[Federal Register Volume 63, Number 223 (Thursday, November 19, 1998)]
[Rules and Regulations]
[Pages 64195-64199]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-30844]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
42 CFR Parts 440 and 441
[HCFA-2060-F]
RIN 0938-AJ05
Medicaid Program; Inpatient Psychiatric Services Benefit for
Individuals Under Age 21
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Final rule.
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SUMMARY: This final rule amends the CFR by adding a choice of
accreditation organizations that a State Medicaid agency may use to
fulfill the requirement for Medicaid approval of, and payment to,
psychiatric facilities other than psychiatric hospitals or psychiatric
units of acute care hospitals, that provide the ``inpatient psychiatric
services benefit for individuals under age 21''. In response to
comments received on a prior proposed rule, we are retaining the
requirement for accreditation of psychiatric facilities, but we are
offering alternatives to accreditation by the Joint Commission on
Accreditation of Health Care Organizations. Accreditation of
psychiatric facilities, other than psychiatric hospitals and
psychiatric units in acute care hospitals, could be performed by the
Council on Accreditation of Services for Families and Children, the
Commission on Accreditation of Rehabilitation Facilities, or any other
accrediting body with comparable standards that is recognized by the
State. This change is being made while we continue to develop HCFA
standards for psychiatric facilities based on our evaluation of the
comments that we received on the proposed standards that were published
in the NPRM. All of the comments on
[[Page 4196]]
the remaining provisions of the proposed rule will be addressed in a
second final rule to be published at a future date.
EFFECTIVE DATE: This rule is effective December 21, 1998.
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FOR FURTHER INFORMATION CONTACT: Mary Kay Mullen (410) 786-5480.
SUPPLEMENTARY INFORMATION:
I. Background
Medicaid is the Federally assisted State program authorized under
title XIX of the Social Security Act (the Act) to provide funding for
medical care provided to certain needy aged, blind and disabled
persons, families with dependent children, and low-income pregnant
women and children. Each State determines the scope of its program,
within limitations and guidelines established by the Act and the
implementing regulations at 42 CFR chapter IV, subchapter C. Each State
submits a State plan, for our approval, that provides the basis for
granting Federal funds to cover part of the expenditures incurred by
the State for medical assistance and the administration of the program.
Section 1902(a) of the Act specifies the eligibility requirements
that individuals must meet in order to receive Medicaid. Other parts of
the Act describe the eligibility groups in detail and specify
limitations on what may be paid for as ``medical assistance.''
II. Statutory and Regulatory History
The Social Security Amendments of 1972 (Public Law 92-603) amended
the Medicaid statute to, among other things, allow States the option of
covering inpatient psychiatric hospital services for individuals under
age 21. In this preamble, we will refer to the ``inpatient psychiatric
hospital services benefit for individuals under age 21'' as the
``psychiatric/21 benefit.'' Originally the statute required that the
psychiatric/21 benefit be provided by psychiatric hospitals that were
accredited by the Joint Commission on Accreditation of Hospitals. This
organization is now called the Joint Commission on Accreditation of
Healthcare Organizations. In this preamble, we will refer to this
organization as the ``Joint Commission''.
In 1976, the Social and Rehabilitation Service, one of the Federal
agencies that was later part of the merger that formed HCFA, published
final regulations in 45 CFR part 249, implementing the psychiatric/21
benefit. These regulations allowed the coverage of this benefit in
psychiatric facilities, other than psychiatric hospitals, that were
accredited by the Joint Commission. The term ``psychiatric facility''
was used rather than the statutory term ``psychiatric hospital''
because the Joint Commission had modified its accrediting practices to
encompass a broader range of settings providing psychiatric services.
Since the statute then required Joint Commission accreditation, we
wanted to keep our conditions of participation consistent with Joint
Commission practices.
In 1981, we received comments from the Joint Commission expressing
concern about our regulatory requirement for exclusive Joint Commission
accreditation. The Joint Commission indicated that this Federal
requirement was in conflict with Joint Commission policy that
facilities should seek accreditation voluntarily. In response, we noted
that the regulatory requirement for accreditation by the Joint
Commission could not be removed because it was required by statute.
The Deficit Reduction Act of 1984 (DRA) amended section 1905(h) of
the Act, removing the requirement for Joint Commission accreditation
and adding the requirement that providers of the psychiatric/21 benefit
meet the definition of a ``psychiatric hospital'' under the Medicare
program as specified in section 1861(f) of the Act.
Despite this statutory change, based on our reading of
Congressional intent, we did not remove the requirement for Joint
Commission accreditation from Sec. 441.151(b). Our reliance on Joint
Commission accreditation was the only basis for coverage of the
psychiatric/21 benefit in psychiatric facilities other than psychiatric
hospitals. Our decision to retain the regulatory requirement for Joint
Commission accreditation was based on the fact that, in enacting the
1984 amendment, the Congress gave no indication that it intended to
narrow the psychiatric/21 benefit or alter our policy that had been in
effect since 1976.
On November 5, 1990, the Omnibus Budget Reconciliation Act of 1990
(OBRA '90), amended section 1905(h) of the Act to specify that the
psychiatric/21 benefit can be provided in psychiatric hospitals that
meet the definition of that term in section 1861(f) of the Act ``or in
another inpatient setting that the Secretary has specified in
regulations.'' This amendment, which was effective as if it had been
enacted earlier as part of the DRA, affirmed and effectively ratified
our preexisting policy as articulated in subpart D of 42 CFR part 441,
which interpreted sections 1905(a)(16) and 1905(h) of the Act as not
being limited solely to psychiatric hospital settings. OBRA '90
provides our authority to allow other inpatient settings in addition to
the psychiatric hospital setting for the psychiatric/21 benefit without
continuing to require that providers obtain Joint Commission
accreditation.
III. Provisions of the Proposed Rule
In the NPRM, published November 17, 1994 (59-FR-59624) we proposed
to delete the existing regulatory requirement for Joint Commission
accreditation in Sec. 441.151(b) and to establish HCFA standards that
psychiatric facilities other than psychiatric hospitals would have to
meet. In response to the many comments on the issue of accreditation
that are discussed below, we have reconsidered our position and have
retained the accreditation requirement, but we have provided additional
accreditation options. Under the new rule we are not requiring the
exclusive use of the Joint Commission. We are allowing the option of
using additional organizations in order to increase the States'
flexibility in the choice of accrediting organizations. We will
continue to evaluate the comments on
[[Page 64197]]
the proposed standards for facilities that provide the psychiatric/21
benefit and we will publish these comments and responses in a second
final rule at a future date.
This final rule revises the requirements in Secs. 441.151 and
440.160 only for psychiatric facilities providing the psychiatric/21
benefit. The requirements governing psychiatric hospitals and
psychiatric units in acute care hospitals are not changed.
IV. Analysis of and Responses to Public Comments
In the preamble to the proposed rule, we included a history of the
requirement for accreditation by the Joint Commission which has been
part of the psychiatric/21 benefit since it was first enacted. In the
NPRM, we proposed to delete the requirement for Joint Commission
accreditation of psychiatric facilities other than psychiatric
hospitals from the regulations, since the requirement had been deleted
from the statute. The NPRM proposed new HCFA standards for psychiatric
facilities other than psychiatric hospitals or psychiatric units of
acute care hospitals that provided this benefit. We received a large
number of comments on the subject of accreditation, more than on any
other issue raised in the proposed rule.
Comment: Most of the commenters stated that the NPRM did not
sufficiently acknowledge the value of accreditation by a national body.
Response: We proposed in the NPRM to remove the requirement that
providers of the Psychiatric/21 benefit obtain Joint Commission
accreditation. Forty eight percent of the 100 commenters stated that
the proposed rule gave insufficient attention to the importance and the
value that such accreditation can provide. We recognize the value of
accreditation as an effective process to measure quality of service
provided under this benefit. In response to the concerns of those
groups that asked us to retain the requirement for accreditation, we
are doing so, but we are also giving states flexibility to choose
accrediting bodies for psychiatric facilities that are not psychiatric
hospitals or psychiatric units of acute care hospitals that include not
only the Joint Commission, but also the Council on Accreditation of
Services for Families and Children (COA), the Commission on
Accreditation of Rehabilitation Facilities (CARF), or any other
accrediting body with comparable standards, that is recognized by the
State. We will continue to evaluate the comments received on the
proposed HCFA standards.
Comment: Many commenters said that it is inefficient to survey
providers that are accredited. Other commenters urged HCFA to encourage
States to waive the conditions of participation for providers that are
accredited by a national accrediting body. Several other commenters
suggested that HCFA allow accreditation by a national organization to
serve as a substitute for meeting the proposed HCFA standards. One
commenter said that HCFA should not allow States to require
accreditation in addition to HCFA standards, because this would create
another layer of requirements and entail another survey.
Response: We plan to reevaluate whether imposition of our standards
on psychiatric facilities that are not psychiatric hospitals or units
of acute care hospitals but are already accredited is necessary to
ensure the quality of services provided under this benefit.
Comment: A number of commenters objected to the proposed deletion
of the requirement for Joint Commission accreditation, which they
referred to as the industry standard of quality.
Response: We are aware that accreditation is recognized by many as
a standard of quality and for this reason we are retaining the
requirement. However we are offering alternatives to Joint Commission
accreditation of psychiatric facilities that are not psychiatric
hospitals or units of acute care hospitals by adding COA, CARF, or any
other accrediting body, recognized by the State, with comparable
standards. As previously stated, this change is necessary while we
continue to develop HCFA standards based on the comments we received on
the proposed standards that were published in the NPRM.
Comment: A few commenters supported the deletion of the
accreditation requirement.
Response: We are continuing to retain the requirement for
psychiatric facility accreditation in this final rule while we evaluate
the need for HCFA standards based on the comments received on the
proposed standards and the relationship of these proposed standards to
accreditation.
Comment: One commenter said that if the regulatory requirement is
deleted, the State should require Joint Commission accreditation. A few
commenters indicated that States should have the option of requiring
accreditation if they consider it necessary.
Response: We agree with those commenters who support States having
the option of determining what accrediting body will be recognized by
the State to accredit psychiatric/21 benefit providers. Accordingly, we
have amended language in this final rule to expand accreditation beyond
the Joint Commission to include COA, CARF, or any other accrediting
body with comparable standards that is recognized by the State.
V. Provisions of the Final Regulations
This final rule, changes Secs. 441.151 and 440.160 of the proposed
rule, returning it to the current regulatory requirement of
accreditation but adding as alternative options to Joint Commission
accreditation of psychiatric facilities that are not psychiatric
hospitals or psychiatric units of an acute care hospital, accreditation
by COA, CARF, or any other accrediting body, recognized by the State,
with comparable standards. The remaining provisions of the proposed
rule, together with all related comments and responses will be
published in a final rule at a future date.
VI. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995, we are required to
provide 60-day notice in the Federal Register and solicit public
comment before a collection of information requirement is submitted to
the Office of Management and Budget (OMB) for review and approval. In
order to fairly evaluate whether an information collection should be
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act
of 1995 requires that we solicit comment on the following issues:
The need for the information collection and its usefulness
in carrying out the proper functions of our agency.
The accuracy of our estimate of the information collection
burden.
The quality, utility, and clarity of the information to be
collected.
Recommendations to minimize the information collection
burden on the affected public, including automated collection
techniques.
Therefore, we are soliciting public comment on this issue for the
information requirement discussed below.
Section 441.151 General Requirements
Section 441.151(d) states that a psychiatric facility, or an
inpatient program in a psychiatric facility, must certify in writing
that Medicaid services provided to persons who have reached the age of
22 years are still necessary in the setting in which it will be
provided (or is being provided in emergency circumstances) in
accordance with Sec. 441.152.
While this IRC is subject to the PRA, we believe that the burden
associated
[[Page 64198]]
with this ICR is exempt in accordance with 5 CFR 13220.3(b)(2) because
the time and effort and financial resources necessary to comply with
this requirement would be incurred by persons in the normal course of
their activities. These are reasonable and customary State practices
and the State would impose this standard for efficient utilization of
Medicaid services in the absence of a Federal requirement. Therefore we
have assigned one (1) token hour of burden.
We have submitted a copy of this final rule to OMB for its review
of the information collection requirement described above. This
requirement is not effective until it has been approved by OMB.
If you comment on this information collection requirement, please
mail copies directly to the following:
Health Care Financing Administration, Office of Information Services,
Security and Standards Group Division of HCFA Enterprise Standards Room
N2-14-26, 7500 Security Boulevard Baltimore, MD 21244-1850 Attention:
Louis Blank, HCFA-2060-F
and
Office of Information and Regulatory Affairs, Office of Management and
Budget, Room 10235, New Executive Office Building, Washington, DC
20503, Attention: Allison Eydt, HCFA Desk Officer
VII. Regulatory Impact Statement
We have examined the impacts of this final rule as required by
Executive Order 12866 (EO 12866), the Unfunded Mandates Act of 1995,
and the Regulatory Flexibility Act (RFA) (Public Law 96-354). EO 12866
directs agencies to assess all cost and benefits of available
regulatory alternatives and, when regulation is necessary, to select
regulatory approaches that maximize net benefits including potential
economic, environmental, public health and safety effects, distributive
impacts, and equity. A regulatory impact analysis (RIA) must be
prepared for major rules with economically significant effects (100
million or more annually).
Section 1102(b) of the Act requires us to prepare an RIA if a rule
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.
A. The Unfunded Mandates Act
The Unfunded Mandates Reform Act of 1995 also requires (in section
202) that agencies perform an assessment of anticipated costs and
benefits before proposing any rule that may result in an annual
expenditure by State, local or tribal governments, in the aggregate, or
by the private sector, of $100 million.
B. Regulatory Flexibility Act
The RFA requires us to analyze options for regulatory relief of
small businesses. For purposes of the RFA, small entities include small
businesses, non-profit organizations and governmental agencies. Most
hospitals and most other providers and suppliers are small entities,
either by nonprofit status or by having revenues of $5 million or less
annually. Intermediaries and carriers are not considered to be small
entities.
This is not a major rule and there will be no additional costs to
the Medicaid program as a result of this final rule.
For this reason we are not preparing an analysis for either the RFA
or section 1102(b) of the Act, since we have determined, and we certify
that this final rule would not result in a significant impact on a
substantial number of small entities and would not have a significant
impact on the operations of a substantial number of small rural
hospitals.
In accordance with the provisions of Executive Order 12866, this
final regulation was reviewed by the Office of Management and Budget.
List of Subjects
42 CFR Part 440
Grant programs--health, Medicaid.
42 CFR Part 441
Family Planning, Grant programs--health, Infants and children,
Medicaid, Penalties, Reporting and recordkeeping requirements.
For the reasons set out in the preamble, 42 CFR Chapter IV is
amended as follows:
PART 440--SERVICES: GENERAL PROVISIONS
A. Part 440 is amended as follows:
1. The authority citation for part 440 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
2. Section 440.160 is revised to read as follows:
Sec. 440.160 Inpatient psychiatric services for individuals under age
21.
``Inpatient psychiatric services for individuals under age 21''
means services that--
(a) Are provided under the direction of a physician;
(b) Are provided by--
(1) A psychiatric hospital or an inpatient psychiatric program in a
hospital, accredited by the Joint Commission on Accreditation of
Healthcare Organizations, or
(2) A psychiatric facility which is accredited by the Joint
Commission on Accreditation of Healthcare Organizations, the Council on
Accreditation of Services for Families and Children, the Commission on
Accreditation of Rehabilitation Facilities, or by any other accrediting
organization, with comparable standards, that is recognized by the
State.
(c) Meet the requirements in Sec. 441.151 of this subchapter.
PART 441--SERVICES: REQUIREMENTS AND LIMITS APPLICABLE TO SPECIFIC
SERVICES
B. Part 441 is amended as follows:
1. The authority citation for part 441 continues to read as
follows:
Authority: Sec. 1102 of the Social Security Act (42 U.S.C.
1302).
2. Section 441.151 is amended by revising paragraphs (b) and (c)
and adding a new paragraph (d) to read as follows:
Sec. 441.151 General requirements.
* * * * *
(b) By--
(1) A psychiatric hospital or an inpatient psychiatric program in a
hospital, accredited by the Joint Commission on Accreditation of
Healthcare Organizations; or
(2) A psychiatric facility which is accredited by the Joint
Commission on Accreditation of Healthcare Organizations, the Commission
on Accreditation of Rehabilitation Facilities, the Council on
Accreditation of Services for Families and Children, or by any other
accrediting organization, with comparable standards that is recognized
by the State.
(c) Before the individual reaches age 21 or, if the individual was
receiving the services immediately before he or she reached age 21,
before the earlier of the following--
(1) The date the individual no longer requires the services; or
(2) the date the individual reaches 22; and
(d) Certified in writing to be necessary in the setting in which it
will be
[[Page 64199]]
provided (or is being provided in emergency circumstances) in
accordance with Sec. 441.152.
(Catalog of Federal Domestic Assistance Program No. 93,778 Medical
Assistance Program)
Dated: June 2, 1998.
Nancy-Ann Min Deparle,
Administrator, Health Care Financing Administration.
Dated: August 12, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 98-30844 Filed 11-18-98; 8:45 am]
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