[Federal Register Volume 62, Number 159 (Monday, August 18, 1997)]
[Rules and Regulations]
[Pages 43931-43937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21731]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 431, 442, 488, 489, and 498
[HSQ-139-F]
RIN 0938-AC88
Medicare and Medicaid Programs: Effective Dates of Provider
Agreements and Supplier Approvals
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
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SUMMARY: This rule establishes uniform criteria for determining the
effective dates of Medicare and Medicaid provider agreements and of the
approval of Medicare suppliers when the provider or supplier is subject
to survey and certification as a basis for determining participation in
those programs. It also establishes appeal
[[Page 43932]]
rights and procedures for entities that are dissatisfied with effective
date determinations.
DATES: Effective date: This rule is effective September 17, 1997.
FOR FURTHER INFORMATION CONTACT: Diane Bavaria, (410) 786-6773 or
Sandra Farragut, (410) 786-3503.
SUPPLEMENTARY INFORMATION:
A. Background
Under sections 1866 and 1902 of the Social Security Act (the Act),
providers of services seeking to participate in Medicare or Medicaid
must enter into an agreement with the Secretary or the State Medicaid
agency, as appropriate. Under HCFA rules, suppliers of Medicare
services must be approved for coverage of the services they furnish to
Medicare beneficiaries.
Generally, in order to enter into a provider agreement or obtain
approval as a supplier, an entity must first be surveyed by HCFA or the
State survey agency to ascertain whether it complies with the
conditions of participation, conditions for coverage, or long-term care
requirements. However, under section 1865 of the Act, HCFA may ``deem''
that an entity meets the Federal requirements if that entity is
accredited by a national accrediting organization whose program is
approved by HCFA.
Medicare or Medicaid payment may not be made for services furnished
before the effective date of the provider agreement or supplier
approval.
B. Notice of Proposed Rulemaking
On October 8, 1992, we published a Notice of Proposed Rulemaking
(at 57 FR 46362) to establish uniform criteria for determining the
effective date of provider agreements and supplier approvals. We
received 6 letters of comment from two States, one health care
association, the Small Business Administration, one lawyer, and one
citizen. Those comments and our responses to them are detailed below.
C. Discussion of Comments
1. Level of Compliance
Comment: One commenter noted that the proposed rule was not
consistent with Federal statutes that require full compliance for
skilled nursing facilities (SNFs) and nursing facilities (NFs) or
automatic termination within 6 months after survey. The commenter
disagreed with our references to level A and level B requirements, and
the provision that would permit initial certification of SNFs and NFs
that have lower level deficiencies.
Response: As noted by the commenter, under the Omnibus Budget
Reconciliation Act of 1987 (OBRA '87), we must, for SNFs and NFs,
replace our hierarchical requirement scheme (condition level or level
A, and standard level or level B) with a scheme built on the premise
that all requirements must be met and enforced. However, because the
final rule for implementing the OBRA '87 amendments had not been
published, we had to continue using the hierarchical ``level A and
Level B'' scheme in the proposed rule.
A final rule identified as HSQ-156-F, published on November 10,
1994 (at 59 FR 56116) implemented the OBRA '87 amendments. That rule--
Establishes a revised enforcement system that detects and
responds to noncompliance with any of the requirements, as opposed to
the previous system which provided for adverse action only when the
noncompliance was with level A requirements;
Establishes the concept of ``substantial compliance'' as
the criterion that SNFs and NFs must meet in order to participate in
Medicare and Medicaid, and defines the term;
Provides for termination of any SNF or NF that does not
achieve substantial compliance within 6 months from the date of survey;
and
Removes references to ``level A and level B''
requirements.
Regarding the issue of allowing participation by an SNF or NF that
has minor deficiencies, we believe that it is impractical and
unrealistic to require perfect compliance. In fact, in 1992, only 7.3
percent of all SNFs and NFs surveyed were deficiency-free. Under the
previous enforcement system defined by ``level A'' and ``level B''
requirements, most of the facilities that were experiencing only minor
problems could continue to participate because the system allowed for
some noncompliance at the lower or ``B'' level. That is no longer the
case. By vastly increasing the number of statutory requirements that
SNFs and NFs must meet, and by requiring us to do away with the
hierarchy of requirements, Congress made it far more difficult for the
facilities to qualify for program participation. We do not believe that
Congress intended to write into law a set of requirements that would
preclude almost all SNFs and NFs from participating in Medicare and
Medicaid. Therefore, we have defined ``substantial compliance'' as a
degree of compliance such that any existing deficiencies have not
caused actual harm and do not create the potential for more than
minimal harm to a resident. This definition is consistent with the
statutory focus on resident outcomes as opposed to procedural
requirements that do not always accurately measure whether quality care
is being furnished. Although an SNF or NF that falls short of total
compliance may escape imposition of a remedy, it still has a duty to
provide, to each resident, care that enhances the chances of positive
outcomes and avoids negative outcomes. If a single resident experiences
any harm, the facility has not satisfied its statutory obligations.
Given the statute's focus on each resident's right to receive quality
care, and the facility's obligation to provide it, we could not adopt a
less rigorous standard of compliance. (The preamble to HSQ-156-F
contained a more detailed discussion of the background and rationale
for the ``substantial compliance'' concept.)
However, precisely because the new standard is more stringent than
its predecessor, it follows that once an SNF or NF achieves
``substantial compliance'', it has demonstrated its capacity for
participation in the programs. Thus, if the survey finds that the
facility is in ``substantial compliance'', the provider agreement is
effective on the date the survey is completed. If we require the SNF or
NF to submit a plan of correction for whatever requirements it does not
fully meet, that does not delay the effective date of the agreement. If
the facility needs a waiver, current practice remains unchanged, and
the effective date is delayed until we receive an approvable waiver
request.
2. Appeals and Payment
Comment: One commenter expressed the opinion that the proposed rule
would not change the basic procedures for determining effective date,
but merely add an appeal mechanism. The commenter understood the
appeals provisions to mean that--
Payment to a new provider would continue during the
pendency of an appeal; and
If the hearing decision changed the effective date,
payments would be effective as of the new date.
Response: We agree that the procedures for determining effective
date remain essentially unchanged except for the new ``substantial
compliance'' concept for SNFs and NFs. For other providers, the rule
continues to be that the effective date is the earlier of the date on
which the provider meets all requirements or the date on which it meets
all condition level requirements (or conditions for coverage in the
case of suppliers) and has an acceptable plan of correction for
standard level
[[Page 43933]]
deficiencies or an approvable waiver request, or both.
To preclude any confusion concerning the determination of effective
date when it is related to a plan of correction or waiver request, we
revised the rule to state that the effective date of the agreement or
approval is the date that the State or HCFA receives (as opposed to the
date the facility submits) the acceptable plan or approvable waiver
request.
The commenter is correct in interpreting that payment would be
made, during pendency of the appeal, for services furnished on or after
the effective date of the agreement or approval; and would be adjusted
to the new effective date determined by the hearing decision.
3. Effective Date When Facility Is Accredited Before It Seeks
Participation
Comment: Two commenters were concerned about how the proposed rule
would be applied when a facility had already been accredited by an
accrediting organization. The proposed rule would not allow the
provider to enter into a retroactive agreement so that it could receive
payment for services furnished after accreditation but before it sought
participation in Medicare or Medicaid. The commenters stated that this
situation commonly arises when a provider that has been surveyed and
found to be in compliance with Federal requirements--
Is participating in its own State's Medicaid program and
provides services to a Medicaid recipient from another State; or
Is not participating in Medicaid but provides services to
a Medicaid recipient before learning of the individual's Medicaid
status.
Response: We consider the concerns to be justified. Accordingly, we
have revised Sec. 431.108 (content previously contained in Sec. 442.13)
and Sec. 489.13 to provide that an agreement or approval may be made
retroactive for a provider or supplier that--
Has been deemed to meet all applicable Federal
requirements on the basis of accreditation by an accrediting
organization whose program had HCFA approval at the time the
organization surveyed and accredited the provider or supplier; and
Meets all applicable State licensure and Life Safety Code
requirements.
Specifically, the final rule provides that the effective date of an
agreement or approval can be made retroactive for up to one year to
encompass dates on which the provider or supplier furnished covered
services to a beneficiary or recipient. However, the retroactive
effective date may not be before the earlier of--
The date on which HCFA approves the accrediting
organization's program; and
The date of accreditation.
We already have several regulations that provide for payment in
special situations:
Sec. 431.52--for Medicaid services furnished out of State.
Part 424 and Secs. 440.170(e) and 482.2--for emergency care
furnished by nonparticipating hospitals.
We believe that additional flexibility in determining effective
dates of agreements and approvals will further ensure that all eligible
providers and suppliers receive payment. The one-year period for
retroactivity is consistent with Medicare and Medicaid regulations
which generally require that claims be submitted for payment within one
year from the date of service.
4. Applicability of the Rule
Comment: Two commenters questioned whether physicians in private
practice and other non-institutional providers of Medicaid services
would be subject to the regulation since, according to Sec. 440.3, the
effective date provisions apply to all types of Medicaid providers. One
of the commenters disagreed with the provisions governing deemed status
if they are to be applied to Medicaid private non-institutional
providers.
Response: In response to these comments, Sec. 431.108(a)(2) (for
Medicaid) and Sec. 489.13(a) (for Medicare) specify that the rules for
determining effective date apply only to providers and suppliers that
are subject to survey and certification by HCFA or the State survey
agency, or have deemed status on the basis of accreditation by an
accrediting organization whose program has HCFA approval. (Section
440.3 of the proposed rule cited Sec. 442.13 for the effective date
rules. In this final regulation, we have moved those rules to the new
Sec. 431.108 of subpart C because that is the subpart that pertains to
Medicaid provider agreements.)
5. Regulatory Impact Statement
Comment: One commenter noted that the impact statement in the
proposed rule did not explain why the Secretary certified that the rule
would not have a significant impact on a substantial number of small
entities. The commenter requested that the final rule include a
comprehensive regulatory impact analysis.
Response: A regulatory impact analysis is required when a rule
would have a significant impact. It has been determined that the effect
of this rule on small entities is negligible because, in practice, we
have for the most part determined effective dates of provider
agreements and supplier approvals using the policies and procedures
that were not until now incorporated in the regulations. Therefore,
since the procedures for determining effective dates generally do not
change, the impact on providers and suppliers is inconsequential and
thus forms the basis for certifying that this rule will not have a
significant economic impact. Since there is no significant impact, a
regulatory impact analysis is not required.
Although this rule makes only minimal changes in the way effective
dates are determined, it does add an appeals mechanism. We do not
anticipate a significant increase in the number of requests for
hearings for two reasons:
First, the current Federal regulations provide appeal rights for a
prospective provider or supplier who is denied participation in the
Medicare program. (State regulations may provide a similar appeals
mechanism for Medicaid denials.) A determination to deny a prospective
provider's or prospective supplier's request for participation in
Medicare is usually based on the entity's lack of compliance with our
requirements for participation. Effective date hearings would, for the
most part, focus on the same noncompliance issues. Appeals from
effective date determinations will probably arise when an entity
disagrees with the date that HCFA or the State determines that
noncompliance was corrected. We do not anticipate that entities will
appeal both an initial denial and a subsequent effective date
determination.
Second, the right to appeal an effective date determination, while
not previously codified, had already been confirmed by court decisions.
Since the effective date of participation is usually determined only
once, at the time of the initial survey (the exception being ICFs/MR
which have time-limited agreements), and since entities are already
appealing these decisions, we do not anticipate that codification of
the appeal rights will cause any great increase in the number of
hearing requests.
Further, we have no reason to anticipate that publication of this
rule will cause an increase in the number of small entities that
request agreements or approvals for participation in Medicare, or
Medicaid, or both. Neither do we have any basis for estimating how many
prospective providers or suppliers will
[[Page 43934]]
make such requests after this rule is published.
6. Part Title
Comment: One commenter suggested that we change the title of part
442 from ``Standards for Payment to Nursing Facilities and Intermediate
Care Facilities for the Mentally Retarded'' to ``Standards for Payment
to Nursing Facilities and Intermediate Care Facilities for Persons with
Mental Retardation''.
Response: We agree that it would be preferable to have a title that
recognizes the person first and the disability second, as opposed to
referring directly to the disability. However, section 1905(d) of the
statute identifies these institutions as ``intermediate care facilities
for the mentally retarded''. We believe that retention of that language
is the best way to preclude any possible misunderstanding.
7. Miscellaneous Comments
Comment: We received favorable comments on two provisions of the
proposed rule--
Having the State survey agency recommend the effective
date when it has conducted the survey.
Precluding appeals based on the contention that a survey
should have been conducted earlier than it was.
Response: We appreciate the commenter's support and believe that
these two provisions will contribute to smooth implementation of the
rules.
D. Provisions of the Final Rule
In summary, this final rule--
Makes clear that the rules for determination of the
effective date of a provider agreement or supplier approval apply to
all providers and suppliers that are subject to survey and
certification by HCFA, or the State survey agency, or have deemed
status on the basis of accreditation;
Provides that the State agency that conducts the survey
makes recommendations concerning the effective date;
Reflects statutory changes under which the basis for
determining effective date for SNFs and NFs is different from the basis
used in connection with other providers and with suppliers;
Sets forth the circumstances under which effective dates
may be made retroactive;
Makes existing Medicare appeals procedures available, and
requires Medicaid agencies to make their existing appeals procedures
available, for effective date determinations.
Specifies that, for laboratories, Medicaid agreements and
Medicare approvals are effective only while the laboratory has in
effect a valid CLIA certificate issued under part 493 of the HCFA
rules, and only for the specialty and subspecialty tests it is
authorized to perform; and
Sets forth the effective date rules that apply to Medicare
provider agreements with community mental health centers (CMHCs) and
Federally qualified health centers (FQHCs). The effective date rule for
Medicaid agreements with FQHCs will be issued as part of a separate
regulation. (CMHCs do not participate in the Medicaid program.)
We are also taking advantage of this opportunity to clarify policy
on termination of provider agreements, as set forth in Sec. 489.53.
Specifically, this final rule amends that section to revise the
paragraph (b) heading and restore language that was inadvertently
changed by HSQ-156-F, Survey, Certification, and Enforcement for
Skilled Nursing Facilities and Nursing Facilities (59 FR 56116 of
November 10, 1994).
The 1994 final rule, in revising Sec. 489.53, inadvertently
expanded an exception by making the 2-day notice applicable to ``a
provider or supplier'', instead of only to a skilled nursing facility
(SNF). This rule revises Sec. 489.53(c)(2) to restore the previous
language: ``For an SNF with deficiencies that pose immediate jeopardy
to the health or safety of its residents, HCFA gives notice at least 2
days before the effective date of termination of the provider
agreement.'' (The correctly limited rule for nursing facilities is set
forth in Sec. 488.402(f)(3) of the HCFA rules.)
We would also correct a technical error--the retention of ``; and''
at the end of Sec. 489.11(c)(2) when paragraph (c)(3) of that section
was removed.
Collection of Information Requirements
This rule contains no new information collection requirements
subject to review by the Office of Management and Budget under the
Paperwork Reduction Act.
Regulatory Impact Statement
Consistent with the Regulatory Flexibility Act (RFA) and section
1102(b) of the Social Security Act, we prepare a regulatory impact
analysis for each rule, unless we can certify that the rule will not
have a significant economic impact on a substantial number of small
entities, or a significant impact on the operation of a substantial
number of small rural hospitals.
The RFA defines small entity as a small business, a nonprofit
enterprise, or a governmental jurisdiction (such as a county, city, or
township) with a population of less than 50,000. We also consider all
providers and suppliers of services to be small entities. For purposes
of section 1102(b) of the Act, we define small rural hospital as a
hospital that has fewer than 50 beds, and is not located in a
metropolitan statistical area.
This rule makes minimal changes in the procedures for determining
the effective date of a provider agreement or a supplier approval, and
makes existing appeals procedures available to entities that are
dissatisfied with any effective date determination. It has been
determined that the effect of these changes on small entities is
negligible because, in practice, we have for the most part determined
effective dates of agreements and approvals using the policies and
procedures that had not until now been incorporated in our regulations.
The important aspect of this rule is that it is essentially a matter of
codification, of inclusion of those practices in the CFR.
In addition, we do not anticipate that codification of the right to
appeal effective date determinations will lead to a significant
increase in the number of hearing requests for several reasons.
First, current Federal regulations provide appeal rights for a
prospective provider or supplier who is denied participation in the
Medicare program. (State regulations may provide a similar appeals
mechanism for Medicaid denials). Denial of participation is usually
based on the prospective provider's or prospective supplier's lack of
compliance with our requirements. Effective date hearings would, for
the most part, focus on the same noncompliance issues. Appeals from
effective date determinations will probably arise when the entity
disagrees with the date that HCFA or the State determines that the
noncompliance was corrected. We do not believe that entities will
appeal both an initial denial and a subsequent effective date
determination.
Second, the right to appeal an effective date determination, while
not previously codified, had been confirmed by court decisions. Since
entities are currently appealing these decisions, and since the
effective date of participation is usually determined only once, at the
time of the initial survey (the exception being ICFs/MR which have
time-limited agreements) we do not anticipate a large increase in the
number of hearing requests.
It is clear that, since the procedures for determining and
appealing effective date determinations generally will not
[[Page 43935]]
change as a result of publishing this rule, the criteria for requiring
a regulatory impact analysis are not met. Accordingly, we have not
prepared a regulatory impact analysis because we have determined and
the Secretary certifies that this rule will not have a significant
economic impact on a substantial number of small entities or a
significant impact on the operation of a substantial number of small
rural hospitals.
We have no reason to anticipate that this rule will cause an
increase in the number of small entities that request agreements or
approvals for participation in Medicare or Medicaid or both. Neither do
we have any basis for estimating how many will make such requests after
the effective date of this rule.
We have reviewed this rule and determined that, under the
provisions of Public Law 104-121, it is not a major rule.
In accordance with the provisions of Executive Order 12866, this
final rule was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 431
Grant programs--health, Health facilities, Reporting and
recordkeeping requirements.
42 CFR Part 442
Grant programs--health, Health facilities, Health professions,
Health records, Medicaid, Nursing homes, Nutrition, Reporting and
recordkeeping requirements, Safety.
42 CFR Part 488
Health facilities, Survey and certification, Forms and guidelines.
42 CFR Part 489
Health facilities, Medicare.
42 CFR Part 498
Administrative practice and procedure, Appeals, Medicare,
Practitioners, providers, and suppliers.
42 CFR Chapter IV is amended as set forth below.
PART 431--STATE ORGANIZATION AND GENERAL ADMINISTRATION
A. Part 431 is amended as set forth below.
1. The authority citation for part 431 continues to read as
follows:
Authority: Section 1102 of the Social Security Act (42 U.S.C.
1302).
2. Subpart C is amended to add new Sec. 431.108 to read as follows:
Sec. 431.108 Effective date of provider agreements.
(a) Applicability--(1) General rule. Except as provided in
paragraph (a)(2) of this section, this section applies to Medicaid
provider agreements with entities that, as a basis for participation in
Medicaid--
(i) Are subject to survey and certification by HCFA or the State
survey agency; or
(ii) Are deemed to meet Federal requirements on the basis of
accreditation by an accrediting organization whose program has HCFA
approval at the time of accreditation survey and accreditation
decision.
(2) Exception. A Medicaid provider agreement with a laboratory is
effective only while the laboratory has in effect a valid CLIA
certificate issued under part 493 of this chapter, and only for the
specialty and subspecialty tests it is authorized to perform.
(b) All requirements are met on the date of survey. The agreement
is effective on the date the onsite survey (including the Life Safety
Code survey if applicable) is completed, if on that date the provider
meets--
(1) All applicable Federal requirements as set forth in this
chapter; and
(2) Any other requirements imposed by the State for participation
in the Medicaid program. (If the provider has a time-limited agreement,
the new agreement is effective on the day following expiration of the
current agreement.)
(c) All requirements are not met on the date of survey. If on the
date the survey is completed the provider fails to meet any of the
requirements specified in paragraph (b) of this section, the following
rules apply:
(1) An NF provider agreement is effective on the date on which--
(i) The NF is found to be in substantial compliance as defined in
Sec. 488.301 of this chapter; and
(ii) HCFA or the State survey agency receives from the NF, if
applicable, an approvable waiver request.
(2) For an agreement with any other provider, the effective date is
the earlier of the following:
(i) The date on which the provider meets all requirements.
(ii) The date on which a provider is found to meet all conditions
of participation but has lower level deficiencies, and HCFA or the
State survey agency receives from the provider an acceptable plan of
correction for the lower level deficiencies, or an approvable waiver
request, or both. (The date of receipt is the effective date of the
agreement, regardless of when HCFA approves the plan of correction or
waiver request, or both.)
(d) Accredited provider requests participation in the Medicaid
program.--(1) General rule. If a provider is currently accredited by a
national accrediting organization whose program had HCFA approval at
the time of accreditation survey and accreditation decision, and on the
basis of accreditation, HCFA has deemed the provider to meet Federal
requirements, the effective date depends on whether the provider is
subject to requirements in addition to those included in the
accrediting organization's approved program.
(i) Provider subject to additional requirements. For a provider
that is subject to additional requirements, Federal or State, or both,
the effective date is the date on which the provider meets all
requirements, including the additional requirements.
(ii) Provider not subject to additional requirements. For a
provider that is not subject to additional requirements, the effective
date is the date of the provider's initial request for participation if
on that date the provider met all Federal requirements.
(2) Special rule: Retroactive effective date. If the provider meets
the requirements of paragraphs (d)(1) and (d)(1)(i) or (d)(1)(ii) of
this section, the effective date may be retroactive for up to one year,
to encompass dates on which the provider furnished, to a Medicaid
recipient, covered services for which it has not been paid.
3. Section 431.151(a) is amended to republish the introductory text
and add a paragraph (a)(3), to read as follows:
Sec. 431.151 Scope and applicability.
(a) General rules. This subpart sets forth the appeals procedures
that a State must make available as follows:
* * * * *
(3) To an NF or ICF/MR that is dissatisfied with a determination as
to the effective date of its provider agreement.
* * * * *
4. Section 431.153 is amended to republish the introductory text of
paragraph (b) and add a paragraph (b)(5), to read as follows:
Sec. 431.153 Evidentiary hearing.
* * * * *
(b) Limit on grounds for appeal. The following are not subject to
appeal:
* * * * *
(5) A State survey agency's decision as to when to conduct an
initial survey of a prospective provider.
* * * * *
[[Page 43936]]
Sec. 431.610 [Amended]
5. In Sec. 431.610, the following changes are made:
a. In paragraph (e)(1), ``if'' is removed and ``whether'' is
inserted in its place.
b. In paragraph (e)(2), the period is removed and ``; and'' is
added in its place.
c. A new paragraph (e)(3) is added, to read as set forth below:
Sec. 431.610 Relations with standard-setting and survey agencies.
* * * * *
(e) Designation of survey agency. * * *
(3) The agency designated in paragraph (e)(1) of this section makes
recommendations regarding the effective dates of provider agreements,
as determined under Sec. 431.108.
* * * * *
PART 442--STANDARDS FOR PAYMENT TO NURSING FACILITIES AND
INTERMEDIATE CARE FACILITIES FOR THE MENTALLY RETARDED
B. Part 442 is amended as set forth below.
1. The heading for part 442 is revised to read as set forth above.
2. The authority citation for part 442 continues to read as
follows:
Authority: Section 1102 of the Social Security Act (42 U.S.C.
1302).
3. Section 442.13 is revised to read as follows:
Sec. 442.13 Effective date of provider agreement.
The effective date of a provider agreement with an NF or ICF/MR is
determined in accordance with the rules set forth in Sec. 431.108.
PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES
C. Part 488 is amended as set forth below.
1. The authority citation for part 488 continues to read as
follows:
Authority: Secs. 1102 and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. Section 488.11 is revised to read as follows:
Sec. 488.11 State survey agency functions.
State and local agencies that have agreements under section 1864(a)
of the Act perform the following functions:
(a) Survey and make recommendations regarding the issues listed in
Sec. 488.10.
(b) Conduct validation surveys of accredited facilities as provided
in Sec. 488.7.
(c) Perform other surveys and carry out other appropriate
activities and certify their findings to HCFA.
(d) Make recommendations regarding the effective dates of provider
agreements and supplier approvals in accordance with Sec. 489.13 of
this chapter.
PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL
D. Part 489 is amended as set forth below.
1. The authority citation for part 489 continues to read as
follows:
Authority: Secs. 1102, and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. In Sec. 489.1, a new paragraph (d) is added, to read as follows:
Sec. 489.1 Statutory basis.
* * * * *
(d) Although section 1866 of the Act speaks only to providers and
provider agreements, the effective date rules in this part are made
applicable also to the approval of suppliers that meet the requirements
specified in Sec. 489.13.
3. Sec. 489.13 is revised to read as follows:
Sec. 489.13 Effective date of agreement or approval.
(a) Applicability--(1) General rule. Except as provided in
paragraph (a)(2) of this section, this section applies to Medicare
provider agreements with, and supplier approval of, entities that, as a
basis for participation in Medicare--
(i) Are subject to survey and certification by HCFA or the State
survey agency; or
(ii) Are deemed to meet Federal requirements on the basis of
accreditation by an accrediting organization whose program has HCFA
approval at the time of accreditation survey and accreditation
decision.
(2) Exceptions. (i) For an agreement with a community mental health
center (CMHC) or a Federally qualified health center (FQHC), the
effective date is the date on which HCFA accepts a signed agreement
which assures that the CMHC or FQHC meets all Federal requirements.
(ii) A Medicare supplier approval of a laboratory is effective only
while the laboratory has in effect a valid CLIA certificate issued
under part 493 of this chapter, and only for the specialty and
subspecialty tests it is authorized to perform.
(b) All Federal requirements are met on the date of survey. The
agreement or approval is effective on the date the survey (including
the Life Safety Code survey, if applicable) is completed, if on that
date the provider or supplier meets all applicable Federal requirements
as set forth in this chapter. (If the agreement or approval is time-
limited, the new agreement or approval is effective on the day
following expiration of the current agreement or approval.)
(c) All Federal requirements are not met on the date of survey. If
on the date the survey is completed the provider or supplier fails to
meet any of the requirements specified in paragraph (b) of this
section, the following rules apply:
(1) For an agreement with an SNF, the effective date is the date on
which--
(i) The SNF is in substantial compliance (as defined in
Sec. 488.301 of this chapter) with the requirements for participation;
and
(ii) HCFA or the State survey agency receives from the SNF, if
applicable, an approvable waiver request.
(2) For an agreement with, or an approval of, any other provider or
supplier, (except those specified in paragraph (a)(2) of this section),
the effective date is the earlier of the following:
(i) The date on which the provider or supplier meets all
requirements.
(ii) The date on which a provider or supplier is found to meet all
conditions of participation or coverage, but has lower level
deficiencies, and HCFA or the State survey agency receives an
acceptable plan of correction for the lower level deficiencies, or an
approvable waiver request, or both. (The date of receipt is the
effective date regardless of when HCFA approves the plan of correction
or the waiver request, or both.)
(d) Accredited provider or supplier requests participation in the
Medicare program--(1) General rule. If the provider or supplier is
currently accredited by a national accrediting organization whose
program had HCFA approval at the time of accreditation survey and
accreditation decision, and on the basis of accreditation, HCFA has
deemed the provider or supplier to meet Federal requirements, the
effective date depends on whether the provider or supplier is subject
to requirements in addition to those included in the accrediting
organization's approved program.
(i) Provider or supplier subject to additional requirements. If the
provider or supplier is subject to additional requirements, the
effective date of the agreement or approval is the date on which the
provider or supplier meets all requirements, including the additional
requirements.
[[Page 43937]]
(ii) Provider or supplier not subject to additional requirements.
For a provider or supplier that is not subject to additional
requirements, the effective date is the date of the provider's or
supplier's initial request for participation if on that date the
provider or supplier met all Federal requirements.
(2) Special rule: Retroactive effective date. If a provider or
supplier meets the requirements of paragraphs (d)(1) and (d)(1)(i) or
(d)(1)(ii) of this section, the effective date may be retroactive for
up to one year to encompass dates on which the provider or supplier
furnished, to a Medicare beneficiary, covered services for which it has
not been paid.
4. Section 489.53 is amended to revise the heading of paragraph (b)
and paragraphs (c)(1) and (c)(2) to read as follows:
Sec. 489.53 Termination by HCFA.
* * * * *
(b) Termination of agreements with certain hospitals. * * *
(c) Notice of termination--(1) Timing: Basic rule. Except as
provided in paragraph (c)(2) of this section, HCFA gives the provider
notice of termination at least 15 days before the effective date of
termination of the provider agreement.
(2) Timing exceptions: Immediate jeopardy situations--(i) Hospital
with emergency department. If HCFA finds that a hospital with an
emergency department is in violation of Sec. 489.24, paragraphs (a)
through (e), and HCFA determines that the violation poses immediate
jeopardy to the health or safety of individuals who present themselves
to the hospital for emergency services, HCFA--
(A) Gives the hospital a preliminary notice indicating that its
provider agreement will be terminated in 23 days if it does not correct
the identified deficiencies or refute the finding; and
(B) Gives a final notice of termination, and concurrent notice to
the public, at least 2 , but not more than 4, days before the effective
date of termination of the provider agreement.
(ii) Skilled nursing facilities (SNFs). For an SNF with
deficiencies that pose immediate jeopardy to the health or safety of
residents, HCFA gives notice at least 2 days before the effective date
of termination of the provider agreement.
* * * * *
PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT
AFFECT THE PARTICIPATION OF CERTAIN ICFs/MR AND CERTAIN NFs IN THE
MEDICAID PROGRAM
E. Part 498 is amended as set forth below.
1. The authority citation for part 498 continues to read as
follows:
Authority: Secs. 1102, and 1871 of the Social Security Act (42
U.S.C. 1302 and 1395hh).
2. Section 498.3 is amended to revise paragraph (a), republish the
introductory text of paragraph (b) and add a paragraph (b)(14), revise
the introductory text of paragraph (d) and add new paragraphs (d)(14)
and (d)(15), to read as follows:
Sec. 498.3 Scope and applicability.
(a) Scope. This part sets forth procedures for reviewing initial
determinations that HCFA makes with respect to the matters specified in
paragraph (b) of this section, and that the OIG makes with respect to
the matters specified in paragraph (c) of this section. It also
specifies, in paragraph (d) of this section, administrative actions
that are not subject to appeal under this part.
(b) Initial determinations by HCFA. HCFA makes initial
determinations with respect to the following matters:
* * * * *
(14) The effective date of a Medicare provider agreement or
supplier approval.
* * * * *
(d) Administrative actions that are not initial determinations.
Administrative actions that are not initial determination (and
therefore not subject to appeal under this part) include but are not
limited to the following:
* * * * *
(14) The choice of alternative sanction or remedy to be imposed on
a provider or supplier.
(15) A decision by the State survey agency as to when to conduct an
initial survey of a prospective provider or supplier.
* * * * *
F. Technical correction.
Sec. 489.1 [Amended]
In Sec. 489.11(c), the following changes are made:
a. At the end of paragraph (c)(1), the word ``and'' is added.
b. At the end of paragraph (c)(2), ``; and'' is removed and a
period is inserted in its place.
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; Program No. 93.774, Medicare--
Supplementary Medical Insurance; and Program No. 93.778, Medical
Assistance.)
Dated: September 20, 1996.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
Dated: December 27, 1996.
Donna E. Shalala,
Secretary.
[FR Doc. 97-21731 Filed 8-15-97; 8:45 am]
BILLING CODE 4120-01-P