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Federal Register / Vol. 86, No. 147 / Wednesday, August 4, 2021 / Rules and Regulations
The total change in burden associated with this final rule including all updates to wage rate, case counts,
facility numbers, and the measures and administrative policies is a reduction of 287,924 hours and $512,065 from our
currently approved burden of 3,381,086
hours and $127,331,707. We refer readers to Table 17 for details.

TABLE 17: Summary of Final Requirements and Annual Burden Estimates Under 0MB Control Number 0938-1171 CMS-10432

VI. Regulatory Impact Analysis
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A. Statement of Need This rule finalizes updates to the prospective payment rates for Medicare inpatient hospital services provided by IPFs for discharges occurring during FY
2022 October 1, 2021 through September 30, 2022. We are finalizing our proposal to apply the 2016-based IPF market basket increase of 2.7
percent, less the productivity adjustment of 0.7 percentage point as required by 1886s2Ai of the Act for a final total FY 2022 payment rate update of 2.0 percent. In this final rule, we are finalizing our proposal to update the IPF labor-related share and update the IPF wage index to reflect the FY
2022 hospital inpatient wage index.
B. Overall Impact We have examined the impacts of this final rule as required by Executive Order 12866 on Regulatory Planning and Review September 30, 1993, Executive Order 13563 on Improving Regulation and Regulatory Review January 18, 2011, the Regulatory Flexibility Act RFA September 19, 1980, Pub. L. 96 354, section 1102b of the Social Security Act the Act, section 202 of the Unfunded Mandates Reform Act of 1995 March 22, 1995; Pub. L.
1044, Executive Order 13132 on Federalism August 4, 1999, and the Congressional Review Act 5 U.S.C.
8042. Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. Section 3f of Executive Order 12866 defines a significant regulatory action as an action that is likely to
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result in a rule: 1 Having an annual effect on the economy of $100 million or more in any 1 year, or adversely and materially affecting a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or state, local or tribal governments or communities also referred to as economically significant; 2 creating a serious inconsistency or otherwise interfering with an action taken or planned by another agency; 3 materially altering the budgetary impacts of entitlement grants, user fees, or loan programs or the rights and obligations of recipients thereof; or 4 raising novel legal or policy issues arising out of legal mandates, the Presidents priorities, or the principles set forth in the Executive Order.
A regulatory impact analysis RIA
must be prepared for major rules with significant regulatory action/s or with economically significant effects $100
million or more in any 1 year.
We estimate that the total impact of these changes for FY 2022 payments compared to FY 2021 payments will be a net increase of approximately $80
million. This reflects an $75 million increase from the update to the payment rates +$100 million from the 2nd quarter 2021 IGI forecast of the 2016based IPF market basket of 2.7 percent, and -$25 million for the productivity adjustment of 0.7 percentage point, as well as a $5 million increase as a result of the update to the outlier threshold amount. Outlier payments are estimated to change from 1.9 percent in FY 2021
to 2.0 percent of total estimated IPF
payments in FY 2022.
Based on our estimates, OMBs Office of Information and Regulatory Affairs has determined that this rulemaking is economically significant, and hence also a major rule under Subtitle E of the Small Business Regulatory Enforcement
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Fairness Act of 1996 also known as the Congressional Review Act.
C. Detailed Economic Analysis In this section, we discuss the historical background of the IPF PPS
and the impact of this final rule on the Federal Medicare budget and on IPFs.
1. Budgetary Impact As discussed in the November 2004
and RY 2007 IPF PPS final rules, we applied a budget neutrality factor to the Federal per diem base rate and ECT
payment per treatment to ensure that total estimated payments under the IPF
PPS in the implementation period would equal the amount that would have been paid if the IPF PPS had not been implemented. The budget neutrality factor includes the following components: Outlier adjustment, stoploss adjustment, and the behavioral offset. As discussed in the RY 2009 IPF
PPS notice 73 FR 25711, the stop-loss adjustment is no longer applicable under the IPF PPS.
As discussed in section III.D.1 of this final rule, we are updating the wage index and labor-related share in a budget neutral manner by applying a wage index budget neutrality factor to the Federal per diem base rate and ECT
payment per treatment. Therefore, the budgetary impact to the Medicare program of this final rule will be due to the market basket update for FY 2022 of 2.7 percent see section III.A.4 of this final rule less the productivity adjustment of 0.7 percentage point required by section 1886s2Ai of the Act and the update to the outlier fixed dollar loss threshold amount.
We estimate that the FY 2022 impact will be a net increase of $80 million in payments to IPF providers. This reflects an estimated $75 million increase from the update to the payment rates and a $5 million increase due to the update to the outlier threshold amount to set total
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