Medicare Program; Modification of Limitations on Redesignation by the Medicare Geographic Classification Review Board (MGCRB)
Interim final rule with comment period.
CFR Part: "42 CFR Part 412"
RIN Number: "RIN 0938-AU56"
Citation: "86 FR 24735"
Document Number: "CMS-1762-IFC"
Page Number: "24735"
"Rules and Regulations"
Agency: "
SUMMARY: This interim final rule with comment period (IFC) amends our current regulations to allow hospitals with a rural redesignation under the Social Security Act (the Act) to reclassify through the
DATES:
Effective date: These regulations are effective on
Comment date: To be assured consideration, comments must be received at one of the addresses provided below by
ADDRESSES: In commenting, please refer to file code CMS-1762-IFC. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX) transmission.
Comments, including mass comment submissions, must be submitted in one of the following three ways (please choose only one of the ways listed):
1. Electronically. You may (and we encourage you to) submit electronic comments on this regulation to http://www.regulations.gov. Follow the instructions under the "submit a comment" tab.
2. By regular mail. You may mail written comments to the following address ONLY:
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3. By express or overnight mail. You may send written comments via express or overnight mail to the following address ONLY:
For information on viewing public comments, we refer readers to the beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http://regulations.gov. Follow the search instructions on that website to view public comments.
Comments received timely will be also available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the
I. Background
A. Wage Index for Acute Care Hospitals Paid Under the Hospital Inpatient Prospective Payment System (IPPS)
Under section 1886(d) of the Social Security Act (the Act), hospitals are paid based on prospectively set rates. To account for geographic area wage level differences, section 1886(d)(3)(E) of the Act requires that the Secretary of the
Section 1886(d)(3)(E) of the Act requires the Secretary to update the wage index of hospitals annually, and to base the update on a survey of wages and wage-related costs of short-term, acute care hospitals. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that aggregate payments under the IPPS, after implementation of the provisions of sections 1886(d)(8)(B), 1886(d)(8)(C), and 1886(d)(10) of the Act, regarding geographic reclassification of hospitals, are equal to the aggregate prospective payments that would have been made absent these provisions.
B. Hospital Reclassifications Under Sections 1886(d)(8)(E) and 1886(d)(10) of the Act
Hospitals may seek to have their geographic designation reclassified. Under section 1886(d)(8)(E) of the Act, a qualifying prospective payment hospital located in an urban area may apply for rural status. Specifically, section 1886(d)(8)(E) of the Act states that "[f]or purposes of this subsection, not later than 60 days after the receipt of an application (in a form and manner determined by the Secretary) from a subsection (d) hospital described in clause (ii), the Secretary shall treat the hospital as being located in the rural area (as defined in paragraph (2)(D)) of the state in which the hospital is located." The regulations governing these geographic redesignations are codified in
In a separate process, hospitals may also reclassify for purposes of the wage index under the IPPS under section 1886(d)(10) of the Act by applying to the
Prior to a court decision in Geisinger Community Medical v. Secretary,
II. Provisions of the Interim Final Rule With Comment Period
Pursuant to our
However, our current policy compares the average hourly wage of a
On
The Court agreed with the Plaintiffs that the statute at section 1886(d)(8)(E)(i) of Act requires that CMS treat qualifying hospitals as being located in the rural area for purposes of section 1886(d) of the Act, including MGCRB reclassification. The Bates decision requires that CMS consider the rural area to be the area in which the hospital is located for the wage comparisons required for MGCRB reclassifications. For example, pursuant to Bates, a
As a result of the Bates court's decision, we are revising our policy so that the redesignated rural area, and not the hospital's geographic urban area, will be considered the area a
Specifically, to align our policy with the court's decision in Bates, we are amending the regulations at
These changes implement the Bates court's interpretation of the requirement at section 1886(d)(8)(E)(i) of the Act that "the Secretary shall treat the hospital as being located in the rural area." That is, a
Therefore, effective for reclassification applications due to the MGCRB on
III. Waiver of Proposed Rulemaking and Delay in Effective Date
We ordinarily publish a notice of proposed rulemaking in the
Section 553(d) of the APA ordinarily requires a 30-day delay in the effective date of a final rule from the date of its publication in the
We find good cause for waiving notice-and comment rulemaking and a delay in effective date given the decision of the district court and the public interest in expeditious implementation of the court's interpretation of the statute. Revising the regulation text by adding
IV. Collection of Information Requirements
This document does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the
V. Regulatory Impact Statement
We have examined the impact of this rule as required by Executive Order 12866 on Regulatory Planning and Review (
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A Regulatory Impact Analysis (RIA) must be prepared for major rules with economically significant effects (
The RFA requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than
In addition, section 1102(b) of the Act requires us to prepare an RIA 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 for Medicare payment regulations as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. We are not preparing an analysis for section 1102(b) of the Act because we have determined, and the Secretary certifies, that this IFC would not have a significant impact on the operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of
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. Since this regulation does not impose any costs on state or local governments, the requirements of Executive Order 13132 are not applicable.
Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). Section 3(f) of Executive Order 12866 defines a "significant regulatory action" as an action that is likely to result in a rule: (1) Having an annual effect on the economy of
We estimate that this rule is "significant" but not "economically significant," as measured by the
With regard to our impact analysis, as a result of this IFC, for FY 2022, there are approximately 22 hospitals that may qualify for a reclassification to a new or different urban area with a higher wage index than they might otherwise have received based on the information currently available to us (for example, applications submitted to the MGCRB.) For FY 2022, if these hospitals qualify for and accept reclassification to a new or different urban area with a higher wage index than they might otherwise have received, we estimate a total increase in payments to these hospitals of approximately
We do not know as a result of this IFC: (1) How many additional hospitals will elect to apply to the MGCRB by
We also note that OMB requested public comment on the recommendations it received from the
In accordance with the provisions of Executive Order 12866, this IFC was reviewed by the
VI. Response to Comments
Because of the large number of public comments we normally receive on
I,
List of Subjects in 42 CFR Part 412 Administrative practice and procedure, Health facilities, Medicare,
For the reasons set forth in the preamble, the
PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES
1. The authority for part 412 continues to read as follows:
Authority: 42 U.S.C. 1302 and 1395hh.
2. Section 412.230 is amended by adding paragraph (a)(1)(iii) and revising paragraph (a)(5)(i) to read as follows:
(a) * * *
(1) * * *
(iii) An urban hospital that has been granted redesignation as rural under
*****
(5) * * *
(i) An individual hospital may not be redesignated to another area for purposes of the wage index if the pre-reclassified average hourly wage for that area is lower than the pre-reclassified average hourly wage for the area in which the hospital is located. An urban hospital that has been granted redesignation as rural under
*****
Dated:
Secretary,
[FR Doc. 2021-08889 Filed 4-27-21;
BILLING CODE 4120-01-P



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