[Federal Register Volume 67, Number 164 (Friday, August 23, 2002)]
[Notices]
[Pages 54657-54659]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-21372]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
[CMS-2140-FN]
RIN 0938-ZA13
Medicare and Medicaid Programs; Approval of Deeming Authority for
Critical Access Hospitals by the Joint Commission on Accreditation of
Healthcare Organizations (JCAHO)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final notice.
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SUMMARY: This final notice announces our decision to approve the Joint
Commission on Accreditation of Healthcare Organization's (JCAHO's)
application as a national accrediting organization for critical access
hospitals (CAHs) seeking to participate in the Medicare program.
Following our evaluation of the organizational and programmatic
capabilities of JCAHO, we have determined that JCAHO standards for CAHs
meet or exceed the Medicare conditions of participation. Therefore,
CAHs accredited by JCAHO will be granted deemed status under the
Medicare program.
EFFECTIVE DATE: This final notice is effective November 21, 2002
through November 21, 2008.
FOR FURTHER INFORMATION CONTACT: Cindy Melanson, (410) 786-0310.
SUPPLEMENTARY INFORMATION:
I. Background
Statutory Provisions and Regulations
Under the Medicare program, eligible beneficiaries may receive
covered services in a critical access hospital (CAH), provided that the
hospital meets certain requirements. Sections 1820(c)(2)(B) and 1820(e)
of the Social Security Act (the Act) establish distinct criteria for
facilities seeking CAH designation. Under this authority, the Secretary
has set forth in regulations minimum requirements that a CAH must meet
to participate in Medicare. The regulations at 42 CFR part 485, subpart
F (Conditions of Participation: Critical Access Hospitals (CAHs))
determine the basis and scope of CAH-covered services. Conditions for
Medicare payment for critical access services can be found at
Sec. 413.70. Applicable regulations concerning provider agreements are
at 42 CFR part 489 (Provider Agreements and Supplier Approval) and
those pertaining to facility survey and certification are at 42 CFR
part 488, subparts A and B.
Verifying Medicare Conditions of Participation
In general, we approve a CAH for participation in the Medicare
program, if it is participating as a hospital at the time it applies
for CAH designation, and is in compliance with parts 482 (Conditions of
Participation for Hospitals), and 485, subpart F (Conditions of
Participation: Critical Access Hospitals (CAHs)). Section 403 of the
Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999
expanded this criterion to allow a limited number of additional
entities to become eligible for CAH designation under certain
circumstances. Specifically, a rural health clinic previously downsized
from an acute care hospital, or a closed hospital that requests to
reopen as a CAH, need only meet the provisions of 42 CFR part 485,
subpart F (at the time they apply for CAH designation) to be eligible
to participate in Medicare.
For a CAH to enter into a provider agreement, a State survey agency
must certify that the CAH is in compliance with the conditions or
standards set forth in the statute and part 485 subpart F of our
regulations. Then, the CAH is subject to ongoing review by a State
survey agency to determine whether it continues meeting Medicare
requirements. There is, however, an alternative to State compliance
surveys. Certification by a nationally recognized accreditation program
can substitute for ongoing State review.
Section 1865(b)(1) of the Act provides that, if a provider is
accredited by a national accreditation body under standards that meet
or exceed the Medicare conditions of participation, the Secretary can
``deem'' the provider as having met the Medicare requirements for those
conditions. Accreditation is voluntary and not required for
participation in Medicare; providers have the option to undergo State
surveys or pursue accreditation. The American Osteopathic Association
(AOA) is currently the only CMS-approved national accreditation
organization for CAHs.
[[Page 54658]]
II. Deeming Application Approval Process
Section 1865(b)(3)(A) of the Act provides a statutory timetable to
ensure that our review of deeming applications is conducted in a timely
manner. The Act provides us with 210 calendar days to complete our
survey activities and application review process. Within 60 days of
receiving a completed application, we must publish a notice in the
Federal Register that identifies the national accreditation body making
the request, describes the nature of the request, and provides no less
than a 30-day public comment period.
III. Proposed Notice
On March 22, 2002, we published a proposed notice at 67 FR 13344
announcing the JCAHO's request for approval as a deeming organization
for CAHs. In the notice, we detailed our evaluation criteria. Under
section 1865(b)(2) of the Act and Sec. 488.4, we conducted a review of
the JCAHO application in accordance with the criteria specified by our
regulation, which includes, but is not limited to the following:
An onsite administrative review of JCAHO's (1) corporate
policies; (2) financial and human resources available to accomplish the
proposed surveys; (3) procedures for training, monitoring, and
evaluation of its surveyors; (4) ability to investigate and respond
appropriately to complaints against accredited facilities; and (5)
survey review and decision-making process for accreditation.
A comparison of JCAHO's CAH accreditation standards to our
current Medicare CAH conditions of participation standards.
A documentation review of JCAHO's survey processes to do
the following:
Determine the composition of the survey team, surveyor
qualifications, and the ability of JCAHO to provide continuing surveyor
training.
Compare JCAHO's processes to those of State survey
agencies, including survey frequency, and the ability to investigate
and respond appropriately to complaints against accredited facilities.
Evaluate JCAHO's procedures for monitoring providers or
suppliers found to be out of compliance with JCAHO program
requirements. The monitoring procedures are used only when the JCAHO
identifies noncompliance. If noncompliance is identified through
validation reviews, the survey agency monitors corrections as specified
at Sec. 488.7(b)(2).
Assess JCAHO's ability to report deficiencies to the
surveyed facilities and respond to the facility's plan of correction in
a timely manner.
Establish JCAHO's ability to provide us with electronic
data in ASCII-comparable code and reports necessary for effective
validation and assessment of JCAHO's survey process.
Determine the adequacy of staff and other resources.
Review JCAHO's ability to provide adequate funding for
performing required surveys.
Confirm JCAHO's policies with respect to whether surveys
are announced or unannounced.
Obtain JCAHO's agreement to provide us with a copy of the
most current accreditation survey together with any other information
related to the survey as we may require, including corrective action
plans.
In accordance with section 1865(b)(3)(A) of the Act, the proposed
notice also solicited public comments regarding whether JCAHO's
requirements met or exceeded the Medicare conditions of participation
for CAHs. We received no public comments in response to our proposed
notice.
IV. Provisions of the Final Notice
A. Differences Between JCAHO and Medicare's Conditions and Survey
Requirements
We compared the standards contained in the JCAHO's ``Critical
Access Hospital (CAH) Manual'' and its survey process in the ``Critical
Access Hospital Surveyor Handbook'' with the Medicare CAH conditions of
participation and CMS's ``State and Regional Operations Manual.'' Our
review and evaluation of JCAHO's deeming application, which were
conducted as described in section III of this notice yielded the
following:
JCAHO provided an updated crosswalk (a table showing the
match between their standards and our standards) of recommended
revisions or clarifications to its requirements to ensure that the
requirements meet or exceed CMS requirements.
JCAHO adjusted language to consistently refer to CAHs as
opposed to hospitals.
JCAHO modified and adjusted its standards for CAHs to more
clearly document the JCAHO standard and intent statement. The
reformatted version presents the standards in their entirety and
facilitates a comparison to the Medicare COPs.
JCAHO added language to each chapter of the CAH Manual
stating, ``Critical Access Hospitals going through a deemed status
survey are expected to meet the standards and the full intent of the
standards.'' This added language eliminates CMS's concern about JCAHO's
intent statements not carrying the same weight as the Medicare
standards.
JCAHO modified its standard and intent statement to
include a list of drugs and biologicals commonly used in life-saving
procedures in order to meet the requirements of Sec. 485.618.
In order to meet the requirements of Sec. 485.639, JCAHO
added to its standard and intent statement the language that surgery
can only be performed by: (1) A doctor of medicine or osteopathy,
including an osteopathic practitioner recognized under section
1101(a)(7) of the Act; (2) a doctor of dental surgery or dental
medicine; or (3) a doctor of podiatric medicine.
JCAHO standards previously indicated resurvey of a CAH
every 3 years. JCAHO modified its standards to indicate in the resurvey
requirements that a 1-year-follow-up visit after the initial
accreditation survey is required. After the 1-year-follow-up, CAHs will
be resurveyed every 3 years.
JCAHO provided a list of currently accredited facilities
and schedule of surveys to be performed to meet the requirements of
Sec. 488.4(a)(9) and (10).
JCAHO addressed our regulations at Sec. 485.623 and
specifically, Sec. 485.623(d)(1), by recognizing that assessing
compliance with the life safety code (LSC) is a JCAHO responsibility.
The LSC, published on an ongoing basis by the National Fire Prevention
Association, contains building and construction standards designed to
promote fire-safe structures. In addition to the JCAHO requirement that
the CAH complete a Statement of Conditions (SOC), which allows the CAH
to report any known deficiencies in the physical plant, a JCAHO trained
surveyor also surveys the CAH using the JCAHO environment-of-care
standards. During the JCAHO survey process, a surveyor will conduct a
building tour, including above-the-ceiling inspections, and will
validate what the organization has reported on its SOC. As a result of
the inspection, JCAHO findings may be cited as requirements for
improvement and may impact the score and survey outcome. JCAHO requires
that all findings on the SOC be remediated in the same manner as those
found independently by JCAHO surveyors. The CMS Financial Report to
Congress, published in 2002, includes a report on ``Medicare's
Validation Program for Hospitals Accredited by the JCAHO''. This report
showed a large discrepancy between the LSC survey findings made by the
State survey agencies and JCAHO surveys. JCAHO regularly failed to
identify LSC deficiencies. We expect
[[Page 54659]]
that the current JCAHO LSC survey process will be reviewed when CMS
adopts the 2000 edition of the LSC, which was published as a proposed
rule on October 26, 2001 (66 FR 54178). The final rule is under
development. Insofar as there may be differences between state survey
standards and JCAHO standards based on the 2000 LSC, we want to provide
both JCAHO and the states with an opportunity to bring their procedures
into alignment with the new LSC. If, after reviewing JCAHO's
performance under such standards, significant discrepancies continue to
occur, we will address the matter at that time.
B. Term of Approval
Based on the review and observations described in section III of
this final notice, we have determined that JCAHO's requirements for
CAHs meet or exceed our requirements. Therefore, we recognize the JCAHO
as a national accreditation organization for CAHs that request
participation in the Medicare program, effective November 21, 2002
through November 21, 2008.
V. Collection of Information Requirements
This final notice does not impose any information collection and
recordkeeping requirements subject to the Paperwork Reduction Act
(PRA). Consequently, it does not need to be reviewed by the Office of
Management and Budget (OMB) under the authority of the PRA. The
requirements associated with granting and withdrawal of deeming
authority to national accreditation organizations, codified in 42 CFR
part 488, (Survey, Certification, and Enforcement Procedures) are
currently approved by OMB under OMB approval number 0938-0690, with an
expiration date of September 30, 2002.
VI. Regulatory Impact Statement
We have examined the impact of this notice as required by Executive
Order 12866 (September 1993, Regulatory Planning and Review), the
Regulatory Flexibility Act (RFA) (Pub. L. 98-354), section 1102(b) of
the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub.
L. 104-4), and Executive Order 13132.
Executive Order 12866 directs agencies to assess all costs and
benefits of available regulatory alternatives and, when regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public health and safety
effects; distributive impacts; and equity). The RFA requires agencies
to analyze options for regulatory relief for small businesses. For
purposes of the RFA, States and individuals are not considered small
entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis for any notice that may have a significant
impact on the operations of a substantial number of small rural
hospitals. Such an analysis must conform to the provisions of section
604 of the RFA. For purposes of section 1102(b) of the Act, we consider
a small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 100 beds.
This final notice recognizes JCAHO as a national accreditation
organization for CAHs that request participation in the Medicare
program. There are neither significant costs nor savings for the
program and administrative budgets of Medicare. Therefore, this notice
is not a major rule as defined in Title 5, United States Code, section
804(2) and is not an economically significant rule under Executive
Order 12866. We have determined, and the Secretary certifies, that this
notice will not result in a significant impact on a substantial number
of small entities and will not have a significant effect on the
operations of a substantial number of small rural hospitals. Therefore,
we are not preparing analyses for either the RFA or section 1102(b) of
the Act.
Section 202 of the Unfunded Mandates Act of 1995 also requires that
agencies assess anticipated costs and benefits before issuing any rule
that may result in expenditure in any 1 year by State, local, or tribal
governments, in the aggregate, or by the private sector, of $110
million. This notice will not result in an impact of $110 million on
the governments mentioned or on the private sector.
In an effort to better assure the health, safety, and services of
beneficiaries in CAHs already certified as well as provide relief to
State budgets in this time of tight fiscal restraints, we deem CAHs
accredited by JCAHO as meeting our Medicare requirements. Thus, we
continue our focus on assuring the health and safety of services by
providers and suppliers already certified for participation in a cost-
effective manner.
In accordance with the provisions of Executive Order 12866, this
notice was not reviewed by the Office of Management and Budget. In
accordance with Executive Order 13132, we have determined that this
notice will not significantly affect the rights of States, local or
tribal governments.
Authority: Section 1865 of the Social Security Act (42 U.S.C.
1395bb).
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program;
and No. 93.774, Medicare--Supplemental Medical Insurance Program).
Dated: August 16, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-21372 Filed 8-22-02; 8:45 am]
BILLING CODE 4120-01-P