83 FR 42596 - Medicare Program; Certain Changes to the Low-Volume Hospital Payment Adjustment Under the Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals for Fiscal Years 2011 Through 2017

DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services

Federal Register Volume 83, Issue 164 (August 23, 2018)

This document announces changes to the payment adjustment for low-volume hospitals under the hospital inpatient prospective payment systems (IPPS) for acute care hospitals for fiscal years (FYs) 2011 through 2017 in accordance with section 429 of the Consolidated Appropriations Act, 2018.

[Federal Register Volume 83, Number 164 (Thursday, August 23, 2018)]
[Rules and Regulations]
[Pages 42596-42600]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-18271]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1709-N]
RIN 0938-ZB49


Medicare Program; Certain Changes to the Low-Volume Hospital 
Payment Adjustment Under the Hospital Inpatient Prospective Payment 
Systems (IPPS) for Acute Care Hospitals for Fiscal Years 2011 Through 
2017

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

ACTION: Application of a payment adjustment.

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SUMMARY: This document announces changes to the payment adjustment for 
low-volume hospitals under the hospital inpatient prospective payment 
systems (IPPS) for acute care hospitals for fiscal years (FYs) 2011 
through 2017 in accordance with section 429 of the Consolidated 
Appropriations Act, 2018.

DATES: Effective date: August 22, 2018.
    Applicability date: The provisions described in this document are 
applicable for discharges on or after October 1, 2010, and on or before 
September 30, 2017, in accordance with section 429 of the Consolidated 
Appropriations Act, 2018.

FOR FURTHER INFORMATION CONTACT: Michele Hudson, (410) 786-5490.; Mark 
Luxton, (410) 786-4530.

SUPPLEMENTARY INFORMATION:

I. Background

    On March 23, 2018 the Consolidated Appropriations Act, 2018 (Pub. 
L. 115-141) was enacted. Section 429 of the Consolidated Appropriations 
Act, 2018 makes certain changes to the payment adjustment for low-
volume hospitals for fiscal years (FYs) 2011 through 2017 relating to 
the application of the mileage criterion for Indian Health Service and 
non-Indian Health Service facilities.

II. Provisions of the Document

A. Changes to the Payment Adjustment for Low-Volume Hospitals in FYs 
2011 Through 2017

1. Background
    Section 1886(d)(12) of the Act provides for an additional payment 
to each qualifying low-volume hospital under the Hospital Inpatient 
Prospective Payment Systems (IPPS) for Acute Care Hospitals beginning 
in FY 2005. CMS implemented this provision in the regulations at 42 CFR 
412.101. The payment adjustment to a low-volume hospital provided for 
under section 1886(d)(12) of the Act is ``[i]n addition to any payment 
calculated under this section.'' Therefore, meaning the payment 
adjustment is based on the per discharge amount paid to the qualifying 
hospital under section 1886 of the Act. In other words, the low-volume 
hospital payment adjustment is based on total per discharge payments 
made under section 1886 of the Act, including capital, disproportionate 
share hospital (DSH), indirect medical education (IME), and outlier 
payments. For sole community hospitals (SCHs) and Medicare-dependent 
hospitals (MDHs), the low-volume hospital payment adjustment is based 
in part on either the Federal rate or the hospital-specific rate, 
whichever results in a greater operating IPPS payment.
    The Affordable Care Act amended section 1886(d)(12) of the Act by 
modifying the definition of a low-volume hospital and the methodology 
for calculating the payment adjustment for low-volume hospitals, 
effective only for discharges occurring during FYs 2011 and 2012, and 
subsequent legislation extended those temporary modifications through 
FY 2018. (The most recent statutory extension of those temporary 
changes to the low-volume hospital payment policy was for FY 2018 and 
is discussed in a document

[[Page 42597]]

(CMS 1677-N) that appeared in the April 26, 2018 Federal Register (83 
FR 18301).) Specifically, those provisions amended the qualifying 
criteria for low volume hospitals under section 1886(d)(12)(C)(i) of 
the Act to specify that, for FYs 2011 through 2018, a subsection (d) 
hospital qualifies as a low-volume hospital if it is more than 15 road 
miles from another subsection (d) hospital and has less than 1,600 
discharges of individuals entitled to, or enrolled for, benefits under 
Part A during the fiscal year. In addition, these provisions amended 
section 1886(d)(12)(D) of the Act to provide that for FYs 2011 through 
2018, the low-volume hospital payment adjustment (that is, the 
percentage increase) is to be determined using a continuous linear 
sliding scale ranging from 25 percent for low-volume hospitals with 200 
or fewer discharges of individuals entitled to, or enrolled for, 
benefits under Part A in the fiscal year to zero percent for low-volume 
hospitals with greater than 1,600 discharges of such individuals in the 
fiscal year. (We note that under Sec.  412.101(b)(2)(ii), for FYs 2011 
through 2017, a hospital's Medicare discharges from the most recently 
available MedPAR data, as determined by CMS, are used to determine 
whether the hospital meets the discharge criterion to receive the low 
volume hospital payment adjustment in the applicable fiscal year. In 
the FY 2019 IPPS/LTCH PPS final rule, we finalized conforming changes 
to this provision to reflect that the low-volume hospital payment 
adjustment policy in effect for FY 2018 is the same low-volume hospital 
payment adjustment policy in effect for FYs 2011 through 2017 (83 FR 
41144, August 17, 2018).
2. Treatment of Indian Health Service and Non-Indian Health Service 
Facilities
    Section 1886(d)(12)(C) of the Act requires that, in order to 
qualify for the low volume hospital payment adjustment, a hospital must 
be located more than a specified number of miles from the nearest 
subsection (d) hospital (referred to as the mileage criterion, which is 
implemented at Sec.  412.101(b)(2)). Since CMS considers Indian Health 
Service (IHS) and Tribal hospitals (collectively referred to here as 
``IHS hospitals'') to be subsection (d) hospitals, for the reasons 
discussed in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38188 through 
38189), we adopted a parallel adjustment at Sec.  412.101(e) which 
specifies that, for discharges occurring in FY 2018 and subsequent 
years, only the distance between IHS hospitals would be considered when 
assessing whether an IHS hospital meets the mileage criterion under 
Sec.  412.101(b)(2), and similarly, only the distance between non-IHS 
hospitals would be considered when assessing whether a non-IHS hospital 
meets the mileage criterion under Sec.  412.101(b)(2).
    While the policy finalized in the FY 2018 IPPS/LTCH PPS final rule 
addresses FY 2018 and subsequent fiscal years, section 429 of the 
Consolidated Appropriations Act, 2018 amended section 1886(d)(12)(C) of 
the Act by adding a new clause (iii) specifying that for purposes of 
determining whether an IHS or a non-IHS hospital meets the mileage 
criterion under section 1886(d)(12)(C)(i) of the Act with respect to FY 
2011 or a succeeding year, the Secretary shall apply the policy 
described in the regulations at Sec.  412.101(e) (as in effect on the 
date of enactment). In other words, under this statutory change, the 
special treatment with respect to the proximities between IHS and non-
IHS hospitals as set forth in Sec.  412.101(e) for discharges occurring 
in FY 2018 and subsequent fiscal years is now also applicable for 
purposes of applying the mileage criterion for the low-volume hospital 
payment adjustment for FYs 2011 through 2017. Therefore, when assessing 
the mileage criterion under Sec.  412.101(b)(2) for FYs 2011 through 
2017, an IHS hospital would be considered to have met the mileage 
criterion in the applicable year if it was more than 15 road miles from 
the nearest IHS hospital, and a non-IHS hospital would be considered to 
have met the mileage criterion in the applicable year if it was more 
than 15 road miles from the nearest non-IHS hospital.

B. Implementation of the Low-Volume Hospital Payment Adjustment Under 
Section 429 of the Consolidated Appropriations Act, 2018

    Section 429 of the Consolidated Appropriations Act, 2018 applies 
the policy at Sec.  412.101(e) to prior years, that is, for discharges 
occurring during FYs 2011 through 2017. To implement these changes, 
hospitals that qualify for the low-volume hospital payment adjustment 
under the provisions of the Consolidated Appropriations Act, 2018 may 
receive the low-volume hospital payment adjustment as part of the cost 
report settlement and reopening process for each cost report that 
includes discharges from one of the applicable fiscal years (that is, 
from FYs 2011 through 2017). In the event a hospital, having followed 
our process to request the low-volume hospital payment adjustment as 
described in this document, qualifies as a low-volume hospital for 
discharges occurring in one of the applicable fiscal years and those 
discharges are in a cost report that has been settled, the Medicare 
Administrative Contractors (MAC) will reopen such cost reports in 
accordance with 42 CFR 405.1885 which allows for the reopening of cost 
reports upon request only if a request to reopen is received by the MAC 
within 3 years of the date of the determination or decision that is the 
subject of the reopening or if the cost report is the subject of a 
pending jurisdictionally proper appeal before the Provider 
Reimbursement Review Board or CMS Administrator. Therefore, the 
application of the low-volume hospital payment adjustment under the 
provisions of section 429 of the Consolidated Appropriations Act, 2018 
will only be applied to discharges occurring in FYs 2011 through 2017 
(as applicable) that are in cost reports that are either currently open 
or for which the hospital requests reopening within the 3-year 
reopening period by making a request to the MAC with the information 
described in this document. In this document, we are explicitly 
directing the MACs to reopen and revise these matters, but only under 
the circumstances and for the cost reporting periods specified herein 
and subject to the time limits specified both in 42 CFR 405.1885(b) and 
this document. (See 42 CFR 405.1885(c)(1).) If a hospital's reopening 
request is untimely or if a hospital fails to provide adequate written 
documentation as described in this document, the MAC may deny the 
reopening request.
    We are directing a reopening here under the circumstances described 
solely in response to the amendment made by section 429 of the 
Consolidated Appropriations Act, 2018, which changed the application of 
the mileage criterion for purposes of the low-volume hospital payment 
adjustment for FYs 2011 through 2017. We reiterate here that, apart 
from the specific circumstances, time periods, and cost reporting 
periods for which we are explicitly directing reopening in this 
document, reopening denials by the MAC in this and other contexts are 
discretionary and unreviewable under Your Home Visiting Nurse Servs., 
Inc. v. Shalala, 525 U.S. 449 (1999) and related precedent.
    We note, any reopening under this procedure shall be for the sole 
purpose of making a low-volume hospital payment adjustment under the 
provisions of section 429 of the Consolidated Appropriations Act, 2018

[[Page 42598]]

and for no other purpose. (For additional information on the reopening 
regulations at 42 CFR 405.1885, refer to the following final rules 
published in the Federal Register: (67 FR 50096), (73 FR 30230), and 
(78 FR 75162) as well as sections 2931 through 2932 of chapter 29 of 
the Provider Reimbursement Manual (PRM), Part 1.)
    The changes to the low-volume hospital payment adjustment under 
section 429 of the Consolidated Appropriations Act, 2018 do not affect 
the discharge criterion in place between FYs 2011 and 2017. Thus, in 
accordance with the existing regulations at Sec.  412.101(b)(2)(ii) and 
consistent with our implementation of the low-volume hospital payment 
adjustment in FYs 2011 through 2017, the discharge data source used to 
identify qualifying low-volume hospitals and calculate the payment 
adjustment in accordance with the changes under section 429 of the 
Consolidated Appropriations Act, 2018 is the same discharge data source 
used to identify qualifying low-volume hospitals and calculate the 
payment adjustment for discharges that occurred in that fiscal year; 
that is, the most recent data available at the time of the development 
of the payment rates and factors established in the corresponding final 
rule. Under Sec.  412.101(b)(2)(ii), for FYs 2011 through 2017, a 
hospital's Medicare discharges from the most recently available MedPAR 
data for the applicable fiscal year, as determined by CMS, are used to 
determine whether the hospital meets the discharge criterion to receive 
the low-volume payment adjustment in the applicable year. The 
applicable low-volume percentage increase for FYs 2011 through 2017 is 
determined using a continuous linear sliding scale equation that 
results in a low-volume adjustment ranging from an additional 25 
percent for hospitals with 200 or fewer Medicare discharges to a zero 
percent additional payment adjustment for hospitals with 1,600 or more 
Medicare discharges (Sec.  412.101(c)(2)).
    For the discharge data source used to identify qualifying low-
volume hospitals and to calculate the payment adjustment for FY 2011, 
refer to the chart in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50242 
through 50274) or the `Medicare Discharge Count for FY 2011 Low Volume 
Adjustment' file on the ``Files for FY 2011 Final Rule and Correction 
Notice'' home page (https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Acute-Inpatient-Files-for-Download-Items/CMS1255464.html). For FYs 2012 through 2017, Table 14 of each 
year's respective IPPS/LTCH PPS final rule (which is available through 
the internet on the CMS website at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/index.html under 
``Acute Inpatient--Files for Download'' for the respective year) lists 
the ``subsection (d)'' hospitals with fewer than 1,600 Medicare 
discharges based on the applicable data source and their payment 
adjustment for that fiscal year (if eligible).
    These discharges and corresponding payment adjustment are based on 
the most recent data available at the time of the development of that 
year's payment rates and factors established in the corresponding final 
rule. (For additional details on the discharge data source used to 
identify qualifying low-volume hospitals and calculate the payment 
adjustment for FYs 2011 through 2017, refer to the following FY 2011 
(75 FR 50241 through 50275); FY 2012 (76 FR 51679 through 51680); FY 
2013 (78 FR 14689 through 14691); FY 2014 ((79 FR 15022 through 15025) 
and (79 FR 34444 through 34446)); FY 2015 ((80 FR 49998 through 49999) 
and Change Request 9197 (Transmittal 3281; June 5, 2015)); FY 2016 (80 
FR 49595 through 49597); and FY 2017 (81 FR 56941 through 56943).) The 
list of hospitals with fewer than 1,600 Medicare discharges for each of 
FYs 2011 through 2017 (previously described) does not reflect whether 
or not the hospital meets the mileage criterion. In addition to meeting 
the discharge criterion, an IHS hospital would be eligible for the low-
volume hospital payment adjustment for an applicable fiscal year under 
the provisions of section 429 of the Consolidated Appropriations Act, 
2018 if, in the applicable fiscal year, it was located more than 15 
road miles from the nearest IHS hospital. Likewise, a non-IHS hospital 
meeting the discharge requirement would be eligible for the low-volume 
hospital payment adjustment for an applicable fiscal year under the 
provisions of section 429 of the Consolidated Appropriations Act, 2018 
if, in the applicable fiscal year, it was located more than 15 road 
miles from the nearest non-IHS hospital.
    We are using the following procedure for a hospital to request the 
low-volume hospital payment adjustment for any applicable fiscal years 
between FYs 2011 and 2017 under the provisions of section 429 of the 
Consolidated Appropriations Act, 2018. In order for the applicable low-
volume hospital payment adjustment to be applied for an applicable 
fiscal year's discharges in an open or reopenable cost report(s), a 
hospital must notify and provide documentation to its MAC in writing 
that it meets the mileage criterion under the provisions of section 429 
of the Consolidated Appropriations Act, 2018 in the applicable fiscal 
year (as described in this document). In the case of a reopenable cost 
report, the hospital must request a reopening when submitting its 
written notification and documentation to its MAC. We note, for a 
hospital to receive the low-volume payment adjustment in FYs 2011 
through 2017 under the provisions of the Consolidated Appropriations 
Act, 2018, the hospital must have been unable to meet the mileage 
criterion for that fiscal year prior to the enactment of the 
Consolidated Appropriations Act, 2018 (that is, the provisions of 
section 429 of the Consolidated Appropriations Act, 2018 do not affect 
hospitals which met the mileage criterion without regard to this 
provision). Specifically, for an IHS hospital to be eligible to receive 
the low-volume hospital payment adjustment in FYs 2011 through 2017 
under section 429 of the Consolidated Appropriations Act, 2018, that 
IHS hospital must not have been able to meet the mileage criterion in 
the applicable fiscal year based on its proximity to a non-IHS 
hospital. Similarly, for an non-IHS hospital to be eligible to receive 
the low-volume payment adjustment in FYs 2011 through 2017 under 
section 429 of the Consolidated Appropriations Act, 2018, that non-IHS 
hospital must not have been able to meet the mileage criterion in the 
applicable fiscal year based on its proximity to an IHS hospital. We 
encourage hospitals to notify their MAC as soon as possible because, as 
previously noted, under 42 CFR 405.1885, reopening a cost report is 
limited to 3 years after cost report settlement. In other words, the 
application of the low-volume hospital payment adjustment under the 
provisions of section 429 of the Consolidated Appropriations Act, 2018 
is limited to discharges occurring in FYs 2011 through 2017 (as 
applicable) that are in cost reports that are either currently open or 
within the 3-year reopening period. Therefore, to receive the low-
volume payment adjustment for discharges in FYs 2011 through 2017, the 
written request must be received by the MAC prior to the close of the 
3-year period for the cost report that includes such discharges.
    The use of a Web-based mapping tool as part of documenting that the 
hospital meets the mileage criterion for low-volume hospitals in the 
applicable fiscal year is acceptable. The MAC will determine if the 
information submitted by the hospital, such as the name and

[[Page 42599]]

street address of the nearest hospitals, location on a map, and 
distance (in road miles, as defined in the regulations at Sec.  
412.101(a)) from the hospital requesting low-volume hospital status, is 
sufficient to document that the hospital requesting low-volume hospital 
status meets the mileage criterion in the applicable fiscal year (and 
had previously been unable to meet the mileage criterion in that fiscal 
year as described in this document). The MAC may follow up with the 
hospital to obtain additional necessary information to determine 
whether or not the hospital meets the low-volume mileage criterion for 
any applicable fiscal year. In addition, the MAC will refer to the 
hospital's Medicare discharge data determined by CMS for the applicable 
fiscal year(s) to determine whether or not the hospital met the 
discharge criterion in that fiscal year, and the amount of the low-
volume hospital payment adjustment for such year(s), once it is 
determined that the mileage criterion has been met. (The applicable 
Medicare discharge data for each of FYs 2011 through 2017 is previously 
described.) In addition, in order to receive the low-volume hospital 
payment adjustment, sufficient documentation in the written request to 
the MAC must include the following to demonstrate that the hospital was 
unable to meet the mileage criterion for that fiscal year prior to the 
enactment of the Consolidated Appropriations Act, 2018. For each 
applicable fiscal year, an IHS hospital must provide documentation to 
its MAC that it was not able to meet the mileage criterion in the 
applicable fiscal year based on its proximity to a non-IHS hospital. 
Similarly, a non-IHS hospital must provide documentation to its MAC 
that it was not able to meet the mileage criterion in the applicable 
fiscal year based on its proximity to an IHS hospital.
    Program guidance on the implementation of this provision, including 
instructions for cost report settlement and reopening as applicable, 
will be announced in an upcoming transmittal. We intend to make any 
conforming changes to the regulations text at 42 CFR 412.101 to reflect 
the changes to the low-volume hospital payment adjustment policy in 
accordance with the amendments made by section 429 of the Consolidated 
Appropriations Act, 2018 as described in this document in future 
rulemaking.

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995 (44 U.S.C. 35).

IV. Regulatory Impact Statement

A. Statement of Need

    This document is necessary to update the low-volume hospital 
payment adjustment policy for FYs 2011 through 2017 to reflect changes 
provided by section 429 of the Consolidated Appropriations Act, 2018. 
Section 429 of the Consolidated Appropriations Act, 2018 makes certain 
changes to the payment adjustment for low-volume hospitals for FYs 2011 
through 2017 relating to the application of the mileage criterion for 
IHS and non-IHS hospitals.

B. Overall Impact Statement

    We have examined the impacts of this document as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 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), the Congressional Review Act (5 U.S.C. 804(2)), and 
Executive Order 13771 on Reducing Regulation and Controlling Regulatory 
Costs (January 30, 2017).
    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). Section 
3(f) of Executive Order 12866 defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more in any 1 year, or 
adversely and materially affecting a sector of the economy, 
productivity, competition, jobs, the environment, public health or 
safety, or state, local or tribal governments or communities (also 
referred to as ``economically significant''); (2) creating a serious 
inconsistency or otherwise interfering with an action taken or planned 
by another agency; (3) materially altering the budgetary impacts of 
entitlement grants, user fees, or loan programs or the rights and 
obligations of recipients thereof; or (4) raising novel legal or policy 
issues arising out of legal mandates, the President's priorities, or 
the principles set forth in the Executive Order.
    A regulatory impact analysis (RIA) must be prepared for regulatory 
actions with economically significant effects ($100 million or more in 
any 1 year). Although we do not consider this document to constitute a 
substantive rule or regulatory action, the monetary impact of the 
changes announced in this document is approximately a $40 million 
increase in low-volume hospital payments total for FYs 2011 through 
2017 relative to the estimates included in the respective FY IPPS/LTCH 
PPS final rules.

C. Anticipated Effects

    The RFA requires agencies to analyze options for regulatory relief 
of small businesses, if a rule has a significant impact on a 
substantial number 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 to $34.5 million in any 1 year). 
(For details on the latest standard for health care providers, we refer 
readers to page 33 of the Table of Small Business Size Standards for 
NAIC 622 at the Small Business Administration's website at https://www.sba.gov/sites/default/files/files/Size_Standards_Table.pdf.) 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 note that we expect 
the effects of the changes announced in this document to impact only 
approximately 15 providers.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule 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 604 of the RFA. With 
the exception of hospitals located in certain New England counties, for 
purposes of section 1102(b) of the Act, we now define a small rural 
hospital as a hospital that is located outside of an urban area and has 
fewer

[[Page 42600]]

than 100 beds. Section 601(g) of the Social Security Amendments of 1983 
(Pub. L. 98-21) designated hospitals in certain New England counties as 
belonging to the adjacent urban area. Thus, for purposes of the IPPS, 
we continue to classify these hospitals as urban hospitals. As noted 
previously, we expect the effects of the changes announced in this 
document to impact only approximately 15 providers.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(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 2018, that threshold is approximately $150 million. The 
changes announced in this document will not mandate any requirements 
for State, local, or tribal governments, nor will it affect private 
sector costs.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. The changes announced in this document will not have a 
substantial effect on State and local governments.
    Executive Order 13771, entitled ``Reducing Regulation and 
Controlling Regulatory Costs,'' was issued on January 30, 2017, and 
requires that the costs associated with significant new regulations 
``shall, to the extent permitted by law, be offset by the elimination 
of existing costs associated with at least two prior regulations.'' It 
has been determined that the provisions announced in this document are 
actions that primarily result in transfers, and thus are not a 
regulatory or deregulatory action for the purposes of Executive Order 
13771.

V. Waiver of Proposed Rulemaking and Delay of Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment prior to a rule taking 
effect in accordance with section 553(b) of the Administrative 
Procedure Act (APA) and section 1871 of the Act. In addition, in 
accordance with section 553(d) of the APA and section 1871(e)(1)(B)(i) 
of the Act, we ordinarily provide a 30 day delay to a substantive 
rule's effective date. For substantive rules that constitute major 
rules, in accordance with 5 U.S.C. 801, we ordinarily provide a 60-day 
delay in the effective date.
    None of the processes or effective date requirements apply, 
however, when the rule in question is interpretive, a general statement 
of policy, or a rule of agency organization, procedure or practice. 
They also do not apply when the statute establishes rules that are to 
be applied, leaving no discretion or gaps for an agency to fill in 
through rulemaking.
    In addition, an agency may waive notice and comment rulemaking, as 
well as any delay in effective date, when the agency for good cause 
finds that notice and public comment on the rule as well the effective 
date delay are impracticable, unnecessary, or contrary to the public 
interest. In cases where an agency finds good cause, the agency must 
incorporate a statement of this finding and its reasons in the rule 
issued.
    The policies being publicized in this document do not constitute 
agency rulemaking. Rather, the statute, as amended by the Consolidated 
Appropriations Act, 2018, has already required that the agency make 
these changes, and we are simply notifying the public of the changes to 
the payment adjustment for low-volume hospitals for FYs 2011 through 
2017 relating to the application of the mileage criterion for IHS and 
non-IHS hospitals. As this document merely informs the public of these 
changes, it is not a rule and does not require any notice and comment 
rulemaking. To the extent any of the policies articulated in this 
document constitute interpretations of the statute's requirements or 
procedures that will be used to implement the statute's directive, they 
are interpretive rules, general statements of policy, and rules of 
agency procedure or practice, which are not subject to notice and 
comment rulemaking or a delayed effective date.
    However, to the extent that notice and comment rulemaking, a delay 
in effective date, or both would otherwise apply, we find good cause to 
waive such requirements. Specifically, we find it unnecessary to 
undertake notice and comment rulemaking in this instance as this 
document does not propose to make any substantive changes to the 
policies or methodologies already in effect as a matter of law, but 
simply applies payment adjustments under the Consolidated 
Appropriations Act, 2018 to these existing policies and methodologies. 
As the changes outlined in this document have already taken effect, it 
would also be impracticable to undertake notice and comment rulemaking. 
For these reasons, we also find that a waiver of any delay in effective 
date, if it were otherwise applicable, is necessary to comply with the 
requirements of the Consolidated Appropriations Act, 2018. Therefore, 
we find good cause to waive notice and comment procedures as well as 
any delay in effective date, if such procedures or delays are required 
at all.

    Dated: August 16, 2018.
Seema Verma,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 2018-18271 Filed 8-22-18; 8:45 am]
BILLING CODE 4120-01-P