[Federal Register: September 24, 2008 (Volume 73, Number 186)]
[Notices]
[Page 55086-55089]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24se08-105]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8034-N]
RIN 0938-AP03
Medicare Program; Inpatient Hospital Deductible and Hospital and
Extended Care Services Coinsurance Amounts for Calendar Year 2009
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year (CY) 2009 under Medicare's Hospital
Insurance
[[Page 55087]]
program (Medicare Part A). The Medicare statute specifies the formulae
used to determine these amounts. For CY 2009, the inpatient hospital
deductible will be $1068. The daily coinsurance amounts for CY 2009
will be: (a) $267 for the 61st through 90th day of hospitalization in a
benefit period; (b) $534 for lifetime reserve days; and (c) $133.50 for
the 21st through 100th day of extended care services in a skilled
nursing facility in a benefit period.
DATES: Effective Date: This notice is effective on January 1, 2009.
FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390 for
general information. Gregory J. Savord, (410) 786-1521 for case-mix
analysis.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires us to determine
and publish each year the amount of the inpatient hospital deductible
and the hospital and extended care services coinsurance amounts
applicable for services furnished in the following CY.
II. Computing the Inpatient Hospital Deductible for CY 2009
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding CY, adjusted by our best estimate of the payment-weighted
average of the applicable percentage increases (as defined in section
1886(b)(3)(B) of the Act) used for updating the payment rates to
hospitals for discharges in the fiscal year (FY) that begins on October
1 of the same preceding CY, and adjusted to reflect real case-mix. The
adjustment to reflect real case-mix is determined on the basis of the
most recent case-mix data available. The amount determined under this
formula is rounded to the nearest multiple of $4 (or, if midway between
two multiples of $4, to the next higher multiple of $4).
Under section 1886(b)(3)(B)(i) of the Act, the percentage increase
used to update the payment rates for FY 2009 for hospitals paid under
the inpatient prospective payment system is the market basket
percentage increase, otherwise known as the market basket update. Under
section 1886(b)(3)(B)(viii) of the Act, hospitals will receive the full
market basket update only if they submit quality data as specified by
the Secretary. The market basket update for hospitals that do not
submit this data is reduced by 2.0 percentage points. We are estimating
that after accounting for those hospitals receiving the lower market
basket update in the payment-weighted average update, the calculated
deductible will remain the same.
Under section 1886(b)(3)(B)(ii) of the Act, the percentage increase
used to update the payment rates for FY 2009 for hospitals excluded
from the prospective payment system is the market basket percentage
increase, defined according to section 1886(b)(3)(B)(iii) of the Act.
The market basket percentage increase for 2009 is 3.6 percent, as
announced in the final rule published in the Federal Register entitled,
``Medicare Program; Changes to the Hospital Inpatient Prospective
Payment Systems and Fiscal Year 2009 Rates'' (73 FR 48434, August 19,
2008). Therefore, the percentage increase for hospitals paid under the
prospective payment system is 3.6 percent. The average payment
percentage increase for hospitals excluded from the prospective payment
system is 3.5 percent. Weighting these percentages in accordance with
payment volume, our best estimate of the payment-weighted average of
the increases in the payment rates for FY 2009 is 3.6 percent.
To develop the adjustment for real case-mix, we first calculated
for each hospital an average case-mix that reflects the relative
costliness of that hospital's mix of cases compared to those of other
hospitals. We then computed the change in average case-mix for
hospitals paid under the Medicare prospective payment system in FY 2008
compared to FY 2007. (We excluded from this calculation hospitals
excluded from the prospective payment system because their payments are
based on reasonable costs.) We used Medicare bills from prospective
payment hospitals that we received as of July 2008. These bills
represent a total of about 8.9 million Medicare discharges for FY 2008
and provide the most recent case-mix data available at this time. Based
on these bills, the change in average case-mix in FY 2008 is 1.55
percent. Based on these bills and past experience, we expect the
overall case mix change to be 1.75 percent as the year progresses and
more FY 2008 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case-mix change that
is determined to be real. In the FY 2008 IPPS final rule with comment
period, we indicated that we believe the adoption of the MS-DRGs had
the potential to lead to increases in aggregate payments without a
corresponding increase in actual patient severity of illness due to the
incentives for improved documentation and coding. In that final rule,
we estimated that changes in coding or classification that do not
reflect real change in case-mix would be 1.2 percent for FY 2008.
Therefore, since we are expecting overall case mix to increase by 1.75
percent and 1.2 percent of that to be caused by coding changes, real
case mix changes resulted in an increase of 0.55 percent for FY 2008.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
3.6 percent, and the real case-mix adjustment factor for the deductible
is 0.55 percent. Therefore, under the statutory formula, the inpatient
hospital deductible for services furnished in CY 2009 is $1068. This
deductible amount is determined by multiplying $1024 (the inpatient
hospital deductible for CY 2008) by the payment-weighted average
increase in the payment rates of 1.036 multiplied by the increase in
real case-mix of 1.0055, which equals $1066.70 and is rounded to $1068.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2009
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same CY. Thus, the increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2009, in accordance with the
fixed percentages defined in the law, the daily coinsurance for the
61st through 90th day of hospitalization in a benefit period will be
$267 (one-fourth of the inpatient hospital deductible); the daily
coinsurance for lifetime reserve days will be $534 (one-half of the
inpatient hospital deductible); and the daily coinsurance for the 21st
through 100th day of extended care services in a skilled nursing
facility in a benefit period will be $133.50 (one-eighth of the
inpatient hospital deductible).
[[Page 55088]]
IV. Cost to Medicare Beneficiaries
Table 1 summarizes the deductible and coinsurance amounts for CYs
2008 and 2009, as well as the number of each that is estimated to be
paid.
Table 1--Part A Deductible and Coinsurance Amounts for Calendar Years 2008 and 2009
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Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2008 2009 2008 2009
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Inpatient hospital deductible................... $1024 $1068 8.54 8.53
Daily coinsurance for 61st-90th day............. 256 267 2.22 2.22
Daily coinsurance for lifetime reserve days..... 512 534 1.06 1.06
SNF coinsurance................................. 128 133.50 39.66 40.05
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The estimated total increase in costs to beneficiaries is about
$680 million (rounded to the nearest $10 million) due to: (1) The
increase in the deductible and coinsurance amounts; and (2) the change
in the number of deductibles and daily coinsurance amounts paid.
V. Waiver of Proposed Notice and Comment Period
The Medicare statute, as discussed previously, requires publication
of the Medicare Part A inpatient hospital deductible and the hospital
and extended care services coinsurance amounts for services for each
CY. The amounts are determined according to the statute. As has been
our custom, we use general notices, rather than notice and comment
rulemaking procedures, to make the announcements. In doing so, we
acknowledge that, under the Administrative Procedure Act (APA),
interpretive rules, general statements of policy, and rules of agency
organization, procedure, or practice are excepted from the requirements
of notice and comment rulemaking.
We considered publishing a proposed notice to provide a period for
public comment. However, we may waive that procedure if we find good
cause that prior notice and comment are impracticable, unnecessary, or
contrary to the public interest. We find that the procedure for notice
and comment is unnecessary because the formulae used to calculate the
inpatient hospital deductible and hospital and extended care services
coinsurance amounts are statutorily directed, and we can exercise no
discretion in following the formulae. Moreover, the statute establishes
the time period for which the deductible and coinsurance amounts will
apply and delaying publication would be contrary to the public
interest. Therefore, we find good cause to waive publication of a
proposed notice and solicitation of public comments.
VI. Collection of Information Requirements
This document does not impose information collection and
recordkeeping requirements. Consequently, it need not be reviewed by
the Office of Management and Budget under the authority of the
Paperwork Reduction Act of 1995 (44 U.S.C. 35).
VII. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive
Order 12866 on regulatory planning and review (September 30 1993), as
further amended, the Regulatory Flexibility Act (RFA) (September 19,
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act,
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4,
1999) and the Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 (as amended by Executive Orders 13258 and
13422) 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 1 year). As stated in section IV of this notice,
we estimate that the total increase in costs to beneficiaries
associated with this notice is about $680 million due to: (1) The
increase in the deductible and coinsurance amounts and (2) the change
in the number of deductibles and daily coinsurance amounts paid.
Therefore, this notice is a major rule as defined in Title 5, United
States Code, section 804(2), and is an economically significant rule
under Executive Order 12866.
The RFA requires agencies to analyze options for regulatory relief
of small businesses, if a rule has a significant impact on a
substantial number of small entities. For purposes of the RFA, small
entities include small businesses, nonprofit organizations, and
government agencies. Most hospitals and most other providers and
suppliers are small entities, either by nonprofit status or by having
revenues of $6.5 million to $31.5 million in any 1 year. Individuals
and States are not included in the definition of a small entity. We
have determined that this notice will not have a significant economic
impact on a substantial number of small entities. Therefore we are not
preparing an analysis for the RFA.
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. Therefore, the Secretary
has determined that this notice will not have a significant impact on
the operations of a substantial number of small rural hospitals.
Therefore, we are not preparing an analysis for section 1102(b) of the
Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also
requires that agencies assess anticipated costs and benefits before
issuing any rule whose mandates require spending in any 1 year of $100
million in 1995 dollars, updated annually for inflation. In 2008, that
threshold is approximately $130 million. This notice has no
consequential effect on State, local, or tribal governments or on the
private sector. However, States may be required to pay the deductibles
and coinsurance for dually-eligible beneficiaries.
[[Page 55089]]
Executive Order 13132 establishes certain requirements that an
agency must meet when it promulgates a proposed rule (and subsequent
final rule) that imposes substantial direct requirement costs on State
and local governments, preempts State law, or otherwise has Federalism
implications. This notice will not have a substantial effect on State
or local governments.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: August 28, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: September 5, 2008.
Michael O. Leavitt,
Secretary.
[FR Doc. E8-22310 Filed 9-19-08; 9:00 am]
BILLING CODE 4120-01-P