[Federal Register Volume 65, Number 249 (Wednesday, December 27, 2000)]
[Proposed Rules]
[Pages 81813-81815]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32995]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 422

[HCFA-1160-P]
RIN 0938-AK41


Medicare Program; Requirements for the Recredentialing of 
Medicare+Choice Organization Providers

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would change the requirement of 
recredentialing providers, who are physicians or other health care 
professionals, for Medicare+Choice Organizations (M+COs) from at least 
every 2 years to at least every 3 years. This change is consistent with 
managed care industry recognized standards of practice and quality, and 
with standards already adopted by nationally recognized private quality 
assurance accrediting organizations. The intent of this change is to 
simplify administrative requirements by retaining consistency with the 
private accrediting processes. This rule would benefit M+COs and 
providers within the M+COs who must be recredentialed, while continuing 
to address quality issues of Medicare beneficiaries.

DATES: We will consider comments if we receive them at the appropriate

[[Page 81814]]

address, as provided below, no later than 5 p.m. on January 26, 2001.

ADDRESSES: Mail written comments (1 original and 3 copies) to the 
following address: Health Care Financing Administration, Department of 
Health and Human Services, Attention: HCFA-1160-P, P. O. Box 8018, 
Baltimore, MD 21244-8018.
    To ensure that mailed comments are received in time for us to 
consider them, please allow for possible delays in delivering them.
    If you prefer, you may deliver your written comments (1 original 
and 3 copies) to one of the following addresses: Room 443-G, Hubert H. 
Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, 
or Room C5-16-03, 7500 Security Boulevard, Baltimore, MD 21244.
    Comments mailed to the above addresses may be delayed and received 
too late for us to consider them.
    Because of staff and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code HCFA-1160-P. Comments received timely will be available 
for public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, in Room 443-G of 
the Department's office at 200 Independence Avenue, SW., Washington, 
DC, on Monday through Friday of each week from 8:30 to 5 p.m. (phone: 
(202) 690-7890).

FOR FURTHER INFORMATION CONTACT: Siera Gollan, (410) 786-6664.

SUPPLEMENTARY INFORMATION:

I. Background

    Sections 1851 through 1859 of the Social Security Act (the Act) 
established a new Part C of the Medicare program, known as the 
``Medicare+Choice (M+C) Program.'' On June 26, 1998, we published a 
comprehensive interim final rule (63 FR 34968) in the Federal Register 
to implement the M+C Program. That interim final rule set forth the new 
M+C regulations in 42 CFR Part 422--Medicare+Choice Program. We 
published a subsequent final rule with comment period in the Federal 
Register on June 29, 2000 (65 FR 40170).
    When these rules were promulgated, we established a 2-year 
recredentialing cycle consistent with standards adopted by nationally 
recognized private quality assurance accrediting organizations. Under 
Sec. 422.204(b)(2)(ii), Medicare+Choice Organizations (M+COs) are 
required to recredential providers, who are physicians or other health 
care professionals (including members of physicians groups) at least 
every 2 years. The recredentialing updates information obtained during 
initial credentialing and considers performance indicators such as 
those collected through quality assurance programs, utilization 
management systems, handling of grievances and appeals, enrollment 
satisfaction surveys, other plan activities, and an attestation of the 
correctness and completeness of the new information.
    Since the promulgation of these M+C rules, however, the nationally 
recognized private quality assurance accrediting organizations' 
standards for recredentialing have changed to a 3-year cycle. 
Therefore, our regulations are no longer consistent with standards 
adopted by these organizations. We believe that the change in the 
standards for recredentialing from a 2-year cycle to a 3-year cycle is 
appropriate because it lessens the administrative burdens on M+COs and 
their providers without negatively affecting Medicare beneficiaries or 
the Medicare program.

II. Provisions of this Proposed Regulation

    We propose to change the recredentialing cycle requirement in 
Sec. 422.204(b)(2)(ii) from at least a 2-year cycle to at least a 3-
year cycle. This change would maintain consistency with managed care 
industry recognized standards of practice and quality, and is 
consistent with standards already adopted by nationally recognized 
private quality assurance accrediting organizations. Under this 
proposed change to the regulation, M+COs that wish to recredential on a 
2-year cycle may continue to do so.

I. Collection of Information Requirements

    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements:
    Section 422.204 (Provider selection and credentialing) requires 
recredentialing at least every 3 years that updates information 
obtained during initial credentialing and considers performance 
indicators such as those collected through quality assurance programs, 
utilization management systems, handling of grievances and appeals, 
enrollee satisfaction surveys, other plan activities, and an 
attestation of the correctness and completeness of the new information. 
While the criteria and timing of the recredentialing process is 
currently approved under OMB control number 0938-0753, the general 
recredentialing criteria of every 2 years is being revised to every 3 
years.
    If you comment on the information collection and recordkeeping 
requirements, please mail copies directly to the following:

Health Care Financing Administration, Office of Information Services, 
Information Technology Investment Management Group, Attn.: John Burke, 
Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Allison Herron Eydt, HCFA Desk Officer.

IV. Regulatory Impact Statement

A. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 (September 1993, Regulatory Planning and Review) and the 
Regulatory Flexibility Act (RFA) (September 19, 1980 Public Law 96-
354). Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in any 1 year). This rule is 
not a major rule, as there are no additional costs to implement the one 
change that results from this proposed rule. Since the proposed rule 
changes the

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recredentialing requirement from a 2-year to a 3-year cycle to remain 
consistent with the private accreditation processes, the regulation 
change decreases administrative costs for the health plan and the 
providers within the health plan.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 
million or less annually. For purposes of the RFA, some M+COs are 
considered to be small entities. Individuals and States are not 
included in the definition of a small entity.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area and has fewer than 50 beds.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in an expenditure in any 1 year by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million. The proposed rule will not have an 
effect on State, local, or tribal governments, nor will the rule meet 
the $100 million threshold.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This rule does not impose any direct requirement costs on 
State or local governments.

B. Anticipated Effects

1. Effects on M+COs
    The effect on M+COs will be to lessen the mandated recredentialing 
requirements to at least once every 3 years rather than the current 
requirement of at least once every 2 years. If the rule is not 
promulgated, Medicare M+COs would be required to recredential on a 
schedule that is different and more demanding for Medicare contractors 
than private contractors, adding an administrative complexity and cost 
without benefit. M+COs can maintain recredentialing more often at their 
option; this change simply addresses consistency with standards of 
private accreditation agencies.
2. Effects on Other Providers
    Effects on other providers are limited, except that providers in 
M+COs will not be required to provide credentialing material at a 
greater frequency than they are required to provide it by the private 
accreditation agencies and the M+COs' individual corporate 
requirements.
3. Effects on the Medicare and Medicaid Programs
    This rule makes no change to the Medicaid program. The rule 
simplifies the recredentialing mandated cycle for consistency with the 
private accreditation processes for Medicare M+COs. If the rule is not 
promulgated, a cycle inconsistent with the private accreditation 
organizations will require private accreditation organizations to 
change their cycle in order to be deemed for Medicare and require M+COs 
and their providers to undergo an additional administrative cost and 
process without identified benefit to Medicare beneficiaries or the 
Medicare program.
C. Alternatives Considered
    The only other alternative would be to leave the regulation 
unchanged. To meet our goal to be consistent, when appropriate, with 
the standards of the private accreditation organizations, we decided 
that the change is necessary.
D. Conclusion
    For these reasons, we are not preparing analyses for either the RFA 
or section 1102(b) of the Act because we have determined, and we 
certify, that this rule would not have a significant economic impact on 
a substantial number of small entities, or a significant impact on the 
operations of a substantial number of small rural hospitals.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

V. Response to Comments

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

List of Subjects in 42 CFR Part 422

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare+Choice, Penalties, Privacy, 
Provider-sponsored organizations (PSO), Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, the Health Care 
Financing Administration would amend 42 CFR chapter IV as follows:

PART 422--MEDICARE+CHOICE PROGRAM

    1. The authority citation for part 422 is revised to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).
    2. Revise Sec. 422.204(b)(2)(ii) to read as follows:


Sec. 422.204  Provider selection and credentialing.

* * * * *
    (b) * * *
    (2) * * *
    (ii) Recredentialing at least every 3 years that updates 
information obtained during initial credentialing and considers 
performance indicators such as those collected through quality 
assurance programs, utilization management systems, handling of 
grievances and appeals, enrollee satisfaction surveys, other plan 
activities, and an attestation of the correctness and completeness of 
the new information; and
* * * * *

    Authority: Secs. 1102, 1851 through 1857, 1859, and 1871 of the 
Social Security Act (42 U.S.C. 1302, 1395w-21 through 1395w-27, and 
1395hh).

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
    Dated: November 9, 2000.
Michael M. Hash,
Acting Administrator, Health Care, Financing Administration

    Dated: November 28, 2000.
Donna E. Shalala,
Secretary.
[FR Doc. 00-32995 Filed 12-26-00; 8:45 am]
BILLING CODE 4120-01-P