[Federal Register Volume 65, Number 35 (Tuesday, February 22, 2000)]
[Notices]
[Pages 8727-8730]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4154]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2057-FN]
RIN 0938-AJ66


Medicare and Medicaid Programs; Recognition of the American 
Osteopathic Association (AOA) for Continued Approval of Deeming 
Authority for Hospitals

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

ACTION: Final notice.

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SUMMARY: This notice announces the reapproval of the American 
Osteopathic Association (AOA) as a national accreditation organization 
for hospitals that request participation in the Medicare program. We 
believe that continuing accreditation of hospitals by AOA demonstrates 
that all Medicare hospital conditions of participation are met or 
exceeded. Thus, we grant deemed status to those hospitals accredited by 
AOA.

EFFECTIVE DATE: This final notice is effective February 22, 2000, 
through March 31, 2005.

[[Page 8728]]


FOR FURTHER INFORMATION CONTACT: Janice Adams-King, (410) 786-8354.

SUPPLEMENTARY INFORMATION:

I. Background

Laws and Regulations

    Under the Medicare program, eligible beneficiaries may receive 
covered services in a hospital provided certain requirements are met. 
The regulations specifying the Medicare conditions of participation for 
hospital care are located in 42 CFR part 482. These conditions 
implement section 1861(e) of the Social Security Act (the Act), which 
specifies services covered as hospital care and the conditions that a 
hospital program must meet in order to participate in the Medicare 
program.
    Regulations concerning provider agreements are at 42 CFR part 489 
and those pertaining to the activities relating to the survey and 
certification of facilities are at 42 CFR part 488.
    Generally, in order to enter into a provider agreement, a hospital 
must first be certified by a State survey agency as complying with the 
conditions or standards set forth in the statute and part 482 of the 
regulations. Then, the hospital is subject to regular 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'' hospitals 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 participation. Section 1865(b)(1) of the Act provides that, if 
a provider demonstrates through accreditation that all applicable 
conditions are met or exceed the Medicare conditions, we can ``deem'' 
the hospital as having met the requirements.
    Our regulations concerning reapproval of accrediting organizations 
are set forth at Secs. 488.4 and 488.8(d)(3). The regulations at 
Sec. 488.8(d)(3) require reapplication at least every 6 years and 
permit us to determine the required materials as enumerated in 
Sec. 488.4 and the deadline to reapply for continued approval of 
deeming authority.

II. Approval of Deeming Organizations

    Section 1865(b)(2) of the Act further requires that our findings 
concerning review of national accrediting organizations consider, among 
other factors, the accreditation organization's requirements for 
accreditation, its survey procedures, its ability to provide adequate 
resources for conducting required surveys and ability to supply 
information for use in enforcement activities, its monitoring 
procedures for provider entities found out of compliance with the 
conditions or requirements, and its ability to provide us with 
necessary data for validation.
    Section 1865(b)(3)(A) of the Act further requires that we publish, 
within 60 days of receipt of an organization's complete application, a 
notice identifying the national accreditation body making the request, 
describing the nature of the request, and providing at least a 30-day 
public comment period. Subsequently, we have 210 days from receipt of 
the request to publish approval or denial of the application.
    The purpose of this notice is to notify the public of our decision 
to approve AOA's request for continuation of its deeming authority. 
This decision is based on our finding that the AOA's separate 
accreditation programs for hospital care meet or exceed the Medicare 
hospital conditions of participation.

III. Proposed Notice

    On September 10, 1999, we published a proposed notice at 64 FR 
49199 announcing AOA's request for reapproval as a deeming organization 
for hospitals. In the notice, we detailed the evaluation criteria. 
Under section 1865(b)(2) of the Act and our regulations at 
Sec. 488.8(d)(3)(i), our review and evaluation of the AOA application 
were conducted in accordance with the following criteria:
     An on-site administrative review of the corporate 
policies, resources to accomplish the proposed surveys, program and 
surveyor evaluation and monitoring, its ability to investigate and 
respond appropriately to complaints against accredited facilities, and 
the survey review and decision-making process for accreditation.
     A determination of the equivalency of AOA's standards for 
a hospital to our comparable hospital conditions of participation.
     A review through documentation and on-site observation of 
AOA's survey processes to determine the following:

-- The comparability of AOA's processes to those of State agencies, 
including survey frequency and whether surveys are announced or 
unannounced.
-- The adequacy of the guidance and instructions and survey forms AOA 
provides to surveyors.
-- AOA's procedures for monitoring providers or suppliers found to be 
out of compliance with program requirements. (These procedures are used 
only when AOA identifies noncompliance.)

     AOA's procedures for responding to complaints and for 
coordinating these activities with appropriate licensing bodies and 
ombudsmen programs.
     AOA's policies and procedures for identifying potential 
fraud and abuse and its coordination with us or reporting to us.
     AOA's survey team, 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.
     AOA's data management system and reports used to assess 
its surveys and accreditation decisions, and its ability to provide us 
with electronic data and new statistical validation information 
including the number, accreditation status, and resurvey cycle for 
facilities; the number, types, and resolution times for follow up when 
deficiencies are detected during surveys; the top 10 deficiencies 
found, and the number of actionable cases of noncompliance and the 
method and time frame for resolution.
     A review of all types of accreditation status AOA offers 
and an assessment of the appropriateness of those for which AOA seeks 
deemed status.
     A review of the pattern of AOA's deemed facilities (that 
is, types and duration of accreditation and its schedule of all planned 
full and partial surveys).
     The adequacy of AOA's staff and other resources to perform 
the surveys, and its financial viability.
     AOA'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.

IV. Summary of Public Comments Received on the Proposed Notice and 
Our Responses

    Comments: We received comments in favor of renewing AOA's deeming 
authority from five professional osteopathic organizations. One 
organization stated that ``The AOA is accepted as a leader in the 
osteopathic profession by providing quality service to its hospitals, 
enabling them to comply with the guidelines as set forth

[[Page 8729]]

by Medicare and Medicaid.'' Another organization stated, 
``Historically, the AOA accreditation program has assured the hospitals 
of a program meeting, if not more stringent than, the recognized 
national standards.'' These comments are representative of the support 
provided by these five osteopathic organizations, which favor the 
renewal of AOA's application for deeming authority for hospitals.
    Response: We are pleased that all comments received on behalf of 
renewing AOA's deeming authority for hospitals were very supportive.

V. Review and Evaluation

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

Differences between the AOA and Medicare Conditions and Survey 
Requirements

    We compared the standards contained in the AOA ``Accreditation 
Requirements for Healthcare Facilities'' and the AOA's survey process 
outlined in its ``Survey Team Handbook'' supplemented by flow charts of 
the survey process with the Medicare conditions of participation and 
the ``State and Regional Operations Manual.'' The AOA has made the 
following revisions or clarifications:
     Patients' Rights
    AOA developed and implemented the New Patients' Rights Condition of 
Participation in accordance with 42 CFR 482.13.
     Survey Process
    AOA redesigned its standards and survey process for Life Safety 
Code to ensure that its surveyors assess hospitals for compliance to 
its standards. The AOA also made minor revisions to its standards for 
the survey process, excluding Life Safety Code, to ensure that 
hospitals surveyed met their standards.
     Fraud and Abuse
    AOA developed and implemented the Fraud and Abuse standards in 
accordance with our renewal requirements.
    In addition to these changes, AOA provided a revised crosswalk 
(table showing the match between AOA's standards and ours) 
incorporating all the changes necessitated by our requests.

VI. Results of Evaluation

    We completed a standard-by-standard comparison of AOA's conditions 
or requirements for hospitals to determine whether they met or exceeded 
Medicare requirements. We found that, after requested revisions were 
made, AOA's requirements for hospitals did meet or exceed our 
requirements. In addition, we visited the corporate headquarters of AOA 
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 AOA'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 
AOA as a national accreditation organization for hospitals that request 
participation in the Medicare program, effective February 22, 2000, 
through March 31, 2005.

VII. 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 
June 30, 2002.

VIII. 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 AOA as a national accreditation 
organization for hospitals 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 the Medicare program. 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 an effort to better ensure the health, safety, and services of 
beneficiaries in hospitals already certified, and to provide relief to 
State budgets in this time of tight fiscal constraints, we deem 
hospitals accredited by the AOA as meeting our Medicare hospital 
conditions of participation.
    In accordance with Executive Order 13122, Federalism, we have 
included various provisions throughout this regulation that demonstrate 
cooperation with the States. For example, while the provisions of this 
notice may reduce the number of surveys a State Agency performs for 
Medicare certification of hospitals, it may engender additional 
validation surveys to assess the performance of the AOA survey process 
and standards as the validation process expands with the growth of 
deemed status facilities. State officials will remain responsible for 
any survey and certification requirements that are allegedly not being 
enforced.
    In accordance with the provisions of Executive Order 12866, this 
notice was not 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; and Program No. 93.778, Medical 
Assistance Program)


[[Page 8730]]


    Dated: February 2, 2000.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 00-4154 Filed 2-18-00; 8:45 am]
BILLING CODE 4120-01-P