Federal Register, Volume 72 Issue 151 (Tuesday, August 7, 2007)

[Federal Register Volume 72, Number 151 (Tuesday, August 7, 2007)]
[Rules and Regulations]
[Pages 44284-44335]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3789]

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Part III

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Part 412

Medicare Program; Inpatient Rehabilitation Facility Prospective Payment
System for Federal Fiscal Year 2008; Final Rule

Federal Register / Vol. 72, No. 151 / Tuesday, August 7, 2007 / Rules
and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 412

[CMS-1551-F]
RIN 0938-AO63

Medicare Program; Inpatient Rehabilitation Facility Prospective
Payment System for Federal Fiscal Year 2008

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

ACTION: Final rule.

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SUMMARY: This final rule will update the prospective payment rates for
inpatient rehabilitation facilities (IRFs) for Federal fiscal year (FY)
2008 (for discharges occurring on or after October 1, 2007 and on or
before September 30, 2008) as required under section 1886(j)(3)(C) of
the Social Security Act (the Act). Section 1886(j)(5) of the Act
requires the Secretary to publish in the Federal Register on or before
the August 1 that precedes the start of each fiscal year, the
classification and weighting factors for the IRF prospective payment
system's (PPS) case-mix groups and a description of the methodology and
data used in computing the prospective payment rates for that fiscal
year.
We are revising existing policies regarding the PPS within the
authority granted under section 1886(j) of the Act.

DATES: The regulatory changes to 42 CFR part 412 are effective October
1, 2007. The updated IRF prospective payment rates are applicable for
discharges on or after October 1, 2007 and on or before September 30,
2008.

FOR FURTHER INFORMATION CONTACT: Pete Diaz, (410) 786-1235, for
information regarding the 75 percent rule.
Susanne Seagrave, (410) 786-0044, for information regarding the
payment policies.
Zinnia Ng, (410) 786-4587, for information regarding the wage index
and prospective payment rate calculation.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002
Through 2007
B. Requirements for Updating the IRF PPS Rates
C. Operational Overview of the Current IRF PPS
II. Provisions of the Proposed Regulations
III. Analysis of and Responses to Public Comments
IV. 75 Percent Rule Policy
V. Classification System for the Inpatient Rehabilitation Facility
Prospective Payment System
VI. FY 2008 IRF PPS Federal Prospective Payment Rates
A. FY 2008 IRF Market Basket Increase Factor and Labor-Related
Share
B. Area Wage Adjustment
C. Description of the IRF Standard Payment Conversion Factor and
Payment Rates for FY 2008
D. Example of the Methodology for Adjusting the Federal
Prospective Payment Rates
VII. Update to Payments for High-Cost Outliers Under the IRF PPS
A. Update to the Outlier Threshold Amount for FY 2008
B. Update to the IRF Cost-to-Charge Ratio Ceilings
VIII. Clarification to the Regulations Text for Special Payment
Provisions for Patients That Are Transferred
IX. Miscellaneous Comments Outside the Scope of the Proposed Rule
X. Provisions of the Final Regulation
XI. Collection of Information Requirement
XII. Regulatory Impact Analysis
A. Overall Impact
B. Anticipated Effects of the Final Rule
C. Anticipated Effects of the 75 Percent Rule Policy
D. Alternatives Considered
E. Accounting Statement
F. Conclusion
Regulation Text
Addendum

Acronyms

Because of the many terms to which we refer by acronym in this
final rule, we are listing the acronyms used and their corresponding
terms in alphabetical order below.

ASCA Administrative Simplification Compliance Act of 2002, Pub. L.
107-105
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L.
106-113
BIPA Medicare, Medicaid, and SCHIP [State Children's Health
Insurance Program] Benefits Improvement and Protection Act of 2000,
Pub. L. 106-554
CBSA Core-Based Statistical Area
CCR Cost-to-Charge Ratio
CFR Code of Federal Regulations
CMG Case-Mix Group
DRA Deficit Reduction Act of 2005, Pub. L. 109-171
DSH Disproportionate Share Hospital
ECI Employment Cost Indexes
FI Fiscal Intermediary
FR Federal Register
FY Federal Fiscal Year
HHH Hubert H. Humphrey Building
HIPAA Health Insurance Portability and Accountability Act, Pub. L.
104-191
IFMC Iowa Foundation for Medical Care
IOM Internet-Only Manual
IPPS Inpatient Prospective Payment System
IRF Inpatient Rehabilitation Facility
IRF-PAI Inpatient Rehabilitation Facility-Patient Assessment
Instrument
IRF PPS Inpatient Rehabilitation Facility Prospective Payment System
IRVEN Inpatient Rehabilitation Validation and Entry
LIP Low-Income Percentage
MEDPAR Medicare Provider Analysis and Review
MMA Medicare Prescription Drug, Improvement, and Modernization Act
of 2003 (Pub. L. 108-173)
MSA Metropolitan Statistical Area
NAICS North American Industrial Classification System
OMB Office of Management and Budget
PAI Patient Assessment Instrument
PPS Prospective Payment System
RAND RAND Corporation
RAC Recovery Audit Contractor
RFA Regulatory Flexibility Act, Pub. L. 96-354
RIA Regulation Impact Analysis
RIC Rehabilitation Impairment Category
RPL Rehabilitation, Psychiatric, and Long-Term Care Hospital Market
Basket
SCHIP State Children's Health Insurance Program
SIC Standard Industrial Code
TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-
248

I. Background

A. Historical Overview of the Inpatient Rehabilitation Facility
Prospective Payment System (IRF PPS) for Fiscal Years (FYs) 2002
Through 2007

Section 4421 of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-
33), as amended by section 125 of the Medicare, Medicaid, and SCHIP
[State Children's Health Insurance Program] Balanced Budget Refinement
Act of 1999 (BBRA, Pub. L. 106-113), and by section 305 of the
Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (BIPA, Pub. L. 106-554), provides for the implementation of a
per discharge prospective payment system (PPS), through section 1886(j)
of the Social Security Act (the Act), for inpatient rehabilitation
hospitals and inpatient rehabilitation units of a hospital (hereinafter
referred to as IRFs).
Payments under the IRF PPS encompass inpatient operating and
capital costs of furnishing covered rehabilitation services (that is,
routine, ancillary, and capital costs) but not costs of approved
educational activities, bad debts, and other services or items outside
the scope of the IRF PPS. Although a complete discussion of the IRF PPS
provisions appears in the August 7, 2001 final rule (66 FR 41316) as
revised in the FY 2006 IRF PPS final rule (70 FR 47880, August 15,
2005), we are providing below a general

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description of the IRF PPS for fiscal years (FYs) 2002 through 2005.
Under the IRF PPS from FY 2002 through FY 2005, as described in the
August 7, 2001 final rule, the Federal prospective payment rates were
computed across 100 distinct case-mix groups (CMGs). We constructed 95
CMGs using rehabilitation impairment categories (RICs), functional
status (both motor and cognitive), and age (in some cases, cognitive
status and age may not be a factor in defining a CMG). In addition, we
constructed five special CMGs to account for very short stays and for
patients who expire in the IRF.
For each of the CMGs, we developed relative weighting factors to
account for a patient's clinical characteristics and expected resource
needs. Thus, the weighting factors accounted for the relative
difference in resource use across all CMGs. Within each CMG, we created
tiers based on the estimated effects that certain comorbidities would
have on resource use.
We established the Federal PPS rates using a standardized payment
conversion factor (formerly referred to as the budget neutral
conversion factor). For a detailed discussion of the budget neutral
conversion factor, please refer to our August 1, 2003 final rule (68 FR
45674, 45684 through 45685). In the FY 2006 IRF PPS final rule, we
discussed in detail the methodology for determining the standard
payment conversion factor.
We applied the relative weighting factors to the standard payment
conversion factor to compute the unadjusted Federal prospective payment
rates. Under the IRF PPS from FYs 2002 through 2005, we then applied
adjustments for geographic variations in wages (wage index), the
percentage of low-income patients, and location in a rural area (if
applicable) to the IRF's unadjusted Federal prospective payment rates.
In addition, we made adjustments to account for short-stay transfer
cases, interrupted stays, and high cost outliers.
For cost reporting periods that began on or after January 1, 2002
and before October 1, 2002, we determined the final prospective payment
amounts using the transition methodology prescribed in section
1886(j)(1) of the Act. Under this provision, IRFs transitioning into
the PPS were paid a blend of the Federal IRF PPS rate and the payment
that the IRF would have received had the IRF PPS not been implemented.
This provision also allowed IRFs to elect to bypass this blended
payment and immediately be paid 100 percent of the Federal IRF PPS
rate. The transition methodology expired as of cost reporting periods
beginning on or after October 1, 2002 (FY 2003), and payments for all
IRFs now consist of 100 percent of the Federal IRF PPS rate.
We established a CMS Web site as a primary information resource for
the IRF PPS. The Web site URL is http://www.cms.hhs.gov/InpatientRehabFacPPS/ and may be accessed to download or view
publications, software, data specifications, educational materials, and
other information pertinent to the IRF PPS.
Section 1886(j) of the Act confers broad statutory authority to
propose refinements to the IRF PPS. We finalized the refinements
described in this section in the FY 2006 IRF PPS final rule. The
provisions of the FY 2006 IRF PPS final rule became effective for
discharges beginning on or after October 1, 2005. We published
correcting amendments to the FY 2006 IRF PPS final rule in the Federal
Register on September 30, 2005 (70 FR 57166). Any reference to the FY
2006 IRF PPS final rule in this final rule also includes the provisions
effective in the correcting amendments.
In the FY 2006 final rule (70 FR 47880 and 70 FR 57166), we
finalized a number of refinements to the IRF PPS case-mix
classification system (the CMGs and the corresponding relative weights)
and the case-level and facility-level adjustments. These refinements
were based on analyses by the RAND Corporation (RAND), a non-partisan
economic and social policy research group, using calendar year 2002 and
FY 2003 data. These were the first significant refinements to the IRF
PPS since its implementation. In conducting the analysis, RAND used
claims and clinical data for services furnished after the IRF PPS
implementation. These newer data sets were more complete, and reflected
improved coding of comorbidities and patient severity by IRFs. The
researchers were able to use new data sources for imputing missing
values and more advanced statistical approaches to complete their
analyses. The RAND reports supporting the refinements made to the IRF
PPS are available on the CMS Web site at: http://www.cms.hhs.gov/InpatientRehabFacPPS/09_Research.asp.
The final key policy changes, effective for discharges occurring on
or after October 1, 2005, are discussed in detail in the FY 2006 IRF
PPS final rule (70 FR 47880 and 70 FR 57166). The following is a brief
summary of the key policy changes:
Adopted the Office of Management and Budget's (OMB's)
Core-Based Statistical Area (CBSA) market area definitions in a budget
neutral manner.
Implemented a budget-neutral 3-year hold harmless policy
for IRFs that had been classified as rural in FY 2005, but became urban
in FY 2006.
Implemented a payment adjustment to account for changes in
coding that did not reflect real changes in case mix. We reduced the
standard payment amount by 1.9 percent to account for such changes in
coding following implementation of the IRF PPS.
Modified the CMGs, tier comorbidities, and relative
weights in a budget-neutral manner. The five special CMGs remained the
same as they had been before FY 2006 and continued to account for very
short stays and for patients who expire in the IRF.
Implemented a teaching status adjustment in a budget
neutral manner for IRFs, similar to the one adopted for inpatient
psychiatric facilities.
Revised and rebased the market basket and labor-related
share to reflect the operating and capital cost structures for
rehabilitation, psychiatric, and long-term care (RPL) hospitals to
update IRF payment rates.
Updated the rural adjustment from 19.14 percent to 21.3
percent in a budget neutral manner.
Updated the low-income percentage (LIP) adjustment from an
exponent of 0.484 to an exponent of 0.6229 in a budget neutral manner.
Updated the outlier threshold amount from $11,211 to
$5,129.
As noted above, a detailed discussion of the final key policy
changes for FY 2006 appears in the FY 2006 IRF PPS final rule (70 FR
47880 and 70 FR 57166).
In the FY 2007 final rule (71 FR 48354) we made the following
revisions and updates:
Updated the relative weight and average length of stay
tables based on re-analysis of the data by CMS and our contractor, the
RAND Corporation.
Reduced the standard payment amount by 2.6 percent to
account more fully for coding changes that do not reflect real changes
in case mix.
Updated the IRF PPS payment rates by the FY 2007 estimates
of the market basket and the labor-related share.
Updated the IRF PPS payment rates by the FY 2007 wage
indexes.
Applied the second year of the hold harmless policy in a
budget neutral manner.
Updated the outlier threshold from $5,129 to $5,534.
Updated the urban and rural national cost-to-charge ratio
ceilings for

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the purposes of determining outlier payments under the IRF PPS and
clarified the methodology described in the regulations text.
Revised the regulation text in Sec. 412.23(b)(2)(i) and
Sec. 412.23(b)(2)(ii) to reflect the statutory changes in section 5005
of the Deficit Reduction Act of 2005 (DRA, Pub. L. 109-171). The
regulation text change prolongs the overall duration of the phased
transition to the full 75 percent threshold established in Sec.
412.23(b)(2)(i) and Sec. 412.23(b)(2)(ii), by extending the
transition's 60 percent phase for an additional 12 months. In addition
to the above DRA requirements pertaining to the applicable compliance
percentage requirements under Sec. 412.23(b)(2), we also permitted a
comorbidity that meets the criteria as specified in Sec.
412.23(b)(2)(i) to continue to be used before the 75 percent compliance
threshold must be met.

B. Requirements for Updating the IRF PPS Rates

On August 7, 2001, we published a final rule titled ``Medicare
Program; Prospective Payment System for Inpatient Rehabilitation
Facilities'' in the Federal Register (66 FR 41316) that established a
PPS for IRFs as authorized under section 1886(j) of the Act and
codified at subpart P of part 412 of the Medicare regulations. In the
August 7, 2001 final rule, we set forth the per discharge Federal
prospective payment rates for FY 2002, which provided payment for
inpatient operating and capital costs of furnishing covered
rehabilitation services (that is, routine, ancillary, and capital
costs) but not costs of approved educational activities, bad debts, and
other services or items that are outside the scope of the IRF PPS. The
provisions of the August 7, 2001 final rule were effective for cost
reporting periods beginning on or after January 1, 2002. On July 1,
2002, we published a correcting amendment to the August 7, 2001 final
rule in the Federal Register (67 FR 44073). Any references to the
August 7, 2001 final rule in this final rule include the provisions
effective in the correcting amendment.
Section 1886(j)(5) of the Act and Sec. 412.628 of the regulations
require the Secretary to publish in the Federal Register, on or before
the August 1 that precedes the start of each new FY, the
classifications and weighting factors for the IRF CMGs and a
description of the methodology and data used in computing the
prospective payment rates for the upcoming FY. On August 1, 2002, we
published a notice in the Federal Register (67 FR at 49928) to update
the IRF Federal prospective payment rates from FY 2002 to FY 2003 using
the methodology as described in Sec. 412.624. As stated in the August
1, 2002 notice, we used the same classifications and weighting factors
for the IRF CMGs that were set forth in the August 7, 2001 final rule
to update the IRF Federal prospective payment rates from FY 2002 to FY
2003. We continued to update the prospective payment rates in
accordance with the methodology set forth in the August 7, 2001 final
rule for each succeeding FY up to and including FY 2005. For FY 2006,
however, we published a final rule that revised several IRF PPS
policies (70 FR 47880). The provisions of the FY 2006 IRF PPS final
rule became effective for discharges occurring on or after October 1,
2005. We published correcting amendments to the FY 2006 IRF PPS final
rule in the Federal Register (70 FR 57166). Any reference to the FY
2006 IRF PPS final rule in this final rule includes the provisions
effective in the correcting amendments.
In the final rule for FY 2007, we updated the IRF Federal
prospective payment rates. In addition, we updated the cost-to-charge
ratio ceilings and the outlier threshold. We implemented a 2.6 percent
reduction to the FY 2007 standard payment amount to account more fully
for changes in coding practices that do not reflect real changes in
case mix. We revised the tier comorbidities and the relative weights to
ensure that IRF PPS payments reflect, as closely as possible, the costs
of caring for patients in IRFs. The final FY 2007 Federal prospective
payment rates were effective for discharges occurring on or after
October 1, 2006 and on or before September 30, 2007.

C. Operational Overview of the Current IRF PPS

As described in the August 7, 2001 final rule, upon the admission
and discharge of a Medicare Part A fee-for-service patient, the IRF is
required to complete the appropriate sections of a patient assessment
instrument, the Inpatient Rehabilitation Facility-Patient Assessment
Instrument (IRF-PAI). All required data must be electronically encoded
into the IRF-PAI software product. Generally, the software product
includes patient grouping programming called the GROUPER software. The
GROUPER software uses specific Patient Assessment Instrument (PAI) data
elements to classify (or group) patients into distinct CMGs and account
for the existence of any relevant comorbidities.
The GROUPER software produces a five-digit CMG number. The first
digit is an alpha-character that indicates the comorbidity tier. The
last four digits represent the distinct CMG number. (Free downloads of
the Inpatient Rehabilitation Validation and Entry (IRVEN) software
product, including the GROUPER software, are available on the CMS Web
site at http://www.cms.hhs.gov/InpatientRehabFacPPS/06_Software.asp).
Once a patient is discharged, the IRF completes the Medicare claim
(UB-92 or its equivalent) using the five-digit CMG number and sends it
to the appropriate Medicare fiscal intermediary (FI). 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 amends section 1862(a) of the Act by adding
paragraph (22) which requires the Medicare program, subject to section
1862(h) of the Act, to deny payment under Part A or Part B for any
expenses 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, in turn, provides that the Secretary shall waive
such denial in two types of cases and may also waive such denial ``in
such unusual cases as the Secretary finds appropriate.'' See also the
final rule on Electronic Submission of Medicare Claims (70 FR 71008,
November 25, 2005). Section 3 of the ASCA operates in the context of
the administrative simplification provisions of HIPAA, which include,
among others, the requirements for transaction standards and code sets
codified as 45 CFR parts 160 and 162, subparts A and I through R
(generally known as the Transactions Rule). The Transactions Rule
requires covered entities, including covered providers, to conduct
covered electronic transactions according to the applicable transaction
standards. (See the program claim memoranda issued and published by CMS
at: http://www.cms.hhs.gov/ElectronicBillingEDITrans/ and the Internet-
Only Manual (IOM) at Pub. 100-04 published by CMS at: http://www.cms.hhs.gov/Manuals/IOM/list.asp). Instructions for the limited
number of claims submitted to Medicare on paper are published by CMS
at: http://www.cms.hhs.gov/manuals/downloads/clm104c25.pdf.
The Medicare FI processes the claim through its software system.
This software system includes pricing programming called the PRICER
software. The PRICER software uses the CMG number, along with other
specific

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claim data elements and provider-specific data, to adjust the IRF's
prospective payment for interrupted stays, transfers, short stays, and
deaths, and then applies the applicable adjustments to account for the
IRF's wage index, percentage of low-income patients, rural location,
and outlier payments. For discharges occurring on or after October 1,
2005, the IRF PPS payment also reflects the new teaching status
adjustment that became effective as of FY 2006, as discussed in the FY
2006 IRF PPS final rule (70 FR 47880).

II. Provisions of the Proposed Regulation

As discussed in the FY 2008 IRF PPS proposed rule (72 FR 26230), we
proposed to make revisions to the regulation text in order to implement
policy changes for IRFs for FY 2008 and subsequent fiscal years.
Specifically, we proposed to make conforming changes in 42 CFR part
412. We discuss these proposed revisions and others in detail below.

A. Section 412.624 Methodology for Calculating the Federal Prospective
Payment Rates

We proposed to revise the current regulations text in paragraph
(f)(2)(v) to clarify that we determine whether a high-cost outlier
payment would be applicable for transfer cases. We emphasize that this
is not a change to our current methodology for determining whether a
high-cost outlier payment applies to transfer cases.

B. Additional Proposed Changes

Update the FY 2008 IRF PPS payment rates by the market
basket, as discussed in section IV.A of the FY 2008 IRF PPS proposed
rule (72 FR 26320).
Update the FY 2008 IRF PPS payment rates by the proposed
wage index and the labor related share in a budget neutral manner, as
discussed in section IV.A and B of the FY 2008 IRF PPS proposed rule
(72 FR 26320).
Update the pre-reclassified and pre-floor wage indexes
based on the CBSA changes published in the most recent OMB bulletins
that apply to the hospital wage data used to determine the current IRF
PPS wage index, as discussed in section IV.B of the FY 2008 IRF PPS
proposed rule (72 FR 26320).
Revise the wage index policy for rural areas without
hospital wage data by imputing an average wage index from all
contiguous CBSAs to represent a reasonable proxy for the rural area
within a State, as discussed in section IV.B of the proposed rule (72
FR 26320).
Implement the final year of the 3-year hold harmless
policy adopted in the FY 2006 IRF PPS final rule (70 FR 47880, 447923
through 47926) in a budget neutral manner, as discussed in section IV.B
of the FY 2008 IRF PPS proposed rule (72 FR 26320).
Update the outlier threshold amount for FY 2008 to $7,522,
as discussed in section V.A of the FY 2008 IRF PPS proposed rule (72 FR
26320).
Update the cost-to-charge ratio ceiling and the national
average urban and rural cost-to-charge ratios for purposes of
determining outlier payments under the IRF PPS, as discussed in section
V.B of the FY 2008 IRF PPS proposed rule (72 FR 26320).

III. Analysis of and Responses to Public Comments

We received approximately 40 timely items of correspondence
containing multiple comments on the FY 2008 proposed rule (72 FR 26230)
from the public. We received comments from a university, various trade
associations, inpatient rehabilitation facilities, health care industry
organizations, and health care consulting firms. The following
discussion, arranged by subject area, includes a summary of the public
comments that we received, and our responses to the comments appear
under the appropriate subject heading.

IV. 75 Percent Rule Policy

In order to be excluded from the acute care inpatient hospital PPS
specified in Sec. 412.1(a)(1) and instead be paid under the IRF PPS, a
hospital or rehabilitation unit of an acute care hospital must meet the
requirements for classification as an IRF stipulated in subpart B of
part 412. As discussed in previous Federal Register publications 68 FR
26786 (May 16, 2003), 68 FR 53266 (September 9, 2003), 69 FR 25752 (May
7, 2004), 70 FR 36640 (June 24, 2005), and 71 FR 48354 (August 18,
2006)), Sec. 412.23(b)(2) specifies one criterion that Medicare uses
for classifying a hospital or unit of a hospital as an IRF. The
criterion is that a minimum percentage of a facility's total inpatient
population must require intensive rehabilitative services for the
treatment of at least one of 13 medical conditions listed in Sec.
412.23(b)(2)(iii) in order for the facility to be classified as an IRF.
The minimum percentage is known as the ``compliance threshold.'' In
addition, for cost reporting periods beginning on or after July 1,
2004, and before July 1, 2008, a patient's comorbidity, as defined at
Sec. 412.602, as well as the patient's principal diagnosis, may be
included when determining the medical conditions of the inpatient
population that count toward the required applicable percentage, if
certain requirements are met.
Prior to the May 7, 2004 final rule (69 FR 25752), Sec.
412.23(b)(2) stipulated that the compliance threshold was 75 percent.
Therefore, the compliance threshold was commonly referred to as the
``75 percent rule.'' In addition, prior to the May 7, 2004 final rule,
the regulation only specified 10 medical conditions. However, in the
May 7, 2004 final rule, we revised Sec. 412.23(b)(2) to increase the
number of medical conditions to 13. We also temporarily lowered the
compliance threshold, while at the same time specifying a transition
period at the end of which IRFs would once again have to meet a
compliance threshold of 75 percent. Also, as described below, the
revised regulation specified that during the compliance threshold
transition period, a patient's comorbidity may be used to determine
whether a provider met the compliance threshold, provided certain
applicable requirements were met.
The regulations at Sec. 412.602 define a comorbidity as a specific
patient condition that is secondary to the patient's principal
diagnosis. A patient's principal diagnosis is the primary reason a
patient is admitted to an IRF, and this diagnosis is used to determine
whether the patient had a medical condition that can be counted toward
meeting the compliance threshold. As specified in the May 7, 2004 final
rule, in order for an inpatient with a certain comorbidity to be
included in the inpatient population that counts toward the applicable
percentage, the following criteria must be met:
The patient is admitted for inpatient rehabilitation for a
condition that is not one of the conditions listed in Sec.
412.23(b)(2)(iii).
The patient also has a comorbidity that falls within one
of the conditions listed in Sec. 412.23(b)(2)(iii).
The comorbidity has caused significant decline in
functional ability in the individual such that, even in the absence of
the admitting condition, the individual would require the intensive
rehabilitation treatment that is unique to inpatient rehabilitation
facilities paid under the IRF PPS and that cannot be appropriately
performed in another Medicare-covered care setting.
In accordance with the May 7, 2004 final rule, IRFs would have had
to meet a compliance threshold of 75 percent for cost reporting periods
starting on or after July 1, 2007. However, section 5005 of the Deficit
Reduction Act of 2005 (DRA, Pub. L. 109-171) modified the applicable
time periods when the various compliance thresholds, as originally
specified in the May 7, 2004 final rule, must be met. The net effect of
the DRA was extension of the

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compliance threshold transition period. Due to the DRA, the transition
period was extended to include cost reporting periods starting on or
after July 1, 2004, and before July 1, 2008. Therefore, in order to
conform the regulations to the DRA, we revised Sec. 412.23(b)(2) by
stipulating that an IRF must meet the full 75 percent compliance
threshold as of its first cost reporting period that starts on or after
July 1, 2008, rather than on or after July 1, 2007. In addition, we
also permitted a comorbidity that meets the criteria as specified in
paragraph (b)(2)(i) of Sec. 412.23 to continue to be used, along with
principal diagnosis, to determine the compliance threshold for cost
reporting periods beginning before July 1, 2008, rather than before
July 1, 2007. (For a complete description of all of the changes, see
the FY 2007 IRF PPS final rule (71 FR 48354)).
Under existing policy, for cost reporting periods beginning on or
after July 1, 2008, comorbidities will not be eligible for inclusion in
the calculations used to determine whether the provider meets the 75
percent compliance threshold specified in Sec. 412.23(b)(2)(ii).
However, in the May 7, 2004 final rule (69 FR 25762), we encouraged
research evaluating the continued use of comorbidities in determining
compliance with the 75 percent rule. Therefore, in the May 8, 2007
proposed rule (72 FR 26230), we solicited comments supporting current
policy or other options, including use of some or all of the existing
comorbidities in calculating the compliance percentage for an
additional fixed period of one or more years or to integrate the
inclusion of some or all of the existing comorbidities on a permanent
basis. In addition, we solicited comments that include clinical data
based on scientifically sound research that provide evidence to support
these and other options.
We received many comments on this proposal, which are summarized
below.
Comment: Commenters cited our acknowledgement, made during a
conference on Medicare and Medicaid payment issues held March 2007 in
Baltimore, Maryland, that approximately 7 percent of inpatients from
July 2005 through June 2006 were counted toward the compliance
threshold because they met the medical conditions listed in Sec.
412.23(b)(2)(iii) only because of the patient's comorbidities. They
argued that eliminating use of comorbidities to determine the
compliance percentage would be equivalent to adding an additional 7
percent to the compliance threshold.
Response: One method that we use to determine compliance with the
requirements specified at Sec. 412.23(b)(2) is analysis of the
impairment group and etiologic diagnosis codes, as well as the
comorbidity codes, recorded on the IRF-PAI. It is true that IRF-PAI
data from July 1, 2005, to June 30, 2006, indicates that approximately
7 percent of IRF cases met the compliance standards based on the IRF-
PAI comorbidity codes alone rather than on the IRF-PAI impairment group
or etiologic diagnosis codes. However, this does not mean that the
cases were evenly distributed across providers or that 7 percent of
IRFs met the compliance threshold solely because of the comorbid
conditions of their inpatients. The commenters offer no evidence that
IRFs needed to rely on those 7 percent of cases in order to meet the
compliance threshold. Also, our rules already provide that up to 25
percent of the cases do not have to be admitted because of a qualifying
diagnosis. It does not follow that, because 7 percent of the IRF cases
met the compliance standards only because of the comorbidities recorded
on the IRF-PAIs, using just the principal diagnoses to determine
compliance would result in a higher ``effective'' compliance threshold.
For example, although an IRF may have had a certain percentage of cases
that presumptively met a medical condition listed in Sec.
412.23(b)(2)(iii) only because of the comorbid conditions recorded on
the IRF-PAI, the IRF may also have a sufficient number of other cases
with impairment group or etiologic codes that meet one of the medical
conditions identified in Sec. 412.23(b)(2)(iii), and these other cases
by themselves could allow the IRF to meet the compliance threshold.
In addition, there is a second method of verifying compliance,
which is the FI analyzing a random sample of medical records.
Consequently, although the IRF may fail to meet the compliance
threshold by an analysis of its IRF-PAI data, the IRF may meet the
compliance threshold when the medical records are analyzed. The medical
records identify the principal diagnoses, as well as the information
supporting the principal diagnoses, which is much more detailed than
the list of codes recorded on the IRF-PAIs. Thus, the medical record of
a patient may indicate the presence of a qualifying condition that
meets the 75 percent rule when the IRF data does not.
The medical conditions that we believe are most appropriate for
treatment in an IRF are listed in Sec. 412.23(b)(2)(iii). However,
these medical conditions are not specific diagnoses, but broad medical
categories. In addition, we acknowledge that there may be atypical
patients with medical conditions not listed in Sec. 412.23(b)(2)(iii)
who may occasionally also require treatment in an IRF. Therefore, Sec.
412.23(b)(2) has always allowed the IRF the flexibility to admit a
percentage of patients with medical conditions not listed in this
section of the regulations without losing its classification status as
an IRF and the higher reimbursement rate than would be paid to
hospitals under the IPPS.
It is important to note that even when the compliance threshold
increases to 75 percent, an IRF may admit up to 25 percent of patients
who have medical needs that meet the IRF medical necessity criteria but
do not have as a principal diagnosis one of the 13 medical conditions
used to classify a provider as an IRF. Thus, an IRF may admit up to 25
percent of patients not meeting the 75 percent rule and still be
eligible to be paid under the IRF PPS. In other words, when the
compliance threshold increases to 75 percent, as many as 1 in every 4
patients may still be admitted with a principal diagnosis that is not
one of the medical conditions listed in Sec. 412.23(b)(2)(iii), as
long as the patient requires an IRF level of care. Therefore, if an IRF
believes that the clinical status of some patients involves principal
diagnoses or comorbidities that are so unusually medically and
functionally complex as to demonstrate medical necessity to be admitted
the IRF, then the IRF may admit these atypical cases as part of the
percentage of cases that do not have to meet the 75 percent rule.
Comment: Many commenters urged CMS to permanently continue to use a
patient's comorbidities to determine whether a provider met the 75
percent rule. Some commenters stated that terminating the use of
comorbidities would decrease the number of IRFs that can achieve
compliance as they are adapting their admissions policies and operating
procedures. Several commenters urged us to continue the use of
comorbidities in the compliance calculations until we can refine the
way we identify patients that are most appropriate for an IRF-level of
care, or until such time as we have sufficient data to reassess all the
provisions of the 75 percent rule. These commenters state that the
simple diagnosis-based criteria used in the 75 percent rule is
insensitive to the special needs of individual patients, and encouraged
CMS to move toward more patient-specific criteria. These commenters
also urged CMS to modernize the classifying conditions. Several
commenters argued that

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comorbidities should be retained for use in compliance calculations at
a minimum until further research examining the use of comorbidities is
conducted, such as assessing the potential negative patient outcomes
that may result from the discontinued use. Commenters believed that
expiration of the comorbidity provision would change provider behavior,
and specifically change admission patterns, in ways that cannot be
evaluated using historical data.
Response: We believe a patient's principal diagnosis most
accurately identifies the medical condition that required intensive
inpatient rehabilitation. A patient's principal diagnosis is determined
from the combination of items and services the IRF furnished to the
inpatient as documented in the patient's medical record, including the
data derived from medical tests, lab tests, procedures, and therapy, as
well as the notes of the IRF's clinicians. Medical conditions that are
secondary to the patient's principal reason for the inpatient
rehabilitation stay are comorbid medical conditions.
It is not unusual for patients admitted to an IRF to have more than
one ailment for which the patient exhibited a need for medical
treatment. However, it is the patient's principal diagnosis that most
accurately denotes whether a patient had a medical condition listed in
Sec. 412.23(b)(2)(iii) that required intensive inpatient
rehabilitation because of how, as described previously, the principal
diagnosis is determined. In other words, the data used to determine the
principal diagnosis makes it the most accurate diagnosis that
identifies the medical condition which required intensive inpatient
rehabilitation. Additionally, as stated above, Sec. 412.23(b)(2) has
always allowed the IRF the flexibility to admit a percentage of
patients with medical conditions not listed in this regulation section,
as long as the patient requires an IRF level of care, without
jeopardizing the IRF's classification and eligibility for payment under
the IRF PPS.
We believe it is essential that we maintain appropriate criteria to
ensure that only facilities providing medically necessary intensive
inpatient rehabilitation are classified as IRFs. Thus, it is imperative
to identify medical conditions that would typically require intensive
inpatient rehabilitation in IRFs, because rehabilitation in general can
be delivered in a variety of settings, such as acute care hospitals,
SNFs, and outpatient settings. The most appropriate method we can use
to identify the medical condition of an inpatient is to determine the
impairment that led to admission of the patient to the IRF. It is the
principal diagnosis that best identifies the impairment which resulted
in the patient's admission providing the principal diagnosis was made
in accordance with acceptable medical practice and appropriate clinical
coding standards.
The inclusion of comorbidities in determining provider compliance
with IRF classification requirements was established as a temporary
policy in our May 7, 2004 final rule (69 FR 25752), and the revised
regulation continues to be commonly referred to as the 75 percent rule.
After careful review of a large volume of comments, we stated in the
May 7, 2004 final rule (69 FR 25752, 25762) that we recognized IRFs
could need additional time in order to adjust to the revised
regulations. Therefore, in order to give IRFs flexibility to adapt we
implemented a phase-in to meeting the 75 percent compliance threshold.
Similarly, the intent of the comorbidity provision was to provide
flexibility that would help providers adapt to the phase-in of
enforcement of the compliance threshold.
Originally the transition time period, which provided for a phase-
in of the compliance percentage and included the use of comorbid
conditions in compliance calculations, was 3 years. However, in
accordance with the DRA, the transition time period was extended one
additional year. We also decided to extend the use of comorbidities for
one additional year as well to maintain consistency with our current
approach with respect to the counting of comorbidities before the 75
percent threshold applies. Therefore, providers will have had 4 years
to adjust their case-mixes and adapt their operations in order to
comply with the 75 percent rule.
As stated in the May 7, 2004 final rule (69 FR 25752, 25762) we
have encouraged stakeholders to conduct research studies that could
assist us in evaluating IRF compliance criteria. (Elsewhere in this
preamble we describe our research efforts.) While we are aware that
some studies have been initiated, they have not yet yielded results.
The commenters urging the continuation of comorbidities did not support
their arguments with sound clinical evidence on the value of including
comorbidities when calculating the compliance percentage. In the
absence of such evidence, we do not believe it would be appropriate to
convert what was always intended to be a temporary accommodation during
the phase-in period to a permanent policy. Similarly, we think it would
be inappropriate to adopt an extension of indefinite duration because
we have no way to estimate when and if sufficient data will become
available to reevaluate the IRF classification criteria. However, we
will examine our policies as the results of well-designed, rigorous,
scientific studies become available and continue to encourage the
industry and academics to conduct rehabilitation research. We will
continue to evaluate the 75 percent rule and as appropriate will
consider improvements to the criteria identifying appropriate IRF
admissions that are supported by high-quality research and/or our data
analysis.

Miscellaneous 75 Percent Rule Comments

Although it is difficult to separate comments on our comorbidity
policy and comments on the other provisions of the 75 percent rule, we
believe that the following comments were generally about the other
aspects of the 75 percent rule.
Comment: Commenters stated that the 75 percent rule jeopardized the
care of patients who required treatment in an IRF by restricting access
to treatment. They believe that patients with medical conditions not
listed in Sec. 412.23(b)(2)(iii) should be admitted to IRFs because
IRFs provide better care for these types of patients. One commenter
further stated that the 75 percent rule, by restricting access to care,
is denying patients with disabilities access to the comprehensive,
coordinated rehabilitation services in an IRF. Another commenter
referenced research that the commenter believes shows the length of
stay (LOS) of patients with single joint replacements was less in an
IRF as opposed to a SNF.
Response: In this rule, we did not propose changes to the 13
qualifying conditions considered to be appropriate for IRF care.
However, in the May 7, 2004 final rule (69 FR 25752) we responded to
similar comments. We continue to believe that an IRF is appropriately
characterized as an inpatient hospital setting designed to provide the
specialized, intensive, and interdisciplinary rehabilitation level of
care that certain types of patients need. Although we remain committed
to maintaining access to rehabilitation care for all Medicare
beneficiaries, not all patients require the intensive degree of
rehabilitation services that an IRF furnishes. We believe that those
specific patients with certain medical conditions requiring intensive
inpatient physical therapy, occupational therapy, and, if necessary,
speech and language therapy

[[Page 44290]]

are the patients most appropriate for treatment in an IRF.
We do not believe that the 75 percent rule jeopardizes access to an
appropriate level of rehabilitation care, nor do we have data to
support that perspective. In addition, although an IRF is capable of
extensive medical management of patients by virtue of its inpatient
hospital status, as we stated in the May 7, 2004 final rule (69 FR
25752, 25764) ``patients who require medical management but not
intensive, interdisciplinary rehabilitation can be cared for in another
setting.'' The fact that care in an IRF may be preferred by some
patients and/or their physicians does not make it the most appropriate
clinical treatment setting or the most optimal use of intensive
rehabilitation resources uniquely provided by IRFs. As part of our
ongoing efforts to evaluate the impact of the requirements at Sec.
412.23(b)(2) since we revised the regulations, we have analyzed the
available data extensively. Our most recent analysis of this data is
available at the following Web site: http://www.cms.hhs.gov/InpatientRehabFacPPS/Downloads/IRF_PPS_75_percent_Rule_060807.pdf.
As the IRF industry has noted, the reduced claims volume identified
since 2004, which shows the decrease in the inpatient population of
IRFs, is almost entirely attributable to cases in one of these five IRF
PPS rehabilitation impairment categories (RICs): Lower extremity joint
replacement, cardiac, osteoarthritis, pain syndrome, and the
miscellaneous category. These five RICs are precisely the types of
medical conditions that the 75 percent rule was designed to screen out,
because they are not generally thought to require the intensive
rehabilitation services provided by IRFs. The clinical experts that CMS
consulted prior to publishing the May 7, 2004 final rule (69 FR 25752)
indicated that the vast majority of patients with these medical
conditions could typically be cared for appropriately in other less
intensive settings. In addition, while we have and are continuing to
encourage research studies, these studies have not yet been completed.
In the absence of findings generated from well-designed scientific
studies, we have no evidence showing that the medical conditions in
these 5 RICs require treatment in an IRF as opposed to receiving
treatment at another treatment setting. Therefore, we do not agree that
without a more complete analysis of the patient characteristics and
care needs of patients served in the different settings that a
shortened length of stay for single joint replacement cases is, in
itself, a compelling reason for these cases to be treated in an IRF.
In addition, as more fully described in the analysis, which is
available on the previously identified Web site, our examination of the
data indicates that patients requiring post-acute rehabilitation care
for four common conditions (total knee replacement, total hip
replacement, hip fracture, and stroke) have access to and are receiving
services in different settings. Therefore, we believe that the data
indicate beneficiaries have access to care and are receiving the
appropriate level of care at an appropriate cost to the Medicare
program. Further, we believe the 75 percent rule promotes equal access
to those who require an IRF level of care.
The IRF classification polices are used to identify those patients
who have a need for a more intensive level of rehabilitation than is
generally required by most patients. Recent industry reports emphasize
only a very selective subset of the CMS data, using as their starting
point the highest level of utilization and then focusing on the
relative decreases that follow. It is important to note, however, that
the highest historical level of utilization is not necessarily the most
appropriate or even the most typical level of utilization, and that
patients who need rehabilitation services have continued access to
these services in other settings, as shown by the data in the analysis
on the previously referenced Web site. For example:
Although the proportion of total knee replacement and
total hip replacement patients receiving care in IRFs has dropped
significantly since 2004, our data show that the proportions of these
patients receiving care in the other post-acute care settings are
increasing.
The SNFs, particularly, are now better able to manage
patients with musculoskeletal conditions with the introduction of 9 new
resource utilization group payment categories beginning in FY 2006.
These new payment categories compensate SNFs more fully for patients
who have both significant rehabilitation and medical needs--precisely
the type of patient who may need some level of medical monitoring but
does not require the intense level of inpatient rehabilitation services
provided in an IRF setting.
The analyses described above are part of our ongoing evaluation of
our IRF classification policies. However, although we have encouraged
research to be undertaken that would contribute to improving the
criteria for identifying appropriate IRF admissions, we have not
received results of well-designed scientific studies that would support
such changes at this time.
Comment: Several commenters stated that we should suspend
increasing the compliance percentage until we have implemented a single
post-acute assessment instrument. One commenter stated that we should
devise a price-neutral payment system to pay for care that could be
furnished in either a SNF or an IRF. Although the commenter was not
clear, we believe that by ``price-neutral payment system'' the
commenter means payments that are basically the same regardless of the
setting where the services were furnished. We refer to such a payment
system as being site-neutral. Another commenter stated that instead of
the broad 13 medical conditions we should use facility characteristics
to define a provider as an IRF. Many commenters recommended that the
medical conditions listed at Sec. 412.23(b)(2)(iii) should be updated.
Other commenters suggested that we should use more specific patient-
centered criteria than the broad 13 medical conditions in order to
identify which patients should receive care in an IRF. Similarly, a
commenter stated that a patient's overall function should be used to
determine compliance. Another commenter encouraged us to better
identify patients who ``typically'' are in need of inpatient
rehabilitation. This commenter urged CMS to consider that the
comorbidity in combination with the primary diagnosis establishes the
need for inpatient rehabilitation. Some commenters stated that the 75
percent rule is insensitive and inadequate as a tool to determine a
patient's need for IRF care.
Response: While these recommendations address issues that are
beyond the scope of this rule because they concern issues about which
we did not make any proposals, we will address them briefly because
they generally pertain to the 75 percent rule. We agree that future
data analysis and the results of well-designed scientific studies may
inform policy decisions regarding the IRF classification criteria. With
input from all our stakeholders, we will continue our efforts to make
these refinements as quickly as possible. In attempting to promote
research that better identifies the types of patients whose treatment
needs require an IRF setting, CMS has collaborated with several crucial
stakeholders to create a framework for future research. We describe
some of these efforts below.
At CMS's request, the National Center for Medical
Rehabilitation Research at the National Institute of Child Health and
Human Development

[[Page 44291]]

(NCMRR/NICHD) at the National Institutes of Health (NIH) convened a
panel in February 2005 to develop a research agenda on appropriate
settings for rehabilitation.
Recently, NCMRR/NICHD also issued a notice on the NIH Web
site recognizing the need to enhance the evidence base for clinical
practice, with a commitment to work with providers and research groups
to encourage the design of clinical studies that meet NIH standards. We
also intend to work with researchers conducting NIH-approved studies so
that they can meet their study objectives within the overall framework
of the Medicare program benefit.
Over the past year, we have been actively participating in
various NIH panel discussions to foster research in the area of medical
rehabilitation, with the goal to better identify typical
characteristics of patients in need of the intensive rehabilitative
services that only IRFs can provide. In the course of attending these
meetings, we have established connections with many of the researchers
conducting the research in this area and have been helping them to
identify the appropriate resources within CMS.
We strongly support industry research efforts by serving
on project advisory boards and by participating in industry-sponsored
meetings and research conferences.
We also want to express our support for our integrated post-acute
payment system demonstration project. As part of that demonstration, we
are developing an assessment instrument that can be used to assess
patients in different treatment settings. We expect that the
demonstration will generate much needed data on differences in patient
characteristics and treatment outcomes across settings that will be
extremely useful in our ongoing evaluation of the IRF PPS. Further, in
an effort to try to move toward a site-neutral payment system as
suggested by a commenter, the proposed FY 2008 President's Budget
includes a proposal to reduce the difference in payment between IRFs
and SNFs for total knee and hip replacements. We will continue to look
for opportunities to propose policies which move the program in the
direction of our ultimate goal of PAC payment reform.
In summary, we will continue to examine our IRF classification
polices and the criteria for identifying appropriate IRF admissions
using sound data analysis or well-designed scientific studies.
Comment: A commenter believes that our CMG data should be used to
identify the concentrations of typical conditions treated in an IRF and
use that data instead of or in combination with the 13 medical
conditions listed in the regulations as the criteria to classify a
provider as an IRF.
Response: We addressed a similar comment in the May 7, 2004 final
rule (69 FR 25752, 25758-25759) regarding why it would be inappropriate
to use the RICs to classify a provider as an IRF. The CMGs are derived
from the RICs and, thus, using CMGs to classify a provider as an IRF
would also be inappropriate. The payment system, which is based on the
RICs, was devised to pay for all the patients an IRF admits, including
the patients not counted as part of the compliance percentage the IRF
must meet. Thus, a PPS created to pay for IRF cases is different than a
classification system that specifies the percentage of patients that
must have certain medical conditions. We refer the commenter to the May
7, 2004 final rule for a more detailed explanation.
Comment: A commenter suggested that we modify our medical review
policies to assume that any claim with a qualifying diagnosis or a
comorbidity code used in the 75 percent rule calculations can be deemed
to meet Medicare's medical necessity provisions. Another commenter
stated that FIs were incorrectly performing medical necessity reviews.
The same commenter expressed concerns regarding how the Recovery Audit
Contractors (RACs) are performing their reviews. Another commenter
stated that the 75 percent rule is being used as a crude measure of
medical necessity. A few commenters suggested all local coverage
determination polices be suspended until we fully examine the issues
associated with medical necessity for IRF level of care. Another
commenter requested that we use the criteria specified in the Health
Care Financing Administration (HCFA) ruling 85-2 as the sole
determinant for the medical necessity of an IRF admission, and
implement a moratorium on new rehabilitation programs participating in
Medicare until we revise the 75 percent rule. One commenter requested
that CMS expand our policy to include additional complicating
conditions as comorbidities, which count toward compliance with the 75
percent rule.
Response: These comments relate to regulatory policies or
operational issues that are outside the scope of the rule.
Nevertheless, we address them briefly here. First, the purpose of the
comorbidity policy has been to recognize patients with one of the 13
qualifying conditions, even when that qualifying condition is not the
primary reason for the IRF admission. The effect of adding new codes
would be to inappropriately expand the set of qualifying conditions
without any clinical evidence or review. Second, our medical review
protocols and IRF compliance criteria were designed to perform two
distinct oversight functions. For example, medical review protocols are
used to ensure that claims are paid appropriately, but our IRF
classification criteria are used to ensure that only facilities that
provide intensive inpatient rehabilitation services are paid under the
IRF PPS. While we continue to work diligently to improve consistency
between the review protocols where appropriate, we realize that there
will always be some differences that reflect differences in statutory,
regulatory and operational priorities and the two distinct oversight
functions. Third, regarding the reviews performed by our contractors,
it should be noted that we believe these reviews are necessary to
ensure the integrity of the Medicare trust fund. As part of this
oversight function, we continuously review the performance of our
contractors to ensure that they are functioning in accordance with our
policies and guidance. Finally, we believe that implementing a
moratorium on new rehabilitation programs participating in Medicare
could result in restricting access to care and therefore is not
appropriate at this time.
Comment: A commenter stated that the impact of the 75 percent rule
combined with reviews being performed by FIs and RACs have decreased
IRF admissions well beyond the estimates we envisioned in the May 7,
2004 final rule (69 FR 25752). In addition, the commenter appeared to
indicate that the significant drop in IRF admissions as a result of the
75 percent rule and the contractor reviews calls into question the
validity of the revisions to Sec. 412.23(b)(2) that we made in the May
7, 2004 final rule.
Response: In evaluating the potential effect of an impending rule
change, the regulatory impact analysis represents our best effort to
project the economic impact of the change, based on the data available
at the time of publication. It is important to note that such
projections are estimates, and that they consider only the potential
effect of the change itself. Moreover, we do not use such projections
as program targets or benchmarks, but rather, conduct reviews and
analyses of program data after the change is implemented in order to
evaluate its actual impact.
In order to put a proposed change in perspective, a regulatory
impact analysis generally is projected on the

[[Page 44292]]

assumption that all other variables remain constant. Thus, the
projections in a regulatory impact analysis take historical data on
provider behavior, utilization of services, and expenditure levels and
simply trend them forward, in order to show more clearly the effect of
the single policy change under review.
When we imposed the temporary moratorium on enforcing the 75
percent rule in June 2002, we assumed that provider case-mix and
utilization would remain stable while we took steps to standardize the
provider classification procedures. However, our data indicate that
during the period when the moratorium was in effect, there was actually
a pronounced increase in the volume of IRF cases involving certain
specific categories of conditions. In general, the medical conditions
in these particular rehabilitation impairment categories--lower
extremity joint replacement, cardiac, osteoarthritis, pain syndrome,
and miscellaneous--are unlikely to require intensive rehabilitation in
IRFs. According to the clinical experts that CMS consulted in revising
the 75 percent rule criteria prior to publishing the May 7, 2004 final
rule, the vast majority of patients with these medical conditions can
typically be appropriately cared for in other less intensive settings.
In addition, we have not received reports from well-designed scientific
studies showing that these medical conditions are typically appropriate
for treatment in an IRF. Thus, we continue to believe that these
medical conditions are appropriately treatable in other, less intensive
settings.
When we resumed enforcement of the 75 percent rule, the volume of
these less intensive IRF cases decreased, accompanied by a concomitant
increase in the volume of cases involving conditions that typically do
require intensive rehabilitation: brain injury and certain nervous
system conditions. This phenomenon would appear to indicate that:
The 75 percent rule accurately identifies as IRFs those
facilities serving patients who genuinely need intensive
rehabilitation; and
Significant behavior changes occurred among IRFs in
response to both the initial imposition and the subsequent lifting of
the moratorium, underscoring the inappropriateness of utilizing the
2004 final rule's regulatory impact analysis projections (which were
not designed to take possible behavior changes into account) as a
benchmark in analyzing subsequent utilization patterns.
We do not believe that the decline in IRF utilization levels for
certain conditions in the period since we lifted the moratorium is an
indication that beneficiaries are being denied access to needed care in
this setting. As explained above, we believe that the moratorium itself
may well have triggered aberrant IRF utilization patterns, which were
skewed toward certain conditions that generally do not require the
exceptionally intensive type of rehabilitation that characterizes the
IRF setting. As a consequence, what would appear to be a relative
decline in IRF utilization since that time may, in fact, represent a
return to more normal utilization patterns, which better reflect the
actual prevalence of patient need for the kind of intensive
rehabilitation that the IRF setting is intended to provide.
We will continue to review Medicare claim and patient assessment
data closely as part of our ongoing effort to monitor Medicare
beneficiary access to rehabilitation services in IRFs.
Comment: A commenter stated that the 75 percent rule is negatively
affecting the financial operations of IRFs because the 75 percent rule
and other IRF policies have resulted in more severely ill patients
being treated in IRFs, which is not being reflected in IRF PPS payment
rates.
Response: We agree that IRF utilization patterns have changed since
we began enforcing the 75 percent rule in 2004. The CMS data show a
shift in the pattern of admissions away from lower acuity cases such as
unilateral knee replacements to more severe conditions. However, we do
not agree that the IRF PPS rates do not cover the cost of treating
these more severely ill patients, in fact, comparisons of IRF payments
and costs, as calculated by both CMS and MedPAC, showed double digit
profit margins from the start of the IRF PPS in 2002 through 2005. The
IRF profit margins are expected to decline in FY 2008, but should still
remain positive. Based on this profitability analysis, we believe that
the existing IRF PPS rate structure adequately accounts for the full
range of IRF patients. Further, these analyses support our
understanding that the IRF case-mix system was specifically designed to
reflect the needs and costs of a unique segment of the post acute
population requiring both intensive rehabilitation and medical
management.
Final Decision: After carefully considering the comments, we are
maintaining the comorbidity policy specified in Sec. 412.23(b)(2).
Therefore, for cost reporting periods beginning on or after July 1,
2007, and before July 1, 2008, the compliance threshold remains 65
percent and we will continue to include comorbidities when calculating
the compliance percentage. However, for cost reporting periods
beginning on or after July 1, 2008, the compliance threshold will
increase to 75 percent, but the comorbidities will not be used to
determine whether a provider met the 75 percent of the compliance
threshold.

V. Classification System for the Inpatient Rehabilitation Facility
Prospective Payment System

For the FY 2008 IRF PPS, we will use the same case-mix
classification system that we used for FY 2007, as set forth in the FY
2007 IRF PPS final rule (71 FR 48354). Table 1 below, ``Relative
Weights and Average Lengths of Stay for Case-Mix Groups'', presents the
CMGs, the comorbidity tiers, the corresponding relative weights, and
the average length of stay value for each CMG and tier. The average
length of stay for each CMG is used to determine when an IRF discharge
meets the definition of a short-stay transfer, which results in a per
diem case level adjustment. Because these data elements are not
changing, Table 1 shown below is identical to Table 4 that was
published in the FY 2007 IRF PPS final rule (71 FR 48354, 48364 through
48370). The methodology we used to construct the data elements in Table
1 is described in detail in the FY 2007 IRF PPS final rule (71 FR
48354).
We received a few comments on the proposed classification system
for FY 2008, which are summarized below.
Comment: A few commenters expressed concerns about the proposed CMG
relative weight and average length of stay values for FY 2008, noting
that they are based on FY 2003 data and that these data do not reflect
the changes in IRF cost structures that may be occurring in response to
the renewed enforcement of the 75 percent rule. These commenters
requested that CMS use the latest available data to update the CMG
relative weights and average length of stay values for FY 2008 and
future years. One commenter suggested that CMS update the CMG
definitions regularly to reflect changes in clinical practice that
affect resource use.
Response: We agree with the commenters that it is important to
update the CMG relative weights, average length of stay values, and CMG
definitions regularly to reflect changes in IRF admission patterns and
cost structures, using the most recent available data. We are analyzing
the data carefully to prepare to update the IRF classification system,
as appropriate, in the future. However, we also believe it is important
to balance the need to update these elements with the benefits derived
from maintaining

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stability within the IRF classification system and payment rates. In
the FY 2006 IRF PPS final rule (70 FR 47880, 47886 through 47904), we
implemented major changes to the IRF classification system, including
revising the CMG definitions and recalibrating the CMG relative weights
and average length of stay values. Given that these major changes to
the classification system took effect less than 2 years ago, we believe
that, in the interest of fostering stability in the IRF PPS, we should
allow more time to pass before we implement more changes to the system.
By waiting at least one additional year before making further changes
to the system, we will ensure that we have sufficient time to analyze
the effects of the FY 2006 revisions and the impact they are having on
providers, which will improve the accuracy of future IRF PPS
refinements. We also believe that further analysis of the FY 2006 data
is needed to determine how the changes to the classification system, as
well as the changes to the facility-level adjustments and the other
changes we adopted in the FY 2006 final rule, are affecting providers.
Now that the FY 2006 claims data are available, we are analyzing them
and will propose updates to the system as appropriate in the future.
Although we believe that it is best to delay updating the CMG
relative weights and average length of stay values, we have conducted
an analysis of these components of the IRF classification system using
FY 2006 data. This analysis shows that updating these elements of the
classification system would not materially change payments for the vast
majority of IRF discharges. From this analysis, we found that payments
for about 90 percent of the cases in our data would change by less than
4 percent. CMGs for which payments would change by more than 4 percent
contain a small number of cases. Based on our analysis, we believe that
it is more appropriate to update the CMG relative weights and average
length of stay values after we conduct careful analysis of the FY 2006
data and analyze IRFs' responses to the changes that we implemented to
the system in FY 2006. We believe that the results that we will obtain
from this analysis of the effects of the FY 2006 revisions on providers
will improve the accuracy of future revisions to the IRF PPS.
Comment: One commenter suggested that CMS should review the FY 2006
revisions to the classification system with more recent data to
determine whether the revisions caused a 2.2 percent decrease in
aggregate IRF payments and whether further revisions to the system are
needed to account for this.
Response: Since this comment is on revisions that we implemented
for FY 2006, and we did not propose additional revisions to the IRF
classification system for FY 2008, this comment is outside the scope of
this final rule. Further, we responded to a very similar comment in the
FY 2007 IRF PPS final rule (71 FR 48373 through 48374). However, our
analysis of the data continues to show that the FY 2006 refinements to
the IRF classification system did not cause a reduction in aggregate
IRF payments. We are continuing to work with the industry to understand
its concerns, and we are analyzing the FY 2006 IRF claims data in
detail to identify any unanticipated effects of the FY 2006 revisions
to the classification system on IRF payments. However, our analysis of
the data continues to show that we implemented the FY 2006 refinements
to the IRF classification system in a budget neutral manner, so that
estimated aggregate payments to providers did not increase or decrease
as a result of these refinements. Although our preliminary data do not
show any decrease in IRF aggregate payments for FY 2006 resulting from
the FY 2006 revisions to the IRF classification system, we will
continue to analyze the FY 2006 data to determine whether additional
refinements to the IRF classification system are necessary in the
future.
Final Decision: After carefully reviewing the comments that we
received on the proposed changes to the CMG relative weights and
average length of stay values, we proposed and will finalize our
decision to update the CMG relative weights and the average length of
stay values for FY 2008, as shown in Table 1.

Table 1.--Relative Weights and Average Lengths of Stay for Case Mix Groups
----------------------------------------------------------------------------------------------------------------
CMG description Relative weights Average length of stay
CMG (M=motor, C=cognitive, -----------------------------------------------------------------------
A=age) Tier 1 Tier 2 Tier 3 None Tier 1 Tier 2 Tier 3 None
----------------------------------------------------------------------------------------------------------------
0101............ Stroke
M>51.05............... 0.7707 0.7303 0.6572 0.6347 8 11 9 9
----------------------------------------------------------------------------------------------------------------
0102............ Stroke
M>44.45 and M<51.05 0.9493 0.8995 0.8095 0.7818 11 15 11 10
and C>18.5.
----------------------------------------------------------------------------------------------------------------
0103............ Stroke
M>44.45 and M<51.05 1.1192 1.0605 0.9544 0.9218 14 13 12 12
and C<18.5.
----------------------------------------------------------------------------------------------------------------
0104............ Stroke
M>38.85 and M<44.45... 1.1885 1.1260 1.0134 0.9787 13 14 13 13
----------------------------------------------------------------------------------------------------------------
0105............ Stroke
M>34.25 and M<38.85... 1.4261 1.3512 1.2161 1.1745 16 17 16 15
----------------------------------------------------------------------------------------------------------------
0106............ Stroke
M>30.05 and M<34.25... 1.6594 1.5722 1.4150 1.3666 18 20 18 18
----------------------------------------------------------------------------------------------------------------
0107............ Stroke
M>26.15 and M<30.05... 1.9150 1.8145 1.6330 1.5771 21 23 21 20
----------------------------------------------------------------------------------------------------------------
0108............ Stroke
M<26.15 and A>84.5.... 2.2160 2.0997 1.8897 1.8250 28 29 25 24
----------------------------------------------------------------------------------------------------------------
0109............ Stroke

[[Page 44294]]

M>22.35 and M<26.15 2.1998 2.0843 1.8758 1.8116 23 26 24 23
and A<84.5.
----------------------------------------------------------------------------------------------------------------
0110............ Stroke
M<22.35 and A<84.5.... 2.6287 2.4907 2.2416 2.1649 30 33 28 27
----------------------------------------------------------------------------------------------------------------
0201............ Traumatic brain injury
M>53.35 and C>23.5.... 0.8143 0.6806 0.6080 0.5647 10 9 9 8
----------------------------------------------------------------------------------------------------------------
0202............ Traumatic brain injury
M>44.25 and M<53.35 1.0460 0.8743 0.7810 0.7254 12 10 11 9
and C>23.5.
----------------------------------------------------------------------------------------------------------------
0203............ Traumatic brain injury
M>44.25 and C<23.5.... 1.2503 1.0450 0.9335 0.8671 15 15 12 12
----------------------------------------------------------------------------------------------------------------
0204............ Traumatic brain injury
M>40.65 and M<44.25... 1.3390 1.1192 0.9998 0.9287 15 16 13 13
----------------------------------------------------------------------------------------------------------------
0205............ Traumatic brain injury
M>28.75 and M<40.65... 1.6412 1.3718 1.2254 1.1382 17 18 16 15
----------------------------------------------------------------------------------------------------------------
0206............ Traumatic brain injury
M>22.05 and M<28.75... 2.1445 1.7924 1.6011 1.4873 23 22 21 20
----------------------------------------------------------------------------------------------------------------
0207............ Traumatic brain injury
M<22.05............... 2.7664 2.3122 2.0655 1.9185 35 29 26 25
----------------------------------------------------------------------------------------------------------------
0301............ Non-traumatic brain
injury
M>41.05............... 1.1394 0.9533 0.8552 0.7772 12 12 11 10
----------------------------------------------------------------------------------------------------------------
0302............ Non-traumatic brain
injury
M>35.05 and M<41.05... 1.4875 1.2446 1.1164 1.0147 14 16 14 13
----------------------------------------------------------------------------------------------------------------
0303............ Non-traumatic brain
injury
M>26.15 and M<35.05... 1.7701 1.4810 1.3285 1.2074 20 19 17 16
----------------------------------------------------------------------------------------------------------------
0304............ Non-traumatic brain
injury
M<26.15............... 2.4395 2.0410 1.8309 1.6640 32 25 23 21
----------------------------------------------------------------------------------------------------------------
0401............ Traumatic spinal cord
injury
M>48.45............... 0.9587 0.8456 0.7722 0.6858 12 12 11 10
----------------------------------------------------------------------------------------------------------------
0402............ Traumatic spinal cord
injury
M>30.35 and M<48.45... 1.3256 1.1691 1.0676 0.9482 18 16 14 13
----------------------------------------------------------------------------------------------------------------
0403............ Traumatic spinal cord
injury
M>16.05 and M<30.35... 2.3069 2.0347 1.8580 1.6502 22 24 24 22
----------------------------------------------------------------------------------------------------------------
0404............ Traumatic spinal cord
injury
M<16.05 and A>63.5.... 4.1542 3.6639 3.3458 2.9717 51 46 41 37
----------------------------------------------------------------------------------------------------------------
0405............ Traumatic spinal cord
injury
M<16.05 and A<63.5.... 3.1371 2.7668 2.5266 2.2441 33 37 33 28
----------------------------------------------------------------------------------------------------------------
0501............ Non-traumatic spinal
cord injury
M>51.35............... 0.7648 0.6455 0.5687 0.5071 9 8 8 7
----------------------------------------------------------------------------------------------------------------
0502............ Non-traumatic spinal
cord injury
M>40.15 and M<51.35... 1.0262 0.8661 0.7630 0.6804 13 12 11 9
----------------------------------------------------------------------------------------------------------------
0503............ Non-traumatic spinal
cord injury
M>31.25 and M<40.15... 1.3596 1.1476 1.0109 0.9014 15 15 13 12
----------------------------------------------------------------------------------------------------------------
0504............ Non-traumatic spinal
cord injury
M>29.25 and M<31.25... 1.6984 1.4335 1.2628 1.1260 21 19 16 15
----------------------------------------------------------------------------------------------------------------
0505............ Non-traumatic spinal
cord injury
M>23.75 and M<29.25... 2.0171 1.7025 1.4997 1.3373 23 22 19 18
----------------------------------------------------------------------------------------------------------------
0506............ Non-traumatic spinal
cord injury
M<23.75............... 2.7402 2.3128 2.0374 1.8167 29 28 26 23
----------------------------------------------------------------------------------------------------------------
0601............ Neurological

[[Page 44295]]

M>47.75............... 0.8991 0.7330 0.7019 0.6522 11 10 9 9
----------------------------------------------------------------------------------------------------------------
0602............ Neurological
M>37.35 and M<47.75... 1.1968 0.9757 0.9342 0.8682 13 13 13 12
----------------------------------------------------------------------------------------------------------------
0603............ Neurological
M>25.85 and M<37.35... 1.5326 1.2495 1.1965 1.1118 17 17 15 15
----------------------------------------------------------------------------------------------------------------
0604............ Neurological
M<25.85............... 1.9592 1.5973 1.5295 1.4213 22 20 21 19
----------------------------------------------------------------------------------------------------------------
0701............ Fracture of lower
extremity
M>42.15............... 0.9028 0.7717 0.7338 0.6617 12 11 10 9
----------------------------------------------------------------------------------------------------------------
0702............ Fracture of lower
extremity
M>34.15 and M<42.15... 1.1736 1.0033 0.9539 0.8602 13 14 13 12
----------------------------------------------------------------------------------------------------------------
0703............ Fracture of lower
extremity
M>28.15 and M<34.15... 1.4629 1.2506 1.1890 1.0722 16 17 16 14
----------------------------------------------------------------------------------------------------------------
0704............ Fracture of lower
extremity
M<28.15............... 1.7969 1.5361 1.4605 1.3170 20 20 19 18
----------------------------------------------------------------------------------------------------------------
0801............ Replacement of lower
extremity joint
M>49.55............... 0.6537 0.5504 0.5131 0.4607 7 7 7 6
----------------------------------------------------------------------------------------------------------------
0802............ Replacement of lower
extremity joint
M>37.05 and M<49.55... 0.8542 0.7193 0.6704 0.6020 10 10 9 8
----------------------------------------------------------------------------------------------------------------
0803............ Replacement of lower
extremity joint
M>28.65 and M<37.05 1.2707 1.0700 0.9974 0.8956 15 15 13 12
and A>83.5.
----------------------------------------------------------------------------------------------------------------
0804............ Replacement of lower
extremity joint
M>28.65 and M<37.05 1.1040 0.9296 0.8665 0.7781 13 12 12 10
and A<83.5.
----------------------------------------------------------------------------------------------------------------
0805............ Replacement of lower
extremity joint
M>22.05 and M<28.65... 1.3927 1.1727 1.0931 0.9816 17 16 14 13
----------------------------------------------------------------------------------------------------------------
0806............ Replacement of lower
extremity joint
M<22.05............... 1.6723 1.4082 1.3126 1.1787 18 19 17 15
----------------------------------------------------------------------------------------------------------------
0901............ Other orthopedic
M>44.75............... 0.8425 0.7641 0.6868 0.6120 10 11 10 9
----------------------------------------------------------------------------------------------------------------
0902............ Other orthopedic
M>34.35 and M<44.75... 1.1088 1.0057 0.9039 0.8056 13 13 12 11
----------------------------------------------------------------------------------------------------------------
0903............ Other orthopedic
M>24.15 and M<34.35... 1.4638 1.3277 1.1934 1.0635 18 19 16 15
----------------------------------------------------------------------------------------------------------------
0904............ Other orthopedic
M<24.15............... 1.8341 1.6636 1.4952 1.3325 25 23 21 19
----------------------------------------------------------------------------------------------------------------
1001............ Amputation, lower
extremity
M>47.65............... 0.9625 0.8879 0.7957 0.7361 11 11 11 10
----------------------------------------------------------------------------------------------------------------
1002............ Amputation, lower
extremity
M>36.25 and M<47.65... 1.2709 1.1724 1.0507 0.9719 14 15 14 13
----------------------------------------------------------------------------------------------------------------
1003............ Amputation, lower
extremity
M<36.25............... 1.7876 1.6491 1.4779 1.3671 19 22 19 18
----------------------------------------------------------------------------------------------------------------
1101............ Amputation, non-lower
extremity
M>36.35............... 1.2554 1.0482 0.9225 0.8496 14 15 12 11
----------------------------------------------------------------------------------------------------------------
1102............ Amputation, non-lower
extremity
M<36.35............... 1.8824 1.5717 1.3832 1.2739 19 19 18 17
----------------------------------------------------------------------------------------------------------------
1201............ Osteoarthritis
M>37.65............... 1.0177 0.8785 0.8182 0.7405 11 12 11 10
----------------------------------------------------------------------------------------------------------------
1202............ Osteoarthritis

[[Page 44296]]

M>30.75 and M<37.65... 1.3168 1.1367 1.0586 0.9581 15 16 14 13
----------------------------------------------------------------------------------------------------------------
1203............ Osteoarthritis
M<30.75............... 1.6241 1.4020 1.3057 1.1817 21 19 17 16
----------------------------------------------------------------------------------------------------------------
1301............ Rheumatoid, other
arthritis
M>36.35............... 1.0354 0.9636 0.8511 0.7429 12 13 11 10
----------------------------------------------------------------------------------------------------------------
1302............ Rheumatoid, other
arthritis
M>26.15 and M<36.35... 1.4321 1.3327 1.1772 1.0275 15 18 15 14
----------------------------------------------------------------------------------------------------------------
1303............ Rheumatoid, other
arthritis
M<26.15............... 1.8250 1.6984 1.5002 1.3094 22 21 20 18
----------------------------------------------------------------------------------------------------------------
1401............ Cardiac
M>48.85............... 0.8160 0.7351 0.6534 0.5861 10 9 9 8
----------------------------------------------------------------------------------------------------------------
1402............ Cardiac
M>38.55 and M<48.85... 1.1038 0.9944 0.8839 0.7928 12 13 12 11
----------------------------------------------------------------------------------------------------------------
1403............ Cardiac
M>31.15 and M<38.55... 1.3705 1.2347 1.0975 0.9844 16 16 14 13
----------------------------------------------------------------------------------------------------------------
1404............ Cardiac
M<31.15............... 1.7370 1.5649 1.3910 1.2477 21 20 18 16
----------------------------------------------------------------------------------------------------------------
1501............ Pulmonary
M>49.25............... 0.9986 0.8870 0.7793 0.7399 11 13 10 10
----------------------------------------------------------------------------------------------------------------
1502............ Pulmonary
M>39.05 and M<49.25... 1.2661 1.1246 0.9880 0.9381 13 15 12 12
----------------------------------------------------------------------------------------------------------------
1503............ Pulmonary
M>29.15 and M<39.05... 1.5457 1.3730 1.2062 1.1453 16 16 15 15
----------------------------------------------------------------------------------------------------------------
1504............ Pulmonary
M<29.15............... 2.0216 1.7957 1.5775 1.4979 26 21 20 18
----------------------------------------------------------------------------------------------------------------
1601............ Pain syndrome
M>37.15............... 1.0070 0.8550 0.7774 0.6957 12 11 10 10
----------------------------------------------------------------------------------------------------------------
1602............ Pain syndrome
M>26.75 and M<37.15... 1.3826 1.1739 1.0673 0.9552 15 17 14 13
----------------------------------------------------------------------------------------------------------------
1603............ Pain syndrome
M<26.75............... 1.7025 1.4455 1.3143 1.1762 19 19 18 16
----------------------------------------------------------------------------------------------------------------
1701............ Major multiple trauma
without brain or
spinal cord injury
M>39.25............... 0.9818 0.9641 0.8479 0.7368 12 12 11 10
----------------------------------------------------------------------------------------------------------------
1702............ Major multiple trauma
without brain or
spinal cord injury
M>31.05 and M<39.25... 1.2921 1.2688 1.1158 0.9696 14 16 15 13
----------------------------------------------------------------------------------------------------------------
1703............ Major multiple trauma
without brain or
spinal cord injury
M>25.55 and M<31.05... 1.5356 1.5080 1.3262 1.1524 17 20 18 16
----------------------------------------------------------------------------------------------------------------
1704............ Major multiple trauma
without brain or
spinal cord injury
M<25.55............... 1.9246 1.8899 1.6620 1.4443 26 26 22 19
----------------------------------------------------------------------------------------------------------------
1801............ Major multiple trauma
with brain or spinal
cord injury
M>40.85............... 1.1920 0.9866 0.8243 0.7342 15 13 13 10
----------------------------------------------------------------------------------------------------------------
1802............ Major multiple trauma
with brain or spinal
cord injury
M>23.05 and M<40.85... 1.9058 1.5774 1.3179 1.1738 19 21 18 16
----------------------------------------------------------------------------------------------------------------
1803............ Major multiple trauma
with brain or spinal
cord injury
M<23.05............... 3.4302 2.8391 2.3721 2.1127 43 33 30 27
----------------------------------------------------------------------------------------------------------------

[[Page 44297]]

1901............ Guillian Barre
M>35.95............... 1.2399 1.0986 1.0965 0.9350 14 13 14 12
----------------------------------------------------------------------------------------------------------------
1902............ Guillian Barre
M>18.05 and M<35.95... 2.3194 2.0552 2.0512 1.7491 27 25 25 23
----------------------------------------------------------------------------------------------------------------
1903............ Guillian Barre
M<18.05............... 3.3464 2.9651 2.9593 2.5235 37 39 31 33
----------------------------------------------------------------------------------------------------------------
2001............ Miscellaneous
M>49.15............... 0.8734 0.7381 0.6735 0.6084 10 10 9 8
----------------------------------------------------------------------------------------------------------------
2002............ Miscellaneous
M>38.75 and M<49.15... 1.1447 0.9674 0.8827 0.7975 12 13 12 11
----------------------------------------------------------------------------------------------------------------
2003............ Miscellaneous
M>27.85 and M<38.75... 1.4777 1.2488 1.1395 1.0294 16 16 15 14
----------------------------------------------------------------------------------------------------------------
2004............ Miscellaneous
M<27.85............... 1.9716 1.6662 1.5204 1.3735 25 22 20 18
----------------------------------------------------------------------------------------------------------------
2101............ Burns
M>0................... 2.1842 2.1842 1.6606 1.4587 27 24 20 17
----------------------------------------------------------------------------------------------------------------
5001............ Short-stay cases, ....... ....... ....... 0.2201 ....... ....... ....... 2
length of stay is 3
days or fewer.
----------------------------------------------------------------------------------------------------------------
5101............ Expired, orthopedic, ....... ....... ....... 0.6351 ....... ....... ....... 8
length of stay is 13
days or fewer.
----------------------------------------------------------------------------------------------------------------
5102............ Expired, orthopedic, ....... ....... ....... 1.5985 ....... ....... ....... 22
length of stay is 14
days or more.
----------------------------------------------------------------------------------------------------------------
5103............ Expired, not ....... ....... ....... 0.7203 ....... ....... ....... 8
orthopedic, length of
stay is 15 days or
fewer.
----------------------------------------------------------------------------------------------------------------
5104............ Expired, not ....... ....... ....... 1.8784 ....... ....... ....... 24
orthopedic, length of
stay is 16 days or
more.
----------------------------------------------------------------------------------------------------------------

VI. FY 2008 IRF PPS Federal Prospective Payment Rates

A. FY 2008 IRF PPS Market Basket Increase Factor and Labor-Related
Share

Section 1886(j)(3)(C) of the Act requires the Secretary to
establish an increase factor that reflects changes over time in the
prices of an appropriate mix of goods and services included in the
covered IRF services, which is referred to as a market basket index. In
updating the FY 2008 payment rates outlined in this final rule, CMS
applied an appropriate increase factor to the FY 2007 IRF PPS payment
rates that is based on the rehabilitation, psychiatric, and long-term
care hospital (RPL) market basket. In constructing the RPL market
basket, we used the methodology set forth in the FY 2006 IRF PPS final
rule (70 FR 47880, 47908 through 47915).
As discussed in that final rule, the RPL market basket primarily
uses the Bureau of Labor Statistics' (BLS) data as price proxies, which
are grouped in one of the three BLS categories: Producer Price Indexes
(PPI), Consumer Price Indexes (CPI), and Employment Cost Indexes (ECI).
We evaluated and selected these particular price proxies using the
criteria of reliability, timeliness, availability, and relevance, and
believe they continue to be the best measures of price changes for the
cost categories.
As discussed in the FY 2007 IRF PPS proposed rule, beginning April
2006 with the publication of March 2006 data, the BLS' ECI has used a
different classification system, the North American Industrial
Classification System (NAICS), instead of the Standard Industrial Codes
(SIC). We have consistently used the ECI as the data source for our
wages and salaries and other price proxies in the RPL market basket and
did not propose to make any changes to the data source in the proposed
rule. This final rule's estimated FY 2008 IRF market basket increase
factor and labor-related share is based on the most recent data
available from the BLS.
We will use the same methodology described in the FY 2006 IRF PPS
final rule to compute the FY 2008 IRF market basket increase factor and
labor-related share. For this final rule, the FY 2008 IRF market basket
increase factor is 3.2 percent. This is based on Global Insight, Inc.'s
(GII) forecast of price proxies for the second quarter of 2007 (2007Q2)
with historical data through the first quarter of 2007 (2007Q1).
In addition, we have used the methodology described in the FY 2006
IRF PPS final rule to update the labor-related share for FY 2008. As
discussed in the FY 2006 IRF PPS final rule (70 FR 47880, 47915 through
47917), we rebased and revised the market basket for FY 2006 using the
2002-based cost structures for IRFs, inpatient psychiatric hospitals,
and long-term care hospitals to determine the FY 2006 labor-related
share. For FY 2007, we used the same methodology discussed in the FY
2006 IRF PPS final rule (70 FR 47880, 47908 through 47917) to determine
the FY 2007 IRF labor-related share. For FY 2008, we continue to use
the same

[[Page 44298]]

methodology discussed in the FY 2006 IRF PPS final rule. As shown in
Table 2, the total FY 2008 RPL labor-related share is 75.818 percent in
this final rule.

Table 2.--FY 2008 IRF Labor-Related Share Relative Importance
------------------------------------------------------------------------
FY 2008 IRF
labor-related
Cost category relative
importance
------------------------------------------------------------------------
Wages and salaries.................................... 52.640
Employee benefits..................................... 14.125
Professional fees..................................... 2.907
All other labor intensive services.................... 2.144
-----------------
Subtotal.......................................... 71.816
Labor-related share of capital costs.................. 4.002
-----------------
Total............................................. 75.818
------------------------------------------------------------------------
Source: Global Insight, Inc, 2nd Qtr, 2007; @USMACRO/CONTROL0507@CISSIM/
TL0507.SIM, Historical Data through 1st QTR, 2007.

We received two comments on the proposed FY 2008 IRF PPS market
basket and labor-related share, which are summarized below.
Comment: One commenter requested that the IRF PPS market basket
adjustments be calculated using more current market basket data,
stating that the inflation factors for FY 2008 are based upon data that
are 5 years old (FY 2002). The commenter suggested that this may result
in an underestimation of the labor cost inflation experienced by IRFs.
Response: We disagree with the comment that the inflation factors
used in the market basket are based upon data that are 5 years old. To
derive the IRF market basket, we use FY 2002 data to derive the
relative cost weights for the base year. While these cost weights
remain fixed until the market basket is rebased to a new base year,
data for the respective price proxies are frequently updated to reflect
more recent data as they become available. The final IRF market basket
update for FY 2008 is based on GII's forecast for the second quarter of
2007 (2007Q2). This forecast reflects historical data for the various
inflation factors through the first quarter of 2007 (2007Q1).
Comment: Several commenters expressed concern about the methodology
for computing the labor-related share. One commenter requested that we
begin updating the labor-related share on an annual basis in FY 2009
using the most recent available data. The commenter stated that the
current calculation of the labor-related share is based on 2002 data
and expressed concern that this time lag is distorting actual labor
cost trends being experienced by IRFs. Another commenter said that the
methodology does not adequately reflect the difficulty IRFs have in
recruiting a skilled labor force.
Response: We disagree with the commenters' view that the
methodology does not reflect accurate labor-related costs for IRFs. The
FY 2008 labor-related share is calculated as the sum of the relative
importance of those costs that are related to, influenced by, or vary
with the local labor market. This includes wages and salaries, fringe
benefits, professional fees, labor-intensive services, and a portion of
capital costs. We calculate this share based on the cost weights
associated with the 2002-based RPL market basket, which is constructed
using Medicare Cost Reports submitted by IRFs.
Further, we believe these weights adequately reflect the current
cost structures of Medicare-participating IRFs given our methodology
for calculating the labor-related relative importance for FY 2008.
First, we compute the FY 2008 price index level for the total market
basket and each cost category of the market basket. Second, we
calculate a ratio for each cost category by dividing the FY 2008 price
index level for that cost category by the total market basket price
index level. Third, we determine the FY 2008 relative importance for
each cost category by multiplying this ratio by the base year (FY 2002)
weight. Finally, we sum the FY 2008 relative importance for each of the
labor-related categories to produce the FY 2008 labor-related relative
importance.
The price proxies that move the different cost categories in the
market basket do not necessarily change at the same rate, and the
relative importance captures these changes. Accordingly, the relative
importance figure more closely reflects the cost share weights for FY
2008 when compared to the base year weights from the 2002-based RPL
market basket. We revised and rebased the market basket and labor-
related share in FY 2006 and expect to conduct additional updates on a
regular basis.
Final Decision: We will continue to update the IRF PPS payment
rates using our current methodology, which reflects the most recent
available data. For this final rule, the FY 2008 IRF market basket
increase factor is 3.2 percent and the labor-related share is 75.818
percent. This is based on GII's forecast for the second quarter of 2007
(2007Q2) with historical data through the first quarter of 2007
(2007Q1).

B. Area Wage Adjustment

Section 1886(j)(6) of the Act requires the Secretary to adjust the
proportion (as estimated by the Secretary from time to time) of
rehabilitation facilities' costs attributable to wages and wage-related
costs by a factor (established by the Secretary) reflecting the
relative hospital wage level in the geographic area of the
rehabilitation facility compared to the national average wage level for
those facilities. The Secretary is required to update the wage index on
the basis of information available to the Secretary on the wages and
wage-related costs to furnish rehabilitation services. Any adjustments
or updates made under section 1886(j)(6) of the Act for a FY are made
in a budget neutral manner.
In the FY 2007 IRF PPS final rule, we maintained the methodology
described in the FY 2006 IRF PPS final rule to determine the wage
index, labor market area definitions, and hold harmless policy
consistent with the rationale outlined in that final rule (70 FR 47880,
47917 through 47933). In the FY 2006 IRF PPS final rule, we adopted a
3-year hold harmless policy specifically for rural IRFs whose labor
market designations changed from rural to urban under the CBSA-based
labor market area designations. This policy specifically applied to
IRFs that had been previously designated rural and which, effective for
discharges on or after October 1, 2005, would otherwise have become
ineligible for the 19.14 percent rural adjustment. For FY 2008, the
third and final year of the 3-year phase-out of the budget neutral hold
harmless policy, we will no longer apply an adjustment for IRFs that
meet the criteria described in the FY 2006 final rule (70 FR 47880,
47923 through 47926).
For FY 2008, we will maintain the policies and methodologies
described in the FY 2007 IRF PPS final rule relating to the labor
market area definitions, the wage index methodology for areas with wage
data, and hold harmless policy consistent with the rationale outlined
in the FY 2006 IRF PPS final rule (70 FR 47880, 47917 through 47933).
Therefore, this final rule continues to use the CBSA labor market area
definitions and the pre-reclassification and pre-floor hospital wage
index based on 2003 cost report data. In addition, the budget neutral
hold harmless policy established in the FY 2006 final rule will expire
for discharges occurring on or after October 1, 2007.
In adopting the CBSA geographic designations in FY 2006, we
provided a 1-year transition with a blended wage index for all
providers. For FY 2006, the

[[Page 44299]]

wage index for each provider consisted of a blend of 50 percent of the
FY 2006 metropolitan statistical area (MSA)-based wage index and 50
percent of the FY 2006 CBSA-based wage index (both using FY 2001
hospital data). We referred to the blended wage index as the FY 2006
IRF PPS transition wage index. As discussed in the FY 2006 IRF PPS
final rule (70 FR 47880, 47926), subsequent to the expiration of this
1-year transition on September 30, 2006, we used the full CBSA-based
wage index values as published in the Addendum of the FY 2007 IRF PPS
final rule (71 FR 48354) and in the Addendum of this final rule.
When adopting OMB's new labor market designations, we identified
some geographic areas where there were no hospitals and, thus, no
hospital wage index data on which to base the calculation of the IRF
PPS wage index (70 FR 47880).
In this final rule, we are revising our methodology to determine a
proxy for rural areas without hospital wage data. Under the CBSA labor
market areas, there are no rural hospitals in rural Massachusetts and
rural Puerto Rico. Because there was no rural proxy for more recent
rural data within those areas, we used the FY 2006 wage index value in
both FY 2006 and FY 2007 for rural Massachusetts and rural Puerto Rico.
Due to the use of the same wage index value (from FY 2006) for
these areas for two fiscal years, we believe it is appropriate at this
point to consider alternatives in our methodology to update the wage
index for rural areas without rural hospital wage index data. We
believe that the best imputed proxy would (1) use pre-floor, pre-
reclassified hospital data, (2) be easy to evaluate, (3) use the most
local data, and (4) be easily updateable from year-to-year. Since the
implementation of the IRF PPS, we have used the pre-floor, pre-
reclassified hospital wage data that is easy to evaluate and is
updatable from year-to-year. In addition, the IRF PPS wage index is
based on hospitals' cost report data, which reflects local available
data. Therefore, we believe the imputed proxy for a rural area without
hospital wage data is consistent with our past methodology and other
post-acute PPS wage index policy. Although our current methodology uses
rural pre-floor, pre-reclassified hospital wage data, this method is
not updateable from year-to-year.
Therefore, in cases where there is a rural area without rural
hospital wage data, we are finalizing the use of the average wage index
from all contiguous CBSAs to represent a reasonable proxy for the rural
area within a State. While this approach does not use rural data, it
does use pre-floor, pre-reclassified hospital wage data, it is easy to
evaluate, it is updateable from year-to-year, and it uses the most
local data available.
In determining an imputed rural wage index, we interpret the term
``contiguous'' to mean sharing a border. For example, in the case of
Massachusetts, the entire rural area consists of Dukes and Nantucket
counties. We have determined that the borders of Dukes and Nantucket
counties are local and contiguous with Barnstable and Bristol counties.
Under this methodology, the wage indexes for the counties of Barnstable
(CBSA 12700: 1.2539) and Bristol (CBSA 39300: 1.0783) are averaged,
resulting in an imputed rural wage index of 1.1661 for rural
Massachusetts for FY 2008. We believe that this policy could be readily
applied to other rural areas that lack hospital wage data (possibly due
to hospitals converting to a different provider type, such as a
critical access hospital, that does not submit the appropriate wage
data), and we may re-examine this policy should a similar situation
arise in the future.
However, we do not believe that this policy is appropriate for
Puerto Rico. There are sufficient economic differences between
hospitals in the United States and those in Puerto Rico (including the
payment of hospitals in Puerto Rico using blended Federal/Commonwealth-
specific rates) that a separate and distinct policy for Puerto Rico is
necessary. Consequently, any alternative methodology for imputing a
wage index for rural Puerto Rico would need to take into account these
economic differences and the payment rates hospitals receive in Puerto
Rico. Our policy of imputing a rural wage index based on the wage
index(es) of CBSAs contiguous to the rural area in question does not
recognize the unique circumstances of Puerto Rico. While we have not
yet identified an alternative methodology for imputing a wage index for
rural Puerto Rico, we will continue to evaluate the feasibility of
using existing hospital wage data and, possibly, wage data from other
sources. By maintaining our current policy for Puerto Rico, we will
maintain consistency with other post-acute care PPS wage index
policies. Accordingly, we will continue using the most recent wage
index previously available for Puerto Rico; that is, a wage index of
0.4047.
In the FY 2006 IRF PPS final rule (70 FR 47880, 47920), we notified
the public that the Office of Management and Budget (OMB) published a
bulletin that changed the titles of certain CBSAs after the publication
of our FY 2006 IRF PPS proposed rule (70 FR 30186). Since the
publication of the FY 2006 IRF PPS final rule, OMB published additional
bulletins that updated the CBSAs. Specifically, OMB added or deleted
certain CBSA numbers and revised certain titles. Accordingly, in this
final rule, we are clarifying that this and all subsequent IRF PPS
rules and notices are considered to incorporate the CBSA changes
published in the most recent OMB bulletin that applies to the hospital
wage data used to determine the current IRF PPS wage index. The OMB
bulletins may be accessed online at http://www.whitehouse.gov/omb/bulletins/index.html.
To calculate the wage-adjusted facility payment for the payment
rates set forth in this final rule, we multiply the unadjusted Federal
prospective payment by the FY 2008 RPL labor-related share (75.818
percent) to determine the labor-related portion of the Federal
prospective payments. We then multiply this labor-related portion by
the applicable IRF wage index shown in Table 1 for urban areas and
Table 2 for rural areas in the Addendum.
Adjustments or updates to the IRF wage index made under section
1886(j)(6) of the Act must be made in a budget neutral manner;
therefore, we calculated a budget neutral wage adjustment factor as
established in the August 1, 2003 final rule and codified at Sec.
412.624(e)(1), and described in the steps below. We use the following
steps to ensure that the FY 2008 IRF standard payment conversion factor
reflects the update to the wage indexes (based on the FY 2003 pre-
reclassified and pre-floor hospital wage data) and the labor-related
share in a budget neutral manner:
Step 1. Determine the total amount of the estimated FY 2007 IRF PPS
rates, using the FY 2007 standard payment conversion factor and the
labor-related share and the wage indexes from FY 2007 (as published in
the FY 2007 IRF PPS final rule).
Step 2. Calculate the total amount of estimated IRF PPS payments,
using the FY 2007 standard payment conversion factor and the FY 2008
labor-related share and CBSA urban and rural wage indexes.
Step 3. Divide the amount calculated in step 1 by the amount
calculated in step 2, which equals the FY 2008 budget neutral wage
adjustment factor of 1.0028.
Step 4. Apply the FY 2008 budget neutral wage adjustment factor
from step 3 to the FY 2007 IRF PPS standard payment conversion factor
after the

[[Page 44300]]

application of the estimated market basket update to determine the FY
2008 standard payment conversion factor.
We received a few comments on the proposed IRF PPS wage index,
which are summarized below.
Comment: A few commenters recommended that we revise the urban IRF
PPS wage index policies to stabilize the wage index from one year to
the next. The commenters stated that the FY 2008 IRF PPS proposed wage
indexes would be lower than other IRFs or acute care hospitals in their
local market area. In addition, the variability of the wage index from
one year to the next causes unpredictable annual revenue swings that
make it difficult to retain staff. Thus, it is difficult for these IRFs
to compete for healthcare personnel in the same market area as other
local IRFs and acute care hospitals. The wage index recommendations
varied from a general change to the urban wage index to specific
criteria an IRF must meet in order to qualify for the commenter's
recommended wage index policy.
We also received a few public comments that recommend that we
consider wage index policies under the acute IPPS because IRFs compete
in a similar labor pool as acute care hospitals. The IPPS wage index
policies would allow IRFs to benefit from the IPPS reclassification
and/or floor policies. (A discussion of the IPPS reclassification and
floor policies may be found on our Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/01_overview.asp.)
In addition, commenters recommended that we conduct further
analysis and discussions with the industry regarding alternative wage
index methodologies that would minimize fluctuations in the wage index
and better reflect the costs of IRF labor in the market areas.
Response: For FY 2008, we proposed a revision to our methodology to
determine a proxy for rural areas without hospital wage data. This
proxy would be applied to rural geographic areas in a State where there
is no hospital wage data. We did not propose changes in the IRF PPS
methodology for urban areas with available hospital wage data nor did
we propose to revise our current wage index policies to adopt the
reclassification or floor provisions used in the IPPS. For this reason,
we are not making changes at this time to wage index policies beyond
what we discussed in the FY 2008 IRF PPS proposed rule (72 FR 26230).
A few commenters recommended alternative approaches to the IRF PPS
wage index that we would like to further analyze and may consider in
the future. For example, we received recommendations ranging from a
general change to the urban wage index and wage data to specific
criteria an IRF must meet in order to qualify for the commenter's
recommended wage index policy. We met in 2006 and 2007 with industry
representatives that recommended several different approaches to the
IRF PPS wage index that they believe would minimize the shifts in the
wage index from one year to the next. However, we agree with the
commenters that urged us to conduct further analysis. For this reason,
we believe that it is prudent to refrain from acting on these
recommendations at this time so that we can consider, if appropriate,
these recommended approaches and provide the public the opportunity in
future rulemaking to evaluate and comment upon any alternatives we may
propose.
We reviewed Medicare Payment Advisory Commission's (MedPAC) wage
index recommendations as discussed in MedPAC's June 2007 report titled,
``Report to Congress: Promoting Greater Efficiency in Medicare.''
Although some commenters recommend that we adopt the IPPS wage index
policies such as reclassification and floor policies, we note that
MedPAC's June 2007 report to Congress recommends that Congress ``repeal
the existing hospital wage index statute, including reclassification
and exceptions, and give the Secretary authority to establish new wage
index systems.'' We believe that adopting the IPPS wage index policies,
such as reclassification or floor, would not be prudent at this time
because MedPAC suggests that the reclassification and exception
policies in the IPPS wage index alters the wage index values for one-
third of IPPS hospitals. In addition, MedPAC found that the exceptions
may lead to anomalies in the wage index. By adopting the IPPS
reclassification and exceptions at this time, the IRF PPS wage index
may be vulnerable to similar issues that MedPAC identified in their
June 2007 Report to Congress. However, we will continue to review and
consider MedPAC's recommendations on a refined or an alternative wage
index methodology for the IRF PPS in future years.
Therefore, we will only revise the methodology for computing a wage
index for rural areas without hospital wage data by computing an
average wage index from all contiguous CBSAs to represent a reasonable
proxy for the rural area within a State (as discussed above). We may
consider the commenters' recommended alternative wage index policies
and methodology in the future.
Comment: We received a comment that supports the expiration of the
hold-harmless policy implemented in FY 2006 for IRFs that were rural in
FY 2005 and became urban based on the CBSAs. Specifically, the budget
neutral hold harmless policy established in the FY 2006 final rule will
expire for discharges occurring on or after October 1, 2007.
Response: As discussed above and in the FY 2006 IRF PPS final rule
(70 FR 47880), the hold harmless policy was implemented in FY 2006 and,
as recommended by the commenter, will expire for discharges occurring
on or after October 1, 2007.
Final Decision: Although we solicited public comments on revising
the wage index for rural areas without hospital wage data, we did not
receive any comments regarding the use of an imputed wage index for
rural areas without wage data within a State. Therefore, we proposed
and will finalize in this rule the methodology for computing a wage
index for rural areas without hospital wage data by computing an
average wage index from all contiguous CBSAs to represent a reasonable
proxy for the rural area within a State (as discussed above), as
proposed in the FY 2008 proposed rule. In addition, the wage index
tables for the IRF PPS in this and all subsequent IRF PPS rules and
notices are considered to incorporate the CBSA changes published in the
most recent OMB bulletin (see Web site at http://www.whitehouse.gov/omb/bulletins/index.html) that applies to the hospital wage data used
to determine the current IRF PPS wage index.

C. Description of the IRF Standard Payment Conversion Factor and
Payment Rates for FY 2008

To calculate the standard payment conversion factor for FY 2008 and
as illustrated in Table 3 below, we begin by applying the estimated
market basket increase factor (3.2 percent) to the standard payment
conversion factor for FY 2007 ($12,981), which equals $13,396. We then
apply the combined budget neutrality factor for the wage index and
labor related share and final year of the hold harmless policy of
1.0041 (1.0028 * 1.0013 = 1.0041), which would result in a standard
payment conversion factor of $13,451.

[[Page 44301]]

Table 3.--Calculations To Determine the FY 2008 Standard Payment
Conversion Factor
------------------------------------------------------------------------
Explanation for adjustment Calculations
------------------------------------------------------------------------
FY 2007 Standard Payment Conversion Factor.............. 12,981
FY 2008 Market Basket Increase Factor................... x 1.032
Subtotal................................................ = 13,396
Budget Neutrality Factor for the Wage Index, Labor- x 1.0041
Related Share, and the Hold Harmless Provision.........
FY 2008 Standard Payment Conversion Factor.............. = $13,451
------------------------------------------------------------------------

After the application of the relative weights, the resulting
unadjusted IRF prospective payment rates for FY 2008 are shown below in
Table 4, ``FY 2008 Payment Rates.''

Table 4.--FY 2008 Payment Rates
----------------------------------------------------------------------------------------------------------------
Payment rate Payment rate Payment rate Payment rate no
CMG tier 1 tier 2 tier 3 comorbidity
----------------------------------------------------------------------------------------------------------------
0101.................................... $10,366.69 $9,823.27 $8,840.00 $8,537.35
0102.................................... 12,769.03 12,099.17 10,888.58 10,515.99
0103.................................... 15,054.36 14,264.79 12,837.63 12,399.13
0104.................................... 15,986.51 15,145.83 13,631.24 13,164.49
0105.................................... 19,182.47 18,174.99 16,357.76 15,798.20
0106.................................... 22,320.59 21,147.66 19,033.17 18,382.14
0107.................................... 25,758.67 24,406.84 21,965.48 21,213.57
0108.................................... 29,807.42 28,243.06 25,418.35 24,548.08
0109.................................... 29,589.51 28,035.92 25,231.39 24,367.83
0110.................................... 35,358.64 33,502.41 30,151.76 29,120.07
0201.................................... 10,953.15 9,154.75 8,178.21 7,595.78
0202.................................... 14,069.75 11,760.21 10,505.23 9,757.36
0203.................................... 16,817.79 14,056.30 12,556.51 11,663.36
0204.................................... 18,010.89 15,054.36 13,448.31 12,491.94
0205.................................... 22,075.78 18,452.08 16,482.86 15,309.93
0206.................................... 28,845.67 24,109.57 21,536.40 20,005.67
0207.................................... 37,210.85 31,101.40 27,783.04 25,805.74
0301.................................... 15,326.07 12,822.84 11,503.30 10,454.12
0302.................................... 20,008.36 16,741.11 15,016.70 13,648.73
0303.................................... 23,809.62 19,920.93 17,869.65 16,240.74
0304.................................... 32,813.71 27,453.49 24,627.44 22,382.46
0401.................................... 12,895.47 11,374.17 10,386.86 9,224.70
0402.................................... 17,830.65 15,725.56 14,360.29 12,754.24
0403.................................... 31,030.11 27,368.75 24,991.96 22,196.84
0404.................................... 55,878.14 49,283.12 45,004.36 39,972.34
0405.................................... 42,197.13 37,216.23 33,985.30 30,185.39
0501.................................... 10,287.32 8,682.62 7,649.58 6,821.00
0502.................................... 13,803.42 11,649.91 10,263.11 9,152.06
0503.................................... 18,287.98 15,436.37 13,597.62 12,124.73
0504.................................... 22,845.18 19,282.01 16,985.92 15,145.83
0505.................................... 27,132.01 22,900.33 20,172.46 17,988.02
0506.................................... 36,858.43 31,109.47 27,405.07 24,436.43
0601.................................... 12,093.79 9,859.58 9,441.26 8,772.74
0602.................................... 16,098.16 13,124.14 12,565.92 11,678.16
0603.................................... 20,615.00 16,807.02 16,094.12 14,954.82
0604.................................... 26,353.20 21,485.28 20,573.30 19,117.91
0701.................................... 12,143.56 10,380.14 9,870.34 8,900.53
0702.................................... 15,786.09 13,495.39 12,830.91 11,570.55
0703.................................... 19,677.47 16,821.82 15,993.24 14,422.16
0704.................................... 24,170.10 20,662.08 19,645.19 17,714.97
0801.................................... 8,792.92 7,403.43 6,901.71 6,196.88
0802.................................... 11,489.84 9,675.30 9,017.55 8,097.50
0803.................................... 17,092.19 14,392.57 13,416.03 12,046.72
0804.................................... 14,849.90 12,504.05 11,655.29 10,466.22
0805.................................... 18,733.21 15,773.99 14,703.29 13,203.50
0806.................................... 22,494.11 18,941.70 17,655.78 15,854.69
0901.................................... 11,332.47 10,277.91 9,238.15 8,232.01
0902.................................... 14,914.47 13,527.67 12,158.36 10,836.13
0903.................................... 19,689.57 17,858.89 16,052.42 14,305.14
0904.................................... 24,670.48 22,377.08 20,111.94 17,923.46
1001.................................... 12,946.59 11,943.14 10,702.96 9,901.28
1002.................................... 17,094.88 15,769.95 14,132.97 13,073.03
1003.................................... 24,045.01 22,182.04 19,879.23 18,388.86
1101.................................... 16,886.39 14,099.34 12,408.55 11,427.97

[[Page 44302]]

1102.................................... 25,320.16 21,140.94 18,605.42 17,135.23
1201.................................... 13,689.08 11,816.70 11,005.61 9,960.47
1202.................................... 17,712.28 15,289.75 14,239.23 12,887.40
1203.................................... 21,845.77 18,858.30 17,562.97 15,895.05
1301.................................... 13,927.17 12,961.38 11,448.15 9,992.75
1302.................................... 19,263.18 17,926.15 15,834.52 13,820.90
1303.................................... 24,548.08 22,845.18 20,179.19 17,612.74
1401.................................... 10,976.02 9,887.83 8,788.88 7,883.63
1402.................................... 14,847.21 13,375.67 11,889.34 10,663.95
1403.................................... 18,434.60 16,607.95 14,762.47 13,241.16
1404.................................... 23,364.39 21,049.47 18,710.34 16,782.81
1501.................................... 13,432.17 11,931.04 10,482.36 9,952.39
1502.................................... 17,030.31 15,126.99 13,289.59 12,618.38
1503.................................... 20,791.21 18,468.22 16,224.60 15,405.43
1504.................................... 27,192.54 24,153.96 21,218.95 20,148.25
1601.................................... 13,545.16 11,500.61 10,456.81 9,357.86
1602.................................... 18,597.35 15,790.13 14,356.25 12,848.40
1603.................................... 22,900.33 19,443.42 17,678.65 15,821.07
1701.................................... 13,206.19 12,968.11 11,405.10 9,910.70
1702.................................... 17,380.04 17,066.63 15,008.63 13,042.09
1703.................................... 20,655.36 20,284.11 17,838.72 15,500.93
1704.................................... 25,887.79 25,421.04 22,355.56 19,427.28
1801.................................... 16,033.59 13,270.76 11,087.66 9,875.72
1802.................................... 25,634.92 21,217.61 17,727.07 15,788.78
1803.................................... 46,139.62 38,188.73 31,907.12 28,417.93
1901.................................... 16,677.89 14,777.27 14,749.02 12,576.69
1902.................................... 31,198.25 27,644.50 27,590.69 23,527.14
1903.................................... 45,012.43 39,883.56 39,805.54 33,943.60
2001.................................... 11,748.10 9,928.18 9,059.25 8,183.59
2002.................................... 15,397.36 13,012.50 11,873.20 10,727.17
2003.................................... 19,876.54 16,797.61 15,327.41 13,846.46
2004.................................... 26,519.99 22,412.06 20,450.90 18,474.95
2101.................................... 29,379.67 29,379.67 22,336.73 19,620.97
5001.................................... 0.00 0.00 0.00 2,960.57
5101.................................... 0.00 0.00 0.00 8,542.73
5102.................................... 0.00 0.00 0.00 21,501.42
5103.................................... 0.00 0.00 0.00 9,688.76
5104.................................... 0.00 0.00 0.00 25,266.36
----------------------------------------------------------------------------------------------------------------

D. Example of the Methodology for Adjusting the Federal Prospective
Payment Rates

Table 5 illustrates the methodology for adjusting the Federal
prospective payments (as described in sections VI.A through VI.C of
this final rule). The examples below are based on two hypothetical
Medicare beneficiaries, both classified into CMG 0110 (without
comorbidities). The unadjusted Federal prospective payment rate for CMG
0110 (without comorbidities) can be found in Table 4 above.
One beneficiary is in Facility A, an IRF located in rural Spencer
County, Indiana, and another beneficiary is in Facility B, an IRF
located in urban Harrison County, Indiana. Facility A, a non-teaching
hospital, has a disproportionate share hospital (DSH) percentage of 5
percent (which results in a LIP adjustment of 1.0309), a wage index of
0.8538, and an applicable rural adjustment of 21.3 percent. Facility B,
a teaching hospital, has a DSH percentage of 15 percent (which results
in a LIP adjustment of 1.0910), a wage index of 0.9118, and an
applicable teaching status adjustment of 0.109.
To calculate each IRF's labor and non-labor portion of the Federal
prospective payment, we begin by taking the unadjusted Federal
prospective payment rate for CMG 0110 (without comorbidities) from
Table 4 above. Then, we multiply the estimated labor-related share
(75.818) described in section VI.A of this final rule by the unadjusted
Federal prospective payment rate. To determine the non-labor portion of
the Federal prospective payment rate, we subtract the labor portion of
the Federal payment from the unadjusted Federal prospective payment.
To compute the wage-adjusted Federal prospective payment, we
multiply the result of the labor portion of the Federal payment by the
appropriate wage index found in the Addendum in Tables 1 and 2, which
will result in the wage-adjusted amount. Next, we compute the wage-
adjusted Federal payment by adding the wage-adjusted amount to the non-
labor portion.
To adjust the Federal prospective payment by the facility-level
adjustments, there are several steps. First, we take the wage-adjusted
Federal prospective payment and multiply it by the appropriate rural
and LIP adjustments (if applicable). Then, to determine the appropriate
amount of additional payment for the teaching status adjustment (if
applicable), we multiply the teaching status adjustment (0.109, in this
example) by the wage-adjusted and rural-adjusted amount (if
applicable). Finally, we add the additional teaching status payments
(if applicable) to the wage, rural, and LIP-adjusted Federal
prospective payment rate. Table 5 illustrates the components of the
adjusted payment calculation.

[[Page 44303]]

Table 5.--Example of Computing an IRF's FY 2008 Federal Prospective Payment
----------------------------------------------------------------------------------------------------------------
Rural Facility A Urban Facility B
Steps (Spencer Co., (Harrison Co.,
IN) IN)
----------------------------------------------------------------------------------------------------------------
1.............................. Unadjusted Federal Prospective Payment..... $29,120.07 $29,120.07
2.............................. Labor Share................................ x 0.75818 x 0.75818
3.............................. Labor Portion of Federal Payment........... = $22,078.25 = $22,078.25
4.............................. CBSA Based Wage Index (shown in the x 0.8538 x 0.9118
Addendum, Tables 1 and 2).
5.............................. Wage-Adjusted Amount....................... = $18,850.41 = $20,130.95
6.............................. Non-labor Amount........................... + $7,041.82 + $7,041.82
7.............................. Wage-Adjusted Federal Payment.............. = $25,892.23 = $27,172.77
8.............................. Rural Adjustment........................... x 1.213 x 1.000
9.............................. Wage- and Rural-Adjusted Federal Payment... = $31,407.27 = $27,172.77
10............................. LIP Adjustment............................. x 1.0309 x 1.0910
11............................. FY2007 Wage-, Rural- and LIP-Adjusted = $32,377.76 = $29,645.49
Federal Prospective Payment Rate.
12............................. FY2007 Wage- and Rural-Adjusted Federal $31,407.27 $27,172.77
Prospective Payment.
13............................. Teaching Status Adjustment................. x 0.000 x 0.109
14............................. Teaching Status Adjustment Amount.......... = $0.00 = $2,961.83
15............................. FY2007 Wage-, Rural-, and LIP-Adjusted + $32,377.76 + $29,645.49
Federal Prospective Payment Rate.
16............................. Total FY2007 Adjusted Federal Prospective = $32,377.76 = $32,607.32
Payment.
----------------------------------------------------------------------------------------------------------------

Thus, the adjusted payment for Facility A would be $32,377.76 and
the adjusted payment for Facility B would be $32,607.32.

VII. Update to Payments for High-Cost Outliers Under the IRF PPS

A. Update to the Outlier Threshold Amount for FY 2008

Section 1886(j)(4) of the Act provides the Secretary with the
authority to make payments in addition to the basic IRF prospective
payments for cases incurring extraordinarily high costs. A case
qualifies for an outlier payment if the estimated cost of the case
exceeds the adjusted outlier threshold. We calculate the adjusted
outlier threshold by adding the IRF PPS payment for the case (that is,
the CMG payment adjusted by all of the relevant facility-level
adjustments) and the adjusted threshold amount (also adjusted by all of
the relevant facility-level adjustments). Then, we calculate the
estimated cost of a case by multiplying the IRF's overall cost-to-
charge ratio (CCR) by the Medicare allowable covered charge. If the
estimated cost of the case is higher than the adjusted outlier
threshold, we make an outlier payment for the case equal to 80 percent
of the difference between the estimated cost of the case and the
outlier threshold.
In the August 7, 2001 final rule (66 FR 41316, 41362 through
41363), we discussed our rationale for setting the outlier threshold
amount for the IRF PPS so that estimated outlier payments would equal 3
percent of total estimated payments. Subsequently, we updated the IRF
outlier threshold amount in the FYs 2006 and 2007 IRF PPS final rules
(70 FR 47880 and 71 FR 48354) to maintain estimated outlier payments at
3 percent of total estimated payments, and we also stated that we would
continue to analyze the estimated outlier payments for subsequent years
and adjust the outlier threshold amount as appropriate to maintain the
3 percent target.
For this final rule, we performed an updated analysis of FY 2006
claims and IRF-PAI data using the same methodology that we used to set
the initial outlier threshold amount when we first implemented the IRF
PPS in the August 7, 2001 final rule (66 FR 41316), which is also the
same methodology that we used to update the outlier threshold amounts
for FYs 2006 and 2007. Using the updated FY 2006 claims and IRF-PAI
data, we estimate that IRF outlier payments as a percentage of total
estimated payments for FY 2007 increased from 3 percent using the FY
2004 data to approximately 3.7 percent using the updated FY 2006 data.
Based on the updated analysis using FY 2006 data, and consistent
with the broad statutory authority conferred upon the Secretary in
sections 1886(j)(4)(A)(i) and 1886(j)(4)(A)(ii) of the Act, we are
updating the outlier threshold amount to $7,362 to decrease estimated
outlier payments from approximately 3.7 to 3 percent of total estimated
aggregate IRF payments for FY 2008.

B. Update to the IRF Cost-to-Charge Ratio Ceilings

In accordance with the methodology stated in the August 1, 2003
final rule (68 FR 45692 through 45694), we apply a ceiling to IRFs'
cost-to-charge ratios (CCRs). Using the methodology described in that
final rule, we are updating the national urban and rural CCRs for IRFs.
We apply the national urban and rural CCRs in the following situations:
New IRFs that have not yet submitted their first Medicare
cost report.
IRFs whose overall CCR is in excess of 3 standard
deviations above the corresponding national geometric mean, which is
set at 1.56 for FY 2008.
Other IRFs for whom accurate data with which to calculate
an overall CCR are not available.
Specifically, for FY 2008, we estimate a national CCR of 0.596 for
rural IRFs and 0.476 for urban IRFs. For new facilities, we use these
national ratios until the data become available for us to compute the
facility's actual CCR using the first tentative settled or final
settled cost report data, which we will then use for the subsequent
cost reporting period.

C. Adjustment of IRF Outlier Payments

In the August 1, 2003 final rule (68 FR 45674, 45693 through
45694), we finalized a proposal to make IRF outlier payments subject to
reconciliation when IRFs' cost reports are settled, consistent with the
policy adopted for IPPS hospitals in the June 9, 2003 IPPS final rule
(68 FR 34494, 34501). The revised methodology provides for retroactive
adjustments to IRF outlier payments to account for differences between
the CCRs from the latest settled cost report and the actual CCRs
computed at the time the cost report that coincides with the date of
discharge is settled using the cost and charge data from that cost
report. This revised methodology addresses vulnerabilities found in the
IPPS and the IRF outlier payment policies, which may have resulted in
outlier payments that were too high or too low. Along these lines, we
are analyzing IRF outlier payments from the

[[Page 44304]]

beginning of the IRF PPS through FY 2005, obtained from IRFs' cost
report filings, to identify specific payment vulnerabilities in the IRF
outlier payment policy.
Under this policy, which is outlined in Sec. 412.624(e)(5), which
in turn references Sec. 412.84(i) and Sec. 412.84(m) of the IPPS
regulations, outlier payments will be processed on an interim basis
throughout the year using IRFs' CCRs based on the best information
available at the time. When an IRF's cost report is settled, any
reconciliation of outlier payments by fiscal intermediaries will be
based on the relationship between an IRF's costs and charges at the
time a particular discharge actually occurred. This revised methodology
ensures that the final outlier payments reflect an accurate assessment
of the actual costs that the IRF incurred for treating the case.
We have not yet issued instructions to the fiscal intermediaries
regarding IRF outlier reconciliation because we have been analyzing the
data and assessing the systems changes necessary to conduct the
reconciliation. Thus, we will soon issue instructions to fiscal
intermediaries to begin reconciling IRF outlier payments upon
settlement of IRF cost reports.
We received several comments on the proposed high-cost outliers
under the IRF PPS, which are summarized below.
Comment: One commenter suggested that CMS adopt a new methodology
for modeling charge increases and cost-to-charge ratio (CCR) changes in
estimating the outlier threshold amount, similar to the methodology
implemented for IPPS hospitals in the FY 2007 IPPS final rule (71 FR
47870, 48150 through 48151).
Response: In response to the comment, we considered adopting the
same methodology described in the FY 2007 IPPS final rule (71 FR 47870,
48150 through 48151) for projecting cost and charge growth in
estimating the FY 2008 IRF outlier threshold amount. However, we
discovered that the accuracy of the projections depends on the case mix
of patients in the facilities remaining similar from year to year, as
it does in IPPS hospitals. However, with the recent phase in of the
enforcement of the 75 percent rule criteria, we find evidence of
relatively large changes in the case mix of patients in IRFs,
especially in the years immediately following the reinstatement of
enforcement of the 75 percent rule (FYs 2004 through 2006). In
performing our analysis, we discovered that we could get inaccurate
results if we based future projections of cost and charge growth on
data from years in which IRFs were experiencing abnormal fluctuations
in case mix. Rather than implementing an outlier threshold amount for
FY 2008 based on these potentially inaccurate results, we thought a
better approach would be to wait until we could further analyze the
interactions between case mix changes and IRF cost and charge growth.
Our analysis of the data suggests that it is likely better to wait
until the 75 percent rule has been fully phased in, and the IRF case
mix has stabilized, before we attempt to project cost and charge growth
using a new methodology. Otherwise, the substantial changes occurring
in the system all at the same time, including changes in IRFs' charges,
costs, and case mix, could compromise the accuracy of our results. For
the reasons described above, our analysis shows that using the same
methodology we used previously for updating the outlier threshold
amount for FY 2008 is the best approach at this time. However, we will
carefully consider the commenter's suggestions as we investigate
alternative approaches for projecting IRF cost and charge growth in
estimating future updates to the IRF outlier threshold amount.
Comment: One commenter requested that we use updated FY 2006 data
to estimate the IRF outlier threshold amount for FY 2008, because the
FY 2006 data better reflect changes in the volume of IRF cases due to
the 75 percent rule.
Response: We agree with the commenter and we have updated our
analysis for this final rule based on FY 2006 data using the same
methodology that was described in the August 7, 2001 final rule (66 FR
41316), which was the same methodology used to calculate the proposed
outlier threshold for the FY 2008 proposed rule (72 FR 26250).
Comment: In the proposed rule, we indicated that we would
investigate the reasons for our finding that estimated FY 2007 outlier
payments increased from 3.0 to 3.8 percent of total estimated payments
when we updated the claims data used in the calculations from FY 2004
to FY 2005. Two commenters requested that we report the findings of our
analysis and our rationale for increasing the outlier threshold amount
in this final rule.
Response: Our analysis of the increase in estimated FY 2007 outlier
payments using the updated FY 2005 claims data (compared with the FY
2004 claims data) shows that the increase was caused primarily by
increases in IRF charges and cost-to-charge ratios (CCRs) between FY
2004 and FY 2005. As discussed above in section VII.C of this final
rule, we are continuing to examine these changes closely to assess
whether they indicate the presence of specific payment vulnerabilities
in the IRF outlier payment policy. This is ongoing research, but we
have already discovered large variations in charges and CCRs among IRFs
from year to year since the implementation of the IRF PPS that we
believe may be indicative of specific payment vulnerabilities in the
IRF PPS outlier payment policy.
For this final rule, we used updated FY 2006 IRF claims data to
analyze IRF outliers. Similar to the findings from the FY 2005 data,
the FY 2006 data show that estimated IRF outlier payments would equal
3.7 percent of total estimated payments in FY 2007. Thus, based on the
analysis of both the FYs 2005 and 2006 data, we believe that continuing
to use the same outlier threshold amount for FY 2008 that we
implemented for FY 2007 would result in an overpayment of IRF outlier
payments, above the 3 percent outlier pool that we established when we
first implemented the IRF PPS. For this reason, we are finalizing our
decision to update the IRF outlier threshold amount for FY 2008 to
$7,362, based on analysis of FY 2006 data.
Comment: Two commenters supported the proposed change to the IRF
outlier threshold amount for FY 2008 to maintain estimated outlier
payments at 3 percent of total estimated payments. One commenter
indicated that the outlier threshold amount may have been set too low
in FYs 2006 and 2007, which they said may have meant that the standard
payment conversion factor in these years was also too low.
Response: We agree with these commenters that it is important to
adjust the outlier threshold amount to maintain estimated outlier
payments at 3 percent of total estimated payments for FY 2008. However,
our calculation of the outlier threshold amount for a given FY has no
effect on the amount of the standard payment conversion factor for that
FY. Therefore, we disagree that the standard payment conversion factor
was too low in FYs 2006 and 2007.
Comment: One commenter requested that CMS provide additional data
and information to the public to allow the IRF industry and external
researchers to conduct a more thorough review of CMS's proposed updates
to the outlier threshold amount. Specifically, the commenter asked that
we provide information on IRF charges and CCRs, a discussion of the
data sources and time periods used in computing the outlier threshold,
an IRF Medpar file (including total payments, outlier payments, and
actual, estimated, and proposed CMGs), historical information on IRF
facility-level payment factors (specifically

[[Page 44305]]

CCRs), and actual levels and percentages of outlier payments.
Response: We will carefully consider all of the commenter's
suggestions in updating the IRF rate setting files that we post on the
IRF PPS Web site in conjunction with each IRF PPS proposed and final
rule. These files are available for download from the IRF PPS Web site
at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles.asp. These
files already contain much of the facility-level payment data requested
by the commenter, including the CCRs used to compute the IRF outlier
threshold amount. For this final rule, we used FY 2006 IRF claims data,
merged with FY 2006 IRF-PAI data, to conduct patient-level payment
simulations to estimate the outlier threshold amount for FY 2008. This
data file contains information that can be used to identify individual
Medicare beneficiaries and is therefore not publicly available. We
obtained the provider-level CCR data used in this analysis from the
Provider-Specific Files, which contain historical CCR data and are
available for download from the CMS Web site at http://www.cms.hhs.gov/ProspMedicareFeeSvcPmtGen/03_psf.asp.
The modified Medpar data files that CMS provides to IPPS hospitals
already contain IRF stay data. However, we have recently discovered
that these files do not include the CMGs, and we recognize that there
may be other limitations to the usefulness of these files for analyzing
IRF payments. Based on the commenter's request, we will carefully
consider the usefulness and feasibility of including additional
variables on the Medpar file in the future to facilitate IRF analyses.
Comment: One commenter recommended that CMS consider placing a 10
percent upper limit on the amount of an IRF's outlier payments (as a
percentage of total payments) to encourage IRFs to strengthen their
management of cases that might become high-cost outlier cases. In
addition, the commenter requested that CMS incorporate any unused funds
from the 3 percent IRF outlier pool back into the IRF base rate to
increase payments for all IRF discharges.
Response: We appreciate the commenter's suggestion to place a cap
on an IRF's outlier payments, and will consider this approach in the
future as we work to eliminate potential vulnerabilities in the IRF
outlier payment policy. However, at this time, we believe that a better
approach to mitigating the vulnerabilities in the IRF outlier payment
methodology is to increase the accuracy of the IRF outlier payments. As
discussed previously in section VII.C of this final rule, we will soon
be issuing instructions to fiscal intermediaries to begin reconciling
the IRF CCRs upon settlement of the cost reports. We believe that using
the actual CCR computed from an IRF's cost report at the time the cost
report is settled, rather than an older CCR, to compute the outlier
payments on the discharges that coincide with that cost report will
improve the accuracy of the outlier payment calculations. We expect
that much of the variation in outlier payments (as a percentage of
total payments) among IRFs will be reduced by this approach, because it
will limit IRFs' ability to increase their outlier payments by
increasing their charges.
As discussed in the August 7, 2001 final rule (66 FR 41316, 41362
through 41363), we believe that setting estimated outlier payments
equal to 3 percent of total estimated payments effectively balances the
need to encourage IRFs to continue admitting potential high-cost
outlier cases, while simultaneously ensuring that adequate funds are
available to reimburse IRFs for treating the non-high-cost outlier
cases. As we discussed in response to comments that we received on the
FY 2006 IRF PPS rule and other PPS rules, we do not make adjustments to
IRF PPS payment rates to account for differences between the 3 percent
target and actual outlier payments. (See 70 FR 47936 for the IRF PPS
response and a list of the FRs addressing this issue for other PPS
systems.) If outlier payments for a given year are higher than 3
percent, we do not recoup money from IRFs. Similarly, if outlier
payments in a given year are below 3 percent, we do not increase IRF
PPS payments to account for this. We believe that this policy is
consistent with the statute and with the goals of the prospective
payment systems.
Comment: Two commenters supported CMS's plan to instruct fiscal
intermediaries to begin reconciling IRF outlier payments, in certain
instances, upon settlement of the IRF cost reports. However, both
commenters recommended that CMS limit the administrative burden of
these reviews by conducting reconciliation on only those IRF providers
whose outlier payments and cost-to-charge ratio fluctuations exceed
certain thresholds, similar to the process for IPPS hospitals.
Specifically, one commenter recommended that CMS structure the IRF
outlier reconciliation policy so that it is similar to the
reconciliation policies for IPPS and long-term care hospitals. In
addition, one commenter suggested that CMS limit our reconciliation
efforts to discharges that occurred on or after October 1, 2003, the
effective date of recent improvements to the methodology for
determining IRF outlier payments.
Response: We agree with the commenters that we should conduct
outlier reconciliation to address vulnerabilities in IRF outlier
payments, and we also agree that we should apply the outlier
reconciliation policies used in the IPPS and long-term care hospital
settings as closely as possible. To this end, we have been working
closely with the CMS components that develop the outlier reconciliation
policies for these facilities. We also agree that focusing our outlier
reconciliation efforts on those IRFs whose outlier payments and cost-
to-charge ratio fluctuations exceed certain thresholds, similar to the
process for IPPS hospitals, would limit the administrative burden of
the reconciliation process. We are in the process now of determining
the appropriate thresholds to apply in the IRF setting, and will
carefully consider the commenters' recommendations in this regard. We
will issue the final thresholds in our instructions to the fiscal
intermediaries. We will also consider the commenter's suggestions in
deciding which years to review for outlier reconciliation.
Final Decision: Based on a careful review of the comments that we
received on the proposed update to the outlier threshold amount for FY
2008 and based on updated analysis of the FY 2006 data, we are
finalizing our decision to update the outlier threshold amount for FY
2008 to $7,362. In addition, we did not receive any comments on the IRF
cost-to-charge ratio ceilings and are finalizing the national average
urban CCR at 0.476 and the national average rural CCR at 0.596. We are
also finalizing our estimate of 3 standard deviations above the
corresponding national geometric mean, at 1.56 for FY 2008.

VIII. Clarification to the Regulation Text for Special Payment
Provisions for Patients That Are Transferred

Section 125(a)(3) of the BBRA amended section 1886(j)(1) of the Act
by adding a paragraph (E) that states ``Construction relating to
transfer authority--Nothing in this subsection shall be construed as
preventing the Secretary from providing for an adjustment to payments
to take into account the early transfer of a patient from a
rehabilitation facility to another site of care.'' In the FY 2002
proposed and final IRF PPS rules, we proposed and adopted the transfer
payment policy

[[Page 44306]]

under Sec. 412.624(f). The transfer policy provides payments that more
accurately reflect facility resources used and services delivered for
patients that transfer to another site of care as discussed in the FY
2002 IRF PPS final rule (66 FR 41316, 41353 through 41355). We are
revising our regulations text to clarify our existing policy under
Sec. 412.624(f).
In the FY 2002 IRF PPS final rule (66 FR 41316, 41353 through
41355), we discuss our rationale, criteria for defining a transfer
case, and the methodology to determine the unadjusted Federal
prospective payment for the transfer case. In addition, we discuss
several adjustments that we apply to the unadjusted Federal prospective
payment rate. The final adjustments described in the FY 2002 IRF PPS
final rule (65 FR 66304, 66347 through 66357) include the area wage
adjustment, rural adjustment, the LIP adjustment, and the high-cost
outlier adjustment. In our FY 2006 IRF PPS final rule (70 FR 47880), we
refined the facility level adjustments and also adopted a teaching
status adjustment.
We define a ``transfer'' under Sec. 412.602 to mean the release of
a Medicare inpatient from an IRF to another IRF, a short-term, acute-
care prospective payment hospital, a long-term care hospital as
described in Sec. 412.23(e), or a nursing home that qualifies to
receive Medicare or Medicaid payment. In order to receive a transfer
payment under Sec. 412.624(f), a patient must be transferred to
another site of care as defined in Sec. 412.602 and must have been
admitted to the IRF for less than the average length of stay for the
CMG. Table 1 in this final rule presents the CMGs, the comorbidity
tiers, the corresponding relative weights, and the average length of
stay value for each CMG and tier. We use the average length of stay for
each CMG to determine when an IRF discharge meets the definition of a
transfer, which results in a per diem case level adjustment.
Since the implementation of the IRF PPS, a claim meets the high-
cost outlier policy under Sec. 412.624(e)(5), as revised in the FY
2007 IRF PPS final rule (71 FR 48354, 48382 through 48383), if the
estimated cost of the case exceeds the adjusted outlier threshold. For
a case that qualifies, we make an outlier payment equal to 80 percent
of the difference between the estimated cost of the case and the
outlier threshold. Since the implementation of the IRF PPS, we have
provided an additional high-cost outlier payment to both transfer cases
and full CMG cases when applicable. We proposed to clarify the
regulations text to articulate the transfer policy more clearly.
Specifically, we proposed to add the phrase ``subject to paragraph
(e)(5)'' at the end of the paragraph under Sec. 412.624(f)(2)(v). We
proposed to revise Sec. 412.624(f)(2)(v) to read, ``[B]y applying the
adjustment described in paragraphs (e)(1), (e)(2), (e)(3), (e)(4), and
(e)(7) of this section to the unadjusted payment amount determined in
paragraph (f)(2)(iv) of this section to equal the adjusted transfer
payment amount, subject to paragraph (e)(5).''
We received a couple comments on the proposed clarification to the
regulation text for special payment provisions for patients that are
transferred, which are summarized below.
Comment: We received a comment supporting the revisions to the
clarification to the regulation text for special payment provisions for
patients that are transferred described above. Another commenter
requested additional clarification to better understand the intent of
the revision to the regulation text.
Response: In the past, we have received questions from the public
about whether an outlier payment applies to cases that are transferred
to another site of care as defined in Sec. 412.602. As discussed in
detail above in this section, we have provided an additional high-cost
outlier payment to both transfer cases and full CMG cases when
applicable. We reviewed Sec. 412.624(f) and believe that a minor
revision to the regulation text would clarify the existing policy. As
we emphasized in the proposed rule, the revision to the regulation text
will not change our current methodology for determining whether a high-
cost outlier payment applies to transfer cases. Based on the comment,
we believe the regulations text should be revised to make more clear
that we will apply a high-cost outlier payment to a transfer case based
on the methodology set forth in Sec. 412.624(e)(5), which we use to
determine whether a high-cost outlier payment. Therefore, we will add
the phrase to the end of Sec. 412.624(f)(2)(v) to read, ``and making
an outlier payment in accordance with (e)(5), if applicable.''
Final Decision: We are finalizing our change to the regulations
text at Sec. 412.624(f)(2)(v) by revising the paragraph to read,
``[B]y applying the adjustment described in paragraphs (e)(1), (e)(2),
(e)(3), (e)(4), and (e)(7) of this section to the unadjusted payment
amount determined in paragraph (f)(2)(iv) of this section to equal the
adjusted transfer payment amount and making an outlier payment in
accordance with (e)(5), if applicable.''

IX. Miscellaneous Comments

Comment: One commenter requested that CMS work to define more
precisely the requirements for other post acute care providers, such as
skilled nursing facilities and long-term care hospitals that also
provide rehabilitation services.
Response: Because this comment concerns the establishment of
regulations for other Medicare post-acute care settings, the comment is
outside the scope of this final rule. However, in the IRF PPS final
rule for FY 2007 (71 FR 48354), we described our plans to explore
refinements to the existing provider-oriented ``silos'' to create a
more seamless system for payment and delivery of post-acute care (PAC)
under Medicare. We expect that this new model will be characterized by
more consistent payments for the same type of care across different
sites of service, quality driven pay-for-performance incentives, and
collection of uniform clinical assessment information to support
quality and discharge planning functions. In the IRF PPS final rule for
FY 2007 (71 FR 48354), we described how section 5008 of the DRA
provides for a demonstration on uniform assessment and data collection
across different sites of service. We are developing a standard,
comprehensive assessment instrument to be completed at hospital
discharge for use in the demonstration, which we expect to begin in
2008. We expect that the demonstration will enable us to test the
usefulness of this instrument, and analyze cost and outcomes across
different PAC sites.
Comment: A few commenters recommended that CMS implement additional
refinements to the IRF PPS using more recent data that reflect changes
in IRF case mix and volume occurring in response to the 75 percent rule
compliance criteria and medical necessity reviews. Specifically, one
commenter recommended changes to the IRF facility-level adjustments,
including suggested revisions to CMS's methodology for determining the
amount of the adjustments. A few commenters also suggested that CMS
work with the IRF industry and researchers to develop an analytical
framework for analyzing future payment adjustments to account for
coding changes that do not reflect real changes in IRFs' case mix.
Response: Since we did not propose any additional refinements to
the IRF PPS for FY 2008, these comments are outside the scope of this
final rule. However, we are currently analyzing the

[[Page 44307]]

FY 2006 data to determine whether any future revisions to the IRF PPS,
including revisions to the facility-level adjustments and coding
adjustments, would be appropriate. In conducting our analyses, we will
carefully consider the suggestions offered by the commenters and will
explore any new analytical frameworks that may be useful for developing
future refinements.

X. Provisions of the Final Regulations

In this final rule we are adopting the provisions as set forth in
the May 8, 2007 proposed rule (72 FR 26230) except as noted elsewhere
in the preamble with the following revisions:
We will update the pre-reclassified and pre-floor wage
indexes based on the CBSA changes published in the most recent OMB
bulletins that apply to the hospital wage data used to determine the
current IRF PPS wage index, as discussed in section VI.B.
We will revise the wage index policy for rural areas
without hospital wage data by imputing an average wage index from all
contiguous CBSAs to represent a reasonable proxy for the rural area
within a State, as discussed in section VI.B of this final rule.
We are updating the FY 2008 IRF PPS payment rates by the
market basket (3.2 percent), as discussed in section VI.A of this final
rule.
We are updating the FY 2008 IRF PPS payment rates by the
labor-related share (75.818 percent), the wage indexes, and the final
year of the hold harmless policy in a budget neutral manner, as
discussed in sections VI of this final rule.
We are updating the outlier threshold amount for FY 2008
to $7,362, as discussed in section VII.A in this final rule.
We are updating the urban and rural national cost-to-
charge ratio ceilings for purposes of determining outlier payments
under the IRF PPS, as discussed in section VII.B in this final rule.
We are maintaining the comorbidity policy specified in
Sec. 412.23(b)(2). Therefore, for cost reporting periods beginning on
or after July 1, 2007, and before July 1, 2008, the compliance
threshold remains 65 percent and we will continue to include
comorbidities when calculating the compliance percentage. However, for
cost reporting periods beginning on or after July 1, 2008, the
compliance threshold will increase to 75 percent, but the comorbidities
will not be used to determine if a provider met the 75 percent of the
compliance threshold.
We are revising the regulation text at Sec.
412.624(f)(2)(v) to clarify that we determine whether a high-cost
outlier payment would be applicable for transfer cases.

XI. 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.

XII. Regulatory Impact Analysis

A. Overall Impact

We have examined the impacts of this final rule as required by
Executive Order 12866 (September 1993, Regulatory Planning and Review),
the Regulatory Flexibility Act (RFA, September 16, 1980, Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
Executive Order 12866 (as amended by Executive Order 13258, which
merely reassigns responsibility of duties) directs 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). A
regulatory impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any one
year). This final rule is a major rule, as defined in Title 5, United
States Code, section 804(2), because we estimate the impact to the
Medicare program, and the annual effects to the overall economy, will
be more than $100 million. We estimate that the total impact of these
changes for estimated FY 2008 payments compared to estimated FY 2007
payments will be an increase of approximately $150 million (this
reflects a $195 million increase from the update to the payment rates
and a $45 million decrease due to the update to the outlier threshold
amount to decrease estimated outlier payments from approximately 3.7
percent in FY 2007 to 3 percent in FY 2008).
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 government
jurisdictions. Most IRFs and most other providers and suppliers are
considered small entities, either by nonprofit status or by having
revenues of $6 million to $29 million in any one year. (For details,
see the Small Business Administration's final rule that set forth size
standards for health care industries, at 65 FR 69432, November 17,
2000.) Because we lack data on individual hospital receipts, we cannot
determine the number of small proprietary IRFs or the proportion of
IRFs' revenue that is derived from Medicare payments. Therefore, we
assume that all IRFs (an approximate total of 1,200 IRFs, of which
approximately 60 percent are nonprofit facilities) are considered small
entities and that Medicare payment constitutes the majority of their
revenues. The Department of Health and Human Services generally uses a
revenue impact of 3 to 5 percent as a significance threshold under the
RFA. As shown in Table 6, we estimate that the net revenue impact of
this final rule on all IRFs is to increase estimated payments by about
2.4 percent, with an estimated increase in payments of 3 percent or
higher for some categories of IRFs (such as urban IRFs in the Mountain
region and rural IRFs in the Middle Atlantic and East South Central
regions). Thus, we anticipate that this final rule may have a
significant impact on a substantial number of small entities. However,
the estimated impact of this final rule is a net increase in revenues
across all categories of IRFs, so we believe that this final rule will
not impose a significant burden on small entities. Medicare fiscal
intermediaries and carriers are not considered to be small entities.
Individuals and States are not included in the definition of a small
entity.
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. For
purposes of section 1102(b) of the Act, we define a small rural
hospital as a hospital that is located outside of a Metropolitan
Statistical Area and has fewer than 100 beds. As discussed in detail
below, the rates and policies set forth in this final rule will not
have an adverse impact on rural hospitals based on the data of the 198
rural units and 20 rural hospitals in our database of 1,220 IRFs for
which data were available.
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
one year of $100 million in 1995, updated annually

[[Page 44308]]

for inflation. That threshold level is currently approximately $120
million. This final rule 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 final rule that imposes
substantial direct requirement costs on State and local governments,
preempts State law, or otherwise has Federalism implications. As stated
above, this final rule will not have a substantial effect on State and
local governments.

B. Anticipated Effects of the Final Rule

We discuss below the impacts of this final rule on the budget and
on IRFs.
1. Basis and Methodology of Estimates
This final rule sets forth updates of the IRF PPS rates contained
in the FY 2007 final rule, updates the outlier threshold for high-cost
cases, and establishes an adjustment to the wage index methodology.
Based on the above, we estimate that the FY 2008 impact will be a
net increase of $150 million in payments to IRF providers (this
reflects a $195 million estimated increase from the update to the
payment rates and a $45 million estimated decrease due to the update to
the outlier threshold amount to decrease the estimated outlier payments
from approximately 3.7 percent in FY 2007 to 3 percent in FY 2008). The
impact analysis in Table 6 of this final rule represents the projected
effects of the policy changes in the IRF PPS for FY 2008 compared with
estimated IRF PPS payments in FY 2007 without the policy changes. We
estimate the effects by estimating payments while holding all other
payment variables constant. We use the best data available, but we do
not attempt to predict behavioral responses to these changes, and we do
not make adjustments for future changes in such variables as number of
discharges or case-mix.
We note that certain events may combine to limit the scope or
accuracy of our impact analysis, because such an analysis is future-
oriented and, thus, susceptible to forecasting errors because of other
changes in the forecasted impact time period. Some examples could be
legislative changes made by the Congress to the Medicare program that
will impact program funding, or changes specifically related to IRFs.
In addition, changes to the Medicare program may continue to be made as
a result of the BBA, the BBRA, the BIPA, the MMA, the DRA, or new
statutory provisions. Although these changes may not be specific to the
IRF PPS, the nature of the Medicare program is such that the changes
may interact, and the complexity of the interaction of these changes
could make it difficult to predict accurately the full scope of the
impact upon IRFs.
In updating the rates for FY 2008, we are implementing a number of
standard annual revisions and clarifications mentioned elsewhere in
this final rule (for example, the update to the wage and market basket
indexes used to adjust the Federal rates). We estimate that these
revisions will increase payments to IRFs by approximately $195 million.
The aggregate change in estimated payments associated with this
final rule is estimated to be an increase in payments to IRFs of $150
million for FY 2008. The market basket increase of $195 million and the
$45 million decrease due to the update to the outlier threshold amount
to decrease estimated outlier payments from approximately 3.7 percent
in FY 2007 to 3.0 percent in FY 2008 will result in a net change in
estimated payments from FY 2007 to FY 2008 of $150 million.
The effects of the changes that affect IRF PPS payment rates are
shown in Table 6. The following changes that affect the IRF PPS payment
rates are discussed separately below:
The effects of the update to the outlier threshold amount
to decrease total estimated outlier payments from approximately 3.7 to
3 percent of total estimated payments for FY 2008, consistent with
section 1886(j)(4) of the Act.
The effects of the annual market basket update (using the
RPL market basket) to IRF PPS payment rates, as required by sections
1886(j)(3)(A)(i) and 1886(j)(3)(C) of the Act.
The effects of applying the budget neutral labor-related
share and wage index adjustment, including revisions to our methodology
for determining a proxy for rural areas without hospital wage data (as
described in section VI of this final rule), as required under section
1886(j)(6) of the Act.
The effects of the final year of the 3-year budget neutral
hold-harmless policy for IRFs that were rural under Sec. 412.602
during FY 2005, but are urban under Sec. 412.602 beginning in FY 2006
and lose the rural adjustment, resulting in a decrease in the estimated
IRF PPS payments if not for the hold harmless policy.
The total change in estimated payments based on the FY
2008 policies relative to estimated FY 2007 payments without the
policies.
2. Description of Table 6
The table below categorizes IRFs by geographic location, including
urban or rural location, and location with respect to CMS's nine census
divisions (as defined on the cost report) of the country. In addition,
the table divides IRFs into those that are separate rehabilitation
hospitals (otherwise called freestanding hospitals in this section),
those that are rehabilitation units of a hospital (otherwise called
hospital units in this section), rural or urban facilities, ownership
(otherwise called for-profit, non-profit, and government), and by
teaching status. The top row of the table shows the overall impact on
the 1,220 IRFs included in the analysis.
The next 12 rows of Table 6 contain IRFs categorized according to
their geographic location, designation as either a freestanding
hospital or a unit of a hospital, and by type of ownership; all urban,
which is further divided into urban units of a hospital, urban
freestanding hospitals, and by type of ownership; and all rural, which
is further divided into rural units of a hospital, rural freestanding
hospitals, and by type of ownership. There are 1,002 IRFs located in
urban areas included in our analysis. Among these, there are 806 IRF
units of hospitals located in urban areas and 196 freestanding IRF
hospitals located in urban areas. There are 218 IRFs located in rural
areas included in our analysis. Among these, there are 198 IRF units of
hospitals located in rural areas and 20 freestanding IRF hospitals
located in rural areas. There are 406 for-profit IRFs. Among these,
there are 328 IRFs in urban areas and 78 IRFs in rural areas. There are
745 non-profit IRFs. Among these, there are 622 urban IRFs and 123
rural IRFs. There are 69 government-owned IRFs. Among these, there are
52 urban IRFs and 17 rural IRFs.
The remaining three parts of Table 6 show IRFs grouped by their
geographic location within a region, and the last part groups IRFs by
teaching status. First, IRFs located in urban areas are categorized
with respect to their location within a particular one of the nine CMS
geographic regions. Second, IRFs located in rural areas are categorized
with respect to their location within a particular one of the nine CMS
geographic regions. In some cases, especially for rural IRFs located in
the New England, Mountain, and Pacific regions, the number of IRFs
represented is small. Finally, IRFs are grouped by teaching status,
including non-teaching IRFs, IRFs with an intern

[[Page 44309]]

and resident to average daily census (ADC) ratio less than 10 percent,
IRFs with an intern and resident to ADC ratio greater than or equal to
10 percent and less than or equal to 19 percent, and IRFs with an
intern and resident to ADC ratio greater than 19 percent.
The estimated impact of each change to the facility categories
listed above are shown in the columns of Table 6. The description of
each column is as follows:
Column (1) shows the facility classification categories described
above.
Column (2) shows the number of IRFs in each category in our FY 2006
analysis file.
Column (3) shows the number of cases in each category in our FY
2006 analysis file.
Column (4) shows the estimated effect of the adjustment to the
outlier threshold amount so that estimated outlier payments decrease
from approximately 3.7 percent in FY 2007 to 3 percent of total
estimated payments for FY 2008.
Column (5) shows the estimated effect of the market basket update
to the IRF PPS payment rates.
Column (6) shows the estimated effect of the update to the IRF
labor-related share, wage index, and the final year of the hold
harmless policy, in a budget neutral manner.
Column (7) compares our estimates of the payments per discharge,
incorporating all of the changes reflected in this final rule for FY
2008, to our estimates of payments per discharge in FY 2007 (without
these changes).
The average estimated increase for all IRFs is approximately 2.4
percent. This estimated increase includes the effects of the 3.2
percent market basket update. It also includes the 0.7 percent overall
estimated decrease in estimated IRF outlier payments from the update to
the outlier threshold amount. Because we are making the remainder of
the changes outlined in this final rule in a budget neutral manner,
they will not affect total estimated IRF payments in the aggregate.
However, as described in more detail in each section, they will affect
the estimated distribution of payments among providers.

Table 6.--Projected Impact on the IRF PPS for FY 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
FY08 CBSA wage
index, labor-
Number of IRFs Number of Outlier (4) Market basket related share, Total change
Facility classification (1) in FY 2006 cases in FY (percent) (5) (percent) and hold (7) (percent)
(2) 2006 (3) harmless (6)
(percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total................................................... 1,220 404,331 -0.7 3.2 0 2.4
Urban unit.............................................. 806 225,170 -1.0 3.2 0.2 2.4
Rural unit.............................................. 198 35,612 -0.8 3.2 0.2 2.7
Urban hospital.......................................... 196 137,865 -0.4 3.2 -0.3 2.5
Rural hospital.......................................... 20 5,684 -0.4 3.2 0.1 2.9
Urban For-Profit........................................ 328 137,349 -0.6 3.2 -0.2 2.4
Rural For-Profit........................................ 78 14,824 -0.6 3.2 0.1 2.7
Urban Non-Profit........................................ 622 210,708 -0.8 3.2 0.1 2.5
Rural Non-Profit........................................ 123 23,686 -0.7 3.2 0.3 2.7
Urban Government........................................ 52 14,978 -0.9 3.2 -0.2 2.0
Rural Government........................................ 17 2,786 -1.2 3.2 0.3 2.3
Urban................................................... 1,002 363,035 -0.7 3.2 0.0 2.4
Rural................................................... 218 41,296 -0.7 3.2 0.2 2.7
Urban by region:
Urban New England................................... 32 15,634 -0.7 3.2 -0.4 2.0
Urban Middle Atlantic............................... 155 63,821 -0.5 3.2 0.1 2.8
Urban South Atlantic................................ 134 61,794 -0.7 3.2 -0.6 1.8
Urban East North Central............................ 195 62,561 -0.9 3.2 0.6 2.8
Urban East South Central............................ 53 26,084 -0.5 3.2 -0.8 1.9
Urban West North Central............................ 72 19,076 -0.9 3.2 0.2 2.4
Urban West South Central............................ 180 64,823 -0.7 3.2 -0.4 2.1
Urban Mountain...................................... 75 22,942 -0.9 3.2 0.7 3.0
Urban Pacific....................................... 106 26,300 -1.0 3.2 0.5 2.6
Rural by region:
Rural New England................................... 5 1,078 -1.4 3.2 -0.8 1.0
Rural Middle Atlantic............................... 19 3,706 -0.4 3.2 0.7 3.4
Rural South Atlantic................................ 26 6,175 -0.5 3.2 -0.1 2.6
Rural East North Central............................ 36 6,804 -0.7 3.2 0.3 2.7
Rural East South Central............................ 22 4,357 -0.6 3.2 0.5 3.1
Rural West North Central............................ 37 6,334 -1.0 3.2 0.5 2.7
Rural West South Central............................ 58 11,392 -0.6 3.2 0.1 2.7
Rural Mountain...................................... 9 946 -1.8 3.2 -0.2 1.1
Rural Pacific....................................... 6 504 -1.2 3.2 0.3 2.3
Teaching Status:
Non-teaching........................................ 1,103 352,896 -0.8 3.2 0.0 2.4
Resident to ADC less than 10%....................... 59 32,718 -0.6 3.2 0.1 2.9
Resident to ADC 10%-19%............................. 41 15,597 -0.6 3.2 0.1 2.7
Resident to ADC greater than 19%.................... 17 3,120 -0.7 3.2 0.1 2.8
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 44310]]

3. Impact of the Update to the Outlier Threshold Amount (Column 4,
Table 6)
In the FY 2007 IRF PPS final rule (71 FR 48354), we used FY 2004
patient-level claims data (the best, most complete data available at
that time) to set the outlier threshold amount for FY 2007 so that
estimated outlier payments would equal 3 percent of total estimated
payments for FY 2007. For this final rule, we are updating our analysis
using FY 2006 data. Using the updated FY 2006 data, we now estimate
that IRF outlier payments as a percentage of total estimated payments
for FY 2007 increased from 3 percent using the FY 2004 data to
approximately 3.7 percent using the updated FY 2006 data. Thus, we are
adjusting the outlier threshold amount for FY 2008 to $7,362 to set
total estimated outlier payments equal to 3 percent of total estimated
payments in FY 2008. The estimated change in total payments between FY
2007 and FY 2008, therefore, includes a 0.7 percent overall estimated
decrease in payments because the estimated outlier portion of total
payments is estimated to decrease from approximately 3.7 percent to 3
percent.
The impact of this update (as shown in column 4 of Table 6) is to
decrease estimated overall payments to IRFs by 0.7 percent. We do not
estimate that any group of IRFs would experience an increase in
payments from this update. We estimate the largest decrease in payments
to be a 1.8 percent decrease in estimated payments to rural IRFs in the
Mountain region.
4. Impact of the Market Basket Update to the IRF PPS Payment Rates
(Column 5, Table 6)
In column 5 of Table 6, we present the estimated effects of the
market basket update to the IRF PPS payment rates. In the aggregate,
and across all hospital groups, the update will result in a 3.2 percent
increase in overall estimated payments to IRFs.
5. Impact of the CBSA Wage Index, Labor-Related Share, and the Hold
Harmless Policy for FY 2008 (Column 6, Table 6)
In column 6 of Table 6, we present the effects of the budget
neutral update of the wage index, labor-related share, and the final
year of the hold harmless policy. In FY 2006, we provided a 1-year
blended wage index and a 3-year phase out of the rural adjustment for
IRFs that changed designation because of the change from MSAs to CBSAs
(referenced as the hold harmless policy). We applied the blended wage
index to all IRFs and the hold harmless policy to those IRFs that
qualify, as described in Sec. 412.624(e)(7), in order to mitigate the
impact of the change from the MSA-based labor area definitions to the
CBSA-based labor area definitions for IRFs.
As discussed in the FY 2007 IRF PPS final rule (71 FR 48345), the
blended wage index expired in FY 2007 and will not be applied for
discharges occurring on or after October 1, 2006. In addition, FY 2008
is the third and final year of the hold harmless policy, and we are
continuing to apply this policy as described in the FY 2006 final rule
in a budget neutral manner.
As discussed in this final rule, we are revising our methodology to
impute a rural wage index value for rural areas without hospital wage
data and update the wage index based on the CBSA-based labor market
area definitions in a budget neutral manner. We are also applying the
third and final year of the hold harmless policy in a budget neutral
manner. Thus, in the aggregate, the estimated impact of the update to
the wage index and labor-related share is zero percent.
In the aggregate and for all urban IRFs, we do not estimate that
these changes will affect overall estimated payments to IRFs. However,
we estimate that these changes will have small distributional effects.
We estimate a 0.2 percent increase in estimated payments to rural IRFs.
We estimate the largest increase in payments to be a 0.7 percent
increase for urban IRFs in the Mountain region and for rural IRFs in
the Middle Atlantic region. We estimate the largest decrease in
payments to be a 0.8 percent decrease for urban IRFs in the East South
Central region and for rural IRFs in the New England region.

C. Anticipated Effects of the 75 Percent Rule Policy

The existing policy for classifying a facility as an IRF, on the
basis of its meeting the compliance threshold, which is described in
Sec. 412.23(b)(2), allows the inclusion of comorbidities meeting
certain requirements in the calculations used to determine the
compliance percentage for cost reporting periods beginning on or after
July 1, 2004, and before July 1, 2008. However, for cost reporting
periods beginning on or after July 1, 2008, the existing regulations
indicate that comorbidities will not be eligible for inclusion in the
calculations used to determine whether the provider meets the 75
percent compliance threshold. As discussed in section IV of this final
rule, we are not changing the existing policy. On or after July 1,
2008, we anticipate that IRFs will make adjustments to their admission
and coding practices to continue to meet the compliance threshold. Data
limitations and two important sources of uncertainty prevent a precise
estimate of the effect of this policy at this time. One source of
uncertainty is what proportion of patients who would no longer be
treated in IRFs would instead be treated by other, lower-cost post-
acute care settings such as skilled nursing facilities or home health
agencies. Another source of uncertainty is determining how providers
will make adjustments on or after July 1, 2008. While we cannot make a
precise estimate at this time, we anticipate modest decreases in
Medicare payments beginning on or after July 1, 2008.

D. Alternatives Considered

Because we have determined that this final rule will have a
significant economic impact on IRFs and on a substantial number of
small entities, we will discuss alternative changes to the IRF PPS that
we considered.
Section 1886(j)(3)(C) of the Act requires the Secretary to update
the IRF PPS payment rates by an increase factor that reflects changes
over time in the prices of an appropriate mix of goods and services
included in the covered IRF services. As discussed above, we estimate
the RPL market basket increase factor for FY 2008 to be 3.2 percent.
This increase factor represents the majority of the impact on IRF
providers shown in Table 6. Thus, we believe this estimated net
increase in payments across all categories of IRFs represents a benefit
to IRF providers and, thus, to IRFs that are small entities.
We considered maintaining the existing outlier threshold amount for
FY 2008 because updating the outlier threshold amount has an estimated
negative impact on IRF providers and, therefore, on small entities. If
we were to maintain the FY 2007 outlier threshold amount, more outlier
cases would have qualified for the additional outlier payments in FY
2008. However, analysis of updated FY 2006 data indicates that
estimated outlier payments would not equal 3 percent of total estimated
payments for FY 2008 unless we updated the outlier threshold amount.
Also, we estimate that the overall effect of this policy on estimated
payments to IRFs is small (less than 1 percent).
We considered two other options regarding the use of comorbidities
in determining compliance with the 75 percent rule, in addition to the
one that we are finalizing to maintain the existing policy regarding
use of the comorbidities. First, we considered

[[Page 44311]]

retaining the use of the comorbidities for one additional year, for
cost reporting periods beginning before July 1, 2009. We considered
this option in order to extend the phase in of the 75 percent rule for
one additional year and to separate the increase in the compliance
percentage (to 75 percent) from the expiration of the use of
comorbidities. However, providers have already had 4 years to adjust
their case-mixes and adapt their operations in order to comply with the
75 percent rule.
The second alternative option that we considered was to continue
the use of the comorbidities in determining compliance with the 75
percent rule on a permanent basis. However, we believe that, in the
absence of sound clinical data, it would be premature to convert a
temporary transition policy into a permanent part of the compliance
requirements. Thus, we believe that continuing the existing policy,
which expires the use of comorbidities in determining compliance with
the 75 percent rule for cost reporting periods beginning on or after
July 1, 2008, is the best approach.

E. Accounting Statement

As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 7 below, we
have prepared an accounting statement showing the classification of the
expenditures associated with the provisions of this final rule. This
table provides our best estimate of the increase in Medicare payments
under the IRF PPS as a result of the changes presented in this final
rule based on the data for 1,220 IRFs in our database. All estimated
expenditures are classified as transfers to Medicare providers (that
is, IRFs).

Table 7.--Accounting Statement: Classification of Estimated
Expenditures, from the 2007 IRF PPS Rate Year to the 2008 IRF PPS Rate
Year
[In millions]
------------------------------------------------------------------------
Category Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............ $150 million.
From Whom To Whom? Federal Government to IRF
Medicare Providers.
------------------------------------------------------------------------

F. Conclusion (Column 7, Table 6)

Overall, the estimated payments per discharge for IRFs in FY 2008
are projected to increase by 2.4 percent, compared with those in FY
2007, as reflected in column 7 of Table 6. We estimate that IRFs in
urban areas will experience a 2.4 percent increase in estimated
payments per discharge compared with FY 2007. We estimate that IRFs in
rural areas will experience a 2.7 percent increase in estimated
payments per discharge compared with FY 2007. We estimate that
rehabilitation units in urban areas will experience a 2.4 percent
increase in estimated payments per discharge and that freestanding
rehabilitation hospitals in urban areas will experience a 2.5 percent
increase in estimated payments per discharge. We estimate that
rehabilitation units in rural areas will experience a 2.7 percent
increase in estimated payments per discharge, while freestanding
rehabilitation hospitals in rural areas will experience a 2.9 percent
increase in estimated payments per discharge.
Overall, we estimate that the largest payment increase will be 3.4
percent among rural IRFs in the Middle Atlantic region. We do not
estimate that any group of IRFs will experience an overall decrease in
payments from the changes in this final rule.
Comment: One commenter expressed concerns about the total number of
IRFs (Column 2, Table 6) and the total number of IRF discharges (Column
3, Table 6) reflected in table 6 of the proposed rule. The commenter
noted that a recent report released by CMS on June 8, 2007 projected an
estimated number of IRF discharges of approximately 412,000 in 2006,
whereas table 6 of the proposed rule shows 427,419 IRF discharges in
the FY 2005 claims data. The commenter questioned why CMS based its
impact analysis on the higher number of discharges rather than the more
recent, lower number.
Response: For the proposed rule, we analyzed the most current and
complete IRF claims data available at that time, FY 2005, to estimate
the impact of the proposed policies. The FY 2005 claims data show that
there were 427,419 Medicare discharges from IRFs in that year. However,
we have updated our analysis for this final rule using FY 2006 IRF
claims data. This data show that there were 404,331 Medicare discharges
from IRFs in FY 2006. Note that both of these numbers were calculated
on a FY basis, whereas the 412,000 Medicare discharges reported in the
June 8, 2007 report were estimated on a calendar year basis.
As discussed above, we use the best data available in estimating
the impact of the policies contained in this final rule, but we do not
attempt to predict behavioral responses to these changes and we do not
make adjustments for future changes in such variables as number of
discharges or case-mix. Thus, the number of Medicare discharges
reflected in table 6 represents the actual number of discharges for
which we have IRF claims in the FY 2006 data, and we have not attempted
to predict how many discharges would be expected to occur in FY 2008.
We are confident that the impact analysis, based on FY 2006 data,
provides our best estimate of the payment impact of the policies
contained in this final rule.
Comment: One commenter requested that CMS provide additional
information, including detailed payment information, to allow
interested parties to recreate CMS's impact table, make projections on
a facility-level basis, and review the proposed policies in more
detail.
Response: We will carefully consider the commenter's suggestions in
updating the IRF PPS rate setting files that we post in conjunction
with each IRF PPS proposed and final rule. These files are available
for download from the IRF PPS Web site at http://www.cms.hhs.gov/InpatientRehabFacPPS/07_DataFiles. asp. Some of the payment
information that the commenter requested is already contained in these
files, and we will consider the possibility of adding additional
information to the file.
We believe the public should have as much information as possible
to be able to review our proposed policies and evaluate the impacts of
these policies. However, to recreate the detailed payment simulations
used in preparing the impact analysis, the public would need detailed
patient-level data, such as claims and IRF-PAI data. Some of these data
files are available to the public through CMS's standard data
distribution systems. More information on CMS's data distribution
policies is available on CMS's Web site at http://www.cms.hhs.gov/researchers/statsdata.asp.
We will continue to work with researchers and with industry groups
to determine the best ways of providing data that will be useful in
reviewing and analyzing our IRF PPS payment policies.
In accordance with the provisions of Executive Order 12866, this
regulation was reviewed by the Office of Management and Budget.

List of Subjects in 42 CFR Part 412

Administrative practice and procedure, Health facilities, Medicare,
Puerto Rico, Reporting and recordkeeping requirements.

[[Page 44312]]

0
For the reasons set forth in the preamble, the Centers for Medicare &
Medicaid Services amends 42 CFR chapter IV as follows:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES

0
1. The authority citation for part 412 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).

Subpart P--Prospective Payment for Inpatient Rehabilitation
Hospitals and Rehabilitation Units

0
2. Section 412.624 is amended by revising paragraph (f)(2)(v) to read
as follows:

Sec. 412.624 Methodology for calculating the Federal prospective
payment rates.

* * * * *
(f) * * *
(2) * * *
(v) By applying the adjustment described in paragraphs (e)(1),
(e)(2), (e)(3), (e)(4), and (e)(7) of this section to the unadjusted
payment amount determined in paragraph (f)(2)(iv) of this section to
equal the adjusted transfer payment amount and making a payment in
accordance with paragraph (e)(5) of this section, if applicable.

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

Dated: July 18, 2007.
Leslie V. Norwalk,
Acting Administrator, Centers for Medicare & Medicaid Services.
Approved: July 24, 2007.
Michael O. Leavitt,
Secretary.

The following addendum will not appear in the Code of Federal
Regulations.

Addendum

This addendum contains the tables referred to throughout the
preamble of this final rule. The tables presented below are as follows:

Table 1.--Inpatient Rehabilitation Facility Wage Index for Urban Areas
for Discharges Occurring From October 1, 2007 Through September 30,
2008
Table 2.--Inpatient Rehabilitation Facility Wage Index for Rural Areas
for Discharges Occurring From October 1, 2007 Through September 30,
2008

Table 1.--Inpatient Rehabilitation Facility Wage Index for Urban Areas
for Discharges Occurring From October 1, 2007 Through September 30, 2008
------------------------------------------------------------------------
Wage
CBSA code Urban area (constituent counties) index
------------------------------------------------------------------------
10180............ Abilene, TX................................. 0.8000
Callahan County, TX........................
Jones County, TX...........................
Taylor County, TX..........................
10380............ Aguadilla-Isabela-San Sebasti[aacute]n, PR.. 0.3915
Aguada Municipio, PR.......................
Aguadilla Municipio, PR....................
A[ntilde]asco Municipio, PR................
Isabela Municipio, PR......................
Lares Municipio, PR........................
Moca Municipio, PR.........................
Rinc[oacute]n Municipio, PR................
San Sebasti[aacute]n Municipio, PR.........
10420............ Akron, OH................................... 0.8654
Portage County, OH.........................
Summit County, OH..........................
10500............ Albany, GA.................................. 0.8991
Baker County, GA...........................
Dougherty County, GA.......................
Lee County, GA.............................
Terrell County, GA.........................
Worth County, GA...........................
10580............ Albany-Schenectady-Troy, NY................. 0.8720
Albany County, NY..........................
Rensselaer County, NY......................
Saratoga County, NY........................
Schenectady County, NY.....................
Schoharie County, NY.......................
10740............ Albuquerque, NM............................. 0.9458
Bernalillo County, NM......................
Sandoval County, NM........................
Torrance County, NM........................
Valencia County, NM........................
10780............ Alexandria, LA.............................. 0.8006
Grant Parish, LA...........................
Rapides Parish, LA.........................
10900............ Allentown-Bethlehem-Easton, PA-NJ........... 0.9947
Warren County, NJ..........................
Carbon County, PA..........................
Lehigh County, PA..........................
Northampton County, PA.....................

[[Page 44313]]

11020............ Altoona, PA................................. 0.8812
Blair County, PA...........................
11100............ Amarillo, TX................................ 0.9169
Armstrong County, TX.......................
Carson County, TX..........................
Potter County, TX..........................
Randall County, TX.........................
11180............ Ames, IA.................................... 0.9760
Story County, IA...........................
11260............ Anchorage, AK............................... 1.2023
Anchorage Municipality, AK.................
Matanuska-Susitna Borough, AK..............
11300............ Anderson, IN................................ 0.8681
Madison County, IN.........................
11340............ Anderson, SC................................ 0.9017
Anderson County, SC........................
11460............ Ann Arbor, MI............................... 1.0826
Washtenaw County, MI.......................
11500............ Anniston-Oxford, AL......................... 0.7770
Calhoun County, AL.........................
11540............ Appleton, WI................................ 0.9455
Calumet County, WI.........................
Outagamie County, WI.......................
11700............ Asheville, NC............................... 0.9216
Buncombe County, NC........................
Haywood County, NC.........................
Henderson County, NC.......................
Madison County, NC.........................
12020............ Athens-Clarke County, GA.................... 0.9856
Clarke County, GA..........................
Madison County, GA.........................
Oconee County, GA..........................
Oglethorpe County, GA......................
12060............ Atlanta-Sandy Springs-Marietta, GA.......... 0.9762
Barrow County, GA..........................
Bartow County, GA..........................
Butts County, GA...........................
Carroll County, GA.........................
Cherokee County, GA........................
Clayton County, GA.........................
Cobb County, GA............................
Coweta County, GA..........................
Dawson County, GA..........................
DeKalb County, GA..........................
Douglas County, GA.........................
Fayette County, GA.........................
Forsyth County, GA.........................
Fulton County, GA..........................
Gwinnett County, GA........................
Haralson County, GA........................
Heard County, GA...........................
Henry County, GA...........................
Jasper County, GA..........................
Lamar County, GA...........................
Meriwether County, GA......................
Newton County, GA..........................
Paulding County, GA........................
Pickens County, GA.........................
Pike County, GA............................
Rockdale County, GA........................
Spalding County, GA........................
Walton County, GA..........................
12100............ Atlantic City, NJ........................... 1.1831
Atlantic County, NJ........................
12220............ Auburn-Opelika, AL.......................... 0.8096
Lee County, AL.............................
12260............ Augusta-Richmond County, GA-SC.............. 0.9667
Burke County, GA...........................
Columbia County, GA........................
McDuffie County, GA........................

[[Page 44314]]

Richmond County, GA........................
Aiken County, SC...........................
Edgefield County, SC.......................
12420............ Austin-Round Rock, TX....................... 0.9344
Bastrop County, TX.........................
Caldwell County, TX........................
Hays County, TX............................
Travis County, TX..........................
Williamson County, TX......................
12540............ Bakersfield, CA............................. 1.0725
Kern County, CA............................
12580............ Baltimore-Towson, MD........................ 1.0088
Anne Arundel County, MD....................
Baltimore County, MD.......................
Carroll County, MD.........................
Harford County, MD.........................
Howard County, MD..........................
Queen Anne's County, MD....................
Baltimore City, MD.........................
12620............ Bangor, ME.................................. 0.9711
Penobscot County, ME.......................
12700............ Barnstable Town, MA......................... 1.2539
Barnstable County, MA......................
12940............ Baton Rouge, LA............................. 0.8084
Ascension Parish, LA.......................
East Baton Rouge Parish, LA................
East Feliciana Parish, LA..................
Iberville Parish, LA.......................
Livingston Parish, LA......................
Pointe Coupee Parish, LA...................
St. Helena Parish, LA......................
West Baton Rouge Parish, LA................
West Feliciana Parish, LA..................
12980............ Battle Creek, MI............................ 0.9762
Calhoun County, MI.........................
13020............ Bay City, MI................................ 0.9251
Bay County, MI.............................
13140............ Beaumont-Port Arthur, TX.................... 0.8595
Hardin County, TX..........................
Jefferson County, TX.......................
Orange County, TX..........................
13380............ Bellingham, WA.............................. 1.1104
Whatcom County, WA.........................
13460............ Bend, OR.................................... 1.0743
Deschutes County, OR.......................
13644............ Bethesda-Frederick-Gaithersburg, MD......... 1.0903
Frederick County, MD.......................
Montgomery County, MD......................
13740............ Billings, MT................................ 0.8712
Carbon County, MT..........................
Yellowstone County, MT.....................
13780............ Binghamton, NY.............................. 0.8786
Broome County, NY..........................
Tioga County, NY...........................
13820............ Birmingham-Hoover, AL....................... 0.8894
Bibb County, AL............................
Blount County, AL..........................
Chilton County, AL.........................
Jefferson County, AL.......................
St. Clair County, AL.......................
Shelby County, AL..........................
Walker County, AL..........................
13900............ Bismarck, ND................................ 0.7240
Burleigh County, ND........................
Morton County, ND..........................
13980............ Blacksburg-Christiansburg-Radford, VA....... 0.8213
Giles County, VA...........................
Montgomery County, VA......................
Pulaski County, VA.........................
Radford City, VA...........................

[[Page 44315]]

14020............ Bloomington, IN............................. 0.8533
Greene County, IN..........................
Monroe County, IN..........................
Owen County, IN............................
14060............ Bloomington-Normal, IL...................... 0.8944
McLean County, IL..........................
14260............ Boise City-Nampa, ID........................ 0.9401
Ada County, ID.............................
Boise County, ID...........................
Canyon County, ID..........................
Gem County, ID.............................
Owyhee County, ID..........................
14484............ Boston-Quincy, MA........................... 1.1679
Norfolk County, MA.........................
Plymouth County, MA........................
Suffolk County, MA.........................
14500............ Boulder, CO................................. 1.0350
Boulder County, CO.........................
14540............ Bowling Green, KY........................... 0.8148
Edmonson County, KY........................
Warren County, KY..........................
14740............ Bremerton-Silverdale, WA.................... 1.0913
Kitsap County, WA..........................
14860............ Fairfield County, CT........................ 1.2659
Bridgeport-Stamford-Norwalk, CT............
15180............ Brownsville-Harlingen, TX................... 0.9430
Cameron County, TX.........................
15260............ Brunswick, GA............................... 1.0164
Brantley County, GA........................
Glynn County, GA...........................
McIntosh County, GA........................
15380............ Buffalo-Niagara Falls, NY................... 0.9424
Erie County, NY............................
Niagara County, NY.........................
15500............ Burlington, NC.............................. 0.8674
Alamance County, NC........................
15540............ Burlington-South Burlington, VT............. 0.9474
Chittenden County, VT......................
Franklin County, VT........................
Grand Isle County, VT......................
15764............ Cambridge-Newton-Framingham, MA............. 1.0970
Middlesex County, MA.......................
15804............ Camden, NJ.................................. 1.0392
Burlington County, NJ......................
Camden County, NJ..........................
Gloucester County, NJ......................
15940............ Canton-Massillon, OH........................ 0.9031
Carroll County, OH.........................
Stark County, OH...........................
15980............ Cape Coral-Fort Myers, FL................... 0.9342
Lee County, FL.............................
16180............ Carson City, NV............................. 1.0025
Carson City, NV............................
16220............ Casper, WY.................................. 0.9145
Natrona County, WY.........................
16300............ Cedar Rapids, IA............................ 0.8888
Benton County, IA..........................
Jones County, IA...........................
Linn County, IA............................
16580............ Champaign-Urbana, IL........................ 0.9644
Champaign County, IL.......................
Ford County, IL............................
Piatt County, IL...........................
16620............ Charleston, WV.............................. 0.8542
Boone County, WV...........................
Clay County, WV............................
Kanawha County, WV.........................
Lincoln County, WV.........................
Putnam County, WV..........................
16700............ Charleston-North Charleston, SC............. 0.9145

[[Page 44316]]

Berkeley County, SC........................
Charleston County, SC......................
Dorchester County, SC......................
16740............ Charlotte-Gastonia-Concord, NC-SC........... 0.9554
Anson County, NC...........................
Cabarrus County, NC........................
Gaston County, NC..........................
Mecklenburg County, NC.....................
Union County, NC...........................
York County, SC............................
16820............ Charlottesville, VA......................... 1.0125
Albemarle County, VA.......................
Fluvanna County, VA........................
Greene County, VA..........................
Nelson County, VA..........................
Charlottesville City, VA...................
16860............ Chattanooga, TN-GA.......................... 0.8948
Catoosa County, GA.........................
Dade County, GA............................
Walker County, GA..........................
Hamilton County, TN........................
Marion County, TN..........................
Sequatchie County, TN......................
16940............ Cheyenne, WY................................ 0.9060
Laramie County, WY.........................
16974............ Chicago-Naperville-Joliet, IL............... 1.0751
Cook County, IL............................
DeKalb County, IL..........................
DuPage County, IL..........................
Grundy County, IL..........................
Kane County, IL............................
Kendall County, IL.........................
McHenry County, IL.........................
Will County, IL............................
17020............ Chico, CA................................... 1.1053
Butte County, CA...........................
17140............ Cincinnati-Middletown, OH-KY-IN............. 0.9601
Dearborn County, IN........................
Franklin County, IN........................
Ohio County, IN............................
Boone County, KY...........................
Bracken County, KY.........................
Campbell County, KY........................
Gallatin County, KY........................
Grant County, KY...........................
Kenton County, KY..........................
Pendleton County, KY.......................
Brown County, OH...........................
Butler County, OH..........................
Clermont County, OH........................
Hamilton County, OH........................
Warren County, OH..........................
17300............ Clarksville, TN-KY.......................... 0.8436
Christian County, KY.......................
Trigg County, KY...........................
Montgomery County, TN......................
Stewart County, TN.........................
17420............ Cleveland, TN............................... 0.8109
Bradley County, TN.........................
Polk County, TN............................
17460............ Cleveland-Elyria-Mentor, OH................. 0.9400
Cuyahoga County, OH........................
Geauga County, OH..........................
Lake County, OH............................
Lorain County, OH..........................
Medina County, OH..........................
17660............ Coeur d'Alene, ID........................... 0.9344
Kootenai County, ID........................
17780............ College Station-Bryan, TX................... 0.9045
Brazos County, TX..........................

[[Page 44317]]

Burleson County, TX........................
Robertson County, TX.......................
17820............ Colorado Springs, CO........................ 0.9701
El Paso County, CO.........................
Teller County, CO..........................
17860............ Columbia, MO................................ 0.8542
Boone County, MO...........................
Howard County, MO..........................
17900............ Columbia, SC................................ 0.8933
Calhoun County, SC.........................
Fairfield County, SC.......................
Kershaw County, SC.........................
Lexington County, SC.......................
Richland County, SC........................
Saluda County, SC..........................
17980............ Columbus, GA-AL............................. 0.8239
Russell County, AL.........................
Chattahoochee County, GA...................
Harris County, GA..........................
Marion County, GA..........................
Muscogee County, GA........................
18020............ Columbus, IN................................ 0.9318
Bartholomew County, IN.....................
18140............ Columbus, OH................................ 1.0107
Delaware County, OH........................
Fairfield County, OH.......................
Franklin County, OH........................
Licking County, OH.........................
Madison County, OH.........................
Morrow County, OH..........................
Pickaway County, OH........................
Union County, OH...........................
18580............ Corpus Christi, TX.......................... 0.8564
Aransas County, TX.........................
Nueces County, TX..........................
San Patricio County, TX....................
18700............ Corvallis, OR............................... 1.1546
Benton County, OR..........................
19060............ Cumberland, MD-WV........................... 0.8446
Allegany County, MD........................
Mineral County, WV.........................
19124............ Dallas-Plano-Irving, TX..................... 1.0075
Collin County, TX..........................
Dallas County, TX..........................
Delta County, TX...........................
Denton County, TX..........................
Ellis County, TX...........................
Hunt County, TX............................
Kaufman County, TX.........................
Rockwall County, TX........................
19140............ Dalton, GA.................................. 0.9093
Murray County, GA..........................
Whitfield County, GA.......................
19180............ Danville, IL................................ 0.9266
Vermilion County, IL.......................
19260............ Danville, VA................................ 0.8451
Pittsylvania County, VA....................
Danville City, VA..........................
19340............ Davenport-Moline-Rock Island, IA-IL......... 0.8846
Henry County, IL...........................
Mercer County, IL..........................
Rock Island County, IL.....................
Scott County, IA...........................
19380............ Dayton, OH.................................. 0.9037
Greene County, OH..........................
Miami County, OH...........................
Montgomery County, OH......................
Preble County, OH..........................
19460............ Decatur, AL................................. 0.8159
Lawrence County, AL........................

[[Page 44318]]

Morgan County, AL..........................
19500............ Decatur, IL................................. 0.8172
Macon County, IL...........................
19660............ Deltona-Daytona Beach-Ormond Beach, FL...... 0.9263
Volusia County, FL.........................
19740............ Denver-Aurora, CO........................... 1.0930
Adams County, CO...........................
Arapahoe County, CO........................
Broomfield County, CO......................
Clear Creek County, CO.....................
Denver County, CO..........................
Douglas County, CO.........................
Elbert County, CO..........................
Gilpin County, CO..........................
Jefferson County, CO.......................
Park County, CO............................
19780............ Des Moines-West Des Moines, IA.............. 0.9214
Dallas County, IA..........................
Guthrie County, IA.........................
Madison County, IA.........................
Polk County, IA............................
Warren County, IA..........................
19804............ Detroit-Livonia-Dearborn, MI................ 1.0281
Wayne County, MI...........................
20020............ Dothan, AL.................................. 0.7381
Geneva County, AL..........................
Henry County, AL...........................
Houston County, AL.........................
20100............ Dover, DE................................... 0.9847
Kent County, DE............................
20220............ Dubuque, IA................................. 0.9133
Dubuque County, IA.........................
20260............ Duluth, MN-WI............................... 1.0042
Carlton County, MN.........................
St. Louis County, MN.......................
Douglas County, WI.........................
20500............ Durham, NC.................................. 0.9826
Chatham County, NC.........................
Durham County, NC..........................
Orange County, NC..........................
Person County, NC..........................
20740............ Eau Claire, WI.............................. 0.9630
Chippewa County, WI........................
Eau Claire County, WI......................
20764............ Edison, NJ.................................. 1.1190
Middlesex County, NJ.......................
Monmouth County, NJ........................
Ocean County, NJ...........................
Somerset County, NJ........................
20940............ El Centro, CA............................... 0.9076
Imperial County, CA........................
21060............ Elizabethtown, KY........................... 0.8697
Hardin County, KY..........................
Larue County, KY...........................
21140............ Elkhart-Goshen, IN.......................... 0.9426
Elkhart County, IN.........................
21300............ Elmira, NY.................................. 0.8240
Chemung County, NY.........................
21340............ El Paso, TX................................. 0.9053
El Paso County, TX.........................
21500............ Erie, PA.................................... 0.8827
Erie County, PA............................
21604............ Essex County, MA............................ 1.0418
Essex County, MA...........................
21660............ Eugene-Springfield, OR...................... 1.0876
Lane County, OR............................
21780............ Evansville, IN-KY........................... 0.9071
Gibson County, IN..........................
Posey County, IN...........................
Vanderburgh County, IN.....................

[[Page 44319]]

Warrick County, IN.........................
Henderson County, KY.......................
Webster County, KY.........................
21820............ Fairbanks, AK............................... 1.1059
Fairbanks North Star Borough, AK...........
21940............ Fajardo, PR................................. 0.4036
Ceiba Municipio, PR........................
Fajardo Municipio, PR......................
Luquillo Municipio, PR.....................
22020............ Fargo, ND-MN................................ 0.8250
Cass County, ND............................
Clay County, MN............................
22140............ Farmington, NM.............................. 0.8589
San Juan County, NM........................
22180............ Fayetteville, NC............................ 0.8945
Cumberland County, NC......................
Hoke County, NC............................
22220............ Fayetteville-Springdale-Rogers, AR-MO....... 0.8865
Benton County, AR..........................
Madison County, AR.........................
Washington County, AR......................
McDonald County, MO........................
22380............ Flagstaff, AZ............................... 1.1601
Coconino County, AZ........................
22420............ Flint, MI................................... 1.0969
Genesee County, MI.........................
22500............ Florence, SC................................ 0.8388
Darlington County, SC......................
Florence County, SC........................
22520............ Florence-Muscle Shoals, AL.................. 0.7843
Colbert County, AL.........................
Lauderdale County, AL......................
22540............ Fond du Lac, WI............................. 1.0063
Fond du Lac County, WI.....................
22660............ Fort Collins-Loveland, CO................... 0.9544
Larimer County, CO.........................
22744............ Fort Lauderdale-Pompano Beach-Deerfield 1.0133
Beach, FL.
Broward County, FL.........................
22900............ Fort Smith, AR-OK........................... 0.7731
Crawford County, AR........................
Franklin County, AR........................
Sebastian County, AR.......................
Le Flore County, OK........................
Sequoyah County, OK........................
23020............ Fort Walton Beach-Crestview-Destin, FL...... 0.8643
Okaloosa County, FL........................
23060............ Fort Wayne, IN.............................. 0.9517
Allen County, IN...........................
Wells County, IN...........................
Whitley County, IN.........................
23104............ Fort Worth-Arlington, TX.................... 0.9569
Johnson County, TX.........................
Parker County, TX..........................
Tarrant County, TX.........................
Wise County, TX............................
23420............ Fresno, CA.................................. 1.0943
Fresno County, CA..........................
23460............ Gadsden, AL................................. 0.8066
Etowah County, AL..........................
23540............ Gainesville, FL............................. 0.9277
Alachua County, FL.........................
Gilchrist County, FL.......................
23580............ Gainesville, GA............................. 0.8958
Hall County, GA............................
23844............ Gary, IN.................................... 0.9334
Jasper County, IN..........................
Lake County, IN............................
Newton County, IN..........................
Porter County, IN..........................
24020............ Glens Falls, NY............................. 0.8324

[[Page 44320]]

Warren County, NY..........................
Washington County, NY......................
24140............ Goldsboro, NC............................... 0.9171
Wayne County, NC...........................
24220............ Grand Forks, ND-MN.......................... 0.7949
Polk County, MN............................
Grand Forks County, ND.....................
24300............ Grand Junction, CO.......................... 0.9668
Mesa County, CO............................
24340............ Grand Rapids-Wyoming, MI.................... 0.9455
Barry County, MI...........................
Ionia County, MI...........................
Kent County, MI............................
Newaygo County, MI.........................
24500............ Great Falls, MT............................. 0.8598
Cascade County, MT.........................
24540............ Greeley, CO................................. 0.9602
Weld County, CO............................
24580............ Green Bay, WI............................... 0.9787
Brown County, WI...........................
Kewaunee County, WI........................
Oconto County, WI..........................
24660............ Greensboro-High Point, NC................... 0.8866
Guilford County, NC........................
Randolph County, NC........................
Rockingham County, NC......................
24780............ Greenville, NC.............................. 0.9432
Greene County, NC..........................
Pitt County, NC............................
24860............ Greenville, SC.............................. 0.9804
Greenville County, SC......................
Laurens County, SC.........................
Pickens County, SC.........................
25020............ Guayama, PR................................. 0.3235
Arroyo Municipio, PR.......................
Guayama Municipio, PR......................
Patillas Municipio, PR.....................
25060............ Gulfport-Biloxi, MS......................... 0.8915
Hancock County, MS.........................
Harrison County, MS........................
Stone County, MS...........................
25180............ Hagerstown-Martinsburg, MD-WV............... 0.9038
Washington County, MD......................
Berkeley County, WV........................
Morgan County, WV..........................
25260............ Hanford-Corcoran, CA........................ 1.0282
Kings County, CA...........................
25420............ Harrisburg-Carlisle, PA..................... 0.9402
Cumberland County, PA......................
Dauphin County, PA.........................
Perry County, PA...........................
25500............ Harrisonburg, VA............................ 0.9073
Rockingham County, VA......................
Harrisonburg City, VA......................
25540............ Hartford-West Hartford-East Hartford, CT.... 1.0894
Hartford County, CT........................
Litchfield County, CT......................
Middlesex County, CT.......................
Tolland County, CT.........................
25620............ Hattiesburg, MS............................. 0.7430
Forrest County, MS.........................
Lamar County, MS...........................
Perry County, MS...........................
25860............ Hickory-Lenoir-Morganton, NC................ 0.9010
Alexander County, NC.......................
Burke County, NC...........................
Caldwell County, NC........................
Catawba County, NC.........................
25980............ Hinesville-Fort Stewart, GA1................ 0.9178
Liberty County, GA.........................

[[Page 44321]]

Long County, GA............................
26100............ Holland-Grand Haven, MI..................... 0.9163
Ottawa County, MI..........................
26180............ Honolulu, HI................................ 1.1096
Honolulu County, HI........................
26300............ Hot Springs, AR............................. 0.8782
Garland County, AR.........................
26380............ Houma-Bayou Cane-Thibodaux, LA.............. 0.8082
Lafourche Parish, LA.......................
Terrebonne Parish, LA......................
26420............ Houston-Sugar Land-Baytown, TX.............. 1.0008
Austin County, TX..........................
Brazoria County, TX........................
Chambers County, TX........................
Fort Bend County, TX.......................
Galveston County, TX.......................
Harris County, TX..........................
Liberty County, TX.........................
Montgomery County, TX......................
San Jacinto County, TX.....................
Waller County, TX..........................
26580............ Huntington-Ashland, WV-KY-OH................ 0.8997
Boyd County, KY............................
Greenup County, KY.........................
Lawrence County, OH........................
Cabell County, WV..........................
Wayne County, WV...........................
26620............ Huntsville, AL.............................. 0.9007
Limestone County, AL.......................
Madison County, AL.........................
26820............ Idaho Falls, ID............................. 0.9088
Bonneville County, ID......................
Jefferson County, ID.......................
26900............ Indianapolis-Carmel, IN..................... 0.9895
Boone County, IN...........................
Brown County, IN...........................
Hamilton County, IN........................
Hancock County, IN.........................
Hendricks County, IN.......................
Johnson County, IN.........................
Marion County, IN..........................
Morgan County, IN..........................
Putnam County, IN..........................
Shelby County, IN..........................
26980............ Iowa City, IA............................... 0.9714
Johnson County, IA.........................
Washington County, IA......................
27060............ Ithaca, NY.................................. 0.9928
Tompkins County, NY........................
27100............ Jackson, MI................................. 0.9560
Jackson County, MI.........................
27140............ Jackson, MS................................. 0.8271
Copiah County, MS..........................
Hinds County, MS...........................
Madison County, MS.........................
Rankin County, MS..........................
Simpson County, MS.........................
27180............ Jackson, TN................................. 0.8853
Chester County, TN.........................
Madison County, TN.........................
27260............ Jacksonville, FL............................ 0.9165
Baker County, FL...........................
Clay County, FL............................
Duval County, FL...........................
Nassau County, FL..........................
St. Johns County, FL.......................
27340............ Jacksonville, NC............................ 0.8231
Onslow County, NC..........................
27500............ Janesville, WI.............................. 0.9655
Rock County, WI............................

[[Page 44322]]

27620............ Jefferson City, MO.......................... 0.8332
Callaway County, MO........................
Cole County, MO............................
Moniteau County, MO........................
Osage County, MO...........................
27740............ Johnson City, TN............................ 0.8043
Carter County, TN..........................
Unicoi County, TN..........................
Washington County, TN......................
27780............ Johnstown, PA............................... 0.8620
Cambria County, PA.........................
27860............ Jonesboro, AR............................... 0.7662
Craighead County, AR.......................
Poinsett County, AR........................
27900............ Joplin, MO.................................. 0.8605
Jasper County, MO..........................
Newton County, MO..........................
28020............ Kalamazoo-Portage, MI....................... 1.0704
Kalamazoo County, MI.......................
Van Buren County, MI.......................
28100............ Kankakee-Bradley, IL........................ 1.0083
Kankakee County, IL........................
28140............ Kansas City, MO-KS.......................... 0.9495
Franklin County, KS........................
Johnson County, KS.........................
Leavenworth County, KS.....................
Linn County, KS............................
Miami County, KS...........................
Wyandotte County, KS.......................
Bates County, MO...........................
Caldwell County, MO........................
Cass County, MO............................
Clay County, MO............................
Clinton County, MO.........................
Jackson County, MO.........................
Lafayette County, MO.......................
Platte County, MO..........................
Ray County, MO.............................
28420............ Kennewick-Richland-Pasco, WA................ 1.0343
Benton County, WA..........................
Franklin County, WA........................
28660............ Killeen-Temple-Fort Hood, TX................ 0.8901
Bell County, TX............................
Coryell County, TX.........................
Lampasas County, TX........................
28700............ Kingsport-Bristol-Bristol, TN-VA............ 0.7985
Hawkins County, TN.........................
Sullivan County, TN........................
Bristol City, VA...........................
Scott County, VA...........................
Washington County, VA......................
28740............ Kingston, NY................................ 0.9367
Ulster County, NY..........................
28940............ Knoxville, TN............................... 0.8249
Anderson County, TN........................
Blount County, TN..........................
Knox County, TN............................
Loudon County, TN..........................
Union County, TN...........................
29020............ Kokomo, IN.................................. 0.9669
Howard County, IN..........................
Tipton County, IN..........................
29100............ La Crosse, WI-MN............................ 0.9426
Houston County, MN.........................
La Crosse County, WI.......................
29140............ Lafayette, IN............................... 0.8931
Benton County, IN..........................
Carroll County, IN.........................
Tippecanoe County, IN......................
29180............ Lafayette, LA............................... 0.8289

[[Page 44323]]

Lafayette Parish, LA.......................
St. Martin Parish, LA......................
29340............ Lake Charles, LA............................ 0.7914
Calcasieu Parish, LA.......................
Cameron Parish, LA.........................
29404............ Lake County-Kenosha County, IL-WI........... 1.0570
Lake County, IL............................
Kenosha County, WI.........................
29460............ Lakeland, FL................................ 0.8879
Polk County, FL............................
29540............ Lancaster, PA............................... 0.9589
Lancaster County, PA.......................
29620............ Lansing-East Lansing, MI.................... 1.0088
Clinton County, MI.........................
Eaton County, MI...........................
Ingham County, MI..........................
29700............ Laredo, TX.................................. 0.7811
Webb County, TX............................
29740............ Las Cruces, NM.............................. 0.9273
Dona Ana County, NM........................
29820............ Las Vegas-Paradise, NV...................... 1.1430
Clark County, NV...........................
29940............ Lawrence, KS................................ 0.8365
Douglas County, KS.........................
30020............ Lawton, OK.................................. 0.8065
Comanche County, OK........................
30140............ Lebanon, PA................................. 0.8679
Lebanon County, PA.........................
30300............ Lewiston, ID-WA............................. 0.9853
Nez Perce County, ID.......................
Asotin County, WA..........................
30340............ Lewiston-Auburn, ME......................... 0.9126
Androscoggin County, ME....................
30460............ Lexington-Fayette, KY....................... 0.9181
Bourbon County, KY.........................
Clark County, KY...........................
Fayette County, KY.........................
Jessamine County, KY.......................
Scott County, KY...........................
Woodford County, KY........................
30620............ Lima, OH.................................... 0.9042
Allen County, OH...........................
30700............ Lincoln, NE................................. 1.0092
Lancaster County, NE.......................
Seward County, NE..........................
30780............ Little Rock-North Little Rock, AR........... 0.8890
Faulkner County, AR........................
Grant County, AR...........................
Lonoke County, AR..........................
Perry County, AR...........................
Pulaski County, AR.........................
Saline County, AR..........................
30860............ Logan, UT-ID................................ 0.9022
Franklin County, ID........................
Cache County, UT...........................
30980............ Longview, TX................................ 0.8788
Gregg County, TX...........................
Rusk County, TX............................
Upshur County, TX..........................
31020............ Longview, WA................................ 1.0011
Cowlitz County, WA.........................
31084............ Los Angeles-Long Beach-Glendale, CA......... 1.1760
Los Angeles County, CA.....................
31140............ Louisville, KY-IN........................... 0.9118
Clark County, IN...........................
Floyd County, IN...........................
Harrison County, IN........................
Washington County, IN......................
Bullitt County, KY.........................
Henry County, KY...........................

[[Page 44324]]

Jefferson County, KY.......................
Meade County, KY...........................
Nelson County, KY..........................
Oldham County, KY..........................
Shelby County, KY..........................
Spencer County, KY.........................
Trimble County, KY.........................
31180............ Lubbock, TX................................. 0.8613
Crosby County, TX..........................
Lubbock County, TX.........................
31340............ Lynchburg, VA............................... 0.8694
Amherst County, VA.........................
Appomattox County, VA......................
Bedford County, VA.........................
Campbell County, VA........................
Bedford City, VA...........................
Lynchburg City, VA.........................
31420............ Macon, GA................................... 0.9519
Bibb County, GA............................
Crawford County, GA........................
Jones County, GA...........................
Monroe County, GA..........................
Twiggs County, GA..........................
31460............ Madera, CA.................................. 0.8154
Madera County, CA..........................
31540............ Madison, WI................................. 1.0840
Columbia County, WI........................
Dane County, WI............................
Iowa County, WI............................
31700............ Manchester-Nashua, NH....................... 1.0243
Hillsborough County, NH....................
Merrimack County, NH.......................
31900............ Mansfield, OH............................... 0.9271
Richland County, OH........................
32420............ Mayag[uuml]ez, PR........................... 0.3848
Hormigueros Municipio, PR..................
Mayag[uuml]ez Municipio, PR................
32580............ McAllen-Edinburg-Pharr, TX.................. 0.8773
Hidalgo County, TX.........................
32780............ Medford, OR................................. 1.0818
Jackson County, OR.........................
32820............ Memphis, TN-MS-AR........................... 0.9373
Crittenden County, AR......................
DeSoto County, MS..........................
Marshall County, MS........................
Tate County, MS............................
Tunica County, MS..........................
Fayette County, TN.........................
Shelby County, TN..........................
Tipton County, TN..........................
32900............ Merced, CA.................................. 1.1471
Merced County, CA..........................
33124............ Miami-Miami Beach-Kendall, FL............... 0.9812
Miami-Dade County, FL......................
33140............ Michigan City-La Porte, IN.................. 0.9118
LaPorte County, IN.........................
33260............ Midland, TX................................. 0.9786
Midland County, TX.........................
33340............ Milwaukee-Waukesha-West Allis, WI........... 1.0218
Milwaukee County, WI.......................
Ozaukee County, WI.........................
Washington County, WI......................
Waukesha County, WI........................
33460............ Minneapolis-St. Paul-Bloomington, MN-WI..... 1.0946
Anoka County, MN...........................
Carver County, MN..........................
Chisago County, MN.........................
Dakota County, MN..........................
Hennepin County, MN........................
Isanti County, MN..........................

[[Page 44325]]

Ramsey County, MN..........................
Scott County, MN...........................
Sherburne County, MN.......................
Washington County, MN......................
Wright County, MN..........................
Pierce County, WI..........................
St. Croix County, WI.......................
33540............ Missoula, MT................................ 0.8928
Missoula County, MT........................
33660............ Mobile, AL.................................. 0.7913
Mobile County, AL..........................
33700............ Modesto, CA................................. 1.1729
Stanislaus County, CA......................
33740............ Monroe, LA.................................. 0.7997
Ouachita Parish, LA........................
Union Parish, LA...........................
33780............ Monroe, MI.................................. 0.9707
Monroe County, MI..........................
33860............ Montgomery, AL.............................. 0.8009
Autauga County, AL.........................
Elmore County, AL..........................
Lowndes County, AL.........................
Montgomery County, AL......................
34060............ Morgantown, WV.............................. 0.8423
Monongalia County, WV......................
Preston County, WV.........................
34100............ Morristown, TN.............................. 0.7933
Grainger County, TN........................
Hamblen County, TN.........................
Jefferson County, TN.......................
34580............ Mount Vernon-Anacortes, WA.................. 1.0517
Skagit County, WA..........................
34620............ Muncie, IN.................................. 0.8562
Delaware County, IN........................
34740............ Muskegon-Norton Shores, MI.................. 0.9941
Muskegon County, MI........................
34820............ Myrtle Beach-Conway-North Myrtle Beach, SC.. 0.8810
Horry County, SC...........................
34900............ Napa, CA.................................... 1.3374
Napa County, CA............................
34940............ Naples-Marco Island, FL..................... 0.9941
Collier County, FL.........................
34980............ Nashville-Davidson-Murfreesboro, TN......... 0.9847
Cannon County, TN..........................
Cheatham County, TN........................
Davidson County, TN........................
Dickson County, TN.........................
Hickman County, TN.........................
Macon County, TN...........................
Robertson County, TN.......................
Rutherford County, TN......................
Smith County, TN...........................
Sumner County, TN..........................
Trousdale County, TN.......................
Williamson County, TN......................
Wilson County, TN..........................
35004............ Nassau-Suffolk, NY.......................... 1.2662
Nassau County, NY..........................
Suffolk County, NY.........................
35084............ Newark-Union, NJ-PA......................... 1.1892
Essex County, NJ...........................
Hunterdon County, NJ.......................
Morris County, NJ..........................
Sussex County, NJ..........................
Union County, NJ...........................
Pike County, PA............................
35300............ New Haven-Milford, CT....................... 1.1953
New Haven County, CT.......................
35380............ New Orleans-Metairie-Kenner, LA............. 0.8831
Jefferson Parish, LA.......................

[[Page 44326]]

Orleans Parish, LA.........................
Plaquemines Parish, LA.....................
St. Bernard Parish, LA.....................
St. Charles Parish, LA.....................
St. John the Baptist Parish, LA............
St. Tammany Parish, LA.....................
35644............ New York-Wayne-White Plains, NY-NJ.......... 1.3177
Bergen County, NJ..........................
Hudson County, NJ..........................
Passaic County, NJ.........................
Bronx County, NY...........................
Kings County, NY...........................
New York County, NY........................
Putnam County, NY..........................
Queens County, NY..........................
Richmond County, NY........................
Rockland County, NY........................
Westchester County, NY.....................
35660............ Niles-Benton Harbor, MI..................... 0.8915
Berrien County, MI.........................
35980............ Norwich-New London, CT...................... 1.1932
New London County, CT......................
36084............ Oakland-Fremont-Hayward, CA................. 1.5819
Alameda County, CA.........................
Contra Costa County, CA....................
36100............ Ocala, FL................................... 0.8867
Marion County, FL..........................
36140............ Ocean City, NJ.............................. 1.0472
Cape May County, NJ........................
36220............ Odessa, TX.................................. 1.0073
Ector County, TX...........................
36260............ Ogden-Clearfield, UT........................ 0.8995
Davis County, UT...........................
Morgan County, UT..........................
Weber County, UT...........................
36420............ Oklahoma City, OK........................... 0.8843
Canadian County, OK........................
Cleveland County, OK.......................
Grady County, OK...........................
Lincoln County, OK.........................
Logan County, OK...........................
McClain County, OK.........................
Oklahoma County, OK........................
36500............ Olympia, WA................................. 1.1081
Thurston County, WA........................
36540............ Omaha-Council Bluffs, NE-IA................. 0.9450
Harrison County, IA........................
Mills County, IA...........................
Pottawattamie County, IA...................
Cass County, NE............................
Douglas County, NE.........................
Sarpy County, NE...........................
Saunders County, NE........................
Washington County, NE......................
36740............ Orlando, FL................................. 0.9452
Lake County, FL............................
Orange County, FL..........................
Osceola County, FL.........................
Seminole County, FL........................
36780............ Oshkosh-Neenah, WI.......................... 0.9315
Winnebago County, WI.......................
36980............ Owensboro, KY............................... 0.8748
Daviess County, KY.........................
Hancock County, KY.........................
McLean County, KY..........................
37100............ Oxnard-Thousand Oaks-Ventura, CA............ 1.1546
Ventura County, CA.........................
37340............ Palm Bay-Melbourne-Titusville, FL........... 0.9443
Brevard County, FL.........................
37460............ Panama City-Lynn Haven, FL.................. 0.8027

[[Page 44327]]

Bay County, FL.............................
37620............ Parkersburg-Marietta, WV-OH................. 0.7977
Washington County, OH......................
Pleasants County, WV.......................
Wirt County, WV............................
Wood County, WV............................
37700............ Pascagoula, MS.............................. 0.8215
George County, MS..........................
Jackson County, MS.........................
37860............ Pensacola-Ferry Pass-Brent, FL.............. 0.8000
Escambia County, FL........................
Santa Rosa County, FL......................
37900............ Peoria, IL.................................. 0.8982
Marshall County, IL........................
Peoria County, IL..........................
Stark County, IL...........................
Tazewell County, IL........................
Woodford County, IL........................
37964............ Philadelphia, PA............................ 1.0996
Bucks County, PA...........................
Chester County, PA.........................
Delaware County, PA........................
Montgomery County, PA......................
Philadelphia County, PA....................
38060............ Phoenix-Mesa-Scottsdale, AZ................. 1.0287
Maricopa County, AZ........................
Pinal County, AZ...........................
38220............ Pine Bluff, AR.............................. 0.8383
Cleveland County, AR.......................
Jefferson County, AR.......................
Lincoln County, AR.........................
38300............ Pittsburgh, PA.............................. 0.8674
Allegheny County, PA.......................
Armstrong County, PA.......................
Beaver County, PA..........................
Butler County, PA..........................
Fayette County, PA.........................
Washington County, PA......................
Westmoreland County, PA....................
38340............ Pittsfield, MA.............................. 1.0266
Berkshire County, MA.......................
38540............ Pocatello, ID............................... 0.9400
Bannock County, ID.........................
Power County, ID...........................
38660............ Ponce, PR................................... 0.4842
Juana D[iacute]az Municipio, PR............
Ponce Municipio, PR........................
Villalba Municipio, PR.....................
38860............ Portland-South Portland-Biddeford, ME....... 0.9908
Cumberland County, ME......................
Sagadahoc County, ME.......................
York County, ME............................
38900............ Portland-Vancouver-Beaverton, OR-WA......... 1.1416
Clackamas County, OR.......................
Columbia County, OR........................
Multnomah County, OR.......................
Washington County, OR......................
Yamhill County, OR.........................
Clark County, WA...........................
Skamania County, WA........................
38940............ Port St. Lucie-Fort Pierce, FL.............. 0.9833
Martin County, FL..........................
St. Lucie County, FL.......................
39100............ Poughkeepsie-Newburgh-Middletown, NY........ 1.0911
Dutchess County, NY........................
Orange County, NY..........................
39140............ Prescott, AZ................................ 0.9836
Yavapai County, AZ.........................
39300............ Providence-New Bedford-Fall River, RI-MA.... 1.0783
Bristol County, MA.........................

[[Page 44328]]

Bristol County, RI.........................
Kent County, RI............................
Newport County, RI.........................
Providence County, RI......................
Washington County, RI......................
39340............ Provo-Orem, UT.............................. 0.9537
Juab County, UT............................
Utah County, UT............................
39380............ Pueblo, CO.................................. 0.8753
Pueblo County, CO..........................
39460............ Punta Gorda, FL............................. 0.9405
Charlotte County, FL.......................
39540............ Racine, WI.................................. 0.9356
Racine County, WI..........................
39580............ Raleigh-Cary, NC............................ 0.9864
Franklin County, NC........................
Johnston County, NC........................
Wake County, NC............................
39660............ Rapid City, SD.............................. 0.8833
Meade County, SD...........................
Pennington County, SD......................
39740............ Reading, PA................................. 0.9622
Berks County, PA...........................
39820............ Redding, CA................................. 1.3198
Shasta County, CA..........................
39900............ Reno-Sparks, NV............................. 1.1963
Storey County, NV..........................
Washoe County, NV..........................
40060............ Richmond, VA................................ 0.9177
Amelia County, VA..........................
Caroline County, VA........................
Charles City County, VA....................
Chesterfield County, VA....................
Cumberland County, VA......................
Dinwiddie County, VA.......................
Goochland County, VA.......................
Hanover County, VA.........................
Henrico County, VA.........................
King and Queen County, VA..................
King William County, VA....................
Louisa County, VA..........................
New Kent County, VA........................
Powhatan County, VA........................
Prince George County, VA...................
Sussex County, VA..........................
Colonial Heights City, VA..................
Hopewell City, VA..........................
Petersburg City, VA........................
Richmond City, VA..........................
40140............ Riverside-San Bernardino-Ontario, CA........ 1.0904
Riverside County, CA.......................
San Bernardino County, CA..................
40220............ Roanoke, VA................................. 0.8647
Botetourt County, VA.......................
Craig County, VA...........................
Franklin County, VA........................
Roanoke County, VA.........................
Roanoke City, VA...........................
Salem City, VA.............................
40340............ Rochester, MN............................... 1.1408
Dodge County, MN...........................
Olmsted County, MN.........................
Wabasha County, MN.........................
40380............ Rochester, NY............................... 0.8994
Livingston County, NY......................
Monroe County, NY..........................
Ontario County, NY.........................
Orleans County, NY.........................
Wayne County, NY...........................
40420............ Rockford, IL................................ 0.9989

[[Page 44329]]

Boone County, IL...........................
Winnebago County, IL.......................
40484............ Rockingham County-Strafford County, NH...... 1.0159
Rockingham County, NH......................
Strafford County, NH.......................
40580............ Rocky Mount, NC............................. 0.8854
Edgecombe County, NC.......................
Nash County, NC............................
40660............ Rome, GA.................................... 0.9193
Floyd County, GA...........................
40900............ Sacramento-Arden-Arcade-Roseville, CA....... 1.3372
El Dorado County, CA.......................
Placer County, CA..........................
Sacramento County, CA......................
Yolo County, CA............................
40980............ Saginaw-Saginaw Township North, MI.......... 0.8874
Saginaw County, MI.........................
41060............ St. Cloud, MN............................... 1.0362
Benton County, MN..........................
Stearns County, MN.........................
41100............ St. George, UT.............................. 0.9265
Washington County, UT......................
41140............ St. Joseph, MO-KS........................... 1.0118
Doniphan County, KS........................
Andrew County, MO..........................
Buchanan County, MO........................
DeKalb County, MO..........................
41180............ St. Louis, MO-IL............................ 0.9005
Bond County, IL............................
Calhoun County, IL.........................
Clinton County, IL.........................
Jersey County, IL..........................
Macoupin County, IL........................
Madison County, IL.........................
Monroe County, IL..........................
St. Clair County, IL.......................
Crawford County, MO........................
Franklin County, MO........................
Jefferson County, MO.......................
Lincoln County, MO.........................
St. Charles County, MO.....................
St. Louis County, MO.......................
Warren County, MO..........................
Washington County, MO......................
St. Louis City, MO.........................
41420............ Salem, OR................................... 1.0438
Marion County, OR..........................
Polk County, OR............................
41500............ Salinas, CA................................. 1.4337
Monterey County, CA........................
41540............ Salisbury, MD............................... 0.8953
Somerset County, MD........................
Wicomico County, MD........................
41620............ Salt Lake City, UT.......................... 0.9402
Salt Lake County, UT.......................
Summit County, UT..........................
Tooele County, UT..........................
41660............ San Angelo, TX.............................. 0.8362
Irion County, TX...........................
Tom Green County, TX.......................
41700............ San Antonio, TX............................. 0.8844
Atascosa County, TX........................
Bandera County, TX.........................
Bexar County, TX...........................
Comal County, TX...........................
Guadalupe County, TX.......................
Kendall County, TX.........................
Medina County, TX..........................
Wilson County, TX..........................
41740............ San Diego-Carlsbad-San Marcos, CA........... 1.1354

[[Page 44330]]

San Diego County, CA.......................
41780............ Sandusky, OH................................ 0.9302
Erie County, OH............................
41884............ San Francisco-San Mateo-Redwood City, CA.... 1.5165
Marin County, CA...........................
San Francisco County, CA...................
San Mateo County, CA.......................
41900............ San Germ[aacute]n-Cabo Rojo, PR............. 0.4885
Cabo Rojo Municipio, PR....................
Lajas Municipio, PR........................
Sabana Grande Municipio, PR................
San Germ[aacute]n Municipio, PR............
41940............ San Jose-Sunnyvale-Santa Clara, CA.......... 1.5543
San Benito County, CA......................
Santa Clara County, CA.....................
41980............ San Juan-Caguas-Guaynabo, PR................ 0.4452
Aguas Buenas Municipio, PR.................
Aibonito Municipio, PR.....................
Arecibo Municipio, PR......................
Barceloneta Municipio, PR..................
Barranquitas Municipio, PR.................
Bayam[oacute]n Municipio, PR...............
Caguas Municipio, PR.......................
Camuy Municipio, PR........................
Can[oacute]vanas Municipio, PR.............
Carolina Municipio, PR.....................
Cata[ntilde]o Municipio, PR................
Cayey Municipio, PR........................
Ciales Municipio, PR.......................
Cidra Municipio, PR........................
Comer[iacute]o Municipio, PR...............
Corozal Municipio, PR......................
Dorado Municipio, PR.......................
Florida Municipio, PR......................
Guaynabo Municipio, PR.....................
Gurabo Municipio, PR.......................
Hatillo Municipio, PR......................
Humacao Municipio, PR......................
Juncos Municipio, PR.......................
Las Piedras Municipio, PR..................
Lo[iacute]za Municipio, PR.................
Manat[iacute] Municipio, PR................
Maunabo Municipio, PR......................
Morovis Municipio, PR......................
Naguabo Municipio, PR......................
Naranjito Municipio, PR....................
Orocovis Municipio, PR.....................
Quebradillas Municipio, PR.................
R[iacute]o Grande Municipio, PR............
San Juan Municipio, PR.....................
San Lorenzo Municipio, PR..................
Toa Alta Municipio, PR.....................
Toa Baja Municipio, PR.....................
Trujillo Alto Municipio, PR................
Vega Alta Municipio, PR....................
Vega Baja Municipio, PR....................
Yabucoa Municipio, PR......................
42020............ San Luis Obispo-Paso Robles, CA............. 1.1598
San Luis Obispo County, CA.................
42044............ Santa Ana-Anaheim-Irvine, CA................ 1.1473
Orange County, CA..........................
42060............ Santa Barbara-Santa Maria-Goleta, CA........ 1.1091
Santa Barbara County, CA...................
42100............ Santa Cruz-Watsonville, CA.................. 1.5457
Santa Cruz County, CA......................
42140............ Santa Fe, NM................................ 1.0824
Santa Fe County, NM........................
42220............ Santa Rosa-Petaluma, CA..................... 1.4464
Sonoma County, CA..........................
42260............ Sarasota-Bradenton-Venice, FL............... 0.9868

[[Page 44331]]

Manatee County, FL.........................
Sarasota County, FL........................
42340............ Savannah, GA................................ 0.9351
Bryan County, GA...........................
Chatham County, GA.........................
Effingham County, GA.......................
42540............ Scranton-Wilkes-Barre, PA................... 0.8347
Lackawanna County, PA......................
Luzerne County, PA.........................
Wyoming County, PA.........................
42644............ Seattle-Bellevue-Everett, WA................ 1.1434
King County, WA............................
Snohomish County, WA.......................
42680............ Sebastian-Vero Beach, FL.................... 0.9573
Indian River County, FL....................
43100............ Sheboygan, WI............................... 0.9026
Sheboygan County, WI.......................
43300............ Sherman-Denison, TX......................... 0.8502
Grayson County, TX.........................
43340............ Shreveport-Bossier City, LA................. 0.8865
Bossier Parish, LA.........................
Caddo Parish, LA...........................
De Soto Parish, LA.........................
43580............ Sioux City, IA-NE-SD........................ 0.9200
Woodbury County, IA........................
Dakota County, NE..........................
Dixon County, NE...........................
Union County, SD...........................
43620............ Sioux Falls, SD............................. 0.9559
Lincoln County, SD.........................
McCook County, SD..........................
Minnehaha County, SD.......................
Turner County, SD..........................
43780............ South Bend-Mishawaka, IN-MI................. 0.9842
St. Joseph County, IN......................
Cass County, MI............................
43900............ Spartanburg, SC............................. 0.9174
Spartanburg County, SC.....................
44060............ Spokane, WA................................. 1.0447
Spokane County, WA.........................
44100............ Springfield, IL............................. 0.8890
Menard County, IL..........................
Sangamon County, IL........................
44140............ Springfield, MA............................. 1.0079
Franklin County, MA........................
Hampden County, MA.........................
Hampshire County, MA.......................
44180............ Springfield, MO............................. 0.8469
Christian County, MO.......................
Dallas County, MO..........................
Greene County, MO..........................
Polk County, MO............................
Webster County, MO.........................
44220............ Springfield, OH............................. 0.8593
Clark County, OH...........................
44300............ State College, PA........................... 0.8784
Centre County, PA..........................
44700............ Stockton, CA................................ 1.1442
San Joaquin County, CA.....................
44940............ Sumter, SC.................................. 0.8083
Sumter County, SC..........................
45060............ Syracuse, NY................................ 0.9691
Madison County, NY.........................
Onondaga County, NY........................
Oswego County, NY..........................
45104............ Tacoma, WA.................................. 1.0789
Pierce County, WA..........................
45220............ Tallahassee, FL............................. 0.8942
Gadsden County, FL.........................
Jefferson County, FL.......................

[[Page 44332]]

Leon County, FL............................
Wakulla County, FL.........................
45300............ Tampa-St. Petersburg-Clearwater, FL......... 0.9144
Hernando County, FL........................
Hillsborough County, FL....................
Pasco County, FL...........................
Pinellas County, FL........................
45460............ Terre Haute, IN............................. 0.8765
Clay County, IN............................
Sullivan County, IN........................
Vermillion County, IN......................
Vigo County, IN............................
45500............ Texarkana, TX-Texarkana, AR................. 0.8104
Miller County, AR..........................
Bowie County, TX...........................
45780............ Toledo, OH.................................. 0.9586
Fulton County, OH..........................
Lucas County, OH...........................
Ottawa County, OH..........................
Wood County, OH............................
45820............ Topeka, KS.................................. 0.8730
Jackson County, KS.........................
Jefferson County, KS.......................
Osage County, KS...........................
Shawnee County, KS.........................
Wabaunsee County, KS.......................
45940............ Trenton-Ewing, NJ........................... 1.0835
Mercer County, NJ..........................
46060............ Tucson, AZ.................................. 0.9202
Pima County, AZ............................
46140............ Tulsa, OK................................... 0.8103
Creek County, OK...........................
Okmulgee County, OK........................
Osage County, OK...........................
Pawnee County, OK..........................
Rogers County, OK..........................
Tulsa County, OK...........................
Wagoner County, OK.........................
46220............ Tuscaloosa, AL.............................. 0.8542
Greene County, AL..........................
Hale County, AL............................
Tuscaloosa County, AL......................
46340............ Tyler, TX................................... 0.8811
Smith County, TX...........................
46540............ Utica-Rome, NY.............................. 0.8396
Herkimer County, NY........................
Oneida County, NY..........................
46660............ Valdosta, GA................................ 0.8369
Brooks County, GA..........................
Echols County, GA..........................
Lanier County, GA..........................
Lowndes County, GA.........................
46700............ Vallejo-Fairfield, CA....................... 1.5137
Solano County, CA..........................
47020............ Victoria, TX................................ 0.8560
Calhoun County, TX.........................
Goliad County, TX..........................
Victoria County, TX........................
47220............ Vineland-Millville-Bridgeton, NJ............ 0.9832
Cumberland County, NJ......................
47260............ Virginia Beach-Norfolk-Newport News, VA-NC.. 0.8790
Currituck County, NC.......................
Gloucester County, VA......................
Isle of Wight County, VA...................
James City County, VA......................
Mathews County, VA.........................
Surry County, VA...........................
York County, VA............................
Chesapeake City, VA........................
Hampton City, VA...........................

[[Page 44333]]

Newport News City, VA......................
Norfolk City, VA...........................
Poquoson City, VA..........................
Portsmouth City, VA........................
Suffolk City, VA...........................
Virginia Beach City, VA....................
Williamsburg City, VA......................
47300............ Visalia-Porterville, CA..................... 0.9968
Tulare County, CA..........................
47380............ Waco, TX.................................... 0.8633
McLennan County, TX........................
47580............ Warner Robins, GA........................... 0.8380
Houston County, GA.........................
47644............ Warren-Troy-Farmington Hills, MI............ 1.0054
Lapeer County, MI..........................
Livingston County, MI......................
Macomb County, MI..........................
Oakland County, MI.........................
St. Clair County, MI.......................
47894............ Washington-Arlington-Alexandria, DC-VA-MD-WV 1.1054
District of Columbia, DC...................
Calvert County, MD.........................
Charles County, MD.........................
Prince George's County, MD.................
Arlington County, VA.......................
Clarke County, VA..........................
Fairfax County, VA.........................
Fauquier County, VA........................
Loudoun County, VA.........................
Prince William County, VA..................
Spotsylvania County, VA....................
Stafford County, VA........................
Warren County, VA..........................
Alexandria City, VA........................
Fairfax City, VA...........................
Falls Church City, VA......................
Fredericksburg City, VA....................
Manassas City, VA..........................
Manassas Park City, VA.....................
Jefferson County, WV.......................
47940............ Waterloo-Cedar Falls, IA.................... 0.8408
Black Hawk County, IA......................
Bremer County, IA..........................
Grundy County, IA..........................
48140............ Wausau, WI.................................. 0.9722
Marathon County, WI........................
48260............ Weirton-Steubenville, WV-OH................. 0.8063
Jefferson County, OH.......................
Brooke County, WV..........................
Hancock County, WV.........................
48300............ Wenatchee, WA............................... 1.0346
Chelan County, WA..........................
Douglas County, WA.........................
48424............ West Palm Beach-Boca Raton-Boynton Beach, FL 0.9649
Palm Beach County, FL......................
48540............ Wheeling, WV-OH............................. 0.7010
Belmont County, OH.........................
Marshall County, WV........................
Ohio County, WV............................
48620............ Wichita, KS................................. 0.9063
Butler County, KS..........................
Harvey County, KS..........................
Sedgwick County, KS........................
Sumner County, KS..........................
48660............ Wichita Falls, TX........................... 0.8311
Archer County, TX..........................
Clay County, TX............................
Wichita County, TX.........................
48700............ Williamsport, PA............................ 0.8139
Lycoming County, PA........................

[[Page 44334]]

48864............ Wilmington, DE-MD-NJ........................ 1.0684
New Castle County, DE......................
Cecil County, MD...........................
Salem County, NJ...........................
48900............ Wilmington, NC.............................. 0.9835
Brunswick County, NC.......................
New Hanover County, NC.....................
Pender County, NC..........................
49020............ Winchester, VA-WV........................... 1.0091
Frederick County, VA.......................
Winchester City, VA........................
Hampshire County, WV.......................
49180............ Winston-Salem, NC........................... 0.9276
Davie County, NC...........................
Forsyth County, NC.........................
Stokes County, NC..........................
Yadkin County, NC..........................
49340............ Worcester, MA............................... 1.0722
Worcester County, MA.......................
49420............ Yakima, WA.................................. 0.9847
Yakima County, WA..........................
49500............ Yauco, PR................................... 0.3854
Gu[aacute]nica Municipio, PR...............
Guayanilla Municipio, PR...................
Pe[ntilde]uelas Municipio, PR..............
Yauco Municipio, PR........................
49620............ York-Hanover, PA............................ 0.9397
York County, PA............................
49660............ Youngstown-Warren-Boardman, OH-PA........... 0.8802
Mahoning County, OH........................
Trumbull County, OH........................
Mercer County, PA..........................
49700............ Yuba City, CA............................... 1.0730
Sutter County, CA..........................
Yuba County, CA............................
49740............ Yuma, AZ.................................... 0.9109
Yuma County, AZ............................
------------------------------------------------------------------------
\1\ At this time, there are no hospitals located in this CBSA-based
urban area on which to base a wage index. Therefore, the wage index
value is based on the methodology described in the August 15, 2005
final rule (70 FR 47880). The wage index value for this area is the
average wage index for all urban areas within the state.

Table 2.--Inpatient Rehabilitation Facility Wage Index for Rural Areas
for Discharges Occurring From October 1, 2007 Through September 30, 2008
------------------------------------------------------------------------
Wage
CBSA code Nonurban area index
------------------------------------------------------------------------
01.................................. Alabama................ 0.7591
02.................................. Alaska................. 1.0661
03.................................. Arizona................ 0.8908
04.................................. Arkansas............... 0.7307
05.................................. California............. 1.1454
06.................................. Colorado............... 0.9325
07.................................. Connecticut............ 1.1709
08.................................. Delaware............... 0.9705
10.................................. Florida................ 0.8594
11.................................. Georgia................ 0.7593
12.................................. Hawaii................. 1.0448
13.................................. Idaho.................. 0.8120
14.................................. Illinois............... 0.8320
15.................................. Indiana................ 0.8538
16.................................. Iowa................... 0.8681
17.................................. Kansas................. 0.7998
18.................................. Kentucky............... 0.7768
19.................................. Louisiana.............. 0.7438
20.................................. Maine.................. 0.8443
21.................................. Maryland............... 0.8926
22.................................. Massachusetts \2\...... 1.1661
23.................................. Michigan............... 0.9062
24.................................. Minnesota.............. 0.9153
25.................................. Mississippi............ 0.7738
26.................................. Missouri............... 0.7927
27.................................. Montana................ 0.8590
28.................................. Nebraska............... 0.8677
29.................................. Nevada................. 0.8944
30.................................. New Hampshire.......... 1.0853
31.................................. New Jersey \1\......... .........
32.................................. New Mexico............. 0.8332
33.................................. New York............... 0.8232
34.................................. North Carolina......... 0.8588
35.................................. North Dakota........... 0.7215
36.................................. Ohio................... 0.8658
37.................................. Oklahoma............... 0.7629
38.................................. Oregon................. 0.9753
39.................................. Pennsylvania........... 0.8320
40.................................. Puerto Rico \3\........ 0.4047
41.................................. Rhode Island \1\....... .........
42.................................. South Carolina......... 0.8566
43.................................. South Dakota........... 0.8480
44.................................. Tennessee.............. 0.7827
45.................................. Texas.................. 0.7965
46.................................. Utah................... 0.8140
47.................................. Vermont................ 0.9744
48.................................. Virgin Islands......... 0.8467
49.................................. Virginia............... 0.7940
50.................................. Washington............. 1.0263
51.................................. West Virginia.......... 0.7607
52.................................. Wisconsin.............. 0.9553
53.................................. Wyoming................ 0.9295

[[Page 44335]]

65.................................. Guam................... 0.9611
------------------------------------------------------------------------
\1\ All counties within the State are classified as urban.
\2\ Massachusetts has areas designated as rural; however, no short-term,
acute care hospitals are located in the area(s) for FY 2008. As
discussed in the preamble in Section VI.B, we will impute a wage index
value for rural Massachusetts based on the average wage index from all
contiguous CBSAs.
\3\ Puerto Rico has areas designated as rural; however, no short-term,
acute care hospitals are located in the area(s) for FY 2008. As
discussed in the preamble in Section VI.B, we will continue to use the
most recent wage index previously available for Puerto Rico as
discussed in the FY 2006 IRF PPS final rule (70 FR 47880).

[FR Doc. 07-3789 Filed 7-31-07; 4:00 pm]
BILLING CODE 4120-01-P