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Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / Rules and Regulations with that resident. Therefore, if there are more IPF displaced residents than available cap slots, the slots may be apportioned according to the closing IPFs discretion. The decision to transfer a cap slot if one is available will be voluntary and made at the sole discretion of the originating IPF.
However, if the originating IPF decides to do so, then it will be the originating IPFs responsibility to determine how much of an available cap slot will go with a particular resident if any. We also note that, as we previously discussed in the May 6, 2011 IPF PPS
final rule 76 FR 25455, only to the extent a receiving IPF would exceed its FTE cap by training displaced residents would it be eligible for a temporary adjustment to its resident FTE cap.
Displaced residents are factored into the receiving IPFs ratio of resident FTEs to the facilitys average daily census.

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3. Final Cost of Living Adjustment for IPFs Located in Alaska and Hawaii The IPF PPS includes a payment adjustment for IPFs located in Alaska and Hawaii based upon the area in which the IPF is located. As we explained in the November 2004 IPF
PPS final rule, the FY 2002 data demonstrated that IPFs in Alaska and Hawaii had per diem costs that were disproportionately higher than other IPFs. Other Medicare prospective payment systems for example, the IPPS
and LTCH PPS adopted a COLA to account for the cost differential of care furnished in Alaska and Hawaii.
We analyzed the effect of applying a COLA to payments for IPFs located in Alaska and Hawaii. The results of our analysis demonstrated that a COLA for IPFs located in Alaska and Hawaii will improve payment equity for these facilities. As a result of this analysis, we provided a COLA in the November 2004
IPF PPS final rule.
A COLA for IPFs located in Alaska and Hawaii is made by multiplying the non-labor-related portion of the Federal per diem base rate by the applicable COLA factor based on the COLA area in which the IPF is located.
The COLA factors through 2009 were published by the Office of Personnel Management OPM, and the OPM
memo showing the 2009 COLA factors is available at https www.chcoc.gov/
content/nonforeign-area-retirementequity-assurance-act.
We note that the COLA areas for Alaska are not defined by county as are the COLA areas for Hawaii. In 5 CFR
591.207, the OPM established the following COLA areas:

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City of Anchorage, and 80-kilometer 50-mile radius by road, as measured from the Federal courthouse.
City of Fairbanks, and 80-kilometer 50-mile radius by road, as measured from the Federal courthouse.
City of Juneau, and 80-kilometer 50-mile radius by road, as measured from the Federal courthouse.
Rest of the state of Alaska.
As stated in the November 2004 IPF
PPS final rule, we update the COLA
factors according to updates established by the OPM. However, sections 1911
through 1919 of the Non-foreign Area Retirement Equity Assurance Act, as contained in subtitle B of title XIX of the National Defense Authorization Act NDAA for FY 2010 Pub. L. 11184, October 28, 2009, transitions the Alaska and Hawaii COLAs to locality pay.
Under section 1914 of NDAA, locality pay was phased in over a 3-year period beginning in January 2010, with COLA
rates frozen as of the date of enactment, October 28, 2009, and then proportionately reduced to reflect the phase-in of locality pay.
When we published the proposed COLA factors in the RY 2012 IPF PPS
proposed rule 76 FR 4998, we inadvertently selected the FY 2010
COLA rates, which had been reduced to account for the phase-in of locality pay.
We did not intend to propose the reduced COLA rates because that would have understated the adjustment. Since the 2009 COLA rates did not reflect the phase-in of locality pay, we finalized the FY 2009 COLA rates for RY 2010
through RY 2014.
In the FY 2013 IPPS/LTCH final rule 77 FR 53700 through 53701, we established a new methodology to update the COLA factors for Alaska and Hawaii, and adopted this methodology for the IPF PPS in the FY 2015 IPF final rule 79 FR 45958 through 45960. We adopted this new COLA methodology for the IPF PPS because IPFs are hospitals with a similar mix of commodities and services. We think it is appropriate to have a consistent policy approach with that of other hospitals in Alaska and Hawaii.
Therefore, the IPF COLAs for FY 2015
through FY 2017 were the same as those applied under the IPPS in those years.
As finalized in the FY 2013 IPPS/LTCH
PPS final rule 77 FR 53700 and 53701, the COLA updates are determined every 4 years, when the IPPS market basket labor-related share is updated. Because the labor-related share of the IPPS
market basket was updated for FY 2018, the COLA factors were updated in FY
2018 IPPS/LTCH rulemaking 82 FR
38529. As such, we also updated the IPF PPS COLA factors for FY 2018 82

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FR 36780 through 36782 to reflect the updated COLA factors finalized in the FY 2018 IPPS/LTCH rulemaking.
For FY 2022, we are finalizing our proposal to update the COLA factors published by OPM for 2009 as these are the last COLA factors OPM published prior to transitioning from COLAs to locality pay using the methodology that we finalized in the FY 2013 IPPS/LTCH
PPS final rule and adopted for the IPF
PPS in the FY 2015 IPF final rule.
Specifically, we are finalizing our proposal to update the 2009 OPM COLA
factors by a comparison of the growth in the Consumer Price Indices CPIs for the areas of Urban Alaska and Urban Hawaii, relative to the growth in the CPI
for the average U.S. city as published by the Bureau of Labor Statistics BLS. We note that for the prior update to the COLA factors, we used the growth in the CPI for Anchorage and the CPI for Honolulu. Beginning in 2018, these indexes were renamed to the CPI for Urban Alaska and the CPI for Urban Hawaii due to the BLS updating its sample to reflect the data from the 2010
Decennial Census on the distribution of the urban population https
www.bls.gov/regions/west/factsheet/
2018cpirevisionwest.pdf, accessed January 22, 2021. The CPI for Urban Alaska area covers Anchorage and Matanuska-Susitna Borough in the State of Alaska and the CPI for Urban Hawaii covers Honolulu in the State of Hawaii.
BLS notes that the indexes are considered continuous over time, regardless of name or composition changes.
Because BLS publishes CPI data for only Urban Alaska and Urban Hawaii, using the methodology we finalized in the FY 2013 IPPS/LTCH PPS final rule and adopted for the IPF PPS in the FY
2015 IPF final rule, we are finalizing our proposal to use the comparison of the growth in the overall CPI relative to the growth in the CPI for those areas to update the COLA factors for all areas in Alaska and Hawaii, respectively. We believe that the relative price differences between these urban areas and the U.S. as measured by the CPIs are appropriate proxies for the relative price differences between the other areas of Alaska and Hawaii and the U.S.
BLS publishes the CPI for All Items for Urban Alaska, Urban Hawaii, and for the average U.S. city. However, consistent with our methodology finalized in the FY 2013 IPPS/LTCH
PPS final rule and adopted for the IPF
PPS in the FY 2015 IPF final rule, we are finalizing our proposal to create reweighted CPIs for each of the respective areas to reflect the underlying
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