[Federal Register Volume 64, Number 75 (Tuesday, April 20, 1999)]
[Notices]
[Pages 19376-19379]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-9802]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-2029-FN]
RIN 0938-AJ42


Medicare Program; Recognition of the Community Health 
Accreditation Program, Inc. (CHAP) for Hospices

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

ACTION: Final notice.

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SUMMARY: This notice recognizes the Community Health Accreditation 
Program, Inc. (CHAP) as a national accreditation organization for 
hospices that request participation in the Medicare program. We believe 
that accreditation of hospices by CHAP demonstrates that all Medicare 
hospice conditions of participation are met or exceeded. Thus, we grant 
deemed status to those hospices accredited by CHAP. The proposed notice 
included the application from the Joint Commission for Accreditation of 
Healthcare Organizations (JCAHO). We have separated the final notices 
to appropriately process each application and will issue a separate 
final notice containing the decision for JCAHO under HCFA-2039-FN.

EFFECTIVE DATE: This final notice is effective April 20, 1999 through 
November 20, 2003.

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

SUPPLEMENTARY INFORMATION:

I. Background

A. Laws and Regulations

    Under the Medicare program, eligible beneficiaries may receive 
covered palliative services in a hospice provided certain requirements 
are met. The regulations specifying the Medicare conditions of 
participation for hospice care are located in 42 CFR part 418. These 
conditions implement section 1861(dd) of the Social Security Act (the 
Act), which specifies services covered as hospice care and the 
conditions that a hospice program must meet in order to participate in 
the Medicare program.
    Generally, in order to enter into an agreement with Medicare, a 
hospice must first be certified by a State survey agency as complying 
with the conditions or standards set forth in part 418 of the 
regulations. Then, the hospice is subject to routine surveys by a State 
survey agency to determine whether it continues to meet Medicare 
requirements. There is an alternative, however, to surveys by State 
agencies.
    Current section 1865(b)(1) of the Act permits ``accredited'' 
hospices to be exempt from routine surveys by State survey agencies to 
determine compliance with Medicare conditions of participation. 
Accreditation by an accreditation organization is voluntary and is not 
required for Medicare certification. Section 1865(b)(1) of the Act 
provides that, if a provider is accredited by a national accreditation 
body that has standards that meet or exceed the Medicare conditions, 
the Secretary can ``deem'' that hospice as having met the Medicare 
requirements.
    We have rules at part 488 that set forth the procedure we use to 
review applications submitted by national accreditation organizations 
requesting our approval. A national accreditation organization applying 
for approval must furnish to us information and materials listed in the 
regulations at Sec. 488.4. The regulations at Sec. 488.8 (``Federal 
review of accreditation organizations'') detail the Federal review and 
approval process of applications for recognition as an accrediting 
organization. On April 26, 1996, however, new legislation entitled 
``Omnibus Consolidated Rescissions and Appropriations Act of 1996'' 
(Pub. L. 104-134) was enacted.
    Section 1865(b)(3)(A) of the Act, as amended by section 516 of Pub. 
L. 104-134, requires us to publish a notice in the Federal Register 
within 60 days after receiving an accreditation organization's written 
request that we make a determination regarding whether its 
accreditation requirements meet or exceed Medicare requirements. 
Section 1865(b)(3)(A) of the Act also requires that we identify in the 
notice the organization and the nature of the request and allow a 30-
day comment period. This section further requires that we publish a 
notice of our approval or disapproval within 210 days after we receive 
a complete package of information and the organization's application.

B. Proposed Notice

    On September 11, 1998, we published a proposed notice (63 FR 48735) 
announcing the requests of CHAP and JCAHO for our approval as national 
accreditation organizations for hospices. In the notice, we detailed 
the factors on which we would base our evaluation. (We inadvertently 
gave the citation for the regulations governing our evaluation as 
Sec. 488.8, ``Federal review of accreditation organizations,'' rather 
than as Sec. 488.4, ``Application and reapplication procedures for 
accreditation organizations.'') Under section 1865(b)(2) of the Act and 
our regulations at Sec. 488.4, our review and evaluation of the CHAP 
application were conducted in accordance with the following factors:
     A determination that CHAP is a national accreditation 
body, as required by the Act.
     A determination of the equivalency of CHAP's requirements 
for a hospice to our comparable hospice requirements.
     A review of CHAP's survey processes to determine the 
following:

--The comparability of CHAP's processes to those of State agencies, 
including survey frequency; its ability to investigate and respond

[[Page 19377]]

appropriately to complaints against accredited facilities; whether 
surveys are announced or unannounced; and the survey review and 
decision-making process for accreditation.
--The adequacy of the guidance and instructions and survey forms CHAP 
provides to surveyors.
--CHAP's procedures for monitoring providers or suppliers found to be 
out of compliance with program requirements. (These procedures are used 
only when CHAP identifies noncompliance.)

     The composition of CHAP's survey team, surveyor 
qualifications, the content and frequency of the in-service training 
provided, the evaluation systems used to assess the performance of 
surveyors, and potential conflict-of-interest policies and procedures.
     CHAP's data management system and reports used to assess 
its surveys and accreditation decisions, and its ability to provide us 
with electronic data.
     CHAP's procedures for responding to complaints and for 
coordinating these activities with appropriate licensing bodies and 
ombudsmen programs.
     CHAP's policies and procedures for withholding or removing 
accreditation from a facility that fails to meet its standards or 
requirements.
     A review of all types of accreditation status CHAP offers 
and an assessment of the appropriateness of those for which CHAP seeks 
deemed status.
     A review of the pattern of CHAP's deemed facilities (that 
is, types and duration of accreditation and its schedule of all planned 
full and partial surveys).
     The adequacy of CHAP's staff and other resources to 
perform the surveys, and its financial viability.
     CHAP's written agreement to--

--Meet our requirements to provide to all relevant parties timely 
notifications of changes to accreditation status or ownership, to 
report to all relevant parties remedial actions or immediate jeopardy, 
and to conform its requirements to changes in Medicare requirements; 
and
--Permit its surveyors to serve as witnesses for us in adverse actions 
against its accredited facilities.

    We received no comments on our proposed notice.

II. Review and Evaluation

    Our review and evaluation of the CHAP application, which were 
conducted as detailed above, yielded the following information.

Differences between the Community Health Care Program, Inc. (CHAP) and 
Medicare Conditions and Survey Requirements

    We compared the standards contained in the CHAP 1997 ``Standards of 
Excellence for Hospice Organizations'' with CHAP's survey process 
outlined in its training materials and ``Hospice Surveyor Operations 
Manual,'' which incorporates our 1994 guidelines to the Medicare 
hospice conditions and survey procedures. In 13 areas CHAP has made the 
following revisions or clarifications:
     No surveys prior to enrollment form verification. State 
survey agencies do not conduct health and safety inspections until a 
hospice has submitted a ``Medicare and Other Federal Health Care 
Program General Enrollment Health Care Provider/Supplier Application'' 
(Form HCFA-855) that the servicing fiscal intermediary has reviewed and 
approved. CHAP has provided written assurance that ``It is CHAP's 
policy not to conduct a deemed status accreditation survey until an 
organization is properly enrolled in the Medicare program.'' In 
addition, CHAP has added a blanket statement that an organization must 
meet not only ``All state licensure laws, Certificate of Need (CON) 
requirements or other state regulations and standards,'' but ``Federal 
requirements'' as well.
     Unannounced surveys (Reference Sec. 488.4(a)(3)(v)). 
Current CHAP procedures contain the following statement regarding 
unannounced surveys for Medicare-certified home health agencies: ``All 
visits to Medicare home health agencies will be unannounced. The 
specific timing of the visit is determined by the CHAP's Board of 
Review and no one from the applicant organization will be informed of 
the dates.'' We expect that a similar statement will be added for 
Medicare-certified hospices that elect the deemed status option. CHAP 
has agreed to add this language to its hospice procedures.
     Core services. Medicare requires that substantially all 
core services (nursing, medical social services, and counseling 
services) be provided directly by hospice employees, the only exception 
being during times of peak patient loads or under extraordinary 
circumstances. CHAP responded by revising its standards to require that 
a hospice program employ sufficient staff to provide all core services 
or provide documentation describing unusual or extraordinary 
circumstances necessitating the use of contracted staff for these 
services.
     Notification when required services are not provided. 
Medicare-certified hospices are required by section 1861(dd)(1) of the 
Act to provide routinely the following services: nursing care, medical 
social services, and counseling. CHAP has agreed that when it becomes 
aware that any Medicare-certified hospice is not providing one or more 
of these core services, we shall be promptly notified.
     Change of status notification. We require prompt 
notification from the accreditation organizations regarding hospice 
changes of ownership, hospice mergers, hospice site expansions, 
withdrawals from accreditation, and involuntary terminations from 
accreditation by the accreditation organization, because those actions 
require certification and enrollment actions by us, the fiscal 
intermediary, or the State survey agency. CHAP has stipulated in 
writing that its ``home care policy and practice to provide prompt 
notification to HCFA of changes in ownership, mergers, site expansion, 
withdrawals or involuntary termination'' will be applied to the hospice 
program.
     Accreditation survey review and decision-making process 
(Reference Sec. 488.4(a)(3)(iii)). CHAP has responded to two requests 
we made for clarification regarding current CHAP terminology in its 
accreditation application under the heading, ``CHAP Accreditation 
Policies and Procedures'':
    --Deferral of action. CHAP has confirmed that facilities in 
deferral are not considered accredited.
    --Warnings. CHAP has confirmed that it issues a warning to an 
accredited entity that ``has made limited progress regarding required 
actions and recommendations or has demonstrated a decline in meeting 
CHAP standards since the last appraisal based on a site visit or 
progress report.'' We have also received assurance that the time frames 
for reaching a decision on whether or not to withdraw accreditation for 
these entities are comparable to those we use for State-surveyed 
facilities.
     Contracted services.

--Some of the requirements in Sec. 418.56 did not appear to be included 
in CHAP standards. CHAP provided clarifying cross references and 
revised pages, demonstrating that its standards do incorporate all of 
the requested requirements.
--The requirement for retaining fiscal responsibility needed to be 
included for all contracted services, not just inpatient care 
contracts. CHAP revised its standard to read, ``the hospice program 
retains professional

[[Page 19378]]

management and fiscal responsibilities for patient care when services 
are provided under arrangement with contractors.''

     Millennium updates. CHAP has provided us with its plans to 
ensure that deemed hospices maintain equipment and systems to sustain 
the quality of patient care through the millennium updates.
     Data exchange. CHAP has assured us that it has the ability 
to provide us with timely electronic survey data and validation of 
survey findings for all Medicare-certified hospices that have elected 
the deemed status option.
     Qualified social worker. Medicare requires that medical 
social services be provided by a qualified social worker under the 
direction of a physician. Medicare defines a hospice social worker at 
Sec. 418.3 as ``a person who has at least a bachelor's degree from a 
school accredited or approved by the Council on Social Work 
Education.'' CHAP's standard required that social work services be 
provided by a qualified social worker or social worker assistant. CHAP 
has provided revised language for its related standard to require that 
``social work services are provided under the direction of a physician 
by a person who has at least a bachelor's degree from a school 
accredited or approved by the Council on Social Work Education'' and 
that the services are in agreement with the patient's plan of care.
     Home health aide supervision. Medicare requires at 
Sec. 418.94(a) that a registered nurse visit the home site at least 
every 2 weeks when aide services are being provided and that the visit 
include an assessment of the aide services. In addition, Medicare 
requires that a registered nurse provide written instructions for 
patient care. CHAP's standard required that nursing and home health 
aide services always be provided under the supervision of a qualified 
registered nurse, available at all times, but made no reference to 
biweekly, direct (in-person) supervision and assessment. CHAP responded 
by clarifying how these requirements were covered at HIII.1d4(c) in its 
``Standards of Excellence for Hospice Organizations'': ``Written 
instructions prepared by an RN are provided to paraprofessional staff 
for care plan compliance.'' CHAP further stipulates at HIII.1d4(b) that 
a home health aide's performance is evaluated by a registered nurse 
every 2 weeks.
     Inpatient care.

--The Medicare standard requires at Sec. 418.98(c) that the total 
number of inpatient care days used by Medicare beneficiaries not exceed 
20 percent of the total number of hospice days for this group of 
beneficiaries in any 12-month period preceding a certification survey. 
We could not find this standard in the application. CHAP responded by 
clarifying how this requirement was covered at HII6.a1 in its 
``Standards for Excellence for Hospice Organizations'': ``The hospice 
program reviews total inpatient days routinely in any 12 month period 
to prevent Medicare clients from exceeding 20% of the total number of 
hospice days.''
--Another Medicare standard requires at Sec. 418.100(a) that hospices 
providing inpatient care directly provide 24-hour nursing services that 
are sufficient to meet total nursing needs and that are in accordance 
with the patient's plan of skilled care. We asked CHAP to provide 
evidence that this standard was included in its requirements. CHAP 
responded by clarifying how this requirement was covered at Item 17 of 
HIII.1i in its ``Standards for Excellence for Hospice Organizations'': 
``Inpatient facilities provide 24 hour nursing services, including a 
registered nurse on each shift, which are sufficient to meet total 
nursing needs and which are in accordance with the patient plan of 
care.''
     Storage of drugs. Medicare standards require at 
Sec. 418.100(k)(6) that separately locked compartments be provided for 
storage of Schedule II drugs and other drugs subject to abuse. CHAP's 
standard did not include ``other drugs subject to abuse'' in the list 
of drugs to be stored in separately locked compartments. CHAP revised 
its standard by adding ``Separately locked compartment for Schedule II 
drugs and other drugs subject to abuse (multidose containers)'' at 
H.III.4 in CHAP's ``Standards of Excellence for Hospice 
Organizations.''
    In addition to these changes, CHAP provided a revised crosswalk 
(table showing the match between CHAP's standards and ours) 
incorporating all the changes necessitated by our requests.

III. Results of Evaluation

    We completed a standard-by-standard comparison of CHAP's conditions 
or requirements for hospices to determine whether they met or exceeded 
Medicare requirements. We found that, after requested revisions were 
made, CHAP's requirements for hospices did meet or exceed our 
requirements. In addition, we visited the corporate headquarters of 
CHAP to validate the information it submitted and to verify that its 
administrative systems could adequately monitor compliance with its 
standards and survey processes and that its decision-making 
documentation and processes met our standards. We also observed a 
survey in real time to see that it met or exceeded our standards. As a 
result of our review of the documents and observations, we requested 
certain clarifications to CHAP's survey and communications processes. 
These clarifications were provided as indicated above, and changes were 
made to the documentation in the applications. Therefore, we recognize 
CHAP as a national accreditation organization for hospices that request 
participation in the Medicare program, effective April 20, 1999 through 
November 20, 2003.

IV. Paperwork Reduction Act

    This document does not impose any information collection and record 
keeping requirements subject to the Paperwork Reduction Act (PRA). 
Consequently, it does not need to be reviewed by the Office of 
Management and Budget (OMB) under the authority of the PRA. The 
requirements associated with granting and withdrawal of deeming 
authority to national accreditation, codified in part 488, ``Survey, 
Certification, and Enforcement Procedures,'' are currently approved by 
OMB under OMB approval number 0938-0690, with an expiration date of 
August 31, 1999.

V. Regulatory Impact Statement

    We have examined the impacts of this notice as required by 
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (P.L. 
96-354). 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, States and individuals are not considered small 
entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis for any notice 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 consider 
a small rural hospital as a hospital that is located outside of

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a Metropolitan Statistical Area and has fewer than 50 beds.
    This notice merely recognizes CHAP as a national accreditation 
organization for hospices that request participation in the Medicare 
program. As evidenced by the following data for the cost of surveys, 
there are neither significant costs nor savings for the program and 
administrative budgets of Medicare. Therefore, this notice is not a 
major rule as defined in Title 5, United States Code, section 804(2) 
and is not an economically significant rule under Executive Order 
12866.
    Therefore, we have determined, and the Secretary certifies, that 
this notice will not result in a significant impact on a substantial 
number of small entities and will not have a significant effect on the 
operations of a substantial number of small rural hospitals. Therefore, 
we are not preparing analyses for either the RFA or section 1102(b) of 
the Act.
    In fiscal year 1996, there were 2,148 certified hospices 
participating in the Medicare program. We conducted 258 initial 
surveys, 322 recertification surveys (both at a cost of $634,904), and 
145 complaint surveys.
    In fiscal year 1997, there were 2,270 certified hospices. This was 
an increase of 122 facilities. We conducted 180 initial surveys, 354 
recertification surveys (both at a cost of $330,686), and 237 complaint 
surveys.
    In fiscal year 1998, there were 2,290 certified hospices. This was 
an increase of 20 facilities. We conducted 126 initial surveys, 196 
recertification surveys (both at a cost of $360,783), and 201 complaint 
surveys.
    As the data above indicate, the number of hospices and the cost for 
conducting hospice surveys by State agencies are increasing. There was 
a 6.6 percent increase in hospices within 3 years (fiscal years 1996 
through 1998). The fiscal year 1999 appropriation for hospice survey 
activities was not increased, and these surveys were included within 
the lowest priority category. This appropriation does not allow 
sufficient resources for some regions to meet the survey demand, 
especially for resurvey activity, which remains a small proportion of 
eligible facilities (less than 9 percent for a maximum resurvey once 
every 12 years). Hospices accredited by CHAP would be surveyed every 3 
years. The numbers of participating providers continue to increase. In 
an effort to better assure the health, safety, and services of 
beneficiaries in hospices already certified, as well as to provide 
relief to State budgets in this time of tight fiscal constraints, we 
deem hospices accredited by CHAP as meeting our Medicare requirements. 
Thus, we continue our focus on assuring the health and safety of 
services by providers and suppliers already certified for participation 
in a cost-effective manner.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by OMB.

    Authority: Section 1865(b)(3)(A) of the Social Security Act (42 
U.S.C. 1395bb(b)(3)(A)).

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

    Dated: March 1, 1999.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 99-9802 Filed 4-19-99; 8:45 am]
BILLING CODE 4120-01-P