42 CFR § 413.196 - Notification of changes in rate-setting methodologies and payment rates.

---
identifier: "/us/cfr/t42/s413.196"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "42 CFR § 413.196 - Notification of changes in rate-setting methodologies and payment rates."
title_number: 42
title_name: "Public Health"
section_number: "413.196"
section_name: "Notification of changes in rate-setting methodologies and payment rates."
chapter_name: "CENTERS FOR MEDICARE & MEDICAID SERVICES, DEPARTMENT OF HEALTH AND HUMAN SERVICES"
subchapter_number: "B"
subchapter_name: "MEDICARE PROGRAM"
part_number: "413"
part_name: "PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED NURSING FACILITIES; PAYMENT FOR ACUTE KIDNEY INJURY DIALYSIS"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 1395m, 1395x(v), 1395x(kkk), 1395hh, 1395rr, 1395tt, and 1395ww."
regulatory_source: "51 FR 34793, Sept. 30, 1986, unless otherwise noted."
cfr_part: "413"
---


# 413.196 Notification of changes in rate-setting methodologies and payment rates.

(a) CMS or the facility's contractor notifies each facility of changes in its payment rate. This notice includes changes in individual facility payment rates resulting from corrections or revisions of particular geographic labor cost adjustment factors.

(b) Changes in payment rates resulting from incorporation of updated cost data or general revisions of geographic labor cost adjustment factors are announced by notice published in the *Federal Register* without opportunity for prior comment. Revisions of the rate-setting methodology are published in the *Federal Register* in accordance with the Department's established rulemaking procedures.

(c) Effective for items and services furnished on or after January 1, 2011 and before January 1, 2012, CMS adjusts the composite rate portion of the basic case-mix adjusted composite payment system described in § 413.220 by the ESRD bundled market basket percentage increase factor.

(d) Effective for items and services furnished on or after January 1, 2012, CMS updates on an annual basis the following:

(1) The per-treatment base rate and the composite rate portion of the basic case-mix adjusted composite payment system described in § 413.220 by the ESRD bundled market basket percentage increase factor minus a productivity adjustment factor.

(2) The wage index using the most current wage data for occupations related to the furnishing of renal dialysis services from the Bureau of Labor Statistics and occupational mix data from the most recent full calendar year of Medicare cost reports submitted in accordance with § 413.198(b).

(3) The fixed dollar loss amount as defined in § 413.237 of this part to ensure that outlier payments continue to be 1.0 percent of total payments to ESRD facilities.

[62 FR 43668, Aug. 15, 1997, as amended at 75 FR 49199, Aug. 12, 2010; 89 FR 89212, Nov. 12, 2024]