Medicare program; court ordered regulations regarding prospective payment amount and administrative review--HCFA. Interim rule.

This interim rule is being issued solely in response to an order of the United States District Court for the Northern District of California in Redbud Hospital District v. Heckler, No. C-84-4382 MHP dated June 4, 1985. HCFA disagrees with the court's order and has appealed the decision to the United States Court of Appeals for the Ninth Circuit. These interim rules modify the process for determining the Medicare prospective payment rate for inpatient hospital services to take into account extraordinary and unusual costs incurred after the base year; the special needs of hospitals serving disproportionate numbers of Medicare and low-income patients; and the special needs of sole community hospitals. In addition, they modify the requirements for administrative review of the hospital-specific portion of a hospital's PPS rate. These rules will be null and void in the event that either (a) a stay of the June 14, 1985 order is entered by a higher Court or (b) the June 14, 1985 order is reversed on appeal.