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Federal Register / Vol. 86, No. 154 / Friday, August 13, 2021 / Rules and Regulations
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42 CFR 413.20d3. We also finalized the use of this data in a new market-based methodology for calculating the IPPS MS
DRG relative weights to reflect relative market-based pricing, beginning in FY 2024.
Specifically, we finalized that we would begin using the reported median payerspecific negotiated charge by MSDRG for MA organizations in the market-based MS
DRG relative weight methodology beginning with the relative weights calculated for FY
2024.
In the FY 2022 IPPS and LTCH PPS
proposed rule, we proposed to repeal the requirement that a hospital report on the Medicare cost report the median payerspecific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MSDRG, for cost reporting periods ending on or after January 1, 2021.
We also proposed to repeal the market-based MSDRG relative weight methodology adopted for calculating the MSDRG relative weights effective in FY 2024, and to continue using the existing cost-based methodology for calculating the MSDRG relative weights for FY 2024 and subsequent fiscal years.
In the FY 2022 IPPS/LTCH PPS proposed rule, we considered an alternative to our proposal to maintain the requirement that hospitals report the median payer-specific negotiated charge for MA organizations on the Medicare cost report, but delay the implementation of the market-based MS
DRG relative weight methodology from FY
2024 to a later date. Under the alternative to delay the implementation of the marketbased MSDRG relative weight methodology, we would maintain the market-based MS
DRG relative weight data collection policy, as finalized in the FY 2021 IPPS/LTCH PPS
final rule, and would require that hospitals follow the steps outlined in the frequently asked questions document published on January 15, 2021 that provides examples for how hospitals would calculate the median payer specific negotiated charge so that the market-based data is comparable and consistent across different negotiation tactics used by hospitals and MA organizations.
After consideration of the public comments, as discussed in section V.L. of the preamble of this final rule, we are finalizing our proposal to repeal the requirement that hospitals report on the Medicare cost report the median payer-specific negotiated charge that the hospital has negotiated with all of its MA organization payers, by MSDRG, for cost reporting periods ending on or after January 1, 2021, as finalized in the FY 2021
IPPS/LTCH PPS final rule. We are also finalizing our proposal to repeal the marketbased MSDRG relative weight methodology adopted effective for FY 2024, as finalized in the FY 2021 IPPS/LTCH PPS final rule.
P. Overall Conclusion 1. Acute Care Hospitals Acute care hospitals are estimated to experience an increase of approximately
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$2.293 billion in FY 2022, including operating, capital, and new technology changes, as estimated for this final rule. The estimated change in operating payments is approximately $1.6 billion discussed in section I.G. and I.H. of this Appendix. The estimated change in capital payments is approximately $0.076 billion discussed in section I.I. of this Appendix. The estimated change in new technology add-on payments is approximately $0.65 billion as discussed in section I.H. of this Appendix. The change in new technology add-on payments reflects the net impact of new and continuing new technology add-on payments. Total may differ from the sum of the components due to rounding.
Table I. of section I.G. of this Appendix also demonstrates the estimated redistributional impacts of the IPPS budget neutrality requirements for the final MSDRG
and wage index changes, and for the wage index reclassifications under the MGCRB.
We estimate that hospitals would experience a 0.9 percent increase in capital payments per case, as shown in Table III. of section I.I. of this Appendix. We project that there will be a $76 million increase in capital payments in FY 2022 compared to FY 2021.
The discussions presented in the previous pages, in combination with the remainder of this final rule, constitute a regulatory impact analysis.
2. LTCHs Overall, LTCHs are projected to experience an increase in estimated payments in FY
2022. In the impact analysis, we are using the final rates, factors, and policies presented in this final rule based on the best available claims and CCR data to estimate the change in payments under the LTCH PPS for FY
2022. Accordingly, based on the best available data for the 363 LTCHs in our database, we estimate that overall FY 2022
LTCH PPS payments will increase approximately $42 million relative to FY
2021 primarily due to the annual update to the LTCH PPS standard Federal rate.

rulemakings 83 FR 41777, 84 FR 42697, and 85 FR 32460, we believe that the number of past commenters would be a fair estimate of the number of reviewers of the proposed rule.
We welcomed any public comments on the approach in estimating the number of entities that reviewed the proposed rule.
We also recognize that different types of entities are in many cases affected by mutually exclusive sections of the rule.
Therefore, for the purposes of our estimate, and consistent with our approach in previous rulemakings 83 FR 41777, 84 FR 42697, and 85 FR 32460, we assume that each reviewer read approximately 50 percent of the proposed rule. We welcomed public comments on this assumption.
We have used the number of timely pieces of correspondence on the FY 2021 IPPS/
LTCH proposed rule as our estimate for the number of reviewers of the proposed rule.
We continue to acknowledge the uncertainty involved with using this number, but we believe it is a fair estimate due to the variety of entities affected and the likelihood that some of them choose to rely in full or in part on press releases, newsletters, fact sheets, or other sources rather than the comprehensive review of preamble and regulatory text. Using the wage information from the BLS for medical and health service managers Code 119111, we estimate that the cost of reviewing the final rule is $114.24
per hour, including overhead and fringe benefits https www.bls.gov/oes/current/
oes_nat.htm. Assuming an average reading speed, we estimate that it would take approximately 31.96 hours for the staff to review half of this final rule. For each IPPS
hospital or LTCH that reviews this final rule, the estimated cost is $3,651.40 31.96 hours $114.24. Therefore, we estimate that the total cost of reviewing this final rule is $102,450,869 $3,651.40 28,058 reviewers.

Q. Regulatory Review Costs If regulations impose administrative costs on private entities, such as the time needed to read and interpret a rule, we should estimate the cost associated with regulatory review. Due to the uncertainty involved with accurately quantifying the number of entities that would review the proposed rule, we assumed that the total number of timely pieces of correspondence on last years proposed rule would be the number of reviewers of the proposed rule. We acknowledge that this assumption may understate or overstate the costs of reviewing the rule. It is possible that not all commenters reviewed last years rule in detail, and it is also possible that some reviewers chose not to comment on the proposed rule. For those reasons, and consistent with our approach in previous
As required by OMB Circular A4
available at https
obamawhitehouse.archives.gov/omb/
circulars_a-004_a-4/ and https
georgewbush-whitehouse.archives.gov/omb/
circulars/a004/a-4.html, in Table V. of this Appendix, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this final rule as they relate to acute care hospitals. This table provides our best estimate of the change in Medicare payments to providers as a result of the changes to the IPPS presented in this final rule. All expenditures are classified as transfers to Medicare providers.
As shown in Table V. of this Appendix, the net costs to the Federal Government associated with the policies finalized in this final rule are estimated at $2.293 billion.

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II. Accounting Statements and Tables A. Acute Care Hospitals
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