[Federal Register Volume 65, Number 35 (Tuesday, February 22, 2000)]
[Notices]
[Pages 8722-8725]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-4155]


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

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2058-FN]
RIN 0938-AJ68


Medicare and Medicaid Programs; Reapproval of the Deeming 
Authority of the Joint Commission on Accreditation of Healthcare 
Organizations (JCAHO) for Home Health Agencies (HHAs)

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

[[Page 8723]]


ACTION: Final notice.

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

SUMMARY: This notice announces the reapproval of the Joint Commission 
on Accreditation of Healthcare Organizations (JCAHO) as a national 
accreditation organization for home health agencies (HHAs) that request 
participation in the Medicare program. We have found that JCAHO's 
standards for HHAs meet or exceed those established by the Medicare 
program. Therefore, HHAs accredited by JCAHO will be granted deemed 
status under the Medicare program.

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

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

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 1861(o) and 1891 of the Social Security Act (the Act) and 
part 484 of the Medicare regulations specify the conditions that a home 
health agency (HHA) must meet in order to participate in the Medicare 
program. Generally, in order to enter into an agreement with Medicare, 
an HHA must first be certified by a State survey agency as complying 
with the conditions or standards set forth in part 484 of the 
regulations. Then, the HHA 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'' HHAs 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 under a set 
of standards that meet or exceed the Medicare conditions, the Secretary 
can ``deem'' that HHA as having met the Medicare requirements for those 
conditions.
    Our regulations concerning reapproval of accrediting organizations 
are set forth at 42 CFR 488.4 and 488.8(d)(3). Section 488.8(d)(3) 
requires reapplication at least every 6 years and permits the Secretary 
to determine the required materials from those enumerated in 
Sec. 488.4, as well as the deadline to reapply for continued approval 
of deeming authority. We have determined that the procedures set out in 
section 1865(b)(3)(A) of the Act for initial applications for deeming 
authority should apply to renewals as well. These procedures require us 
to-- (1) 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 
continue to meet or exceed Medicare requirements; (2) identify in the 
notice the organization and the nature of the request and allow a 30-
day public comment period; and (3) publish a notice of our approval or 
disapproval within 210 days after we receive the organization's 
application and complete package of information.

II. Provisions of the Proposed Notice

    On September 10, 1999, we published a proposed notice in the 
Federal Register (64 FR 49197) announcing the receipt of an application 
from JCAHO for renewal of its privileges as a national accreditation 
organization for HHAs. In the proposed notice, we detailed the factors 
on which we would base our evaluation. Under section 1865(b)(2) of the 
Act and our regulations at Sec. 488.8(d)(3)(i), our review and 
evaluation of the JCAHO application were conducted in accordance with 
the following procedures:
     An on-site administrative review of the following: (1) The 
accrediting organization's corporate policies; (2) its financial and 
human resources available to accomplish the proposed surveys; (3) the 
training, monitoring, and evaluation of its surveyors, (4) its ability 
to investigate and respond appropriately to complaints against 
accredited facilities; and (5) its survey review and decision-making 
process for accreditation.
     A determination of the equivalency of JCAHO's standards 
for an HHA to our comparable HHA conditions of participation.
     A review, both through documentation and on-site 
observation, of JCAHO's survey processes to determine the following:

--The comparability of JCAHO'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 JCAHO 
provides to surveyors; and
--JCAHO's procedures for monitoring providers or suppliers found to be 
out of compliance with our requirements (these procedures are used when 
JCAHO identifies noncompliance).

     JCAHO's procedures for responding to complaints and for 
coordinating these activities with appropriate Federal, State, and 
local licensing bodies and ombudsmen programs.
     JCAHO's policies and procedures for identifying potential 
fraud and abuse, and its coordination with or reporting to us.
     JCAHO'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.
     JCAHO's data management system and reports used to--
--Assess its surveys and accreditation decisions; and
--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 10 most common deficiencies found in surveyed HHAs; and
    + The number of actionable cases of noncompliance and an indication 
of the method and timeframe for resolution including plans of 
correction, if any.
     A review of all types of accreditation status JCAHO offers 
and the extent to which each type corresponds with HCFA's standards of 
compliance.
     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 situations of 
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.

    In accordance with section 1865(b)(3)(A) of the Act the proposed 
notice also solicited public comment regarding whether JCAHO's 
requirements meet or exceed the Medicare conditions of participation 
for HHAs. We received no public comments in response to our proposed 
notice.

III. Provisions of the Final Notice

A. Differences between JCAHO and Medicare's Conditions and Survey 
Requirements

    Our review and evaluation of the JCAHO application, which were 
conducted as detailed in section II of

[[Page 8724]]

this notice, yielded the following information.
    We compared the standards contained in JCAHO's ``1999-2000 
Comprehensive Accreditation Manual for Home Care'' and its ``Deemed 
Status Education Program'' supplemented by flow charts comparing the 
survey process, deficiency resolution, complaint monitoring, and 
accreditation decision making with the Medicare conditions of 
participation and our ``State and Regional Operations Manual.''
    Under its current authority, JCAHO had used informal procedures and 
its technical advisory groups to inform us in advance of potential 
changes to its standards. It had routinely provided us with its updated 
manuals after, rather than before, the effective date as required by 
Sec. 488.4(b)(3)(iii). In response to our request, JCAHO put procedures 
in place which would require a more formal submission of proposed 
manual changes to our director of the Center for Medicaid and State 
Operations (CMSO) 30 days in advance of their effective dates to fully 
meet the requirements of Sec. 488.4(b)(3)(iii). JCAHO has also agreed 
to provide us with an updated crosswalk (a table showing the match 
between their standards and our standards) any time changes are made in 
the substance or numbering of its standards that changes the mapping to 
Medicare requirements.
    In 11 areas JCAHO has made the following revisions or 
clarifications:
     Ownership information. JCAHO has revised its policies to 
retain detailed ownership information encompassing the names and 
addresses of all persons with an ownership or controlling interest in 
the HHA. In addition, JCAHO has created new forms for use by its 
surveyors to validate and document ownership information, and requires 
the surveyors to send any changes to the JCAHO central office to update 
its files.
     Crosswalk references. JCAHO has submitted evidence of 
changes to its crosswalk references, to assure that incorrect 
advertisement of services by a provider, or decisions by a provider not 
to provide certified services because of reimbursements, are correctly 
cited and reported to our regional offices.
     Group of professional personnel. JCAHO has changed its 
survey requirements and submitted appropriate documentation of this 
change through a policy letter, to review not only the composition of 
the professional group participating in the HHA, but also to evaluate 
the attendance, participation of all required disciplines, and the 
appropriate exercise of the professional group's advisory functions.
     Comprehensive assessment condition. JCAHO has clarified 
that ``When a Joint Commission standard is `cross walked', the 
interpretation of that standard is supplanted exactly by the Medicare 
Condition of Participation or standard.'' This makes the Medicare 
interpretation the one used by the JCAHO. Specifically, standards 
governing patient eligibility for home health care (including home 
bound status) and the incorporation of data management requirements 
found in Sec. 484.55 are crosswalked, to comply with our interpretation 
of the requirements. They state, ``you may consider that we add to the 
evaluation of the Joint Commission's standard and intent, the exact 
wording of the Medicare condition or standard.'' The evaluation of such 
standards becomes the sum of the requirements, not one set or the 
other. Both sets of criteria must be met.
     Early survey option. When an HHA elects to use the JCAHO's 
Early Survey Option II approved by us, the HHA must provide skilled 
nursing and at least one other therapeutic service. JCAHO standards 
require that the HHA must serve at least ten patients. JCAHO has added 
to its standard that seven active patients must be receiving at least 
one skilled service (nursing assessments do not count as a skilled 
service). These requirements conform to our policy. In addition, JCAHO 
has provided documentation that it requires its surveyors to perform 
home visits using the HCFA's sampling methodology to select the correct 
number of home visits, as JCAHO does on standard deemed status HHA 
surveys.
     Corrective action timeframes. JCAHO's timeframes for 
corrective actions have been revised to conform to those limits set by 
statute and the our State Operations Manual.

--JCAHO has provided documentation that its administrative and survey 
procedures state that all findings of immediate and serious jeopardy, 
as defined by us, must be reported to the appropriate regional office 
within 24 hours of discovery. These incidents would include any 
``sentinel events'' that meet the definition of immediate and serious 
threats to health or safety.
--JCAHO will provide the listings of facilities and the letters 
containing the results of surveys to the appropriate HCFA regional 
office and to our CMSO contact when the notification goes to the 
facility.
--JCAHO has revised its notification letter to the facility to indicate 
any Medicare condition or standard level deficiencies separate from any 
Type I recommendations (JCAHO accreditation deficiencies). This will 
allow our staff in the central office or the regional office to 
identify clearly the level and type of Medicare deficiency, and 
initiate action to resolve condition level deficiencies as we judge 
necessary.
--JCAHO has explained the process by which its preliminary 
nonaccreditation (PNA) decisions are validated and the timeframes for 
doing so.
--JCAHO has created a Medicare timeframe for resolution of deficiencies 
in its deemed status facilities and supplied us with a clear outline of 
this process, that includes timeframes for all steps. This new 
procedure provides a more efficient process and includes sending all 
relevant communications to our regional offices in accordance the 
policy parameters found in our policies and procedures. JCAHO has 
clarified that it will use the Medicare timeframe for evaluating survey 
findings (for both Medicare and JCAHO standards) and processing letters 
to deemed status agencies. This new process eliminates the situation 
where a finding would be identified after a listing of Medicare 
deficiencies had been sent to us and cited only in the JCAHO portion of 
the report, even when the finding was relevant to Medicare. JCAHO's 
commitment to a 30-day maximum for each follow-up cycle until 
correction (of all Type I recommendations) is achieved (within the 
procedural limits of 6 months set by Medicare) meets our requirements.

     Documentation of deficiencies. JCAHO has revised its 
documentation requirements by adding the language ``all relevant scope 
and severity information, including a description of the findings, to 
present a clear picture of events and outcomes. Documentation will be 
consistent with Medicare regulation, and a demonstration of 
investigative techniques.'' This addition to JCAHO's documentation 
requirements makes these rules comparable to the Medicare requirements. 
To validate this goal JCAHO has provided training materials and an 
agenda for January 2000 training of HHA deemed status surveyors which 
instructs that the documentation of its surveyors will meet or exceed 
our 1999 ``Principles of Documentation.''
     Systemic problems. JCAHO has clarified that its philosophy 
and process are directed at identifying underlying systemic problems 
and then securing correction. This is accomplished for accreditation 
standards through the use of a computerized algorithm which weighs and 
combines compliance with

[[Page 8725]]

standards to create an overall ``score.'' Surveyors evaluate and 
document the Medicare requirements by hand-entering data on printed 
forms, while the JCAHO standards are evaluated using data entry into a 
computerized algorithm. JCAHO is reinforcing correct identification and 
documentation of Medicare problems by its surveyors in its January 2000 
training. These Medicare findings are supported and expanded by the 
results of the JCAHO computerized assessment, which aids in the 
identification of systemic problems. Validation of these systemic 
problems is done through appropriate follow-up, either by on-site 
survey or through documented evidence, as appropriate, within 30 days.
     Complaint process. JCAHO has provided us with detailed 
information about its current definitions of and criteria for 
determining the severity of complaints and the process for handling 
complaints for each severity level. This process does not include any 
routine reporting of such complaints to us. JCAHO appropriately is 
postponing changing this complaint process so that its changes will 
conform to our new requirements for an improved complaint interface 
process, currently under development, as soon as it is promulgated.
     State and local requirements. JCAHO has clarified that 
``[w]hen any Joint Commission standard has the phrase, `applicable law 
and regulation' included within the standard or intent, surveyors are 
instructed that the requirements of the most stringent law or 
regulation are those to be followed and surveyed for compliance.'' It 
has also provided us with the procedures it uses to instruct its 
surveyors to apply when they are unsure of whether or not a facility 
meets these requirements.
     Fraud and abuse identification and reporting. JCAHO 
confirmed that its ``survey process specifically evaluates the billing 
and eligibility practices of organizations, as well as ethical 
behaviors.'' Any violation would be included in the routine reports 
subsequent to any survey to the regional office within 10 days of the 
last survey.
    In addition to these changes, JCAHO provided a revised crosswalk 
incorporating all the changes necessitated by our requests.

B. Term of Approval

    Based on the review and observations described in section III.A of 
this notice we have determined that JCAHO's requirements for HHAs meet 
or exceed our requirements. Therefore, we recognize JCAHO as a national 
accreditation organization for HHAs that request participation in the 
Medicare program, effective February 22, 2000, through March 31, 2005.

IV. Paperwork Reduction Act

    This document does not impose any information collection and 
recordkeeping 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 organizations, codified in 42 CFR 
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.

V. Regulatory Impact Statement

    We have examined the impact of this notice as required by Executive 
Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 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 recognizes JCAHO as a national accreditation 
organization for HHAs that request participation in the Medicare 
program. 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 an effort to better assure the health, safety, and services of 
beneficiaries in HHAs already certified, as well as to provide relief 
to State budgets in this time of tight fiscal constraints, we deem HHAs 
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 not reviewed by OMB.
    In accordance with Executive Order 13132, we have determined that 
this notice will not significantly affect the rights of States, local 
or tribal governments.
    (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)
(Catalog of Federal Domestic Assistance Program No. 93.778--Medical 
Assistance Programs)


    Dated: February 7, 2000.
Nancy-Ann Min DeParle,
Administrator, Health Care Financing Administration.
[FR Doc. 00-4155 Filed 2-18-00; 8:45 am]
BILLING CODE 4120-01-P