[Federal Register Volume 64, Number 15 (Monday, January 25, 1999)]
[Rules and Regulations]
[Pages 3748-3763]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-1448]



[[Page 3747]]

_______________________________________________________________________

Part II





Department of Health and Human Services





_______________________________________________________________________



Health Care Financing Administration



_______________________________________________________________________



42 CFR Parts 484 and 488



Medicare and Medicaid Programs: Reporting Outcome and Assessment 
Information Set (OASIS) Data as Part of the Conditions of Participation 
for Home Health Agencies and Comprehensive Assessment and Use of the 
OASIS as Part of the Conditions of Participation for Home Health 
Agencies; Final Rules

  Federal Register / Vol. 64, No. 15 / Monday, January 25, 1999 / Rules 
and Regulations  

[[Page 3748]]



DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 484 and 488

[HCFA-3006-IFC]
RIN 0938-AJ10


Medicare and Medicaid Programs: Reporting Outcome and Assessment 
Information Set (OASIS) Data as Part of the Conditions of Participation 
for Home Health Agencies

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

ACTION: Interim final rule with comment period.

-----------------------------------------------------------------------

SUMMARY: Section 4602(e) of the Balanced Budget Act of 1997 authorizes 
the Secretary to require that home health agencies (HHAs) submit any 
information that the Secretary considers necessary to develop a 
reliable case mix system. This interim final rule with comment period 
requires electronic reporting of data from the Outcome and Assessment 
Information Set (OASIS) as a condition of participation for HHAs. 
Specifically, this rule provides guidelines for HHAs for the electronic 
transmission of the OASIS data set as well as responsibilities of the 
State agency or HCFA OASIS contractor in collecting and transmitting 
this information to HCFA. This interim final rule also sets forth rules 
concerning the privacy of patient identifiable information generated by 
the OASIS. The requirements of this interim final rule with comment 
period are necessary to establish a prospective payment system for HHAs 
and to achieve broad-based, measurable improvement in the quality of 
care furnished through Federal programs.

DATES: Effective Date: February 24, 1999. Applicability Date: 
Regulations at Sec. 484.20 are applicable for testing of the HHA's 
transmission system and encoding of OASIS data on March 26, 1999, and 
for reporting of the HHA's OASIS data on April 26, 1999.
    Comment Period: Comments will be considered if we receive them at 
the appropriate address no later than 5:00 p.m. on March 26, 1999.

ADDRESSES: Mail written comments (one original and three copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-3006-IFC, P.O. Box 7517, 
Baltimore, MD 21244-1850.
    If you prefer, you may deliver your written comments (one original 
and three copies) to one of the following addresses:

Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW, 
Washington, DC 20201; or
Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

    For information on ordering copies of the Federal Register 
containing this document and electronic access, see the beginning of 
the SUPPLEMENTARY INFORMATION.

FOR FURTHER INFORMATION CONTACT: Tracey Mummert, (410) 786-3398 or Mary 
Weakland, (410) 786-6835.

SUPPLEMENTARY INFORMATION:

Comments, Procedures, Availability of Copies, and Electronic Access

    Because of staffing and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-3006-IFC. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately three weeks after publication of a document, in Room 445-
G of the Department's offices at 200 Independence Avenue SW, 
Washington, DC, Monday through Friday of each week from 8:30 a.m. to 
5:00 p.m. (Phone (202) 690-7890).
    For comments that relate to information collection requirements, 
mail a copy of the comments to:

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, Attn: 
John Burke HCFA-3006-IFC; and,
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Allison Herron Eydt, HCFA Desk Officer.

    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 37194, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order payable to 
the Superintendent of Documents, or enclose your Visa or Master Card 
number and expiration date. Credit card orders may also be placed by 
calling the order desk at (202) 512-1800 or by faxing an order to (202) 
512-2250. The cost for each copy is $8.00. As an alternative, you may 
view and photocopy the Federal Register document at most libraries 
designated as Federal Depository Libraries and at many other public and 
academic libraries throughout the country that receive the Federal 
Register.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available via a Wide 
Area Information Server (WAIS) through the Internet and asynchronous 
dial-in. Internet users may access the database using the World Wide 
Web. The Superintendent of Documents home page address is: http://
www.access.gpo.gov/su__docs/, by using local WAIS client software, or 
by the telnet to SWAIS.access.gpo.gov, then log in as ``guest'' (no 
password required). Dial-in users should use communications software 
and a modem to call (202) 512-1661, type swais, then log in as 
``guest'' (no password required).

I. Background

A. General

    Home health services are covered for the elderly and disabled under 
the Hospital Insurance (Part A) and Supplemental Medical Insurance 
(Part B) benefits of the Medicare program and are described in section 
1861(m) of the Social Security Act (the Act). These services must be 
furnished by, or under arrangement with, an HHA that participates in 
the Medicare program, and must be provided on a visiting basis in the 
beneficiary's home.
    Section 1861(o) of the Act specifies certain requirements that a 
home health agency must meet to participate in the Medicare program. 
(Existing regulations at 42 CFR 440.70(d) specify that HHAs 
participating in the Medicaid program must also meet the Medicare 
conditions of participation (COPs)). In particular, section 1861(o)(6) 
of the Act provides that an HHA must meet the COPs specified in section 
1891(a) of the Act and any other COPs that the Secretary finds 
necessary in the interest of the health and safety of HHA patients. 
Section 1861(o)(8) of the Act provides that an HHA must meet additional 
requirements that the Secretary finds necessary for the effective and 
efficient operation of the home health program.
    Section 1891 of the Act sets forth the conditions that HHAs must 
meet to participate in the Medicare program. Specifically, section 
1891(a) of the Act establishes specific requirements for HHAs in 
several areas, including patient rights, home health aide training and 
competency, and compliance with applicable Federal, State, and local 
laws. Under section 1891(b) of the Act,

[[Page 3749]]

the Secretary is responsible for assuring that the COPs, and their 
enforcement, are adequate to protect the health and safety of 
individuals under the care of an HHA and to promote the effective and 
efficient use of Medicare funds. In accordance with sections 1864 and 
1891(c) of the Act, State agencies generally conduct surveys of HHAs to 
determine whether they are complying with the COPs.
    Under the authority of sections 1861(o), 1871, and 1891 of the Act, 
the Secretary has established in regulations the requirements that an 
HHA must meet to participate in Medicare. These requirements are set 
forth at 42 CFR part 484, Conditions of Participation: Home Health 
Agencies. The COPs apply to an HHA and the services furnished to each 
individual under the care of the HHA, unless a condition is 
specifically limited to Medicare beneficiaries.
    Section 1864 of the Act authorizes the use of State agencies to 
determine providers' compliance with the COPs. Responsibilities of 
States in ensuring compliance with the COPs are set forth in 
regulations at 42 CFR part 488, Survey, Certification, and Enforcement 
Procedures.

B. New Legislation and Related Regulations

    Section 4603 of the Balanced Budget Act (Public Law 105-33 (BBA)), 
enacted on August 5, 1997, amended the Act to require the Secretary to 
establish a prospective payment system for home health care. Although 
the implementation of a prospective payment system will be delayed 
until all related systems achieve year 2000 compliance, we will still 
need to begin receiving the data to be used for standardizing the 
payment amounts as soon as possible. The BBA reformed the payment 
system for Medicare home health services to achieve $21.2 billion in 
savings by the year 2002. These reductions were undertaken as part of 
the overall strategy to balance the federal budget and extend solvency 
of the Medicare trust fund. The payment reform for home health services 
includes an interim payment system (IPS) with reduced cost limits and 
eventual implementation of a prospective payment system for HHAs. 
Details of the IPS can be found in the March 31, 1998 Federal Register 
at 63 FR 15718. The IPS will generally result in overall reduced 
payments to HHAs. Our objective in implementing the provisions of 
section 4603 of the BBA is to develop a payment system that promotes 
HHA efficiency while assuring that providers who serve patients with 
high care needs are reimbursed within statutory dictates.
    In order to implement this prospective payment system, it is 
necessary that we have data from HHAs to develop a reliable case-mix 
adjuster system. Section 4602 of the BBA provides that, for cost 
reporting periods beginning on or after October 1, 1997, the Secretary 
may require HHAs to submit additional information that the Secretary 
considers necessary for the development of a reliable case-mix system. 
We intend for the Outcome and Assessment Information Set (OASIS), a 
data set comprised of patient care items developed for the purpose of 
measuring patient health care outcomes in HHAs, to be the vehicle 
through which information for the case-mix system is collected. Thus, 
as discussed below, to facilitate the implementation of the prospective 
payment system and to gather data that can be used to evaluate and 
develop plans to improve outcomes of care in HHAs, we are publishing 
two regulations in this issue of the Federal Register. Specifically, we 
are publishing a final rule titled, ``Comprehensive Assessment and Use 
of the OASIS as Part of the Conditions of Participation for Home Health 
Agencies,'' which requires that HHAs complete a comprehensive 
assessment for each patient and that they incorporate the OASIS into 
their comprehensive assessment process. In addition, as discussed in 
detail below, in this interim final rule with comment period, we are 
requiring that HHAs electronically report data from the OASIS to the 
State agency or other entity designated by HCFA (HCFA OASIS 
contractor).

II. Provisions of This Interim Final Rule With Comment Period

    In this regulation we are requiring Medicare-approved HHAs and 
those HHAs that are required to meet Medicare conditions (including 
Medicaid HHAs and managed care organizations providing home health 
services to Medicare and Medicaid beneficiaries) to, with certain 
exceptions, report via electronic transmission their OASIS data to a 
database established by HCFA within each State. These reporting 
requirements are consistent with the collection requirements also 
published today in this issue of the Federal Register.
    In addition to requirements for HHAs, this interim final rule with 
comment period includes responsibilities of the State agencies and HCFA 
OASIS contractors, which have been approved by HCFA to maintain an 
OASIS database. Finally, to ensure confidentiality of patient 
identifiable data generated by the OASIS, we are setting forth 
requirements for State agencies, HCFA OASIS contractors, and HHAs 
regarding the release of this information.

A. Section 484.20 Condition of Participation: Reporting OASIS 
Information

    We are adding a new Sec. 484.20, Condition of Participation: 
Reporting OASIS Information, to provide that HHAs must report OASIS 
data on all patients except those specified in the preamble to the 
regulation describing collection of OASIS data, that is, 
``Comprehensive Assessment and Use of the OASIS as Part of the 
Conditions of Participation for Home Health Agencies,'' mentioned 
previously. This new COP at Sec. 484.20 will consist of four standards, 
which are discussed in detail below.
    In 1988, we entered into a contract with the Center for Health 
Services and Policy Research at the University of Colorado Health 
Sciences Center to develop, test, and refine a system of outcome 
measures that could be used for outcome-based quality improvement in 
HHAs. The results of subsequent studies have shown that the collection 
of precise information on the health status of patients at different 
points in time can be used in a variety of ways. Once reported to a 
central database, the compiled, aggregate results of the collection of 
OASIS data can be used by the HHA to determine how it is performing in 
terms of patient outcomes compared with other HHAs. The term most often 
linked with the use of OASIS data to improve quality of care is 
``outcome-based quality improvement'' or OBQI. The OASIS data set is 
but one of several components of OBQI.
    Other components of OBQI include using outcome and case mix reports 
within an agency to improve quality, evaluate effectiveness of 
practice, and better manage care to enhance outcomes and control costs 
and utilization. Outcome reports will be generated by the State agency 
or HCFA OASIS contractor and will contain data related to patient 
outcome and case mix findings based on the patient-level data submitted 
by the HHA. For example, outcome reports may provide information 
relative to hospitalization rates, medication management, and patient 
functional status within an HHA. These data will be displayed relative 
to the individual HHA, along with data representing local and national 
trends. When outcome reports become available, we expect that each

[[Page 3750]]

HHA will be able to use them in its own quality assessment and 
performance improvement program. HHAs will be able to examine specific 
care domains and case mix of patients, compare current performance to 
past performance, and compare their aggregate outcomes to national 
reference values, that is, the aggregate outcomes from all HHAs. The 
HHA could then compare its performance with other HHAs locally, 
regionally, and nationally. This information will be advantageous not 
only to Medicare beneficiaries and other home care clients, but also to 
the home care industry in demonstrating its effectiveness. For example, 
as a result of collecting OASIS information and submitting it to a 
central data base for evaluation, the University of Colorado has data 
indicating a statistically significant decrease in rate of re-
hospitalization among HHA patients when the agency incorporates outcome 
reports into its OBQI program.
    Outcome reports will most likely be available to HHAs from State 
agencies on a yearly basis, based on OASIS data that HHAs report to the 
State. These data will be used to establish and maintain a national 
database, based on the data from outcome reports. To generate outcome 
reports that are statistically valid, it is necessary that HHAs 
transmit a sufficient number of data points. Results of the OASIS 
demonstration project suggest that reports be based on the collection 
of data over a year's time. We estimate that outcome reports will begin 
to be made available no less than one year from the date HHAs are 
required to begin reporting their OASIS data. We expect that the 
outcome reports will be made available at least annually thereafter.
    In addition, we, along with State agencies, will be able to use the 
outcome reports to identify opportunities for improvement in national 
or local priority areas, such as a project to improve medication 
management for beneficiaries generally or to shorten the time necessary 
to achieve a clinically important patient outcome. Therefore, the 
benefit of reporting OASIS data is two-fold. We not only meet our 
statutory requirements for establishing a prospective payment system 
for home health but also gather data that can be used at a national 
level to evaluate and develop plans to improve outcomes of care in the 
Medicare and Medicaid home health benefit. We believe that computerized 
patient assessment data would be a valuable resource to monitor trends 
in patient care in the home health industry. In addition, a national 
data base would provide important insights into the structure of the 
industry and use of resources to achieve positive patient outcomes.
    In our companion regulation concerning collection of OASIS data 
items, time frames for completing OASIS data sets are described for the 
comprehensive assessment (5 days from start of care), routine update of 
the comprehensive assessment (two calendar months from start of care), 
and discharge from a hospital admission, that is, resumption of care 
(48 hours). Specific time frames for completion of OASIS data were not 
described for discharge, including discharge to the community, transfer 
to an inpatient facility (with or without agency discharge), and death 
at home, nor were comments received relative to these time frames. For 
consistency in encoding (entering data into a computer) and reporting 
data relative to these OASIS data sets, we expect that HHAs would 
complete the OASIS data set items for these time points within 48 hours 
of knowledge of their occurrence. We are seeking comment on the 
expectation that HHAs will complete these assessment updates within 48 
hours. The reason for the requirement to complete these other 
assessment types within two calendar days is that the HHA can more 
readily assess specific information related to the patient's condition 
at that point in time and maintain a uniform platform for reporting all 
assessment types.
1. Section 484.20(a) Standard: Encoding OASIS Data
    At Sec. 484.20(a), we require that HHAs encode and finalize data 
entry (lock) for all patients (except those specified in the preamble 
to the regulation describing collection of OASIS data, that is, 
``Comprehensive Assessment and Use of the OASIS as Part of the 
Conditions of Participation for Home Health Agencies'') in the agency 
within 7 days of completing an OASIS data set.
    Once the OASIS data set has been collected by the authorized 
clinical staff member at the specified time points described at 
Sec. 484.55, HHAs may take up to 7 calendar days after collection to 
enter it into their computer systems. To enter the data, HHAs will 
operate the Home Assessment Validation Entry (HAVEN) software program 
and run the OASIS data set through the HCFA-specified edits in order to 
make it transmission-ready. This process involves using the HAVEN 
software to review the data for accuracy and consistency, making any 
necessary changes, and finalizing the data. We specify 7 days to 
encode, edit, and lock the OASIS data because we believe that this is a 
reasonable amount of time to expect agencies to complete this task 
while ensuring accuracy of the data. The agency must enter the OASIS 
data and identify any information that does not pass the HCFA-specified 
edits, that is, any missing, incorrect, or inconsistent data. This is a 
simple process of entering a data set into a computer using software 
that mirrors the OASIS data items. Editing and locking are functions 
automatically performed using the HAVEN software. If HAVEN identifies 
data items in need of clarification or additional information, we 
believe that 7 days is a reasonable amount of time for staff entering 
data to contact and seek assistance from the qualified clinician who 
assessed the patient. It is preferable that the edits and corrections 
be made as close in time as possible to the assessment activity, since 
the clinician's recall of the patient assessment and the clinical notes 
that document the assessment are fresher at that point. Seven days is 
also consistent with the timeframe currently required by long-term care 
facilities encoding Minimum Data Set (MDS) information. We believe that 
keeping OASIS encoding consistent with MDS encoding would be simpler 
for providers and State agencies to manage than introducing a different 
set of timeframes. In addition, we expect that, in order to provide 
quality care, HHAs would assess patients and submit OASIS data in a 
timely fashion for data entry in order to prepare and maintain a 
current and viable plan of care. As such, we feel that it is reasonable 
to expect that HHAs will be able to encode, edit, and ready OASIS data 
for transmission within 7 days of the data's collection.
    HHAs will have flexibility in the method used to encode their data. 
Once the assessment is completed and OASIS data items are collected by 
the qualified skilled professional (that is, the nurse or therapist 
responsible for coordinating or completing the assessment), data can be 
encoded directly by that skilled professional, by a clerical staff 
member from a hard copy of a completed OASIS, or by a data entry 
operator with whom the HHA may contract to enter the data. Non-clinical 
staff may not assess patients or complete assessment items; however, 
clerical staff or data entry operators may enter the OASIS data 
collected by the skilled professional into the computer. We note that 
in entering the data, HHAs must comply with requirements for 
safeguarding the confidentiality of patient identifiable

[[Page 3751]]

information. These requirements are discussed in detail below.
    Once the OASIS information is encoded, HHAs will ``lock'' the data, 
that is, use their software to review and edit it to create a file that 
will be transmitted to the State agency or other entity approved to 
receive this transmission. The edits will include an electronic safety 
net to preclude the transmission of erroneous or inconsistent 
information, and required formatting for the data set items. The 
locking mechanism is necessary to ensure the accuracy of the patient 
assessment at the point in time that the assessment took place. The 
locking mechanism will prevent the override of current assessment 
information with future information.
2. Section 484.20(b) Standard: Accuracy of Encoded OASIS Data
    Section 484.20(b) requires that the encoded OASIS data accurately 
reflect the patient's status at the time the information is collected. 
As research has shown that the patient status changes over time, the 
data must accurately represent a patient's status at selected points in 
time. Before transmission, the HHA must ensure that data items on its 
own collection record match the encoded data that are sent to the 
State. We expect that once the qualified skilled professional completes 
the OASIS using either a hard copy of the instrument or an electronic 
method, the HHA will develop a means to ensure that the data put into 
the computer and transmitted to the State agency or HCFA OASIS 
contractor reflect the data collected by the skilled professional. The 
HHA might appoint staff to audit OASIS records after input as part of 
the HHA's overall quality assurance program. In addition, the State 
survey process for HHAs may include review of OASIS data collected 
versus data encoded and transmitted to the State.
3. Section 484.20(c) Standard: Transmittal of OASIS Data
    General requirements. At Sec. 484.20(c), we require that the HHA 
electronically transmit to the State agency or HCFA OASIS contractor, 
at least monthly, accurate, completed, encoded, and locked OASIS data 
for each patient. This time frame allows for transmission more 
frequently as determined by the HHA. We also provide that the data must 
be transmitted in a format that meets the requirements specified in the 
data format standard at Sec. 484.20(d). Thus, data collected, encoded 
and locked in February will need to be transmitted in March. We believe 
that a monthly time frame for transmitting the data will minimize the 
burden on the HHA associated with frequency of transmission, maintain 
uniform assessment reporting time frames, and maintain a clear 
reporting time frame that eliminates the variation of days in a month. 
We provide flexibility for the HHA in that we do not specify a date on 
which HHAs must transmit the data. Therefore HHAs are free to develop 
monthly schedules for transmitting the data that best suit their needs. 
In addition, we provide that HHAs may send OASIS data to the State 
agency or HCFA OASIS contractor more frequently than monthly if they 
choose to do so.
    We note that the HHA must transmit the Clinical Record Items 
section of the OASIS, which identifies the patient, with each data set. 
The Clinical Record Items section includes information such as agency 
identification, patient identification, and start of care date. The 
Clinical Record Items are a key aspect of an OASIS data set that will 
allow the HHA, State agency or HCFA OASIS contractor, and HCFA to track 
all data sets collected on individual patients within the episode of 
care. Many elements in the Clinical Records Items section may be 
completed initially by clerical staff as part of the intake/referral 
process; but should be verified by the clinician doing the assessment.
    As we continue to develop our system to maintain the OASIS data 
base, the items in the Clinical Record Items section may change to 
accommodate growth. No substantive changes have been made to the 
clinical data items published in the Federal Register on March 10, 
1997, although minor changes have been made to the numbering system to 
accommodate electronic reporting. We refer you to the HCFA webpage 
(http://www.hcfa.gov/medicare/hsqb/oasis/oasishmp.htm) for changes 
necessary to comply with OASIS reporting requirements. The current 
version of OASIS is a proposed information collection requirement 
pending OMB approval. We have summarized the Paperwork Reduction Act 
process below and have described the timeframes associated with that 
process. As an alternative to Internet access, which is the most 
efficient method of obtaining the current version of the OASIS, 
agencies may contact their State agency or HCFA regional office home 
health representatives to request a paper copy of the data set for 
review. Any future changes to OASIS will be submitted to OMB to review 
pursuant to the Paperwork Reduction Act of 1995, will be available 
electronically on the HCFA website, and, when approved by OMB, 
available in hard copy from the National Technical Information Service 
((703) 487-4650).
    In addition to OASIS data, HHAs will transmit information that 
identifies the location and description of the HHA sending data and the 
identity of the person submitting the data to the State agency or HCFA 
OASIS contractor. This information is referred to as the header record. 
Header information is not information requested by the OASIS data set. 
Rather, it is information required to support the transmission process. 
At the end of the transmission file, a record concerning the number of 
records being transmitted is required to complete the transmission 
process. This information is referred to as the trailer record. When 
the HHA is ready to transmit its data to the State, it will use the 
HAVEN software to add the selected records to be sent with the header 
and trailer records to create an export file. The export file is then 
transmitted to the State by the HHA.
    HHAs should use standard communication software to dial-up to the 
State agency or HCFA OASIS contractor, transmit the export file, and 
receive validation information. HHAs should have a system that supports 
dial-up communications for the transmission of OASIS data to the State. 
The communications capability must meet our specification related to 
transmission of OASIS data. More detailed instructions on the process 
for data submission will be made available in the near future. This 
dial-up link will eventually serve as a means of communicating 
information such as reports, notices, and documents between HHAs and 
the State agency without requiring additional hardware or software.
    HHAs must transmit the OASIS data using a private dial-up network 
based on a direct telephone connection from the HHA. The telephone 
communication provides a secure source of transmission, with 
interception of information being prohibited by Federal and State law. 
The information is transmitted via a modem at the HHA and received at 
the State communications server where the file is validated. The State 
agency or HCFA OASIS contractor will provide to the HHAs in their State 
specific instructions and phone numbers of the lines available for 
transmission.
    Once transmitted, the State agency or HCFA OASIS contractor 
validates the information while the HHA remains on-line to ensure that 
some basic elements conform to HCFA requirements, such as proper format 
and HHA information. Once these file checks are complete, a

[[Page 3752]]

message indicating whether the file has been accepted or rejected is 
sent back to the HHA's terminal via the agency's communication link. If 
the submission passes the initial validation check, the record is 
checked for errors or exceptions to the data specifications and a Final 
Validation Report is generated. If the submission is rejected, a 
message is sent to the HHA along with the rejected submission file for 
correction in the header or trailer record. A record may be rejected 
for a variety of reasons, for example, the provider identification name 
or number submitted may be incorrect or does not match the name or 
number at the State, or the number of records indicated in the trailer 
record does not match the actual number of records submitted. The HHA 
will need to make the corrections and re-submit the submission file to 
the State.
    Initial transmission requirements. In order to initiate 
transmission of OASIS data to the State agency or HCFA OASIS 
contractor, we are including the requirement that HHAs make a 
successful transmission of test data to the State agency or HCFA OASIS 
contractor during the test transmission period. The initial test should 
include both 1) a transmission of any start of care or resumption of 
care OASIS data that passes HCFA edit checks; and 2) a validation 
report back from the State confirming transmission of data. We require 
that HHAs successfully transmit test data to the State agency or HCFA 
OASIS contractor beginning March 26, 1999, and no later than April 26, 
1999. This test data will not be included in the national repository.
    On or after April 26, 1999 we expect that HHAs will send to the 
State agency or HCFA OASIS contractor all OASIS data collected on 
existing patients under the care of the HHA on March 26, 1999. The data 
should include the start of care; follow-up of the start of care; 
resumption of care; discharge to the community; transfer to an 
inpatient facility (with or without agency discharge); and death at 
home OASIS assessment items. Specifically, on patients admitted to the 
HHA on or after March 26, 1999 the data should include a start of care 
assessment and any other OASIS data collected in accordance with the 
requirements at Sec. 484.55. For patients already under the care of the 
HHA as of March 26, 1999 the data may not include a start of care data 
set, but must include any OASIS data collected in accordance with the 
requirements at Sec. 484.55 (follow-up, resumption of care (following 
an inpatient stay), transfer to inpatient facility (with or without 
agency discharge), or discharge (including death at home)). As stated 
above, OASIS data should be reported on all HHA patients except those 
specified in the regulation describing collection of OASIS data, that 
is, ``Comprehensive Assessment and Use of the OASIS as Part of the 
Conditions of Participation for Home Health Agencies.'' Specific 
directions for coding these assessments for initial transmission will 
be included in the State training and manual instructions. On or after, 
April 26, 1999 and at least monthly thereafter, HHAs will transmit 
OASIS updates on those patients included in the initial transmission as 
well as comprehensive assessment OASIS data and updates on any patients 
admitted to the HHA on or after March 26, 1999.
    To further clarify the OASIS effective dates schedule, we offer the 
following chart based on the assumption that this regulation and the 
companion regulation describing collection of OASIS data, 
``Comprehensive Assessment and Use of the OASIS as Part of the 
Conditions of Participation for Home Health Agencies,'' are published 
November 16, 1998. While the publication date of the OASIS regulations 
differs from the one used in this example, the effective dates in the 
following chart are based on an assumed publication date. HHAs are 
cautioned to substitute the actual publication date into the formulas 
listed below to derive the actual effective dates in addition to 
reading the discussion of effective dates above. When these regulations 
are published, we will post the publication date and effective dates on 
the OASIS webpage.

                                     OASIS Collection and Reporting Timeline
----------------------------------------------------------------------------------------------------------------
                                                                                                   HHA begins
                                                                                HHA tests       reporting OASIS
                          Collection begins (11/  Encoding begins (11/16/     transmission      data (11/16/98 +
   Publication  date       16/98 + 30 days) \1\      98 + 60 days) \2\     system (11/16/98 +     90 days and
                                                                              60 through 90         monthly
                                                                                  days)         thereafter) \3\
----------------------------------------------------------------------------------------------------------------
11/16/98...............  12/16/98...............  1/15/99................  1/15/99 through 2/  2/14/99 and
                                                                            14/99.              monthly
                                                                                                thereafter.
----------------------------------------------------------------------------------------------------------------
\1\ HHA collects start of care, resumption of care, follow-up, discharge to the community, transfer to an
  inpatient facility (with or without discharge) and death at home OASIS data on all patients under the care of
  the HHA as of 12/16/98.
\2\ HHA collects and encodes start of care, resumption of care, follow-up, discharge to the community, transfer
  to an inpatient facility (with or without discharge) and death at home OASIS data on all patients under the
  care of the HHA as of 1/15/99. For patients admitted to the HHA before 1/15/99, it is not required to encode
  start of care data.
\3\ HHA reports (transmits to the State agency or HCFA OASIS contractor) all OASIS data collected and encoded
  from 1/15/99 through 2/14/99 and monthly thereafter. Monthly transmissions should include all OASIS data
  collected and encoded in the previous month.

4. Section 484.20(d) Standard: Data Format
    At Sec. 484.20(d) we specify that the HHA must encode and transmit 
data using the software available from HCFA or software that conforms 
to HCFA standard electronic record layout, edit specifications, and 
data dictionary and includes OASIS data items specified in 
Sec. 484.55(e). To meet the data format requirements, HHAs will be able 
to use the HAVEN software developed by HCFA, or other vendor's software 
that conforms to HCFA standardized electronic record formats, edit 
specifications, data dictionaries, and that passes standardized edits 
defined by HCFA. The HAVEN software can be used for several purposes. 
HHAs will be able to use HAVEN to encode OASIS data, maintain agency 
and patient-specific OASIS information, and create export files to 
submit OASIS data. HAVEN will provide comprehensive on-line help to 
users in encoding, editing and transmitting these data sets. 
Additionally, we have developed a hotline to support this software 
product.
    HAVEN will alert the individual who is encoding the data to use the 
correct screen for the specific type of assessment record required. We 
suggest that as HHAs plan for implementation, those HHAs using paper 
copies of OASIS data sets consider a way to differentiate among the 
various subsets of OASIS data. For example, agencies who were involved 
in the demonstration pilot studies used different colored paper for 
each subset of the OASIS instrument. We caution HHAs that the HAVEN 
system will provide only the minimum requirements to encode and format 
the data. We will support these functions and applications; however, we 
do not intend to provide any other applications

[[Page 3753]]

related to care planning, financial information, durable medical 
equipment, medications, or personnel issues. Software vendors are 
encouraged to use the HAVEN software as a minimum system until they 
have developed their own software to accommodate HCFA specifications 
and other applications useful for HHAs. If the HHA uses software other 
than HAVEN it must conform to HCFA standardized electronic record 
formats, edit specifications, and data dictionaries. The software must 
also include the OASIS data items specified in Sec. 484.55(e).
    HCFA will provide standardized training to State agencies or HCFA 
OASIS contractors, who, in turn, will provide training to HHAs in each 
State in advance of the implementation date of this interim final rule. 
This training, which will include the OASIS User's Manual, will focus 
on how to use the HAVEN software to encode and format data, how to 
transmit data, and how to interpret the validation reports.
    The required OASIS data set will be available on our website 
located at http://www.hcfa.gov/medicare/hsqb/oasis/oasishmp.htm at all 
times. HHAs will be able to access the website and download the 
required OASIS data set for each data collection time point (start of 
care; resumption of care following an inpatient facility stay; follow-
up; discharge (not to an inpatient facility); transfer to inpatient 
facility (with or without agency discharge); and death at home). We 
expect the required OASIS to vary slightly from that published in the 
March 10, 1997, proposed rule; however, there are no changes in the 
core data items that were published in the proposed rule. Items in the 
Clinical Records Items section of the OASIS are being updated to 
accommodate electronic reporting. In addition, the HAVEN software is 
available on the HCFA website and can be downloaded at no charge to 
HHAs and used to report OASIS data. This website includes the data 
specifications, data dictionaries, OASIS data set, and the OASIS User's 
Manual for the OASIS data set, HAVEN software and HHA data submission. 
We will also post other educational materials for HHAs on the website. 
We intend for the website to provide direct access for HHAs, State 
agencies, HCFA OASIS contractors, software vendors, professional 
organizations, and consumers. We encourage vendors and agencies to 
regularly review the website for information related to the 
computerization of OASIS and other HCFA-related home health issues. We 
will continue to promote processes for assuring accuracy in the 
software. In the future, an alternate version of the OASIS may be 
required. HHAs will be directed to the HCFA website for the applicable 
version of the OASIS data set. Once the data set is approved by OMB, 
HHAs may also obtain hard copies from the National Technical 
Information Service at ((703) 487-4650).

B. Exemption for HHAs in Research and Demonstration Projects

    Some HHAs participating in OASIS research and demonstration 
projects may be using other data collection sets, which have been 
approved by the Secretary. HHAs in research and demonstration projects 
may be exempt from the requirement to use the OASIS as part of the 
comprehensive assessment and reporting process for the duration of the 
project. These determinations will be made on a case-by-case basis. 
Whether an HHA participating in a research or demonstration project is 
exempt from the requirements of the final rules requiring collection 
and reporting of OASIS data will depend on several factors including, 
the nature of the demonstration project, the data set used, payment 
implications for the HHA, quality concerns, and burden issues.
    At completion or termination of the studies, we will work on a 
case-by-case basis with these HHAs to transition them into compliance 
with the general collection and reporting requirements for HHAs that 
are required to meet the Medicare home health COPs.

C. Section 484.11  Condition of Participation: Release of Patient 
Identifiable OASIS Information

    We are adding a new Sec. 484.11 Condition of Participation: Release 
of Patient Identifiable OASIS Information. Section 484.11 provides that 
the HHA or agent acting on behalf of the HHA must ensure the 
confidentiality of all patient identifiable information contained in 
the clinical record and may not release patient identifiable OASIS 
information to the public. We believe that this provision will ensure 
that access to all OASIS data (hard copy as well as electronic data) 
will be secured and controlled by the HHA, State agency or HCFA OASIS 
contractor. We also specify that an agent acting on behalf of the HHA 
in accordance with a written contract between the HHA and the agent may 
not use or disclose the information. The agent may only use or disclose 
data to the extent the HHA itself is permitted to do so. We believe 
that this COP will act as a safeguard against the unauthorized use of a 
patient's clinical record information, regardless of the form or 
storage method.

D. Section 488.68  State Agency Responsibilities for OASIS Collection 
and Database Requirements

    Under section 1891(b) of the Act, the Secretary must assure that 
processes are in place to protect the health and safety of individuals 
under the care of a home health agency and to promote the effective and 
efficient use of public moneys. Section 1864 of the Act authorizes the 
use of State health agencies to determine a provider's compliance with 
the COPs. State responsibilities for ensuring compliance with the COPs 
are set forth at part 488, Survey, Certification, and Enforcement 
Procedures.
    Under the authority referenced above, we are adding a new 
Sec. 488.68, State agency OASIS collection and data base 
responsibilities. This section provides that the overall responsibility 
for fulfilling requirements to operate the OASIS system will rest with 
the State agency or other entity designated by HCFA. The State may 
enter into an agreement with the State Medicaid agency, another State 
component, or a private entity to perform day-to-day operations of the 
system, or HCFA may contract with an entity directly, in the event the 
State is unable or unwilling to perform these operations. While these 
entities may actually perform all OASIS-related functions, the ultimate 
responsibility of the OASIS program rests with the State agency or 
authorized entity under contract directly to HCFA. If the standard 
State system is operated by an entity other than the State agency, the 
State must ensure that it has suitable access to this system to fully 
support all OASIS-driven functions required of the State agency (for 
example, outcome-based quality improvement reports and survey specific 
data). Section 488.68 also specifies State agency and HCFA OASIS 
contractor responsibilities with regard to the OASIS system, which are 
discussed in detail below.
1. Section 488.68(a) Establish and Maintain the OASIS Data Base
    At Sec. 488.68(a), we provide that the State agency or other entity 
designated by HCFA must use a standard system developed or approved by 
HCFA to collect, store and analyze data generated by OASIS. The system 
developed to compile the Minimum Data Set (MDS) assessments (the HCFA 
standard State system) has already been procured, installed, and used 
to collect MDS data. We are currently modifying the standard State 
system to accommodate OASIS data transmitted by HHAs. The standard 
State system currently includes a database, communication, supporting

[[Page 3754]]

files, print servers for client workstations, local and wide area data 
networks, and application software for performing all aspects of MDS 
related functions and tasks. This system may also be utilized to 
reconfigure data into reports that can be used by State surveyors to 
focus facility surveys and improve quality of care.
    We are providing States with the software and any additional 
hardware needed to support the standard State system. In several States 
the home health component of the survey agency is a separate entity 
that is governed separately and sometimes located in a different 
geographical location from the agency that currently supports the 
standard State system. In these States, HCFA will fund the purchase and 
installation of a computer work station to provide these separate 
agencies access to OASIS data. As part of the survey responsibilities, 
Sec. 488.68(a) also provides that States will be responsible for basic 
system management responsibilities such as hardware and software 
maintenance, system backup, and monitoring the status of the database.
    We also set forth requirements for modification of the HCFA 
standard State system. Specifically, the State agency must obtain HCFA 
approval before modifying any parts of the system. The State agency or 
HCFA OASIS contractor may not modify any aspect of the standard State 
system that pertains to the standard HCFA-approved OASIS data items, 
standard HCFA-approved record formats and validation edits, and 
standard HCFA-approved agency encoding and transmission methods.
2. Section 488.68(b) Analyze and Edit OASIS Data
    At Sec. 488.68(b), we provide that the State agency or HCFA OASIS 
contractor is responsible for analyzing and preparing OASIS data for 
HCFA to retrieve. Upon receipt of data from an HHA, we require that the 
State agency or HCFA OASIS contractor edit the data as specified by 
HCFA, and ensure that the HHA resolves errors within the limits 
specified by HCFA. At least monthly, the State agency or HCFA OASIS 
contractor must make available for retrieval by HCFA all edited OASIS 
records received during that period, according to formats specified by 
HCFA, and correct and retransmit rejected data as needed. We will 
electronically retrieve OASIS data from the HCFA standard State system 
into a central repository at HCFA for analysis.
    Finally, we require that the State agency or HCFA OASIS contractor 
analyze the data and generate reports as specified by HCFA. This 
responsibility includes generating the outcome reports discussed above 
for use by the HHA as well as for the State's own use in focusing 
onsite inspection activities associated with the home health survey 
process. The OASIS data will significantly improve each State's ability 
to identify areas of potential quality concerns and will facilitate 
partnership between States and industry in identifying opportunities to 
improve care. In addition to the responsibility for generating outcome 
reports, the State will issue validation reports once OASIS data is 
received in their systems. Validation reports provide timely feedback 
to HHAs as to whether the OASIS data they sent has been accepted or 
rejected, along with reasons why.
3. Section 488.68(c) Ensure Accuracy of OASIS Data
    We are requiring at Sec. 488.68(c) that, as part of the survey 
process, the State agency review an HHA's records to verify that OASIS 
data collected is consistent with OASIS data reported to the State 
agency or HCFA OASIS contractor. In keeping with Sec. 484.20(b), which 
requires that the HHA's encoded OASIS data accurately reflect the 
patient's status at the time the information is collected, we expect 
that the HHA will develop a means to ensure that the data input into 
the computer and transmitted to the State agency or HCFA OASIS 
contractor reflects the data collected by the skilled professional. As 
discussed earlier, methods to ensure accuracy of OASIS data may include 
appointing staff to audit OASIS records after input as part of the 
HHA's overall quality assurance program. The State agency may include a 
review of the HHA's quality assurance documentation as part of the 
overall determination of compliance with OASIS related COPs.
4. Section 488.68(d) Restrict Access to OASIS Data
    To secure and control access to patient identifiable information, 
we are requiring at Sec. 488.68(d) that the State agency or HCFA OASIS 
contractor be responsible for restricting access to OASIS data. 
Specifically, we require that the State agency or HCFA OASIS contractor 
must assure that access to data is restricted except for transmission 
of data and reports to HCFA, transmission of data and reports to the 
State agency component that conducts surveys for purposes related to 
this function, and transmission of data and reports to other entities 
only when authorized by HCFA.
    We also specify that patient identifiable OASIS data may not be 
released to the public by the State agency or HCFA OASIS contractor 
except to the extent it is permitted to do so under the Privacy Act of 
1974. Disclosure may be made under the Privacy Act for ``routine 
uses,'' that are compatible with the purpose for which the information 
was collected. These routine uses are described in the Privacy Act 
System of Records, which will be published in the near future. 
Consistent with these provisions, the State agency or HCFA OASIS 
contractor is not permitted to release patient identifiable information 
to the public but may release aggregated data.
5. Section 488.68(e) Provide Training and Technical Support for HHAs
    The State agency will play a key role in providing educational and 
technical resources to the HHA to implement the automation of the OASIS 
data set. Therefore, at Sec. 488.68(e), we require the State agency or 
HCFA OASIS contractor to provide training and technical support for 
HHAs. Specifically, we require the State agency or HCFA OASIS 
contractor to provide HHAs in each State with training on the 
administration and integration of the OASIS data set into the 
facility's own comprehensive assessment system. We also specify that 
the State agency is responsible for instructing each HHA on the use of 
software to encode and transmit OASIS data.
    The State agency staff who operate the HCFA standard system will 
provide training to designated staff in HHAs on the use of the free 
HCFA software that will allow the HHAs to encode and format OASIS data 
for transmission to the State or HCFA OASIS contractor. In a similar 
manner, HCFA will provide standardized instructions for using the free 
software, as well as instructions for data submission which will be 
available electronically on the HCFA website. The designated trainer in 
the HHA should train HHA staff responsible for collecting OASIS 
information using a standard training curriculum and manual, which will 
be provided by HCFA. A User's Manual is available electronically on the 
HCFA website, and will be available in hard copy from the National 
Technical Information Service ((703) 487-4650).
    States' responsibilities for training and supporting HHAs in the 
implementation of the OASIS and automation of the OASIS database will 
likely include the following tasks:
     Training HHAs on OASIS data set administration;

[[Page 3755]]

     Providing training and technical support to HHAs in 
integrating the OASIS items into the HHA's own comprehensive assessment 
system;
     Answering questions on the clinical aspects of OASIS and 
providing information to HHAs on the use of the OASIS data in 
determining prospective payment rates for HHA patients;
     Providing training to other State agency staff in using 
OASIS data and outcome reports for survey activities;
     Training HHAs on the submission of OASIS data to the 
State;
     Interpreting validation reports;
     Providing information relative to hardware and software 
requirements for HHAs to consider when purchasing computer equipment;
     Assisting with training HHAs on encoding and transmitting 
OASIS data to the State agency, including providing support for 
transmission of test data during startup, supporting callers requesting 
technical assistance, providing passwords to HHAs, answering questions 
about the computer edits and reports; and
     Participating in an annual update on the OASIS and home 
health prospective payment system project.
    To promote national consistency in OASIS systems for States, we 
have requested that each State designate one or two individuals to 
support the several tasks involved in this project. These individuals, 
the State OASIS Educational Coordinator and State Automation 
Coordinator, will be funded by HCFA through the Medicare survey and 
certification program.

III. Response to Comments

    Because of the large number of items of correspondence we normally 
receive on Federal Register documents published for comment, we are not 
able to acknowledge or respond to them individually. We will consider 
all comments that we receive by the date and time specified in the 
DATES section of this preamble, and, when we proceed with a subsequent 
document, we will respond to the comments in the preamble to that 
document.

IV. Waiver of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed and the terms and substance 
of the proposed rule or description of the subjects and issues 
involved. This procedure can be waived, however, if an agency finds 
good cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest.
    The primary reasons for waiving the proposed rulemaking process are 
two-fold. First, in the interest of creating budgetary savings, 
Congress explicitly authorizes the Secretary under section 4602(e) of 
the BBA to collect whatever data the Secretary deems necessary to 
implement a revised home health payment structure to be implemented in 
the very near future. We cannot issue a proposed rule followed by a 
final rule and be timely with the implementation of the revised home 
health payment system within the timeframes contemplated by Congress. 
No later than April 26, 1999, we must begin receiving OASIS data in 
order to revise the payment system as required by section 4603 of the 
BBA. Currently, HHAs are receiving payment for services via an interim 
payment system and will continue to receive payment for services via 
the interim payment system until the new payment system is developed 
and implemented.
    Second, we believe it is consistent with public interest not to 
delay implementation of a prospective payment system by publishing a 
proposed rule. Publication of this rule as final is necessary to begin 
the flow of data to HCFA in order to establish, in the very near 
future, a system of payment for home health agencies using case mix 
adjusters. Finalizing this rule is in the best interest of the public 
because affording notice and opportunity for comment would extend the 
time home health agencies are reimbursed under the current interim 
payment system while delaying the implementation of the prospective 
payment system.
    In addition, delaying the OASIS reporting process would postpone 
the implementation of a variety of survey and quality measures designed 
to protect and promote patient health and safety. Therefore, we find 
good cause to waive the notice of proposed rulemaking and to issue this 
final rule on an interim basis. We are providing a 60-day comment 
period for public comment.

V. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, agencies are required to 
provide a 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:
     Whether the information collection is necessary and useful 
to carry out the proper functions of the agency;
     The accuracy of the agency's estimate of the information 
collection burden;
     The quality, utility, and clarity of the information to be 
collected; and
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are, however, requesting an emergency review of this interim 
final rule with comment period. In compliance with section 
3506(c)(2)(A) of the Paperwork Reduction Act of 1995, we are submitting 
to the Office of Management and Budget (OMB) the following requirements 
for emergency review. We are requesting an emergency review because the 
collection and reporting of this information is needed before the 
expiration of the normal time limits under OMB's regulations at 5 CFR 
Part 1320, to ensure the timely availability and reporting of data as 
necessary for the development of a reliable case mix adjuster that we 
require for the establishment of a prospective payment system for home 
health services in compliance with sections 4602 and 4603 of the BBA. 
We cannot reasonably comply with normal clearance procedures because 
public harm is likely to result if the agency does not enforce the 
inclusion of OASIS elements into an HHA's comprehensive assessment 
requirement early enough to permit training and to enable the HHA to 
collect and report reliable OASIS data for the period beginning on 
April 26, 1999. As mentioned above, delaying the OASIS reporting 
process would delay the implementation of a variety of survey and 
quality measures designed to protect and promote patient health and 
safety. In addition, this time frame is necessary because a key aspect 
of creating a prospective payment system based on agency cost 
experience is the need to ``standardize'' the rates by adjusting the 
agency costs for their case mix. In effect, case mix needs to be 
adjusted out of the basic payment rates, then, relevant to admissions, 
built back into the rates on an agency-specific basis. We believe the 
most reliable way to accomplish this result is by using data from 
existing agencies. Because the prospective payment system must be 
implemented as soon as possible, we will need to begin receiving the 
data to be used for standardizing the prospective payment amounts.

[[Page 3756]]

    The immediate publication of rules requiring the collection and 
reporting of OASIS data and OMB approval of these requirements pursuant 
to the Paperwork Reduction Act of 1995 are essential because these data 
are required for the development of the home health prospective payment 
system, required by statute in October of 2000. Because OASIS data will 
form the basis for the case mix adjustment component of the prospective 
payment system, national OASIS data must be used in the extensive 
statistical analyses needed to calculate standardized prospective 
payment rates and estimate their impact. The process of rate 
development must take place in the early spring of 1999 for 
incorporation in a proposed rule. The proposed rule regarding the home 
health prospective payment system must be published by the fall of 1999 
to allow for necessary comments and revisions prior to the publication 
of a final rule in the summer of 2000. Given the lag time between the 
publication of the OASIS rules and the receipt of viable national data 
by HCFA, we are already at the point where only two months of national 
data will be potentially available for use in the proposed rule and 
less than a year of data for the final rule. Further delays would 
reduce the amount of national data available for development of the 
prospective payment rates and thus seriously undermine the project plan 
aimed at implementation of the prospective payment system on October 1, 
2000.
    We note that the information collection requirements and associated 
burden referenced in this regulation are primarily concerned with the 
``reporting'' of OASIS data. The collection requirements and related 
burden associated with the ``collection'' of OASIS data are referenced 
in a separate final rule published today in the Federal Register and 
approved under OMB control number 0938-0365. Also worth noting is the 
fact that HCFA-R-39 (0938-0365), ``Home Health Medicare Conditions of 
Participation Information Collection Requirement as Outlined in 
Regulation 42 CFR 484,'' is currently being revised to include the 
OASIS data set as displayed at http://www.hcfa.gov/medicare/hsqb/oasis/
oasishmp.htm. As an alternative to Internet access, which is the most 
efficient method of obtaining the current version of the OASIS, 
agencies may contact their State agency or HCFA regional office home 
health representatives to request a paper copy of the data set for 
review.
    The current version of OASIS is a proposed information collection 
requirement pending OMB approval. We have summarized the Paperwork 
Reduction Act process below and have described the timeframes 
associated with that process. We are asking not only for approval of 
OASIS but also reapproval of the COPs previously included in HCFA-R-39 
and approved under the OMB control number indicated above.
    HCFA is requesting OMB review and approval of this collection 
within 16 working days from the date of publication of this regulation, 
with a 180-day approval period. Written comments and recommendations 
will be accepted from the public if received by the individuals 
designated below within 15 working days from the date of publication of 
this regulation.
    During this 180-day approval period, we will publish a separate 
Federal Register notice announcing the initiation of an extensive 60-
day agency review and public comment period on these requirements. We 
will submit the requirements for OMB review and an extension of this 
emergency approval.
    We are soliciting public comment on each of these issues for the 
provisions that contain information collection requirements as 
summarized below:

Section 484.11  Condition of Participation: Release of Patient 
Identifiable OASIS Information

    Section 484.11 states that the HHA may release patient identifiable 
information to an agent acting on behalf of the HHA only in accordance 
with a written contract between the HHA and the agent. As such, the 
agent agrees not to use or disclose the information except to the 
extent the HHA itself is permitted to do so.
    The burden associated with this record keeping requirement is the 
time and effort for the HHA to maintain a copy of the written 
agreement. We estimate that each HHA will maintain one written 
agreement which will take 2 minutes. We estimate that there will be 
2,623 written agreements (25% x 10,492 HHAs x 1 agreement) which will 
each take 2 minutes for a total annual burden of 88 hours.

Section 484.20  Condition of Participation: Reporting OASIS Information

    Section 484.20 states that HHAs must electronically report all 
OASIS data collected in accordance with Sec. 484.55 and the 
requirements contained in this section.
    The burden associated with meeting Sec. 484.20 is the time and 
effort for the HHA to electronically report all OASIS data collected in 
accordance with Sec. 484.55 and the requirements contained in this 
section. We estimate that each HHA will take 121.50 hours on an annual 
basis (486 admissions per year x 2.5 assessments x 6 minutes to review, 
enter, transmit and perform a 15-minute monthly data audit) to comply 
with Sec. 484.20. We estimate that the total annual burden for 10,492 
HHA's will be 1,274,778 hours. As noted above, the requirements and 
associated burden imposed by this section relate only to the 
``reporting'' burden. The burden associated with the ``collection'' of 
OASIS data is contained in the regulation HCFA-3007-F which is 
published as a separate final rule in this issue of the Federal 
Register.
    The table below indicates the annual number of responses for each 
regulation section in this interim final rule with comment period that 
contains information collection requirements, the average burden per 
response in minutes or hours, and the total annual burden hours.

                                             Estimated Annual Burden
----------------------------------------------------------------------------------------------------------------
                                                             Average  burden per
              CFR section                   Responses              response               Annual burden hours
----------------------------------------------------------------------------------------------------------------
484.11(b)..............................           2,623  2 minutes..................  88 hours
484.20.................................          10,492  121.50 hours...............  1,274,778 hours
                                                                                     ---------------------------
    Total..............................  ..............  ...........................  1,274,866 hours
----------------------------------------------------------------------------------------------------------------


[[Page 3757]]

    We have submitted a copy of this interim final rule with comment 
period to OMB for its review of the information collection 
requirements. These requirements are not effective until they have been 
approved by OMB. A notice will be published in the Federal Register 
when approval is obtained.
    To obtain copies of the supporting statement and any related forms 
for the proposed paperwork collections referenced above, E-mail your 
request, including your address, phone number, and HCFA form number(s) 
and/or OMB numbers referenced above, to [email protected], or call the 
Reports Clearance Office on (410) 786-1326.
    Interested persons are invited to send comments regarding the 
burden or any other aspect of these collections of information 
requirements. However, as noted above, comments on these information 
collection and recordkeeping requirements must be mailed and/or faxed 
to the designees referenced below, within 15 working days from the date 
of this publication in the Federal Register to:

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 Attn: 
John Burke HCFA-3006-IFC Fax number: 410-786-0262

and,

Office of Information and Regulatory Affairs, Office of Management and 
Budget Room 10235, New Executive Office Building Washington, D.C. 20503 
Attn.: Allison Herron Eydt, HCFA Desk Officer Fax numbers: 202-395-6974 
or 202-395-5167

VI. Regulatory Impact Statement

A. General

    We have examined the impacts of this interim final rule with 
comment period as required by Executive Order 12866, the Regulatory 
Flexibility Act (RFA) (Pub. L. 96-354), and the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4). Executive Order 12866 directs 
agencies to assess all costs and benefits of available regulatory 
alternatives and, when regulation is necessary, to select regulatory 
approaches that maximize net benefits (including potential economic, 
environmental, public health and safety effects; distributive impacts; 
and equity). The RFA requires agencies to analyze options for 
regulatory relief for small businesses. For purposes of the RFA, most 
hospitals, and most other providers, physicians, and health care 
suppliers are small entities, either by nonprofit status or by having 
revenues of $5 million or less annually. For purposes of the RFA, most 
HHAs are considered small entities.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis for an interim final rule with comment 
period that may have a significant impact on the operations of a 
substantial number of small rural hospitals. Such an analysis must 
conform to the provisions of section 604 of the RFA. For purposes of 
section 1102(b) of the Act, we define a small rural hospital as a 
hospital that is located outside of a Metropolitan Statistical Area and 
has fewer than 50 beds. We are not preparing a rural impact statement 
since we have determined, and the Secretary certifies that this interim 
final rule with comment period would not have a significant economic 
impact on the operations of a substantial number of small rural 
hospitals. However, we have provided a detailed discussion on the costs 
and various benefits of reporting OASIS data in tables, I and II in 
Section B. Costs associated with OASIS reporting, and in accompanying 
explanations.
    Section 202 of the Unfunded Mandates Reform Act requires agencies 
to prepare 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 (adjusted annually for inflation). As discussed 
in detail in the cost benefit analysis below, we estimate that the 
amount of the unfunded mandate associated with this interim rule with 
comment period will result in an annual expenditure of less than $100 
million to these governmental and private sectors. Therefore, we 
believe the law does not apply.
    We are requiring that all Medicare-certified HHAs and HHAs that are 
required to meet Medicare conditions of participation (for example, 
Managed Care and Medicaid HHAs), assess their patients using the 
standardized, outcome oriented data set known as OASIS. OASIS was 
developed through extensive research and validated in a multi-State 
demonstration project. As discussed in detail in a separate rule on 
OASIS data collection published today in the Federal Register, this 
defined set of core data items was developed largely for the purpose of 
measuring and risk adjusting patient-level outcomes in home health care 
and as such, is explicitly tailored to home care. Data reported from 
the OASIS will allow HHAs to integrate a quality assurance and 
performance improvement measurement system approach into their 
practices and, as discussed above, will also be used to support the 
Medicare HHA prospective payment system.
    The Balanced Budget Act of 1997 requires HCFA to develop a 
prospective payment system for home health. A prospective payment 
system pays providers based on the predicted costs of care, giving 
providers the incentive to provide care efficiently. In the home health 
prospective payment system, beneficiaries will be classified into case 
mix groupings based on their predicted resource use, with each group 
having a specific payment rate.
    In developing a sound classification system, HCFA must account for 
the factors that would influence the beneficiary's use of services. In 
the case of the hospital prospective payment system, this was done 
using Medicare claims data linked to diagnosis data. Because the 
majority of inpatient services are attributed to the medical diagnosis, 
Medicare claims provide enough information to classify patients for 
hospital payments.
    Post-acute care services such as home health and skilled nursing 
facility services are influenced in part by the medical diagnosis. 
However, other factors have a strong influence in the use of post-acute 
care, such as the severity of illness and functional abilities. 
Therefore, a more comprehensive data source is needed for proper 
patient classification. Because Medicare claims provide information 
only about diagnosis, age, gender, and race, a claims-based grouping 
would not adequately classify beneficiaries into payment groups.
    The first attempt to design a prospective payment system for post-
acute services was the case of skilled nursing facilities. Under this 
payment system, HCFA has used data from both claims and the Minimum 
Data Set (MDS) to classify patients into payment groups. Similarly, 
HCFA plans to use OASIS data in addition to claims data to construct 
the home health prospective payment system. A classification system 
that takes into account severity of illness as well as functional 
abilities will help to ensure adequate payment for high-cost 
beneficiaries. At this time, there is no other viable data source that 
would provide this information other than OASIS. If HCFA does not use 
OASIS data to identify case mix groups, then, on average, prospective 
payment amounts could be too low for beneficiaries who need assistance 
with many activities of daily living and too high for beneficiaries who 
need less assistance.

[[Page 3758]]

    The Balanced Budget Act of 1997 also requires the amounts paid for 
each case mix group under the prospective payment system to be based on 
a standardized payment rate. HCFA is designing the case-mix 
classification system based on OASIS and claims data from a stratified 
sample of 90 HHAs. Standardization requires removing the effect of case 
mix and wage variation from payment levels for these 90 HHAs and from 
national payment levels. This helps to ensure that if resource use 
varies from region to region, payments in the prospective payment 
system are adjusted accordingly. This process requires the same 
information that is used to classify patients into payment groups. 
Therefore, we must collect OASIS data from HHAs before HCFA can set 
standardized payment rates for a prospective payment system.
    The OASIS instrument has been in development for the past ten 
years. A large number of home health agencies have participated in its 
development and testing. The instrument has demonstrated its validity 
and reliability as an assessment and outcome measurement tool. We share 
the industry's interest in the adoption of a useful and appropriate 
instrument with as little disruption to existing HHAs operations as 
possible. We also share the industry's interest in minimizing 
unnecessary paperwork and record keeping burdens, while at the same 
time, ensuring quality of care for beneficiaries. Paperwork and record 
keeping requirements must be cost effectively integrated into HCFA's 
survey and enforcement processes (both from the balanced perspectives 
of the public and private sectors), and must maximize available 
information technologies. In particular, we may reevaluate OASIS data 
and reporting needs for patient reassessments. We solicit public 
comment on appropriate refinements to reassessment data requirements 
and any other aspects of OASIS that can be improved as the result of 
program experience.
    In addition to its use as the basis for prospective payment, OASIS 
will assist agencies in improving their performance through outcomes-
based assessment. The quality component of OASIS is crucial to ensuring 
that beneficiaries receive needed services under the home health 
prospective payment system.
    OASIS is one of several components of the outcome-based quality 
improvement (OBQI) approach that has produced documented positive 
impacts on the clinical status of HHA patients. The outcome data 
encapsulated in OASIS allows HHAs to improve quality, evaluate the 
effectiveness of its care, and better manage care to enhance outcomes 
and control costs and utilization. Key features of the OBQI approach 
are the collection of patient/client data at regular intervals; the 
aggregation and comparison of agency outcomes on a yearly basis and 
nationally; changing care associated with poor outcomes; and 
reinforcing care for exemplary outcomes. Outcome measures are defined 
as a quantification of a change in patient health status between two or 
more time points and in OBQI, outcome measures are computed using OASIS 
data from start of care and from subsequent time points or discharge. 
HCFA commissioned a demonstration study to evaluate the clinical 
outcomes associated with the application of OBQI/OASIS. The Center for 
Health Services and Policy Research at the University of Colorado has 
preliminary findings associated with an outcome-based quality 
improvement study. Preliminary results from the study, yet unpublished, 
suggest that risk-adjusted hospitalization rates declined from 
approximately 31 percent to 28 percent (about a 10 percent rate of 
decrease) from the first to second years of OBQI application. The 
demonstration findings also showed an improvement in other health 
status outcomes. OBQI, properly implemented and maintained, is capable 
of assisting HHAs enhance patient outcomes. However, in order to 
realize the full benefits of using OASIS data, the information needs to 
be computerized and configurable as an analytical tool. Implementation 
of this rule will allow this goal to be realized.
    The OASIS data transmitted by HHAs and States to HCFA will improve 
the delivery of quality care to patients receiving services from HHAs 
in the following ways. The database will enable the State agencies and 
us to provide HHAs with reports of aggregated State and national 
patient outcome measures and trends. These reports will allow HHAs to 
compare themselves to similar providers and develop improvement 
activities, where the need is identified. By establishing internal 
quality assurance analyses derived from the computerized data, HHAs 
will be able to evaluate the effectiveness of various components of 
their home health care delivery systems. The evaluations will lead to 
identification of best clinical practices and interventions, optimal 
personnel staffing, and optimal length and type of services for each 
agency and its patients.
    Access to this electronic data will provide information that will 
benefit both the policy and operational components of Federal and State 
government. The system has the potential of providing consumer groups 
with outcome and quality information for making health care decisions. 
States will have access to timely OASIS data that will improve their 
ability to focus on-site inspection activities associated with the home 
health survey process. Since we require OASIS data for almost all home 
health patients regardless of payer source, the database will allow for 
comparison of outcomes of most patients receiving home health services. 
The OASIS data will significantly improve each State's ability to 
identify areas of potential quality concerns in an effective and 
efficient manner, and will facilitate partnership between States and 
industry in identifying opportunities to improve care. At both the 
Federal and State level, information from the OASIS system will provide 
a valid and reliable tool for evaluating and improving the efficacy of 
survey and certification activities. The quality of peer profiling will 
be made available from the State agency to allow the HHA to compare 
itself against its peers. If the HHA needs assistance with ways to 
improve its activity, the State agency or other consultative group will 
be able to provide guidance in this iterative process.
    We note that OASIS data will become part of the same information 
system that is being designed to collect and report beneficiary 
specific outcomes of care and provider performance data across a 
multitude of delivery sites. Currently, as required in Sec. 483.315(h), 
States are collecting and reporting assessment data on residents in all 
Medicare and Medicaid certified nursing homes through the use of the 
MDS. As OASIS data becomes part of this standard State system, we will 
have data on the second piece of the post-acute care continuum. The 
systems and staffing infrastructure to collect OASIS and MDS 
information have already been established at each State survey agency, 
as well as within HCFA itself, so that State costs associated with 
electronically collecting OASIS data from HHAs will be on an 
incremental basis.

B. Costs Associated With OASIS Reporting

General
    We anticipate that both HHAs and States will incur some incremental 
costs from reporting OASIS information. We estimate total start-up 
costs of $11.4 million, which represents only costs incurred by HHAs 
(we will be supplying the OASIS software directly to States and States 
already have the requisite hardware). This includes as much as $5.2 
million in Medicare program costs.

[[Page 3759]]

We also estimate total ongoing annual costs of about $25.0 million, 
which includes $22.0 million in costs for HHAs and $3.0 million in 
costs for States. Approximately $10.1 million of the $22 million will 
be reimbursable by Medicare annually. The annual administrative cost 
for States of $3.0 million will be absorbed within HCFA's program 
management appropriation. We will be supplying OASIS software directly 
to States and States already have the requisite hardware. However, the 
benefits associated with computerizing the OASIS far outweigh the 
additional costs of automating the data.
    The preceding represents our estimates of the individual costs 
associated with this effort. These figures are based on our best 
estimates of actual burden to existing HHAs and are without the benefit 
of actual cost data documenting the incremental costs associated with 
the reporting of OASIS data. Any adjustments to Medicare cost limits 
would necessarily be based on cost data rather than estimates. In 
addition, these costs are based on the assumption that implementation 
will be in fiscal years 1999 and 2000. On August 11, 1998, we published 
in the Federal Register a notice with comment period that set forth the 
schedules of per-visit and per-beneficiary limitations for HHA costs 
(63 FR 42912). In that notice, we included an OASIS offset adjustment 
factor to the per visit limitations to address costs incurred with 
OASIS implementation. While we based this adjustment on the best data 
we had available, we are concerned that we may not have captured all 
relevant costs, particularly ongoing and automation costs. In part, 
this is because our data are based on agencies whose costs in this 
regard may not have been fully representative of agency costs in 
general. In the above notice, we asked for specific comments on ongoing 
and automation costs associated with OASIS reporting. We also asked for 
cost data that would impact subsequent decision making on future cost 
limit notices. In this interim final rule, we are requesting comments 
on the adequacy of estimated initial and on-going costs associated with 
the automation of OASIS data. Because the comment period for the notice 
referred to above closed on October 13, 1998, we will consider comments 
on cost limit adjustments based on the estimates we have included in 
this rule in future cost limit notices. However, we will only consider 
such comments on cost limit adjustments if they relate to the 
provisions of this interim final rule, specifically those associated 
with the incremental cost of OASIS implementation.
    We have used this approach of accepting comments on cost limit 
adjustment in response to this interim final rule because we would not 
consider re-opening the previous comment period. The issues in the 
August 1998 notice on the interim payment system are much broader than 
the payment adjustment for OASIS related costs. Consequently, the 
comments we received were almost entirely directed to the broader 
issues. In fact, we received only two comments suggesting additional 
factors to be considered in assessing costs associated with OASIS. We 
expect a great deal more comments relative to this issue in response to 
this interim rule with comment period, which focuses entirely on OASIS 
related concerns.
Home Health Agencies
    Upon publication of this rule, each HHA that is required to meet 
the Medicare Conditions of Participation must electronically transmit 
OASIS data to its respective State survey agency or HCFA OASIS 
contractor. Most costs associated with computerizing the OASIS will be 
related to hardware and software. The costs presented below are based 
on the profile of an average HHA, where applicable, since certain costs 
(such as a computer) are constant regardless of the size of the agency. 
We define an average size HHA as having 18 clinicians and other service 
practitioners and 486 admissions per year.
    At the current time, we estimate that approximately 50 percent of 
the 10,492 Medicare certified HHAs as of March 1998, or 5,246 agencies, 
already possess the requisite hardware needed to support automation of 
the OASIS. This estimate is based on a national survey conducted by the 
Joint Commission on Accreditation for Healthcare Organizations. We note 
that many HHAs currently contract with outside entities to 
electronically bill fiscal intermediaries for Medicare services. We 
anticipate that, similarly, many HHAs will choose to contract for the 
encoding and transmitting of the OASIS data as well. Therefore, these 
HHAs will not be incurring any costs associated with procuring the 
hardware needed to support this effort. Nonetheless, for the purpose of 
the estimates in this rule, we have assumed that all 50 percent of the 
HHAs without computer equipment will opt to purchase the requisite 
hardware.
Reimbursement for Costs
     Medicare
    The BBA has mandated us to develop a prospective payment system for 
home health services based on units of payment. Until the HHA 
prospective payment system is in effect, the BBA also required that we 
implement an interim payment system (IPS) for home health, which began 
on October 1, 1997. This interim payment system established two sets of 
cost limits for home health agencies. Details of the IPS can be found 
in the March 31, 1998, Federal Register (63 FR 15718) and in the August 
11, 1998, Federal Register (63 FR 42911). The IPS will generally result 
in overall reduced payments to HHAs. We anticipate that HHAs will incur 
some costs associated with the implementation of OASIS data collection 
and reporting. However, as stated above, we are evaluating comments on 
the August 11, 1998 payment notice setting forth HHA cost limitations 
that included an OASIS offset adjustment factor to the per visit 
limitations. This payment notice addresses costs incurred with the 
incremental costs of OASIS implementation.
    The implementation of this interim final rule with comment period 
will be accomplished by HHAs in existence, and participating in HCFA 
programs. HHAs that apply for and receive Medicare certification in the 
future will be expected to comply with the current COPs regarding 
comprehensive assessment of patients prior to certification. Therefore 
we would not expect HHAs that are certified in the future to have 
start-up costs related to revising their comprehensive assessments.
     Medicaid
    States have flexibility in designing their payment methodology for 
home health services that are reimbursable under the Medicaid program. 
The payment methodology can recognize provider costs or it can 
recognize a certain rate that the State is willing to pay. The State 
agency has a choice to either determine a negotiated rate with the HHA 
or to set a standard rate for all HHA providers. In this case, the HHA 
has the option of accepting the rate, or not. To the extent that an HHA 
incurs costs in computerizing the OASIS (such as, the acquisition of 
hardware or software, staff training, or additional staffing), the 
provider may take the costs into account when establishing its rates 
for home health services. The State Medicaid agency can also take the 
costs into consideration in reimbursing the provider. Therefore, we do 
not believe that these costs will serve as a barrier to new, viable HHA 
entrants.

[[Page 3760]]

    The following tables show our estimates of national costs for OASIS 
reporting.

                              Table. I--National Start-up Costs for OASIS Reporting
----------------------------------------------------------------------------------------------------------------
                                                     Number of
                                                     agencies     Start-up costs  Medicare costs  Costs to other
                       FY                            incurring     (in millions)   (in millions)    sources (in
                                                  start-up costs        \5\                        millions) \3\
----------------------------------------------------------------------------------------------------------------
1999 and 2000 \1\...............................          10,492       $11.4 \4\            $5.2            $6.2
2001............................................               0               0               0               0
2002............................................               0               0               0               0
2003............................................               0               0               0               0
----------------------------------------------------------------------------------------------------------------


                                                      Table II.--National Costs for OASIS Reporting
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          On-going Costs
                                                                          Total on-going    State Admin    @ $2,097 per   Medicare Costs  Costs to Other
                           FY                             Number of HHAs     costs (in       Costs (in        HHA (in     (in  millions)    sources (in
                                                                           millions) \5\   millions) \2\     millions)                     millions) \3\
--------------------------------------------------------------------------------------------------------------------------------------------------------
1999 \1\................................................          10,492           $25.0            $3.0           $22.0           $10.1           $11.9
2000 \1\................................................          10,492            25.0             3.0            22.0            10.1            11.9
2001....................................................          10,492            25.0             3.0            22.0            10.1            11.9
2002....................................................          10,492            25.0             3.0            22.0            10.1            11.9
2003....................................................          10,492            25.0             3.0            22.0            10.1           11.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
Tables I and II reflect estimates of total costs versus incremental costs. These costs are based on the following assumptions:
\1\ Implementation will be in Fiscal years 1999 and 2000.
\2\ Expected to be absorbed within HCFA's program management appropriation.
\3\ Medicare will reimburse HHAs for their reasonable start-up and ongoing costs, subject to cost limits, based on the estimate that approximately 46%
  of HHA patients are Medicare beneficiaries. This estimate is reflected in Table I by indicating that 46% of $11.4 million (or $5.2 million) will be
  reimbursable by Medicare for start up costs. This estimate is also reflected in Table II by indicating that 46% of $22.0 million (or $10.1. million)
  will be reimbursable by Medicare for annual ongoing costs. These estimates may be overstated to the extent that reasonable cost determinations and
  application of cost limits reduce this expense. The remaining 54% of the start-up costs, or $6.2 million in Table I, and the remaining 54% of the
  ongoing costs in Table II, or $11.9 million annually may be absorbed by a combination of the Medicaid program, private insurers, and beneficiaries.
  Because approximately 23% of HHA patients are Medicaid beneficiaries, we expect HHAs to try to have the Medicaid programs absorb up to 23% of the
  $11.4 million in start-up costs or $2.6 million. Subtracting $2.6 million from the remaining $6.2 million start-up costs leaves $3.6 million in start-
  up costs to be passed along to private insurers and beneficiaries. In a similar way, we expect HHAs to have the Medicaid programs absorb up to 23 per
  cent of the annual $22.0 million in ongoing costs, or $5.1 million. Subtracting $5.1 million from the remaining $11.9 million annual ongoing costs
  leaves $6.8 million in annual ongoing costs. However, after implementation, ongoing costs become part of the HHA's base history.
\4\ See Table I--Estimated start-up costs include $170.00 for training expenses x 10,492 HHAs ($1.8 million). We estimate approximately $1,829 per HHA
  to purchase computers x 5,246 HHAs because an estimated one half of the 10,492 HHAs already have the necessary computer equipment ($9.6 million).
  Therefore, $1.8 million + $9.6 million = $11.4 million.
\5\ The total of start up costs and ongoing costs equals $61.4 million. This is based on an estimated start up cost of $11.4 million for Fiscal years
  1999 and 2000, and ongoing costs of $25 million per year, for those two years.

     Hardware: We estimate total hardware costs associated with 
automating the OASIS to be approximately $1,829 for a typical HHA, 
which includes the computer and communications components capable of 
running OASIS software and transmitting OASIS assessments, and a laser 
printer. This estimate is based on the most recent cost data available 
for a system that includes an Intel Pentium processor. This system 
typically would use Windows 95 or Windows NT 4.0, and include at least 
32 megabytes of RAM, 2 gigabytes disk space, a 3.5 floppy disk drive, 
CD-ROM drive, a color SVGA monitor, a mouse, a laser printer, and a 56 
kbps modem connected to a dedicated telephone line. The cost estimate 
is based on the optimal system we anticipate that many HHAs will choose 
to purchase. However, at a minimum, HHAs should have at least a 486-50 
personal computer in a Windows 3.1 environment with 8 megabytes of RAM, 
at least 100 megabytes of available hard disk space, a VGA color 
monitor, keyboard, mouse, a 3.5 floppy drive, and a laser printer. All 
HHAs should have at least a 28.8 kbps modem for telecommunications of 
the data, as well as web browser software that supports dial-up 
communications for the transmission of HHA assessment data to the 
State. The communications capability must meet our specifications 
related to transmission of OASIS data.
     Software: HHAs have the option of purchasing data 
collection software that can be used to support other clinical or 
operational needs (for example, care planning, quality assurance, or 
billing) or other regulatory requirements for reporting patient 
information. However, HCFA has developed an OASIS data entry system 
(that is, Home Assessment Validation and Entry, or ``HAVEN'') that is 
available to HHAs at no charge through HCFA's website at http://
www.hcfa.gov/medicare/hsqb/oasis/oasishmp.htm. HHAs may also request 
HAVEN on CD-ROM. Therefore, HHAs who plan to use HAVEN will need either 
Internet access (for example, a dial-up Internet Service Provider (ISP) 
account) or a CD-ROM drive in order to obtain and install the software.
    HAVEN will offer users the ability to collect OASIS assessments 
data in a database and transmit the data in a HCFA-standard format to 
State databases. The data entry software will import and export data in 
standard OASIS record format, maintain agency, patient, and employee 
information, enforce data integrity through rigorous edit checks, and 
provide comprehensive on-line help. It is recommended that the

[[Page 3761]]

Windows operating system be operated at a screen resolution of 800x600 
for HAVEN. While HAVEN will operate at 640x480 resolution, the data 
entry forms will not be completely visible on the screen, and the user 
will need to scroll to view some of the variables.
     Supplies: Supplies necessary for collection and 
transmission of data, including forms, diskettes, computer paper, and 
toner, will vary according to the size of the agency, the number of 
patients served, and the number of assessments conducted. We anticipate 
that an average HHA with 486 admissions per year will incur 
approximately $250 in costs for supplies.
     Maintenance: There are costs associated with normal 
maintenance of computer equipment such as the replacement of disk 
drives or memory chips. Typically, such maintenance is provided through 
extended warranty agreements with the original equipment manufacturer, 
system retailer, or a firm that provides computer support. These 
maintenance costs are estimated to average no more than $100 per year.
     Training: HHA staff will require training on encoding 
assessments and compiling OASIS data for electronic submission. One 
person in each agency should be trained in data entry and data 
transmission procedures and requirements. We expect that this initial 
training will require about 5.5 hours of staff time, and will cost an 
average HHA about $170 based on an average hourly rate of $12.50 for 
technical staff. This cost also includes travel expenses and travel 
time, since facility staff may need to travel to a centralized training 
site within the State (we anticipate that training will be provided in 
multiple sites in the State once the system is implemented). We expect 
that the State survey agencies will supply this training.
     Data Entry: HHAs have flexibility in choosing the method 
used to collect OASIS data, but the method must comply with our 
requirement for safeguarding the confidentiality of clinical records. 
HHAs must collect and transmit OASIS data to the State survey agency, 
at a minimum, on a monthly basis. The data may be entered directly by a 
technical staff member from a paper document completed by a clinical 
staff member, or by a data entry operator under contract to the HHA to 
key in data. Additionally, HHAs must allow time for data validation, 
preparation of data for transmission, and correction of returned 
records that failed checks at the State data-editing level. We estimate 
that an average HHA with 486 admissions per year will incur an annual 
data entry cost of $1,557 per year, based on an estimate of 2.5 
assessments per admission and an hourly rate for data entry costs of 
$12.50. This cost includes data review and entry, as well as a 
(recommended) 15 minute monthly data entry audit for quality assurance 
purposes.
     Ongoing Data Transmission: HHAs will fund the cost of 
transmitting OASIS data to their respective State agencies. HHA staff 
must also manage the data transmission function, correct communications 
problems, and manage report logs and validation reports transmitted 
from the State. We estimate that it will take about one additional hour 
of staff time to perform data transmission related tasks each month, 
including running a data edit check program. This staff time will cost 
an average size HHA about $150 per year based on an hourly rate of 
$12.50.
    Some States will opt to provide their HHAs with a toll-free line to 
use in transmitting their data. However, in the States that choose not 
to do so, we estimate that an average HHA will incur about $36 per year 
to electronically report its OASIS data to the State.
States
    We expect that overall responsibility for fulfilling requirements 
to operate the State OASIS system will rest with the State survey 
agency. OASIS data will be maintained on the standard State systems 
that currently house the MDS assessments being reported by all 
certified nursing homes. HCFA has already procured and installed this 
system in each State survey agency. It is currently being used to 
collect the MDS data and to configure reports that will be used by the 
State surveyors to better focus surveys. However, there are some States 
in which responsibility for the long term survey and certification 
functions are located in different components of the State agency than 
the home health survey and certification functions. HCFA will fund the 
purchase and installation of a computer work station in these States, 
so that the non-long term care surveyors will have direct access to the 
OASIS data.
    Since HCFA has already deployed computer hardware and software to 
the States to operate the MDS automated system, the entity operating 
the MDS system will also be responsible for day-to-day operations of 
the OASIS system. In most cases, the State is operating the system 
itself. However, several States have exercised their option to enter 
into an agreement with either the State Medicaid agency, another State 
component, or a private contractor to perform the day-to-day operations 
of the MDS system. Just as we required for MDS data, prior to entering 
an agreement with a subcontractor to extend support for OASIS data, a 
State must receive approval from its respective HCFA regional office if 
the State OASIS system is to be operated by an entity other than the 
survey agency. If the State system is operated by an entity other than 
the State survey agency, the State must ensure that the survey agency 
has suitable access to this system to fully support all OASIS-driven 
functions that the State will require of the survey agency (for 
example, quality indicator reporting and survey targeting). The State 
is also responsible for maintaining OASIS data for retrieval by HCFA to 
a central repository to be established by HCFA.
    States will use OASIS data primarily to focus the home health 
survey process and to provide HHAs and consumers with OASIS-driven 
information. As previously mentioned, the OASIS information will be 
maintained on the already existing MDS system which currently includes 
a database, communication, supporting file(s), and print servers for 
client workstations; local and wide area data networks; and application 
software for performing all aspects of MDS related functions and tasks. 
This system has been designed and developed within a broad class of 
systems known as Client/Server architecture.
    We are providing the OASIS system to States primarily for use in 
the survey and certification program. As such, most Federally 
reimbursable costs incurred by the States for automating the OASIS will 
be funded through the Medicare survey and certification program. 
However, some States could also choose to use OASIS data in 
administering their Medicaid programs. When that is the case, Federal 
reimbursement is applicable to the extent that a State uses the OASIS 
for administering its Medicaid program. As a result, it may be 
appropriate for a State to allocate some OASIS costs to its Medicaid 
administrative cost claims.
    When a State does use OASIS in administering its Medicaid programs, 
it should apportion Federal costs associated with automating the OASIS 
and operating the data system between the Medicare survey and 
certification program and the Medicaid program (as administrative 
costs, when applicable). The State should apportion OASIS costs to 
these programs based on the State's determination of each program's 
utilization of the OASIS system. The Federal financial participation 
rate for costs apportioned as Medicaid administrative costs is 50 
percent. When

[[Page 3762]]

the State licensure program benefits from the automation of the OASIS, 
the State should also share in the OASIS automation costs.
     Hardware: As previously discussed, States already have the 
systems infrastructure in place to support the requirement to collect 
OASIS data from their certified HHAs. However, HCFA will fund the 
purchase and installation of a computer work station in those States in 
which the long term care and non-long term care surveyors work in 
different offices. We anticipate that these States will require a 
Pentium 233 workstation with 8 gigabyte hard drive and a 15 inch 
monitor. This system will run on Windows NT 4.0 and include a network 
card for LAN connections.
     Software: HCFA will provide each State with a standard 
suite of software applications to perform all OASIS-related functions, 
including receipt and validation of OASIS records, posting of records 
to the master repository, and analytical applications to be used to 
inform and support the home health agency.
    The OASIS system, in most cases, will be operated by personnel 
within the designated State agency. We will require the State systems 
to perform the full gamut of OASIS system responsibilities including 
receiving, authenticating, and validating the records received from 
HHAs, providing feedback to the HHAs, storing the OASIS records in a 
permanent database within the State system, creating system management 
reports and logs, generating provider performance reports, and 
retransmitting validated OASIS records from each State agency to a 
national OASIS repository maintained by HCFA. When a State develops its 
own customized OASIS applications, the costs of developing and 
maintaining these additional software applications (and any related 
hardware components) will not be Federally funded.
     Operational Staff Time: The systems infrastructure that 
will collect and configure the OASIS data from HHAs is already in place 
in all States. We expect that States will hire or reassign the 
technical staff required to support the system. However, HCFA 
recognizes that there will be incremental staff time required to 
support the additional technical activities associated with maintaining 
additional provider passwords and a larger database, as well as 
fulfilling the provider/vendor education and support role. We are 
requesting that each State assign an OASIS automation coordinator who 
will be our key contact within each State for managing OASIS system 
issues. States have already named an MDS automation coordinator, and we 
anticipate that in many cases, this same individual will also be 
supporting OASIS.
    HCFA will fund additional staffing costs based on the incremental 
time requirements associated with the computerization of OASIS. We have 
ranked States into three groups based on the number of HHAs in each 
State and will fund staffing costs depending on the number of HHAs 
within each State. We will fund an additional .5 full time equivalent 
(FTE) staff time for a State with less than 100 HHAs; we will fund an 
additional 1.0 FTE for a State with 101-250 HHAs; and, we will fund an 
additional 1.5 FTE for a State with greater than 251 HHAs. These 
additional FTEs represent both the incremental technical time needed to 
support OASIS, as well as the duties of the OASIS Automation 
Coordinator whose duties will include training providers to encode data 
in the HCFA standard format, to create export files, and to use the 
communications software to dial into the State database; error tracking 
and resolution of HHA provider data problems; and other data management 
responsibilities such as cleaning and aggregating the data prior to 
transmission to HCFA and system backup and archiving. We estimate that 
the incremental staffing costs for both technical staff and the OASIS 
Automation Coordinator will be about $44,000 for an average size State 
with responsibility for 101-250 HHAs.
     Supplies: States can expect about $600 per year in 
incremental OASIS-related costs for products that are consumed, such as 
printer toner, paper, and back-up tapes.
     Training: We plan to centralize training of State 
personnel who will be responsible for administrative and technical 
aspects of OASIS operations. With our technical support and guidance, 
States will work closely with the HHA provider community in providing 
information on specific requirements related to the submission of OASIS 
assessments to the State repository.
    In order to promote national consistency in OASIS system operations 
and troubleshooting, we will request the OASIS coordinators to attend a 
national multi-day training session. We will also convene at least one 
national meeting of the OASIS coordinators each year. We will use this 
forum to present new information, gather suggestions for system 
improvements, exchange ideas on OASIS system operations, administration 
and troubleshooting issues, and to discuss objectives for future system 
development and refinement. States will be expected to work with their 
HHA provider community to educate them on automating the OASIS. We 
anticipate annual training costs associated with training for an 
average size State to be about $5,600 which includes travel costs 
associated with both the centralized training and educating the HHAs 
and vendor community on computerization requirements.
     Data Transmission: States will incur data communication 
costs both in receiving OASIS data from HHAs and transmitting 
validation reports back to the HHAs. These costs have two basic 
elements:
(1) Fixed monthly line fees of approximately $23.00 per line per month. 
The number of lines required varies from 8 to 48 according to the 
number of HHAs supported by a State. On average, a State's fixed line 
costs will be $2,208 per year.
(2) Line connect and long distance charges of approximately $.03 per 
assessment for the monthly connection times associated with 
transmitting error logs and edit reports back to the HHAs. This 
translates into an average connection cost of $7,665 per year per 
State.

C. Conclusion

    As discussed in detail above, HHAs and States will bear some 
incremental costs associated with this proposal. However, we believe 
that these costs are well justified when considered within the context 
of the anticipated increased quality of care for HHA patients, as well 
as the potential uses of the automated data by the HHAs, the States, 
and us. The foregoing estimates may actually overstate anticipated 
costs because they do not take into account cost-savings to be achieved 
by improving HHAs' management information systems, as well as potential 
improvements in patients' overall health status. Nor do they represent 
the savings inherent in future improvements to the survey and 
certification process, and specifically, a more focused, uniform 
approach by both the States and us in assessing quality of care in the 
nation's HHAs. We note that we have received feedback from many of the 
HHAs that chose to participate in the HCFA-sponsored OASIS 
Demonstration Project that has been underway for the past several 
years. These HHAs have indicated that the value of the information they 
have received about their individual performance has well outweighed 
the incremental cost associated with collecting and reporting the data.
    In accordance with the provisions of Executive Order 12866, this 
regulation

[[Page 3763]]

was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 484

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 488

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

    42 CFR Chapter IV is amended as follows:
    A. Part 484 is amended as follows:

PART 484--CONDITIONS OF PARTICIPATION FOR HOME HEALTH AGENCIES

    1. The authority citation for part 484 continues to read as 
follows:

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

Subpart B--Administration

    2. Section 484.11 is added to subpart B to read as follows:


Sec. 484.11  Condition of participation: Release of patient 
identifiable OASIS information.

    The HHA and agent acting on behalf of the HHA in accordance with a 
written contract must ensure the confidentiality of all patient 
identifiable information contained in the clinical record, including 
OASIS data, and may not release patient identifiable OASIS information 
to the public.
    3. Section 484.20 is added to subpart B to read as follows:


Sec. 484.20  Condition of participation: Reporting OASIS information.

    HHAs must electronically report all OASIS data collected in 
accordance with Sec. 484.55.
    (a) Standard: Encoding OASIS data. The HHA must encode and be 
capable of transmitting OASIS data for each agency patient within 7 
days of completing an OASIS data set.
    (b) Standard: Accuracy of encoded OASIS data. The encoded OASIS 
data must accurately reflect the patient's status at the time of 
assessment.
    (c) Standard: Transmittal of OASIS data. The HHA must--
    (1) Electronically transmit accurate, completed, encoded and locked 
OASIS data for each patient to the State agency or HCFA OASIS 
contractor at least monthly;
    (2) For all assessments completed in the previous month, transmit 
OASIS data in a format that meets the requirements of paragraph (d) of 
this section;
    (3) Successfully transmit test data to the State agency or HCFA 
OASIS contractor beginning March 26, 1999, and no later than April 26, 
1999; and
    (4) Transmit data using electronic communications software that 
provides a direct telephone connection from the HHA to the State agency 
or HCFA OASIS contractor.
    (d) Standard: Data Format. The HHA must encode and transmit data 
using the software available from HCFA or software that conforms to 
HCFA standard electronic record layout, edit specifications, and data 
dictionary, and that includes the required OASIS data set.
    B. Part 488 is amended as follows:

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

    1. The authority citation for part 488 is revised to read as 
follows:

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

Subpart B--Special Requirements

    2. Section 488.68 is added to subpart B to read as follows:


Sec. 488.68  State Agency responsibilities for OASIS collection and 
data base requirements.

    As part of State agency survey responsibilities, the State agency 
or other entity designated by HCFA has overall responsibility for 
fulfilling the following requirements for operating the OASIS system:
    (a) Establish and maintain an OASIS database--. The State agency or 
other entity designated by HCFA must'
    (1) Use a standard system developed or approved by HCFA to collect, 
store, and analyze data;
    (2) Conduct basic system management activities including hardware 
and software maintenance, system back-up, and monitoring the status of 
the database; and
    (3) Obtain HCFA approval before modifying any parts of the HCFA 
standard system including, but not limited to, standard HCFA-approved--
    (i) OASIS data items;
    (ii) Record formats and validation edits; and
    (iii) Agency encoding and transmission methods.
    (b) Analyze and edit OASIS data. The State agency or other entity 
designated by HCFA must--
    (1) Upon receipt of data from an HHA, edit the data as specified by 
HCFA and ensure that the HHA resolves errors within the limits 
specified by HCFA;
    (2) At least monthly, make available for retrieval by HCFA all 
edited OASIS records received during that period, according to formats 
specified by HCFA, and correct and retransmit previously rejected data 
as needed; and
    (3) Analyze data and generate reports as specified by HCFA.
    (c) Ensure accuracy of OASIS data. The State agency must audit the 
accuracy of the OASIS data through the survey process.
    (d) Restrict access to OASIS data. The State agency or other entity 
designated by HCFA must do the following:
    (1) Ensure that access to data is restricted except for the 
transmission of data and reports to--
    (i) HCFA;
    (ii) The State agency component that conducts surveys for purposes 
related to this function; and
    (iii) Other entities if authorized by HCFA.
    (2) Ensure that patient identifiable OASIS data is released only to 
the extent that it is permitted under the Privacy Act of 1974.
    (e) Provide training and technical support for HHAs. The State 
agency or other entity designated by HCFA must--
    (1) Instruct each HHA on the administration of the data set, 
privacy/confidentiality of the data set, and integration of the OASIS 
data set into the facility's own record keeping system;
    (2) Instruct each HHA on the use of software to encode and transmit 
OASIS data to the State;
    (3) Specify to a facility the method of transmission of data to the 
State, and instruct the facility on this method.
    (4) Monitor each HHA's ability to transmit OASIS data.
    (5) Provide ongoing technical assistance and general support to 
HHAs in implementing the OASIS reporting requirements specified in the 
conditions of participation for home health agencies; and
    (6) Carry out any other functions as designated by HCFA necessary 
to maintain OASIS data on the standard State system.

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

    Dated: November 3, 1998.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.

    Dated: December 15, 1998.
Donna E. Shalala,
Secretary.
[FR Doc. 99-1448 Filed 1-22-99; 8:45 am]
BILLING CODE 4120-01-P