[Federal Register Volume 63, Number 231 (Wednesday, December 2, 1998)]
[Notices]
[Pages 66554-66556]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-32102]



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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-2008-FN]
RIN 0938-AI90


Medicare Program; Recognition of the American Association for 
Accreditation of Ambulatory Surgery Facilities, Inc. for Ambulatory 
Surgical Centers Program

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

ACTION: Final notice.

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SUMMARY: This notice announces the approval of the American Association 
for the Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF) 
as an accreditation organization acknowledged by the Medicare program. 
We have found that AAAASF's standards for ambulatory surgical centers 
(ASCs) meet or exceed those established by the Medicare program. ASCs 
accredited by AAAASF will receive deemed status under the Medicare 
program.

EFFECTIVE DATE: This final notice is effective December 2, 1998, 
through December 2, 2004.

FOR FURTHER INFORMATION CONTACT: Joan Berry, (410) 786-7233.

SUPPLEMENTARY INFORMATION:

I. Background

A. Determining Compliance of Ambulatory Surgical Centers--Surveys and 
Deeming

    In order to participate in the Medicare program, ambulatory 
surgical centers (ASCs) must meet conditions for coverage specified in 
regulations that implement Title XVIII of the Social Security Act (the 
Act). ASCs enter into a Medicare participation agreement but generally 
only after they are certified by a State survey agency as complying 
with the ASC conditions for coverage set forth in the Act and 
regulations. ASCs are subject to routine surveys by State agencies to 
determine whether they continue to meet these requirements; an ASC that 
does not meet these requirements is considered out of compliance and 
risks having its participation in the Medicare program terminated.
    Section 1865 of the Act includes a provision that permits ASCs to 
be exempt from routine surveys by the State survey agencies to 
determine compliance with the Medicare conditions of coverage. 
Specifically, section 1865(b) of the Act provides that if we find that 
accreditation of a provider entity by a national accrediting body 
demonstrates that all Medicare conditions or requirements are met or 
exceeded, we would (for certain providers, including ASCs) ``deem'' 
these entities as meeting the applicable Medicare conditions. In order 
to enter the Medicare program under this deeming authority, the 
entities must meet the regulatory requirements at 42 CFR 489.13 
(``Effective date of agreement or approval''). Under our regulations at 
Sec. 416.40 (``Condition for coverage--Compliance with State licensure 
law''), an ASC must still meet the State's licensure requirements. 
However, certification by Medicare is still required to receive payment 
regardless of whether the certification is by us or the accrediting 
body.
    In making our finding as to whether the standards of an 
accreditation body demonstrate comparability with all Medicare 
conditions or requirements, we consider factors such as the body's 
accreditation requirements, its survey procedures, its ability to 
provide adequate resources for conducting required surveys and 
supplying information for use in enforcement activities, its monitoring 
procedures for provider entities found to be out of compliance with the 
conditions or requirements, and its ability to provide us with 
necessary data for validation.
    As suppliers, ASCs are included by definition of provider entity in 
section 1865(b)(4) of the Act. Thus, if we were to recognize an ASC 
accreditation organization's program as demonstrating that all the 
Medicare ASC conditions of coverage are met, the ASCs accredited under 
the approved Medicare program would be considered or ``deemed'' to meet 
the same conditions for which the accreditation standards have been 
recognized. The American Association for the Accreditation of 
Ambulatory Surgery Facilities, Inc. (AAAASF) is the third accreditation 
organization that we have approved for ASCs. The other two 
accreditation organizations are the Joint Commission on the 
Accreditation of Healthcare Organizations (JCAHO) and the Accreditation 
Association for Ambulatory Health Care (AAAHC).
    It has been brought to our attention that some ASCs are under the 
mistaken impression that once deemed authority is granted by HCFA to an 
accreditation organization, then ASCs must be accredited by such a body 
to receive Medicare certification. Accreditation by an accreditation 
organization is voluntary and not required by HCFA for Medicare 
certification.

B. Deeming Authority Process

    On November 23, 1993, we published a final rule (58 FR 61816) that 
set forth the procedure that we would use to review and approve 
national accreditation organizations that wish to be recognized as 
providing reasonable assurance that Medicare conditions of coverage are 
met (Sec. 488.4, ``Application and reapplication procedures for 
accreditation organizations''). A national accreditation organization 
(Accreditation organization) applying for approval of deeming authority 
must furnish to us information and materials listed in our regulations 
at Sec. 488.4. Our regulations at Sec. 488.8 (``Federal review of 
accreditation organizations'') detail the Federal review and approval 
process of applications for deeming authority. On April 26, 1996, 
however, new legislation entitled ``Making Appropriations for Fiscal 
Year 1996 to Make a Further Down Payment Toward a Balanced Budget and 
for Other Purposes (Pub. L. 104-134)'' was enacted.
    Section 516 of Public Law 104-134 amended section 1865 of the Act 
in a number of ways. The legislation removed the requirements that 
accreditation organizations provide reasonable assurance that entities 
accredited by them would meet Medicare conditions coverage or 
requirements. In revised section 1865(b)(1) of the Act, organizations 
are now required to demonstrate that their accredited entities would 
meet or exceed all of the applicable Medicare conditions. Section 
1865(b)(4) includes suppliers (for example, ASCs) under the provider 
entities that we may consider for deemed status. We are required to 
publish a proposed notice in the Federal Register 60 days after the 
receipt of a written request for deemed status by a national 
accreditation body. After review of the national accreditation body's 
application, the statute requires that we publish a notice of our 
approval or disapproval within 210 days after we receive a complete 
package of information and the organization's deeming application.
    We received an application from AAAASF on November 18, 1997 and in 
accordance with the statute, this final notice should have been 
published by June 16, 1998. However, HCFA was waiting for AAAASF to 
submit required materials on a quality improvement project for their 
training program before approving its deeming authority. AAAASF chose 
to delay the publication date, rather than be denied deemed status and 
have to reapply for deemed authority. Regulations at Sec. 488.8(c)

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specify that the deeming authority for AAAASF will take effect 90 days 
from the publication of this final notice. Thus, AAAASF cannot award 
deemed accreditation to a supplier and request HCFA certification 
before the end of that 90-day period.

C. Ambulatory Surgical Center Conditions for Coverage and Requirements

    The regulations specifying the Medicare conditions for coverage for 
ASCs are located in part 416. These conditions implement section 
1832(a)(2)(F)(i) of the Act, which provides for Medicare Part B 
coverage of facility services furnished in connection with surgical 
procedures specified by us under section 1833(i)(1) of the Act.

II. Provisions of the Proposed Notice

    The proposed notice announced the application of AAAASF for deemed 
status for its accreditation program only to the extent that it 
accredits ASCs.
    Under section 1865(b)(2) of the Act and our regulations at 
Sec. 488.8 (``Federal review of accreditation organizations''), our 
review and evaluation of this national accreditation organization was 
conducted in accordance with, but was not necessarily limited to, the 
following factors:
     The equivalency of an accreditation organization's 
requirements for an entity to be certified compared to our requirements 
for certification.
     The organization's survey process to determine the 
following:
    * The composition of the survey team, surveyor qualifications, and 
the ability of the organization to provide continuing surveyor 
training.
    * The comparability of the organization's process to that of State 
agencies, including survey frequency, and the ability to investigate 
and respond appropriately to complaints against accredited facilities.
    * The organization's procedures for monitoring providers or 
suppliers found to be out of compliance with program requirements. If 
noncompliance is identified through validation reviews, the survey 
agency monitors corrections as specified at Sec. 488.7(b)(2).
    * The ability of the organization to report deficiencies to the 
surveyed facilities and respond to the facility's plan of correction in 
a timely manner.
    * The ability of the organization to provide us with electronic 
data in ASCII comparable code and reports necessary for effective 
validation and assessment of the organization's survey process.
    * The adequacy of staff and other resources.
    * The organization's ability to provide adequate funding for 
performing required surveys.
    * The organization's policies with respect to whether surveys are 
announced or unannounced.
     The accreditation organization's agreement to provide us 
with a copy of the most current accreditation survey together with any 
other information related to the survey that we may require (including 
corrective action plans).
    We met with representatives of AAAASF to evaluate its accreditation 
standards and survey process to determine if the organization 
demonstrated that its accredited facilities met Medicare conditions. We 
did a standard by standard comparison of the applicable conditions or 
requirements to determine which of them met or exceeded Medicare 
requirements. The representatives responded to our concerns by 
proposing to change the organization standards for its member ASCs 
needing Medicare certification. We subsequently received revised survey 
guidelines and amended standards for their member ASCs requesting 
Medicare certification.

A. Differences Between the American Association for the Accreditation 
of Ambulatory Surgery Facilities, Inc. and Medicare Conditions and 
Survey Requirements

    We compared the standards contained in the AAAASF's 1994 Standards 
Manual for accreditation of ambulatory surgery facilities and its 
survey process in the 1994 Inspectors Manual to the Medicare ASC 
conditions and survey procedures. In 18 areas the AAAASF has made the 
following revisions:
     Exclusivity Requirement--AAAASF has included a statement 
on ASC surgical exclusivity as an integral part of its application 
package.
     Unannounced Surveys--AAAASF has added language to the on-
site inspection information to include a declaration that all surveys 
will be unannounced. In order to accommodate the need to assure that 
key staff are on hand for surveys without notification of the facility, 
AAAASF has agreed to request that the facility send staffing schedules 
on a regular basis once their application is complete.
     Frequency of Surveys--AAAASF resurveys an ASC every 3 
years. Our original requirement was to survey ASCs every year. In 
practice, our resurveys have been averaging almost 3 years. Both the 
JCAHO and AAAHC have 3-year resurvey cycles. Therefore, we accept 
AAAASF's 3-year resurvey cycle.
     State and Local Laws--AAAASF has agreed to assure that 
out-of-state inspectors receive adequate information on certification, 
licensure, and scope of practice requirements of that State.
     Reasonable Assurance--AAAASF has agreed to modify its 
process to build in a review of the past history of facilities that 
already have Medicare certification through the State.
     Fraud and Abuse--AAAASF has agreed to require that its 
inspectors report any suspected instances of fraud and abuse to the 
appropriate HCFA Regional Office.
     Hearing Schedules and Appeals--AAAASF has specified the 
dates and locations for its Accreditation Committee hearings over the 
next 4 years.
     Hospitalization--AAAASF has inserted the word ``local'' to 
indicate those hospitals eligible to receive immediate transfers for 
patients requiring emergency medical care beyond the capabilities of 
the ASC.
     Anesthetic Risk and Evaluation--AAAASF has added language 
to indicate that a physician must examine each patient immediately 
before surgery to evaluate the risk of anesthesia and the procedure to 
be performed.
     Recovery Room and Waiting Area--AAAASF has specified that 
an ASC must have a separate recovery room and waiting area.
     Emergency Personnel--AAAASF has added the requirement that 
personnel trained in the use of emergency equipment and cardiopulmonary 
resuscitation must be available whenever a patient is in the facility.
     Other Practitioners--AAAASF has added the requirement that 
if certified operating room technicians are employed that their 
certification or licensure must be current. Furthermore, if uncertified 
or unlicensed operating room technicians are used, it must be 
permissible under State law and the technician must be personally 
trained by the employing surgeon.
     Organization and staffing--AAAASF has added the 
requirement that a registered nurse must be available for emergency 
treatment whenever a patient is in the facility.
     Oral Orders--AAAASF has added a standard that requires 
that oral orders for drugs and biologicals must be followed by a 
written order and signed by the prescribing physician.
     Laboratory and Radiologic Services--AAAASF has added the 
requirement that radiologic services be obtained from a Medicare-
approved facility and that ASC laboratories must meet requirements of 
part 493.

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Furthermore, if the ASC does not provide its own laboratory services, 
it must have procedures for obtaining routine and emergency laboratory 
services from a certified laboratory in accordance with part 493. Any 
referral laboratory must be certified in the appropriate specialties 
and subspecialties of service to perform the referred tests in 
accordance with the requirements of part 493.
     Life Safety Code: Surgical Procedures--AAAASF agreed to 
require facilities to meet State and local requirements, or the 
National Fire Prevention Association (NFPA) Standards for Health Care 
Facilities (NFPA 99), and Life Safety Code (NFPA 101) Chapters 12 and 
13 (and appropriate references), whichever is more stringent. Language 
was added to specify that their regular inspections for installation 
and maintenance of surgical equipment will be at least annually. In 
conformity with the NFPA requirements, AAAASF has made standby 
generator as the mandatory source of emergency power and reduced the 
time for such generators to reach full power from 30 to 10 seconds.
     Life Safety Code: Environment--AAAASF has specified that 
fire drills must be held once a month for each shift and has made smoke 
detectors mandatory for all office-based ASCs.
     Life Safety Code: Standards Addendum--AAAASF has specified 
that facilities must be inspected at least annually by the local or 
State fire control agency if this service is available. If not, AAAASF 
agrees to contract with a State agency or qualified subcontractor to 
perform the inspections.
     Inspector Training Program--AAAASF has submitted a revised 
training program that provides for consistent, national training of all 
inspectors in their processes and integrates instruction in the 
Medicare requirements based on either the trainer's participation in 
Medicare training or using Medicare survey experts as instructors.
    We have agreed to accept language that requires compliance with the 
1985 edition of the Life Safety Code with an encouragement by AAAASF 
that facilities comply with the 1997 Code. These standards will apply 
to all facilities regardless of size.

B. Analysis and Responses to Public Comments and Provisions of the 
Final Notice

    We received no comments on our proposed notice. The provisions of 
the proposed notice are being made final in this notice.

III. Paperwork Reduction Act

    The public reporting and record keeping burden reflected in this 
notice is referenced in the currently approved regulation entitled 
``Granting and Withdrawal of Deeming Authority to National 
Accreditation Organizations (58 FR 61816).'' The paperwork burden 
referenced in the above mentioned regulation is currently approved by 
the Office of Management and Budget (OMB), under OMB approval number 
0938-0690, with an expiration date of 8/31/99.

IV. Regulatory Impact Statement

    In fiscal year 1995, there were 2,105 certified ASCs participating 
in the Medicare/Medicaid programs. We conducted 211 initial surveys, 
288 recertification surveys (both at a cost of $714,069), and 24 
complaint surveys. In fiscal year 1996, there were 2,219 certified 
ASCs. This was an increase of 114 facilities. We conducted 180 initial 
surveys, 115 recertification surveys (both at a cost of $848,125), and 
one complaint survey. In fiscal year 1997, there were 2,433 certified 
ASCs. This was an increase of 214 facilities. We conducted 236 initial 
surveys, 252 recertification surveys (both at a cost of $1,403,000), 
and seven complaint surveys. As the data above indicate, the number of 
ASCs and the cost for conducting ASC surveys by State Agencies are 
increasing.
    As indicated above, there was a 16 percent increase in ASCs within 
3 years (fiscal years 1995 through 1997). The fiscal year 1998 
appropriation for ASC survey activities to HCFA was decreased as the 
priority of both initial surveys and resurveys remained in the bottom 
10 percent of surveys performed, but without any adjustment for 
inflation. This does not allow sufficient resources for some regions to 
meet the survey demand. In an effort to guarantee the continued health, 
safety, and services of beneficiaries in facilities already certified 
as well as provide relief to State budgets in this time of tight fiscal 
restraints, we are approving deeming for ASCs accredited by AAAASF as 
meeting our Medicare requirements. Thus, we continue our focus on 
assuring the health and safety of services by providers and suppliers 
already certified for participation in a cost effective manner.
    In accordance with the provisions of Executive Order 12866, this 
notice was not reviewed by the Office of Management and Budget.

    Authority: Section 1865 of the Social Security Act (42 U.S.C. 
1395bb)

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program; 
and No. 93.774, Medicare--Supplementary Medical Insurance Program)

    Dated: October 19, 1998.
Nancy-Ann DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 98-32102 Filed 12-1-98; 8:45 am]
BILLING CODE 4120-01-P