Medicare Program; Inpatient HospitalDeductible and Hospital and ExtendedCare Services Coinsurance Amountsfor CY 2012

8/3/2019 Medicare Program; Inpatient HospitalDeductible and Hospital and ExtendedCare Services Coinsurance Amountsfor

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67568 Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Centers for Medicare & MedicaidServices

[CMS8043N]

RIN 0938AQ14

Medicare Program; Inpatient HospitalDeductible and Hospital and ExtendedCare Services Coinsurance Amountsfor CY 2012

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

ACTION: Notice.

SUMMARY: This notice announces theinpatient hospital deductible and thehospital and extended care servicescoinsurance amounts for servicesfurnished in calendar year (CY) 2012under Medicares Hospital InsuranceProgram (Medicare Part A). The

Medicare statute specifies the formulaeused to determine these amounts. ForCY 2012, the inpatient hospitaldeductible will be $1,156. The dailycoinsurance amounts for CY 2012 will

be(1) $289 for the 61st through 90thday of hospitalization in a benefitperiod; (2) $578 for lifetime reservedays; and (3) $144.50 for the 21stthrough 100th day of extended careservices in a skilled nursing facility ina benefit period.

DATES: Effective Date: This notice iseffective on January 1, 2012.

FOR FURTHER INFORMATION CONTACT:

Clare McFarland, (410) 7866390 forgeneral information. Gregory J. Savord,(410) 7861521 for case-mix analysis.

SUPPLEMENTARY INFORMATION:

I. Background

Section 1813 of the Social SecurityAct (the Act) provides for an inpatienthospital deductible to be subtractedfrom the amount payable by Medicarefor inpatient hospital services furnishedto a beneficiary. It also provides forcertain coinsurance amounts to besubtracted from the amounts payable byMedicare for inpatient hospital and

extended care services. Section1813(b)(2) of the Act requires us todetermine and publish each year theamount of the inpatient hospitaldeductible and the hospital andextended care services coinsuranceamounts applicable for servicesfurnished in the following calendar year(CY).

II. Computing the Inpatient HospitalDeductible for CY 2012

Section 1813(b) of the Act prescribesthe method for computing the amount of

the inpatient hospital deductible. Theinpatient hospital deductible is anamount equal to the inpatient hospitaldeductible for the preceding CY,adjusted by our best estimate of thepayment-weighted average of theapplicable percentage increases (asdefined in section 1886(b)(3)(B) of theAct) used for updating the payment

rates to hospitals for discharges in thefiscal year (FY) that begins on October1 of the same preceding CY, andadjusted to reflect changes in real case-mix. The adjustment to reflect real case-mix is determined on the basis of themost recent case-mix data available. Theamount determined under this formulais rounded to the nearest multiple of $4(or, if midway between two multiples of$4, to the next higher multiple of $4).

Under section 1886(b)(3)(B)(i)(XX) ofthe Act, the percentage increase used toupdate the payment rates for FY 2012for hospitals paid under the inpatient

prospective payment system is themarket basket percentage increase,otherwise known as the market basketupdate, reduced by 0.1 percentagepoints (see section 1886(b)(3)(B)(xii)(II)of the Act), and an adjustment based onchanges in the economy-wideproductivity (the multifactorproductivity (MFP) adjustment (seesection 1886(b)(3)(B)(xi)(II) of the Act).Under section 1886(b)(3)(B)(viii) of theAct, hospitals will receive this updateonly if they submit quality data asspecified by the Secretary. The updatefor hospitals that do not submit this datais reduced by 2.0 percentage points. We

are estimating that after accounting forthose hospitals receiving the lowermarket basket update in the payment-weighted average update, the calculateddeductible will remain the same, as themajority of hospitals submit quality dataand receive the full market basketupdate.

Under section 1886(b)(3)(B)(ii)(VIII) ofthe Act, the percentage increase used toupdate the payment rates for FY 2012for hospitals excluded from theinpatient prospective payment system isas follows:

For FY 2012, the percentage

increase for long term care hospitals isthe market basket percentage increasereduced by 0.1 percentage points andthe MFP adjustment (see section1886(m)(3)(A) of the Act).

For FY 2012, the percentageincrease for inpatient rehabilitationfacilities is the market basket percentageincrease reduced by 0.1 percentagepoints and the MFP adjustment (seesection 1886(j)(3)(C) of the Act).

For FY 2012, the percentageincrease used to update the paymentrate for psychiatric hospitals is the

market basket percentage increasereduced by 0.25 percentage points (seesection 1886(s)(2)(A)(ii) of the Act).

The market basket percentage increasefor 2012 is 3.0 percent and the MFPadjustment is 1.0 percent, as announcedin the final rule with comment periodpublished in the Federal Register onAugust 18, 2011 entitled, Changes to

the Hospital Inpatient ProspectivePayment Systems for Acute CareHospitals and FY 2012 Rates and to theLong Term Care Hospital PPS and FY2012 Rates. Therefore, the percentageincrease for hospitals paid under theinpatient prospective payment system is1.9 percent. The average paymentpercentage increase for hospitalsexcluded from the inpatient prospectivepayment system is 2.29 percent.Weighting these percentages inaccordance with payment volume, our

best estimate of the payment-weightedaverage of the increases in the payment

rates for FY 2012 is 1.95 percent.To develop the adjustment to reflectchanges in real case-mix, we firstcalculated for each hospital an averagecase-mix that reflects the relativecostliness of that hospitals mix of casescompared to those of other hospitals.We then computed the change inaverage case-mix for hospitals paidunder the Medicare prospectivepayment system in FY 2011 comparedto FY 2010. (We excluded from thiscalculation hospitals whose paymentsare not based on the inpatientprospective payment system becausetheir payments are based on alternate

prospective payment systems orreasonable costs.) We used Medicare

bills from prospective paymenthospitals that we received as of July2011. These bills represent a total ofabout 8 million Medicare discharges forFY 2011 and provide the most recentcase-mix data available at this time.Based on these bills, the change inaverage case-mix in FY 2011 is0.3percent. Based on these bills and pastexperience, we expect the overall casemix change to be zero percent as theyear progresses and more FY 2011 data

become available.

Section 1813 of the Act requires thatthe inpatient hospital deductible beadjusted only by that portion of thecase-mix change that is determined to

be real. Since we are not expecting anyoverall case mix to increase, the realcase mix will remain unchanged for FY2011.

Thus, the estimate of the payment-weighted average of the applicablepercentage increases used for updatingthe payment rates is 1.95 percent, andthe real case-mix adjustment factor forthe deductible is zero percent.

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67569Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

Therefore, under the statutory formula,the inpatient hospital deductible forservices furnished in CY 2012 is $1156.This deductible amount is determined

by multiplying $1132 (the inpatienthospital deductible for CY 2011) by thepayment-weighted average increase inthe payment rates of 1.0195 multiplied

by the increase in real case-mix of 1.000,

which equals $1154.07 and is roundedto $1156.

III. Computing the Inpatient Hospitaland Extended Care ServicesCoinsurance Amounts for CY 2012

The coinsurance amounts providedfor in section 1813 of the Act are

defined as fixed percentages of theinpatient hospital deductible forservices furnished in the same CY. Theincrease in the deductible generatesincreases in the coinsurance amounts.For inpatient hospital and extended careservices furnished in CY 2012, inaccordance with the fixed percentagesdefined in the law, the dailycoinsurance for the 61st through 90thday of hospitalization in a benefitperiod will be $289 (one-fourth of theinpatient hospital deductible); the dailycoinsurance for lifetime reserve dayswill be $578 (one-half of the inpatienthospital deductible); and the daily

coinsurance for the 21st through 100thday of extended care services in askilled nursing facility in a benefitperiod will be $144.50 (one-eighth ofthe inpatient hospital deductible).

IV. Cost to Medicare Beneficiaries

Table 1 below summarizes the

deductible and coinsurance amounts forCYs 2011 and 2012, as well as thenumber of each that is estimated to bepaid.

TABLE 1PART A DEDUCTIBLE AND COINSURANCE AMOUNTS FOR CALENDAR YEARS 2011 AND 2012

Type of cost sharing

Value Number paid(in millions)

2011 20122011 2012

Inpatient hospital deductible ............................................................................................ $1132 $1156 8.50 8.76Daily coinsurance for 61st90th Day .............................................................................. 283 289 2.26 2.34Daily coinsurance for lifetime reserve days .................................................................... 566 578 1.13 1.17SNF coinsurance ............................................................................................................. 141.50 144.50 43.94 45.73

The estimated total increase in coststo beneficiaries is about $970 million(rounded to the nearest $10 million) dueto(1) The increase in the deductibleand coinsurance amounts; and (2) thechange in the number of deductiblesand daily coinsurance amounts paid.

V. Waiver of Proposed Notice andComment Period

The Medicare statute, as discussedpreviously, requires publication of theMedicare Part A inpatient hospitaldeductible and the hospital andextended care services coinsuranceamounts for services for each CY. Theamounts are determined according tothe statute. As has been our custom, weuse general notices, rather than noticeand comment rulemaking procedures, tomake the announcements. In doing so,we acknowledge that, under theAdministrative Procedure Act (APA),interpretive rules, general statements ofpolicy, and rules of agency organization,

procedure, or practice are excepted fromthe requirements of notice and commentrulemaking.

We considered publishing a proposednotice to provide a period for publiccomment. However, we may waive thatprocedure if we find good cause thatprior notice and comment areimpracticable, unnecessary, or contraryto the public interest. We find that theprocedure for notice and comment isunnecessary because the formulae usedto calculate the inpatient hospitaldeductible and hospital and extended

care services coinsurance amounts arestatutorily directed, and we can exerciseno discretion in following the formulae.Moreover, the statute establishes thetime period for which the deductibleand coinsurance amounts will applyand delaying publication would becontrary to the public interest.Therefore, we find good cause to waivepublication of a proposed notice and

solicitation of public comments.

VI. Collection of InformationRequirements

This document does not imposeinformation collection andrecordkeeping requirements.Consequently, it need not be reviewed

by the Office of Management andBudget under the authority of thePaperwork Reduction Act of 1995 (44U.S.C. 35).

VII. Regulatory Impact Statement

We have examined the impact of this

notice as required by Executive Order12866 on Regulatory Planning andReview (September 30, 1993), ExecutiveOrder 13563 on Improving Regulationand Regulatory Review (January 18,2011), the Regulatory Flexibility Act(RFA) (September 19, 1980, Pub. L. 96354), section 1102(b) of the SocialSecurity Act, section 202 of theUnfunded Mandates Reform Act of 1995(March 22, 1995; Pub. L. 1044),Executive Order 13132 on Federalism(August 4, 1999) and the CongressionalReview Act (5 U.S.C. 804(2)).

Executive Orders 12866 and 13563direct agencies to assess all costs and

benefits of available regulatoryalternatives and, if regulation isnecessary, to select regulatoryapproaches that maximize net benefits(including potential economic,environmental, public health and safetyeffects, distributive impacts, andequity). A regulatory impact analysis

(RIA) must be prepared for major ruleswith economically significant effects($100 million or more in any 1 year). Asstated in section IV of this notice, weestimate that the total increase in coststo beneficiaries associated with thisnotice is about $970 million due to(1) The increase in the deductible andcoinsurance amounts; and (2) thechange in the number of deductiblesand daily coinsurance amounts paid.Therefore, this notice is a major actionas defined in Title 5, United StatesCode, section 804(2), and is aneconomically significant action under

Executive Order 12866.The RFA requires agencies to analyzeoptions for regulatory relief of smallentities. For purposes of the RFA, smallentities include small businesses,nonprofit organizations, and smallgovernmental jurisdictions. Mosthospitals and most other providers andsuppliers are small entities, either bynonprofit status or by having revenuesof $7.0 million to $34.5 million in any1 year. Individuals and States are notincluded in the definition of a smallentity. We have determined that this



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67570 Federal Register / Vol. 76, No. 211/ Tuesday, November 1, 2011/ Notices

notice will not have a significanteconomic impact on a substantialnumber of small entities. Therefore, weare not preparing an analysis under theRFA.

In addition, section 1102(b) of theSocial Security Act requires us toprepare a regulatory impact analysis if

a rule may have a significant impact onthe operations of a substantial numberof small rural hospitals. This analysismust conform to the provisions ofsection 604 of the RFA. For purposes ofsection 1102(b) of the Act, we define asmall rural hospital as a hospital that islocated outside of a MetropolitanStatistical Area for Medicare paymentregulations and has fewer than 100

beds. The Secretary has determined thatthis notice will not have a significantimpact on the operations of a substantialnumber of small rural hospitals.Therefore, we are not preparing ananalysis under section 1102(b) of theAct.

Section 202 of the UnfundedMandates Reform Act of 1995 alsorequires that agencies assess anticipatedcosts and benefits before issuing anyrule whose mandates require spendingin any 1 year of $100 million in 1995dollars, updated annually for inflation.In 2011, that threshold is approximately$136 million. This notice will have noconsequential effect on State, local, ortribal governments or on the privatesector. However, States may be requiredto pay the deductibles and coinsurancefor dually-eligible beneficiaries.

Executive Order 13132 establishescertain requirements that an agencymust meet when it promulgates aproposed rule (and subsequent finalrule) that imposes substantial directrequirement costs on State and localgovernments, preempts State law, orotherwise has Federalism implications.This notice will not have a substantialeffect on State or local governments.

In accordance with the provisions ofExecutive Order 12866, this notice wasreviewed by the Office of Managementand Budget.

(Catalog of Federal Domestic AssistanceProgram No. 93.773, MedicareHospitalInsurance)

Dated: September 22, 2011

Donald M. Berwick,

Administrator, Centers for Medicare &Medicaid Services.

Dated: October 25, 2011.

Kathleen Sebelius,

Secretary.

[FR Doc. 201128187 Filed 102711; 11:15 am]

BILLING CODE 412001P

DEPARTMENT OF HEALTH ANDHUMAN SERVICES

Centers for Medicare & MedicaidServices

[CMS8044N]

RIN 0938AQ15

Medicare Program; Part A Premiumsfor CY 2012 for the Uninsured Agedand for Certain Disabled IndividualsWho Have Exhausted OtherEntitlement

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

ACTION: Notice.

SUMMARY: This annual notice announcesMedicares Hospital Insurance (Part A)premium for uninsured enrollees incalendar year (CY) 2012. This premiumis paid by enrollees age 65 and over whoare not otherwise eligible for benefits

under Medicare Part A (hereafter knownas the uninsured aged) and by certaindisabled individuals who haveexhausted other entitlement. Themonthly Part A premium for the 12months beginning January 1, 2012, forthese individuals will be $451. Thereduced premium for certain otherindividuals as described in this noticewill be $248.

DATES: Effective Date: This notice iseffective on January 1, 2012.FOR FURTHER INFORMATION CONTACT:Clare McFarland, (410) 7866390.

SUPPLEMENTARY INFORMATION:

I. Background

Section 1818 of the Social SecurityAct (the Act) provides for voluntaryenrollment in the Medicare HospitalInsurance Program (Medicare Part A),subject to payment of a monthlypremium, of certain persons aged 65and older who are uninsured under theOld-Age, Survivors, and DisabilityInsurance (OASDI) program or theRailroad Retirement Act and do nototherwise meet the requirements forentitlement to Medicare Part A. Theseuninsured aged individuals are

uninsured under the OASDI program orthe Railroad Retirement Act, becausethey do not have 40 quarters of coverageunder Title II of the Act (or are/were notmarried to someone who did). (Personsinsured under the OASDI program orthe Railroad Retirement Act and certainothers do not have to pay premiums forMedicare Part A.)

Section 1818A of the Act provides forvoluntary enrollment in Medicare PartA, subject to payment of a monthlypremium for certain disabledindividuals who have exhausted other

entitlement. These are individuals whowere entitled to coverage due to adisabling impairment under section226(b) of the Act, but who are no longerentitled to disability benefits and freeMedicare Part A coverage because theyhave gone back to work and theirearnings exceed the statutorily definedsubstantial gainful activity amount

(section 223(d)(4) of the Act).Section 1818A(d)(2) of the Act

specifies that the provisions relating topremiums under section 1818(d)through section 1818(f) of the Act forthe aged will also apply to certaindisabled individuals as described above.

Section 1818(d) of the Act requires usto estimate, on an average per capita

basis, the amount to be paid from theFederal Hospital Insurance Trust Fundfor services incurred in the followingcalendar year (CY) (including theassociated administrative costs) on

behalf of individuals aged 65 and over

who will be entitled to benefits underMedicare Part A. We must thendetermine, during September of eachyear, the monthly actuarial rate for thefollowing year (the per capita amountestimated above divided by 12) andpublish the dollar amount for themonthly premium in the succeeding CY.If the premium is not a multiple of $1,the premium is rounded to the nearestmultiple of $1 (or, if it is a multiple of50 cents but not of $1, it is rounded tothe next highest $1).

Section 13508 of the Omnibus BudgetReconciliation Act of 1993 (Pub. L. 103

66) amended section 1818(d) of the Actto provide for a reduction in thepremium amount for certain voluntaryenrollees (section 1818 and section1818A of the Act). The reductionapplies to an individual who is eligibleto buy into the Medicare Part A programand who, as of the last day of theprevious month

Had at least 30 quarters of coverageunder Title II of the Act;

Was married, and had been marriedfor the previous 1-year period, to aperson who had at least 30 quarters ofcoverage;

Had been married to a person for atleast 1 year at the time of the personsdeath if, at the time of death, the personhad at least 30 quarters of coverage; or

Is divorced from a person and hadbeen married to the person for at least10 years at the time of the divorce if, atthe time of the divorce, the person hadat least 30 quarters of coverage.

Section 1818(d)(4)(A) of the Actspecifies that the premium that theseindividuals will pay for CY 2012 will beequal to the premium for uninsuredaged enrollees reduced by 45 percent.


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Medicare Program; Inpatient HospitalDeductible and Hospital and ExtendedCare Services Coinsurance Amountsfor CY 2012