[Federal Register Volume 59, Number 29 (Friday, February 11, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2680]


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[Federal Register: February 11, 1994]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 400, 410, 413, 489, and 498

[BPD-736-IFC]
RIN 0938-AF53

 

Medicare Program; Partial Hospitalization Services in Community 
Mental Health Centers

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This rule sets forth the coverage criteria and payment 
methodology for partial hospitalization services in community mental 
health centers. The purpose of this rule is to establish regulations 
governing this coverage under the provisions of section 4162 of the 
Omnibus Budget Reconciliation Act of 1990.

DATES: Effective date: These rules are effective February 11, 1994.
    Comment date: Comments will be considered if we receive them at the 
appropriate address, as provided below, no later than 5 p.m. on April 
12, 1994.

ADDRESSES: Mail an original and three copies of comments to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: BPD-736-IFC, P.O. Box 7517, 
Baltimore, MD 21207-0517.
    If you prefer, you may deliver your written comments to one of the 
following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore, 
MD 21207.

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code BPD-736-IFC. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in room 309-G of 
the Department's offices at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. 
(phone: (202) 690-7890).
    If you wish to submit comments on the information collection 
requirements contained in this interim final rule with comment period, 
you may submit comments to: Allison Herron Eydt, HCFA Desk Officer, 
Office of Information and Regulatory Affairs, room 3002, New Executive 
Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Regina Walker, (410) 966-6735.

SUPPLEMENTARY INFORMATION:

I. Background

    Community mental health centers (CMHCs) provide treatment and 
services to mentally ill individuals, including the elderly and 
children, residing in the community. The Community Mental Health 
Centers Act (Pub. L. 88-164, enacted October 31, 1963) created a 
Federal grant program to help States in the construction of CMHCs. The 
Community Mental Health Centers Amendments of 1975 (Pub. L. 94-63, 
enacted July 29, 1975) specified requirements for CMHCs. The Community 
Mental Health Centers Extension Act of 1978 (Pub. L. 95-622, enacted 
November 9, 1978) expanded CMHC services to include programs for the 
prevention and treatment of alcohol and drug abuse and rehabilitation 
of alcohol and drug abusers.
    The Public Health Service (PHS) has primary responsibility for 
regulating CMHCs. Section 1916(c)(4) of the PHS Act (42 U.S.C. 300x-
4(c)(4)) requires a CMHC to provide specialized outpatient services; 
24-hour-a-day emergency care services; day treatment, other partial 
hospitalization services, or psychosocial rehabilitation services; 
screenings to determine appropriateness of admission to State mental 
health facilities; and consultation and education services.
    According to the National Council of Community Mental Health 
Centers, there are approximately 2,310 CMHCs funded through block 
grants to States, and 80 percent of them provide partial 
hospitalization services. Before the Omnibus Budget Reconciliation Act 
of 1990 (OBRA '90), Public Law 101-508, enacted on November 5, 1990, 
partial hospitalization services provided by CMHCs were not covered 
under the Medicare program.
    Medicare coverage of partial hospitalization services provided by a 
hospital to its outpatients became effective December 22, 1987, under 
section 1861(ff) of the Social Security Act (the Act), which defines 
partial hospitalization services. Section 1861(ff) of the Act was 
enacted by section 4070(b)(2) of the Omnibus Budget Reconciliation Act 
of 1987 (Pub. L. 100-203) and corrected by section 411(h)(1)(B) of the 
Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360). Hospital 
outpatient departments do not need to qualify as CMHCs to continue to 
provide partial hospitalization services.

II. Legislative Changes

    Section 4162 of OBRA '90 amended sections 1861(ff) and 1832(a)(2) 
of the Act to extend Medicare coverage and payment to partial 
hospitalization services provided by CMHCs on or after October 1, 1991. 
Section 4162(a) of OBRA '90 amended section 1861(ff) of the Act 
concerning partial hospitalization services as follows:
     Paragraph (ff)(3), which describes a partial 
hospitalization program, was redesignated as subparagraph (ff)(3)(A) 
and amended to include a partial hospitalization program provided by a 
CMHC.
     Subparagraph (ff)(3)(B) was added to define the term CMHC 
as an entity that provides the services described in section 1916(c)(4) 
of the Public Health Service Act and meets applicable licensing or 
certification requirements for CMHCs in the State in which it is 
located.
    Section 4162(b)(1) of OBRA '90 made conforming changes to section 
1832(a)(2) of the Act, which describes the scope of benefits covered 
under Supplementary Medical Insurance Benefits for the Aged and 
Disabled (Part B) of Medicare, by adding subsection (a)(2)(J) which 
refers to partial hospitalization services provided by a CMHC as 
described in section 1861(ff)(3)(A) of the Act.
    Section 4162(b)(2) of OBRA '90 amended the term ``provider of 
services'' described in section 1866(e) of the Act to permit a CMHC to 
enter into a Medicare provider agreement but only with respect to 
providing partial hospitalization services to Medicare beneficiaries as 
described in section 1861(ff)(1) of the Act.
    The provisions of section 4162 of OBRA '90 are effective for 
services furnished on or after October 1, 1991. The following Medicare 
manual instructions have been issued covering partial hospitalization 
services in CMHCs:

A. Medicare Intermediary Manual, Part 3--Claims Process, and Medicare 
Outpatient Physical Therapy and Comprehensive Outpatient Rehabilitation 
Facility Manual, (the same transmittal number and issue date were used 
for both manual issuances) Transmittal No. IM-92-1, issued March 1992: 
New Procedures--Effective Date: October 1, 1991, concerning partial 
hospitalization services provided by CMHCs and bill review instructions 
for these services.
B. Medicare Provider Reimbursement Manual, Part 1, Transmittal No. 366, 
issued March 1992: New Implementing Instructions--Effective Date: 
October 1, 1991, concerning CMHCs as providers of services, the interim 
rates for partial hospitalization services provided in CMHCs, and the 
interim rate for the initial reporting period for these services in 
CMHCs.

III. Current Regulations

    Pertinent regulations regarding partial hospitalization services 
appear in title 42 of the Code of Federal Regulations (CFR) at the 
following locations:

A. Part 410 specifies the benefits, conditions for payment and 
limitations on services available under Medicare Part B. Section 410.2 
contains a definition of partial hospitalization services.
B. Part 424 contains the specific conditions and limitations applicable 
to providers under Medicare Part B. Section 424.24(a) specifies that 
partial hospitalization services are not exempt from physician 
certification requirements. Section 424.24(e) describes the physician 
certification and plan of treatment requirements for partial 
hospitalization services.

IV. Provisions of This Interim Final Rule With Comment Period

    In accordance with the provisions of section 4162 of OBRA '90, we 
are making the changes described below to the Medicare regulations in 
title 42 of the CFR. In addition, we are making other minor technical 
and conforming changes.
    In Sec. 400.202 (Definitions specific to Medicare), we are revising 
the definition of ``Provider'' to include a CMHC that has in effect an 
agreement to participate in Medicare, but only to provide partial 
hospitalization services. We are also revising this definition by 
adding ``occupational therapy'' to the list of covered services 
furnished by a clinic, rehabilitation agency or public health agency. 
These revisions are made in accordance with section 1866(e) of the Act, 
which includes a CMHC as a ``provider of services'' but only with 
respect to providing partial hospitalization services. Section 1866(e) 
of the Act also lists ``occupational therapy'' as a covered service 
provided by the aforementioned facilities.
    We are revising Sec. 410.2 (Definitions for purposes of Part B of 
Medicare) as follows:
     We are rearranging the definitions in alphabetical order.
     To improve readability we are revising the definition of 
``partial hospitalization services'' by removing the list of services 
contained in the current definition and adding a cross-reference to a 
new Sec. 410.43 which lists the services. Under the revised definition, 
partial hospitalization services means a distinct and organized 
intensive ambulatory treatment program that offers less than 24-hour 
daily care and provides the services specified in Sec. 410.43. This 
definition applies to Part B partial hospitalization services provided 
by both hospitals and CMHCs.
     The definition of ``nominal charge provider'' 
inadvertently contains the definition for ``participating'', which 
includes a definition of a ``nonparticipating'' provider under 
Medicare. To correct this, we are removing the definition of 
``participating'' provider (including ``nonparticipating'' provider) 
and listing it as a separate definition in this section. Concurrently, 
in accordance with section 1866(e) of the Act concerning Medicare 
provider agreements, we are revising the definition of 
``participating'' provider to include a CMHC as a provider of services 
that has entered into a Medicare provider agreement, but only to 
provide partial hospitalization services.
     We are also adding a definition for a CMHC. We define a 
CMHC as an entity that provides: Outpatient services, including 
specialized outpatient services for children, the elderly, individuals 
who are chronically mentally ill, and residents of its mental health 
service area who have been discharged from inpatient treatment at a 
mental health facility; 24-hour-a-day emergency care services; day 
treatment or other partial hospitalization services, or psychosocial 
rehabilitation services; screening for patients being considered for 
admission to State mental health facilities to determine the 
appropriateness of such admission; and consultation and education 
services. The definition specifies that a CMHC must also meet 
applicable licensing or certification requirements for CMHCs in the 
State in which it is located.
    This new definition is based upon section 1861(ff)(3)(B) of the 
Act, which defines a CMHC as an entity that: (1) Provides the services 
described in section 1916(c)(4) of the PHS Act; and (2) meets 
applicable State licensing or certification requirements. In the CMHC 
definition at Sec. 410.2, we are listing the required services as they 
appear in section 1916(c)(4) of the PHS Act.
    In Sec. 410.3 (Scope of benefits), we are revising subparagraph 
(a)(2) to include partial hospitalization services provided by a CMHC 
as services covered under Part B of Medicare. This revision is made in 
accordance with section 1832(a)(2)(J) of the Act, which includes 
partial hospitalization services in a CMHC in the scope of Medicare 
Part B benefits.
    In a new Sec. 410.43 (Partial hospitalization services: Conditions 
and exclusions.), in paragraph (a), we list the services that are 
described as partial hospitalization services, based on section 
1861(ff)(2) of the Act. We specify that to be considered a partial 
hospitalization service, a service must be reasonable and necessary for 
the diagnosis or active treatment of the individual's condition and 
reasonably expected to improve or maintain the individual's condition 
and functional level and to prevent relapse or hospitalization. In 
addition, the service must be one of the following:
     Individual and group therapy with physicians or 
psychologists or other mental health professionals to the extent 
authorized under State law.
     Occupational therapy requiring the skills of a qualified 
occupational therapist.
     Services of social workers, trained psychiatric nurses, 
and other staff trained to work with psychiatric patients.
     Drugs and biologicals furnished for therapeutic purposes, 
subject to the limitations described in Sec. 410.29.
     Individualized activity therapies that are not primarily 
recreational or diversionary.
     Family counseling, the primary purpose of which is 
treatment of the individual's condition.
     Patient training and education, to the extent the training 
and educational activities are closely and clearly related to the 
individual's care and treatment.
     Diagnostic services.
     Other items and services as specified by HCFA, excluding 
meals and transportation.
    Some services in this description are separately covered and paid 
as the professional services of independent practitioners. In order to 
determine how to handle the services of certain nonphysician 
practitioners, we have examined the statutory provisions that 
established the hospital outpatient department coverage of partial 
hospitalization services, since the Congress built upon these 
provisions to extend Medicare Part B coverage to a CMHC as a provider 
of partial hospitalization services. Also applicable, therefore, are 
the statutory provisions governing the methodology by which physicians 
and others are paid for their services furnished in hospital settings.
    Below we reference four sections of the Act, which, while 
pertaining expressly to the services of a professional in the context 
of a hospital, we believe serve as a model for the coverage of the 
services of a clinical psychologist (CP) and a physician assistant (PA) 
when those professionals furnish services in a CMHC.
     Section 1861(b)(4) of the Act excludes medical or surgical 
services furnished by a physician, resident or intern, and services 
furnished by a CP and PA from the term ``inpatient hospital services''. 
(Services of a certified nurse midwife and a certified registered nurse 
anesthetist are also excluded from the definition of inpatient hospital 
services, but our focus is on CPs and PAs because the other 
nonphysician practitioners are less likely to furnish services in a 
CMHC, based on the types services that are covered as partial 
hospitalization services.)
     Section 1832(a)(2)(B) of the Act excludes from the scope 
of medical and other health services furnished by a provider, physician 
services and services of certain nonphysician practitioners, including 
CPs. (A CMHC is considered a ``provider of services'' under section 
1866(e)(2) of the Act for the purpose of providing partial 
hospitalization services.) This means these services are excluded from 
the scope of outpatient hospital services and partial hospitalization 
services because they are separately paid for by Medicare Part B under 
section 1832(a)(1) of the Act.
     Sections 1862(a)(14) and 1866(a)(1)(H) of the Act specify 
that services by a physician and a CP and PA are not included in 
payments made to a hospital (either on an inpatient or outpatient 
basis) for certain services. Consequently, these services that are 
``unbundled'' from hospital payment can be billed directly by a CP and 
the employer of a PA to Medicare Part B, and are paid separately.
    Before 1986, the bundling provisions referred solely to inpatient 
services. However, section 9343(c)(2)(B) of the Omnibus Budget 
Reconciliation Act of 1986 (Pub. L. 99-509) amended section 
1866(a)(1)(H) of the Act by striking the phrase ``an inpatient'' and 
inserting the phrase ``a patient''. Therefore, the reference to 
``unbundled'' services pertains to services furnished either to 
inpatients or outpatients.
    Sections 1861(ii) and 1861(s)(2)(K)(i) of the Act enable a CP and 
PA to furnish services that would otherwise be furnished by a 
physician. Accordingly, since these practitioners' services are 
separately covered and no longer considered to be part of a hospital's 
services, including its partial hospitalization services, we are 
providing that the services of a CP and PA are also unbundled when 
furnished in a CMHC. Thus, these practitioners can bill Medicare Part B 
directly for their professional services furnished to hospital patients 
and to CMHC partial hospitalization patients.
    Consequently, we are adding a new Sec. 410.43(b) to our regulations 
to specify that the following services are not paid as partial 
hospitalization services:
     Physician services that meet the criteria of part 405, 
subpart F for payment on a fee schedule basis in accordance with part 
414.
     Clinical psychologist services, as defined in section 
1861(ii) of the Act, that are furnished after December 31, 1990.
     Physician assistant services, as defined in section 
1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 
1990.
    Accordingly, when furnishing services to partial hospitalization 
patients in a CMHC, the professionals specified in Sec. 410.43(b) may 
bill Medicare Part B for their services by submitting their claims 
directly to the Medicare Part B carrier. The CMHC can also serve as a 
billing agent for these professionals, by billing the Part B carrier on 
their behalf for their professional services furnished at the CMHC.
    Conversely, there are some independent practitioners whose services 
are bundled when furnished to hospital patients; for example, clinical 
social workers (CSWs). In accordance with section 1861(hh)(2) of the 
Act, a CSW is not authorized to bill directly for services furnished to 
patients in a hospital and skilled nursing facility that are Medicare 
participating. Therefore, for CSWs or other practitioner's services 
that remain bundled when furnished in the hospital setting, we are 
providing that these services are also bundled in the CMHC setting. 
Accordingly, the CMHC must bill intermediaries for nonphysician 
practitioner services listed under Sec. 410.43(a), and the 
intermediaries will make payment for the services to the CMHC on a 
reasonable cost basis.
    To accommodate the new partial hospitalization services benefit in 
a CMHC and to allow for future expansion of part 410, we are 
redesignating existing subpart E regarding payment of supplementary 
medical insurance benefits as subpart I, adding and reserving subparts 
F through H for future regulations, and adding a new subpart E 
concerning partial hospitalization services provided in a CMHC.
    In the new subpart E in Sec. 410.110, we specify the requirements 
for coverage of partial hospitalization services in a CMHC. We state 
that Medicare Part B covers partial hospitalization services when they 
are furnished directly by, or under arrangements made by, a CMHC as 
defined in Sec. 410.2 that has in effect a provider agreement to 
participate in Medicare. In this context, ``under arrangements'' 
describes situations in which: (1) A CMHC makes contractual 
arrangements with another entity or practitioners to come into the CMHC 
to furnish partial hospitalization services; and (2) Medicare makes 
payment for the services to the CMHC. We have provided that a CMHC can 
provide partial hospitalization services under arrangements based on 
section 1861(ff) of the Act, which treats a CMHC and a hospital as 
comparable providers of partial hospitalization services. Since a 
hospital is permitted to furnish services under arrangements, we 
believe that a CMHC should be treated similarly in this respect. As 
noted above, we believe that the Congress intended that the scope of 
the partial hospitalization benefit in a CMHC would generally follow 
the scope of the benefit as we have implemented it for hospital 
providers. We especially invite comment on this approach of using the 
precedents established for hospital providers of partial 
hospitalization services as a model for Part B coverage and payment of 
the same services in a CMHC context.
    In Sec. 410.110(a), we require that partial hospitalization 
services be prescribed by a physician and furnished under the general 
supervision of a physician. We considered whether the services of a 
full time physician were required to implement the statutory 
requirement under section 1861(ff)(1) of the Act for physician 
supervision of partial hospitalization services under a written plan of 
treatment. We recognize that such a requirement could cause hardship to 
CMHCs because some of these entities are unable to employ physicians on 
a full-time basis because of the expense involved. Therefore, because 
we believe that less than direct supervision by a full-time physician 
in a CMHC would not jeopardize a patient's health or treatment program, 
and there would be a number of professionals involved in the care of 
the patient who have been authorized to furnish services that would 
otherwise be furnished by a physician, we are requiring general 
physician supervision. This means that a physician must at least be 
available by telephone but is not required to be present on the 
premises of the CMHC at all times.
    Physician certification is required under the procedures for 
payment of claims to providers of partial hospitalization services 
under section 1835(a)(2)(F) of the Act. Hence, in Sec. 410.110(b), we 
require that physician certification of the need for partial 
hospitalization services in a CMHC comply with the certification 
requirements in existing Sec. 424.24(e)(1). These requisites, which 
apply to partial hospitalization services provided by hospitals, are 
that:
     A physician certifies that the individual would require 
inpatient psychiatric care in the absence of partial hospitalization 
services.
     The partial hospitalization services are being or were 
furnished while the individual is or was under the care of a physician.
     The services are or were furnished under a written plan of 
treatment.
    In Sec. 410.110(c), we specify that the CMHC partial 
hospitalization services must be furnished under a plan of treatment as 
described in existing Sec. 424.24(e)(2). This requirement is also based 
on sections 1861(ff)(1) and 1835(a)(2)(F) of the Act which require that 
partial hospitalization services be furnished under an individualized, 
written plan of treatment established and periodically reviewed by a 
physician (in consultation with appropriate staff participating in such 
a program). The plan must set forth: (1) The physician's diagnosis; (2) 
the type, amount, duration, and frequency of the services; and (3) the 
goals for treatment. These same plan of treatment requirements apply to 
partial hospitalization services provided by a hospital.
    Existing Sec. 410.150, which specifies to whom payment is made, 
will now be included under redesignated subpart I (Payment of SMI 
(Supplementary Medical Insurance) Benefits). We add a new 
Sec. 410.150(b)(13) to apply the specific rules governing Medicare Part 
B payments to a CMHC. The rules are that Medicare Part B pays a CMHC on 
an individual's behalf, for partial hospitalization services provided 
by the CMHC, or by others under arrangements made with them by the 
CMHC. We are reserving Sec. 410.150(b)(12) for future use.
    Section 4162 of OBRA '90 does not explicitly address payment 
requirements for partial hospitalization services provided by a CMHC. 
The applicable statutory references regarding payment of SMI benefits 
are contained in sections 1833 and 1835 of the Act.
    Section 1833 of the Act describes payment for Medicare Part B 
services and section 1835 of the Act specifies the procedures for 
payment of claims of providers of services.
    Specifically, section 1833(a)(2)(B) of the Act governs payment for 
partial hospitalization services provided by a CMHC. In accordance with 
this section, payment to a CMHC for partial hospitalization services is 
to be made:
    (1) At the lesser of: (a) The reasonable cost of such services, as 
determined under section 1861(v) of the Act; or (b) the customary 
charges with respect to such services, less the amount a provider may 
charge as described in clause (ii) of section 1866(a)(2)(A) of the Act 
(``coinsurance''), but in no case may the payment for such other 
services exceed 80 percent of such reasonable cost; or
    (2) If such services are provided by a public provider of services, 
or by another provider which demonstrates to the satisfaction of the 
Secretary that a significant portion of its patients are low-income 
(and requests that payment be made under this clause), free of charge 
or at nominal charges to the public, payment is made at 80 percent of 
the amount determined in accordance with section 1814(b)(2) of the Act; 
that is, the provider's ``reasonable cost''.
    Section 1833(a)(2)(B) of the Act also provides that if (and for so 
long as) the conditions described in section 1814(b)(3) of the Act are 
met, payment is made in the amounts determined under the reimbursement 
system described in such section. We believe that this provision is not 
applicable to CMHC payment since section 1814(b)(3) of the Act 
addresses payment to hospital providers in a State with a demonstration 
project involving an approved State reimbursement cost control system.
    We are revising the heading of Sec. 410.155 from ``Psychiatric 
services limitations: Expenses incurred for physician services and CORF 
services.'' to ``Outpatient mental health treatment limitation.'' since 
this section focuses on treatment services and not diagnostic services. 
For clarity, we are also revising Sec. 410.155(b) to specify the 
services subject to the outpatient mental health treatment limitation 
in Sec. 410.155(c), which reflects section 1833(c) of the Act. These 
are services for the treatment of a mental, psychoneurotic, or 
personality disorder furnished to an individual who is not an inpatient 
of a hospital and include the following:
    (1) CORF services.
    (2) Physicians' services that meet the criteria of part 405, 
subpart F for payment on a fee schedule basis in accordance with part 
414.
    (3) Physician assistant services, as defined in section 
1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 
1990.
    (4) Clinical psychologist services, as defined in section 1861(ii) 
of the Act, that are furnished after December 31, 1990.
    Section 1833(c) of the Act exempts partial hospitalization services 
that are not directly furnished by a physician from the outpatient 
mental health treatment limitation. The nonphysician practitioners 
specified in Sec. 410.155(b) who furnish services to partial 
hospitalization patients in a CMHC are furnishing services that would 
otherwise be furnished by physicians and, like physicians, may bill 
Medicare directly for Part B services. The professional services 
furnished by these practitioners in a CMHC are not partial 
hospitalization services and, therefore, are subject to the outpatient 
mental health treatment limitation of Sec. 410.155. A discussion of the 
professional services of these practitioners and the method of payment 
for their services was presented in more detail in the explanation of 
Sec. 410.43(b) presented earlier in this preamble.
    Conversely, services furnished by any nonphysician practitioner not 
shown in Sec. 410.43(b) (for example, a clinical social worker) to a 
partial hospitalization patient in a CMHC are considered partial 
hospitalization services and, therefore, are not subject to the 
outpatient mental health treatment limitation.
    In a newly added Sec. 410.172, we specify the conditions for 
payment of partial hospitalization services in a CMHC. In paragraph 
(a), we state that Medicare Part B pays for partial hospitalization 
services provided in a CMHC only if a written request for payment is 
filed by the CMHC. (The form to be used is UB-92, HCFA 1450.) In 
Sec. 410.172(b), we require that partial hospitalization services in a 
CMHC are provided in accordance with the conditions described in 
Sec. 410.110, which require that the services must be:
     Prescribed by a physician and furnished under the general 
supervision of a physician (section 1861(ff)(1) of the Act);
     Subject to certification by a physician in accordance with 
Sec. 424.24(e)(1) (section 1835(a)(2)(F) of the Act); and
     Furnished under a plan of treatment that meets the 
requirements of Sec. 424.24(e)(2) (section 1861(ff)(1) of the Act).
    In part 413, subpart A, concerning the general rules of reasonable 
cost reimbursement, we are adding CMHCs to the list of providers 
described in Sec. 413.1 as authorized to receive Medicare payment for 
services provided to beneficiaries. In Sec. 413.13(b) under the rules 
for applying the principle of lesser of costs or charges, we are adding 
CMHCs to the list of providers under the general rule regarding payment 
under reasonable cost reimbursement, but only with regard to providing 
partial hospitalization services. OBRA '90 did not address payment to a 
CMHC. However, as presented earlier in the discussion of the changes to 
Sec. 410.150, the general payment principles of section 1833(a) apply 
to a CMHC, and they are the basis for our changes to part 413.
    In part 489 concerning provider agreements under Medicare, in 
Sec. 489.2 (Scope of part), we list a CMHC as a provider of services 
authorized to participate in Medicare, but only for purposes of 
providing partial hospitalization services in accordance with section 
1866(e)(2) of the Act. As a provider of partial hospitalization 
services, a CMHC is subject to the rules governing Medicare provider 
agreements. To conform the newly designated Sec. 489.2(c)(1) to section 
1866(e)(1) of the Act, we are also adding ``occupational therapy'' to 
the list of covered services furnished by clinics, rehabilitation 
agencies, and public health agencies.
    Under the basic requirements in Sec. 489.10 and the reasons for 
denying participation in Medicare in Sec. 489.12, we are making a 
technical change in the references to the civil rights requirements. In 
accordance with 45 CFR part 84, appendix A, subpart A, Medicare Part B 
does not constitute Federal financial assistance, and, thus, these 
providers are not subject to the civil rights requirements.
    Although we are not revising Sec. 489.11 (Acceptance of a provider 
as a participant), the provisions of this section apply to a CMHC. We 
are in the process, however, of developing a new provider agreement 
specific to a CMHC. In the interim, if a CMHC desires to participate in 
the Medicare program, it must submit a letter requesting approval as a 
CMHC. The letter requesting approval as a CMHC is considered an 
official application and must be accompanied by a signed attestation 
statement that the CMHC complies with all Federal requirements 
described in section 1861(ff)(3)(B) of the Act and conforms to the 
provisions of section 1866 of the Act concerning Medicare provider 
agreements. If HCFA determines that the CMHC meets all Federal 
requirements, the CMHC receives notification of approval and the CMHC 
is assigned a provider number.
    In Sec. 489.13 (Effective date of agreement), we are modifying 
paragraphs (a) and (b) to refer to a new paragraph (c) that specifies 
the effective date of a provider agreement with a CMHC. Since a CMHC is 
not subject to an onsite survey by a Federal or State agency surveyor 
(see 42 CFR part 488), the effective date of its provider agreement is 
based on receipt of its request to participate in Medicare and 
compliance with all Federal requirements. In order to assure coverage 
of these CMHC services on the effective date of the law, we are 
providing that, for requests for Medicare participation received before 
July 1, 1992, if the CMHC met all Federal requirements by October 1, 
1991, and the CMHC selects this date as the effective date, the 
agreement is effective for services provided on or after October 1, 
1991, the statutory effective date for coverage of partial 
hospitalization benefits in a CMHC (section 4162 of OBRA '90) (or such 
later date as requested by the provider). If Federal requirements were 
not met on October 1, 1991, the agreement is effective on the date the 
requirements are met. For requests for Medicare participation received 
after June 30, 1992, the agreement is effective on the date the CMHC 
meets all Federal requirements but not before the date HCFA receives 
the application. The June 30 and July 1, 1992, dates are the same dates 
contained in the certification package that was sent to all CMHCs 
requesting participation in the Medicare program.
    Section 1866(e) of the Act includes a CMHC as a provider of 
services but only for purposes of providing partial hospitalization 
services. Therefore, we are amending part 498 concerning appeals 
procedures for determinations that affect participation in the Medicare 
program. Specifically, in Sec. 498.2 (Definitions), we are adding CMHC 
to the definition of ``Provider''. (This is the same definition that 
appears at revised Sec. 400.202.) Thus, a CMHC is entitled to a hearing 
and judicial review of the hearing decision if it is dissatisfied with 
a determination that it is not a provider, or with any determination 
described in section 1866(b)(2) of the Act that gives the Secretary the 
authority to refuse participation in Medicare to a provider failing to 
meet certain conditions. As a conforming change to the definition of 
``Provider'' at Sec. 489.2, we are adding ``occupational therapy'' to 
the list of covered services furnished by clinics, rehabilitation 
agencies, and public health agencies in accordance with section 
1866(e)(1) of the Act. For ease of reference, we are also eliminating 
the separate definition of ``prospective supplier'' but incorporating 
its contents as it currently appears in this section into the 
definition of ``Supplier.'' This format is consistent with other 
definitions throughout Chapter IV of Title 42.

V. Collection of Information Requirements

    Regulations at Secs. 410.172, 413.20, and 489.11 contain 
information collection or recordkeeping requirements or both that are 
subject to review by the Office of Management and Budget (OMB) under 
the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Section 
410.172 concerns information collection requirements related to 
submitting the UB-92 form (HCFA-1450), the written request for payment 
that CMHCs must submit when billing for partial hospitalization 
services. We have determined that the annual burden for collecting this 
information is 4.9 hours per CMHC. Thus, based on an estimate of 2,000 
participating CMHCs, the annual burden for submission of the UB92 is 
approximately 9,870 hours (4.9 hours per year x 2,000 CMHCs). The 
information collection requirements in Sec. 410.172 have been approved 
by OMB (control number 0938-0279).
    Section 413.20 concerns information collection and recordkeeping 
requirements associated with the requirement that CMHCs submit an 
annual cost report in order to receive Medicare payment for partial 
hospitalization services. We have determined that the annual burden for 
this cost reporting requirement is 140 hours per CMHC. Therefore, the 
estimated annual burden for CMHCs is 280,000 hours (140 hours per year 
x 2,000 CMHCs). Additionally, Sec. 489.11 contains information 
collection and recordkeeping requirements related to the application 
and signed attestation statement that CMHCs must submit to request 
approval to participate in the Medicare program as a provider of 
partial hospitalization services. The CMHC must attest that it complies 
with the Federal requirements described in section 1861(ff)(3)(B) of 
the Act and conforms to the provisions of section 1866 of the Act 
concerning Medicare provider agreements. The annual burden for 
completing the application and attestation statement is 10 minutes per 
CMHC. Therefore, the annual burden for CMHCs is approximately 333 hours 
(10 minutes per year x 2,000 CMHCs). The information collection and 
recordkeeping requirements associated with Secs. 413.20 and 489.11 have 
been sent to OMB for approval in accordance with the Paperwork 
Reduction Act and will not be effective until OMB approval is received. 
Organizations and individuals desiring to submit comments on the 
information collection and recordkeeping requirements in Secs. 413.20 
or 489.11 should direct then to the OMB official whose name appears in 
the ADDRESSES section of this preamble.

VI. Waiver of Proposed Rulemaking and of Delayed Effective Date

    In accordance with the statutory effective date of October 1, 1991, 
coverage of partial hospitalization services in a CMHC has been 
available to Medicare beneficiaries since that date. Nonetheless, 
because the Secretary is exercising discretion in implementing section 
4162 of OBRA '90, ordinarily we would publish a notice of proposed 
rulemaking and afford a period for public comment. However, section 
4207(j) of OBRA '90 permits the Secretary to issue interim final 
regulations with a comment period (without prior notice and comment) to 
implement any of the provisions of OBRA '90 that affect the Medicare 
and Medicaid programs. Therefore, we are using that authority to 
publish this interim final rule with comment period.

VII. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on a interim final rule with comment period, we are not able to 
acknowledge or respond to them individually. However, we will consider 
all comments that we receive by the date and time specified in the 
DATES section of this preamble, and we will respond to the comments in 
the preamble to the final rule.

VIII. Impact Statement

    Unless the Secretary certifies that a proposed rule would not have 
a significant economic impact on a substantial number of small 
entities, we generally prepare a regulatory flexibility analysis that 
is consistent with the Regulatory Flexibility Act (RFA) (5. U.S.C. 601 
through 612). For purposes of the RFA, all CMHCs are considered to be 
small entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis if an interim final rule with comment 
period may have a significant impact on the operations of a substantial 
number of small rural hospitals. This analysis must conform to the 
provisions of section 604 of the RFA. For purposes of section 1102(b) 
of the Act, we define a small rural hospital as a hospital that is 
located outside of a Metropolitan Statistical Area and has fewer than 
50 beds.
    This interim final rule with comment period implements the 
provisions of section 4162 of OBRA '90, which were effective October 1, 
1991. Before enactment of OBRA '90, partial hospitalization services 
furnished by a CMHC were not covered under the Medicare program.
    According to the National Council of Community Mental Health 
Centers, there were 2,310 CMHCs as of 1990, but only 80 percent of 
them, 1,848, would have qualified to provide partial hospitalization 
services. The average budget for each CMHC for FY 1990 was $3 million, 
with only 2 percent being paid by Medicare for eligible beneficiaries 
for services furnished by psychiatrists, services incident to 
psychiatrist's services, and services that the CMHC billed for on 
behalf of clinical psychologists. In addition, very few of the elderly 
are in partial hospitalization programs because of the limited capacity 
that a CMHC has for Medicare patients. We estimate that, as a result of 
the expansion of coverage to include partial hospitalization services, 
Medicare payments to CMHCs will increase the first year by 10 percent 
over the amount previously paid by Medicare. Thus, the cost of the 
additional benefit for FY 1990 would be calculated as follows: 

Number of CMHCs qualified to provide partial                    
 hospitalization services.............................             1,848
Average Medicare payment under existing                         
 provisions...........................................        x  $60,000
                                                       -----------------
  Estimated FY 1990 Medicare payments.................      $110,880,000
Estimated increase in Medicare payments.......           x  .10 
                                                       -----------------
Total cost of partial hospitalization benefit                   
 rounded to nearest $5 million........................       $10,000,000
                                                                        

    In order to project this estimate forward, we assume continuing 
increases of 7 percent per year in the number of CMHCS. Based on this 
assumption, the projected costs of this benefit for FYs 1994 through 
1998 are as follows: 

   Estimated Medicare Costs--Partial Hospitalization Services in CMHCs  
                       [In millions of dollars]*                        
------------------------------------------------------------------------
          FY 1994              FY 1995    FY 1996    FY 1997    FY 1998 
------------------------------------------------------------------------
$15.........................        $15        $15        $15       $20 
------------------------------------------------------------------------
*Rounded to the nearest $5 million.                                     

    It is estimated that the records maintenance and the record 
extraction time needed to complete the CMHC cost report, required to 
determine rates for partial hospitalization services, would be 
approximately 140 hours, which should not place an undue burden on a 
CMHC. The cost report for a CMHC is based on the same cost report that 
is currently used by comprehensive outpatient rehabilitation facilities 
or facilities furnishing outpatient physical therapy services. It is a 
simplified report required by the Medicare program that requests CMHC 
costs in order for the intermediaries to calculate payment for partial 
hospitalization services. Most of the records needed are currently 
maintained by a CMHC.
    Coverage of partial hospitalization in a CMHC provides the elderly 
with another alternative for treatment of mental illnesses. Not only 
will CMHC patient volume and revenue increase, but the CMHC's role as a 
health care provider will be enhanced due to the expanded scope of 
mental health services covered by the Medicare program.
    In conclusion, we are not preparing analyses for either the RFA or 
section 1102(b) of the Act since we have determined, and the Secretary 
certifies, that this interim final rule with comment period will not 
result in a significant economic impact on a substantial number of 
small entities and will not have a significant economic impact on the 
operations of a substantial number of small rural hospitals.

List of Subjects

42 CFR Part 400

    Grant programs-health, Health facilities, Health maintenance 
organizations (HMO), Medicaid, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 413

    Health facilities, Kidney diseases, Medicare, Puerto Rico, 
Reporting and recordkeeping requirements.

42 CFR Part 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.

42 CFR Part 498

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.

    42 CFR chapter IV is amended as follows:
    A. Part 400, subpart B is amended as follows:

PART 400--INTRODUCTIONS; DEFINITIONS

    1. The authority citation for part 400 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh) and 44 U.S.C. chapter 35.

    2. In Sec. 400.202, the introductory text is republished and the 
definition for ``Provider'' is revised to read as follows:


Sec. 400.202  Definitions specific to Medicare.

    As used in connection with the Medicare program, unless the context 
indicates otherwise--
* * * * *
    Provider means a hospital, an RPCH, a skilled nursing facility, a 
comprehensive outpatient rehabilitation facility, a home health agency, 
or a hospice that has in effect an agreement to participate in 
Medicare, or a clinic, a rehabilitation agency, or a public health 
agency that has in effect a similar agreement but only to furnish 
outpatient physical therapy, or speech pathology services, or a 
community mental health center that has in effect a similar agreement 
but only to furnish partial hospitalization services.
* * * * *
    B. Part 410 is amended as follows:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

    1. The authority citation for part 410 is revised to read as 
follows:

    Authority: Secs. 1102, 1832, 1833, 1834, 1835, 1861(r), (s), 
(aa), (cc), and (ff), 1871, and 1881 of the Social Security Act (42 
U.S.C. 1302, 1395k, 1395l, 1395m, 1395n, 1395x(r), (s), (aa), (cc), 
and (ff), 1395hh, and 1395rr).

Subpart I--Payment of SMI Benefits

Sec.
410.150  To whom payment is made.
410.152  Amounts of payment.
410.155  Outpatient mental health treatment limitation.
410.160  Part B annual deductible.
410.161  Part B blood deductible.
410.163  Payment for services furnished to kidney donors.
410.165  Payment for rural health clinic services and ambulatory 
surgical center services: Conditions.
410.170  Payment for home health services, for medical and other 
health services furnished by a provider or an approved ESRD 
facility, and for comprehensive outpatient rehabilitation facility 
(CORF) services: Conditions.
410.172  Payment for partial hospitalization services in CMHCs: 
Conditions.
410.175  Alien absent from the United States.

    3. Section 410.2 is revised to read as follows:


Sec. 410.2  Definitions.

    As used in this part--
    Community mental health center (CMHC) means an entity that--(1) 
Provides outpatient services, including specialized outpatient services 
for children, the elderly, individuals who are chronically mentally 
ill, and residents of its mental health service area who have been 
discharged from inpatient treatment at a mental health facility;
    (2) Provides 24-hour-a-day emergency care services;
    (3) Provides day treatment or other partial hospitalization 
services, or psychosocial rehabilitation services;
    (4) Provides screening for patients being considered for admission 
to State mental health facilities to determine the appropriateness of 
such admission;
    (5) Provides consultation and education services; and
    (6) Meets applicable licensing or certification requirements for 
CMHCs in the State in which it is located.
    Nominal charge provider means a provider that furnishes services 
free of charge or at a nominal charge, and is either a public provider 
or another provider that (1) demonstrates to HCFA's satisfaction that a 
significant portion of its patients are low-income; and (2) requests 
that payment for its services be determined accordingly.
    Partial hospitalization services means a distinct and organized 
intensive ambulatory treatment program that offers less than 24-hour 
daily care and furnishes the services described in Sec. 410.43.
    Participating refers to a hospital, SNF, HHA, CORF, hospice, that 
has in effect an agreement to participate in Medicare; or a clinic, 
rehabilitation agency, or public health agency that has a provider 
agreement to participate in Medicare but only for purposes of providing 
outpatient physical therapy, occupational therapy, or speech pathology 
services; or a CMHC that has in effect a similar agreement but only for 
purposes of providing partial hospitalization services, and 
nonparticipating refers to a hospital, SNF, HHA, CORF, hospice, clinic, 
rehabilitation agency, public health agency, or CMHC, that does not 
have in effect a provider agreement to participate in Medicare.


Sec. 410.3  [Amended]

    4. In Sec. 410.3(a)(2), the phrase ``and comprehensive outpatient 
rehabilitation facilities (CORFs).'' is revised to read ``comprehensive 
outpatient rehabilitation facilities (CORFs), and partial 
hospitalization services provided by community mental health centers 
(CMHCs).''.
    5. A new section Sec. 410.43 is added under subpart B to read as 
follows:


Sec. 410.43  Partial hospitalization services: Conditions and 
exclusions.

    (a) Partial hospitalization services are services that--
    (1) Are reasonable and necessary for the diagnosis or active 
treatment of the individual's condition;
    (2) Are reasonably expected to improve or maintain the individual's 
condition and functional level and to prevent relapse or 
hospitalization; and
    (3) Include any of the following:
    (i) Individual and group therapy with physicians or psychologists 
or other mental health professionals to the extent authorized under 
State law.
    (ii) Occupational therapy requiring the skills of a qualified 
occupational therapist.
    (iii) Services of social workers, trained psychiatric nurses, and 
other staff trained to work with psychiatric patients.
    (iv) Drugs and biologicals furnished for therapeutic purposes, 
subject to the limitations specified in Sec. 410.29.
    (v) Individualized activity therapies that are not primarily 
recreational or diversionary.
    (vi) Family counseling, the primary purpose of which is treatment 
of the individual's condition.
    (vii) Patient training and education, to the extent the training 
and educational activities are closely and clearly related to the 
individual's care and treatment.
    (viii) Diagnostic services.
    (b) The following services are separately covered and not paid as 
partial hospitalization services:
    (1) Physicians' services that meet the criteria of part 405, 
subpart F of this chapter for payment on a fee schedule basis in 
accordance with part 414 of this chapter.
    (2) Physician assistant services, as defined in section 
1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 
1990.
    (3) Clinical psychologist services, as defined in section 1861(ii) 
of the Act, that are furnished after December 31, 1990.
    6. Subpart E is redesignated as subpart I.

Subpart E--[Redesignated as Subpart I]

    7. A new subpart E consisting of Sec. 410.110 is added to read as 
follows:

Subpart E--Community Mental Health Centers (CMHCs) Providing 
Partial Hospitalization Services


Sec. 410.110  Requirements for coverage of partial hospitalization 
services by CMHCs.

    Medicare part B covers partial hospitalization services furnished 
by or under arrangements made by a CMHC if they are provided by a CMHC 
as defined in Sec. 410.2 that has in effect a provider agreement under 
part 489 of this chapter and if the services are--
    (a) Prescribed by a physician and furnished under the general 
supervision of a physician;
    (b) Subject to certification by a physician in accordance with 
Sec. 424.24(e)(1) of this subchapter; and
    (c) Furnished under a plan of treatment that meets the requirements 
of Sec. 424.24(e)(2) of this subchapter.
    8. Subparts F through H are added and reserved as follows:

Subparts F through H--[Reserved]

    9. In Sec. 410.150, the heading of paragraph (a) is republished, 
paragraph (a)(2) is revised, the introductory text of paragraph (b) 
introductory text is republished, and a new paragraph (b)(13) is added 
to read as follows:


Sec. 410.150  To whom payment is made.

    (a) General rules.
* * * * *
    (2) The services specified in paragraphs (b)(5) through (b)(13) of 
this section must be furnished by a facility that has in effect a 
provider agreement or other appropriate agreement to participate in 
Medicare.
    (b) Specific rules. Subject to the conditions set forth in 
paragraph (a) of this section, Medicare Part B pays as follows:
* * * * *
    (13) To a community mental health center (CMHC) on the individual's 
behalf, for partial hospitalization services furnished by the CMHC (or 
by others under arrangements made with them by the CMHC).
    10. In Sec. 410.155, the section heading and paragraph (b) are 
revised to read as follows:


Sec. 410.155  Outpatient mental health treatment limitation.

* * * * *
    (b) Services subject to limitation. The mental health treatment 
limitation applies to the following services furnished for the 
treatment of a mental, psychoneurotic, or personality disorder, when 
the services are furnished to an individual who is not an inpatient in 
a hospital:
    (1) CORF services.
    (2) Physicians' services that meet the criteria of part 405, 
subpart F of this chapter for payment on a fee schedule basis in 
accordance with part 414 of this chapter.
    (3) Physician assistant services, as defined in section 
1861(s)(2)(K)(i) of the Act, that are furnished after December 31, 
1990.
    (4) Clinical psychologist services, as defined in section 1861(ii) 
of the Act, that are furnished after December 31, 1990.
* * * * *
    11. A new Sec. 410.172 is added to read as follows:


Sec. 410.172  Payment for partial hospitalization services in CMHCs: 
Conditions.

    Medicare Part B pays for partial hospitalization services furnished 
in a CMHC on behalf of an individual only if the following conditions 
are met:
    (a) The CMHC files a written request for payment on the HCFA form 
1450 and in the manner prescribed by HCFA; and
    (b) The services are furnished in accordance with the requirements 
described in Sec. 410.110.
    C. Part 413 is amended as follows:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES

    1. The authority citation for part 413 continues to read as 
follows:


    Authority: Secs. 1102, 1814(b), 1815, 1833(a), (i) and (n), 
1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42 
U.S.C. 1302, 1395f(b), 1395g, 1395l(a), (i) and (n), 1395x(v), 
1395hh, 1395rr, 1395tt, and 1395ww); sec. 104(c) of Pub. L. 100-360, 
as amended by sec. 608(d)(3) of Pub. L. 100-485 (42 U.S.C. 1395ww 
(note)) and sec. 101(c) of Pub. L. 101-234 (42 U.S.C. 1395ww(note)).


    2. In Sec. 413.1, the introductory text of paragraph (a)(1) is 
republished; a new paragraph (a)(1)(viii) is added; and paragraph 
(a)(2) is revised to read as follows:


Sec. 413.1  Introduction.

    (a) Scope.
    (1) General summary. This part sets forth regulations governing 
Medicare payment for services furnished to beneficiaries by--
* * * * *
    (viii) Community mental health centers (CMHCs) but only for 
purposes of furnishing partial hospitalization services.
    (2) Applicability. The principles of payment and the related 
policies described in this part apply to HCFA, to the fiscal 
intermediaries acting as payers of claims on HCFA's behalf, to the 
Provider Reimbursement Review Board, and to the hospitals, SNF, HHAs, 
CORFS, ESRD facilities, OPTs, OPAs, histocompatibility laboratories, 
and CMHCs receiving payment under this part.


Sec. 413.13  [Amended]

    3. In Sec. 413.13(b)(1), the phrase ``and OPTs'' is revised to read 
``OPTs, and CMHCs but only for purposes of providing partial 
hospitalization services,''.
    D. Part 489 is amended as follows:

PART 489--PROVIDER AND SUPPLIER AGREEMENTS UNDER MEDICARE

    1. The authority citation for part 489 continues to read as 
follows:


    Authority: Secs. 1102, 1861, 1864(m), 1866, and 1871 of the 
Social Security Act (42 U.S.C. 1302, 1395x, 1395aa(m), 1395cc, and 
1395hh).

    2. In Sec. 489.2, the introductory text to paragraph (b) is 
republished, a new (b)(8) is added, and paragraph (c) is revised to 
read as follows:


Sec. 489.2  Scope of part.

* * * * *
    (b) The following providers are subject to the provisions of this 
part:
* * * * *
    (8) Community mental health centers (CMHCs).
    (c)(1) Clinics, rehabilitation agencies, and public health agencies 
may enter into provider agreements only for furnishing outpatient 
physical therapy, and speech pathology services.
    (2) CMHCs may enter into provider agreements only to furnish 
partial hospitalization services.


Sec. 489.10  [Amended]

    3. In Sec. 489.10(b), the phrase ``The provider must meet the 
requirements of:'' is revised to read ``The provider must meet the 
applicable civil rights requirements of:''.


Sec. 489.12  [Amended]

    4. In Sec. 489.12(c), the phrase ``45 CFR parts 80, 84, and 90.'' 
is revised to read ``45 CFR parts 80, 84, and 90, subject to the 
provisions of Sec. 489.10.''.
    5. Section 489.13 is revised to read as follows:


Sec. 489.13  Effective date of agreement.

    (a) All Federal requirements are met on the date of the survey.
    Except as provided in paragraph (c) of this section, the agreement 
is effective on the date the onsite survey is completed (or on the day 
following the expiration date of a current agreement) if, on the date 
of the survey, the provider meets all Federal health and safety 
conditions of participation or level A requirements (for SNFs), and any 
other requirements imposed by HCFA.
    (b) All Federal requirements are not met on the date of the survey.
    Except as provided in paragraph (c) of this section, if the 
provider fails to meet any of the requirements specified in paragraph 
(a) of this section, the agreement is effective on the earlier of the 
following dates:
    (1) The date on which the provider meets all requirements.
    (2) The date on which the provider submits a correction plan 
acceptable to HCFA or an approvable waiver request, or both.
    (c) Community mental health center (CMHC). The effective date of a 
provider agreement with a CMHC is determined as follows:
    (1) Request for Medicare participation received before July 1, 
1992.
    (i) If all Federal requirements were met by October 1, 1991, the 
agreement is effective October 1, 1991, or such later date as requested 
by the CMHC.
    (ii) If all Federal requirements were not met by October 1, 1991, 
the agreement is effective on the date the CMHC meets all Federal 
requirements.
    (2) Request for Medicare participation received after June 30, 
1992. The agreement is effective on the date the CMHC meets all Federal 
requirements, but not before the date HCFA receives the application.
    E. Part 498 is amended as follows:

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT 
PARTICIPATION IN THE MEDICARE PROGRAM

    1. The authority citation for part 498 is revised to read as 
follows:

    Authority: Secs. 205(a), 1102, 1861(aa), 1866, 1869(c), 1871, 
and 1872 of the Social Security Act (42 U.S.C. 405(a), 1302, 
1395x(aa), 1395cc, 1395ff(c), 1395hh, and 1395ii), unless otherwise 
noted.

    2. In Sec. 498.2, the introductory text is republished, the 
definition for ``Prospective supplier'' is removed and definitions for 
``Provider'' and ``Supplier'' are revised to read as follows:


Sec. 498.2  Definitions.

    As used in this part--
* * * * *
    Provider means a hospital, skilled nursing facility (SNF), 
comprehensive outpatient rehabilitation facility (CORF), home health 
agency (HHA), or hospice, that has in effect an agreement to 
participate in Medicare; or a clinic, rehabilitation agency, or public 
health agency that has in effect a similar agreement but only to 
furnish outpatient physical therapy, occupational therapy, or 
outpatient speech pathology services, or a community mental health 
center (CMHC) that has in effect a similar agreement but only to 
provide partial hospitalization services, and prospective provider 
means any of the listed entities that seeks to participate in Medicare 
as a provider.
    Supplier means an independent laboratory, supplier of portable X-
ray services, rural health clinic (RHC), Federally qualified health 
center (FQHC), ambulatory surgical center (ASC), organ procurement 
organization (OPO), or end-stage renal disease (ESRD) treatment 
facility that is approved by HCFA as meeting the conditions for 
coverage of its services, and prospective supplier means any of the 
listed entities that seeks to be approved for coverage of its services 
under Medicare. (However, for purposes of the sanctions and penalties 
that may be imposed by the OIG, the term supplier has the meaning 
specified in Sec. 1001.2 of this title.)

(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: September 15, 1993.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
    Approved: October 26, 1993.
Donna E. Shalala,
Secretary.
[FR Doc. 94-2680 Filed 2-10-94; 8:45 am]
BILLING CODE 4120-01-P