Federal Register: May 19, 2003 (Volume 68, Number 96) Continued

[Federal Register: May 19, 2003 (Volume 68, Number 96)]
[Proposed Rules]
[Page 27403-27422]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr19my03-22]

[[pp. 27403-27422]] Medicare Program; Proposed Changes to the Hospital Inpatient
Prospective Payment Systems and Fiscal Year 2004 Rates

[[Continued from page 27402]]

[[Page 27400]]

116 \5\ OTH PERM CARD 1.9873 41.3 34.4
PACEMAK IMPL OR PTCA W
CORONARY ARTERY STENT
IMPLNT.
117 \3\ CARDIAC PACEMAKER 0.9785 27.4 22.8
REVISION EXCEPT DEVICE
REPLACEMENT.
118 \5\ CARDIAC PACEMAKER 1.9873 41.3 34.4
DEVICE REPLACEMENT.
119 \3\ VEIN LIGATION & 0.9785 27.4 22.8
STRIPPING.
120 OTHER CIRCULATORY 1.2476 34.1 28.4
SYSTEM O.R. PROCEDURES.
121 CIRCULATORY DISORDERS W 0.7531 21.9 18.2
AMI & MAJOR COMP,
DISCHARGED ALIVE.
122 CIRCULATORY DISORDERS W 0.6915 20.0 16.6
AMI W/O MAJOR COMP,
DISCHARGED ALIVE.
123 CIRCULATORY DISORDERS W 0.8856 19.0 15.8
AMI, EXPIRED.
124 \4\ CIRCULATORY 1.4090 34.1 28.4
DISORDERS EXCEPT AMI,
W CARD CATH & COMPLEX
DIAG.
125 \4\ CIRCULATORY 1.4090 34.1 28.4
DISORDERS EXCEPT AMI,
W CARD CATH W/O
COMPLEX DIAG.
126 ACUTE & SUBACUTE 0.8902 25.7 21.4
ENDOCARDITIS.
127 HEART FAILURE & SHOCK.. 0.7968 21.9 18.2
128 \1\ DEEP VEIN 0.5711 20.8 17.3
THROMBOPHLEBITIS.
129 CARDIAC ARREST, 1.4170 28.5 23.7
UNEXPLAINED.
130 PERIPHERAL VASCULAR 0.8207 25.0 20.8
DISORDERS W CC.
131 PERIPHERAL VASCULAR 0.6269 22.4 18.6
DISORDERS W/O CC.
132 ATHEROSCLEROSIS W CC... 0.8211 22.5 18.7
133 ATHEROSCLEROSIS W/O CC. 0.7264 22.6 18.8
134 HYPERTENSION........... 0.8971 28.4 23.6
135 CARDIAC CONGENITAL & 0.9873 23.8 19.8
VALVULAR DISORDERS AGE
17 W CC.
136 CARDIAC CONGENITAL & 0.7492 22.9 19.0
VALVULAR DISORDERS AGE
17 W/O CC.
137 \8\ CARDIAC CONGENITAL 0.7347 23.1 19.2
& VALVULAR DISORDERS
AGE 0-17.
138 CARDIAC ARRHYTHMIA & 0.9390 25.2 21.0
CONDUCTION DISORDERS W
CC.
139 CARDIAC ARRHYTHMIA & 0.6224 21.9 18.2
CONDUCTION DISORDERS W/
O CC.
140 ANGINA PECTORIS........ 0.6056 19.3 16.0
141 SYNCOPE & COLLAPSE W CC 0.6735 23.3 19.4
142 SYNCOPE & COLLAPSE W/O 0.5149 20.5 17.0
CC.
143 CHEST PAIN............. 0.7317 21.9 18.2
144 OTHER CIRCULATORY 0.8588 22.9 19.0
SYSTEM DIAGNOSES W CC.
145 OTHER CIRCULATORY 0.7001 21.4 17.8
SYSTEM DIAGNOSES W/O
CC.
146 \8\ RECTAL RESECTION W 1.9873 41.3 34.4
CC.
147 \8\ RECTAL RESECTION W/ 1.9873 41.3 34.4
O CC.
148 MAJOR SMALL & LARGE 1.9660 36.8 30.6
BOWEL PROCEDURES W CC.
149 \1\ MAJOR SMALL & LARGE 0.5711 20.8 17.3
BOWEL PROCEDURES W/O
CC.
150 \4\ PERITONEAL 1.4090 34.1 28.4
ADHESIOLYSIS W CC.
151 \8\ PERITONEAL 1.4090 34.1 28.4
ADHESIOLYSIS W/O CC.
152 \4\ MINOR SMALL & LARGE 1.4090 34.1 28.4
BOWEL PROCEDURES W CC.
153 \8\ MINOR SMALL & LARGE 1.4090 34.1 28.4
BOWEL PROCEDURES W/O
CC.
154 \5\ STOMACH, ESOPHAGEAL 1.9873 41.3 34.4
& DUODENAL PROCEDURES
AGE 17 W CC.
155 \8\ STOMACH, ESOPHAGEAL 1.9873 41.3 34.4
& DUODENAL PROCEDURES
AGE 17 W/O
CC.
156 \8\ STOMACH, ESOPHAGEAL 1.9873 41.3 34.4
& DUODENAL PROCEDURES
AGE 0-17.
157 \8\ ANAL & STOMAL 1.4090 34.1 28.4
PROCEDURES W CC.
158 \3\ ANAL & STOMAL 0.9785 27.4 22.8
PROCEDURES W/O CC.
159 \8\ HERNIA PROCEDURES 1.4090 34.1 28.4
EXCEPT INGUINAL &
FEMORAL AGE 17 W CC.
160 \8\ HERNIA PROCEDURES 1.4090 34.1 28.4
EXCEPT INGUINAL &
FEMORAL AGE 17 W/O CC.
161 \4\ INGUINAL & FEMORAL 1.4090 34.1 28.4
HERNIA PROCEDURES AGE
17 W CC.
162 \8\ INGUINAL & FEMORAL 0.5711 20.8 17.3
HERNIA PROCEDURES AGE
17 W/O CC.
163 \8\ HERNIA PROCEDURES 0.5711 20.8 17.3
AGE 0-17.
164 \8\ APPENDECTOMY W 1.9873 41.3 34.4
COMPLICATED PRINCIPAL
DIAG W CC.
165 \8\ APPENDECTOMY W 0.5711 20.8 17.3
COMPLICATED PRINCIPAL
DIAG W/O CC.
166 \8\ APPENDECTOMY W/O 1.9873 41.3 34.4
COMPLICATED PRINCIPAL
DIAG W CC.
167 \8\ APPENDECTOMY W/O 0.5711 20.8 17.3
COMPLICATED PRINCIPAL
DIAG W/O CC.
168 \5\ MOUTH PROCEDURES W 1.9873 41.3 34.4
CC.
169 \8\ MOUTH PROCEDURES W/ 0.5711 20.8 17.3
O CC.
170 \7\ OTHER DIGESTIVE 1.7827 42.2 35.1
SYSTEM O.R. PROCEDURES
W CC.
171 \7\ OTHER DIGESTIVE 1.7827 42.2 35.1
SYSTEM O.R. PROCEDURES
W/O CC.
172 DIGESTIVE MALIGNANCY W 0.8857 22.4 18.6
CC.
173 DIGESTIVE MALIGNANCY W/ 0.7843 21.9 18.2
O CC.
174 G.I. HEMORRHAGE W CC... 0.8741 24.8 20.6
175 G.I. HEMORRHAGE W/O CC. 0.6770 21.8 18.1
176 COMPLICATED PEPTIC 0.7835 20.6 17.1
ULCER.
177 \2\ UNCOMPLICATED 0.7347 23.1 19.2
PEPTIC ULCER W CC.
178 \1\ UNCOMPLICATED 0.5711 20.8 17.3
PEPTIC ULCER W/O CC.
179 INFLAMMATORY BOWEL 1.0317 26.2 21.8
DISEASE.
180 G.I. OBSTRUCTION W CC.. 0.9491 24.2 20.1
181 G.I. OBSTRUCTION W/O CC 0.7694 21.2 17.6
182 ESOPHAGITIS, GASTROENT 0.9666 25.5 21.2
& MISC DIGEST
DISORDERS AGE 17 W CC.
183 ESOPHAGITIS, GASTROENT 0.7038 22.4 18.6
& MISC DIGEST
DISORDERS AGE 17 W/O CC.

[[Page 27401]]

184 \8\ ESOPHAGITIS, 0.7347 23.1 19.2
GASTROENT & MISC
DIGEST DISORDERS AGE 0-
17.
185 DENTAL & ORAL DIS 0.6932 24.6 20.5
EXCEPT EXTRACTIONS &
RESTORATIONS, AGE 17.
186 \8\ DENTAL & ORAL DIS 0.7347 23.1 19.2
EXCEPT EXTRACTIONS &
RESTORATIONS, AGE 0-17.
187 \8\ DENTAL EXTRACTIONS 0.7347 23.1 19.2
& RESTORATIONS.
188 OTHER DIGESTIVE SYSTEM 1.0481 26.0 21.6
DIAGNOSES AGE 17 W CC.
189 OTHER DIGESTIVE SYSTEM 0.8501 23.5 19.5
DIAGNOSES AGE 17 W/O CC.
190 \8\ OTHER DIGESTIVE 0.7347 23.1 19.2
SYSTEM DIAGNOSES AGE 0-
17.
191 \4\ PANCREAS, LIVER & 1.4090 34.1 28.4
SHUNT PROCEDURES W CC.
192 \1\ PANCREAS, LIVER & 0.5711 20.8 17.3
SHUNT PROCEDURES W/O
CC.
193 \2\ BILIARY TRACT PROC 0.7347 23.1 19.2
EXCEPT ONLY CHOLECYST
W OR W/O C.D.E. W CC.
194 \2\ BILIARY TRACT PROC 0.7347 23.1 19.2
EXCEPT ONLY CHOLECYST
W OR W/O C.D.E. W/O CC.
195 \4\ CHOLECYSTECTOMY W 1.4090 34.1 28.4
C.D.E. W CC.
196 \8\ CHOLECYSTECTOMY W 0.9785 27.4 22.8
C.D.E. W/O CC.
197 \3\ CHOLECYSTECTOMY 0.9785 27.4 22.8
EXCEPT BY LAPAROSCOPE
W/O C.D.E. W CC.
198 \8\ CHOLECYSTECTOMY 0.9785 27.4 22.8
EXCEPT BY LAPAROSCOPE
W/O C.D.E. W/O CC.
199 \8\ HEPATOBILIARY 0.7347 23.1 19.2
DIAGNOSTIC PROCEDURE
FOR MALIGNANCY.
200 \2\ HEPATOBILIARY 0.7347 23.1 19.2
DIAGNOSTIC PROCEDURE
FOR NON-MALIGNANCY.
201 \5\ OTHER HEPATOBILIARY 1.9873 41.3 34.4
OR PANCREAS O.R.
PROCEDURES.
202 CIRRHOSIS & ALCOHOLIC 0.7529 22.7 18.9
HEPATITIS.
203 MALIGNANCY OF 0.6801 19.2 16.0
HEPATOBILIARY SYSTEM
OR PANCREAS.
204 DISORDERS OF PANCREAS 1.0141 23.4 19.5
EXCEPT MALIGNANCY.
205 DISORDERS OF LIVER 0.7334 22.3 18.5
EXCEPT MALIG,CIRR,ALC
HEPA W CC.
206 \2\ DISORDERS OF LIVER 0.7347 23.1 19.2
EXCEPT MALIG,CIRR,ALC
HEPA W/O CC.
207 DISORDERS OF THE 0.7940 22.1 18.4
BILIARY TRACT W CC.
208 \2\ DISORDERS OF THE 0.7347 23.1 19.2
BILIARY TRACT W/O CC.
209 \5\ MAJOR JOINT & LIMB 1.9873 41.3 34.4
REATTACHMENT
PROCEDURES OF LOWER
EXTREMITY.
210 \4\ HIP & FEMUR 1.4090 34.1 28.4
PROCEDURES EXCEPT
MAJOR JOINT AGE 17 W CC.
211 \2\ HIP & FEMUR 0.7347 23.1 19.2
PROCEDURES EXCEPT
MAJOR JOINT AGE 17 W/O CC.
212 \8\ HIP & FEMUR 0.7347 23.1 19.2
PROCEDURES EXCEPT
MAJOR JOINT AGE 0-17.
213 AMPUTATION FOR 1.3912 34.9 29.0
MUSCULOSKELETAL SYSTEM
& CONN TISSUE
DISORDERS.
216 \5\ BIOPSIES OF 1.9873 41.3 34.4
MUSCULOSKELETAL SYSTEM
& CONNECTIVE TISSUE.
217 WND DEBRID & SKN GRFT 1.4438 39.3 32.7
EXCEPT HAND,FOR
MUSCSKELET & CONN TISS
DIS.
218 \3\ LOWER EXTREM & 0.9785 27.4 22.8
HUMER PROC EXCEPT
HIP,FOOT,FEMUR AGE 17 W CC.
219 \8\ LOWER EXTREM & 0.9785 27.4 22.8
HUMER PROC EXCEPT
HIP,FOOT,FEMUR AGE 17 W/O CC.
220 \8\ LOWER EXTREM & 0.9785 27.4 22.8
HUMER PROC EXCEPT
HIP,FOOT,FEMUR AGE 0-
17.
223 \3\ MAJOR SHOULDER/ 0.9785 27.4 22.8
ELBOW PROC, OR OTHER
UPPER EXTREMITY PROC W
CC.
224 \8\ SHOULDER,ELBOW OR 0.7347 23.1 19.2
FOREARM PROC,EXC MAJOR
JOINT PROC, W/O CC.
225 FOOT PROCEDURES........ 0.8912 26.7 22.2
226 \4\ SOFT TISSUE 1.4090 34.1 28.4
PROCEDURES W CC.
227 \3\ SOFT TISSUE 0.9785 27.4 22.8
PROCEDURES W/O CC.
228 \3\ MAJOR THUMB OR 0.9785 27.4 22.8
JOINT PROC,OR OTH HAND
OR WRIST PROC W CC.
229 \8\ HAND OR WRIST PROC, 0.7347 23.1 19.2
EXCEPT MAJOR JOINT
PROC, W/O CC.
230 \4\ LOCAL EXCISION & 1.4090 34.1 28.4
REMOVAL OF INT FIX
DEVICES OF HIP & FEMUR.
232 \2\ ARTHROSCOPY........ 0.7347 23.1 19.2
233 OTHER MUSCULOSKELET SYS 0.9797 28.5 23.7
& CONN TISS O.R. PROC
W CC.
234 \2\ OTHER MUSCULOSKELET 0.7347 23.1 19.2
SYS & CONN TISS O.R.
PROC W/O CC.
235 FRACTURES OF FEMUR..... 0.8715 29.7 24.7
236 FRACTURES OF HIP & 0.7598 27.2 22.6
PELVIS.
237 \2\ SPRAINS, STRAINS, & 0.7347 23.1 19.2
DISLOCATIONS OF HIP,
PELVIS & THIGH.
238 OSTEOMYELITIS.......... 0.8818 28.5 23.7
239 PATHOLOGICAL FRACTURES 0.6892 22.4 18.6
& MUSCULOSKELETAL &
CONN TISS MALIGNANCY.
240 CONNECTIVE TISSUE 0.7118 21.4 17.8
DISORDERS W CC.
241 CONNECTIVE TISSUE 0.4744 19.4 16.1
DISORDERS W/O CC.
242 SEPTIC ARTHRITIS....... 0.7814 26.2 21.8
243 MEDICAL BACK PROBLEMS.. 0.6867 23.5 19.5
244 BONE DISEASES & 0.5664 20.1 16.7
SPECIFIC ARTHROPATHIES
W CC.
245 BONE DISEASES & 0.5134 19.5 16.2
SPECIFIC ARTHROPATHIES
W/O CC.
246 NON-SPECIFIC 0.5556 23.0 19.1
ARTHROPATHIES.
247 SIGNS & SYMPTOMS OF 0.5976 21.4 17.8
MUSCULOSKELETAL SYSTEM
& CONN TISSUE.
248 TENDONITIS, MYOSITIS & 0.7623 24.9 20.7
BURSITIS.
249 AFTERCARE, 0.8101 27.3 22.7
MUSCULOSKELETAL SYSTEM
& CONNECTIVE TISSUE.
250 FX, SPRN, STRN & DISL 0.8309 30.1 25.0
OF FOREARM, HAND, FOOT
AGE 17 W CC.
251 FX, SPRN, STRN & DISL 0.6031 26.7 22.2
OF FOREARM, HAND, FOOT
AGE 17 W/O
CC.
252 \8\ FX, SPRN, STRN & 0.7347 23.1 19.2
DISL OF FOREARM, HAND,
FOOT AGE 0-17.
253 FX, SPRN, STRN & DISL 0.8406 27.1 22.5
OF UPARM,LOWLEG EX
FOOT AGE 17
W CC.
254 FX, SPRN, STRN & DISL 0.7028 25.8 21.5
OF UPARM,LOWLEG EX
FOOT AGE 17
W/O CC.
255 \8\ FX, SPRN, STRN & 0.7347 23.1 19.2
DISL OF UPARM,LOWLEG
EX FOOT AGE 0-17.
256 OTHER MUSCULOSKELETAL 0.8577 26.6 22.1
SYSTEM & CONNECTIVE
TISSUE DIAGNOSES.

[[Page 27402]]

257 \3\ TOTAL MASTECTOMY 0.9785 27.4 22.8
FOR MALIGNANCY W CC.
258 \8\ TOTAL MASTECTOMY 0.9785 27.4 22.8
FOR MALIGNANCY W/O CC.
259 \8\ SUBTOTAL MASTECTOMY 0.9785 27.4 22.8
FOR MALIGNANCY W CC.
260 \8\ SUBTOTAL MASTECTOMY 0.9785 27.4 22.8
FOR MALIGNANCY W/O CC.
261 \5\ BREAST PROC FOR NON- 1.9873 41.3 34.4
MALIGNANCY EXCEPT
BIOPSY & LOCAL
EXCISION.
262 \1\ BREAST BIOPSY & 0.5711 20.8 17.3
LOCAL EXCISION FOR NON-
MALIGNANCY.
263 SKIN GRAFT &/OR DEBRID 1.4696 41.1 34.2
FOR SKN ULCER OR
CELLULITIS W CC.
264 SKIN GRAFT &/OR DEBRID 1.2160 39.9 33.2
FOR SKN ULCER OR
CELLULITIS W/O CC.
265 \7\ SKIN GRAFT &/OR 1.2294 34.7 28.9
DEBRID EXCEPT FOR SKIN
ULCER OR CELLULITIS W
CC.
266 \7\ SKIN GRAFT &/OR 1.2294 34.7 28.9
DEBRID EXCEPT FOR SKIN
ULCER OR CELLULITIS W/
O CC.
267 \8\ PERIANAL & 0.5711 20.8 17.3
PILONIDAL PROCEDURES.
268 \4\ SKIN, SUBCUTANEOUS 1.4090 34.1 28.4
TISSUE & BREAST
PLASTIC PROCEDURES.
269 OTHER SKIN, SUBCUT TISS 1.5232 45.2 37.6
& BREAST PROC W CC.
270 OTHER SKIN, SUBCUT TISS 1.0105 35.9 29.9
& BREAST PROC W/O CC.
271 SKIN ULCERS............ 0.9795 29.9 24.9
272 MAJOR SKIN DISORDERS W 0.7163 22.7 18.9
CC.
273 \1\ MAJOR SKIN 0.5711 20.8 17.3
DISORDERS W/O CC.
274 MALIGNANT BREAST 0.9469 24.9 20.7
DISORDERS W CC.
275 \2\ MALIGNANT BREAST 0.7347 23.1 19.2
DISORDERS W/O CC.
276 \1\ NON-MALIGANT BREAST 0.5711 20.8 17.3
DISORDERS.
277 CELLULITIS AGE 17 W CC.
278 CELLULITIS AGE 17 W/O CC.
279 CELLULITIS AGE 0-178... 0.5711 20.8 17.3
280 TRAUMA TO THE SKIN, 0.9719 29.3 24.4
SUBCUT TISS & BREAST
AGE 17 W CC.
281 TRAUMA TO THE SKIN, 0.7915 27.8 23.1
SUBCUT TISS & BREAST
AGE 17 W/O
CC.
282 \8\ TRAUMA TO THE SKIN, 0.7347 23.1 19.2
SUBCUT TISS & BREAST
AGE 0-17.
283 MINOR SKIN DISORDERS W 0.6998 20.7 17.2
CC.
284 MINOR SKIN DISORDERS W/ 0.6259 23.0 19.1
O CC.
285 AMPUTAT OF LOWER LIMB 1.5856 38.6 32.1
FOR ENDOCRINE,NUTRIT,&
METABOL DISORDERS.
286 ADRENAL & PITUITARY 1.4090 34.1 28.4
PROCEDURES8.
287 SKIN GRAFTS & WOUND 1.4793 41.7 34.7
DEBRID FOR ENDOC,
NUTRIT & METAB
DISORDERS.
288 \5\ O.R. PROCEDURES FOR 1.9873 41.3 34.4
OBESITY.
289 \8\ PARATHYROID 0.9785 27.4 22.8
PROCEDURES.
290 \8\ THYROID PROCEDURES. 0.9785 27.4 22.8
291 \8\ THYROGLOSSAL 0.9785 27.4 22.8
PROCEDURES.
292 OTHER ENDOCRINE, NUTRIT 1.5633 35.8 29.8
& METAB O.R. PROC W CC.
293 \3\ OTHER ENDOCRINE, 0.9785 27.4 22.8
NUTRIT & METAB O.R.
PROC W/O CC.
294 DIABETES AGE 35.
295 \3\ DIABETES AGE 0-35.. 0.9785 27.4 22.8
296 NUTRITIONAL & MISC 0.9560 26.3 21.9
METABOLIC DISORDERS
AGE 17 W CC.
297 NUTRITIONAL & MISC 0.7552 26.4 22.0
METABOLIC DISORDERS
AGE 17 W/O
CC.
298 \8\ NUTRITIONAL & MISC 0.7347 23.1 19.2
METABOLIC DISORDERS
AGE 0-17.
299 \2\ INBORN ERRORS OF 0.7347 23.1 19.2
METABOLISM.
300 ENDOCRINE DISORDERS W 0.8175 23.9 19.9
CC.
301 ENDOCRINE DISORDERS W/O 0.7287 22.9 19.0
CC.
302 \6\ KIDNEY TRANSPLANT.. 0.0000 0.0 0.0
303 \8\ KIDNEY,URETER & 1.9873 41.3 34.4
MAJOR BLADDER
PROCEDURES FOR
NEOPLASM.
304 \5\ KIDNEY,URETER & 1.9873 41.3 34.4
MAJOR BLADDER PROC FOR
NON-NEOPL W CC.
305 \1\ KIDNEY,URETER & 0.5711 20.8 17.3
MAJOR BLADDER PROC FOR
NON-NEOPL W/O CC.
306 \4\ PROSTATECTOMY W CC. 1.4090 34.1 28.4
307 \8\ PROSTATECTOMY W/O 1.4090 34.1 28.4
CC.
308 \4\ MINOR BLADDER 1.4090 34.1 28.4
PROCEDURES W CC.
309 \2\ MINOR BLADDER 0.7347 23.1 19.2
PROCEDURES W/O CC.
310 \4\ TRANSURETHRAL 1.4090 34.1 28.4
PROCEDURES W CC.
311 \1\ TRANSURETHRAL 0.5711 20.8 17.3
PROCEDURES W/O CC.
312 \4\ URETHRAL 1.4090 34.1 28.4
PROCEDURES, AGE 17 W CC.
313 \8\ URETHRAL 0.5711 20.8 17.3
PROCEDURES, AGE 17 W/O CC.
314 \8\ URETHRAL 0.5711 20.8 17.3
PROCEDURES, AGE 0-17.
315 OTHER KIDNEY & URINARY 1.5690 36.4 30.3
TRACT O.R. PROCEDURES.
316 RENAL FAILURE.......... 0.9869 24.5 20.4
317 \3\ ADMIT FOR RENAL 0.9785 27.4 22.8
DIALYSIS.
318 KIDNEY & URINARY TRACT 0.7466 21.7 18.0
NEOPLASMS W CC.
319 \1\ KIDNEY & URINARY 0.5711 20.8 17.3
TRACT NEOPLASMS W/O CC.
320 KIDNEY & URINARY TRACT 0.7744 23.5 19.5
INFECTIONS AGE 17 W CC.
321 KIDNEY & URINARY TRACT 0.6641 23.0 19.1
INFECTIONS AGE 17 W/O CC.
322 \8\ KIDNEY & URINARY 0.7347 23.1 19.2
TRACT INFECTIONS AGE 0-
17.
323 \2\ URINARY STONES W 0.7347 23.1 19.2
CC, &/OR ESW
LITHOTRIPSY.
324 \2\ URINARY STONES W/O 0.7347 23.1 19.2
CC.

[[Page 27403]]

325 KIDNEY & URINARY TRACT 0.8854 27.2 22.6
SIGNS & SYMPTOMS AGE
17 W CC.
326 KIDNEY & URINARY TRACT 0.7590 24.7 20.5
SIGNS & SYMPTOMS AGE
17 W/O CC.
327 \8\ KIDNEY & URINARY 0.7347 23.1 19.2
TRACT SIGNS & SYMPTOMS
AGE 0-17.
328 \1\ URETHRAL STRICTURE 0.5711 20.8 17.3
AGE 17 W CC.
329 \8\ URETHRAL STRICTURE 0.5711 20.8 17.3
AGE 17 W/O
CC.
330 \8\ URETHRAL STRICTURE 0.5711 20.8 17.3
AGE 0-17.
331 OTHER KIDNEY & URINARY 0.8847 23.8 19.8
TRACT DIAGNOSES AGE
17 W CC.
332 OTHER KIDNEY & URINARY 0.6201 22.1 18.4
TRACT DIAGNOSES AGE
17 W/O CC.
333 \8\ OTHER KIDNEY & 0.5711 20.8 17.3
URINARY TRACT
DIAGNOSES AGE 0-17.
334 \8\ MAJOR MALE PELVIC 0.9785 27.4 22.8
PROCEDURES W CC.
335 \8\ MAJOR MALE PELVIC 0.9785 27.4 22.8
PROCEDURES W/O CC.
336 \8\ TRANSURETHRAL 0.7347 23.1 19.2
PROSTATECTOMY W CC.
337 \8\ TRANSURETHRAL 0.7347 23.1 19.2
PROSTATECTOMY W/O CC.
338 \8\ TESTES PROCEDURES, 0.5711 20.8 17.3
FOR MALIGNANCY.
339 \1\ TESTES PROCEDURES, 0.5711 20.8 17.3
NON-MALIGNANCY AGE 17.
340 \8\ TESTES PROCEDURES, 0.5711 20.8 17.3
NON-MALIGNANCY AGE 0-
17.
341 \2\ PENIS PROCEDURES... 0.7347 23.1 19.2
342 \1\ CIRCUMCISION AGE 0.5711 20.8 17.3
17.
343 \8\ CIRCUMCISION AGE 0- 0.5711 20.8 17.3
17.
344 \2\ OTHER MALE 0.7347 23.1 19.2
REPRODUCTIVE SYSTEM
O.R. PROCEDURES FOR
MALIGNANCY.
345 \3\ OTHER MALE 0.9785 27.4 22.8
REPRODUCTIVE SYSTEM
O.R. PROC EXCEPT FOR
MALIGNANCY.
346 \7\ MALIGNANCY, MALE 0.7787 22.3 18.5
REPRODUCTIVE SYSTEM, W
CC.
347 \7\ MALIGNANCY, MALE 0.7787 22.3 18.5
REPRODUCTIVE SYSTEM, W/
O CC.
348 \1\ BENIGN PROSTATIC 0.5711 20.8 17.3
HYPERTROPHY W CC.
349 \1\ BENIGN PROSTATIC 0.5711 20.8 17.3
HYPERTROPHY W/O CC.
350 INFLAMMATION OF THE 1.1947 25.6 21.3
MALE REPRODUCTIVE
SYSTEM.
351 \8\ STERILIZATION, MALE 0.5711 20.8 17.3
352 \3\ OTHER MALE 0.9785 27.4 22.8
REPRODUCTIVE SYSTEM
DIAGNOSES.
353 \8\ PELVIC 1.9873 41.3 34.4
EVISCERATION, RADICAL
HYSTERECTOMY & RADICAL
VULVECTOMY.
354 \8\ UTERINE,ADNEXA PROC 1.9873 41.3 34.4
FOR NON-OVARIAN/
ADNEXAL MALIG W CC.
355 \8\ UTERINE,ADNEXA PROC 1.9873 41.3 34.4
FOR NON-OVARIAN/
ADNEXAL MALIG W/O CC.
356 \8\ FEMALE REPRODUCTIVE 1.4090 34.1 28.4
SYSTEM RECONSTRUCTIVE
PROCEDURES.
357 \8\ UTERINE & ADNEXA 1.4090 34.1 28.4
PROC FOR OVARIAN OR
ADNEXAL MALIGNANCY.
358 \8\ UTERINE & ADNEXA 1.4090 34.1 28.4
PROC FOR NON-
MALIGNANCY W CC.
359 \8\ UTERINE & ADNEXA 1.4090 34.1 28.4
PROC FOR NON-
MALIGNANCY W/O CC.
360 \4\ VAGINA, CERVIX & 1.4090 34.1 28.4
VULVA PROCEDURES.
361 \8\ LAPAROSCOPY & 0.5711 20.8 17.3
INCISIONAL TUBAL
INTERRUPTION.
362 \8\ ENDOSCOPIC TUBAL 0.5711 20.8 17.3
INTERRUPTION.
363 \8\ D&C, CONIZATION & 0.7347 23.1 19.2
RADIO-IMPLANT, FOR
MALIGNANCY.
364 \8\ D&C, CONIZATION 0.7347 23.1 19.2
EXCEPT FOR MALIGNANCY.
365 \5\ OTHER FEMALE 1.9873 41.3 34.4
REPRODUCTIVE SYSTEM
O.R. PROCEDURES.
366 MALIGNANCY, FEMALE 0.8153 23.0 19.1
REPRODUCTIVE SYSTEM W
CC.
367 \2\ MALIGNANCY, FEMALE 0.7347 23.1 19.2
REPRODUCTIVE SYSTEM W/
O CC.
368 INFECTIONS, FEMALE 0.6911 20.1 16.7
REPRODUCTIVE SYSTEM.
369 \3\ MENSTRUAL & OTHER 0.9785 27.4 22.8
FEMALE REPRODUCTIVE
SYSTEM DISORDERS.
370 \8\ CESAREAN SECTION W 0.9785 27.4 22.8
CC.
371 \8\ CESAREAN SECTION W/ 0.7347 23.1 19.2
O CC.
372 \8\ VAGINAL DELIVERY W 0.7347 23.1 19.2
COMPLICATING DIAGNOSES.
373 \8\ VAGINAL DELIVERY W/ 0.7347 23.1 19.2
O COMPLICATING
DIAGNOSES.
374 \8\ VAGINAL DELIVERY W 0.7347 23.1 19.2
STERILIZATION &/OR D&C.

375 \8\ VAGINAL DELIVERY W 0.7347 23.1 19.2
O.R. PROC EXCEPT
STERIL &/OR D&C.
376 \1\ POSTPARTUM & POST 0.5711 20.8 17.3
ABORTION DIAGNOSES W/O
O.R. PROCEDURE.
377 \8\ POSTPARTUM & POST 0.7347 23.1 19.2
ABORTION DIAGNOSES W
O.R. PROCEDURE.
378 \8\ ECTOPIC PREGNANCY.. 0.9785 27.4 22.8
379 \8\ THREATENED ABORTION 0.5711 20.8 17.3
380 \8\ ABORTION W/O D&C... 0.5711 20.8 17.3
381 \8\ ABORTION W D&C, 0.5711 20.8 17.3
ASPIRATION CURETTAGE
OR HYSTEROTOMY.
382 \8\ FALSE LABOR........ 0.5711 20.8 17.3
383 \8\ OTHER ANTEPARTUM 0.5711 20.8 17.3
DIAGNOSES W MEDICAL
COMPLICATIONS.
384 \8\ OTHER ANTEPARTUM 0.5711 20.8 17.3
DIAGNOSES W/O MEDICAL
COMPLICATIONS.
385 \1\ NEONATES, DIED OR 0.5711 20.8 17.3
TRANSFERRED TO ANOTHER
ACUTE CARE FACILITY.
386 \8\ EXTREME IMMATURITY. 0.7347 23.1 19.2
387 \8\ PREMATURITY W MAJOR 0.7347 23.1 19.2
PROBLEMS.
388 \8\ PREMATURITY W/O 0.7347 23.1 19.2
MAJOR PROBLEMS.
389 \8\ FULL TERM NEONATE W 0.7347 23.1 19.2
MAJOR PROBLEMS.
390 \8\ NEONATE W OTHER 0.7347 23.1 19.2
SIGNIFICANT PROBLEMS.
391 \8\ NORMAL NEWBORN..... 0.5711 20.8 17.3
392 \8\ SPLENECTOMY AGE 17.

[[Page 27404]]

393 \8\ SPLENECTOMY AGE 0- 0.7347 23.1 19.2
17.
394 \3\ OTHER O.R. 1.4090 34.1 28.4
PROCEDURES OF THE
BLOOD AND BLOOD
FORMING ORGANS4.
395 RED BLOOD CELL 0.9050 26.8 22.3
DISORDERS AGE 17.
396 \8\ RED BLOOD CELL 0.5711 20.8 17.3
DISORDERS AGE 0-17.
397 COAGULATION DISORDERS.. 1.0816 25.2 21.0
398 RETICULOENDOTHELIAL & 0.9248 23.0 19.1
IMMUNITY DISORDERS W
CC.
399 \1\ RETICULOENDOTHELIAL 0.5711 20.8 17.3
& IMMUNITY DISORDERS W/
O CC.
401 \5\ LYMPHOMA & NON- 1.9873 41.3 34.4
ACUTE LEUKEMIA W OTHER
O.R. PROC W CC.
402 \3\ LYMPHOMA & NON- 0.9785 27.4 22.8
ACUTE LEUKEMIA W OTHER
O.R. PROC W/O CC.
403 LYMPHOMA & NON-ACUTE 0.9099 22.7 18.9
LEUKEMIA W CC.
404 LYMPHOMA & NON-ACUTE 0.7410 17.9 14.9
LEUKEMIA W/O CC.
405 \8\ ACUTE LEUKEMIA W/O 0.7347 23.1 19.2
MAJOR O.R. PROCEDURE
AGE 0-17.
406 \5\ MYELOPROLIF DISORD 1.9873 41.3 34.4
OR POORLY DIFF NEOPL W
MAJ O.R.PROC W CC.
407 \8\ MYELOPROLIF DISORD 0.9785 27.4 22.8
OR POORLY DIFF NEOPL W
MAJ O.R.PROC W/O CC.
408 \3\ MYELOPROLIF DISORD 0.9785 27.4 22.8
OR POORLY DIFF NEOPL W
OTHER O.R.PROC.
409 RADIOTHERAPY........... 0.8961 25.1 20.9
410 \3\ CHEMOTHERAPY W/O 0.9785 27.4 22.8
ACUTE LEUKEMIA AS
SECONDARY DIAGNOSIS.
411 \3\ HISTORY OF 0.9785 27.4 22.8
MALIGNANCY W/O
ENDOSCOPY.
412 \5\ HISTORY OF 1.9873 41.3 34.4
MALIGNANCY W ENDOSCOPY.
413 OTHER MYELOPROLIF DIS 0.9603 25.2 21.0
OR POORLY DIFF NEOPL
DIAG W CC.
414 \2\ OTHER MYELOPROLIF 0.7347 23.1 19.2
DIS OR POORLY DIFF
NEOPL DIAG W/O CC.
415 O.R. PROCEDURE FOR 1.7239 40.9 34.0
INFECTIOUS & PARASITIC
DISEASES.
416 SEPTICEMIA AGE 17.
417 \8\ SEPTICEMIA AGE 0-17 0.9785 27.4 22.8
418 POSTOPERATIVE & POST- 0.8612 25.3 21.0
TRAUMATIC INFECTIONS.
419 \3\ FEVER OF UNKNOWN 0.9785 27.4 22.8
ORIGIN AGE 17 W CC.
420 \1\ FEVER OF UNKNOWN 0.5711 20.8 17.3
ORIGIN AGE 17 W/O CC.
421 \2\ VIRAL ILLNESS AGE 0.7347 23.1 19.2
17.
422 \8\ VIRAL ILLNESS & 0.5711 20.8 17.3
FEVER OF UNKNOWN
ORIGIN AGE 0-17.
423 OTHER INFECTIOUS & 0.9930 25.9 21.5
PARASITIC DISEASES
DIAGNOSES.
424 O.R. PROCEDURE W 1.2281 44.2 36.8
PRINCIPAL DIAGNOSES OF
MENTAL ILLNESS.
425 ACUTE ADJUSTMENT 0.6040 26.9 22.4
REACTION &
PSYCHOLOGICAL
DYSFUNCTION.
426 DEPRESSIVE NEUROSES.... 0.5583 23.3 19.4
427 \4\ NEUROSES EXCEPT 1.4090 34.1 28.4
DEPRESSIVE.
428 \1\ DISORDERS OF 0.5711 20.8 17.3
PERSONALITY & IMPULSE
CONTROL.
429 ORGANIC DISTURBANCES & 0.6562 27.4 22.8
MENTAL RETARDATION.
430 PSYCHOSES.............. 0.4808 22.6 18.8
431 \1\ CHILDHOOD MENTAL 0.5711 20.8 17.3
DISORDERS.
432 \1\ OTHER MENTAL 0.5711 20.8 17.3
DISORDER DIAGNOSES.
433 ALCOHOL/DRUG ABUSE OR 0.3416 14.6 12.1
DEPENDENCE, LEFT AMA.
439 SKIN GRAFTS FOR 1.4429 41.2 34.3
INJURIES.
440 WOUND DEBRIDEMENTS FOR 1.6794 39.4 32.8
INJURIES.
441 \5\ HAND PROCEDURES FOR 1.9873 41.3 34.4
INJURIES.
442 OTHER O.R. PROCEDURES 1.6280 46.4 38.6
FOR INJURIES W CC.
443 \3\ OTHER O.R. 0.9785 27.4 22.8
PROCEDURES FOR
INJURIES W/O CC.
444 TRAUMATIC INJURY AGE 0.9311 30.7 25.5
17 W CC.
445 TRAUMATIC INJURY AGE 0.8278 27.3 22.7
17 W/O CC.
446 \8\ TRAUMATIC INJURY 0.7347 23.1 19.2
AGE 0-17.
447 \3\ ALLERGIC REACTIONS 0.9785 27.4 22.8
AGE 17.
448 \8\ ALLERGIC REACTIONS 0.5711 20.8 17.3
AGE 0-17.
449 \3\ POISONING & TOXIC 0.9785 27.4 22.8
EFFECTS OF DRUGS AGE
17 W CC.
450 \3\ POISONING & TOXIC 0.9785 27.4 22.8
EFFECTS OF DRUGS AGE
17 W/O CC.
451 \8\ POISONING & TOXIC 0.5711 20.8 17.3
EFFECTS OF DRUGS AGE 0-
17.
452 COMPLICATIONS OF 0.9830 25.5 21.2
TREATMENT W CC.
453 COMPLICATIONS OF 0.8894 25.5 21.2
TREATMENT W/O CC.
454 \2\ OTHER INJURY, 0.7347 23.1 19.2
POISONING & TOXIC
EFFECT DIAG W CC.
455 \1\ OTHER INJURY, 0.5711 20.8 17.3
POISONING & TOXIC
EFFECT DIAG W/O CC.
461 O.R. PROC W DIAGNOSES 1.4214 36.6 30.5
OF OTHER CONTACT W
HEALTH SERVICES.
462 REHABILITATION......... 0.6528 22.7 18.9
463 SIGNS & SYMPTOMS W CC.. 0.7824 26.4 22.0
464 SIGNS & SYMPTOMS W/O CC 0.6259 25.2 21.0
465 \1\ AFTERCARE W HISTORY 0.5711 20.8 17.3
OF MALIGNANCY AS
SECONDARY DIAGNOSIS.
466 AFTERCARE W/O HISTORY 0.7783 22.6 18.8
OF MALIGNANCY AS
SECONDARY DIAGNOSIS.
467 OTHER FACTORS 1.4773 32.6 27.1
INFLUENCING HEALTH
STATUS.
468 EXTENSIVE O.R. 2.0716 43.7 36.4
PROCEDURE UNRELATED TO
PRINCIPAL DIAGNOSIS.
469 \6\ PRINCIPAL DIAGNOSIS 0.0000 0.0 0.0
INVALID AS DISCHARGE
DIAGNOSIS.
470 \6\ UNGROUPABLE........ 0.0000 0.0 0.0
471 \5\ BILATERAL OR 1.9873 41.3 34.4
MULTIPLE MAJOR JOINT
PROCS OF LOWER
EXTREMITY.

[[Page 27405]]

473 \2\ ACUTE LEUKEMIA W/O 0.7347 23.1 19.2
MAJOR O.R. PROCEDURE
AGE 17.
475 RESPIRATORY SYSTEM 2.0241 33.0 27.5
DIAGNOSIS WITH
VENTILATOR SUPPORT.
476 PROSTATIC O.R. 1.0056 32.9 27.4
PROCEDURE UNRELATED TO
PRINCIPAL DIAGNOSIS.
477 NON-EXTENSIVE O.R. 1.8688 40.7 33.9
PROCEDURE UNRELATED TO
PRINCIPAL DIAGNOSIS.
478 \7\ OTHER VASCULAR 1.3238 34.9 29.0
PROCEDURES W CC.
479 \7\ OTHER VASCULAR 1.3238 34.9 29.0
PROCEDURES W/O CC.
480 \6\ LIVER TRANSPLANT... 0.0000 0.0 0.0
481 \8\ BONE MARROW 0.5711 20.8 17.3
TRANSPLANT.
482 \5\ TRACHEOSTOMY FOR 1.9873 41.3 34.4
FACE,MOUTH & NECK
DIAGNOSES.
483 TRACH W MECH VENT 96+ 3.1562 54.9 45.7
HRS OR PDX EXCEPT
FACE,MOUTH & NECK DIAG.
484 \8\ CRANIOTOMY FOR 1.9873 41.3 34.4
MULTIPLE SIGNIFICANT
TRAUMA.
485 \8\ LIMB REATTACHMENT, 1.9873 41.3 34.4
HIP AND FEMUR PROC FOR
MULTIPLE SIGNIFICANT
TR.
486 \4\ OTHER O.R. 1.4090 34.1 28.4
PROCEDURES FOR
MULTIPLE SIGNIFICANT
TRAUMA.
487 OTHER MULTIPLE 1.2653 33.2 27.6
SIGNIFICANT TRAUMA.
488 \5\ HIV W EXTENSIVE 1.9873 41.3 34.4
O.R. PROCEDURE.
489 HIV W MAJOR RELATED 0.9656 22.1 18.4
CONDITION.
490 HIV W OR W/O OTHER 0.7956 20.5 17.0
RELATED CONDITION.
491 \8\ MAJOR JOINT & LIMB 1.9873 41.3 34.4
REATTACHMENT
PROCEDURES OF UPPER
EXTREMITY.
492 \8\ CHEMOTHERAPY W 0.9785 27.4 22.8
ACUTE LEUKEMIA AS
SECONDARY DIAGNOSIS OR
W USE HIGH DOSE
CHEMOTHERAPY AGENT.
493 \4\ LAPAROSCOPIC 1.4090 34.1 28.4
CHOLECYSTECTOMY W/O
C.D.E. W CC.
494 \4\ LAPAROSCOPIC 1.4090 34.1 28.4
CHOLECYSTECTOMY W/O
C.D.E. W/O CC.
495 \6\ LUNG TRANSPLANT.... 0.0000 0.0 0.0
496 \8\ COMBINED ANTERIOR/ 1.4090 34.1 28.4
POSTERIOR SPINAL
FUSION.
497 \3\ SPINAL FUSION W CC. 0.9785 27.4 22.8
498 \3\ SPINAL FUSION W/O 0.9785 27.4 22.8
CC.
499 \5\ BACK & NECK 1.9873 41.3 34.4
PROCEDURES EXCEPT
SPINAL FUSION W CC.
500 \4\ BACK & NECK 1.4090 34.1 28.4
PROCEDURES EXCEPT
SPINAL FUSION W/O CC.
501 \5\ KNEE PROCEDURES W 1.9873 41.3 34.4
PDX OF INFECTION W CC.
502 \2\ KNEE PROCEDURES W 0.7347 23.1 19.2
PDX OF INFECTION W/O
CC.
503 \3\ KNEE PROCEDURES W/O 0.9785 27.4 22.8
PDX OF INFECTION.
504 \8\ EXTENSIVE 3RD 1.9873 41.3 34.4
DEGREE BURNS W SKIN
GRAFT.
505 \3\ EXTENSIVE 3RD 0.9785 27.4 22.8
DEGREE BURNS W/O SKIN
GRAFT.
506 \2\ FULL THICKNESS BURN 0.7347 23.1 19.2
W SKIN GRAFT OR INHAL
INJ W CC OR SIG TRAUMA.
507 \2\ FULL THICKNESS BURN 0.7347 23.1 19.2
W SKIN GRFT OR INHAL
INJ W/O CC OR SIG
TRAUMA.
508 \2\ FULL THICKNESS BURN 0.7347 23.1 19.2
W/O SKIN GRFT OR INHAL
INJ W CC OR SIG TRAUMA.
509 \1\ FULL THICKNESS BURN 0.5711 20.8 17.3
W/O SKIN GRFT OR INH
INJ W/O CC OR SIG
TRAUMA.
510 \2\ NON-EXTENSIVE BURNS 0.7347 23.1 19.2
W CC OR SIGNIFICANT
TRAUMA.
511 \1\ NON-EXTENSIVE BURNS 0.5711 20.8 17.3
W/O CC OR SIGNIFICANT
TRAUMA.
512 \6\ SIMULTANEOUS 0.0000 0.0 0.0
PANCREAS/KIDNEY
TRANSPLANT.
513 \6\ PANCREAS TRANSPLANT 0.0000 0.0 0.0
515 \5\ CARDIAC 1.9873 41.3 34.4
DEFIBRILATOR IMPLANT W/
O CARDIAC CATH.
516 \8\ PERCUTANEOUS 0.9785 27.4 22.8
CARDIVASCULAR
PROCEDURE W AMI.
517 \4\ PERCUTANEOUS 1.4090 34.1 28.4
CARDIVASCULAR PROC W
NON-DRUG ELUTING STENT
W/O AMI.
518 \3\ PERCUTANEOUS 0.9785 27.4 22.8
CARDIVASCULAR PROC W/O
CORONARY ARTERY STENT
OR AMI.
519 \4\ CERVICAL SPINAL 1.4090 34.1 28.4
FUSION W CC.
520 \8\ CERVICAL SPINAL 0.9785 27.4 22.8
FUSION W/O CC.
521 ALCOHOL/DRUG ABUSE OR 0.5064 20.9 17.4
DEPENDENCE W CC.
522 ALCOHOL/DRUG ABUSE OR 0.4221 19.5 16.2
DEPENDENCE W
REHABILITATION THERAPY
W/O CC.
523 ALCOHOL/DRUG ABUSE OR 0.4366 21.9 18.2
DEPENDENCE W/O
REHABILITATION THERAPY
W/O CC.
524 TRANSIENT ISCHEMIA..... 0.6178 23.4 19.5
525 \8\ HEART ASSIST SYSTEM 1.9873 41.3 34.4
IMPLANT.
526 \8\ PERCUTANEOUS 1.4090 34.1 28.4
CARVIOVASCULAR PROC W
DRUG-ELUTING STENT W
AMI.
527 \8\ PERCUTANEOUS 1.4090 34.1 28.4
CARVIOVASCULAR PROC W
DRUG-ELUTING STENT W/O
AMI.
528 \8\ INTRACRANIAL 1.9873 41.3 34.4
VASCLUAR PROCEDURES
WITH PDX HEMORRHAGE.
529 \2\ VENTRICULAR SHUNT 0.7347 23.1 19.2
PROCEDURES WITH CC.
530 \8\ VENTRICULAR SHUNT 0.7347 23.1 19.2
PROCEDURES WITHOUT CC.

531 \8\ SPINAL PROCEDURES 1.4090 34.1 28.4
WITH CC.
532 \4\ SPINAL PROCEDURES 1.4090 34.1 28.4
WITHOUT CC.
533 \8\ EXTRACRANIAL 1.9873 41.3 34.4
VASCULAR PROCEDURES
WITH CC.
534 \5\ EXTRACRANIAL 1.9873 41.3 34.4
VASCULAR PROCEDURES
WITHOUT CC.
535 \8\ CARDIAC DEFIB 1.9873 41.3 34.4
IMPLANT WITH CARDIAC
CATH WITH AMI/HF/SHOCK.
536 \5\ CARDIAC DEFIB 1.9873 41.3 34.4
IMPLANT WITH CARDIAC
CATH WITHOUT AMI/HF/
SHOCK.
537 \8\ LOCAL EXCISION AND 0.7347 23.1 19.2
REMOVAL OF INTERNAL
FIXATION DEVICES
EXCEPT HIP AND FEMUR
WITH CC.
538 \4\ LOCAL EXCISION AND 1.4090 34.1 28.4
REMOVAL OF INTERNAL
FIXATION DEVICES
EXCEPT HIP AND FEMUR
WITHOUT CC.
539 \8\ LYMPHOMA AND 1.9873 41.3 34.4
LEUKEMIA WITH MAJOR
O.R. PROCEDURE WITH CC.

[[Page 27406]]

540 \1\ LYMPHOMA AND 0.5711 20.8 17.3
LEUKEMIA WITH MAJOR
O.R. PROCEDURE WITHOUT
CC.
------------------------------------------------------------------------
\1\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to proposed low volume quintile 1.

\2\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to proposed low volume quintile 2.

\3\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to proposed low volume quintile 3.

\4\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to proposed low volume quintile 4.

\5\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to proposed low volume quintile 5.

\6\ Proposed relative weights for these proposed LTC-DRGs were assigned
a value of 0.0000.
\7\ Proposed relative weights for these proposed LTC-DRGs were
determined after adjusting to account for nonmonotonicity (see step 5
above).
\8\ Proposed relative weights for these proposed LTC-DRGs were
determined by assigning these cases to the appropriate proposed low
volume quintile because they had no LTCH cases in the FY 2002 MedPAR.

-----------------------------------------------------------------------

Appendix A--Regulatory Analysis of Impacts

I. Background and Summary

We have examined the impacts of this proposed rule as required
by Executive Order 12866 (September 1993, Regulatory Planning and
Review) and the Regulatory Flexibility Act (RFA) (September 19,
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 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).
We have determined that this proposed rule is a major rule as
defined in 5 U.S.C. 804(2). Based on the overall percentage change
in payments per case estimated using our payment simulation model (a
2.5 percent increase), we estimate that the total impact of these
proposed changes for FY 2004 payments compared to FY 2003 payments
to be approximately a $2.1 billion increase. This amount does not
reflect changes in hospital admissions or case-mix intensity, which
would also affect overall payment changes.
The RFA requires agencies to analyze options for regulatory
relief of small businesses. 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
$5 million to $25 million in any 1 year. For purposes of the RFA,
all hospitals and other providers and suppliers are considered to be
small entities. Individuals and States are not included in the
definition of a small entity.
In addition, section 1102(b) of the Act requires us to prepare a
regulatory impact analysis for any proposed rule that 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 603 of the RFA. With the exception of hospitals located
in certain New England counties, for purposes of section 1102(b) of
the Act, we define a small rural hospital as a hospital with fewer
than 100 beds that is located outside of a Metropolitan Statistical
Area (MSA) or New England County Metropolitan Area (NECMA). Section
601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21)
designated hospitals in certain New England counties as belonging to
the adjacent NECMA. Thus, for purposes of the acute care hospital
inpatient prospective payment systems, we classify these hospitals
as urban hospitals.
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 proposed rule (or a final rule that has
been preceded by a proposed rule) that may result in an expenditure
in any one year by State, local, or tribal governments, in the
aggregate, or by the private sector, of $110 million. This proposed
rule would not mandate any requirements for State, local, or tribal
governments.
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. We have reviewed this proposed rule in
light of Executive Order 13132 and have determined that it would not
have any negative impact on the rights, roles, and responsibilities
of State, local, or tribal governments.
In accordance with the provisions of Executive Order 12866, this
proposed rule was reviewed by the Office of Management and Budget.
The following analysis, in conjunction with the remainder of
this document, demonstrates that this proposed rule is consistent
with the regulatory philosophy and principles identified in
Executive Order 12866, the RFA, and section 1102(b) of the Act. The
proposed rule would affect payments to a substantial number of small
rural hospitals as well as other classes of hospitals, and the
effects on some hospitals may be significant.

II. Objectives

The primary objective of the IPPS is to create incentives for
hospitals to operate efficiently and minimize unnecessary costs
while at the same time ensuring that payments are sufficient to
adequately compensate hospitals for their legitimate costs. In
addition, we share national goals of preserving the Medicare Trust
Fund.
We believe the changes in this proposed rule would further each
of these goals while maintaining the financial viability of the
hospital industry and ensuring access to high quality health care
for Medicare beneficiaries. We expect that these proposed changes
would ensure that the outcomes of this payment system are reasonable
and equitable while avoiding or minimizing unintended adverse
consequences.

III. Limitations of Our Analysis

The following quantitative analysis presents the projected
effects of our proposed policy changes, as well as statutory changes
effective for FY 2004, on various hospital groups. We estimate the
effects of individual proposed policy changes by estimating payments
per case while holding all other payment policies constant. We use
the best data available, but we do not attempt to predict behavioral
responses to our proposed policy changes, and we do not make
adjustments for future changes in such variables as admissions,
lengths of stay, or case-mix. As we have done in previous proposed
rules, we are soliciting comments and information about the
anticipated effects of these proposed changes on hospitals and our
methodology for estimating them.

IV. Hospitals Included In and Excluded From the IPPS

The prospective payment systems for hospital inpatient operating
and capital-related costs encompass nearly all general short-term,
acute care hospitals that participate in the Medicare program. There
were 45 Indian Health Service hospitals in our database, which we
excluded from the analysis due to the special characteristics of the
prospective payment method for these hospitals. Among other short-
term, acute care hospitals, only the 48 such hospitals in Maryland
remain excluded from the IPPS under the waiver at section 1814(b)(3)
of the Act.

[[Page 27407]]

There are approximately 729 critical access hospitals (CAHs).
These small, limited service hospitals are paid on the basis of
reasonable costs rather than under the IPPS. The remaining 20
percent are specialty hospitals that are excluded from the IPPS.
These specialty hospitals include psychiatric hospitals and units,
rehabilitation hospitals and units, long-term care hospitals,
children's hospitals, and cancer hospitals. The impacts of our
proposed policy changes on these hospitals are discussed below.
Thus, as of April 2003, we have included 4,087 hospitals in our
analysis. This represents about 80 percent of all Medicare-
participating hospitals. The majority of this impact analysis
focuses on this set of hospitals.

V. Impact on Excluded Hospitals and Hospital Units

As of April 2003, there were 1,085 specialty hospitals excluded
from the IPPS that were paid instead on a reasonable cost basis
subject to the rate-of-increase ceiling under Sec. 413.40. Broken
down by specialty, there were 484 psychiatric, 214 rehabilitation,
296 long-term care, 80 children's, and 11 cancer hospitals. In
addition, there were 1,410 psychiatric units and 979 rehabilitation
units in hospitals otherwise subject to the IPPS. Under Sec.
413.40(a)(2)(i)(A), the rate-of-increase ceiling is not applicable
to the 48 specialty hospitals and units in Maryland that are paid in
accordance with the waiver at section 1814(b)(3) of the Act.
In the past, hospitals and units excluded from the IPPS have
been paid based on their reasonable costs subject to limits as
established by the Tax Equity and Fiscal Responsibility Act of 1982
(TEFRA). Hospitals that continue to be paid based on their
reasonable costs are subject to TEFRA limits for FY 2004. For these
hospitals, the proposed update is the percentage increase in the
excluded hospital market basket (currently estimated at 3.5
percent).
Inpatient rehabilitation facilities (IRFs) are paid under a
prospective payment system (IRF PPS) for cost reporting periods
beginning on or after January 1, 2002. For cost reporting periods
beginning during FY 2004, the IRF PPS is based on 100 percent of the
adjusted Federal IRF prospective payment amount, updated annually.
Therefore, these hospitals would not be impacted by this proposed
rule.
Effective for cost reporting periods beginning on or after
October 1, 2002, LTCHs are paid under a LTCH PPS, based on the
adjusted Federal prospective payment amount, updated annually. LTCHs
will receive a blended payment (Federal prospective payment and a
reasonable cost-based payment) over a 5-year transition period.
However, under the LTCH PPS, a LTCH may also elect to be paid at 100
percent of the Federal prospective rate at the beginning of any of
its cost reporting periods during the 5-year transition period. For
purposes of the update factor, the portion of the LTCH PPS
transition blend payment based on reasonable costs for inpatient
operating services would be determined by updating the LTCH's TEFRA
limit by the estimate of the excluded hospital market basket (or 3.5
percent).
The impact on excluded hospitals and hospital units of the
update in the rate-of-increase limit depends on the cumulative cost
increases experienced by each excluded hospital or unit since its
applicable base period. For excluded hospitals and units that have
maintained their cost increases at a level below the rate-of-
increase limits since their base period, the major effect would be
on the level of incentive payments these hospitals and hospital
units receive. Conversely, for excluded hospitals and hospital units
with per-case cost increases above the cumulative update in their
rate-of-increase limits, the major effect would be the amount of
excess costs that would not be reimbursed.
We note that, under Sec. 413.40(d)(3), an excluded hospital or
unit whose costs exceed 110 percent of its rate-of-increase limit
receives its rate-of-increase limit plus 50 percent of the
difference between its reasonable costs and 110 percent of the
limit, not to exceed 110 percent of its limit. In addition, under
the various provisions set forth in Sec. 413.40, certain excluded
hospitals and hospital units can obtain payment adjustments for
justifiable increases in operating costs that exceed the limit. At
the same time, however, by generally limiting payment increases, we
continue to provide an incentive for excluded hospitals and hospital
units to restrain the growth in their spending for patient services.

VI. Quantitative Impact Analysis of the Proposed Policy Changes Under
the IPPS for Operating Costs

A. Basis and Methodology of Estimates

In this proposed rule, we are announcing policy changes and
payment rate updates for the IPPS for operating and capital-related
costs. Based on the overall percentage change in payments per case
estimated using our payment simulation model (a 2.5 percent
increase), we estimate the total impact of these changes for FY 2004
payments compared to FY 2003 payments to be approximately a $2.1
billion increase. This amount does not reflect changes in hospital
admissions or case-mix intensity, which would also affect overall
payment changes.
We have prepared separate impact analyses of the proposed
changes to each system. This section deals with changes to the
operating prospective payment system. Our payment simulation model
relies on available data to enable us to estimate the impacts on
payments per case of certain changes we are proposing in this
proposed rule. However, there are other changes we are proposing for
which we do not have data available that would allow us to estimate
the payment impacts using this model. For those proposals, we have
attempted to predict the payment impacts of those proposed changes
based upon our experience and other more limited data.
The data used in developing the quantitative analyses of changes
in payments per case presented below are taken from the FY 2002
MedPAR file and the most current Provider-Specific File that is used
for payment purposes. Although the analyses of the changes to the
operating PPS do not incorporate cost data, data from the most
recently available hospital cost report were used to categorize
hospitals. Our analysis has several qualifications. First, we do not
make adjustments for behavioral changes that hospitals may adopt in
response to these proposed policy changes, and we do not adjust for
future changes in such variables as admissions, lengths of stay, or
case-mix. Second, due to the interdependent nature of the IPPS
payment components, it is very difficult to precisely quantify the
impact associated with each proposed change. Third, we draw upon
various sources for the data used to categorize hospitals in the
tables. In some cases, particularly the number of beds, there is a
fair degree of variation in the data from different sources. We have
attempted to construct these variables with the best available
source overall. However, for individual hospitals, some
miscategorizations are possible.
Using cases in the FY 2002 MedPAR file, we simulated payments
under the operating IPPS given various combinations of payment
parameters. Any short-term, acute care hospitals not paid under the
IPPSs (Indian Health Service hospitals and hospitals in Maryland)
were excluded from the simulations. The impact of payments under the
capital IPPS, or the impact of payments for costs other than
inpatient operating costs, are not analyzed in this section.
Estimated payment impacts of proposed FY 2004 changes to the capital
IPPS are discussed in section IX. of this Appendix.
The proposed changes discussed separately below are the
following:
[sbull] The effects of expanding the postacute care transfer
policy to 19 additional DRGs.
[sbull] The effects of the proposed annual reclassification of
diagnoses and procedures and the recalibration of the DRG relative
weights required by section 1886(d)(4)(C) of the Act.
[sbull] The effects of the proposed changes in hospitals' wage
index values reflecting wage data from hospitals' cost reporting
periods beginning during FY 2000, compared to the FY 1999 wage data,
including the effects of removing wage data for Part B costs of RCHs
and FQHCs.
[sbull] The effects of geographic reclassifications by the MGCRB
that will be effective in FY 2004.
[sbull] The total change in payments based on proposed FY 2004
policies relative to payments based on FY 2003 policies.
To illustrate the impacts of the proposed FY 2004 changes, our
analysis begins with a FY 2004 baseline simulation model using: the
FY 2003 DRG GROUPER (version 20.0); the current postacute care
transfer policy for 10 DRGs; the FY 2003 wage index; and no MGCRB
reclassifications. Outlier payments are set at 5.1 percent of total
operating DRG and outlier payments.
Each proposed and statutory policy change is then added
incrementally to this baseline model, finally arriving at an FY 2004
model incorporating all of the proposed changes. This allows us to
isolate the effects of each proposed change.
Our final comparison illustrates the percent change in payments
per case from FY

[[Page 27408]]

2003 to FY 2004. Five factors have significant impacts here. The
first is the update to the standardized amounts. In accordance with
section 1886(b)(3)(B)(i) of the Act, we are proposing to update the
large urban and the other areas average standardized amounts for FY
2004 using the most recently forecasted hospital market basket
increase for FY 2004 of 3.5 percent. Under section 1886(b)(3)(B)(iv)
of the Act, the updates to the hospital-specific amounts for sole
community hospitals (SCHs) and for Medicare-dependent small rural
hospitals (MDHs) are also equal to the market basket increase, or
3.5 percent.
A second significant factor that impacts changes in hospitals'
payments per case from FY 2003 to FY 2004 is the change in MGCRB
status from one year to the next. That is, hospitals reclassified in
FY 2003 that are no longer reclassified in FY 2004 may have a
negative payment impact going from FY 2003 to FY 2004; conversely,
hospitals not reclassified in FY 2003 that are reclassified in FY
2004 may have a positive impact. In some cases, these impacts can be
quite substantial, so if a relatively small number of hospitals in a
particular category lose their reclassification status, the
percentage change in payments for the category may be below the
national mean. However, this effect is alleviated by section
1886(d)(10)(D)(v) of the Act, which provides that reclassifications
for purposes of the wage index are for a 3-year period.
A third significant factor is that we currently estimate that
actual outlier payments during FY 2003 will be 5.5 percent of total
DRG payments. When the FY 2003 final rule was published, we
projected FY 2003 outlier payments would be 5.1 percent of total DRG
plus outlier payments; the average standardized amounts were offset
correspondingly. The effects of the higher than expected outlier
payments during FY 2003 (as discussed in the Addendum to this
proposed rule) are reflected in the analyses below comparing our
current estimates of FY 2003 payments per case to estimated FY 2004
payments per case.
Fourth, we are proposing to expand the postacute care transfer
policy to 19 additional DRGs. This proposed expansion would result
in Medicare savings of $160 million because we would no longer pay a
full DRG payment for these cases. As a result, there would be a
lower total increase in Medicare spending for FY 2004.
Fifth, section 402(b) of Pub. L. 108-7 provided that the large
urban standardized amount of the Federal rate is applicable for all
IPPS hospitals for discharges occurring on or after April 1, 2003,
and before October 1, 2003. For discharges occurring on or after
October 1, 2003, the Federal rate will again be based on separate
average standardized amounts for hospitals in large urban areas and
for hospitals in other areas. The effect is to reduce the percent
increase in FY 2004 payments compared to those made in FY 2003.

B. Analysis of Table I

Table I demonstrates the results of our analysis. The table
categorizes hospitals by various geographic and special payment
consideration groups to illustrate the varying impacts on different
types of hospitals. The top row of the table shows the overall
impact on the 4,087 hospitals included in the analysis. This number
is 143 fewer hospitals than were included in the impact analysis in
the FY 2003 final rule (67 FR 50279). There are 98 new CAHs that
were excluded from last year's analysis.
The next four rows of Table I contain hospitals categorized
according to their geographic location: all urban, which is further
divided into large urban and other urban; and rural. There are 2,582
hospitals located in urban areas (MSAs or NECMAs) included in our
analysis. Among these, there are 1,493 hospitals located in large
urban areas (populations over 1 million), and 1,089 hospitals in
other urban areas (populations of 1 million or fewer). In addition,
there are 1,505 hospitals in rural areas. The next two groupings are
by bed-size categories, shown separately for urban and rural
hospitals. The final groupings by geographic location are by census
divisions, also shown separately for urban and rural hospitals.
The second part of Table I shows hospital groups based on
hospitals' FY 2004 payment classifications, including any
reclassifications under section 1886(d)(10) of the Act. For example,
the rows labeled urban, large urban, other urban, and rural show
that the number of hospitals paid based on these categorizations
after consideration of geographic reclassifications are 2,591,
1,572, 1,019, and 1,496, respectively.
The next three groupings examine the impacts of the proposed
changes on hospitals grouped by whether or not they have GME
residency programs (teaching hospitals that receive an IME
adjustment) or receive DSH payments, or some combination of these
two adjustments. There are 2,976 nonteaching hospitals in our
analysis, 873 teaching hospitals with fewer than 100 residents, and
238 teaching hospitals with 100 or more residents.
In the DSH categories, hospitals are grouped according to their
DSH payment status, and whether they are considered urban or rural
after MGCRB reclassifications. Therefore, hospitals in the rural DSH
categories represent hospitals that were not reclassified for
purposes of the standardized amount or for purposes of the DSH
adjustment. (However, they may have been reclassified for purposes
of the wage index.)
The next category groups hospitals considered urban after
geographic reclassification, in terms of whether they receive the
IME adjustment, the DSH adjustment, both, or neither.
The next five rows examine the impacts of the proposed changes
on rural hospitals by special payment groups (SCHs, rural referral
centers (RRCs), and MDHs), as well as rural hospitals not receiving
a special payment designation. The RRCs (149), SCHs (494), MDHs
(254), and hospitals that are both SCH and RRC (78) shown here were
not reclassified for purposes of the standardized amount.
The next two groupings are based on type of ownership and the
hospital's Medicare utilization expressed as a percent of total
patient days. These data are taken primarily from the FY 2000

Medicare cost report files, if available (otherwise FY 1999 data are
used). Data needed to determine ownership status were unavailable
for 120 hospitals. Similarly, the data needed to determine Medicare
utilization were unavailable for 104 hospitals.
The next series of groupings concern the geographic
reclassification status of hospitals. The first grouping displays
all hospitals that were reclassified by the MGCRB for FY 2004. The
next two groupings separate the hospitals in the first group by
urban and rural status. The final row in Table I contains hospitals
located in rural counties but deemed to be urban under section
1886(d)(8)(B) of the Act.

Table I.--Impact Analysis of Proposed Changes for FY 2004 Operating Prospective Payment System
[Percent changes in payments per case]
--------------------------------------------------------------------------------------------------------------------------------------------------------
New wage
Transfer index DRG & MCGRB ALL FY
Number of changes DRG New wage without wage reclassi- 2004
hosps.\1\ 2004 base changes data \4\ nonphys. index fication changes
\2\ \3\ part B changes \7\ \8\
\5\ \6\
(1) (2) (3) (4) (5) (6) (7) (8)
-----------------------------------------------------------------
By Geographic Location:
All hospitals............................................... 4,087 -0.2 0.0 -0.4 0.1 0.0 0.0 2.5
Urban hospitals............................................. 2,582 -0.2 0.0 -0.5 0.1 0.0 -0.4 2.5
Large urban areas (populations over 1 million).............. 1,493 -0.2 0.0 -0.4 0.0 -0.1 -0.4 2.6

[[Page 27409]]

Other urban areas (populations of 1 million of fewer)....... 1,089 -0.2 -0.1 -0.5 0.3 0.1 -0.2 2.2
Rural hospitals............................................. 1,505 -0.2 0.0 -0.2 0.0 0.5 2.6 3.1
Bed Size (Urban):
0-99 beds............................................... 626 -0.3 0.0 -0.1 0.3 0.6 -0.7 2.7
100-199 beds............................................ 916 -0.2 0.0 -0.4 0.2 0.1 -0.4 2.6
200-299 beds............................................ 507 -0.2 0.0 -0.5 0.1 -0.1 -0.3 2.3
300-499 beds............................................ 377 -0.2 0.0 -0.3 0.1 0.1 -0.3 2.5
500 or more beds........................................ 156 -0.1 -0.1 -0.8 0.1 -0.5 -0.4 2.3
Bed Size (Rural):
0-49 beds............................................... 690 -0.2 0.2 -0.3 0.0 0.7 0.6 3.4
50-99 beds.............................................. 477 -0.2 0.0 -0.2 0.0 0.5 1.0 3.3
100-149 beds............................................ 202 -0.2 0.0 -0.3 0.0 0.3 2.9 2.8
150-199 beds............................................ 70 -0.2 -0.1 0.0 0.0 0.7 4.6 2.7
200 or more beds........................................ 66 -0.1 -0.1 -0.1 0.0 0.4 4.8 3.0
Urban by Region:
New England............................................. 134 -0.4 0.0 -1.0 0.8 1.1 -0.1 2.7
Middle Atlantic......................................... 394 -0.2 0.0 -1.0 0.1 -0.7 0.1 1.7
South Atlantic.......................................... 372 -0.2 0.0 -0.4 0.1 -0.1 -0.5 2.5
East North Central...................................... 429 -0.2 0.0 -0.5 0.1 -0.1 -0.4 2.5
East South Central...................................... 155 -0.1 -0.1 0.3 0.1 0.6 -0.6 3.1
West North Central...................................... 176 -0.2 -0.1 0.1 0.1 0.3 -0.7 2.8
West South Central...................................... 329 -0.1 0.0 -0.4 0.0 -0.2 -0.6 2.5
Mountain................................................ 131 -0.2 -0.2 0.5 0.1 0.7 -0.5 3.5
Pacific................................................. 416 -0.2 -0.1 -0.4 0.1 -0.1 -0.4 2.5
Puerto Rico............................................. 46 0.0 -0.1 -0.1 0.0 -0.1 -0.7 2.9
Rural by Region:
New England............................................. 38 -0.2 -0.1 0.3 0.0 0.8 2.6 3.3
Middle Atlantic......................................... 67 -0.2 0.1 -0.1 0.0 0.3 2.4 2.6
South Atlantic.......................................... 221 -0.2 0.0 -0.3 0.0 0.2 2.9 2.3
East North Central...................................... 199 -0.2 -0.1 0.2 0.0 0.8 2.1 3.1
East South Central...................................... 232 -0.2 0.1 -0.2 0.0 0.4 2.8 3.0
West North Central...................................... 254 -0.1 -0.1 -0.2 0.1 1.0 1.9 3.8
West South Central...................................... 273 -0.1 0.1 -0.4 0.1 0.2 3.7 3.5
Mountain................................................ 127 -0.1 -0.1 -0.2 0.0 0.3 1.5 3.2
Pacific................................................. 89 -0.2 -0.1 -0.5 0.1 0.5 2.5 3.5
Puerto Rico............................................. 5 0.0 -0.1 -4.1 0.0 -4.1 0.4 -0.2
By Payment Classification:
Urban hospitals............................................. 2,591 -0.2 0.0 -0.5 0.1 0.0 -0.3 2.5
Large urban areas (populations over 1 million).............. 1,572 -0.2 0.0 -0.4 0.1 -0.1 -0.2 2.7
Other urban areas (populations of 1 million of fewer)....... 1,019 -0.2 -0.1 -0.5 0.3 0.1 -0.4 2.2
Rural areas................................................. 1,496 -0.2 0.0 -0.2 0.0 0.5 2.2 3.0
Teaching Status:
Non-teaching............................................ 2,976 -0.2 0.0 -0.3 0.1 0.2 0.4 2.6
Fewer than 100 Residents................................ 873 -0.2 -0.1 -0.2 0.1 0.2 -0.2 2.6
100 or more Residents................................... 238 -0.2 -0.1 -0.9 0.1 -0.5 -0.1 2.3
Urban DSH:
Non-DSH................................................. 1,381 -0.2 -0.1 -0.2 0.1 0.2 0.0 2.7
100 or more beds........................................ 1,398 -0.2 0.0 -0.6 0.1 -0.1 -0.3 2.4
Less than 100 beds...................................... 276 -0.3 0.0 -0.2 0.3 0.5 -0.5 2.4
Rural DSH:
Sole Community (SCH).................................... 484 -0.1 0.1 -0.2 0.0 0.5 0.4 3.7
Referral Center (RRC)................................... 161 -0.1 -0.1 -0.1 0.0 0.4 4.6 2.8
Other Rural: 100 or more beds........................... 75 -0.3 0.1 -0.5 0.0 0.1 1.0 1.9
Less than 100 beds...................................... 312 -0.3 0.2 -0.4 0.0 0.3 1.0 2.5
Urban teaching and DSH:
DSH..................................................... 771 -0.2 0.0 -0.6 0.1 -0.1 -0.3 2.5
Teaching and no DSH..................................... 273 -0.2 -0.1 -0.3 0.1 0.0 -0.2 2.6
No teaching and DSH..................................... 903 -0.2 0.0 -0.5 0.2 0.0 -0.2 2.3
No teaching and no DSH.................................. 644 -0.2 0.0 -0.2 0.1 0.3 -0.3 2.7
Rural Hospital Types:

[[Page 27410]]

Non special status hospitals............................ 521 -0.3 0.1 -0.4 0.0 0.3 1.0 2.2
RRC..................................................... 149 -0.2 -0.1 -0.1 0.0 0.6 5.9 2.6
SCH..................................................... 494 -0.1 0.0 -0.1 0.0 0.5 0.3 3.9
Medicare-dependent hospitals (MDH)...................... 254 -0.3 0.2 -0.2 0.0 0.8 0.7 3.3
SCH and RRC............................................. 78 0.0 -0.1 -0.1 0.0 0.3 1.4 3.3
Type of Ownership:
Voluntary............................................... 2,435 -0.2 0.0 -0.5 0.1 0.0 0.0 2.5
Proprietary............................................. 699 -0.2 0.0 -0.2 0.1 0.2 0.0 2.6
Government.............................................. 833 -0.2 0.0 -0.4 0.1 0.0 0.3 2.7
Unknown................................................. 120 -0.1 0.0 -1.1 0.0 -0.8 -0.4 1.8
Medicare Utilization as a Percent of Inpatient Days:
0-25.................................................... 304 -0.2 -0.1 0.0 0.0 0.1 -0.3 3.0
25-50................................................... 1,557 -0.2 0.0 -0.5 0.1 -0.1 -0.2 2.5
50-65................................................... 1,663 -0.2 0.0 -0.4 0.2 0.2 0.3 2.5
Over 65................................................. 459 -0.2 0.0 -0.1 0.1 0.4 0.7 2.7
Unknown................................................. 104 -0.2 -0.1 0.0 0.0 0.2 -0.6 3.0
Hospitals Reclassified by the Medicare Geographic Classification
Review Board: FY 2004 Reclassifications:
All Reclassified Hospitals...................................... 639 -0.2 0.0 -0.3 0.1 0.3 4.3 3.0
Standardized Amount Only.................................... 22 -0.2 0.0 -0.7 0.5 0.0 3.9 5.8
Wage Index Only............................................. 556 -0.2 0.0 -0.4 0.2 0.3 4.3 2.4
Both........................................................ 33 -0.2 -0.1 -0.4 0.2 0.2 6.0 3.1
Nonreclassified Hospitals....................................... 3,442 -0.2 0.0 -0.4 0.1 0.0 -0.62.5
All Reclassified Urban Hospitals................................ 136 -0.2 0.0 -0.5 0.3 0.1 4.0 2.7
Standardized Amount Only.................................... 13 -0.2 -0.1 -1.4 0.2 -1.2 0.9 2.4
Wage Index Only............................................. 82 -0.2 0.0 -0.7 0.3 0.1 3.9 2.3
Both........................................................ 41 -0.3 0.0 0.1 0.2 0.6 5.4 3.8
Urban Nonreclassified Hospitals............................. 2,415 -0.2 0.0 -0.5 0.1 -0.1 -0.6 2.4
All Reclassified Rural Hospitals................................ 503 -0.2 -0.1 -0.1 0.0 0.5 4.6 3.2
Standardized Amount Only.................................... 15 -0.2 0.1 -0.4 0.1 0.4 4.8 2.1
Wage Index Only............................................. 464 -0.1 -0.1 -0.1 0.0 0.5 4.2 3.2
Both........................................................ 24 -0.2 0.0 -0.1 0.0 0.5 8.7 3.8
Rural Nonreclassified Hospitals................................. 999 -0.2 0.1 -0.3 0.0 0.5 -0.5 2.8
Other Reclassified Hospitals (Section 1886(D)(8)(B))............ 34 -0.2 0.1 0.0 0.0 0.4 -2.0 1.8
......... ......... ......... ......... ......... ......... ......... .........
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the
national total. Discharge data are from FY 2002, and hospital cost report data are from reporting periods beginning in FY 2000 and FY 1999.
\2\ This column displays the payment impact of the expanded postacute care transfer policy.
\3\ This column displays the payment impact of the recalibration of the DRG weights based on FY 2002 MedPAR data and the DRG reclassification changes,
in accordance with section 1886(d)(4)(C) of the Act.
\4\ This column displays the impact of updating the wage index with wage data from hospitals' FY 2000 cost reports.
\5\ This column displays the impact of removing nonphysician Part B costs and hours from cost report data (Worksheet S-3, Part II, Line 5.01).
\6\ This column displays the combined impact of the reclassification and recalibration of the DRGs, the updated and revised wage data used to calculate
the wage index, the removal of nonphysician Part B costs and hours, and the budget neutrality adjustment factor for DRG and wage index changes, in
accordance with sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act. Thus, it represents the combined impacts shown in columns 3, 4, and 5, and
the proposed FY 2004 budget neutrality factor of 1.003133.
\7\ Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects demonstrate
the FY 2004 payment impact of going from no reclassifications to the reclassifications scheduled to be in effect for FY 2004. Reclassification for
prior years has no bearing on the payment impacts shown here.
\8\ This column shows changes in payments from FY 2003 to FY 2004. It incorporates all of the changes displayed in columns 2, 6, and 7 (the changes
displayed in columns 3, 4, and 5 are included in column 6). It also reflects the impact of the FY 2004 update, changes in hospitals' reclassification
status in FY 2004 compared to FY 2003, and the difference in outlier payments from FY 2003 to FY 2004. The sum of these impacts may be different from
the percentage changes shown here due to rounding and interactive effect.

C. Impact of the Proposed Changes to the Postacute Care Transfer
Policy (Column 2)

In column 2 of Table I, we present the effects of the postacute
care transfer policy expansion, as discussed in section IV.A. of the
preamble to this proposed rule. We compared aggregate payments using
the FY 2003 DRG relative weights (GROUPER version 21.0) with the
expanded postacute care transfer policy to aggregate payments using
the proposed expanded postacute care transfer policy (with the
additional 19 DRGs). The changes we are proposing to make would
result in 0.2 percent lower payments to

[[Page 27411]]

hospitals overall. We estimate the total savings at approximately
$160 million.
To simulate the impact of this proposed policy, we calculated
hospitals' transfer-adjusted discharges and case-mix index values,
including the proposed additional 19 DRGs. The transfer-adjusted
discharge fraction is calculated in one of two ways, depending on
the transfer payment methodology. Under our current transfer payment
methodology, for all but the three DRGs receiving special payment
consideration (DRGs 209, 210, and 211), this adjustment is made by
adding 1 to the length of stay and dividing that amount by the
geometric mean length of stay for the DRG (with the resulting
fraction not to exceed 1.0). For example, a transfer after 3 days
from a DRG with a geometric mean length of stay of 6 days would have
a transfer-adjusted discharge fraction of 0.667 ((3+1)/6).
For transfers from any one of the three DRGs receiving the
alternative payment methodology, the transfer-adjusted discharge
fraction is 0.5 (to reflect that these cases receive half the full
DRG amount the first day), plus one half of the result of dividing 1
plus the length of stay prior to transfer by the geometric mean
length of stay for the DRG. None of the proposed 19 additional DRGs
would receive the alternative payment methodology. As with the above
adjustment, the result is equal to the lesser of the transfer-
adjusted discharge fraction or 1.
The transfer-adjusted case-mix index values are calculated by
summing the transfer-adjusted DRG weights and dividing by the
transfer-adjusted discharges. The transfer-adjusted DRG weights are
calculated by multiplying the DRG weight by the lesser of 1 or the
transfer-adjusted discharge fraction for the case, divided by the
geometric mean length of stay for the DRG. In this way, simulated
payments per case can be compared before and after the proposed
change to the transfer policy.
This proposed expansion of the policy has a negative 0.2 percent
payment impact overall among both urban and rural hospitals. There
is very small variation among all of the hospital categories from
this negative 0.2 percent impact. This outcome is different than the
impacts exhibited when we implemented the postacute care transfer
policy for the current 10 DRGs in the July 31, 1998 Federal Register
(63 FR 41108). At that time, the impact of going from no postacute
transfer policy to a postacute care transfer policy applicable to 10
DRGs was a 0.6 percent decrease in payments per case. In addition,
at that time, the impact was greatest among urban hospitals (0.7
percent payment decrease, compared to 0.4 percent among rural
hospitals).
The less dramatic impact observed for this proposed expansion to
additional DRGs is not surprising. The movement to transfer more and
more patients for postacute care sooner appears to have abated in
recent years. While it does appear that many patients continue to be
transferred for postacute care early in the course of their acute
care treatment, the rapid expansion of this trend that was apparent
during the mid-90s appears to have subsided. To a large extent, this
decline probably stems from the decreased payment incentives to
transfer patients to postacute care settings as a result of the
implementation of prospective payment systems for IRFs, SNFs, LTCHs,
and HHAs.

D. Impact of the Proposed Changes to the DRG Reclassifications and
Recalibration of Relative Weights (Column 3)

In column 3 of Table I, we present the combined effects of the
DRG reclassifications and recalibration, as discussed in section II.
of the preamble to this proposed rule. Section 1886(d)(4)(C)(i) of
the Act requires us annually to make appropriate classification
changes and to recalibrate the DRG weights in order to reflect
changes in treatment patterns, technology, and any other factors
that may change the relative use of hospital resources.
We compared aggregate payments using the FY 2003 DRG relative
weights (GROUPER version 20.0) to aggregate payments using the
proposed FY 2004 DRG relative weights (GROUPER version 21.0). Both
simulations reflected the proposed expansion of the postacute care
transfer policy. We note that, consistent with section
1886(d)(4)(C)(iii) of the Act, we have applied a budget neutrality
factor to ensure that the overall payment impact of the DRG changes
(combined with the wage index changes) is budget neutral. This
proposed budget neutrality factor of 1.003133 is applied to payments
in Column 6. Because this is a combined DRG reclassification and
recalibration and wage index budget neutrality factor, it is not
applied to payments in this column.
The major DRG classification changes we are proposing are:
Creating additional DRGs that are split based on the presence or
absence of CCs; creating a new DRG for cases with ruptured brain
aneurysms; and creating a new DRG for cases involving the
implantation of a cardiac defibrillator where the patient
experiences acute myocardial infarction, heart failure, or shock. In
the aggregate, these proposed changes would result in 0.0 percent
change in overall payments to hospitals.
The overall level of the DRG weights are determined by the
normalization factor intended to ensure that recalibration by itself
neither increases nor decreases total payments under the IPPS.
Because we count transfer cases as a fraction of a case in the
recalibration process, expanding the postacute care transfer policy
to 19 additional DRGs would affect the proposed relative weights for
those DRGs. Therefore, we calculated the proposed FY 2004
normalization factor comparing the case-mix using the proposed FY
2004 DRG relative weights in which we treated postacute care
transfer cases in the 19 additional DRGs being proposed for FY 2004
as a fraction of a case with the case-mix using the FY 2003 DRG
relative weights without treating cases in these 19 additional DRGs
as transfer cases. As noted above, the proposed expansion of the
postacute care transfer policy impacts the overall level of the DRG
weights, contributing to the impacts seen in this column.
Rural hospitals with fewer than 50 beds would experience a 0.2
percent increase due to these changes, while rural hospitals with
more than 150 beds will experience a 0.1 percent decrease. Also,
RRCs and hospitals classified with both SCH and RRC would experience
a 0.1 percent decrease. MDHs would experience a 0.2 percent
increase. Hospitals in the urban Mountain census division would
experience the largest change, with a 0.2 percent decrease. Again,
these impacts are ultimately offset by the budget neutrality factor
of 1.003133.

E. Impact of Proposed Wage Index Changes (Columns 4 and 5)

Section 1886(d)(3)(E) of the Act requires that, beginning
October 1, 1993, we annually update the wage data used to calculate
the wage index. In accordance with this requirement, the proposed
wage index for FY 2004 is based on data submitted for hospital cost
reporting periods beginning on or after October 1, 1999 and before
October 1, 2000. As with column 3, the impact of the new data on
hospital payments is isolated in column 4 by holding the other
payment parameters constant in this simulation. That is, column 4
shows the percentage changes in payments when going from a model
using the FY 2003 wage index (based on FY 1999 wage data to a model
using the FY 2004 pre-reclassification wage index based on FY 2000
wage data).
The wage data collected on the FY 2000 cost reports are similar
to the data used in the calculation of the FY 2003 wage index. Also,
as described in section III.B of this preamble, the proposed FY 2004
wage index is calculated by removing the nonphysician Part B costs
and hours of RHCs and FQHCs, shown in column 5.
Column 4 shows the impacts of updating the wage data using FY
2000 cost reports. Overall, the new wage data would lead to a 0.4
percent reduction, but this reduction is offset by the budget
neutrality factor. Urban hospitals' wage indexes would decline by
0.5 percent, and rural hospitals' wage indexes would decline by 0.2
percent. Among regions, the largest impact of updating the wage data
is seen in rural Puerto Rico (a 4.1 percent decrease). Rural
hospitals in the Pacific and West South Central regions would
experience the next largest impact, a 0.5 percent and 0.4 percent
decrease, respectively. Rural New England and East North Central
regions would experience an increase of 0.3 percent and 0.2 percent,
respectively.
Among urban hospitals, New England and the Middle Atlantic
regions would experience 1.0 percent decreases, respectively. These
impacts result, respectively, from a 9.0 percent decrease in the
proposed FY 2004 wage index for Springfield, Massachusetts, and a
6.1 percent decrease in the Pittsburgh, Pennsylvania wage index. The
East South Central, West North Central, and Mountain regions would
experience increases of 0.3 percent, 0.1 percent, and 0.5 percent,
respectively.
The next column shows the impacts on the calculation of the
proposed FY 2004 wage index of removing nonphysician Part B data for
RHCs and FQHCs. Column 5 shows the impacts of removing nonphysician
Part B costs for RHCs and FQHCs. The effects of this proposed change
are relatively small with the

[[Page 27412]]

exception of New England, which would experience a 0.8 percent
decrease.
We note that the wage data used for the proposed wage index are
based upon the data available as of March 2003 and, therefore, do
not reflect revision requests received and processed by the fiscal
intermediaries after that date. To the extent these requests are
granted by hospitals' fiscal intermediaries, these revisions will be
reflected in the final rule. In addition, we continue to verify the
accuracy of the data for hospitals with extraordinary changes in
their data from the prior year.
The following chart compares the shifts in wage index values for
labor market areas for FY 2004 relative to FY 2003. This chart
demonstrates the impact of the changes for the proposed FY 2004 wage
index, including updating to FY 2000 wage data. The majority of
labor market areas (331) would experience less than a 5-percent
change. A total of 13 labor market areas would experience an
increase of more than 5 percent and less than 10 percent. Two areas
would experience an increase greater than 10 percent. A total of 24
areas would experience decreases of more than 5 percent and less
than 10 percent. Finally, 3 areas would experience declines of 10
percent or more.

------------------------------------------------------------------------
Number of labor
market areas
Percentage change in area wage index values ---------------------
FY 2003 FY 2004
------------------------------------------------------------------------
Increase more than 10 percent..................... 3 2
Increase more than 5 percent and less than 10 11 13
percent..........................................
Increase or decrease less than 5 percent.......... 343 331
Decrease more than 5 percent and less than 10 15 24
percent..........................................
Decrease more than 10 percent..................... 1 3
------------------------------------------------------------------------

Among urban hospitals, 45 would experience an increase of
between 5 and 10 percent and 8 more than 10 percent. A total of 64
rural hospitals would experience increases greater than 5 percent,
but none would experience greater than 10-percent increases. On the
negative side, 109 urban hospitals would experience decreases in
their wage index values of at least 5 percent but less than 10
percent. Nine urban hospitals and one rural hospital would
experience decreases in their wage index values greater than 10
percent. There are 25 rural hospitals that would experience
decreases in their wage index values of greater than 5 percent but
less than 10 percent. The following chart shows the projected impact
for urban and rural hospitals.

------------------------------------------------------------------------
Number of hospitals
Percentage change in area wage index values ---------------------
Urban Rural
------------------------------------------------------------------------
Increase more than 10 percent..................... 8 0
Increase more than 5 percent and less than 10 45 64
percent..........................................
Increase or decrease less than 5 percent.......... 2,436 1,714
Decrease more than 5 percent and less than 10 109 25
percent..........................................
Decrease more than 10 percent..................... 9 1
------------------------------------------------------------------------

F. Combined Impact of Proposed DRG and Wage Index Changes,
Including Budget Neutrality Adjustment (Column 6)

The impact of the DRG reclassifications and recalibration on
aggregate payments is required by section 1886(d)(4)(C)(iii) of the
Act to be budget neutral. In addition, section 1886(d)(3)(E) of the
Act specifies that any updates or adjustments to the wage index are
to be budget neutral. As noted in the Addendum to this proposed
rule, we compared simulated aggregate payments using the FY 2003 DRG
relative weights and wage index to simulated aggregate payments
using the proposed FY 2004 DRG relative weights and blended wage
index. In addition, we are required to ensure that any add-on
payments for new technology under section 1886(d)(5)(K) of the Act
are budget neutral. As discussed in section II.E. of the preamble of
this proposed rule, we are proposing to maintain the new technology
status of Xigris^TM (approved in last year's final rule at
67 FR 50013). We estimate the proposed total add-on payments for
this new technology for FY 2004 would be $50 million.
We computed a proposed wage and recalibration budget neutrality
factor of 1.003133. The 0.0 percent impact for all hospitals
demonstrates that these proposed changes, in combination with the
proposed budget neutrality factor, are budget neutral. In Table I,
the combined overall impacts of the effects of both the proposed DRG
reclassifications and recalibration and the proposed updated wage
index are shown in column 6. The proposed changes in this column are
the sum of the proposed changes in columns 3, 4, and 5, combined
with the budget neutrality factor and the wage index floor for urban
areas required by section 4410 of Pub. L. 105-33 to be budget
neutral. There also may be some variation of plus or minus 0.1
percentage point due to rounding.

G. Impact of MGCRB Reclassifications (Column 7)

Our impact analysis to this point has assumed hospitals are paid
on the basis of their actual geographic location (with the exception
of ongoing policies that provide that certain hospitals receive
payments on bases other than where they are geographically located,
such as hospitals in rural counties that are deemed urban under
section 1886(d)(8)(B) of the Act). The changes in column 7 reflect
the per case payment impact of moving from this baseline to a
simulation incorporating the MGCRB decisions for FY 2004. These
decisions affect hospitals' standardized amount and wage index area
assignments.
By February 28 of each year, the MGCRB makes reclassification
determinations that will be effective for the next fiscal year,
which begins on October 1. The MGCRB may approve a hospital's
reclassification request for the purpose of using another area's
standardized amount, wage index value, or both. The proposed FY 2004
wage index values incorporate all of the MGCRB's reclassification
decisions for FY 2004. The wage index values also reflect any
decisions made by the CMS Administrator through the appeals and
review process as of February 28, 2003. Additional changes that
result from the Administrator's review of MGCRB decisions or a
request by a hospital to withdraw its application will be reflected
in the final rule for FY 2004.
The overall effect of geographic reclassification is required by
section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, we
applied an adjustment of 1.003133 to ensure that the effects of
reclassification are budget neutral. (See section II.A.4.b. of the
Addendum to this proposed rule.)
As a group, rural hospitals benefit from geographic
reclassification. Their payments would rise 2.6 percent in column 7.
Payments to urban hospitals would decline 0.4 percent. Hospitals in
other urban areas would experience an overall decrease in payments
of 0.2 percent, while large urban hospitals would lose 0.4 percent.
Among urban hospital groups (that is, bed size, census division, and
special payment status), payments generally would decline.
A positive impact is evident among most of the rural hospital
groups. The smallest increases among the rural census divisions are
0.4 and 1.5 percent for the Puerto Rico and Mountain regions,
respectively. The largest increases are in the rural South Atlantic
and West South Central regions. These regions would experience
increases of 2.9 and 3.7 percent, respectively.
Among all the hospitals that were reclassified for FY 2004
(including hospitals that received wage index reclassifications in
FY 2002 or FY 2003 that extend for 3 years), the MGCRB changes are
estimated to provide a 4.3 percent increase in payments. Urban
hospitals reclassified for FY 2004 are expected to receive an
increase of 4.0 percent, while rural reclassified hospitals are
expected to benefit from the MGCRB changes with a 4.6 percent
increase in payments. Overall, among hospitals that were
reclassified for purposes of the standardized amount only, a payment
increase of 3.9 percent is expected, while those reclassified for
purposes of the wage index only show a 4.3 percent increase in
payments. Payments to urban and rural hospitals that did not
reclassify are expected to decrease slightly due to the MGCRB
changes, decreasing by 0.6 percent for urban hospitals and 0.5
percent for rural hospitals.

H. All Changes (Column 8)

Column 8 compares our estimate of payments per case,
incorporating all changes reflected in this proposed rule for FY
2004 (including statutory changes), to our estimate of payments per
case in FY 2003. This column includes all of the proposed policy
changes. Because the reclassifications shown in column 7 do not
reflect FY 2003

[[Page 27413]]

reclassifications, the impacts of FY 2004 reclassifications only
affect the impacts from FY 2003 to FY 2004 if the reclassification
impacts for any group of hospitals are different in FY 2004 compared
to FY 2003.
Column 8 includes the effects of the 3.5 percent update to the
standardized amounts and the hospital-specific rates for MDHs and
SCHs. It also reflects the 0.4 percentage point difference between
the projected outlier payments in FY 2003 (5.1 percent of total DRG
payments) and the current estimate of the percentage of actual
outlier payments in FY 2003 (5.5 percent), as described in the
introduction to this Appendix and the Addendum to this proposed
rule. As a result, payments are projected to be 0.4 percent higher
in FY 2003 than originally estimated, resulting in a 0.4 percent
smaller increase than would otherwise occur.
Section 213 of Public Law 106-554 provides that all SCHs may
receive payment on the basis of their costs per case during their
cost reporting period that began during 1996. For FY 2004, eligible
SCHs receive 100 percent of their 1996 hospital-specific rate. The
impact of this provision is modeled in column 8 as well.
The proposed expansion of the postacute care transfer policy
also reduces payments by paying for discharges to postacute care in
19 additional DRGs as transfers. Because FY 2003 payments reflect
full DRG payments for all cases in these 19 DRGs, there is a
negative impact due to the proposed expansion of this policy
compared to FY 2003. The net effect of this proposed policy, as
displayed in column 2, is also seen in the lower overall percent
change shown in column 8 comparing FY 2004 simulated payments per
case to FY 2003 payments.
Another influence on the overall change reflected in this column
is the requirement of section 402(b) of Public Law 108-7 that all
hospitals receive the large urban standardized amount for all
discharges occurring on or after April 1, 2003, and before October
1, 2003. For discharges occurring on or after October 1, 2003, the
Federal rate will again be calculated based on separate average
standardized amounts for hospitals in large urban areas and for
hospitals in other areas. The effect is to reduce the percent
increase reflected in the ``all changes'' column.
There might also be interactive effects among the various
factors comprising the payment system that we are not able to
isolate. For these reasons, the values in column 8 may not equal the
sum of the changes described above.
The overall change in payments per case for hospitals in FY 2004
would increases by 2.5 percent. Hospitals in urban areas would
experience a 2.5 percent increase in payments per case compared to
FY 2003. Hospitals in rural areas, meanwhile, would experience a 3.1
percent payment increase. Hospitals in large urban areas would
experience a 2.6 percent increase in payments.
Among urban census divisions, the largest payment increase was
3.5 percent in the Mountain region. Hospitals in the urban East
South Central region and in Puerto Rico would experience an overall
increase of 3.1 percent and 2.9 percent, respectively. The smallest
increase would occur in the Middle Atlantic, with an increase of 1.7
percent. These below average increases are primarily due to the
inflated outlier payments for some of these hospitals during FY 2003
compared to FY 2004. Among rural regions, the only hospital category
that would experience overall payment decreases is Puerto Rico,
where payments would decrease by 0.2 percent, largely due to the
updated wage data. In the West North Central region, payments are
projected to increase by 3.8 percent. West South Central and Pacific
regions also would benefit, both with 3.5 percent increases.
Among special categories of rural hospitals, those hospitals
receiving payment under the hospital-specific methodology (SCHs,
MDHs, and SCH/RRCs) would experience payment increases of 3.9
percent, 3.3 percent, and 3.3 percent, respectively. This outcome is
primarily related to the fact that, for hospitals receiving payments
under the hospital-specific methodology, there are no outlier
payments. Therefore, these hospitals would not experience negative
payment impacts from the decline in outlier payments from FY 2003 to
FY 2004 as would hospitals paid based on the national standardized
amounts.
Hospitals that were reclassified for FY 2004 are estimated to
receive a 3.0 percent increase in payments. Urban hospitals
reclassified for FY 2004 are anticipated to receive an increase of
2.7 percent, while rural reclassified hospitals are expected to
benefit from reclassification with a 3.2 percent increase in
payments. Overall, among hospitals reclassified for purposes of the
standardized amount, a payment increase of 5.8 percent is expected,
while those hospitals reclassified for purposes of the wage index
only would show an expected 2.4 percent increase in payments. Those
hospitals located in rural counties but deemed to be urban under
section 1886(d)(8)(B) of the Act are expected to receive an increase
in payments of 1.8 percent.

Table II.--Impact Analysis of Proposed Changes for FY 2004 Operating Prospective Payment System
[Payments per case]
----------------------------------------------------------------------------------------------------------------
Average FY Average FY
Number of 2003 payment 2004 payment All FY 2004
hospitals per case \1\ per case \1\ changes
(1) (2) (3) (4)
-------------------------------------------------
By Geographic Location:
All hospitals............................... 4,087 7,423 7,612 2.5
Urban hospitals............................. 2,582 7,890 8,084 2.5
Large urban areas (populations over 1 1,493 8,368 8,586 2.6
million)...................................
Other urban areas (populations of 1 million 1,089 7,257 7,418 2.2
or fewer)..................................
Rural hospitals............................. 1,505 5,393 5,558 3.1
Bed Size (Urban):
0-99 beds............................... 626 5,479 5,625 2.7
100-199 beds............................ 916 6,658 6,829 2.6
200-299 beds............................ 507 7,610 7,788 2.3
300-499 beds............................ 377 8,445 8,660 2.5
500 or more beds........................ 156 10,027 10,261 2.3
Bed Size (Rural):
0-49 beds............................... 690 4,468 4,620 3.4
50-99 beds.............................. 477 5,037 5,204 3.3
100-149 beds............................ 202 5,430 5,582 2.8
150-199 beds............................ 70 5,780 5,937 2.7
200 or more beds........................ 66 6,792 6,993 3.0
Urban by Region:
New England............................. 134 8,326 8,555 2.7
Middle Atlantic......................... 394 8,916 9,064 1.7
South Atlantic.......................... 372 7,454 7,640 2.5
East North Central...................... 429 7,416 7,604 2.5
East South Central...................... 155 7,156 7,376 3.1

[[Page 27414]]

West North Central...................... 176 7,659 7,875 2.8
West South Central...................... 329 7,343 7,523 2.5
Mountain................................ 131 7,697 7,967 3.5
Pacific................................. 416 9,598 9,840 2.5
Puerto Rico............................. 46 3,329 3,426 2.9
Rural by Region:
New England............................. 38 6,841 7,067 3.3
Middle Atlantic......................... 67 5,426 5,565 2.6
South Atlantic.......................... 221 5,486 5,614 2.3
East North Central...................... 199 5,451 5,622 3.1
East South Central...................... 232 4,922 5,071 3.0
West North Central...................... 254 5,294 5,497 3.8
West South Central...................... 273 4,711 4,875 3.5
Mountain................................ 127 6,235 6,436 3.2
Pacific................................. 89 7,151 7,399 3.5
Puerto Rico............................. 5 2,553 2,548 -0.2
By Payment Classification:
Urban hospitals............................. 2,591 7,886 8,080 2.5
Large urban areas (populations over 1 1,572 8,283 8,502 2.7
million)...................................
Other urban areas (populations of 1 million 1,019 7,302 7,460 2.2
of fewer)..................................
Rural areas................................. 1,496 5,355 5,516 3.0
Teaching Status:
Non-teaching............................ 2,976 6,132 6,293 2.6
Fewer than 100 Residents................ 873 7,666 7,867 2.6
100 or more Residents................... 238 11,347 11,603 2.3
Urban DSH:
Non-DSH................................. 1,381 6,624 6,803 2.7
100 or more beds........................ 1,398 8,502 8,706 2.4
Less than 100 beds...................... 276 5,447 5,579 2.4
Rural DSH:
Sole Community (SCH).................... 484 5,239 5,434 3.7
Referral Center (RRC)................... 161 6,159 6,331 2.8
Other Rural: 100 or more beds........... 75 4,696 4,785 1.9
Less than 100 beds...................... 312 4,278 4,386 2.5
Urban teaching and DSH:
Both teaching and DSH................... 771 9,333 9,562 2.5
Teaching and no DSH..................... 273 7,618 7,814 2.6
No teaching and DSH..................... 903 6,852 7,009 2.3
No teaching and no DSH.................. 644 6,174 6,341 2.7
Rural Hospital Types:
Non special status hospitals............ 521 4,445 4,544 2.2
RRC..................................... 149 5,851 6,003 2.6
SCH..................................... 494 5,630 5,849 3.9
Medicare-dependent hospitals (MDH)...... 254 4,168 4,305 3.3
SCH and RRC............................. 78 6,757 6,982 3.3
Type of Ownership:
Voluntary............................... 2,435 7,532 7,722 2.5
Proprietary............................. 699 7,087 7,272 2.6
Government.............................. 833 7,164 7,356 2.7
Unknown................................. 120 7,431 7,565 1.8
Medicare Utilization as a Percent of
Inpatient Days:
0-25.................................... 304 9,997 10,294 3.0
25-50................................... 1,557 8,448 8,657 2.5
50-65................................... 1,663 6,450 6,613 2.5
Over 65................................. 459 5,764 5,916 2.7
Unknown................................. 104 6,720 6,921 3.0
Hospitals Reclassified by the Medicare

Geographic Classification Review Board: FY 2004
Reclassifications:
All Reclassified Hospitals...................... 639 6,883 7,088 3.0
Standardized Amount Only.................... 22 5,590 5,912 5.8
Wage Index Only............................. 556 6,914 7,077 2.4
Both........................................ 33 6,081 6,269 3.1
All Nonreclassified Hospitals................... 3,442 7,542 7,734 2.5
All Urban Reclassified Hospitals................ 136 8,787 9,020 2.7
Urban Nonreclassified Hospitals................. 13 6,211 6,358 2.4
Standardized Amount Only.................... 82 9,866 10,098