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Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / Rules and Regulations We note that certain changes to wage index policy may significantly affect Medicare payments. These changes may arise from revisions to the OMB
delineations of statistical areas resulting from the decennial census data, periodic updates to the OMB delineations in the years between the decennial censuses, or other wage index policy changes.
While we consider how best to address these potential scenarios in a consistent and thoughtful manner, we reiterate that our policy principles with regard to the wage index include generally using the most current data and information available and providing that data and information, as well as any approaches to addressing any significant effects on Medicare payments resulting from these potential scenarios, in notice and comment rulemaking.
Comment: Two commenters recommended that CMS incorporate a frontier state floor into the IPF wage index. Another commenter requested that CMS implement policies to address the disparity in payments between rural and urban IPFs, similar to policies that have been adopted for IPPS hospitals.
Response: We appreciate commenters suggestions regarding opportunities to improve the accuracy of the IPF wage index. We did not propose the specific policies that commenters have suggested, but we will take them into consideration to potentially inform future rulemaking.
Final Decision: For FY 2022, we are finalizing the proposal to continue to use the concurrent pre-floor, prereclassified IPPS hospital wage index as the basis for the IPF wage index. Since we did not propose any changes to the 2-year transition that was finalized in the FY 2021 IPF PPS final rule, there will be no cap applied to the reduction in the wage index for the second year that is, FY 2022.
We will apply the IPF wage index adjustment to the labor-related share of the national base rate and ECT payment per treatment. The labor-related share of the national rate and ECT payment per treatment will change from 77.3 percent in FY 2021 to 77.2 percent in FY 2022.
This percentage reflects the laborrelated share of the 2016-based IPF
market basket for FY 2022 see section III.A.4 of this rule.

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b. Office of Management and Budget OMB Bulletins i. Background The wage index used for the IPF PPS
is calculated using the unadjusted, prereclassified and pre-floor IPPS wage index data and is assigned to the IPF on the basis of the labor market area in
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which the IPF is geographically located.
IPF labor market areas are delineated based on the Core-Based Statistical Area CBSAs established by the OMB.
Generally, OMB issues major revisions to statistical areas every 10
years, based on the results of the decennial census. However, OMB
occasionally issues minor updates and revisions to statistical areas in the years between the decennial censuses through OMB Bulletins. These bulletins contain information regarding CBSA changes, including changes to CBSA numbers and titles. OMB bulletins may be accessed online at https
www.whitehouse.gov/omb/informationfor-agencies/bulletins/. In accordance with our established methodology, the IPF PPS has historically adopted any CBSA changes that are published in the OMB bulletin that corresponds with the IPPS hospital wage index used to determine the IPF wage index and, when necessary and appropriate, has proposed and finalized transition policies for these changes.
In the RY 2007 IPF PPS final rule 71
FR 27061 through 27067, we adopted the changes discussed in the OMB
Bulletin No. 0304 June 6, 2003, which announced revised definitions for MSAs, and the creation of Micropolitan Statistical Areas and Combined Statistical Areas. In adopting the OMB CBSA geographic designations in RY 2007, we did not provide a separate transition for the CBSA-based wage index since the IPF PPS was already in a transition period from TEFRA payments to PPS payments.
In the RY 2009 IPF PPS notice, we incorporated the CBSA nomenclature changes published in the most recent OMB bulletin that applied to the IPPS
hospital wage index used to determine the current IPF wage index and stated that we expected to continue to do the same for all the OMB CBSA
nomenclature changes in future IPF PPS
rules and notices, as necessary 73 FR
25721.
Subsequently, CMS adopted the changes that were published in past OMB bulletins in the FY 2016 IPF PPS
final rule 80 FR 46682 through 46689, the FY 2018 IPF PPS rate update 82 FR
36778 through 36779, the FY 2020 IPF
PPS final rule 84 FR 38453 through 38454, and the FY 2021 IPF PPS final rule 85 FR 47051 through 47059. We direct readers to each of these rules for more information about the changes that were adopted and any associated transition policies.
In part due to the scope of changes involved in adopting the CBSA
delineations for FY 2021, we finalized a 2-year transition policy consistent with
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our past practice of using transition policies to help mitigate negative impacts on hospitals of certain wage index policy changes. We applied a 5percent cap on wage index decreases to all IPF providers that had any decrease in their wage indexes, regardless of the circumstance causing the decline, so that an IPFs final wage index for FY
2021 will not be less than 95 percent of its final wage index for FY 2020, regardless of whether the IPF was part of an updated CBSA. We refer readers to the FY 2021 IPF PPS final rule 85 FR
47058 through 47059 for a more detailed discussion about the wage index transition policy for FY 2021.
On March 6, 2020 OMB issued OMB
Bulletin 2001 available on the web at https www.whitehouse.gov/wpcontent/uploads/2020/03/Bulletin-2001.pdf. In considering whether to adopt this bulletin, we analyzed whether the changes in this bulletin would have a material impact on the IPF PPS wage index. This bulletin creates only one Micropolitan statistical area. As discussed in further detail in section III.D.1.b.ii, since Micropolitan areas are considered rural for the IPF PPS wage index, this bulletin has no material impact on the IPF PPS wage index. That is, the constituent county of the new Micropolitan area was considered rural effective as of FY 2021 and would continue to be considered rural if we adopted OMB Bulletin 2001.
Therefore, we did not propose to adopt OMB Bulletin 2001 in the FY 2022 IPF
PPS proposed rule.
ii. Micropolitan Statistical Areas OMB defines a Micropolitan Statistical Area as a CBSA associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000 75 FR 37252. We refer to these as Micropolitan Areas. After extensive impact analysis, consistent with the treatment of these areas under the IPPS as discussed in the FY 2005
IPPS final rule 69 FR 49029 through 49032, we determined the best course of action would be to treat Micropolitan Areas as rural and include them in the calculation of each states IPF PPS
rural wage index. We refer the reader to the FY 2007 IPF PPS final rule 71 FR
27064 through 27065 for a complete discussion regarding treating Micropolitan Areas as rural.
c. Final Adjustment for Rural Location In the November 2004 IPF PPS final rule, 69 FR 66954 we provided a 17
percent payment adjustment for IPFs located in a rural area. This adjustment was based on the regression analysis, which indicated that the per diem cost
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