[Federal Register: October 22, 2009 (Volume 74, Number 203)]
[Notices]
[Page 54579-54581]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr22oc09-60]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-8037-N]
RIN 0938-AP42
Medicare Program; Inpatient Hospital Deductible and Hospital and
Extended Care Services Coinsurance Amounts for Calendar Year 2010
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) 2010 under Medicare's Hospital
Insurance Program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts. For CY 2010, the inpatient
hospital deductible will be $1,100. The daily coinsurance amounts for
CY 2010 will be--(a) $275 for the 61st through 90th day of
hospitalization in a benefit period; (b) $550 for lifetime reserve
days; and (c) $137.50 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, 2010.
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 2010
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 changes in 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)(XX) of the Act, the percentage
increase used to update the payment rates for FY 2010 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)(VIII) of the Act, the percentage
increase used to update the payment rates for FY 2010 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 2010 is 2.1 percent, as
announced in the final rule with comment period published in the
Federal Register on August 27, 2009 entitled, ``Medicare Program;
Changes to the Hospital Inpatient Prospective Payment Systems for Acute
Care Hospitals and Fiscal Year 2010 Rates; and Changes to the Long-Term
Care Hospital Prospective Payment System and Rate Years 2010 and 2009
Rates (IPPS/RY 2010 LTCH PPS) (74 FR 43754).'' Therefore, the
percentage increase for hospitals paid under the prospective payment
system is 2.1 percent. The average payment percentage increase for
hospitals excluded from the prospective payment system is 2.5 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 2010 is 2.15 percent.
To develop the adjustment to reflect changes in 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 2009 compared to FY 2008. (We excluded from this calculation
hospitals whose payments are not based on the Acute care prospective
payment system because their payments are based on alternate
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prospective payment systems or reasonable costs.) We used Medicare
bills from prospective payment hospitals that we received as of June
2009. These bills represent a total of about 9.0 million Medicare
discharges for FY 2009 and provide the most recent case-mix data
available at this time. Based on these bills, the change in average
case-mix in FY 2009 is 2.5 percent. Based on these bills and past
experience, we expect the overall case mix change to be 3.1 percent as
the year progresses and more FY 2009 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 2010 IPPS/RY 2010 LTCH PPS final
rule with comment period, we indicated that we believe the adoption of
the Medicare severity-based diagnosis-related groups (MS-DRGs) led 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 with comment period, we
estimated that changes in coding or classification that do not reflect
real change in case-mix would be 2.3 percent for FY 2009. Therefore,
since we are expecting overall case mix to increase by 3.1 percent and
2.3 percent of that to be caused by coding changes, real case-mix
changes resulted in an increase of 0.8 percent for FY 2009.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
2.15 percent, and the real case-mix adjustment factor for the
deductible is 0.8 percent. Therefore, under the statutory formula, the
inpatient hospital deductible for services furnished in CY 2010 is
$1,100. This deductible amount is determined by multiplying $1,068 (the
inpatient hospital deductible for CY 2009) by the payment-weighted
average increase in the payment rates of 1.0215 multiplied by the
increase in real case-mix of 1.008, which equals $1,099.69 and is
rounded to $1,100.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for CY 2010
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. The increase in the deductible
generates increases in the coinsurance amounts. For inpatient hospital
and extended care services furnished in CY 2010, 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
$275 (one-fourth of the inpatient hospital deductible); the daily
coinsurance for lifetime reserve days will be $550 (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 $137.50 (one-eighth of the
inpatient hospital deductible).
IV. Cost to Medicare Beneficiaries
Table 1 below summarizes the deductible and coinsurance amounts for
CYs 2009 and 2010, as well as the number of each that is estimated to
be paid.
Table 1--Part A Deductible and Coinsurance Amounts for Calendar Years 2009 and 2010
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Value Number paid (in millions)
Type of cost sharing ---------------------------------------------------------------
2009 2010 2009 2010
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Inpatient hospital deductible................... $1068 $1100 8.70 8.80
Daily coinsurance for 61st-90th day............. 267 275 2.27 2.30
Daily coinsurance for lifetime reserve days..... 534 550 1.12 1.13
SNF coinsurance................................. 133.50 137.50 40.79 41.74
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The estimated total increase in costs to beneficiaries is about
$730 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 impacts of this final rule as required by
Executive Order 12866 on Regulatory Planning and Review (September 30,
1993), 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 (Pub. L. 104-4), Executive
Order 13132 on Federalism (August 4, 1999), and the
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Congressional Review Act (5 U.S.C. 804(2)).
Executive Order 12866 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 $730 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 $7.0 million to $34.5 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 under 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. 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 under section 1102(b) of the Act.
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
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 2009, that
threshold is approximately $133 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.
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: September 1, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
Dated: September 17, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-25372 Filed 10-16-09; 4:15 pm]
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