[Federal Register Volume 64, Number 117 (Friday, June 18, 1999)]
[Notices]
[Pages 32881-32886]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-15500]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration
[HCFA-2039-FN]
RIN 0938-AJ41


Medicare Program; Recognition of the Joint Commission for 
Accreditation of Healthcare Organizations (JCAHO) for Hospices

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

ACTION: Final notice.

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SUMMARY: This notice recognizes the Joint Commission for Accreditation 
of Healthcare Organizations (JCAHO) as a national accreditation 
organization for hospices that request participation in the Medicare 
program. We believe that accreditation of hospices by JCAHO 
demonstrates that all Medicare hospice conditions of participation are 
met or exceeded. Thus, we grant deemed status to those hospices 
accredited by JCAHO. The proposed notice included the application from 
the Community Health Accreditation Program, Inc. (CHAP). The final 
notice recognizing CHAP as a national accreditation organization for 
hospices was published on April 20, 1999 at 64 FR 19376.

EFFECTIVE DATE: This final notice is effective June 18, 1999, through 
June 18, 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

[[Page 32882]]

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.
    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 42 CFR part 488 that set forth the procedures 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 
Public Law 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 JCAHO 
application were conducted in accordance with the following factors:
     A determination that JCAHO is a national accreditation 
body, as required by the Act.
     A determination of the equivalency of JCAHO's requirements 
for a hospice to our comparable hospice requirements.
     A review of JCAHO's survey processes to determine the 
following:

--The comparability of JCAHO's processes to those of State agencies, 
including survey frequency; its ability to investigate and respond 
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 JCAHO 
provides to surveyors.
--JCAHO's procedures for monitoring providers or suppliers found to be 
out of compliance with program requirements. (These procedures are used 
only when JCAHO identifies noncompliance.)

     The composition of JCAHO'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.
     JCAHO's data management system and reports used to assess 
its surveys and accreditation decisions, and its ability to provide us 
with electronic data.
     JCAHO's procedures for responding to complaints and for 
coordinating these activities with appropriate licensing bodies and 
ombudsmen programs.
     JCAHO'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 that JCAHO 
requests HCFA accept for deeming of hospices.
     A review of the pattern of JCAHO's deemed facilities (that 
is, types and duration of accreditation and its schedule of all planned 
full and partial surveys).
     The adequacy of JCAHO's staff and other resources to 
perform the surveys, and its financial viability.
     JCAHO'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 the organization's requirements to changes in Medicare 
requirements; and
--Permit the organization's 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 JCAHO application, which were 
conducted as detailed above, yielded the following information.
    Differences between the Joint Commission on the Accreditation of 
Healthcare Organizations (JCAHO) and Medicare Conditions and Survey 
Requirements 
    We compared Medicare requirements with (1) the standards contained 
in the JCAHO 1997-98 ``Comprehensive Accreditation Manual for Home 
Care'' (CAMHC); (2) the survey process outlined in JCAHO's guide 
entitled ``The Complete Guide to the 1997-98 Home Care Survey Process: 
Home Health, Personal Care, Support and Hospice'; and (3) JCAHO's 
training materials. We also evaluated the accuracy of JCAHO's cross 
walk [relational table] between JCAHO standards and Medicare standards. 
In 16 areas JCAHO has made the following revisions or clarifications:
     Unannounced surveys. Our policy requires that all deemed 
status surveys in Medicare-certified hospices be unannounced (that is, 
conducted with no advance notice). This policy includes initial 
accreditation surveys, re-surveys of any kind (regardless of the 
accreditation category for the deemed hospice service), focused 
surveys, and complaint surveys. The JCAHO policy for a routine 
announced, triennial survey of a home care company, including its 
hospice service, does not meet our requirement; a concurrent survey of 
the hospice service conducted at the same time as an announced 
triennial home care survey does not meet our requirement; and any 
survey with 24-hours advance notice, or any advance notice, does not 
meet our requirement. Thus, we requested written revision and 
acceptance of an

[[Page 32883]]

unannounced survey process. JCAHO, in response, has agreed that all 
deemed status hospice surveys will be unannounced:

    No advanced notice of any survey will be provided to any hospice 
electing to use the Joint Commission's accreditation survey to meet 
Medicare provider requirements as a hospice. This includes all 
follow-up surveys and surveys to evaluate complaints. If a hospice 
seeking deemed status is part of a hospital, the hospice survey will 
be conducted unannounced and not in conjunction with the hospital 
survey. Specifically, the hospital survey will be announced, but the 
hospice survey unannounced and definitely not conducted on the dates 
of the hospital survey.
    If a hospice seeking deemed status has other home care services 
within the hospice organization that are not seeking deemed status, 
the hospice survey will be unannounced and conducted first. The 
other home care services will be surveyed for Joint Commission 
accreditation following the completion of the survey.

     Core services. Medicare requires that substantially all 
core services (nursing care, medical social services, and counseling) 
be provided directly by hospice employees. Regulations allow for 
exceptions during times of peak patient loads or under extreme 
circumstances, and the Balanced Budget Act of 1997 provides exceptions 
for physicians' services. JCAHO clarified that CAMHC standards LD 2.2 
and CC2 include this Medicare standard through cross reference and 
evaluation against Sec. 418.202, which contains those provisions.
     Notification issues. JCAHO failed to clearly indicate in 
three instances when it would provide us with information regarding the 
failure of a hospice to meet or maintain Medicare conditions of 
participation:

--Violations of the Medicare conditions of participation, including 
routine core services (nursing care, medical social services, and 
counseling), as required by section 1861(dd)(1) of the Act.
--Changes in accreditation status, such as a decision to preliminarily 
non-accredit a facility, or any other accreditation status not 
recognized under this agreement.
--Changes in sites, corporate status, or services not in violation of 
the Medicare conditions of participation; withdrawal of a provider 
either voluntarily or involuntarily; and changes of ownership, hospice 
mergers, or hospice site expansions.

    JCAHO clarified its required notification in these three instances, 
as well as its subsequent notification of us, as follows:

--Accredited organizations must notify JCAHO in writing within 30 days 
of any changes involving a violation of Medicare conditions of 
participation, including core services. JCAHO will forward this 
information in writing to us and to the relevant State agency within 10 
days of receiving it.
--We will be notified within 30 days of a decision regarding changes in 
any accreditation status not accepted under this agreement.
--Accredited organizations must notify JCAHO in writing within 30 days 
of any changes to sites, corporate status, or services not in violation 
of the conditions of participation. JCAHO will immediately forward this 
information to us and to the State agency. JCAHO also stipulates that 
``the Joint Commission would survey the organization for the changes 
reported within 30 days. HCFA would be notified within 10 days, and 
also receive the report of the surveyed changes within 30 days of the 
completion of the survey.''

     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'' 
(HCFA 855) that the servicing fiscal intermediary has reviewed and 
approved. JCAHO has specified that it will not conduct a deemed status 
survey for a hospice until it has received from the applicant either 
the Medicare provider number or written verification from the fiscal 
intermediary of submission and approval of HCFA 855.
     Change of ownership. Because of our recent experience with 
changes of ownership and the difficulty in recovering overpayments from 
facilities not transferring a provider ID from previous owners, we 
questioned when (that is, before or after making an accreditation award 
to the new owner of a home care company) JCAHO would survey a Medicare-
certified hospice that is undergoing a change of ownership and that has 
not accepted assignment of the former owner's provider agreement 
(including Medicare-certified hospices that are part of an accredited 
home care company). Medicare providers that change ownership and do not 
accept assignment of the former owner's provider agreement are treated 
by us as new applicants to the Medicare program. JCAHO has stipulated 
in writing that ``when a new provider number is being issued, the Joint 
Commission would not transfer its accreditation of the old organization 
to the new. A complete new survey would have to be conducted.''
     Survey process. JCAHO's hospice program standards are a 
subset of the CAMHC, containing requirements for both home health 
agencies and hospices. These two facility types are often part of the 
same organization. It is possible that one facility would be under a 
deeming program and the other would not, resulting in one announced and 
one unannounced survey. Because of this combined presentation, we 
initially had some difficulty in understanding how JCAHO would conduct 
a hospice survey separate from a related home care organization. 
Therefore, we recommended that JCAHO develop a deemed status survey 
protocol for Medicare-certified hospices in the near future and 
indicate if and when this process would be completed. In the meantime, 
we held discussions with JCAHO to ensure that our expectations of 
hospice programs were verified by JCAHO's interpretation of its 
standards and procedures.
    JCAHO provided us with written verification that its hospice survey 
process encompasses all sites of care, including inpatient and respite 
care, where hospice services are provided. JCAHO specified that it 
evaluates contracted organizations, including those providing 
pharmaceutical and home medical equipment services, during the hospice 
survey. If the contracted organization is already accredited by JCAHO, 
some standards that have already been evaluated during the facility's 
own JCAHO survey, such as performance improvement activities or 
environmental safety plan, may not be assessed during the on-site 
survey of the facility. The survey of the non-accredited organizations, 
as well as those accredited by another accreditor, consists of on-site 
evaluation of all applicable JCAHO standards and corresponding Medicare 
conditions of participation, including the Life Safety Codes.
    JCAHO would conduct the deemed status survey of a Medicare-
certified hospice separately and provide a separate report. If home 
care services other than hospice are part of the JCAHO survey, JCAHO 
would survey those other services for its purposes on separate days and 
would not conduct the survey concurrently with the hospice deemed 
status survey. JCAHO would conduct the hospice deemed status survey 
first, followed by a survey of the other home care services. The deemed 
status survey would remain unannounced. This is the current method used 
to conduct the JCAHO

[[Page 32884]]

deemed status process for home health agencies when the same 
organization also provides services that are not Medicare-certified.
    For example, if a Medicare-certified hospice also had within its 
business a licensed home health organization that is not Medicare-
certified, JCAHO would survey both for accreditation. According to 
JCAHO procedures, the survey provided might total 5 days, and the 
survey would be conducted as follows. The survey conducted for the 
entire organization would be unannounced. JCAHO would survey the 
hospice first, at the end of which time (in this scenario, let us 
assume 3 days), JCAHO would issue a report for only the hospice 
Medicare deemed status compliance. On the subsequent days, JCAHO would 
survey the licensed home health agency, and on the final survey day, 
JCAHO would present its report, comprising both the hospice and 
licensed agency, to the organization. JCAHO's detailed survey process 
can be found in its application under tab 3ii, and in Exhibit 5, ``The 
Complete Guide to the 1997-98 Home Care Survey Process: Home Health, 
Personal Care, Support and Hospice.''
     Data systems. We recommended that JCAHO provide assurance 
that it can and will produce a plan indicating when and how they will 
be able to produce validation data such as outcome trends, especially 
deficiency types for regions and States; resolution time frames for 
deficiencies; and complaints for comparative Medicare purposes. JCAHO 
provided the detail for all the data described in our recommendation, 
including outcome trends (deficiency types for regions and States) and 
time frames. These reports, tables, and other displays indicate that 
JCAHO has the capability of producing resolution time frames for 
deficiencies and complaints.
     Conditional accreditation. We were concerned about the 
JCAHO request to consider the category called Conditional Accreditation 
as acceptable for deemed status and certification of facilities under 
Medicare. To clarify how conditional accreditation might be applied to 
a Medicare-certified hospice, we asked the following questions:

--What is the meaning (with examples, if necessary) of the first part 
of the category's definition, which states that ``an organization is 
not in substantial compliance with Joint Commission standards?''
--What criteria would JCAHO use to determine that a Medicare-certified 
hospice would not be in ``substantial compliance'' with JCAHO standards 
and would be placed in this category called Conditional Accreditation?
--What is the meaning (with examples, if necessary) of the rest of the 
definition, which states that ``one or more adverse clinical events 
that potentially reflect underlying systems issues?''
--What are some ``worst case'' scenarios in which a Medicare-certified 
hospice could have had ``one or more adverse clinical events that 
potentially affect underlying systems issues,'' and would be placed in 
this category?

    In response to these questions, JCAHO has indicated that it will 
not accept, for deeming purposes, hospices with a decision of 
conditional accreditation, with one exception: those cases in which the 
hospice was not found to be the cause of the conditional decision. 
JCAHO awards the lowest score given when an organization bridges more 
than one facility type. Thus, a provider-based hospice may receive a 
conditional accreditation based on a deficiency outside the scope of 
its survey. A specific example would be a hospice organization that 
also includes a home health agency that is not Medicare-certified. In 
this case, if the home health agency's compliance with the JCAHO 
standards creates the conditional decision, but the hospice is found in 
compliance with all Medicare conditions of participation, HCFA would 
determine that the hospice is eligible for deemed status. JCAHO has 
agreed to provide us with a letter explaining any conditional 
accreditation decision, in addition to a copy of the deemed status 
hospice report, so that ``HCFA may validate the status of compliance.'' 
JCAHO has also agreed to supply us with quarterly lists of all its home 
care customers and companies that include a deemed hospice service for 
validation to assure that all non-deemed hospices in these settings are 
subject to State agency survey.
     Information sharing. It is important that we be able to 
differentiate between JCAHO's regular home care customers and those 
that include a deemed hospice service, since regular home care 
customers with hospice services that have not elected the deemed status 
option still require the State agency survey. JCAHO has agreed that we 
should receive complete and timely lists of all deemed hospice services 
in an unambiguous format.
     Electronic data exchange.

--We requested a single contact who would have the authority to comply 
with requests for any new data and format revisions for validation 
submissions. JCAHO has supplied the names of contacts with the 
authority to make decisions regarding the release of validation 
information.
--Additionally, we requested JCAHO's plan to ensure that electronic 
exchanges and internal data collection can proceed uninterrupted into 
the Year 2000 (Y2K). JCAHO has appointed a corporate-wide task force of 
key staff and has assigned this task force the responsibility for 
monitoring the implementation of JCAHO's plans for Y2K compliance. A 
major national consulting firm is assisting the task force in this 
effort. To date, JCAHO's implementation plans are proceeding as 
scheduled.
--We required assurances from JCAHO that it has the ability to provide 
us with timely electronic survey data and requested validation of 
survey findings for all Medicare-certified hospices that have elected 
the deemed status option. JCAHO has provided a description of its data 
systems and has stipulated that it has the ability to provide us 
electronically with survey findings for validation.

     Millennium updates. We requested that JCAHO indicate how 
it plans to assure that deemed hospices maintain equipment and systems 
to sustain the quality of patient care through the millennium updates. 
JCAHO stipulates that in 1998 and 1999, initial and resurveys conducted 
for HCFA's hospice applicants include in the ``Management of 
Information'' chapter of the 1997-98 CAMHC several standards that are 
used to address Y2K issues: CAMHC IM 1, ``The organization plans and 
designs information-management processes to meet its internal and 
external information needs''; IM 2, ``Confidentiality, security and 
integrity of data and information are maintained''; and IM 3.1, ``The 
organization takes steps to ensure that the data are complete, 
reliable, valid, and accurate on an ongoing basis.'' Surveyors request 
information from the hospice to determine the organization's awareness 
of the Y2K issue and the steps being taken to assure compliance. In the 
year 2000, the compliance with these standards will be validated during 
the on-site survey process. Non-compliance that affects the quality of 
patient care would be addressed in other standards and could 
potentially lead to loss of accreditation.
     JCAHO scoring of its standards. We were concerned that 
JCAHO puts limits or ``caps'' on scores given to new requirements or 
standards for providers; that is, according to JCAHO policy, new 
requirements cannot be cited from level 3 (partial compliance) to level 
5

[[Page 32885]]

(noncompliance). This practice often prevents new standards from being 
cited as deficiencies within JCAHO's system, which is computer-driven 
and aggregates scores within an area of performance. Scores from 3 to 
5, as explained in the following table, are likely to result in the 
citing of a deficiency or type I recommendation, defined by JCAHO as 
``a recommendation or group of recommendations that addresses 
insufficient or unsatisfactory standards compliance in a specific 
performance area.''

                JCAHO Scoring Scale/Levels of Compliance
------------------------------------------------------------------------
      Score            Level of compliance             Definition
------------------------------------------------------------------------
1................  Substantial compliance....  The organization
                                                consistently meets all
                                                major provisions of the
                                                standard and its intent.
2................  Significant compliance....  The organization meets
                                                most provisions of the
                                                standard and its intent.
3................  Partial compliance........  The organization meets
                                                some provisions of the
                                                standard and its intent.
4................  Minimal compliance........  The organization meets
                                                few provisions of the
                                                standard and its intent.
5................  Noncompliance.............  The organization fails to
                                                meet the provisions of
                                                the standard and its
                                                intent.
------------------------------------------------------------------------

    HCFA requires that scoring of all standards for hospices wishing to 
participate in Medicare, including any new standards that may be added 
to meet Medicare conditions of participation in this notice, be allowed 
through level 5. JCAHO has agreed that ``No hospice standards will be 
`capped' and therefore all may be cited through all levels.'' JCAHO has 
also agreed to notify all currently accredited hospices through 
individual letters, and to notify the public through JCAHO's 
periodicals, website, and the next issuance of its manual, that the 
scoring of hospice standards will not be limited or capped.
     Hospice medical director. Medicare's conditions of 
participation require that the hospice medical director be a doctor of 
medicine or osteopathy. As written, the JCAHO standard reads only that 
qualified individuals be responsible for directing patient care and 
services. It was not clear to us that this standard met Medicare 
conditions of participation for hospices. JCAHO has assured us, 
however, that its deemed hospice standard cross references the Medicare 
requirement and that ``the Medicare condition would be evaluated as 
acceptable only if the medical director were a director of medicine or 
osteopathy.''
     Interdisciplinary Group.

--Medicare's standards require that the Interdisciplinary Group (IDG) 
provide or supervise the provision of care and participate in the 
establishment and periodic review of the patient's plan of care. 
JCAHO's standards include the appropriate composition of the IDG and 
the appropriate process for care planning, but do not appear to link 
the IDG with the care planning processes. JCAHO standards simply 
require the ``organization'' to be responsible for care planning. JCAHO 
clarified that its CAMHC standard TX 1 includes the requirement 
consistent with the Medicare standard that the IDG establishes and is 
responsible for the plan of care. TX-1.3 specifically requires the IDG 
to participate in the review and updating of this plan.
--We questioned whether JCAHO standards clearly indicate that the IDG 
is responsible for designating a registered nurse to coordinate the 
implementation of the plan of care, and thus meet Medicare standards. 
JCAHO demonstrated that CAMHC standard CC 4, which assigns 
``appropriately qualified staff member(s) to coordinate patient care 
services,'' addresses and repeats this Medicare standard verbatim.

     Volunteer staff. The Medicare standard requires that 
hospices maintain a volunteer staff sufficient to provide 
administrative or direct patient care in an amount that, at a minimum, 
equals 5 percent of the total patient care hours of all paid hospice 
employees and contract staff. JCAHO stipulates that the intent of its 
standard at CAMHC HR 3.1 is that Medicare-certified providers must 
maintain and document that volunteer staff hours are equal to at least 
5 percent of patient care hours.
     Inpatient care.

--The Medicare standard requires, at Sec. 418.98(c), that inpatient 
care days may 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. JCAHO clarified that this standard is met through 
CAMHC standard LD 5, which discusses patient care and services 
appropriate to the care plan, and standard LD 8, which, under 8.2, 
discusses the organization's compliance with the applicable law and 
regulation. JCAHO has specified that they--

have specifically listed 418.98(c) as a cross walked standard for 
deemed purposes. Instructions in the application indicate that in all 
circumstances for deemed surveys, the cross walked standards and 
conditions are utilized as an adjunct to the Joint Commission standard 
and intents. In other words, the Joint Commission surveyor evaluates 
compliance with all listed cross walked Medicare conditions of 
participation and standards when evaluating the referenced Joint 
Commission standard. Therefore, the requirement that any 12 month 
period preceding a certification survey for hospices may not exceed 20% 
of the total number of hospice days would be evaluated as the surveyor 
was surveying compliance with LD 5 and LD 8.

--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. JCAHO provided evidence that 
this standard was included in its requirements at CAMHC TX 1.2, which 
implements interventions identified in the care plan; at CC2, which 
provides for 24-hours-a-day, 7-days-a week registered nursing; and at 
LD 2.2, which discusses the use of systematic planning consistent with 
the patient's needs.

III. Results of Evaluation

    We completed a standard-by-standard comparison of JCAHO's 
conditions or requirements for hospices to determine whether they met 
or exceeded Medicare requirements. We found that, after requested 
revisions were made, JCAHO's requirements for hospices did meet or 
exceed our requirements. In addition, we visited the corporate 
headquarters of JCAHO 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 JCAHO'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 JCAHO as a

[[Page 32886]]

national accreditation organization for hospices that request 
participation in the Medicare program, effective June 18, 1999, through 
June 18, 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) (Pub. 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 a 
Metropolitan Statistical Area and has fewer than 50 beds.
    This notice merely recognizes JCAHO 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. The increase in the number of facilities is less than the 
number of initial surveys because of mergers, withdrawals, and closures 
during the year.
    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. The increase in the number of facilities is less than the 
number of initial surveys because of mergers, withdrawals, and closures 
during the year.
    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). Hospices accredited by JCAHO 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 JCAHO 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: Sec. 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: May 3, 1999.

Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 99-15500 Filed 6-17-99; 8:45 am]
BILLING CODE 4120-01-P