2006 proposed fee schedule - American Society of Clinical Oncology

from Worksheet A. The resulting market basket weight for
housekeeping and operations was 1.247 percent.
(6) Labor-Related Share for Capital-Related Expenses
The labor-related share for capital-related expenses
(46 percent of ESRD facilities’ adjusted capital-related
163
building and equipment expenses) reflects the proportion of
ESRD facilities’ capital-related building and equipment
expenses that we believe varies with local area wages.
Capital-related expenses are affected in some
proportion by local area labor costs (such as construction
worker wages) that are reflected in the price of the capital
asset. However, many other inputs that determine capital
costs are not related to local area wage costs, such as
interest rates. Thus, it is appropriate that capital-
related expenses would vary less with local wages than would
the operating expenses for ESRD facilities. The 46 percent
figure is based on regressions run for the Prospective
Payment System for Inpatient Hospital Capital-Related Costs
in 1991 (56 FR 43375).
We use a similar methodology to calculate
capital-related expenses for the labor-related shares for
rehabilitation facilities, psychiatric facilities, long-term
care facilities, and SNFs. (See Rehabilitation Facility
Prospective Payment System for FY 2006, Part II (70 FR