of the Felsenthal National Wildlife Refuge boundary.
(d) Black River (proposed Unit RF9): Restrict designation to Pocahontas, Arkansas, downstream to Black Rock, Arkansas.
(e) Spring River (proposed Unit RF10): Restrict designation to Ravenden, Arkansas, downstream to confluence with Black River. They also believe water temperatures from Hardy to Ravenden, Arkansas, do not support propagation of rabbitsfoot and, thus, are not essential to the conservation of the species.
(f) South Fork Spring River (proposed Unit RF11): Remove entire designation based on the lack of documentation of live rabbitsfoot despite multiple surveys.
(a) Ouachita River (proposed Unit RF4a): We agree, in part, with the commenters and in this final designation have removed the originally proposed Unit RF4a.
(b) Ouachita River (Unit RF4b): We agree, in part, with the commenters and have revised proposed Unit RF4b into two units. The Ouachita River from Arkadelphia downstream to the Little Missouri River confluence has not been comprehensively surveyed for mussels. While the absence of rabbitsfoot from this reach is likely a result of no survey data and not actual absence, the best available scientific information supports designating critical habitat in two Ouachita River units, revised Unit RF4a and revised Unit RF4b (see Summary of Changes from Proposed Rule, below).
(c) Saline River (Unit RF5): We agree, in part, with the commenters and have modified Unit RF5 in this final designation so that the upstream boundary is at the Frazier Creek confluence near Mt. Elba, Arkansas, and the downstream boundary is at the Mill Creek confluence near Stillions, Arkansas.
(d) Black River (Unit RF9): We agree, in part, with the commenters and have modified Unit RF9 in this final
(e) Spring River (Unit RF10): The best available scientific information supports the designation with a slight adjustment to the upstream boundary of Unit RF10 downstream approximately 3.72 rkm (6 rmi) to the Ott Creek confluence. We have made this change in this final designation.
(f) South Fork Spring River (proposed Unit RF11): The best available scientific information supports categorizing the South Fork Spring River rabbitsfoot population as marginal. Therefore, the Service has removed proposed Unit RF11 (the South Fork Spring River) from this final designation. (Note that units have been renumbered for this final rule and final Unit RF11 is not the same location as proposed Unit RF11).
(39)
(40)
The Service considered whether restrictions are likely to result from the designation of critical habitat and found this to be unlikely. Specifically, the Service prepared a memorandum describing the likely outcome of future section 7 consultations (see Appendix D of the FEA). The Service is designating critical habitat in river segments that are occupied by the mussels. Section 7 consultation requirements take effect once the mussels are listed under the Act, even if critical habitat is not designated (see response to Comment 2). Thus, the incremental costs of additional regulation designating critical habitat are limited to the administrative costs to the Service, the Federal action agencies, and third parties involved in consultations. The FEA's estimate of $4.4 million (present value impacts assuming a 7 percent discount rate) results from this additional administrative burden.
(41)
In recognition of the divergent opinions of the courts and to address the Presidential memorandum dated February 28, 2012, the Service promulgated final regulations specifying that it is appropriate for the Secretary to consider impacts of a critical habitat designation on an incremental basis (78 FR 53058, August 28, 2013). This rule discusses the impact analysis for proposed critical habitat through completion of an “incremental analysis.” This method of determining
Accordingly, the FEA employs “without critical habitat” (baseline) and “with critical habitat” (incremental) scenarios. The analysis qualitatively describes how baseline conservation efforts for the two mussels may be implemented across the proposed designation, and, where possible, provides examples of the potential magnitude of costs of these baseline conservation efforts (Chapter 4). The FEA focuses, however, on the incremental analysis, describing and monetizing the incremental impacts due specifically to the designation of critical habitat for the species (Chapter 3). Sections 2.2 and 2.3 of the FEA describe in detail how the analysis defines and identifies incremental effects of the proposed designation.
The incremental approach employed by the Service in its analyses of proposed critical habitat designations does not necessarily limit impacts to administrative costs of consultation. In some cases, designation of critical habitat does result in new project modifications that need to be implemented to avoid possible adverse modification of the habitat. The costs of these project modifications would then be counted in the incremental analysis, regardless of who incurs the cost. In the case of the Neosho mucket and rabbitsfoot, all of the designated critical habitat is occupied by the species, and therefore any project modifications will be required even absent critical habitat (in the baseline) to avoid possibly jeopardizing the species' existence (see response to Comment 2).
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Section 2.3.2 of the FEA discusses how the designation of critical habitat may, under certain circumstances, result in indirect impacts such as time delays, regulatory uncertainty, and stigma effects (such as property value impacts). The Service does not expect indirect impacts to result from critical habitat designation for the two mussels. However, as a result of the concern expressed in these comments, we have added new language to the FEA concerning to the potential for indirect costs associated with third party lawsuits or property value impacts. Because the nature, timing, and likelihood of future litigation or property value impacts are highly uncertain, the FEA does not quantify these impacts but instead describes them qualitatively and notes that these are uncertainties in the analysis.
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Importantly, while the identification of projects requiring consultation is limited to the study area, the consideration of economic impacts that might result if these projects are modified is not limited to this geographic area. However, in the case of Neosho mucket and rabbitsfoot, incremental project modifications are unlikely. Incremental costs are limited to administrative costs, which would be incurred by the agencies or private entities pursuing the projects, regardless of where those entities are headquartered.
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In contrast, the method of economic analysis of proposed Federal regulations is subject to the direction provided by Executive Order 12866 and associated guidance provided by OMB in Circular A-4. As described in Circular A-4, “opportunity cost” is the appropriate concept for valuing benefits and costs of regulatory actions. Costs are incurred when resources are used for one purpose and hence cannot be used for another purpose. The opportunity cost is the value of the benefit that could have been provided by devoting the resources to their best alternative use. Estimates of the change in opportunity cost are sometimes referred to as economic efficiency effects or changes in social welfare.
For example, assume section 7 consultations are required prior to drilling at oil and gas sites potentially affecting the mussels. If delays caused by section 7 consultation cause oil and gas operators to forego the activity without pursuing production at substitute sites, net change in oil and gas production at a national level would represent the opportunity cost of the regulation. If operators pursue production at substitute sites, resulting in no net change in production but redistributing activity away from sites near the mussels, then the marginal cost of reduced profitability associated with the next best alternative location represents the opportunity cost. In either case, the resources used to produce the oil and gas (for example, materials and labor necessary to drill for and transport the oil and gas) are not lost to society. Rather, these resources are still available for other productive uses. As a result, estimates of changes in efficiency effects, or social welfare, are fundamentally different than the estimate of the distributional effects using tools like IMPLAN, and the results are not directly comparable.
Given that the designation of critical habitat for the mussels is unlikely to result in additional project modifications beyond those related to the listing of these species, the types of distributional effects measured using IMPLAN multipliers are likely to be minimal. The opportunity cost of the regulation is limited to the resources (primarily labor) needed to address the administrative requirements of the section 7 process. Thus, the DEA appropriately captured the incremental opportunity costs of the proposed regulation.
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We note that the conditions identified by the commenter from the DEA as “specific conservation recommendations identified by the Service” (
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The choice of discount rates is consistent with OMB's Circular A-4, which states: “As a default position, OMB Circular A-4 states a real discount rate of seven percent should be used as a base-case for regulatory analysis. The seven percent rate is an estimate of the average before-tax rate of return to private capital in the U.S. economy. The effects of regulation do not always fall exclusively or primarily on the allocation of capital. When regulation primarily and directly affects private consumption (for example, through higher consumer prices for goods and services), a lower discount rate is appropriate. For regulatory analysis, you should provide estimates of net benefits using both three percent and seven percent.” The rate of 5 percent recommended by the commenter is captured in this range.
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As shown in Exhibit A-2 of the DEA, the proportion of small entities in the study area that may be affected in one year by the proposed designation ranges from 0.1 percent to 3.1 percent, which is not considered to be a substantial number. Despite this conclusion, the analysis also provides information on whether the economic impact on these entities is likely to be significant. Specifically, the analysis estimates the likely annualized impact per entity as a proportion of estimated annual revenue. Due to lack of data on the annual revenues of each entity that may be involved in section 7 consultations across the designation, we perform a “threshold analysis”; that is, we determine that for impacts to exceed one percent of an entity's annual revenues, those annual revenues would have to be less than $47,000. We assume this is very unlikely to be the case for local government agencies in the study area. For example, one of the least populous counties in the study area in Arkansas is Calhoun County, whose total revenues for 2011 were reported at $8,863,000 (Center for Governmental Research Inc., 2013:
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The information below is provided as a result of the peer and public review process. In this final designation, we have made changes to maps, units, and the rule itself. A change in mapping methodology resulted in a revision to the total number of river kilometers (river miles) for the designation of rabbitsfoot critical habitat. The beginning and ending points of the proposed critical habitat designation, as well as the unit descriptions (as described in the proposed critical habitat rule) will remain the same except where modified for other reasons.
(1) We have made changes to Unit RF7 to correct an oversight in mapping methodology, specifically in methods used for estimating the unit length. The new method uses a better technique for following the curve and meander of the river channel, which results in an additional 1.5 rkm (0.9 rmi) designated as critical habitat for the rabbitsfoot. In addition, this correction resulted in a corresponding increase to the private ownership lands (expressed as river km/mi) adjacent to Unit RF7.
(2) We are not designating critical habitat for Neosho mucket in the Cottonwood River (Unit NM8), Chase County, Kansas, as originally proposed. Recent KDWPT data from 2013 (Tabor 2013, pers. comm.) do not indicate that released individual mussels into the Cottonwood River were able to survive and become established, and the future success of the reintroduction efforts are unknown at this time. We have clarified our definition of extant Neosho mucket populations in this final designation to address reintroduced populations and selection criteria for critical habitat for this mussel (see the
(3) We are not designating critical habitat for rabbitsfoot in the Ouachita River (Unit RF4a), Montgomery County, Arkansas, as originally proposed. Rabbitsfoot was collected live at two sites in 1988 (AGFC Mussel Database 2014). However, an AGFC and Service comprehensive survey in 2007 failed to find any live rabbitsfoot in this reach. In 2013, AGFC resurveyed the two 1988 sites and failed to locate any live or fresh dead (shells still have flesh attached to the valves, retain a luster to their nacre (pearly, innermost layer of the shell), and their periostracum (outermost layer of the shell) is not peeling, indicating relatively recent death (within months)) rabbitsfoot (Harris 2013, pers. comm.). Based on recent survey efforts, the rabbitsfoot population in the Ouachita River upstream of Lake Ouachita should be classified as marginal based on Butler's (2005) classification.
(4) We are not designating critical habitat for rabbitsfoot in the South Fork Spring River (Unit RF11), Fulton County, Arkansas, as originally proposed. Butler (2005, pp. 75-76) categorized the South Fork Spring River as a small population based on a 2002 collection of seven fresh dead specimens upstream of Arkansas Highway 289. Harris
(5) We have modified or revised six critical habitat units for rabbitsfoot (originally proposed Units RF2, RF4b, RF5, RF9, RF10, and RF32) due to new biological information.
• Verdigris River (Unit RF2): We have revised the downstream extent of Unit RF2. A portion of the Verdigris River from near the Bird Creek confluence downstream to Interstate 44 has been altered by the upper extent of the McClellan-Kerr Arkansas River Navigation System and continues to be dredged. There are no rabbitsfoot records from this reach. Therefore, the Service has modified Unit RF2 in this final designation so that the downstream boundary is at Oklahoma Highway 266 northwest of Catoosa, Oklahoma. This change represents a net reduction of 7.6 rkm (4.7 rmi) from the originally proposed Unit RF2.
• Ouachita River (Unit RF4b): We have divided Unit RF4b into two units (Units RF4a and RF4b in this rule). Harris (1999, pp. 3-8 and 3-9) collected live rabbitsfoot at three sites located from near the confluence of Tenmile Creek downstream to the Caddo River confluence. However, the Ouachita River from Caddo River confluence downstream to the Little Missouri River confluence has not been comprehensively surveyed for mussels. While the absence of rabbitsfoot from this reach is likely a result of no survey data and not actual absence, the best available scientific information supports designating critical habitat in two Ouachita River subunits due to the distance between the reaches known to be occupied. Therefore, the Service has created Unit RF4a to be from the Tenmile Creek confluence downstream to the Caddo River confluence (22.7 rkm (14.1 rmi)), and Unit RF4b to be from the Little Missouri River confluence downstream to U.S. Highway 79 near Camden, Arkansas (revised Unit RF4b; 43 rkm (26.7 rmi)). Together, the new Units RF4a and RF4b represent a net reduction of 92.2 rkm (57.3 rmi) from the originally proposed Unit RF4b.
• Saline River (Unit RF5): We have revised the upstream and downstream extent of Unit RF5. Collections by several surveyors since 2002 support the presence of a small population of rabbitsfoot in the Saline River from the Frazier Creek confluence near Mount Elba, Arkansas, to the Mill Creek confluence near Stillions, Arkansas (Service, unpublished data, 2013). One live specimen was collected in Grant County in 1993 (Illinois Natural History Survey Mollusk Collection 14549). One live specimen also was collected at U.S. Highway 167 in 2006 (AGFC Mussel Database 2014), but this record and the 1993 Grant County record are disjunct (approximately 48.3 rkm (30 rmi)) from the aforementioned reach downstream of Mount Elba. Historically, rabbitsfoot was reported from sites at Benton, Arkansas, and Jenkins Ferry State Park (University of Michigan Museum of Zoology 67254, 75750). Based on the best available scientific information, the Service has revised the upstream and downstream extent of Unit RF5 in this final designation due to the lack of live records downstream of the Mill Creek confluence near Stillions, Arkansas, and sporadic disjunct records upstream of the core population. This change represents a net reduction of 168.9 rkm (105.0 rmi) from the originally proposed Unit RF5.
• Black River (Unit RF9): We have revised the downstream boundary of Unit RF9. Rust (1993
• Spring River (Unit RF10): We have changed the upstream boundary of the originally proposed Unit RF10. Harris
• Shenango River (Unit RF32): We have changed the upstream boundary of the originally proposed Unit RF32. Considering new information in Bursey (1987), the best available scientific information supports extending the extent of the originally proposed Unit RF32 (now Unit RF31 in this final designation) upstream 8.6 rkm (5.3 rmi).
The new unit descriptions are provided below in Final Critical Habitat Designation. Because of the removal of the originally proposed Unit RF11, originally numbered Units RF12 to RF32 have been renumbered Units RF11 to RF31. In addition, these revisions resulted in a net decrease of designated critical habitat for the Neosho mucket of approximately 3 rkm (2 rmi) and a net decrease of critical habitat for the rabbitsfoot of 349 rkm (217 rmi). The majority of the changes from the proposed rule are to units occurring in Arkansas, with a net reduction of approximately 350 rkm (218 rmi; a 27 percent decrease). There was only one increase in critical habitat length (originally proposed Unit RF32, now Unit RF31, in this final designation).
(6) The critical habitat in the originally proposed Unit RF19 (now Unit RF18 in this final designation) for rabbitsfoot in the Duck River overlaps with the oyster mussel (
(7) In the proposed rule, we inadvertently left out the description of a physical or biological feature for both species that addresses habitats protected from disturbance or representative of the historical, geographic, and ecological distributions of the species. We have added the description into this final rule (see
(8) In the proposed rule, Primary Constituent Element 4 for both species stated that fish hosts for each mussel were “currently unknown” and provided a statement regarding natural fish assemblages “until appropriate host fish can be identified.” While we do not currently know all fish species that may act as hosts for one or both of the glochidia of these mussels, this final rule identifies those fish species we believe are or may be host species (see
(9) In the proposed rule, we incorrectly labeled the Pond Creek National Wildlife Refuge (NWR) as Cossatot NWR. This has been corrected in this final rule.
(10) Several Counties were inadvertently left out of the Executive Summary of the proposed rule; we added them in this final designation.
(11) In the proposed rule, we incorrectly named Mammoth Cave National Park North Entrance Road as Maple Springs Ranger Station Road in the unit description for Unit RF21. The correct road name is used in this final rule.
Please refer to the proposed listing and critical habitat rule (77 FR 63440; October 16, 2012) and final listing rule (78 FR 57076, September 17, 2013) for the Neosho mucket and rabbitsfoot for a summary of species information. Additional information on the associated draft economic analysis and draft environmental assessment for the proposed rule was published in the
For more information on relative abundance and trends of extant populations of Neosho mucket and rabbitsfoot by river basin please refer to the
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,
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. For example, an area currently occupied by the species but that was not occupied at the time of listing may be essential for the conservation of the species and may be included in the critical habitat designation. 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 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 physical or biological features essential to Neosho mucket and rabbitsfoot from studies of these species' habitat, ecology, and life history as described in the Critical Habitat section of the proposed rule to designate critical habitat published in the
The Neosho mucket is historically associated with the Illinois, Neosho, and Verdigris Rivers and their larger tributaries (Arkansas River basin). Generally, the Neosho mucket is found embedded in stable substrates associated with shallow riffles (areas
The rabbitsfoot is historically associated with small- to medium-sized streams and some larger rivers in the Lower Great Lakes and Lower Mississippi River sub-basins and Ohio, Cumberland, Tennessee, White, Arkansas, and Red River basins. The rabbitsfoot usually occurs in shallow areas along the bank and adjacent runs and riffles with gravel and sand substrates where the water velocity is reduced, but it also may occur in deep runs (Parmalee and Bogan 1998, pp. 211-212). Unlike the Neosho mucket (Barnhart 2003, p. 17), the rabbitsfoot seldom burrows in the substrate, but lies on its side (Watters 1988, p. 13; Fobian 2007, p. 24).
Neosho mucket and rabbitsfoot, similar to other mussels, are dependent on areas with flow refuges where shear stress (the stream's ability to entrain and transport bed material created by the flow acting on the bed material) is low and sediments remain stable during flood events (Layzer and Madison 1995, p. 341; Strayer 1999, pp. 468 and 472; Hastie
Natural river and creek channel stability are achieved by allowing the river or creek to develop a stable dimension, pattern, and profile, such that, over time, channel features are maintained and the river or creek system neither aggrades nor degrades. Channel instability occurs when the scouring (flushing) process leads to degradation or excessive sediment deposition results in aggradation. Stable rivers and creeks consistently transport their sediment load, both in size and type, associated with local deposition and scour (Rosgen 1996, pp. 1-3).
Habitat conditions described above provide space, cover, shelter, and sites for breeding, reproduction, and growth of offspring for the Neosho mucket and rabbitsfoot. These habitats are formed and maintained by water quantity, channel features (dimension, pattern, and profile), and sediment input to the system through periodic flooding, which maintains connectivity and interaction with the flood plain, and are dynamic. Changes in one or more of these parameters can result in channel degradation or aggradation, with serious effects to mussels. Therefore, we identify adequate water quantity, stream channel stability, and floodplain connectivity to be physical or biological features for Neosho mucket and rabbitsfoot that are essential in accommodating feeding, breeding, growth, and other normal behaviors of these species and in promoting gene flow within each species' populations and movement of their fish hosts.
The Neosho mucket and rabbitsfoot are riverine-adapted species that depend upon adequate water flow and are not found in ponds or lakes. Continuously flowing water is a habitat feature associated with all surviving populations of these species. Flowing water maintains the river and creek bottoms and flow refuge habitats in riffles and runs where these species are found, transports food items to the sedentary juvenile and adult life stages, removes wastes, and provides oxygen for respiration of the Neosho mucket and rabbitsfoot. A natural flow regime that includes periodic flooding and maintains connectivity and interaction with the floodplain is critical for the exchange of nutrients, movement of and spawning activities for potential fish hosts, and maintenance of flow refuges in riffle and run habitats.
Mussels, such as the Neosho mucket and rabbitsfoot, filter algae, detritus, microscopic animals, and bacteria from the water column (Fuller 1974, p. 221; Silverman
The ranges of many water quality parameters that define suitable habitat conditions for the Neosho mucket and rabbitsfoot have not been investigated or are poorly understood. The pathways of exposure to a variety of environmental pollutants for all four mussel life stages (free and encysted glochidia, juveniles, and adults) and differences in exposure and sensitivity were previously discussed in the proposed rule (77 FR 63440, see Factor A). Environmental contamination is a causal (contributing) factor in the decline of mussel populations. We estimate most numeric standards for pollutants and water quality parameters (for example, dissolved oxygen, pH, heavy metals) adopted by States under the CWA represent levels essential to the conservation of these mussels. However, some regulatory mechanisms may not adequately protect mollusks in some reaches (77 FR 63440, see Factor D). Other factors that can potentially alter water quality are droughts and periods of low flow, nonpoint-source runoff from adjacent land surfaces (excessive amounts of sediments, nutrients, and pesticides), point-source discharges from municipal and industrial wastewater treatment facilities (excessive amounts of ammonia, chlorine, and metals), and random spills or unregulated discharge events. This could be particularly harmful during drought conditions when flows are depressed and pollutants are more concentrated.
As relatively sedentary animals, mussels must tolerate the full range of environmental stressors that occur within the streams where they persist. Both the amount (flow) and the physical
Mussels require a fish host for transformation of larval mussels (glochidia) to juvenile mussels (Williams
Connections between the rivers and adjacent flood plains occur periodically during wet years and provide habitat for spawning and foraging fish hosts that require flood plain habitats for successful reproduction and recruitment to adulthood. Barko
Under the Act and its implementing regulations, we are required to identify the physical or biological features essential to the conservation of Neosho mucket and rabbitsfoot in areas occupied at the time of listing, focusing on the features' primary constituent elements. 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.
Based on the above needs and our current knowledge of the physical or biological features and habitat characteristics required to sustain the species' life-history processes, we determine that the primary constituent elements specific to the Neosho mucket and rabbitsfoot are:
(1) Geomorphically stable river channels and banks (channels that maintain lateral dimensions, longitudinal profiles, and sinuosity patterns over time without an aggrading or degrading bed elevation) with habitats that support a diversity of freshwater mussel and native fish (such as stable riffles, sometimes with runs, and mid-channel island habitats that provide flow refuges consisting of gravel and sand substrates with low to moderate amounts of fine sediment and attached filamentous algae).
(2) A hydrologic flow regime (the severity, frequency, duration, and seasonality of discharge over time) necessary to maintain benthic habitats where the species are found and to maintain connectivity of rivers with the floodplain, allowing the exchange of nutrients and sediment for maintenance of the mussel's and fish host's habitat, food availability, spawning habitat for native fishes, and the ability for newly transformed juveniles to settle and become established in their habitats.
(3) Water and sediment quality (including, but not limited to, conductivity, hardness, turbidity, temperature, pH, ammonia, heavy metals, and chemical constituents) necessary to sustain natural physiological processes for normal behavior, growth, and viability of all life stages.
(4) The occurrence of natural fish assemblages, reflected by fish species richness, relative abundance, and community composition, for each inhabited river or creek that will serve as an indication of appropriate presence and abundance of fish hosts necessary for recruitment of the Neosho mucket and rabbitsfoot. Suitable fish hosts for Neosho mucket glochidia include smallmouth bass (
(5) Competitive or predaceous invasive (nonnative) species in quantities low enough to have minimal effect on survival of freshwater mussels.
When designating critical habitat, we assess whether the specific areas within the geographic area occupied by the species at the time of listing contain features which are essential to the conservation of the species and which may require special management considerations or protection.
For Neosho mucket and rabbitsfoot, we have grouped the primary threats affecting their habitat, thus potentially the need to implement special management or protection, into nine categories.
(1) Impoundments (primary constituent elements 1-4). Dams eliminate and alter river flow within impounded areas, trap silt leading to increased sediment deposition, alter water quality, change hydrology and channel geomorphology, decrease habitat heterogeneity, affect normal flood patterns, and block upstream and downstream movement of mussels and fish (Layzer
(2) Channelization (primary constituent elements 1-4). Dredging and channelization activities have profoundly altered riverine habitats nationwide. Hartfield (1993, pp. 131-139), Neves
(3) Sedimentation (primary constituent elements 3-4). Excessive sediments are believed to negatively impact riverine mussel populations requiring clean, stable streams (Ellis 1936, pp. 39-40; Brim-Box and Mossa 1999, p. 99). Adverse effects resulting from sediments have been noted for many components of aquatic communities. Potential sediment sources within a watershed include virtually all activities that disturb the land surface. Most localities occupied by the Neosho mucket and rabbitsfoot, including viable populations, are currently being affected to varying degrees by sedimentation. Specific biological effects include reduced feeding and respiratory efficiency from clogged gills, disrupted metabolic processes, reduced growth rates, limited burrowing activity, physical smothering, and disrupted host fish attraction mechanisms (Ellis 1936, pp. 39-40; Marking and Bills 1979, p. 210; Vannote and Minshall 1982, pp. 4105-4106; Waters 1995, pp. 173-175; Hartfield and Hartfield 1996, p. 373). Examples of special management actions that would minimize or ameliorate these threats include: (a) Restoration and protection of riparian corridors, (b) implementation of best management practices to minimize erosion (such as State and industry practices for forestry activities), (c) stream bank restoration projects, and (d) private landowner programs to promote watershed and soil conservation.
(4) Chemical Contaminants (primary constituent elements 3-4). Chemical contaminants are ubiquitous in the environment and are considered a major contributor to the decline of mussel species (Richter
(5) Mining (primary constituent elements 1-4). Gravel, coal, and metal mining are activities negatively affecting water quality in Neosho mucket and rabbitsfoot habitat. Instream and alluvial gravel mining has been implicated in the destruction of mussel populations (Hartfield 1993, pp. 136-138; Brim-Box and Mossa 1999, pp. 103-104). Negative effects associated with gravel mining include stream channel modifications (altered habitat, disrupted flow patterns, sediment transport), water quality modifications (increased turbidity, reduced light penetration, increased temperature), macroinvertebrate population changes (elimination), and changes in fish populations, resulting from adverse effects to spawning and nursery habitat and food web disruptions (Kanehl and Lyons 1992, pp. 4-10). Coal mining activities, resulting in heavy metal-rich drainage, and associated sedimentation has adversely affected many drainages with rabbitsfoot populations (Ortmann 1909
(6) Oil and Natural Gas Development (primary constituent elements 1-4). Exploration and extraction of these energy resources can result in increased siltation, a changed hydrograph (graph showing changes in the discharge of a river over a period of time), and altered water quantity and quality even at considerable distances from the mine or well field because effects are carried downstream from the original source. Examples of special management actions that would minimize or ameliorate these threats include: (a) Developing and implementing best management practices for oil and natural gas development activities (such as Fayetteville Shale located in the upper Little Red River watershed), (b) partnering with industry and nongovernmental organizations to restore mussel habitat (such as Southwestern Energy's ECH
(7) Invasive, nonindigenous species (primary constituent element 5). Invasive, nonindigenous species, such as zebra mussel, black carp, and Asian clam, have potentially adversely affected populations of the Neosho mucket and rabbitsfoot and their fish hosts, and these effects are expected to persist into the future. Examples of special management actions that would minimize or ameliorate these threats include: (a) Implementation of nonregulatory conservation measures to control Asian carp and other invasive, nonindigenous species, and (b) continued State engagement in efforts to minimize effects of Asian carp (such as eradication) on native fish resources.
(8) Temperature (primary constituent elements 3-4). Natural temperature regimes can be altered by impoundments, tailwater releases from dams, industrial and municipal effluents, and changes in riparian habitat. Low temperatures can significantly delay or prevent metamorphosis in mussels (Watters and O'Dee 1999, pp. 454-455). Cold water effluent below dams may negatively impact populations; rabbitsfoot were less abundant and in poor condition below a cold water outflow on the Little River, compared to two other sites upstream (Galbraith and Vaughn 2011, p. 198). Low water temperatures caused by dam releases also may disrupt seasonal patterns in reproduction (Galbraith and Vaughn 2009, pp. 43-44).
High temperatures can reduce dissolved oxygen concentrations in the water, which slows growth, reduces glycogen stores, impairs respiration, and may inhibit reproduction (Fuller 1974, pp. 240-241). Water temperature increases have been documented to shorten the period of glochidial encystment, reduce righting speed (various reflexes that tend to bring the body into normal position in space and resist forces acting to displace it out of normal position), and slow burrowing and movement responses (Bartsch
(9) Climate change (primary constituent elements 2-4). As temperature increases due to climate change throughout the range of Neosho mucket and rabbitsfoot, both species may experience population declines as warmer rivers become more suitable for thermally tolerant species. Overall, the distribution of fish species is expected to change, including range shifts and local extirpations (Ficke
The reduction of these threats will require the implementation of special management considerations or protections within each of the critical habitat areas identified in this rule. All critical habitat requires active management to address some or all of the ongoing threats listed. Some of these activities include, but are not limited to, those previously discussed in the Summary of Factors Affecting the Species section in the final listing rule (78 FR 57076, September 17, 2013).
In summary, we find the areas we are designating as critical habitat were occupied at the time of listing and contain the features essential to the conservation of the Neosho mucket and rabbitsfoot, and these features may require special management considerations or protection. Special management considerations or protection may be required to eliminate, or to reduce to negligible levels, the threats affecting each unit and to preserve and maintain the essential physical or biological features the critical habitat units provide to the Neosho mucket and rabbitsfoot. A more detailed discussion of these threats is presented in the final listing rule under Summary of Factors Affecting the Species (78 FR 57076, September 17, 2013). Additional discussions of threats facing individual sites are provided in the individual unit descriptions.
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. As discussed above, we are designating critical habitat areas that we have determined to be occupied at the time of listing in 2013 and that contain sufficient elements of physical or biological features to support life-
In this rule, we have defined occupied habitat for the Neosho mucket as those stream reaches known to be currently extant. Extant Neosho mucket populations are naturally occurring populations represented by live or fresh dead specimens collected since 1985. For the rabbitsfoot, we have defined occupied habitat as those stream reaches that are sizeable and small populations as defined by Butler (2005, pp. 88-89), and the marginal populations of Fish Creek and Red River that are the last extant populations in their respective basins (Great Lakes and Cumberland) and Allegheny River, a metapopulation (interconnected populations where there is gene flow). All other populations classified as marginal are not considered as occupied habitat.
No unoccupied stream, as defined in the proposed critical habitat rule (77 FR 63440, October 16, 2012), is being designated as critical habitat for Neosho mucket or rabbitsfoot. We find that unoccupied stream reaches are not essential for the conservation of either species for one or more of the following reasons:
(1) Unoccupied habitats are isolated from occupied habitats due to reservoir construction and dam operations (dam water releases have altered natural stream hydrology, geomorphology, water temperature, and native mollusk and fish communities);
(2) Unoccupied areas exhibit limited habitat availability, degraded habitat, or low potential value for management (Muskingum, Elk, Scioto, Little Miami, Licking, East Fork White, Cumberland, Holston, Clinch, Sequatchie, and Buffalo (Duck River system) Rivers);
(3) Collection records for both species indicate that these species have been extirpated from unoccupied areas for several decades or more and, in some cases (such as Cottonwood River), reintroduction efforts have not been successful at re-establishing populations; or
(4) There are no historical records of occurrence within the stream reach for Neosho mucket, rabbitsfoot, or both.
(5) While we recognize the importance of unoccupied habitat to recovery of listed species, in this case, unoccupied habitat does not provide habitat for reintroduction at this time and does not reduce the level of stochastic and human-induced threats for the following reasons:
(a) Unoccupied habitat does not currently contain sufficient physical or biological features or have the ability to be restored to support life-history functions of the Neosho mucket and rabbitsfoot (such characteristics as geomorphically stable channels, perennial water flows, adequate water quality, and appropriate benthic substrates);
(b) Unoccupied habitat does not support the once diverse mollusk communities, including the presence of closely related species requiring physical or biological features similar to the Neosho mucket and rabbitsfoot; or
(c) Unoccupied habitat is not adjacent to currently occupied areas where there is potential for natural dispersal and reoccupation by the Neosho mucket and rabbitsfoot.
Based on the above analysis, a total of 38 units, all of which were occupied at the time of listing, are being designated based on sufficient elements of physical or biological features being present to support Neosho mucket (7 units) and rabbitsfoot (31 units) life-history processes. Some units contain all of the identified elements of physical or biological features and support multiple life-history processes. Some units contain only some elements of the physical or biological features necessary to support the Neosho mucket's or rabbitsfoot's particular use of that habitat.
When determining critical habitat boundaries within this final rule, we made every effort to avoid including developed areas such as dams, piers, and bridges, and other structures because such areas usually lack physical or biological features for the species. Areas designated as critical habitat for the Neosho mucket and rabbitsfoot include only stream channels within the ordinary high-water line and do not contain manmade structures (such as dams, piers and docks, bridges, or other similar structures), or areas inundated by lakes and reservoirs. The ordinary high-water line defines the stream channel and is the point on the stream bank where water is continuous and leaves some evidence, such as erosion or aquatic vegetation. The scale of the maps we prepared under the parameters for publication within the Code of Federal Regulations may not reflect the exclusion of structures or other developed areas. Any such areas inadvertently left inside critical habitat boundaries shown on the maps of this final rule have been excluded by text in the final rule and are not designated as critical habitat. Therefore, a Federal action involving these areas would not trigger section 7 consultation with respect to critical habitat and the requirement of no adverse modification unless the specific action would affect the physical or biological features in the adjacent critical habitat.
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 rule portion. We include more detailed information on the boundaries of the critical habitat designation in the preamble of this document. We will make the coordinates, plot points, or both on which each map is based available to the public on
Three critical habitat units for the Neosho mucket and rabbitsfoot are currently designated as critical habitat for the oyster mussel (
We are designating seven units, totaling approximately 777 rkm (483 rmi), in four States (Arkansas, Kansas, Missouri, and Oklahoma) as critical habitat for the Neosho mucket (Table 2). We are designating 31 units (3 with subunits), totaling approximately 2,312 rkm (1,437 rmi), in 12 States (Alabama, Arkansas, Illinois, Indiana, Kansas, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, and Tennessee) as critical habitat for the rabbitsfoot (Table 2). Four of the 31 units (Units NM4, NM7, RF1, and RF3) are occupied by both Neosho mucket and rabbitsfoot.
Public lands adjacent to Neosho mucket and rabbitsfoot critical habitat units consist of approximately 469 rkm (291 rmi) of riparian lands in the following units:
• Unit NM1: Ozark National Forest, 20.4 rkm (12.7 rmi); ACOE's Lake Tenkiller Project, 9.0 rkm (5.6 rmi); and Sparrowhawk Wildlife Management Area (WMA), 2.2 rkm (1.4 rmi);
• Units NM4 and RF1: Spring River Wildlife Area, 1.4 rkm (0.9 rmi);
• Unit RF2: ACOE's Oologah Lake Project, 0.6 rkm (0.4 rmi);
• Unit NM7: Neosho Wildlife Area, 6.1 rkm (3.8 rmi);
• Unit RF6: Little River NWR, 37.6 rkm (23.5 rmi); Ouachita National Forest, 16.1 rkm (10.0 rmi); and Pond Creek NWR, 11.4 rkm (7.2 rmi);
• Unit RF8a: Jacksonport State Park, 2.9 rkm (1.8 rmi) and Henry Gray-Hurricane Lake WMA, 7.9 rkm (4.9 rmi);
• Unit RF8b: White River NWR, 57.9 rkm (36.0 rmi);
• Unit RF10: Harold Alexander WMA, 1.1 rkm (0.7 rmi);
• Unit RF12: Buffalo National River, 113.6 rkm (70.6 rmi);
• Unit RF13: Sam A. Baker State Park, 1.0 rkm (0.6 rmi) and ACOE's Wappapello Lake Project, 25.3 rkm (15.7 rmi);
• Unit RF15: Tishomingo State Park, 6.1 rkm (3.8 rmi); NPS Natchez Trace Parkway, 4.5 rkm (2.8 rmi); and TVA Pickwick Lake Project, 7.4 rkm (4.6 rmi);
• Unit RF17: Fern Cave NWR, 0.5 rkm (0.3 rmi);
• Unit RF18: Yanahli WMA, 38.9 rkm (24.3 rmi) and Santa Fe County Park, 1.4 rkm (0.9 rmi);
• Unit RF19a: Shiloh National Military Park, 2.6 rkm (1.6 rmi);
• Unit RF19b: Kentucky Dam Village State Resort Park, 0.6 rkm (0.4 rmi) and unnamed TVA land downstream of Kentucky Lake Dam, 2.4 rkm (1.5 rmi);
• Unit RF20: Massac Forest Nature Preserve, 2.2 rkm (1.4 rmi); West Kentucky WMA, 5.6 rkm (3.5 rmi); Ballard WMA, 2.6 rkm (1.6 rmi); and Chestnut Hills Nature Preserve, 2.4 rkm (1.5 rmi);
• Unit RF21: Mammoth Cave National Park, 17.0 rkm (10.6 rmi);
• Unit RF22: Pennsylvania State Game Land, 277, 2.9 rkm (1.8 rmi) and Pennsylvania State Game Land 85, 0.6 rkm (0.4 rmi);
• Unit RF23: Clear Creek State Forest, 9.9 rkm (6.2 rmi);
• Unit RF24: Erie NWR, 16.2 rkm (10.1 rmi);
• Unit RF25: Prophetstown State Park, 2.1 rkm (1.3 rmi);
• Unit RF26: Muskingum Watershed Conservancy Land, 5.0 rkm (3.1 rmi);
• Unit RF27: Little Darby State Scenic Waterway-River Lands, 8.7 rkm (5.4 rmi);
• Unit RF29: Fish Creek Wildlife Area, 1.6 rkm (1.0 rmi); and
• Unit RF31: ACOE's Shenango River Lake Project, 8.8 rkm (5.5 rmi).
These critical habitat units include the river channels within the ordinary high-water line. As defined at 33 CFR 329.11, the ordinary high-water mark on nontidal rivers is the line on the shore established by the fluctuations of water and indicated by physical characteristics, such as a clear, natural line impressed on the bank; shelving; changes in the character of soil; destruction of terrestrial vegetation; the presence of litter and debris; or other appropriate means that consider the characteristics of the surrounding areas. States were granted ownership of lands beneath navigable waters up to the ordinary high-water line upon achieving Statehood (
We present brief descriptions of all units, including the upstream and downstream boundaries of each stream reach, and reasons why they meet the definition of critical habitat for the Neosho mucket and rabbitsfoot.
Unit NM1 includes 146.1 rkm (90.8 rmi) of the Illinois River from the Muddy Fork Illinois River confluence with the Illinois River south of Savoy, Washington County, Arkansas, downstream to the Baron Creek confluence southeast of Tahlequah, Cherokee County, Oklahoma. This unit contains all or some components of all four physical or biological features and contains primary constituent elements 2, 3, 4, and 5. The physical or biological features in this unit may require special management considerations or protection to address changes in stream channel stability associated with urban development and clearing of riparian areas due to land use conversion in the watershed; alteration of water chemistry or water and sediment quality; and changes in stream bed material composition and quality from activities that would release sediments or nutrients into the water, such as urban development and associated construction projects, livestock grazing, confined animal operations, and timber harvesting. The majority of the riparian lands adjacent to, but not included in, this unit are in private ownership or private lands under tribal jurisdiction (Table 3).
Unit NM2 includes a total of 20.3 rkm (12.6 rmi) of the Elk River from Missouri Highway 59 at Noel, McDonald County, Missouri, to the confluence of Buffalo Creek immediately downstream of the Oklahoma and Missouri State line, Delaware County, Oklahoma. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The primary biological or physical features in this unit may require special management considerations or protection to address changes in the existing flow regime due to such activities as impoundment, water diversion, or water withdrawal; alteration of water chemistry or water quality; and changes in stream bed material composition and sediment quality from activities that would release sediments or nutrients into the water, such as urban development and associated construction projects, livestock grazing, confined animal operations (turkey and chicken), timber harvesting, and mining. All the riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit NM3 includes approximately 75.8 rkm (47.1 rmi) of Shoal Creek from Missouri Highway W near Ritchey, Newton County, Missouri, to Empire Lake where inundation begins in Cherokee County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes to the same activities as discussed in Unit NM2, above, and releases of chemical contaminants from industrial and municipal effluents (77 FR 63440, see Factor A). All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit NM4 includes 102.3 rkm (63.6 rmi) of the Spring River from Missouri Highway 97 north of Stotts City, Lawrence County, Missouri, downstream to the confluence of Turkey Creek north of Empire, Cherokee County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes to the same activities as discussed in Unit NM2, above, and releases of chemical contaminants from industrial and municipal effluents. Almost all (99 percent) of the riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit NM5 includes 16.4 rkm (10.2 rmi) of the North Fork Spring River from the confluence of Buck Branch southwest of Jasper, Missouri, downstream to its confluence with the Spring River near Purcell, Jasper County, Missouri. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes to the same activities as discussed in Unit NM2, above. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit NM6 includes a total of 171.1 rkm (106.3 rmi), including 90.4 rkm (56.2 rmi) of the Fall River from Fall River Lake dam northwest of Fall River, Greenwood County, Kansas, downstream to its confluence with the Verdigris River near Neodesha, Wilson County, Kansas. Unit NM6 also includes 80.6 rkm (50.1 rmi) of the Verdigris River from Kansas Highway 39 near Benedict, Wilson County, Kansas downstream to the Elk River confluence near Independence, Montgomery County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes to the same activities as discussed in Unit NM2, above. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit NM7 includes 244.5 rkm (151.9 rmi) of the Neosho River from Kansas Highway 58 west of LeRoy, Coffey County, Kansas, downstream to the Kansas and Oklahoma State line, Cherokee County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes to the same activities as discussed in Unit NM2, above, and releases of chemical contaminants from industrial and municipal effluents and tail water releases downstream of John Redmond Reservoir. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
The physical or biological features in units RF1 through RF31 may require special management considerations to address changes in the existing flow regime due to such activities as impoundment, water diversion, or water withdrawal; alteration of water chemistry or water quality; and changes in stream bed material composition and sediment quality from activities that would release sediments or nutrients into the water, such as urban development and associated construction projects, livestock grazing, confined animal operations (turkey and chicken), timber harvesting, and mining, and releases of chemical contaminants from industrial and municipal effluents. Where there are other activities in individual units requiring special management considerations, they are set forth in the individual unit descriptions.
Unit RF1 includes 56.5 rkm (35.1 rmi) of the Spring River from Missouri Highway 96 at Carthage, Jasper County, Missouri, downstream to the confluence of Turkey Creek north of Empire, Cherokee County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection described above. The majority of the riparian lands adjacent to, but not included in, this unit are in private ownership or private lands under tribal jurisdiction (Table 3).
Unit RF2 includes 38.0 rkm (23.6 rmi) of the Verdigris River from Oologah Lake dam north of Claremore, Oklahoma, downstream to Oklahoma Highway 266 northwest of Catoosa, Rogers County, Oklahoma. This unit contains all or some components of all four physical or biological features and in part, contains primary constituent elements 3, 4, and 5. It is possible that primary constituent elements 1 and 2 are limiting factors for rabbitsfoot distribution and abundance from Oologah Lake dam downstream to the confluence of the Caney River; thus we are unable to determine at this time whether this reach contains primary constituent elements 1 and 2. The physical or biological features in this unit may require special management considerations or protection as described above and changes in the existing flow regime due to such activities as impoundment, tail water releases from Oologah Lake dam, and channelization associated with the McClellan-Kerr Arkansas River Navigation System. The majority of the riparian lands adjacent to, but not included in, this unit are in private ownership or private lands under tribal jurisdiction (Table 3).
Unit RF3 includes 26.6 rkm (16.5 rmi) of the Neosho River from the Deer Creek confluence northwest of Iola, Kansas, downstream to the confluence of Owl Creek southwest of Humboldt, Allen County, Kansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above except for releases of chemical contaminants from industrial and municipal effluents. Approximately 97 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and the remaining lands in State or local ownership (Table 3).
Unit RF4a includes 22.7 rkm (14.1 rmi) of the Ouachita River from the Tenmile Creek confluence north of Donaldson downstream to the Caddo River confluence near Caddo Valley, Hot Spring and Clark Counties, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Approximately 82 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and the remaining 18 percent are in Federal ownership (Table 3).
Unit RF4b includes 43.0 rkm (26.7 rmi) of the Ouachita River from the Little Missouri River confluence downstream to U.S. Highway 79 at Camden, Ouachita County, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. All the riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF5 includes 119.4 rkm (74.2 rmi) of the Saline River from Frazier Creek confluence near Mount Elba, Cleveland County, Arkansas, to the Mill Creek confluence near Stillions, Ashley and Bradley Counties, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. All the riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF6 includes 139.7 rkm (86.8 rmi) of the Little River from the Glover River confluence northwest of Idabel, McCurtain County, Oklahoma, downstream to U.S. Highway 71 north of Wilton, Little River and Sevier Counties, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Riparian lands adjacent to, but not included in, this unit are in private ownership (42 percent), Federal (35 percent), and private land under tribal jurisdiction (23 percent) (Table 3).
Unit RF7 includes 24.8 rkm (15.4 rmi) of the Middle Fork Little Red River from the confluence of Little Tick Creek north of Shirley, Arkansas, downstream to Greers Ferry Reservoir (where inundation begins), Van Buren County, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and natural gas development and hillside rock harvesting. All riparian lands adjacent
Unit RF8a includes 188.3 rkm (117.0 rmi) of the White River from the Batesville Dam at Batesville, Independence County, Arkansas, downstream to the Little Red River confluence north of Georgetown, White, and Woodruff Counties, Arkansas. This unit contains all or some components of all four physical or biological features and contains primary constituent elements 2, 3, 4, and 5. The ACOE maintains a navigation channel, which involves routine dredging and snag removal, from Newport, Arkansas, to its confluence with the Mississippi River. The physical or biological features in this unit may require special management considerations or protection described above except for releases of chemical contaminants from industrial and municipal effluents and including tail water releases from a series of reservoirs on the upper White River; row crop agriculture; increasing demand for instream sand from the White River upstream of Newport, Arkansas, to support natural gas development needs; natural gas development; and channelization. Riparian lands adjacent to, but not included in, this unit are in private ownership (94 percent) and State and local ownership (6 percent) (Table 3).
There are no records of rabbitsfoot from the 160-rkm (100-rmi) reach separating Unit RF8a from Unit RF8b (Butler 2005, p. 66). Unit RF8b includes 68.9 rkm (42.8 rmi) of the White River from U.S. Highway 79 at Clarendon, Monroe County, Arkansas, downstream to Arkansas Highway 1 near St. Charles, Arkansas County, Arkansas. This unit contains all or some components of all four physical or biological features and contains primary constituent elements 2, 3, 4, and 5. The ACOE maintains a navigation channel, which involves routine dredging and snag removal, from Newport, Arkansas, to its confluence with the Mississippi River. The physical or biological features in this unit may require special management considerations or protection described above except for releases of chemical contaminants from industrial and municipal effluents and including tail water releases from a series of reservoirs on the upper White River; row crop agriculture; increasing demand for instream sand from the White River upstream of Newport, Arkansas, to support natural gas development needs; natural gas development; and channelization. Approximately 84 percent of the riparian lands adjacent to, but not included in, this unit are in Federal ownership and 16 percent are in private ownership (Table 3).
Unit RF9 includes 51.2 rkm (31.8 rmi) of the Black River from U.S. Highway 67 at Pocahontas, Randolph County, Arkansas, downstream to the Flat Creek confluence southeast of Powhatan, Lawrence County, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and including row crop agriculture. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF10 includes 51.5 rkm (32.0 rmi) of the Spring River from the Ott Creek confluence southwest of Hardy in Sharp County, Arkansas, downstream to its confluence with the Black River east of Black Rock, Lawrence and Randolph Counties, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF11 includes 123.8 rkm (76.9 rmi) of the Strawberry River from Arkansas Highway 56 south of Horseshoe Bend, Izard County, Arkansas, downstream to its confluence with the Black River southeast of Strawberry, Lawrence County, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF12 includes 113.6 rkm (70.6 rmi) of the Buffalo River from the Cove Creek confluence southeast of Erbie, Newton County, Arkansas, downstream to U.S. Highway 65 west of Gilbert, Searcy County, Arkansas and Arkansas Highway 14 southeast of Mull, Arkansas, downstream to the Leatherwood Creek confluence in the Lower Buffalo Wilderness Area, Arkansas. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. All riparian lands adjacent to, but not included in, this unit are in Federal ownership (Table 3).
Unit RF13 includes 64.3 rkm (40.0 rmi) of the St. Francis River from the Twelvemile Creek confluence west of Saco, Madison County, Missouri, downstream to Lake Wappepello (where inundation begins), Wayne County, Missouri. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Riparian lands adjacent to, but not included in, this unit are in private (59 percent), Federal (39 percent), and less than 2 percent in State or local ownership (Table 3).
Unit RF14 includes 51.5 rkm (32.0 rmi) of the Big Sunflower River from Mississippi Highway 442 west of Doddsville, Mississippi, downstream to the Quiver River confluence east of Indianola, Sunflower County, Mississippi. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and row crop agriculture and channelization. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF15 includes 49.7 rkm (30.9 rmi) of Bear Creek from the Alabama and Mississippi State line east of Golden, Tishomingo County, Mississippi, downstream to Alabama County Road 4 southwest of Sutton Hill, Colbert County, Alabama (just upstream of Pickwick Lake). Unit RF15 in its entirety is currently designated as critical habitat for the oyster mussel (Duck River dartersnapper) and Cumberlandian combshell. Unit RF15 contains all or some components of all four physical or biological features, except in the Bear Creek Floodway, which has been channelized for flood control and only contains components of physical or biological features associated with the species' nutritional or physiological requirements and contains all five primary constituent elements, except in the Bear Creek Floodway, which has been channelized for flood control and only contains primary constituent elements 3, 4, and 5. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Riparian lands adjacent to, but not included in, this unit are in private (64 percent), Federal (24 percent), and 12 percent in State or local ownership (Table 3).
Unit RF16 includes 43.3 rkm (26.9 rmi) of Big Black River from Porter Creek confluence west of Lynchburg, Hinds County, Mississippi, downstream to Mississippi Highway 27 west of Newman, Warren County, Mississippi. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above, as well as row crop agriculture and channelization. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF17 includes 81.0 rkm (50.3 rmi) of the Paint Rock River from the convergence of Estill Fork and Hurricane Creek north of Skyline, Jackson County, Alabama, downstream to U.S. Highway 431 south of New Hope, Madison and Marshall Counties, Alabama. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture and channelization. Approximately 99 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 1 percent is in Federal ownership (Table 3).
Unit RF18 includes 235.3 rkm (146.2 rmi) of the Duck River from Lillard Mill (rkm 288; rmi 179) west of Tennessee Highway 272, Marshall County, Tennessee, downstream to Interstate 40 near Bucksnort, Hickman County, Tennessee. Seventy-four rkm (46 rmi) in Unit RF18 from rkm 214 (rmi 133) upstream to Lillards Mill at rkm 288 (rmi 179) is currently designated as critical habitat for the oyster mussel and Cumberlandian combshell (50 CFR 17.95(f)). Unit RF18 contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture and channelization. Approximately 83 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 17 percent are in State or local ownership (Table 3).
Unit RF19a includes 26.7 rkm (16.6 rmi) of Tennessee River from Pickwick Lake Dam downstream to U.S. Highway 64 near Adamsville, Hardin County, Tennessee. This unit contains all or some components of all four physical or biological features and contains primary constituent elements 1, 3, 4, and 5. The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture, channelization, and channel stability associated with tail water releases. Approximately 90 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 10 percent are in State or local ownership (Table 3).
Unit RF19b includes 35.6 rkm (22.1 rmi) of the Tennessee River from Kentucky Lake Dam downstream to its confluence with the Ohio River, McCracken and Livingston Counties, Kentucky. This unit contains all or some components of all four physical or biological features, and in part, contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Approximately 93 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership, 7 percent are in Federal ownership, and less than 1 percent is in State or local ownership (Table 3).
Unit RF20 includes 45.9 rkm (28.5 rmi) of the Ohio River from the Tennessee River confluence at the downstream extent of Owens Island downstream to Lock and Dam 53 near Olmstead, Illinois. This unit contains all or some components of all four physical or biological features, and in part, contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above, as well as row crop agriculture, channelization, and channel stability associated with tail water releases. Approximately 72 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 28 percent are in State or local ownership (Table 3).
Unit RF21 includes 175.6 rkm (109.1 rmi) of the Green River from Green River Lake Dam south of Campbellsville, Taylor County, Kentucky, downstream to Mammoth Cave National Park North Entrance Road in Mammoth Cave National Park, Kentucky. This unit contains all or some components of all four physical or biological features, and in part, contains all five primary constituent elements. Releases from Green River Lake dam have altered hydrologic flows and temperature regimes in the tail water reach (Butler 2005, p. 39). The physical or biological features in this unit may require special management
Unit RF22 includes 120.4 rkm (74.8 rmi) of French Creek from Union City Reservoir Dam northeast of Union City, Erie County, Pennsylvania, downstream to its confluence with the Allegheny River near Franklin, Venango County, Pennsylvania. The Allegheny River rabbitsfoot population (Unit RF23) is likely a single metapopulation with the French Creek population (Unit RF22) (Butler 2005, p. 31). This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture and oil and gas development. Approximately 97 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 3 percent are in Federal ownership (Table 3).
Unit RF23 includes 57.3 rkm (35.6 rmi) of the Allegheny River from the French Creek confluence near Franklin, Venango County, Pennsylvania, downstream to Interstate 80 near Emlenton, Venango County, Pennsylvania. The lower Allegheny River and French Creek (Unit RF22) populations likely represent a single metapopulation because no barriers exist between the streams (Butler 2005, p. 29). This unit contains all or some components of all four physical or biological features and likely functions as a metapopulation to French Creek (Unit RF22). This unit contains primary constituent elements 1, 3, 4, and 5 for the rabbitsfoot. A series of nine locks and dams and Kinzua Dam constructed over the past century has resulted in altered hydrologic flow regimes in the Allegheny River (Butler 2005, p. 29). The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture, oil and gas development, and channelization. Approximately 83 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 17 percent are in State or local ownership (Table 3).
Unit RF24 includes 20.1 rkm (12.5 rmi) of Muddy Creek from Pennsylvania Highway 77 near Little Cooley, Crawford County, Pennsylvania, downstream to its confluence with French Creek east of Cambridge Springs, Crawford County, Pennsylvania. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and oil and gas development. Approximately 81 percent of the riparian lands adjacent to, but not included in, this unit are in Federal ownership and 19 percent are in private ownership (Table 3).
Unit RF25 includes 75.6 rkm (47.0 rmi) of the Tippecanoe River from Indiana Highway 14 near Winamac, Pulaski County, Indiana, downstream to its confluence with the Wabash River northeast of Battle Ground, Tippecanoe County, Indiana, excluding Lakes Shafer and Freeman and the stream reach between the two lakes. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Approximately 97 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 3 percent are in State or local ownership (Table 3).
Unit RF26 includes 17.5 rkm (10.9 rmi) of the Walhonding River from the convergence of the Kokosing and Mohican Rivers downstream to Ohio Highway 60 near Warsaw, Coshocton County, Ohio. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above. Approximately 83 percent of the riparian lands adjacent to, but not included in, this unit are in private ownership and 17 percent are in State or local ownership (Table 3).
Unit RF27 includes 33.3 rkm (20.7 rmi) of Little Darby Creek from Ohio Highway 161 near Chuckery, Union County, Ohio, downstream to U.S. Highway 40 near West Jefferson, Madison County, Ohio. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and row crop agriculture. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF28 includes a total of 28.5 rkm (17.7 rmi). Unit RF28 includes 21.2 rkm (13.2 rmi) of the North Fork Vermilion River from the confluence of Middle Branch North Fork Vermilion River downstream to Illinois Highway 1 and U.S. Highway 136 upstream of Lake Vermilion, Vermilion County, Illinois. Unit RF28 also includes 7.2 rkm (4.5 rmi) of the Middle Branch North Fork Vermilion River from the Jordan Creek confluence northwest of Alvin, Illinois, downstream to its confluence with North Fork Vermilion River west of Alvin, Vermilion County, Illinois. The rabbitsfoot in the North Fork Vermilion River is considered a metapopulation with the Middle Branch North Fork Vermilion River population (Butler 2005, p. 47). This unit contains all or some components of all four physical or biological features, including connectivity between North Fork Vermilion River and Middle Branch North Fork Vermilion River. This unit contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above and channelization and row crop agriculture. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF29 includes 7.7 rkm (4.8 rmi) of Fish Creek from the Indiana and Ohio
Unit RF30 includes 50.2 rkm (31.2 rmi) of the Red River from the South Fork Red River confluence west of Adairville, Kentucky, downstream to the Sulphur Fork confluence southwest of Adams, Tennessee. This unit contains all or some components of all four physical or biological features and sustains genetic diversity and historical distribution as the largest of two remaining rabbitsfoot populations within the Cumberland River basin. This unit contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protection to address changes described above as well as row crop agriculture and channelization. All riparian lands adjacent to, but not included in, this unit are in private ownership (Table 3).
Unit RF31 includes 24.8 rkm (15.4 rmi) of the Shenango River from Porter Road near Greenville, Pennsylvania, downstream to the point of inundation by Shenango River Lake near Big Bend, Mercer County, Pennsylvania. This unit contains all or some components of all four physical or biological features and contains all five primary constituent elements. The physical or biological features in this unit may require special management considerations or protections to address changes described above as well consumptive water uses. Approximately 54 percent of the riparian lands adjacent to, but not included in, this unit are in Federal ownership and 46 percent are in private ownership (Table 3).
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 Appeals 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 ACOE 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
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 the Neosho mucket and rabbitsfoot. These activities include, but are not limited to:
(1) Actions that would alter the geomorphology of their stream and river habitats. Such activities may include, but are not limited to, instream excavation or dredging, impoundment, channelization, sand and gravel mining, clearing riparian vegetation, and discharge of fill materials. These activities could cause aggradation or degradation of the channel bed elevation or significant bank erosion, result in entrainment or burial of these mollusks, and cause other direct or cumulative adverse effects to these species and their life cycles.
(2) Actions that would significantly alter the existing flow regime where these species occur. Such activities may include, but are not limited to, impoundment, channelization, urban development, water diversion, water withdrawal, and tail water releases downstream of dams. These activities could eliminate or reduce the habitat necessary for growth and reproduction of these mollusks and their life cycles including fish hosts.
(3) Actions that would significantly alter water chemistry or water quality (for example, temperature, pH, contaminants, conductivity, and excess nutrients). Such activities may include, but are not limited to, tail water releases downstream of dams, or the release of chemicals, biological pollutants, or heated effluents into surface water or connected groundwater at a point source or by dispersed release (nonpoint source). These activities could alter water conditions that are beyond the tolerances of these mussels or their fish hosts or both, and result in direct or cumulative adverse effects to the species and their life cycles.
(4) Actions that would significantly alter stream bed material composition and quality by increasing sediment deposition or filamentous algal growth. Such activities may include, but are not limited to, construction projects, gravel and sand mining, oil and gas development, livestock grazing, timber harvest, off-road vehicle use, and other watershed and floodplain disturbances that release sediments or contaminants into the water. These activities could eliminate or reduce habitats necessary for the survival, growth, and reproduction of these mollusks or their fish hosts or both by causing excessive sedimentation and burial of Neosho mucket and rabbitsfoot or their habitats, sublethal effects from sediment exposure that are not readily apparent, acute and chronic exposure to chemical contaminants resulting in sublethal and lethal effects, and nutrification leading to excessive filamentous algal growth. Excessive filamentous algal growth can cause reduced nighttime dissolved oxygen levels and prevent mussel glochidia from settling into stream sediments.
Section 4(a)(3)(B)(i) of the Act (16 U.S.C. 1533(a)(3)(B)(i)) provides that: “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 integrated natural resources management plan (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.” There are no Department of Defense lands with a completed INRMP within the critical habitat designation.
Section 4(b)(2) of the Act states that the Secretary must designate and make revisions to critical habitat on the basis of the best available scientific data after taking into consideration the economic impact, national security impact, and any other relevant impact of specifying any particular area as critical habitat. 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 consider the economic impacts of specifying any particular area as critical habitat. In order to consider economic impacts of the proposed designation, we prepared a DEA (Industrial Economics Incorporated (IEc) 2012). The DEA, dated February 6, 2013, was made available for public review from May 9, 2013, through June 10, 2013 (78 FR 27171), from August 27, 2013, through October 28, 2013 (78 FR 52894), and from May 14, 2014, to July 14, 2014 (79 FR 27547). Following the close of the last comment period, an FEA was developed, taking into consideration the public comments and any new information (IEc 2013, entire). By analyzing economic impacts of the proposed designation, which differs from the final designation, the FEA does not capture the exact incremental impacts of the final designation. Therefore, a final summary memorandum has been prepared describing our revised forecast calculations (IEc 2014a and 2014b, entire).
The intent of the FEA is to quantify the economic impacts of all potential conservation efforts for Neosho mucket and rabbitsfoot; some of these costs will likely be incurred regardless of whether we designate critical habitat (baseline). The economic impact of the proposed critical habitat designation is analyzed by comparing scenarios both “with critical habitat” and “without critical habitat.” The “without critical habitat” scenario represents the baseline for the analysis, considering protections already in place for the species (for example, under the Federal listing and other Federal, State, and local regulations). The baseline, therefore, represents the costs incurred regardless of whether critical habitat is designated. The “with critical habitat” scenario describes the incremental impacts associated specifically with the proposed designation of critical habitat for the species. The incremental conservation efforts and associated impacts are those not expected to occur absent the designation of critical habitat for the species. In other words, the incremental costs are those attributable solely to the designation of critical
The FEA also addresses how potential economic impacts are likely to be distributed, including an assessment of any local or regional impacts of habitat conservation and the potential effects of conservation activities on government agencies, private businesses, and individuals. The FEA measures lost economic efficiency associated with residential and commercial development and public projects and activities, such as economic impacts on water management and transportation projects, Federal lands, small entities, and the energy industry. Decisionmakers can use this information to assess whether the effects of the proposed designation might unduly burden a particular group or economic sector. Finally, the FEA looks retrospectively at costs that occurred between the publication of the final listing rule and the final rule designating critical habitat, and considers those costs that may occur in the 20 years following the designation of critical habitat, which was determined to be the appropriate period for analysis because limited planning information was available for most activities to forecast activity levels for projects beyond a 20-year timeframe. The FEA quantifies economic impacts of Neosho mucket and rabbitsfoot conservation efforts associated with the following categories of activity:
(1) Water flow management;
(2) Water quality management;
(3) Timber, agriculture, and grazing;
(4) Mining;
(5) Oil and gas;
(6) Transportation and utilities;
(7) Development and recreation; and
(8) Other activities (such as animal and biological control, prescribed burns, land clearing, habitat or shoreline restoration, among others).
Baseline protections for the Neosho mucket and rabbitsfoot address a broad range of threats within a significant portion of the critical habitat area. The key conclusion for the incremental analysis is that critical habitat designation is not expected to generate additional requests for conservation efforts in any of the proposed critical habitat units. All critical habitat units are occupied by at least one of the two mussel species. In addition, incremental economic impacts of the designation will likely be limited to additional administrative costs to the Service, Federal agencies, and third parties. This result is attributed to the following key findings: (1) Baseline protections exist for Neosho mucket and rabbitsfoot, and (2) all designated critical habitat is occupied by at least one of the two mussel species.
In total, the incremental impacts to all economic activities are estimated to be $4,400,000 over the 20-year timeframe, or $290,000 on an annualized basis (assuming a 7 percent discount rate) for the proposed critical habitat. Units RF2 (Verdigris River) and NM1 (Illinois River) are expected to generate the largest incremental impacts, due to section 7 consultations expected to occur in all categories within these units. The majority of incremental impacts across all units are related to transportation and utilities, followed by timber, agriculture, and grazing. Incremental costs associated with transportation are estimated to be $1,400,000 over the 20-year timeframe; $960,000 is associated with timber, agriculture, and grazing over the 20-year timeframe.
Incremental conservation costs of avoiding impacts to mussels and their habitat will vary depending on a variety of factors, including, but not limited to, location, size, and type of project being proposed, as well as the extent to which mussels occur in the project area. These include the costs for mussel surveys, relocation, monitoring and reporting, mussel propagation and population augmentation, best management practices for erosion and sedimentation controls, timing restrictions, and limiting project scope, or in-stream work.
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 the Neosho mucket and rabbitsfoot based on economic impacts.
A copy of the FEA with supporting documents may be obtained by contacting the Arkansas Ecological Services Field Office (see
Under section 4(b)(2) of the Act, we consider whether there are lands owned or managed by the Department of Defense or Department of Homeland Security where a national security impact might exist. In preparing this final rule, we have determined that no lands within the designated critical habitat for the Neosho mucket and rabbitsfoot are owned or managed by the Department of Defense or Department of Homeland Security, and, therefore, we anticipate no impact on national security or homeland security. Consequently, the Secretary is not exercising her discretion to exclude any areas from this final designation based on impacts on national security or homeland security.
Under section 4(b)(2) of the Act, we 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. We also consider any social impacts that might occur because of the designation.
In preparing this final rule, we have determined that there are currently no permitted HCPs or other approved management plans for Neosho mucket and rabbitsfoot, and the final designation includes only tribal jurisdictional areas, not lands managed by any Tribe or trust resources. We anticipate no effect to tribal lands, partnerships, or HCPs from this critical habitat designation. Accordingly, the Secretary is not exercising her discretion to exclude any areas from this final designation based on other relevant impacts.
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
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; as well as small businesses. 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 on these small entities are significant, we consider the types of activities that might trigger regulatory impacts under this rule, as well as the 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.
During the development of this final rule, we reviewed and evaluated all information submitted during the comment period that may pertain to our consideration of the probable incremental economic impacts of this critical habitat designation. Based on this information, we affirm our certification that this final critical habitat designation will not have a significant economic impact on a substantial number of small entities, and 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. OMB has provided guidance for implementing this Executive Order that outlines nine outcomes that may constitute “a significant adverse effect” when compared to not taking the regulatory action under consideration. Appendix A of the FEA discusses the potential for critical habitat to affect utilities through the additional cost of considering adverse modification in section 7 consultation. Critical habitat designation for the mussels is anticipated to affect oil and gas activities. The Service does not anticipate consulting with the Federal Energy Regulatory Commission on hydropower operations as a result of the designation. Impacts to oil and gas development are limited to the administrative costs of consultation, and, therefore, reductions in oil and natural gas production are not anticipated. This analysis projects approximately 14 actions each year on oil and gas related activities, totaling approximately $7,000 per year. The magnitude of these consultation costs is not anticipated to increase the cost of energy production or distribution in the United States in excess of one percent.
The economic analysis finds that none of the nine outcomes is relevant to this analysis. Thus, based on information in the economic analysis, energy-related impacts associated with Neosho mucket and rabbitsfoot conservation activities within critical habitat are not expected. As such, the designation of critical habitat is not expected to significantly affect energy supplies, distribution, or use. Therefore, this action is not a significant energy action, and no Statement of Energy Effects is required.
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
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 small governments because it would not produce a Federal mandate of $100 million or greater in any year; that is, it is not a “significant regulatory action” under the Unfunded Mandates Reform Act. Small governments will be affected only to the extent that any programs having Federal funds, permits, or other authorized activities must ensure that their actions will not adversely affect the critical habitat. The FEA concludes incremental impacts may occur due to administrative costs of section 7 consultations for activities related to water flow management; water quality; timber, agriculture, and grazing; mining; oil and gas; transportation and utilities; development and recreation; and other activities; however, these are not expected to significantly affect small government entities. Consequently, we do not believe that the critical habitat designation will significantly or uniquely affect small government entities. As such, a Small Government Agency Plan is not required.
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 Neosho mucket and rabbitsfoot in a takings implications assessment. As discussed above, the designation of critical habitat affects only Federal actions. Although private parties that receive Federal funding, assistance, or 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.
The majority of the designation occurs in navigable waterways whose stream bottoms are owned by the States. Impacts of this designation could occur on non-Federal riparian lands adjacent to, but not included in, the critical habitat designation where there is Federal involvement (such as Federal funding or permitting) subject to section 7 of the Act, or where a decision on a proposed action on federally owned land could affect economic activity on adjoining non-Federal land. However, in general, we believe that the takings implications associated with this critical habitat designation will be insignificant. Based on the best available information, the takings implications assessment concludes that this designation of critical habitat for the Neosho mucket and rabbitsfoot does not pose significant takings implications.
In accordance with Executive Order 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 Alabama, Arkansas, Illinois, Indiana, Kansas, Kentucky, Mississippi, Missouri, Ohio, Oklahoma, Pennsylvania, and Tennessee. We received comments from Kansas, Illinois, Ohio, Oklahoma, and Pennsylvania and have addressed them in the Summary of Comments and Recommendations and Summary of Changes from Proposed Rule sections 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, this 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 or 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 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 the species, the rule identifies the elements of physical or biological features essential to the conservation of the Neosho mucket and rabbitsfoot. The designated areas of critical habitat are presented on maps, and the rule provides several options for the
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 NEPA in connection with designating critical habitat under the Act. We published a notice outlining our reasons for this determination in the
We performed this NEPA analysis and made the draft environmental assessment available for public comment on May 9, 2013 (78 FR 27171), August 27, 2013 (78 FR 52894), and May 14, 2014 (79 FR 27547). The final environmental assessment has been completed and is available with the publication of this final rule. You may obtain a copy of the final environmental assessment online at
The final environmental assessment included a detailed analysis of the potential effects of the proposed critical habitat designation on resource categories, including:
(1) Water flow management;
(2) Water quality management;
(3) Timber, agriculture, and grazing;
(4) Mining;
(5) Oil and gas;
(6) Transportation and utilities;
(7) Development and recreation; and
(8) Other activities (such as animal and biological control, prescribed burns, land clearing, habitat or shoreline restoration, among others, environmental justice, and cumulative effects).
The scope of the effects were primarily limited to those activities involving Federal actions, because critical habitat designation does not have any impact on the environment other than through the Act's section 7 consultation process conducted for Federal actions. Private actions that have no Federal involvement are not affected by critical habitat designation.
Based on the review and evaluation of the information contained in the environmental assessment, we determined that the designation of critical habitat for the Neosho mucket and rabbitsfoot does not constitute a major Federal action having a significant impact on the human environment under the meaning of section 102(2)(c) of NEPA, and so an environmental impact statement is not required.
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 tribal lands are not subject to the same controls as Federal public lands, to remain sensitive to Indian culture, and to make information available to tribes.
We determined that there are no tribal lands occupied by the Neosho mucket and rabbitsfoot at the time of listing that contain the physical or biological features essential to conservation of the species, and no tribal lands unoccupied by the Neosho mucket and rabbitsfoot that are essential for the conservation of the species. Therefore, we are not designating critical habitat for the Neosho mucket and rabbitsfoot on tribal lands.
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 Arkansas 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) * * *
(f)
(1) Critical habitat units are depicted for the Neosho mucket on the maps below in the following Counties:
(i) Benton and Washington Counties, Arkansas;
(ii) Allen, Cherokee, Coffey, Elk, Greenwood, Labette, Montgomery, Neosho, Wilson, and Woodson Counties, Kansas;
(iii) Jasper, Lawrence, McDonald, and Newton Counties, Missouri; and
(iv) Adair, Cherokee, and Delaware Counties, Oklahoma.
(2) Within these areas, the primary constituent elements of the physical or biological features essential to the conservation of the Neosho mucket consist of five components:
(i) Geomorphically stable river channels and banks (channels that maintain lateral dimensions, longitudinal profiles, and sinuosity patterns over time without an aggrading or degrading bed elevation) with habitats that support a diversity of freshwater mussel and native fish (such as stable riffles, sometimes with runs, and mid-channel island habitats that provide flow refuges consisting of gravel and sand substrates with low to moderate amounts of fine sediment and attached filamentous algae).
(ii) A hydrologic flow regime (the severity, frequency, duration, and seasonality of discharge over time) necessary to maintain benthic habitats where the species are found and to maintain connectivity of rivers with the floodplain, allowing the exchange of nutrients and sediment for maintenance of the mussel's and fish host's habitat, food availability, spawning habitat for native fishes, and the ability for newly transformed juveniles to settle and become established in their habitats.
(iii) Water and sediment quality (including, but not limited to, conductivity, hardness, turbidity, temperature, pH, ammonia, heavy metals, and chemical constituents) necessary to sustain natural physiological processes for normal behavior, growth, and viability of all life stages.
(iv) The occurrence of natural fish assemblages, reflected by fish species richness, relative abundance, and community composition, for each inhabited river or creek that will serve as an indication of appropriate presence and abundance of fish hosts necessary for recruitment of the Neosho mucket. Suitable fish hosts for Neosho mucket glochidia include smallmouth bass (
(v) Competitive or predaceous invasive (nonnative) species in quantities low enough to have minimal effect on survival of freshwater mussels.
(3) Critical habitat does not include manmade structures (such as dams, piers and docks, bridges, or other similar structures) within the legal boundaries on June 1, 2015.
(4)
(5) Note: Index map of all critical habitat units for the Neosho mucket follows:
(6) Unit NM1: Illinois River—Benton and Washington Counties, Arkansas; and Adair, Cherokee, and Delaware Counties, Oklahoma.
(i)
(ii) Map of Unit NM1 follows:
(7) Unit NM2: Elk River—McDonald County, Missouri; and Delaware County, Oklahoma.
(i)
(ii) Map of Unit NM2 follows:
(8) Unit NM3: Shoal Creek—Cherokee County, Kansas; and Newton County, Missouri.
(i)
(ii) Map of Unit NM3 follows:
(9) Unit NM4: Spring River—Jasper and Lawrence Counties, Missouri; and Cherokee County, Kansas.
(i)
(ii) Map of Unit NM4 follows:
(10) Unit NM5: North Fork Spring River—Jasper County, Missouri.
(i)
(ii) Map of Unit NM5 follows:
(11) Unit NM6: Fall River—Elk, Greenwood, and Wilson Counties, Kansas; Verdigris River—Montgomery and Wilson Counties, Kansas.
(i)
(ii) Map of Unit NM6 follows:
(12) Unit NM7: Neosho River—Allen, Cherokee, Coffey, Labette, Neosho, and Woodson Counties, Kansas.
(i)
(ii) Map of Unit NM7 follows:
(1) Critical habitat units are depicted for rabbitsfoot on the maps below in the following Counties:
(i) Colbert, Jackson, Madison, and Marshall Counties, Alabama;
(ii) Arkansas, Ashley, Bradley, Clark, Cleburne, Cleveland, Drew, Hot Spring, Independence, Izard, Jackson, Lawrence, Little River, Marion, Monroe, Newton, Ouachita, Randolph, Searcy, Sevier, Sharp, Van Buren, White, and Woodruff Counties, Arkansas;
(iii) Massac, Pulaski, and Vermilion Counties, Illinois;
(iv) Carroll, Pulaski, Tippecanoe, and White Counties, Indiana;
(v) Allen and Cherokee Counties, Kansas;
(vi) Ballard, Edmonson, Green, Hart, Livingston, Logan, Marshall, McCracken, and Taylor Counties, Kentucky;
(vii) Hinds, Sunflower, Tishomingo, and Warren Counties, Mississippi;
(viii) Jasper, Madison, and Wayne Counties, Missouri;
(ix) Coshocton, Madison, Union, and Williams Counties, Ohio;
(x) McCurtain and Rogers Counties, Oklahoma;
(xi) Crawford, Erie, Mercer, and Venango Counties, Pennsylvania; and
(xii) Hardin, Hickman, Humphreys, Marshall, Maury, Montgomery, Perry, and Robertson Counties, Tennessee.
(2) Within these areas, the primary constituent elements of the physical or biological features essential to the
(i) Geomorphically stable river channels and banks (channels that maintain lateral dimensions, longitudinal profiles, and sinuosity patterns over time without an aggrading or degrading bed elevation) with habitats that support a diversity of freshwater mussel and native fish (such as stable riffles, sometimes with runs, and mid-channel island habitats that provide flow refuges consisting of gravel and sand substrates with low to moderate amounts of fine sediment and attached filamentous algae).
(ii) A hydrologic flow regime (the severity, frequency, duration, and seasonality of discharge over time) necessary to maintain benthic habitats where the species are found and to maintain connectivity of rivers with the floodplain, allowing the exchange of nutrients and sediment for maintenance of the mussel's and fish host's habitat, food availability, spawning habitat for native fishes, and the ability for newly transformed juveniles to settle and become established in their habitats.
(iii) Water and sediment quality (including, but not limited to, conductivity, hardness, turbidity, temperature, pH, ammonia, heavy metals, and chemical constituents) necessary to sustain natural physiological processes for normal behavior, growth, and viability of all life stages.
(iv) The occurrence of natural fish assemblages, reflected by fish species richness, relative abundance, and community composition, for each inhabited river or creek that will serve as an indication of appropriate presence and abundance of fish hosts necessary for recruitment of the rabbitsfoot. Suitable fish hosts for rabbitsfoot may include, but are not limited to, blacktail shiner (
(v) Competitive or predaceous invasive (nonnative) species in quantities low enough to have minimal effect on survival of freshwater mussels.
(3) Critical habitat does not include manmade structures (such as dams, piers and docks, bridges, or other similar structures) within the legal boundaries on June 1, 2015.
(4)
(5) Note: Index map of all critical habitat units for the rabbitsfoot follows:
(6) Unit RF1: Spring River—Jasper County, Missouri; and Cherokee County, Kansas.
(i)
(ii) Map of Unit RF1 follows:
(7) Unit RF2: Verdigris River—Rogers County, Oklahoma.
(i)
(ii) Map of Unit RF2 follows:
(8) Unit RF3: Neosho River—Allen County, Kansas.
(i)
(ii) Map of Unit RF3 follows:
(9) Unit RF4a: Ouachita River—Clark and Hot Spring Counties, Arkansas.
(i)
(ii) Map of Unit RF4a follows:
(10) Unit RF4b: Ouachita River—Ouachita County, Arkansas.
(i)
(ii) Map of Unit RF4b follows:
(11) Unit RF5: Saline River—Ashley, Bradley, Cleveland, and Drew Counties, Arkansas.
(i)
(ii) Map of Unit RF5 follows:
(12) Unit RF6: Little River—McCurtain County, Oklahoma; and Little River and Sevier Counties, Arkansas.
(i)
(ii) Map of Unit RF6 follows:
(13) Unit RF7: Middle Fork Little Red River—Cleburne and Van Buren Counties, Arkansas.
(i)
(ii) Map of Unit RF7 follows:
(14) Unit RF8a: White River—Independence, Jackson, White, and Woodruff Counties, Arkansas.
(i)
(ii) Map of Unit RF8a follows:
(15) Unit RF8b: White River—Arkansas and Monroe Counties, Arkansas.
(i)
(ii) Map of Unit RF8b follows:
(16) Unit RF9: Black River—Lawrence and Randolph Counties, Arkansas.
(i)
(ii) Map of Unit RF9 follows:
(17) Unit RF10: Spring River—Lawrence, Randolph, and Sharp Counties, Arkansas.
(i)
(ii) Map of Unit RF10 follows:
(18) Unit RF11: Strawberry River—Independence, Izard, Lawrence, and Sharp Counties, Arkansas.
(i)
(ii) Map of Unit RF11 follows:
(19) Unit RF12: Buffalo River—Marion, Newton, and Searcy Counties, Arkansas.
(i)
(ii) Map of Unit RF12 follows:
(20) Unit RF13: St. Francis River—Madison and Wayne Counties, Missouri.
(i)
(ii) Map of Unit RF13 follows:
(21) Unit RF14: Big Sunflower River—Sunflower County, Mississippi.
(i)
(ii) Map of Unit RF14 follows:
(22) Unit RF15: Bear Creek—Tishomingo County, Mississippi; and Colbert County, Alabama.
(i)
(ii) Map of Unit RF15 follows:
(23) Unit RF16: Big Black River—Hinds and Warren Counties, Mississippi.
(i)
(ii) Map of Unit RF16 follows:
(24) Unit RF17: Paint Rock River—Jackson, Madison, and Marshall Counties, Alabama.
(i)
(ii) Map of Unit RF17 follows:
(25) Unit RF18: Duck River—Hickman, Humphreys, Marshall, Maury, and Perry Counties, Tennessee.
(i)
(ii) Map of Unit RF18 follows:
(26) Unit RF19a: Tennessee River—Hardin County, Tennessee.
(i)
(ii) Map of Unit RF19a follows:
(27) Unit RF19b: Tennessee River—Livingston, Marshall, and McCracken Counties, Kentucky.
(i)
(ii) Map of Unit RF19b follows:
(28) Unit RF20: Ohio River—Ballard, and McCracken Counties, Kentucky; Massac and Pulaski Counties, Illinois.
(i)
(ii) Map of Unit RF20 follows:
(29) Unit RF21: Green River—Edmonson, Green, Hart, and Taylor Counties, Kentucky.
(i)
(ii) Map of Unit RF21 follows:
(30) Unit RF22: French Creek—Crawford, Erie, Mercer, and Venango Counties, Pennsylvania.
(i)
(ii) Map of Unit RF22 follows:
(31) Unit RF23: Allegheny River—Venango County, Pennsylvania.
(i)
(ii) Map of Unit RF23 follows:
(32) Unit RF24: Muddy Creek—Crawford County, Pennsylvania.
(i)
(ii) Map of Unit RF24 follows:
(33) Unit RF25: Tippecanoe River—Carroll, Pulaski, Tippecanoe, and White Counties, Indiana.
(i)
(ii) Map of Unit RF25 follows:
(34) Unit RF26: Walhonding River—Coshocton County, Ohio.
(i)
(ii) Map of Unit RF26 follows:
(35) Unit RF27: Little Darby Creek—Madison and Union Counties, Ohio.
(i)
(ii) Map of Unit RF27 follows:
(36) Unit RF28: North Fork Vermilion River and Middle Branch North Fork Vermilion River, respectively—Vermilion County, Illinois.
(i)
(ii) Map of Unit RF28 follows:
(37) Unit RF29: Fish Creek—Williams County, Ohio.
(i)
(ii) Map of Unit RF29 follows:
(38) Unit RF30: Red River—Logan County, Kentucky; and Montgomery and Robertson Counties, Tennessee.
(i)
(ii) Map of Unit RF30 follows:
(39) Unit RF31: Shenango River—Mercer County, Pennsylvania.
(i)
(ii) Map of Unit RF31 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 |