[Federal Register Volume 65, Number 251 (Friday, December 29, 2000)]
[Rules and Regulations]
[Pages 83130-83154]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-32703]



[[Page 83129]]

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Part II





Department of Health and Human Services





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Health Care Financing Administration



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42 CFR Parts 410, 414, 424, 480, and 498



Medicare Program; Expanded Coverage for Outpatient Diabetes Self-
Management Training and Diabetes Outcome Measurements; Final Rule and 
Notice

  Federal Register / Vol. 65 , No. 251 / Friday, December 29, 2000 / 
Rules and Regulations  

[[Page 83130]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 410, 414, 424, 480, and 498

[HCFA-3002-F]
RIN 0938-AI96


Medicare Program; Expanded Coverage for Outpatient Diabetes Self-
Management Training and Diabetes Outcome Measurements

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

ACTION: Final rule.

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SUMMARY: This final rule implements section 4105 of the Balanced Budget 
Act of 1997 (BBA) by expanding Medicare coverage for outpatient 
diabetes self-management training and establishes outcome measurements 
for evaluating the improvement of the health status of Medicare 
beneficiaries with diabetes. These services include education and 
training furnished to a beneficiary with diabetes by an approved entity 
deemed to meet certain quality standards established in this final 
rule. The physician (or qualified nonphysician practitioner) treating 
the beneficiary's diabetes must certify that these services are needed 
as part of the beneficiary's comprehensive plan of care.

EFFECTIVE DATE: These regulations are effective February 27, 2001.

FOR FURTHER INFORMATION CONTACT: Mary Stojak, (410) 786-6939 
(Conditions for Coverage and Quality Standards); Joan Mitchell, (410) 
786-4508 (Physician Fee Schedule Payments); Joan Brooks, (410) 786-5526 
and Eva Fung, (410) 786-7539 (Accreditation and Deeming); Barbara 
Fleming, M.D., (410) 786-6863 (Outcome Measurement).

SUPPLEMENTARY INFORMATION: Copies: To order copies of the Federal 
Register containing this document, send your request to: New Orders, 
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guest (no password required).

I. Background

A. Legislation

    Section 4105(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 
105-33, enacted on August 5, 1997) provides coverage for diabetes self-
management training in outpatient settings without limiting this 
coverage to hospital outpatient departments. The BBA stipulates that 
training may be furnished by a physician or other individual or entity 
that also provides other items or services payable under Medicare, and 
that meets certain quality standards. The payment amount for the 
services must be established under the physician fee schedule in 
consultation with organizations representing persons with diabetes. 
Additionally, section 4105(c)(1) of the BBA requires the Secretary to 
establish outcome measurements for purposes of evaluating the 
improvement of the health status of Medicare beneficiaries with 
diabetes.
    On February 11, 1999, we published a proposed rule (64 FR 6827) to 
implement the BBA provisions addressing the coverage, payment, and 
accreditation requirements for outpatient diabetes self-management 
training. An overview of that proposed rule is given in section II of 
this preamble, the comments on the proposed rule and our responses to 
those comments are in section III, and a summary of changes in the 
final rule appears in section IV.

B. Program Instructions

    In June and September of 1998, we issued program memoranda (PM AB-
98-36 and PM AB-98-51) that implemented the outpatient diabetes self-
management training benefit. We reissued these program instructions in 
1999 and most recently on July 20, 2000.

C. Office of Inspector General Report

    The Office of Inspector General (OIG) issued a draft report titled 
``Medicare's Expanded Coverage of Outpatient Diabetes Self-Management 
Training Services'' (A-14-99-00207, June 2000) which reviewed the 
reasonableness of the individual and group session payment rates 
proposed by HCFA for diabetes self-management training. The OIG 
concluded that our proposed rates were inflated.
    In our response to the draft report, we did not concur with the 
recommendation that the payment rates should be adjusted downward. We 
did agree, however, that we should refine our payment rates as we gain 
additional experience and knowledge about diabetes self-management 
training. We will periodically review the payment rates as part of our 
review of services furnished under the physician fee schedule and 
include any revisions in our annual updates to the physician fee 
schedule payment rates.

II. Provisions of the Proposed Rule

    On February 11, 1999, we published in the Federal Register, a 
proposed rule (64 FR 6827) to implement section 4105(a) of the BBA 
concerning the expanded coverage of, and payment for, outpatient 
diabetes self-management training.
    In the preamble of the February 1999 proposed rule, we noted that, 
as required by section 4105(a)(3) of the BBA, we consulted with 
representatives of various groups or organizations active in the field 
of diabetes education and training. These organizations or groups 
included the following:
     American Diabetes Association.
     The American Medical Association.
     The American Academy of Family Physicians.
     The Endocrine Society.
     The American Association of Clinical Endocrinologists.
     The American Association of Diabetes Educators.
     The American Dietetic Association.
     The Health Industry Manufacturers Association.
     Merck-Medco.
     The Diabetes Treatment Centers of America.
     American Pharmaceutical Association.
     The National Association of Chain Drug Stores.
     The National Community Pharmacy Associations.
    We also worked extensively with diabetes experts from the Centers 
for

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Disease Control and Prevention (CDC) and the Department of Veterans 
Affairs. In addition, we visited a number of diverse hospital-based 
training programs.
    These consultations and visits revealed that there is no clear 
consensus on several important issues. The issues include critical 
questions concerning: (1) Who should be eligible to receive training; 
(2) how, when, and where the training should be furnished; and (3) who 
should furnish the training (and the specific qualifications 
necessary). We specifically solicited public comments on these issues 
and requested clinical data describing the impact of our proposed 
requirements on beneficiary health outcomes.
    The parties that we consulted about diabetes self-management 
training agree that it is an interactive, collaborative process 
involving individuals with diabetes, their physicians, and their 
educators. The diabetes educational process will furnish the 
beneficiary with the knowledge and skills needed to perform self-care, 
manage crises, and make lifestyle changes to successfully manage the 
disease. The goal is to enable the beneficiary to become an active 
participant in a four-step process that includes assessment of the 
beneficiary's needs, development of an individualized educational plan, 
educational interventions, and evaluation of the beneficiary's success 
in achieving self-management goals.
    The major provisions of the proposed rule are as follows:

A. Outpatient Diabetes Self-Management Training

    We proposed in Sec. 410.141(a) that Medicare Part B would cover an 
outpatient diabetes self-management training program when ordered by 
the physician or qualified nonphysician practitioner treating the 
beneficiary's diabetes. To ensure access to these services, we would 
recognize training ordered by certain nonphysician practitioners who 
treat a beneficiary's diabetes and whose services would be covered 
under Medicare as physician services if they were furnished by a 
physician. We would require these nonphysician practitioners to operate 
within the scope of the statutory benefit and their authority under 
State law or regulations. We further stated that we would not cover 
patient self-referral services.

B. Conditions for Coverage

    In Sec. 410.141(b), we proposed that we would cover outpatient 
diabetes self-management training under Medicare Part B if the 
following conditions are met: The physician (or qualified nonphysician 
practitioner) must order the training; the physician (or qualified 
nonphysician practitioner) must prepare a comprehensive plan of care 
that describes the content, number, frequency, and duration of the 
diabetes self-management training; the physician (or qualified 
nonphysician practitioner) must determine if the diabetes self-
management training is reasonable and necessary for the treatment of 
the beneficiary's diabetes; and the services must be furnished in a 
group setting of 2 to 20 individuals (or on an individual basis if a 
group session is unavailable or if the beneficiary has special needs 
resulting from medical conditions that would hinder the beneficiary's 
participation in a group training session). All individuals in the 
group do not have to be Medicare beneficiaries.

C. Types and Frequency of Training

1. Initial Training
    In Sec. 410.141(c)(1), we proposed that Medicare would cover up to 
10 hours of initial outpatient diabetes self-management training within 
a continuous 12-month period for each beneficiary who meets certain 
conditions. In addition, we proposed that payment would be only for 
those sessions attended (not for packages of sessions unless there is 
documentation that the beneficiary attended all sessions).
2. Additional Training
    In Sec. 410.141(c)(2), we proposed that a beneficiary who receives 
the initial training program would be eligible for a single follow-up 
training session of no more than 1 hour each year. The physician (or 
qualified nonphysician practitioner) treating the beneficiary must 
document in the beneficiary's medical record the specific medical 
condition (described in Sec. 410.141(d)) that warrants the additional 
training.

D. Beneficiaries Who May be Covered

1. Medical Conditions
    In Sec. 410.141(d)(1), we proposed that any beneficiary who has one 
or more of the following medical conditions occurring within the 12-
month period before the physician's order for the training would be 
eligible for Medicare coverage for training from an approved entity:
     New onset diabetes.
     Poor glycemic control as evidenced by a glycosylated 
hemoglobin (HbA1C) of 9.5 percent or more in the 90 days before 
attending the training.
     A change in treatment regimen from no diabetes medications 
to any diabetes medication, or from oral diabetes medication to 
insulin.
     High risk for complications based on poor glycemic 
control; documented acute episodes of severe hypoglycemia or acute 
severe hyperglycemia occurring in the past year during which the 
beneficiary needed third party assistance for either emergency room 
visits or hospitalization.
     High risk based on at least one of the following 
documented complications:
     Lack of feeling in the foot or other foot complications 
such as foot ulcer or amputation.
     Pre-proliferative or proliferative retinopathy or prior 
laser treatment of the eye.
     Kidney complications related to diabetes, such as 
macroalbuminuria or elevated creatinine.
2. Other Conditions
    In Sec. 410.141(d)(2), we proposed that beneficiaries who are 
inpatients in a hospital, skilled nursing facility, hospice, or nursing 
home would not be simultaneously eligible for services under this 
benefit. It is the responsibility of the staff at these facilities to 
furnish effective disease management training as a part of the basic 
care and treatment furnished to the beneficiary while the beneficiary 
is an inpatient of that facility.
    If outpatient diabetes self-management training is furnished in a 
Federally Qualified Health Center (FQHC) or a Rural Health Clinic (RHC) 
setting by a nonphysician practitioner, the services would be bundled 
into the facility rate. The payment made to the FQHC or the RHC under 
the all-inclusive rate specifically accounts for these professional 
services because the facility payment rate reflects the costs of these 
services.

E. Approved Entities

    In proposed Sec. 410.141(e), we identified the conditions we would 
require an approved entity to meet. In order to be an ``approved 
entity,'' we would require that the physician, individual, or entity 
furnish other services for which direct Medicare payment may be made. 
In addition, the approved entity must comply with the Medicare 
regulations on the prohibition on reassignment of Medicare benefits set 
forth in Secs. 424.73 and 424.80.
    We also stated that we would require an approved entity to provide 
us with any documentation that we may request, which may include 
information that is necessary for us to pay a claim or to perform a 
focused post-payment medical review study. Finally, we

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would approve an entity to furnish outpatient diabetes training if it 
meets the quality standards prescribed by us; the National Standards 
for Diabetes Self-Management Education Program (NSDSMEP), previously 
the National Diabetes Advisory Board (NDAB) standard; or standards 
developed by a national organization that is either a nonprofit or not-
for-profit organization (approved by us) with demonstrated experience 
in representing the interest of individuals with diabetes. In order to 
show that these quality standards are met, an approved entity must show 
proof that it has been accredited by a HCFA-approved accreditation 
organization.

F. HCFA's Process for Approving National Accreditation Organizations

    Section 410.142 proposed that we may approve and recognize a 
nonprofit or not-for-profit organization with demonstrated experience 
in representing the interest of individuals with diabetes to accredit 
entities to furnish training. We proposed to require an accreditation 
organization to submit documentation outlining how its quality 
standards are substantially equivalent to the HCFA quality standards as 
outlined in Sec. 410.144(a) of the proposed rule. In addition, we 
proposed that the prospective organization verify and comply with 
information requirements in the application process as described in 
Sec. 410.142(b).

G. Requirements for Approved Accreditation Organizations

    In Sec. 410.143, we proposed the requirements for an approved 
accreditation organization. We included the proposed ongoing 
responsibilities of an approved accreditation organization as well as 
set forth our oversight responsibilities for an approved national 
accreditation organization, our requirements for recognition and 
withdrawal, and our reconsideration process.

H. Quality Standards for a Deemed Entity

    We proposed in Sec. 410.144 that a national accreditation 
organization approved and recognized by us may accredit an entity to 
meet one of the following sets of standards: the quality standards 
prescribed by us and set forth in the proposed rule; the NSDSMEP 
quality standards; or standards of a national accreditation 
organization (approved by us) that represents individuals with 
diabetes.

I. Requirements for Deemed Entities

    In Sec. 410.145 of the proposed rule, we specified the conditions 
under which an entity may be deemed to meet our quality standards. We 
also proposed a procedure for determining the effective date and 
requirements for deemed entities, as well as a procedure for the 
removal of deemed status.

J. Payment for Outpatient Diabetes Self-Management Training Services

    In accordance with section 4105(a) of the BBA, we proposed in 
Sec. 414.63 that Medicare payment for outpatient diabetes self-
management training would be made under the physician fee schedule 
described in Sec. 414.1 through 414.48. Section 1848 of the Act 
requires that payments under the physician fee schedule be based on 
national uniform relative value units (RVUs) that are based on the 
resources used in furnishing a service. We proposed in the preamble of 
the February 1999 proposed rule to pay $55.41 (using the proposed RVUs) 
for individual sessions and $32.62 per person within a group session. 
We stated that these same payment rates would apply for the 1-hour 
annual refresher training. We also stated that actual payments to an 
entity approved by us would be adjusted for geographic variation and 
determined based on the physician fee schedule methodology as described 
in a separate final rule published in the Federal Register on October 
31, 1997 (62 FR 59048).

K. Time Limits for Filing Claims

    We proposed to add a new paragraph (d), ``Outpatient diabetes self-
management training,'' to Sec. 424.44, ``Time limits for filing 
claims.'' New paragraph (d) would state that we would make payment to 
an entity for the furnishing of outpatient diabetes self-management 
training after we approve the entity to furnish the services under part 
410, subpart H.

L. Photocopying Reimbursement and Mailing Costs for Practitioners

    Section 4105(c) of the BBA requires the Secretary to establish 
outcome measurements, including glycosylated hemoglobin (past 90-day 
average blood sugar levels), for purposes of evaluating the improvement 
of the health status of Medicare beneficiaries with diabetes. In order 
to obtain adequate clinical documentation used in developing outcome 
measurements, we proposed to direct Peer Review Organizations (PROs) to 
collect this information from a physician (or qualified nonphysician 
practitioner) treating a beneficiary with diabetes.
    In Sec. 476.111, ``PRO access to records and information of 
institutions and practitioners,'' (now designated Sec. 480.111) we 
proposed to reimburse all Medicare providers and suppliers for the cost 
of photocopying and mailing copies of requested beneficiary medical 
records for any Medicare covered services to the PROs. We proposed 
payment of $.10 per page for photocopying plus first class postage 
costs for mailing the records. The proposed photocopying amount 
includes the cost of labor, supplies, equipment, and overhead based on 
the photocopying payment rates previously established for hospitals.

M. Appeals

    In Sec. 498.2, ``Definitions,'' we proposed adding to the 
definition of ``supplier,'' for the purposes of appeals, the words ``an 
entity approved by HCFA to furnish outpatient diabetes self-management 
training,'' following ``(OPO).''

III. Comments and Responses Based on the Proposed Rule

    We received approximately 1,900 items of correspondence in response 
to our request for public comments on the February 1999 proposed 
regulation on diabetes self-management training. Commenters included 
individuals, professional associations, providers of care, and various 
health care professionals. A summary of those comments and responses 
follows:

Conditions for Coverage (Sec. 410.141(b))

    Comment: One commenter suggested that in Sec. 410.141(b)(1), there 
was no rationale to permit qualified nonphysician practitioners to 
order diabetes self-management training and that only physicians should 
be able to order the services.
    Response: We highly regard the contributions and quality of care 
furnished by physicians in the United States. We will, however, retain 
the requirement in Sec. 410.141(b)(1) that permits qualified 
nonphysician practitioners (such as, clinical nurse specialists, 
physician assistants, nurse practitioners, and nurse midwives) to order 
the training because this provision is consistent with section 
1842(b)(18)(D) of the Act. We believe that the required State licensure 
requirements will ensure that this care is provided in an appropriate 
manner by qualified nonphysician practitioners. We believe, moreover, 
that the availability of training to improve the quality of life for 
Medicare beneficiaries should not be denied, particularly to 
beneficiaries who receive their medical care from qualified 
nonphysician practitioners. Permitting

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qualified nonphysician practitioners to order this training will 
facilitate access to our beneficiaries, particularly in rural areas.
    Comment: Many commenters did not agree with our requirement in 
proposed Sec. 410.141(b)(2) that the physician (or qualified 
nonphysician practitioner) develop the entire plan of care or our 
requirement in proposed Sec. 410.141(b)(2)(iii) that the physician (or 
qualified nonphysician practitioner) sign for any changes in the plan 
of care. The commenters contended that the treating physician should 
initiate the plan of care, but the diabetes educator should be the 
primary administrator of diabetes education and training.
    Response: We continue to believe that the primary care physician 
(or qualified nonphysician practitioner) treating the beneficiary must 
order the training because he or she is most qualified to manage the 
beneficiary's care. Section 4105 of the BBA suggests that the person 
managing the individual's diabetic condition must certify that the 
training is needed under a comprehensive plan of care. Therefore, we 
will retain the requirement in Sec. 410.141(b)(2) that the physician 
(or qualified nonphysician practitioner) develops the comprehensive 
plan of care, which includes the education and training needs of the 
individual beneficiary. We note that in Sec. 410.141(b)(2)(ii) the 
referring physician (or qualified nonphysician practitioner) must 
identify the beneficiary's medical conditions. This is intended to help 
the educator to address the appropriate training.
    We will also retain the requirement in Sec. 410.141(b)(2)(iii) that 
the physician (or qualified nonphysician practitioner) sign any changes 
to the plan of care for the beneficiary before those changes are 
implemented. Diabetes self-management training is an interactive, 
collaborative process involving a beneficiary with diabetes, the 
beneficiary's physician (or qualified nonphysician practitioner) and 
educator. For that reason, we do not believe that the only role the 
physician should have is to refer the beneficiary for education and 
training. Under our quality standards on review of the plan of care and 
goals at Sec. 410.144(a)(7), we have added requirements for the 
approved entity to forward a copy of the documentation to the referring 
physician and to periodically update the referring physician of the 
beneficiary's educational status. In a collaborative environment as 
described above, we believe that training will successfully change the 
beneficiary's self-management behavior.
    Before Congress mandated Medicare coverage of diabetes training, 
some Medicare payments for diabetes training were made under the 
physician services benefit, usually in the context of outpatient or 
inpatient visits with the physician for diabetes management and 
counseling. We believe that physicians will continue to provide this 
type of education for their Medicare beneficiaries in addition to the 
diabetes training now available under this final regulation. We view 
these benefits as complementary and we believe both are appropriate for 
the management of a beneficiary's care.

Types and Frequency of Training (Sec. 410.141(c))

    Comment: Many commenters suggested that we revise our provision in 
Sec. 410.141(c)(1) to require more than 10 hours of initial training to 
cover all the subject areas required in the proposed rule.
    Response: When developing the proposed rule, we conducted 
discussions and on-site visits with many diabetes self-management 
training programs. One of the purposes of these visits was to determine 
how many hours we should cover for a one time initial training benefit. 
We found that for most programs training averaged 10 hours. Training 
consists of 15 content areas. We observed that attendance dwindled and 
beneficiaries began to have compromised attention spans when the total 
number of training hours exceeded 10. We believe training outcomes are 
more effective when the training curriculum is concise and focused. 
Therefore, we conclude that 10 hours is a reasonable amount of time to 
cover the 15 content areas as described in Sec. 410.144(a)(5). Although 
commenters suggested that 10 hours of initial training was not enough, 
they did not provide compelling arguments to support their opinions. We 
will continue to monitor and reassess the amount of hours needed to 
cover the required curriculum to ensure that our beneficiaries receive 
quality training service.
    Comment: Many commenters indicated that we should permit educators 
more flexibility to conduct training in group or individual sessions 
(Sec. 410.141(c)). They stated that the NSDSMEP quality standards 
require that staff develop and update an individualized assessment for 
each patient. Also, certain aspects of diabetes education, such as a 
needs assessment, individualized instruction on medication or insulin 
delivery, and development of an individualized meal plan, can only be 
furnished on a one-to-one basis.
    Response: We believe the commenters are correct that there should 
be more flexibility in our training coverage in Sec. 410.141(c). We 
have increased the flexibility of how educators may furnish the 
training by changing the requirements in Sec. 410.141(c)(1)(i)(F) and 
(c)(2)(i), respectively, to allow 1 hour of initial training and 2 
hours of follow-up training to be individual training without the 
beneficiary meeting one of the special conditions in 
Sec. 410.141(c)(1)(ii). This change will accomodate the requirement for 
individual assessment and special circumstances requiring individual 
training. Further, we revised the requirements for initial and follow-
up training in Sec. 410.141(c)(1) and (2) to permit training in half-
hour increments.
    Even though the attending physician specifies the medical condition 
the training must address, there will be instances in which the 
educator will be determining how the training will be conducted. For 
example, if a beneficiary has not complied with his or her diabetic 
diet after initial training, the educator will determine the 
appropriate intervention. However, if the physician specified that the 
beneficiary needs training on the delivery of insulin or other 
training, the training should address this specific need. Under this 
final rule, the educator is to perform training in adherence to the 
instructions from the referring physician (or qualified nonphysician 
practitioner).
    Comment: Many commenters expressed concern that we revise our 
requirement in Sec. 410.141(c)(2) to require more than 1 hour per year 
of follow-up training. The suggestions for more than 1 hour per year 
ranged from 2 hours to 10 hours per year, or up to 10 additional hours 
over a 5-year period. The most frequently stated comment was to 
increase the amount of follow-up training to 2 hours.
    Response: Before we published the February 1999 proposed rule, our 
consultations with the diabetes community indicated that 1 hour of 
follow-up training would be sufficient to accomplish the goal of 
properly educating a diabetic patient. The comments on the proposed 
rule provided compelling arguments that more time is needed to reassess 
the training needs of the beneficiary and provide new training in some 
situations. An example of a situation when 1 hour of follow-up training 
may not be sufficient is when a beneficiary with Type 2 or non-insulin 
dependent diabetes becomes insulin dependent. A reassessment of the 
beneficiary's

[[Page 83134]]

training needs must be completed and the beneficiary might need 
additional training on how to perform injections and how to self-
monitor glucose levels. Multiple educational interventions to stabilize 
the beneficiary's condition might be needed in a single year, which we 
agree could require more than 1 hour of follow-up training. However, we 
have determined it will not take more than 1 additional hour of 
training. Also, based on comments from the public, 2 hours of follow-up 
training is standard practice for diabetes educators. We received no 
evidence to support allowing more than 2 hours of follow-up training.
    We have accepted commenters suggestions and increased the amount of 
follow-up training in Sec. 410.141(c)(2) to 2 hours each year starting 
in the calendar year after the beneficiary completes the initial 
training (See Sec. 410.141(c)(2)(iii).) In addition, educators may 
provide follow-up training on four different occasions during the year 
using the half-hour increments in the final rule. The follow-up 
training may be provided in individual training sessions or group 
sessions. A beneficiary is not required to meet any special 
requirements in order to obtain an individual follow-up session.
    Comment: A major national organization and other individual 
commenters urged us to furnish coding and payment for educational 
training in increments of 30 minutes instead of 1 hour for individual 
training sessions. The commenters indicated that shorter intervention 
sessions may be more appropriate for older beneficiaries.
    Response: We have considered the comments for the 30-minute 
increment billing code for diabetes education and are adopting this 
comment. We agree that the shorter intervention sessions may be more 
appropriate for older Medicare beneficiaries and will allow more 
flexibility in training schedules. As stated above, we will allow a 30-
minute increment code for individual and group training for both 
initial and follow-up training instead of a 1-hour increment.
    Comment: Some commenters noted that a system needs to be developed 
to track diabetes training to tell providers the number of hours 
available to beneficiaries.
    Response: We agree with the commenter that there is a need to track 
the number of hours of diabetes training furnished to a beneficiary. 
However, in light of other system and privacy demands, we are unable to 
announce a specific system at this time.

Beneficiaries Who May Be Covered (Sec. 410.141(d))

    Comment: Many commenters stated that the HbA1C level of 9.5 percent 
as proposed in Sec. 410.141(d)(1)(ii) would result in an increased risk 
of complications before diabetes education would be available to the 
beneficiary. The comments suggest that this would be especially true 
for individuals of certain ethnic backgrounds because they are at a 
higher risk for complications. Commenters suggested that the HbA1C 
level should be lowered. The suggestions among the commenters for a 
lower level ranged from 7.0 to 8.5 percent.
    Response: We agree with the commenters that establishing an 
appropriate glycohemoglobin requirement as an eligibility criterion for 
the diabetes training benefits is important. In order to do this, we 
reviewed the medical literature for both the relationship of the 
glycohemoglobin level to the risk of developing complications of 
diabetes and the effect of diabetes training in reducing the 
glycohemoglobin level both in terms of the amount of reduction and the 
lowest glycohemoglobin level attained.
    The medical literature was useful in supporting a direct 
relationship between the level of glycohemoglobin and the risk of 
developing diabetes complications. Specifically, lower levels of 
glycohemoglobin reduce the risk of developing complications. Lowering 
the glycohemoglobin, however, from 10 percent to 9 percent results in a 
much greater reduction in risk than lowering the glycohemoglobin from 8 
percent to 7 percent; while lowering the glycohemoglobin from 9 percent 
to 8 percent results in an intermediate reduction in risk.
    Much of the literature on diabetes training consists of studies 
with patients who have poor glycemic control (for example, 
glycohemoglobins higher than 9.5 percent), and generally measured the 
effect of diabetes training for short periods of time. Some studies 
involved concurrent changes in diabetes medications making the effect 
of diabetes education hard to measure. Although some studies 
demonstrated a reduction in glycohemoglobin levels, this reduction was 
generally less than or equal to 1 percent and was short-lived.
    We have found that the medical literature is not conclusive 
regarding the efficacy of diabetes training alone in reducing 
glycohemoglobins below 8.5 percent, in effectuating long term 
improvement of glycemic control below 8.5 percent, or in reducing the 
risk of diabetes complications. Therefore, until strong medical 
evidence becomes available showing the efficacy of diabetes training in 
achieving these goals we have established a glycohemoglobin level of 
8.5 percent as a criterion for eligibility for the diabetes training 
benefit. We believe that this level satisfies the concerns of the 
commenters. We will revisit this requirement when the medical 
literature indicates it is appropriate.
    In determining the eligibility criteria we considered the magnitude 
of the impact of an elevated glycohemoglobin on a beneficiary's health, 
such as a high risk of developing heart disease or hypertension. Our 
eligibility criteria ensure that not only patients at significant risk 
for developing complications of diabetes will have access to the 
diabetes training service, but that patients with diabetes at risk for 
other illnesses such as strokes and heart attacks will also be eligible 
for diabetes training. This impact is related to the degree and the 
duration of the elevation in glycohemoglobin. We believe that making 
all beneficiaries with two consecutive glycohemoglobin levels of 8.5 
percent or more (3 months apart in the year prior to entry into the 
training program) eligible for this service will ensure that 
beneficiaries at significant risk for complications of diabetes will be 
able to get diabetes training. We believe that this lower level is 
sufficient to ensure the availability of training for individuals of 
any ethnic background. In consideration of the risks of elevated HbA1C 
levels in the Medicare population and concerns expressed by the 
commenters, we revised Sec. 410.141(d)(2) to reduce the level of HbA1C 
required for initial training to a level of 8.5 percent or more on 2 
consecutive HbA1C determinations 3 or more months apart in the year 
before the beneficiary begins receiving training.
    Comment: Many commenters suggested in Sec. 410.141(d)(1)(v)(C), 
that we add criteria for a diagnosis of microalbuminuria documented by 
two positive microalbuminuria screening tests in the absence of urinary 
tract infections, fever, or infection in the year before a beneficiary 
receives training.
    Response: We agree with the commenters that a criteria for a 
diagnosis of microalbuminuria should be added. Therefore, in 
Sec. 410.141(d)(5)(iii), we have changed the criteria to read, ``when 
manifested by albuminuria,'' in response to the comment. The term 
albuminuria includes both microalbuminuria and macroalbuminuria.
    Comment: Commenters also suggested adding to proposed 
Sec. 410.141(d)(1)(v)(C)

[[Page 83135]]

levels of hypertension and hyperlipidemia to the criteria.
    Response: We believe the revised criteria in 
Sec. 410.141(d)(5)(iii), as noted above, will also apply to 
beneficiaries who have hypertension and hyperlipidemia because the 
conditions usually occur at the same time as other medical conditions 
already cited in the regulation. Therefore, we have not included those 
additional criteria.

Who May Furnish Services (Sec. 410.141(e))

    Comment: Many commenters advised us that they believe our 
requirements for who may furnish training (proposed Sec. 410.141(e)) 
would not sufficiently expand the access of training in rural areas.
    Response: In order to address the concerns of commenters regarding 
limited access to training in rural areas, we are making several 
clarifications.
    First, we have allowed an approved entity to delay the 
implementation of the requirement for a Certified Diabetes Educator 
(CDE) until February 27, 2004 if the team includes a registered nurse. 
This delay will allow an approved entity additional time to recruit a 
diabetes educator that has the required certification from the National 
Certification Board for Diabetes Educators (NCBDE). (The NCBDE is the 
only eligible certification organization at this time.)
    Second, we have revised the final rule to allow for an exception to 
the team approach in rural areas (Sec. 410.144(a)(4)(ii)). Under the 
exception, an individual who is qualified as a registered dietitian and 
as a CDE currently certified by the NBCDE (or as a registered nurse 
until February 27, 2004) may furnish training in a rural area and will 
be deemed to meet the requirement in (Sec. 410.144(a)(4)(ii)).
    In addition, as stated in the proposed rule an approved entity must 
properly receive Medicare payment under Sec. 424.73 or Sec. 424.80 
which set forth prohibitions on assignment and reassignment of 
benefits. Diabetes training programs may provide services at any 
location if the educators are W-2 employees of the approved entity. 
Thus, even if the employee is part-time, Medicare payment to the 
employer would still be appropriate.
    We also wish to clarify that the reassignment rules allow a 
``facility'', such as a hospital, to use an independent contractor to 
provide training services with in the facility. This option may be 
particularly helpful to certain facilities in rural areas.

Quality Standards for a Deemed Entity (Sec. 410.144)

    Comment: Many commenters believe that we exceeded our authority by 
including the requirement in proposed Sec. 410.144(b) that changes in 
the NSDSMEP quality standards must be approved by HCFA.
    Response: We have reviewed the comments questioning our authority 
to approve or disapprove any subsequent revisions to the NSDSMEP 
quality standards, as well as our proposed rule preamble discussion on 
Sec. 410.143 (which states we reserve the right to approve or 
disapprove any changes made by the ADA). After reconsidering this issue 
in light of the comments, we believe that the statute could be 
interpreted to authorize payment to entities that are found to meet 
revised standards, even if those standards are subsequently modified to 
be less stringent. Therefore, in Sec. 410.144(b), we removed ``approved 
by HCFA''.
    Individuals or entities that meet the quality standards originally 
established by the NDAB or subsequently revised are recognized under 
the Medicare statute. Reviewing the quality standards of entities, 
however, is a separate issue from monitoring accreditation 
organizations in their capability to apply and enforce the quality 
standards. Section 1865 of the Act, as amended in 1996, requires us to 
determine whether the accreditation of a provider or supplier entity by 
the national accreditation organization ensures that the applicable 
Medicare health and safety conditions or requirements will be met or 
exceeded. It is our responsibility to ensure accreditation 
organizations will apply and enforce the quality standards set forth in 
Sec. 410.144. We expect the accreditation organizations to develop 
other procedural and administrative activities to demonstrate the 
accreditation process is solid and, most important of all, ensures that 
the applicable quality standards are being successfully enforced. 
Therefore, we have concluded it is necessary for us to review the 
accreditation organization's program as a whole, as set forth in 
Sec. 410.142 in order to ensure that the organizations that were found 
to have met the quality standards do so on a continuous basis.
    We still have the responsibility for ensuring that organizations 
that enforce the quality standards in Sec. 410.144 perform adequate 
oversight to assure that approved entities continually meet the quality 
standards. We have extensive experience with review and oversight of 
national accreditation organizations that deem other entities to meet 
our quality standards. This oversight consists, in part, of reviewing 
how well the accreditation organizations enforce their standards and 
assure that the Medicare requirements are met. In the interest of 
improving our quality oversight activities, we are currently refining 
and strengthening our validation activities with regard to national 
accreditation organizations. That said, we believe we must assure that 
any national accreditation organization that uses the NSDSMEP quality 
standards also performs adequate oversight and enforcement activities.
    Given that our major concerns are the application and the 
enforcement of the quality standards, we will oversee these 
accreditation organizations and delegate certain responsibilities to 
the accreditation organizations as set forth in Sec. 410.143 to ensure 
beneficiaries will receive quality diabetes self-management training.
    Comment: Several commenters questioned our proposed requirement in 
Sec. 410.144(a)(3) which describes the requirements of the program 
coordinator and asked us to clarify their qualifications. Some 
commenters recommended that a physician should be the program 
coordinator or the team leader.
    Response: In order to allow greater flexibility, we have not 
specified who must be the program coordinator, nor have we identified 
specific qualifications of the program coordinator. We expect the 
program coordinator to be an individual with experience in diabetes and 
program management that can ensure effective coordination of the 
different aspects of the training services.
    Comment: Some commenters recommended our proposed requirements, in 
Sec. 410.144(a)(3)(ii), for nonphysician professional program staff 
should be reduced from 14 hours every 2 years to 12 hours every 2 
years.
    Response: We agree that the requirement for nonphysician 
professional program staff to obtain 12 hours of continuing education 
every 2 years is reasonable and adequate to ensure quality. We 
recognize that nonphysician professional staff have other requirements 
for continuing education, or they will acquire additional clinical 
experience through direct contact with patients. Based on commenters 
suggestions, we have revised the requirement in Sec. 410.144(a)(3)(ii) 
from 14 hours to 12 hours to decrease the burden associated with the 
benefit.
    Comment: Many commenters were concerned that Sec. 410.144 did not 
allow

[[Page 83136]]

sufficient time for those hospital outpatient diabetes self-management 
training programs that had billed Medicare before July 1, 1998, and 
that did not have ADA accreditation, to achieve accreditation by the 
time the final rule is published. Some of these commenters suggested 
that we should allow from 1 to 5 years additional time to accomplish 
accreditation.
    Response: While we understand the concerns regarding these 
outpatient hospital programs, the statute does not give us the 
authority to deem that these programs meet the NSDSMEP quality 
standards. We are aware that the ADA requires a 12-month data 
collection period, before programs can submit the application for 
education recognition. However, the ADA has approved approximately 250 
providers since the February 1999 publication of the proposed rule. 
Based on information obtained from the ADA, they specified that they do 
not have a backlog of applications and are working to maintain timely 
processing. This demonstrates to us that outpatient hospital programs 
not recognized at the time of the proposed rule have been rapidly 
recognized by the ADA. We are also amending this final rule to continue 
to recognize those hospitals with NSDSMEP quality standards 
certificates until July 1, 2002. This will allow adequate time for new 
programs to be deemed during the interim period while other approved 
accrediting organizations are recognized. Additionally, we believe ADA 
will not remain the only accreditation organization once the 18 month 
transition period that exclusively allows ADA recognized programs to 
receive Medicare payment for diabetes training expires.
    Comment: Many commenters stated that many of the existing diabetes 
self-management training programs chose not to seek ADA recognition for 
a number of reasons. These included the lack of staff support by the 
ADA, the burden of recordkeeping, cost, and the amount of time involved 
in the ADA application process. They stated that this hardship is even 
more intensified in smaller, rural programs, which will be forced to go 
out of business.
    Response: We expect other organizations will apply, and we will 
approve more accreditation organizations that will use one of a variety 
of quality standards that meet the requirements of Sec. 410.144. Other 
accreditation organizations that currently evaluate Medicare providers 
may seek to become approved to accredit for this service. As the 
statute is fully implemented, we anticipate a variety of accrediting 
choices will become available that may be procedurally faster and less 
expensive. However, currently the ADA offers the fastest way for an 
entity to demonstrate that they meet the quality standards 
requirements. We will monitor the number of accreditation choices and 
their impact on rural providers. This will assist us in determining the 
need to make future adjustments.
    Comment: One commenter questioned the superiority of ADA-certified 
programs versus non-ADA-certified programs. Also, commenters 
recommended grandfathering entities that are Medicare-certified for a 
period of 1 year.
    Response: We do not automatically assume that ADA-certified 
programs are superior to non-ADA certified programs. By statute, 
Congress has recognized that those programs that have been approved as 
meeting the NSDSMEP quality standards meet our quality standards. Other 
programs may apply to become an accrediting organization. Also, we must 
fulfill the statutory requirement that all approved entities meet a set 
of quality standards. The statute does not provide for a transition 
period for the quality requirement. Therefore, we do not believe that 
it is prudent to grandfather older programs for any period of time 
under our new payment systems.
    Comment: A few commenters questioned if we have studied the 
capacity of ADA-certified programs to furnish services to the Medicare 
population.
    Response: We studied the access issue and the growth rate of ADA-
recognized programs. As of June 2000, ADA has recognized 819 diabetes 
self-management training programs and 482 satellite offices. The number 
of existing ADA-recognized programs has increased significantly since 
the publication of the proposed rule in 1999, when the number of ADA-
recognized programs was 575. At this steady growth rate, we believe the 
existing ADA-recognized programs, coupled with the anticipated 
increased number of programs certified by other accreditation 
organizations, will be adequate to serve the Medicare beneficiaries and 
resolve the access issue.

HCFA Process for Approving National Accreditation Organizations 
(Sec. 410.142)

    Comment: Some commenters suggested that the accreditation 
requirement was not clearly stated in Sec. 410.142 and we should 
explain how we will evaluate quality standards.
    Response: We sometimes use national accrediting organizations to 
determine whether a provider entity meets some or all of the 
requirements that are necessary in order to provide a service for which 
Medicare payment can be made. Entities not currently recognized by the 
ADA, must become accredited by a HCFA-approved accreditation 
organization or recognized by the ADA until August 27, 2002. Given the 
number of Medicare providers or suppliers who are permitted to bill for 
this service if they are found to meet the quality standards, we have 
determined that it will be more efficient to use a national accrediting 
organization to evaluate a prospective diabetes educator, rather than 
increasing our workforce in order to conduct the necessary evaluations.
    Before we can approve an accrediting organization, we must know 
what quality standards the organization plans to use to evaluate 
applicants. Also, we normally must determine that those standards meet 
or exceed our quality standards. As we have stated, we will not review 
any changes to the NSDSMEP quality standards. Still, we need to make 
sure that the accrediting organization will be properly evaluating 
prospective applicants based on one of the three sets of quality 
standards described in Sec. 410.144.
    For any accreditation organization, to become approved by us, we 
would need to determine that the organization would be using either the 
HCFA quality standards, the NSDSMEP quality standards, or some other 
standards that meet or exceed our quality standards in Sec. 410.144(a). 
These alternative standards could include the standards of a national 
accreditation organization that represents individuals with diabetes, 
that we have approved. When the standards of a national accreditation 
organization vary in any way from either the HCFA quality standards or 
the NSDSMEP quality standards, they must meet or exceed the HCFA 
quality standards. If an organization proposes the use of standards 
that include more quality measures but still meets the core HCFA 
quality standards, those standards may be determined to ``exceed'' the 
HCFA quality standards.
    In developing our standards, we used the NSDSMEP quality standards 
as a model. The Congress found that individuals or entities that met 
the NSDSMEP quality standards would be deemed to meet the quality 
standards that we would promulgate by regulation. Therefore, we 
believed it was important to consider the same topics and issues as had 
been previously considered by the diabetes community.
    After evaluating the quality standards the accrediting organization 
would use, we will look at its processes to ensure

[[Page 83137]]

that the organization meets our accreditation requirements. We will use 
these requirements to evaluate all organizations that request our 
approval as an accreditation organization for diabetes self-management 
training programs.
    We are committed to implementing quality standards that impose a 
minimum burden to entities seeking to become approved accredited 
organizations while simultaneously ensuring access to quality diabetes 
self-management training for Medicare beneficiaries.
    Comment: Commenters were concerned about the use and timeliness of 
our approval process for accreditation organizations.
    Response: The 210-day deadline for completing the approval process 
is specified in section 1865(b)(3)(B) of the Act. However, we will 
strive to complete the process as expeditiously as possible. The 
process includes our publication of two notices in the Federal 
Register. The first notice would solicit comments on the accreditation 
organization's accreditation program, and the second notice notifies 
the community of the approval or disapproval of the accreditation 
organization. The nature of the process requires that sufficient time 
be included for essential correspondence between us and the 
accreditation organization. The time required to complete the process 
will be substantially reduced if an organization requesting approval as 
an accreditation organization submits a comprehensive application that 
addresses all the requirements in this final rule.
    We recognize that the normal time frames for approving accrediting 
organizations may cause a delay. We remain committed to ensuring that 
beneficiaries receive, and that providers can bill for these expanded 
services, as quickly as possible. Thus, in order to ensure access to 
expanded quality services while accrediting organizations are being 
approved, we are amending the final rule to deem an entity to meet the 
NSDSMEP quality standards described in Sec. 410.144(b), if the entity 
provides the Medicare contractor that will process its claims with a 
copy of a current certificate the entity received from the ADA that 
verifies the training program it furnishes meets the NSDSMEP quality 
standards described in Sec. 410.144(b). All organizations (including 
the ADA) may apply to HCFA to become a national accreditation 
organization after January 29, 2001. We will strive to review and 
approve the applications as expeditiously as possible. We expect after 
the initial 18 month period expires, that there could be several 
accrediting organizations thereby eliminating any access concerns.
    Comment: Many commenters were concerned with our proposed 
provisions in Sec. 410.142 to approve only national accreditation 
organizations. They believe this would severely limit a Medicare 
beneficiary's access to diabetes self-management training in some rural 
and nonmetropolitan areas where State (not national) certification 
programs exist. Commenters noted that State-certified programs use 
standards that are comparable to the NSDSMEP quality standards. They 
believed that we should allow the use of both national and State 
accreditation organizations or grandfather the State-certified programs 
in for a period of 3 years. Commenters further contended that national 
accreditation incurs high costs, recordkeeping burdens, and resource 
management issues; and that beneficiaries in rural and nonmetropolitan 
areas would be required to travel many miles to reach a nationally 
accredited program.
    Response: Section 1865(a) of the Act requires the use of 
``national'' accreditation organizations for the accreditation of 
providers and suppliers of Medicare services. Permitting the use of 
State-accreditation organizations for this purpose would require a 
statutory change.

Team Approach (Sec. 410.144(a)(4))

    Comment: The HCFA quality standards require, in Sec. 410.144(a)(4), 
that diabetes self-management training services are to be furnished by 
a multidisciplinary team. One commenter suggested that the 
multidisciplinary team approach may cause discomfort for some 
beneficiaries. One commenter stated that the delivery of services using 
a multidisciplinary team is impractical in small communities due to the 
difficulty in assembling a full team in this environment. However, 
other commenters agreed that patients with diabetes are best served by 
a multidisciplinary team.
    Response: We have consulted several groups and organizations active 
in the field of diabetes education and training. They all agreed that 
diabetes self-management training should be an interactive 
collaborative process involving beneficiaries with diabetes, their 
physicians, and their educators. We continue to believe that the 
multidisciplinary team concept set forth in Sec. 410.144(a)(4), is the 
best way for Medicare beneficiaries to receive diabetes self-management 
training. The multidisciplinary team members are necessary to bring the 
appropriate expertise to educate beneficiaries in the 15 training areas 
described in Sec. 410.144(a)(5). Therefore, we are requiring that all 
appropriate team members be present during the portion of the training 
for which they are responsible and must directly furnish the training 
within their scope of practice. Also, we believe that educators serving 
diverse populations will use their experience, interpersonal skills, 
and sensitivity to meet a Medicare beneficiary's individual needs.
    Further, consistent with our understanding that interactive, 
collaborative, skill-based training methods are required for effective 
diabetes education, in Sec. 410.144(a)(6)(iii) we will require entities 
to maximize the use of interactive training.
    Given the need to address each patient's individual needs, maximize 
the effectiveness of training, and facilitate interactive learning 
during group training sessions, we anticipate that in most 
circumstances more than one team member will need to be present for the 
entirety of each training session. For example, each patient in a group 
training session will likely have individual concerns regarding diet, 
exercise, and home glucose monitoring. In order to adequately address 
these concerns, one-on-one interaction between a patient and a team 
member will frequently be needed. This interaction between each team 
member and patient is important to develop a bond of trust. In fact, a 
single training session may involve teaching several content areas due 
to the educational requirements of each patient. Such situations may 
require the presence of more than one team members for the entire 
training session, as needed. We encourage approved entities in rural 
areas to create arrangements to meet the team approach objective while 
still meeting Medicare and State general requirements.
    Comment: Some commenters suggested we replace the CDE requirement 
in proposed Sec. 410.144(a)(4) with a less stringent alternative 
certification requirement, that is, to limit the amount of diabetes 
training to a certain number of hours or days. One commenter 
recommended that practitioners from any health care professions should 
be allowed to apply as a CDE.
    Response: Based on the available literature, we continue to support 
the CDE requirement to ensure quality. We believe the comprehensive 
scope and standards of practice for CDEs will be beneficial to diabetes 
patients and will

[[Page 83138]]

ensure the quality of services furnished. Also, we do not regulate the 
process for becoming a CDE. The NCBDE is currently the sole entity that 
meets our requirements for CDE certification, including the specific 
health care professions that are eligible to apply as CDEs. This does 
not preclude us from considering other organizations in the future, if 
comparable certification organizations are formed that will also ensure 
quality.
    Comment: Some commenters believe that the requirement of a 
multidisciplinary team approach will have a negative effect on access 
to training in rural areas, due to the varying accessibility of 
specific team members in those locations. For this reason they believe 
that mandatory members of the team should be expanded to include such 
professionals as pharmacists.
    Response: The proposed rule required that the team consist of at 
least a registered dietitian and a CDE who have didactic experience and 
knowledge of diabetes clinical and educational issues. (If the team 
includes a registered nurse, an approved entity may delay 
implementation of the requirement for a CDE until February 27, 2004.) 
We found that registered dietitians and registered nurses bring unique 
qualifications to the team that are essential for furnishing adequate 
training, such as specific assessment of patients metabolic needs, plan 
of care, and refinement of nutrition therapy. Pharmacists, though not 
mandatory members of the team, can participate as optional team 
members, program coordinators, or team sponsors if they qualify as 
approved entities. Furthermore, pharmacists have the option of becoming 
CDEs, which would enable them to be included as core team members.
    Comment: Many commenters voiced concern that the proposed 
requirement in Sec. 410.144(a)(4)(i)(A) for the team to include at 
least a dietitian and a CDE would create hardship for programs in rural 
areas.
    Response: The purpose of this final rule is to expand access to 
beneficiaries with diabetes by providing coverage for outpatient 
diabetes self-management training. We believe the establishment of a 
staff quality standard will promote desired outcomes that result in 
improved health status of beneficiaries with diabetes. Those in the 
field of Diabetes Self-Management Education, national organizations 
such as the ADA, the American Association of Clinical Endocrinologists, 
the Diabetes Treatment Center of America, and the American Medical 
Association generally accept that team requirements are appropriate.
    We closely evaluated the Diabetes Educator Certification 
requirement that begins with requiring applicants to hold a current 
unrestricted United States license or registration as a registered 
nurse, dietitian, pharmacist, physician, physician assistant, 
podiatrist, or be a health care professional with a minimum of a 
master's degree from a United States college or university in one of 
the following areas of health care practice: nutrition, social work, 
clinical psychology, exercise physiology, health education, or public 
health. This is followed by a prerequisite certification examination 
requirement of a minimum of 2 calendar years experience in direct 
diabetes patient and self-management education, that is, working a 
minimum of 1,000 hours in direct diabetes patient and self-management 
education in those 2 years or within a 5-calendar-year period before 
application for certification. Patient teaching is a skilled service 
and patient education can affect outcomes of care, for example, HbA1C 
control, medication management, reduced hospitalization from diabetic 
complications, and patient compliance.
    We believe the comprehensive scope and standards of practice for 
CDEs will be beneficial to patients with diabetes and will ensure the 
quality of services furnished. We are aware of a potential shortage of 
CDEs in some areas, and many primary care physicians may have 
registered nurses providing diabetes education at present. Therefore, 
we will delay the implementation of the requirements for a CDE until 
February 27, 2004, if the team includes a registered nurse. 
Furthermore, we added a provision in Sec. 410.144(a)(4)(ii) to allow 
programs in rural areas that have a single individual who is qualified 
both as a registered dietitian and as a CDE to meet the 
multidisciplinary team requirement.

Performance Measurement and Quality Improvement Sec. 410.144(a)(9))

    We requested comments on the requirement for standardized 
performance measures in the preamble of the proposed rule, following 
the discussion on HCFA's quality standards. We did not receive any 
comments.
    However, standardized performance measurement for continuous 
quality improvement is an effective methodology for the development, 
implementation, maintenance, and enhancement of quality diabetes self-
management education. The effectiveness of any systematic educational 
effort is dependent on clearly defining set organizational goals, 
collecting and analyzing data, and identifying and implementing process 
improvement measures. Continuous quality improvement involves 
continuing quantitative and qualitative analysis of processes and 
health and satisfaction outcomes. Therefore, we are maintaining 
performance measurements and quality improvement as part of the HCFA 
quality standards.
    The continuous quality improvement process relies on a demonstrated 
organizational commitment to provide quality diabetes self-management 
education, and an ongoing effort by all organization and diabetes self-
management education team members to meet the needs and expectations of 
individuals with diabetes and other consumers. Quality improvement 
goals and objectives are consistent with the organizational goals and 
are based on an assessment of the diabetes self-management education 
entity's target populations.
    We will establish the performance standards under a separate 
rulemaking.

Peer Review Organization Review (Sec. 410.144(a)(10))

    Comment: Some commenters stated the opinion that the PRO review 
described in proposed Sec. 410.144(a)(10) is a costly, bureaucratic, 
and unnecessary measure to require of diabetes self-management training 
programs. Commenters expressed concern over their mandatory 
participation in PRO projects. Many commenters warned against 
promulgating a final regulation that is too prescriptive. They 
emphasized that what is needed, above all, is flexibility to design a 
program that meets the needs of all sizes and specialties, rather than 
a ``one-size-fits-all'' regulation.
    Response: We believe that quality improvement initiatives are 
necessary to improve the health care furnished to Medicare 
beneficiaries. PROs are tasked with improving quality of care for 
beneficiaries and have experience in evaluating quality initiatives. In 
response to public comments, we are implementing a more flexible 
approach in our final rule. We are providing flexibility with the 
appropriate amount of accountability. Specifically, we have modified 
the requirement for participation in a PRO project for an entity that 
uses the HCFA quality standards. An entity, having an agreement with a 
PRO may either: (1) Participate in a quality improvement project 
defined by the PRO, or (2) if the entity elects not to participate in 
the PRO project, it must be able to demonstrate a level of achievement

[[Page 83139]]

through a project of its own design. The alternative project must be 
comparable to, or better than, the achievement to be expected from 
participation in the PRO-designed project, and must focus on maximizing 
outcomes by improving patient safety and quality of care. An entity 
must measure, analyze, and track quality indicators, including adverse 
patient events or other aspects of performance that reflect processes 
of care and program operations. This approach will allow an entity the 
flexibility to invest appropriate efforts in its quality improvement 
project and the freedom to make decisions about the best way to improve 
the quality of care. The NSDSMEP have a similar provision. Standard 10 
requires an entity to use a continuous quality improvement process to 
evaluate performance of its program and to determine opportunities for 
improvement. An entity using the process described in the NSDSMEP must 
define organizational goals, collect and analyze data, and identify and 
implement process improvement measurement. The NSDSMEP standard is 
substantially equivalent to the HCFA quality standards but does not 
require an agreement with a PRO.
    To aid an entity in developing its own quality improvement 
projects, we are providing the following guidance:
     Improvement projects--These projects are based upon an 
entity's own assessments of its performance and must show measured, 
sustained results that actually benefit patients. Because most 
organizations usually identify more improvement opportunities than they 
can initiate, improvement project priorities must be set. Therefore, 
these priorities must be established by the entity. Although we do not 
require a specific number of projects, we do expect an entity to 
improve its performance on at least one outcome or quality indicator 
each year as stated in this rule (Sec. 410.144 (a)(9)(B). An entity can 
use certain factors such as, the expected impact on performance or the 
selection of high-risk, high-volume, or problem-prone processes. These 
factors are helpful in setting project improvement priorities.
     Peer Review Organization Projects--We developed criteria 
to help PROs select clinical topics for quality improvement projects. 
These criteria were designed to ensure that a project has the greatest 
possible likelihood of significantly impacting the health outcomes of 
Medicare beneficiaries. An entity may use these same criteria in 
determining which projects best encompass its particular needs, and in 
determining if projects the entity identifies will be comparable to the 
expected outcomes of those projects identified by the PRO.
    There are two basic areas of consideration used when establishing 
criteria for selection of PRO projects: (1) Identifying clinical 
topics, and (2) prioritizing clinical topics. The following information 
is provided as guidance for an entity in choosing clinical topic areas 
for quality improvement projects.
Identifying Clinical Topics
    There are four criteria to assess when identifying clinical topics: 
prevalence, science, measurability and the opportunity to improve care 
(OIC). These criteria address the issues central to identifying 
appropriate clinical topics and quality indicators.
     Prevalence/Incidence and Disease Impact--The burden 
(morbidity/mortality) of the clinical condition or medical procedure 
under consideration is great for the population affected. The burden 
within a sub-population (for example, minority, disabled, at-risk, 
etc.) may be another consideration that is taken into account.
     Science--There should be scientific consensus through 
multiple independent observations and/or clinical trials that changing 
a process or procedure of care will measurably improve patient 
outcomes.
     Measurability--The process(es) or outcome(s) of care for 
the topic can be stated in clearly defined, discrete, quantifiable data 
elements from data sources which are valid and reliable; accessible in 
a timely manner; from appropriate care settings; and when necessary, 
span the continuum of care. In addition to the final measures of 
outcome, interim measures of progress toward achieving the quality 
improvement goal are desirable.
     Opportunity to Improve Care--Not only should the process 
or outcome be measurable, there should be a gap between current 
performance and what can reasonably be achieved. The wider the gap 
between the present situation and what is feasibly achievable, the 
greater the opportunity is for improvement. Additionally, there must be 
a feasible means of narrowing that gap. Measuring the problem is not 
sufficient. The entity must also be reasonably certain that the actions 
can improve the situation.

Prioritizing Clinical Topics

    Clinical topics meeting identification criteria above should be 
further prioritized. The following criteria should be helpful in that 
process. Although it is likely that no topic will consistently meet all 
of the criteria, proposed topics can be compared on the basis of the 
number and degree to which the criteria are met.
     Previous Project or Pilot Studies--Demonstrate previous 
experience with the proposed project methodology or demonstrate that a 
project of similar design can reasonably be expected to improve health 
care outcomes. Potential priority topics should have been the subject 
of previous successful projects by PROs or other organizations. Here, 
the focus is on selecting topics for which quality improvement has 
previously been demonstrated or on replicating successful project 
methodologies.
     Adequate Program Resources--The entity would consider the 
adequacy of the resources (time, personnel, and funding) to implement 
the quality improvement project. Alternative potential projects with 
similar costs should be compared for their relative potential benefit. 
Whenever feasible, topics that make use of existing data sets should be 
selected.
     Availability of Partnerships--The entity would select 
topics that allow collaboration with other providers and national, 
regional, and local organizations with similar goals. Collaboration 
with other organizations is encouraged for several reasons: planning, 
implementation and analytic costs can be shared; planned, coordinated 
differences in project methods can be compared for efficacy and cost; 
local lessons learned can be shared and compared; and ideas for second 
and subsequent improvement cycles can be gathered.
     Ability to Enable or Facilitate Ongoing Quality 
Improvement--The entity would select topics and interventions that 
foster or enhance the development of quality improvement efforts that 
extend to care processes and conditions beyond those targeted by the 
improvement project. Some topics may be selected, in part, because of 
the learning value to the intended user (for example, demonstrating 
principles and methods that can be applied by the user to other topics) 
and the sustain ability of the improvements they trigger.
     Likelihood of Success (Readiness)--The entity would 
identify topics that are of interest to the relevant stakeholders who 
will be asked to make improvements. This criterion recognizes the fact 
that significant improvement is not likely to occur if some pivotal 
individuals do not welcome or are not capable of participating in the 
project.
    The criteria will be used as a guide for programs to establish 
priorities when considering whether to implement a PRO project, or 
conduct a project of

[[Page 83140]]

their own. This will aid hospitals in determining if internal projects 
have the potential to yield benefits comparable to, or exceeding 
expectations set by PRO projects.
    Comment: A commenter recommended that the PRO review the State 
diabetes education database to track the differences in health outcomes 
among ADA-recognized programs and non-ADA-recognized programs.
    Response: We plan to track the differences in health outcomes among 
ADA and non-ADA-recognized programs. These plans, however, have not yet 
been finalized and the possibility of a PRO review of State diabetes 
education databases may be considered.

Requirements for deemed entities (Sec. 410.145)

    We proposed under the HCFA quality standards that programs have an 
agreement with a PRO, which has a contract with us to perform quality 
assurance reviews. Among other things, the proposal would have allowed 
the PRO access to beneficiary records. We did not receive any specific 
comments on this point. However, in the final rule, we are extending 
the requirement that all approved entities must provide access to 
beneficiary or group training records to a PRO. Since the review of 
effectiveness of an educational program will rely on evaluation of 
clinical data, we believe the expertise of a PRO is needed to give a 
fair and equitable evaluation of the data. This requirement is 
currently in Sec. 410.145(b)(4), and will facilitate preparation of the 
outcome measures mandated by Congress.
    Recent data shows that diabetes has reached epidemic proportions 
among certain subsets of the Medicare population (Morbidity and 
Mortality Weekly Report 4643, 1014-1018, 1997). We believe that 
participation in quality improvement projects and continuous 
improvement activities are ways that we can encourage better diabetes 
outcomes for Medicare beneficiaries. We believe it is important to 
measure beneficiaries progress as a result of improved education and 
training. Therefore, providing the PRO access to beneficiary and group 
records, will provide us with the raw data we need to measure 
improvement. This is important not only for the programs meeting HCFA 
quality standards, but also for the programs that use alternative 
quality standards.
    With regard to outcome measures, we have only required that 
information be collected on a quarterly basis, in a organized manner, 
which will facilitate the PRO review as well as reduce the burden on 
the approved entities. By making needed information more accessible, it 
will prevent reviewers from spending undue hours locating appropriate 
information. It would also enable approved entities to better evaluate 
their own program. We continue to believe that providers, in this case 
diabetes self-management training programs, must ensure that there is 
an effective, quality-assurance program to evaluate patient care.
    Comment: Some commenters were confused by our use of the term 
``deemed entity'' in this regulation, stating that it does not conform 
with our traditional use of the term in previous regulations.
    Response: In this regulation, we have used the term ``deemed 
entity'' to denote an entity that has been accredited by an approved 
organization as meeting one of the three sets of quality standards 
established in Sec. 410.144. Though deemed by the accreditation 
organization, these entities are not yet approved to furnish the 
training and receive Medicare payment until they have been approved by 
us. Our reason for making this distinction is to differentiate entities 
that meet quality requirements (as determined by an accrediting 
organization) from those that have received final approval from us and 
can be properly paid under Medicare.

Outcome Measurements

    Comment: In response to our specific request, several commenters 
submitted suggestions for developing outcome measurements. One 
commenter recommended that we monitor the following: the percentage of 
patients having an annual dilated examination; the percentage of 
patients with a glycosylated hemoglobin (HbA1C) level that is 2 percent 
below the upper normal range; the percentage of patients who filled 
blood glucose test strip prescription; the percentage of patients with 
retinal photo-coagulation procedures; the percentage of patients with 
amputation; the percentage of patients with frequent hospitalization or 
emergency room visits due to diabetic complications; and the frequency 
of foot examination. Other alternatives suggested included using the 
Health Plan Employer Data and Information Set 2000 (HEDIS), and 
performing a State-based pilot program to determine the evaluation of 
the feasibility of using outcome measurements.
    Response: We evaluated the comments to measure specific items and 
we also considered using different methods of evaluating outcome 
measurements that had previously been established, such as HEDIS. We 
have decided to reduce our collection of information to a few 
meaningful topics that are a part of the patients medical record, and 
we are eliminating the collection of information that is duplicative or 
less useful.
    As a result of comments, we developed a new provision 
(Sec. 410.146) on outcome measurements. Collection of outcome data 
based on Sec. 410.146 will be required after February 27, 2001.
    The following data must be collected and made available to the PRO 
upon request: educational goals; patient information, including 
duration of the diabetic condition, use of insulin or oral agents, 
height and weight by date, results and date of last lipid test, results 
and date of last HbA1C, information on self-monitoring (frequency and 
results), blood pressure and the corresponding dates; assessment of 
educational needs; program goals; plan for assessing achievement of 
program goals between 6 months and 1 year after the end of the training 
(obtained from the patient survey, primary care physician contact, and 
follow-up visit); and documentation of the evaluation of program goals.
    Section 4105(c) of the BBA requires the Secretary to establish 
outcome measures for the purpose of evaluating the improvement of the 
health status of Medicare beneficiaries with diabetes. The BBA also 
requires that the health status information of Medicare beneficiaries 
with diabetes, as measured under the outcome measures, be periodically 
reported by the Secretary to the Congress for the purpose of making 
recommendations to modify coverage under the Medicare program.
    Outcome measurement information is a quality tool which will 
measure the effectiveness of care given to beneficiaries. In keeping 
with the PROs role of quality improvement, the PROs need information to 
assess the effectiveness of care. Access to outcome measurement data 
also allows the PROs to engage in quality improvement initiatives with 
the training programs that meet our quality standards. In 
Sec. 410.146(a) we require all approved entities to effectively report 
beneficiary health outcome information to the PROs.
    We realize diabetes self-management training will be a new service 
for many and that there will be varying levels of experience. For this 
reason, we encourage training programs to use the PRO and other 
resources to assist in the development and growth of these programs. By 
requiring an approved entity to collect outcome measures, we set a 
clear expectation that the training program must take a proactive 
approach

[[Page 83141]]

to monitor, track, and improve, as necessary, their performance and 
outcomes of care.
    We state that information must be organized in a systematic manner, 
and at least collected on a quarterly basis. By requiring quarterly 
documentation, we are allowing sufficient time to assess changes in 
blood levels, compliance, and learning needs. Simultaneously, we will 
have the needed documentation to track beneficiaries on a regular 
basis.

Payment for Outpatient Diabetes Self-Management Services (Sec. 414.63)

    Comment: Many dietitians commented that they believe the final 
regulation should provide for the direct payment to registered 
dietitians. They believe that to deny direct payment to them is in 
conflict with the requirement in Sec. 410.144(a)(4), requiring a 
registered dietitian as a member of the multidisciplinary team 
providing diabetes self-management training. The commenters believe 
nutritional counseling is the cornerstone of effective diabetes care 
and control, and that only registered dietitians are uniquely qualified 
to provide this service.
    Response: The BBA, which established the statutory authority for 
expanded coverage of outpatient diabetes training, explicitly requires 
that a `certified provider' be a physician or other individual or 
entity that ``in addition to providing diabetes outpatient self-
management training, provides other items or services for which payment 
may be made'' under the Medicare program. Though training furnished by 
registered dietitians is essential to high quality outcome 
measurements, dietitians do not furnish other services for which direct 
Medicare payment may be made. Thus, dietitians do not qualify as 
approved entities for the purpose of receiving direct payment for 
outpatient diabetes training. A CDE can be part of a team that can be 
an approved entity (for example, an employee of a physician who is an 
approved entity, or as an independent contractor of a hospital that 
furnishes training onsite at the hospital). Each core member of the 
multidisciplinary team is essential to the success of the diabetes 
self-management education program. However, this does not mean that 
each core team member of an approved entity has a right to be paid 
directly by the Medicare program.
    Comment: Several commenters suggested that we cover core diabetes 
education for Medicare beneficiaries once in a lifetime, not to exceed 
$330, and follow-up visits, if needed, not to exceed $170 per year. By 
limiting the dollar amount instead of the number of hours, these 
commenters suggest that clinicians could take responsibility for 
customizing a cost-effective treatment plan to best meet the needs of 
the patient. For example, $330 could be used for 6 hours of individual 
training or 10 hours of classroom training. It would save time, 
paperwork, and preserve the Medicare budget.
    Response: Under the proposed rule, payment is made for training 
sessions actually attended by the beneficiary and not for packages of 
training sessions. We believe this payment methodology is important to 
ensure that needed training is received and to give us information that 
we can later use to evaluate the effectiveness of the benefit. 
Therefore, in Sec. 414.63(c), we retain the requirement that payment is 
made for training sessions actually attended by the beneficiary and 
documented on attendance sheets by half-hour units. We, however, agree 
that the benefit allows for a once in a lifetime core of training. We 
provide clarification in Sec. 410.141(c).
    Comment: The State of Maine Department of Human Resources 
recommends that FQHCs be allowed to receive payment for diabetes self-
management training similar to that proposed for hospital outpatient 
department programs. The current practice of bundling into the facility 
rate does not provide sufficient payment to the health center for 
coverage of a registered nurse and a registered dietitian with training 
in diabetes education. In 20 years, only 220 individuals with diabetes 
have completed the diabetes education program at the Maine FQHC.
    Response: We explained in the preamble of the February 1999 
proposed rule that if outpatient diabetes self-management training is 
furnished in a FQHC or a RHC setting by a nonphysician practitioner, 
the services would be bundled into the facility rate. Separate payment 
for the professional services of nurse practitioners, physician 
assistants, and clinical nurse specialists furnished in an RHC or FQHC 
setting is not permitted. The professional services of these 
nonphysician practitioners are bundled with other facility services 
when furnished to patients under the RHC and FQHC benefits. The payment 
made to the RHC and FQHC under the all-inclusive rate specifically 
accounts for the services of these nonphysician practitioners furnished 
in the RHC or FQHC setting because the facility payment rate reflects 
the costs of these services.
    Comment: Some commenters requested that we review the payment 
schedule proposed for the diabetes self-management training. Commenters 
stated that the proposed payment rates were inadequate and work at 
cross-purposes to our requirement that approved entities improve 
patient outcomes. The commenter stated that the rates based on average 
salaries of RNs and dietitians that are currently employed in 
institutions may not be comparable with those paid to community 
pharmacists. Also, the proposed reimbursement rates did not account for 
the significant administrative costs, costs of peer review, and the 
costs of accreditation that noninstitutional certified providers would 
incur to participate in the program.
    Response: We believe that the payment rates for outpatient diabetes 
self-management training are reasonable. The initial payments for 
outpatient diabetes self-management training are based on resource-
based RVUs. The RVUs reflect practice expense and malpractice expense. 
They were established in a manner consistent with how we establish 
payments for other new services under the physician fee schedule. Like 
other services paid under the physician fee schedule, the actual 
payment amounts will vary among geographic areas to reflect differences 
in costs of practice as measured by the Geographic Practice Cost 
Indexes.
    Comment: One commenter objected to the methodology used for 
determining practice expense RVUs on an average group of 10, simply 
because groups of 2 to 20 participants are allowed under proposed 
Sec. 410.141(b)(4). The commenter believes this assumption was flawed. 
The commenter stated that most groups would have fewer than 10 
patients.
    Response: In the February 1999 proposed rule, we outlined how 
payment amounts were developed for the training, including our premise 
that an average group will consist of 10 people. We continue to believe 
that 10 participants is a reasonable group size for purposes of 
estimating resource inputs for these services. We will reconsider this 
in the future once we gain additional experience and information about 
how these services are being furnished. Any changes to the payment 
amount will be proposed and finalized in the annual publication of the 
physician fee schedule.
    Comment: Several commenters stated that end stage renal disease 
(ESRD) facilities fall under the definition of approved entities that 
furnish outpatient

[[Page 83142]]

diabetes training. The commenters recommend that a method be 
established to ensure that dialysis facilities can be directly paid 
under this initiative.
    Response: The requirements in Sec. 414.63 state that payment for 
outpatient diabetes self-management training is made under the 
physician fee schedule. We agree, however, that these facilities that 
are not normally paid under the physician fee schedule may qualify to 
be an approved entity if they meet all the criteria for providing this 
service. In this final rule, we added a new Sec. 414.63(d), to provide 
for ``Payments made to those not paid under the physician fee 
schedule''. ESRD facilities that qualify will bill the fiscal 
intermediary for these services using the appropriate HCFA Common 
Procedure Coding System (HCPCS) codes. The same quality standards and 
other requirements apply in any setting. The payment amount for a 
qualifying ESRD facility will be the same as the amount established for 
an entity paid by a carrier.
    Comment: Commenters expressed some concern regarding the differing 
payment methodologies for homebound beneficiaries.
    Response: Homebound beneficiaries under the prospective payment 
system (PPS) bundled payment for home health services receive diabetes 
education in the form of a home visit from a qualified practitioner 
with diabetes knowledge. We note, however, that home health agencies do 
not receive a separate payment under this benefit for services 
furnished to homebound beneficiaries. We will not pay twice for similar 
services under two different benefits.

Billing for Training in 30-minute Increments (Sec. 424.44(d))

    Comment: Many commenters requested that we change the billing codes 
to 30-minute increments and that we explain how payment rates are 
developed.
    Response: In response to comments, we have revised proposed 
Sec. 424.44(d) to require billing of initial and follow-up training in 
half-hour increments. Also, we are revising the HCPCS codes for 
diabetes outpatient self-management training so that training session 
units are now equal to 30-minute increments. The codes are G0108 for 
individual diabetes outpatient self-management training per 30 minutes 
and G0109 for a group session (2 to 20) diabetes outpatient self-
management training per 30 minutes. Before the effective date of the 
final regulation, we will issue program instructions that will 
implement the 30-minute billing increment.
    The payment rates for these services are part of the physician fee 
schedule, which is updated annually. For calendar year 2000, the 
national payment rate is $60.41 (practice expense relative value unit 
(RVU) of 1.65) per hour for individual session and $35.88 (RVU of .98) 
per beneficiary per hour in a group session. The malpractice expense 
RVU is 0.1 for both individual and group training. While the current 
physician fee schedule reflects the amount for hourly sessions for both 
individual and group sessions, the revised training codes are now equal 
to 30 minute sessions, the payment rates are billable at one half of 
the fee schedule amount (that is, $30.21 for individual training and 
$17.94 for an individual in a group). Like other services paid under 
the physician fee schedule, the actual payment amounts will vary among 
geographic areas to reflect differences in costs of practice as 
measured by the Geographic Practice Cost Indexes (GPCIs). The Part B 
carrier will furnish payment amounts including the GPCIs to the fiscal 
intermediary for each calendar year.
    In the case of payments made to other approved entities, such as 
hospital outpatient departments, ESRD facilities, and durable medical 
equipment suppliers, the payment will be equal to amounts established 
under the physician fee schedule and made under the appropriate payment 
systems.
    Comment: One commenter was concerned that all indirect and direct 
resource costs have to be included in the payment rate. The commenter 
asserted, for example, that 30 minutes chart time was not accurate and 
the cost of coverage for vacations and sick time was not included. A 
few commenters suggested that we recalculate the payment schedule to 
include the amount of time it takes to complete the documentation 
required for recognition and to meet the Joint Commission on 
Accreditation of Health Care Organizations (JCAHO) standards.
    Response: The estimates we used to establish the proposed payment 
amount were based on consultations with professional groups. As noted 
above, all comments regarding payment amounts were considered during 
the updates to the physician fee schedule. Payments under the physician 
fee schedule are determined in part, by the ``typical'' resource inputs 
(that is, staff, equipment, and supplies needed to furnish each 
service). Because the Congress designated that payment for the service 
would be established under the physician fee schedule, the rules 
regarding development of the rates under the fee schedule apply.
    Comment: Some of the commenters stated that the payment rates to 
approved entities are too low. The proposed fee schedule in 1999, based 
on the average salaries of registered nurses and dietitians, was 
insufficient for other health care providers who could furnish these 
services. The commenters believe that the proposed salary levels would 
prevent many providers from participating in the program.
    Also, one professional association stated that the payment rates 
grossly underestimated the time and administrative costs involved (that 
is, costs for photocopying, achieving CDE accreditation, and general 
administrative expenses) in applying for accreditation as well as 
maintaining the accreditation.
    Response: We do recognize that there are variations among 
individual entities in how they provide services. The 1999 payment 
amounts for these services were established under the physician fee 
schedule in a manner consistent with how we establish payments for 
other services paid under the fee schedule and as required by statute. 
As noted earlier in this section, for calendar year 2000, however, 
adjustments were made to reflect more relative value units for the 
service.

IV. Summary of Changes to the Proposed Rule

    In response to comments on the proposed rule and to provide policy 
clarifications, we made a number of changes in the final rule, which 
are summarized as follows:
     Add to the definitions section, definitions for the 
American Diabetes Association (ADA), National Standards for Diabetes 
Self-Management Education Program (NSDSMEP), and rural. (See 
Sec. 410.140)
     Clarify that the 10-hour initial training is a one-time 
benefit. (See Sec. 410.141(c))
     Permit 1 hour of the 10-hour initial training to be used 
for assessment of the individual's training needs. (See 
Sec. 410.141(c)(1))
     Increase the amount of follow-up training from 1 hour to 
no more than 2 hours of individual or group training. (See 
Sec. 410.141(c)(2))
     Replace the 90-day provision for evidence of poor glycemic 
control (HbA1C level of 9.5 percent) with evidence of inadequate 
glycemic control from HbA1C level determinations of 8.5 percent 3 or 
more months apart in the year before the beneficiary receives initial 
training. (See Sec. 410.141(d)(2))

[[Page 83143]]

     Expand the proposed medical condition criteria for kidney 
complications related to diabetes to include both macroalbuminuria and 
microalbuminuria by changing the medical requirement to ``Kidney 
complications related to diabetes, when manifested by albuminuria, 
without other cause. * * *'' (See Sec. 410.141(d)(5))
     Correct the proposed regulations text by removing the 
term, ``accreditation requirements'' from the crosswalk requirement in 
Sec. 410.142(b)(2).
     Clarify the process an accreditation organization must use 
to notify HCFA of its intent to change its quality standards. (See 
Sec. 410.143(a))
     Require an accreditation program that uses a set of 
quality standards other than our quality standards or the NSDSMEP 
quality standards to ``meet or exceed'' our quality standards rather 
than ``be substantially equivalent to'' our quality standards. (See 
Sec. 410.142(e)(1) and Sec. 410.144(c))
     Reduce the proposed requirement for nonphysician 
professional staff to obtain 14 hours of continuing education every 2 
years to 12 hours of relevant continuing education every 2 years. (See 
Sec. 410.144(a)(3))
     Add a requirement that the certified diabetes educator 
(CDE) on the multidisciplinary team be currently certified by a 
qualified organization that has registered with us. (See 
Sec. 410.144(a)(4))
     Add a requirement that the appropriate team members must 
be present during the portion of the training for which they are 
responsible and must directly furnish training within the scope of 
their practices. (See 410.144(a)(4))
     In rural areas, provide an exception to the multi-
disciplinary team requirement to allow an individual who is qualified 
as both a registered dietitian and as a CDE certified by a qualified 
organization that has registered with us (or as a registered dietitian 
and an RN until 3 years after the effective date of this final rule) to 
furnish training. (See Sec. 410.144(a)(4)) (For purposes of this 
requirement, a rural area (as defined in Sec. 410.140) includes an area 
served by the Indian Health Service.)
     Maximize the use of interactive training methods. (We wish 
to discourage didactic training; that is, simply lecturing 
beneficiaries.) (See Sec. 410.144(a)(6))
     Add a new requirement under our quality standard on review 
of plan of care and goals, for the approved entity to forward a copy of 
the documentation to the referring physician. (See Sec. 410.144(a)(7))
     Add a new requirement under our quality standard on review 
of plan of care and goals, for the approved entity to periodically 
update the beneficiary's referring physician of the beneficiary's 
educational status. (See Sec. 410.144(a)(7))
     Remove requirements for an entity meeting the Secretary's 
quality standards to report to us nationally standardized performance 
measures and to meet minimum performance levels that we establish. (See 
Sec. 410.144(a)(9))
     Provide more flexibility under the HCFA quality standards 
by allowing a program to design an alternate quality improvement 
project. (See Sec. 410.144(a)(10))
     Remove the proposed requirement that we would approve 
subsequent changes to the NSDSMEP quality standards. (See 
Sec. 410.144(b))
     Provide that we may deem an entity to meet the quality 
standards for the first 18 months after the effective date of this 
final rule if the entity provides us with a copy of its certificate or 
proof of recognition from the ADA that verifies the training it 
furnishes meets the NSDSMEP quality standards. (See Sec. 410.145(a)(2))
     Require that all approved entities allow the PRO, under a 
contract with us to have access to beneficiary and group training 
records. (See Sec. 410.145(b)(4))
     Add a new section on Diabetes Outcome Measurements. (See 
Sec. 410.146)
     Provide for payment for outpatient diabetes self-
management training to entities not routinely paid under the physician 
fee schedule. (See Sec. 414.63(d))
     Require billing of initial and follow-up training in half-
hour increments so that training may be furnished in half-hour 
increments. (See Sec. 424.44(d))

V. Collection of Information Requirements

    Under the Paperwork Reduction Act (PRA) of 1995, we are required to 
provide 30-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 PRA 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 
information collection requirements (ICRs) as summarized and discussed 
below.

Section 410.141  Outpatient Diabetes Self-management and Training

    Paragraph (b) of section 410.141 states that outpatient diabetes 
self-management training must be included in a comprehensive plan of 
care and documented in the patient's medical record by the physician 
(or qualified nonphysician practitioner) treating the beneficiary for 
training that meets the requirements of this section.
    While this ICR is subject to the PRA, we believe the burden 
associated with this ICR is exempt in accordance with 5 CFR 
1320.3(b)(2) because the time, effort, and financial resources 
necessary to comply with these requirements would be incurred by 
persons in the normal course of their activities.
    In addition, this section requires that a HCFA-approved entity 
submit its plans of care to HCFA upon request. While the documentation 
and recordkeeping requirement imposed by this section is subject to the 
PRA, the requirements to disclose information to HCFA upon request are 
not subject to the PRA in accordance with 5 CFR 1320.4(a)(2), since the 
disclosure of information to or for a Federal agency during the conduct 
of an administrative action or audit involving an agency against 
specific individuals or entities is exempt from the PRA.
    Paragraph (b)(2)(ii) of Sec. 410.141 requires the physician (or 
qualified nonphysician practitioner) treating the beneficiary to 
document in the beneficiary's medical record the specific medical 
condition that the additional beneficiary training must address.
    We believe the burden associated with this ICR is exempt in 
accordance with 5 CFR 1320.3(b)(2) because the time, effort, and 
financial resources necessary to comply with these requirements would 
be incurred by certified providers in the normal course of business 
activities.
    Paragraph (c)(1)(ii)(B) of Sec. 410.141 requires that the 
beneficiary's physician (or qualified nonphysician practitioner) 
document in the beneficiary's medical record that the beneficiary has 
special needs resulting from conditions such as severe vision, hearing, 
or language limitations that would hinder effective participation in a 
group training session.
    While this ICR is subject to the PRA, we believe the burden 
associated with

[[Page 83144]]

this ICR is exempt in accordance with 5 CFR 1320.3(b)(2) because the 
time, effort, and financial resources necessary to comply with these 
requirements would be incurred by persons in the normal course of their 
activities.
    Section 410.141(e)(3) requires that an entity submit the necessary 
documentation to, and be accredited by, an accreditation organization 
approved by HCFA under Sec. 410.142 to meet one of the sets of quality 
standards described in Sec. 410.144.
    We previously estimated that each accredited certified provider 
would spend 60 hours to complete the requirements every 3 years for an 
estimated total annual burden of 15,000 hours. We received a comment 
that this amount underestimated the effect of the accreditation 
requirement. However, we believe that 60 hours every year, in addition 
to the amount of recordkeeping that would be normal business practice 
for a diabetes self-management training program, is appropriate. We do 
not believe we should count recordkeeping that would occur even in the 
absence of the accreditation requirement.
    We have updated the burden for this provision based on the increase 
in number of programs accredited in the year 2000. We estimate that 819 
approved entities will take 60 hours to complete these requirements 
every 3 years, for an annual burden of 20 hours per certified provider. 
Therefore, the total annual burden imposed by these requirements is 
estimated to be 16,380 hours.
    Section 410.141(e)(4) states that the entity must provide 
documentation to HCFA, as requested, including diabetes outcome 
measurements set forth at Sec. 410.146.
    Since this documentation will be collected as part of an 
administrative action, investigation or audit against specific 
individuals or entities, we believe that this ICR is exempt in 
accordance with 5 CFR 1320.4(a)(2). In addition, we believe that since 
the request for information is addressed to a single person as defined 
in 5 CFR 1320.3(h)(6), the collection does not meet the definition of 
an information collection as defined in 5 CFR 1320.3(c).

Section 410.142  HCFA Process for Approving National Accreditation 
Organizations

    Section 410.142(b) states that a national organization requesting 
out approval and recognition of its accreditation program must furnish 
to us the information and materials described in this section.
    The burden associated with these requirements is the time and 
effort to furnish to HCFA the information and materials described in 
this section. It is estimated that during the first year after 
publication of the final rule it will take 5 national organizations 96 
hours to comply with these requirements. Since organizations will 
generally be approved for at least 6 years, we have annualized the 
total burden to be 96  x  5 = 480 hours/6 years = 80 annual hours.
    Section 410.142(c) states that we may visit the prospective 
accreditation organization's offices to verify information in the 
organization's application, including, but not limited to, review of 
documents and interviews with the organization's staff.
    The burden imposed by this section is the time and effort necessary 
to disclose documentation related to the onsite visit. However, we 
believe that this requirement is exempt from the PRA since it will be 
imposed under the conditions defined in 5 CFR 1320.4 as a result of an 
administrative action and meet the exception(s) to the definition of 
information as set forth in 5 CFR 1320.3(h)(3), (h)(6), and (h)(9); as 
such, they do not meet the definition of an information collection.
    Section 410.142(g) states that an accreditation organization that 
has received our notice of denial of its request for our approval and 
recognition of its accreditation program to accredit entities to 
furnish training may request reconsideration of our decision in 
accordance with part 488 subpart D of this chapter.
    We believe that this ICR is exempt in accordance with 5 CFR 
1320.4(a)(2) since this requirement is the result of an administrative 
action, investigation, or audit against specific individuals or 
entities.
    Section 410.142(h) states that an organization that has received 
our notice of denial of its request for accreditation may submit a new 
request to us if it meets the conditions in this section.
    We anticipate that this requirement will be imposed on fewer than 
10 persons on an annual basis, and, therefore, is not subject to the 
PRA as defined in 5 CFR 1320.3(c).
    Section 410.142(j) states that, at least 6 months before the 
expiration of our approval and recognition of the accreditation 
organization's program, an accreditation organization must request from 
HCFA continued approval and recognition.
    The burden associated with this requirement is the time and effort 
necessary for an organization to submit to HCFA a request for 
reapproval. The burden associated with this requirement is captured in 
Sec. 410.142(b).

Section 410.143  Requirements for Approved Accreditation Organizations

    Section 410.143(a)(1) states that an accreditation organization 
approved and recognized by us must provide to us in a written form and 
on a monthly basis all of the information set forth in 
Sec. 410.143(a)(1)(i) through (a)(1)(iv).
    The burden associated with these requirements is the time and 
effort for an accreditation organization to furnish the required 
information. It is estimated that it will take each organization 4 
hours to complete these requirements. There will be approximately 5 
respondents for a total of 20 annual hours.
    Section 410.143(a)(2) states that, if an organization does not use 
the NSDSMEP quality standards described in Sec. 410.144(b), and wishes 
to change its quality standards that HCFA previously approved, the 
organization must submit its plan to alter its quality standards and 
include a crosswalk between the set of quality standards described in 
Sec. 410.144 and the organization's revised standards. Paragraph (a)(3) 
states that, if HCFA notifies an organization that uses the HCFA 
quality standards described in Sec. 410.144(a) that it has changed the 
HCFA quality standards, the organization must submit to HCFA, within 30 
days of HCFA's notification of a change in the quality standards, its 
organization's plan to alter its quality standards to conform to the 
revised quality standards described in Sec. 410.144(a).
    The burden associated with these requirements is the time and 
effort for an organization to submit its organization's plan. It is 
estimated that it will take each organization 10 hours to comply with 
these requirements. There will be approximately 5 respondents for a 
total of 50 hours.
    Section 410.143(b) states that we (or our agent(s)) may perform 
oversight activities such equivalency reviews, validation reviews, and 
onsite inspections to ensure that an approved accreditation 
organization and the entities the accreditation organization accredits 
continue to meet the quality standards described in Sec. 410.144. In 
addition, an accreditation organization that is dissatisfied with a 
determination to withdraw our approval and recognition may request a 
reconsideration of our decision in accordance with part 488 subpart D 
of this chapter.
    The burden imposed by this section is the time and effort necessary 
to disclose documentation under the reviews and

[[Page 83145]]

inspections. However, we believe that these requirements are exempt 
from the PRA since they will be imposed under the conditions defined in 
5 CFR 1320.4 as the result of an administrative action and meet the 
exception(s) to the definition of information as set forth in 5 CFR 
1320.3(h)(3), (h)(6), and (h)(9); as such, they do not meet the 
definition of an information collection.

Section 410.144  Quality Standards for Deemed Entities

    Section 410.144, in paragraphs (a)(1)(ii) and (iii), requires that 
a deemed entity clearly define and document the organizational 
relationships, lines of authority, staffing, job descriptions, and 
operational policies. In addition, it must maintain a written policy 
that affirms education as an integral component of diabetes care.
    The burden associated with this requirement is the time and effort 
for a approved entity to document and maintain the information 
described above. It is estimated these requirements will take each 
entity 8 hours. There are approximately 819 entities for a total annual 
burden of 6,552 hours.
    Section 410.144(a)(7) states that an entity must review each 
beneficiary's plan of care and develop and update an individual 
assessment in collaboration with each beneficiary and document the 
results, including assessment, intervention, evaluation, and follow-up 
in the beneficiary's permanent medical record.
    The burden associated with this requirement is captured in 
Sec. 410.141(b) above.
    Paragraph (a)(7) also requires that an entity forward a copy of the 
documentation in paragraph (a)(7)(ii) to the referring physician and 
periodically update the referring physician about the beneficiary's 
educational status.
    While these information collection requirements are subject to the 
PRA, we believe the burden associated with them is exempt as defined in 
5 CFR 1320.3(b)(2) because the time, effort, and financial resources 
necessary to comply with the requirement are incurred by persons in the 
normal course of their activities.Section 410.144(a)(9) states that an 
entity must establish and maintain a performance measurement and 
quality improvement program that meets the requirements of this 
section. In addition, if requested, an entity must report to us 
nationally standardized performance measures to the extent that they 
become available in the future and the Secretary determines they are 
appropriate.
    While the requirements to maintain documentation and the reporting 
of nationally standardized performance measures are subject to the PRA, 
the requirements to disclose information to us upon request are not 
subject to the PRA in accordance with 5 CFR 1320.4(a)(2), since the 
disclosure of information to or for a Federal agency during the conduct 
of an administrative action, investigation, or audit involving an 
agency against specific individuals or entities is exempt from the PRA.
    Therefore, the burden associated with this section that is subject 
to the PRA is the time and effort necessary for an entity to maintain 
documentation related to the performance measurement and quality 
improvement program and the reporting of nationally standardized 
performance measures. It is estimated that the recordkeeping 
requirements will take each entity 3 hours on an annual basis. Since 
there are approximately 819 entities, we estimate a total annual burden 
of 2,457 hours. Since HCFA is not currently requiring entities to 
report nationally standardized performance measures, we are not 
assigning any burden to this requirement. When HCFA does mandate the 
requirement to report these performance measures, the burden associated 
with this requirement will be adjusted accordingly. We solicit comments 
on how long fulfilling this requirement will take.

Section 410.145  Requirements for Approved Entities

    Section 410.145(a)(1)(i) states that an entity may be approved to 
meet our standards described in Sec. 410.144 if the entity has 
submitted necessary documentation and is fully accredited (and 
periodically reaccredited) by a national accreditation organization 
approved by HCFA. The burden associated with meeting these requirements 
is captured in Sec. 410.141(e)(3).
    Section 410.145(b)(1) through (3) states that an entity may be 
approved if the entity:
     Forwards a copy of its certificate from its accreditation 
organization indicating that the entity meets the HCFA quality 
standards described in Sec. 410.144(a) before submitting a claim for 
Medicare payment.
     Agrees to submit to evaluation (including onsite 
inspections) by us (or our agent) to validate its approved 
organization's accreditation process.
     Authorizes for its approved organization to release to 
HCFA a copy of its most recent accreditation evaluation and any 
accreditation-related information that HCFA may require.
    The burden associated with these requirements is the time and 
effort for an entity to submit a copy of its certificate, along with 
its agreement, and authorization.
    It is estimated that it will take each entity 5 minutes to comply 
with these requirements. There are approximately 819 respondents for a 
total of 68 hours.
    Section 410.145(b)(4) states that, at a minimum, the entity must 
allow a PRO (under a contract with HCFA) access to beneficiary or group 
training records.
    The burden associated with this requirement is the time and effort 
necessary to maintain the necessary documentation and to demonstrate 
that the approved entity meets the requirements of this section.
    We estimate that it will take 819 entities 5 minutes on an annual 
basis to maintain the necessary documentation or to report the results 
of an internal quality assessment program to HCFA for an overall annual 
burden of 68 hours.

Section 410.146  Diabetes Outcome Measurements

    This section requires an entity to collect and record specified 
information for a beneficiary who receives training under Sec. 410.141. 
The section also requires an entity to make the data it collects 
available to a Peer Review Organization upon request.
    The burden associated with this section is that for collecting the 
data and for reporting it, upon request. The burden associated with 
collecting the data, while subject to the PRA, is, we believe, is 
exempt in accordance with 5 CFR 1320.3(b)(2) because the time, effort, 
and financial resources necessary to comply with these requirements 
would be incurred by persons in the normal course of their activities. 
The burden for reporting the data is included with the burden for 
Sec. 410.144.

Section 414.63  Payment for Outpatient Diabetes Self-Management 
Training

    Section 414.63(c) states payment may be made for training sessions 
actually attended by the beneficiary and documented on attendance 
sheets.
    While this documentation requirement is subject to the PRA, we have 
not accounted for its burden because we believe the burden associated 
with this ICR is exempt in accordance with 5 CFR 1320.3(b)(2) because 
the time, effort, and financial resources necessary to comply with 
these requirements would be incurred by persons in the normal course of 
their activities. Although we solicited comments, we did not receive 
any on our conclusion that this activity would not be a burden for 
providers.
    We have submitted a copy of this final rule to OMB for its review 
of the

[[Page 83146]]

information collection requirements described above. These requirements 
are not effective until they have been approved by OMB.
    If you comment on any of these 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, Division of HCFA 
Enterprise Standards, Room N2-14-26, 7500 Security Boulevard, 
Baltimore, MD 21244-1850, Attn: Julie Brown HCFA-3002-F.
and,
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Wendy Taylor, HCFA Desk Officer.

VI. Regulatory Impact Analysis

A. Background

    We have examined the impacts of this final rule as required by 
Executive Order 12866, section 1102(b) of the Social Security Act (the 
Act), the Unfunded Mandates Act of 1995, the Regulatory Flexibility Act 
(RFA) (Public Law 96-354), and Executive Order 13132 (Federalism). 
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). A regulatory impact analysis (RIA) 
must be prepared for major rules with economically significant effects 
($100 million or more in any one year). The statutory provision that 
this rule further implements will cause this to be a major rule and 
economically significant rule because we have estimated that the annual 
costs associated with this rule will be significantly higher than $100 
million beginning in 2001.
    Section 1102(b) of the Act requires us to prepare an RIA if a rule 
has a significant impact on the operations of a substantial number of 
small rural hospitals. This analysis must conform to the provisions of 
section 604 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 requires 
agencies to prepare an assessment of anticipated costs and benefits 
before issuing any rule that may mandate an expenditure by State, 
local, or tribal governments, in an aggregate, or by the private 
sector, of $100 million or more in any one year. We believe that this 
final rule will not mandate such expenditures.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit and not-for-profit organizations, and 
governmental agencies. Most hospitals and most other providers and 
suppliers are small entities, either by nonprofit or not-for-profit 
status, or by having revenues of $5 million or less annually. States 
and tribal governments are not considered to be small entities.
    This final rule provides additional benefit payments to providers 
and suppliers for offering classes on diabetes self-management 
training. In section C. of the RIA we discuss the accreditation 
approval process and acknowledge that some small entities may encounter 
a regulatory burden in obtaining accreditation. We discuss measures 
that we believe will lessen the regulatory burden on these entities.
    This final rule sets forth an expanded benefit for Medicare 
beneficiaries with diabetes who meet the criteria for outpatient self-
management training. This final rule also identifies approved entities 
that may furnish these services, and lists the quality standards that 
must be met by these approved entities. This regulation will primarily 
affect beneficiaries with diabetes and certain health care 
professionals and facilities.
    We estimate that there are 4.5 million Medicare beneficiaries with 
diabetes (approximately 4 million aged beneficiaries and .5 million 
disabled beneficiaries). Of this total, we estimate that about half or 
2.25 million beneficiaries, will receive outpatient diabetes self-
management training. This estimate assumes that the remaining 2.25 
million Medicare beneficiaries either have already received the 
training or do not currently meet the conditions of coverage. These 
beneficiaries may meet the conditions of coverage at a later date, if 
their medical condition changes.

B. Diabetes Costs and Benefits

    After consultation with representatives of various groups and 
organizations active in the field of diabetes education and training, 
we believe it is reasonable to cover up to 10 hours of initial diabetes 
self-management training (allowing 1 individual hour and 9 group hours) 
within a continuous 12-month period and up to 2 hours of additional 
training annually (allowing both hours to be either individual or group 
training in any combination of half-hour increments) for each 
beneficiary that meets the conditions of coverage. We estimate that 
there will be twenty half-hour increments billed in the first year and 
possibly four follow-up increments (up to 2 hours) billed each year 
thereafter.
    The following table displays the estimated Federal Medicare outlays 
for the outpatient diabetes self-management training benefit.

                 Projected Budget Impact of New Benefit
                             [$ in millions]
------------------------------------------------------------------------
           FY 2001             FY 2002    FY 2003    FY 2004    FY 2005
------------------------------------------------------------------------
$150........................       $200       $270       $270       $280
------------------------------------------------------------------------

The costs have been recalculated using year 2000 payment rates updated 
annually, and the following assumptions: (1) Payments reflected in the 
budget projections are for the revised benefit, not the benefit 
implemented earlier under program memorandums; (2) utilization is based 
on capacity of accredited programs; (3) the number of accredited 
programs will increase by 100 every year; (4) beneficiaries will 
receive the full amount of the covered service; and (5) approximately 
2.25 million beneficiaries are eligible to receive the benefit. Based 
on the capacity of the ADA recognized programs in 2000 and the number 
of programs we expect in 2001 through 2005, not all beneficiaries will 
be able to receive the initial training immediately. The costs 
associated with initial training are approximately five times greater 
than the costs that are subsequently incurred for follow-up

[[Page 83147]]

training because 10 hours are allowed for initial training and only 2 
hours are allowed for follow-up training. Therefore, costs associated 
with the benefit decline after the backlog of 2.25 million 
beneficiaries receive initial training even with our assumption that 
all beneficiaries will receive 2 hours of follow-up training each year. 
After 2005, with only approximately 300,000 beneficiaries with diabetes 
becoming eligible annually, costs are expected to drop by approximately 
30 percent. These figures assume all payments for the service are made 
at the full fee-for-service rate minus deductible and coinsurance, for 
all beneficiaries and that all beneficiaries who are eligible for the 
service, receive it.
    If the referral rate is low, or actual utilization is low, we would 
expect the stated figures to be reduced by as much as 50 percent. The 
estimates vary considerably from the proposed rule because we had 
incomplete data at that time.
    The expected costs could be considerable, especially in the first 5 
years, but we also expect substantial benefits. When an individual has 
diabetes, his or her body has trouble making or using insulin, a 
hormone produced by the pancreas. Insulin enables the body's tissues to 
use glucose, a sugar that circulates in the bloodstream and that 
normally provides energy for the body's cells. Because a beneficiary 
with diabetes cannot properly use glucose in the blood, blood glucose 
levels remain high, unless the individual takes appropriate medication 
(such as insulin) or is able to reduce blood sugar levels through diet 
and exercise. The consequences of diabetes can be severe. It is the 
fourth leading cause of death by disease in the United States.
    Diabetes can also result in many other medical problems, including 
heart disease, stroke, kidney disease, loss of sensation and 
circulation in the legs, possibly leading to amputations, and 
blindness. Proper health care and self-management can help circumvent 
these problems or slow their onset.
    There are two critical questions regarding outpatient diabetes 
self-management training: (1) When should the person receive the 
training? (2) How much training should the person receive? Initial 
training may bring about short term behavioral changes. Some experts 
express concern about the difficulty individuals with diabetes may have 
in maintaining behavior changes unless they get additional education 
and support as a follow-up to the initial training. To assure that our 
beneficiaries receive the amount of training and support we believe 
they need to maintain good health or improve their existing health 
status, we will provide, when medically necessary, refresher training 
in a subsequent year following the initial training. We believe that 
this provision of coverage will have a positive result on the Medicare 
program.
    We did not receive public comments on the potential cost and impact 
of the outcome measurement requirement in Sec. 410.146 of this final 
rule. However, we consider that the collection and integration of this 
information into a beneficiary's training file or medical plan of care 
would normally be a part of keeping adequate medical records. We plan 
to monitor specific outcome measurements to assist us in ensuring 
quality programs for our beneficiaries. The only sizeable additional 
cost would be for the photocopying of the records. Under the final 
rule, these photocopying and mailing costs would be reimbursable by the 
PRO.

C. Accreditation Process

    Section 1865 of the Act requires us to determine whether the 
accreditation of a provider or supplier entity by a national 
accreditation organization provides assurances that the applicable 
Medicare health and safety conditions or requirements are met.
    The BBA authorized the Secretary to develop her own quality 
standards. We have condensed the standards originally established by 
the NSDSMEP quality standards and recognized by the ADA. We believe 
that our standards offer sufficient assurances that the outpatient 
diabetes self-management training programs will provide quality care 
and the standards are flexible enough to apply in most health care 
settings.
    The ADA Education Recognition Program is a national voluntary 
process that identifies diabetes self-management training programs that 
meet the NSDSMEP quality standards. The ADA currently recognizes 
outpatient diabetes self-management programs. The ADA has given 
recognition to approximately 819 education programs. Under the 
conditions in this final rule, the ADA, along with any other national 
accreditation organization that wishes to be approved and recognized by 
us, will be required to submit appropriate documentation requesting 
accreditation approval from HCFA. Once we have determined that the 
organization meets our requirements concerning frequency of 
accreditation, accreditation forms, and that the organization uses 
guidelines and instructions to evaluators that are as rigorous as our 
requirements with a similar emphasis on outcomes, they may then be 
approved and recognized as national accreditation organizations.
    We fully expect that the ADA will apply to us as a national 
accreditation organization and be quickly approved to accredit 
entities. Our review of the ADA-recognized programs indicates that 
there is a minimum of at least one program in each State and the 
District of Columbia. These programs are located in both small rural 
hospitals as well as large urban hospitals. While the majority of these 
programs are hospital-based, there are some that are clinics and one in 
Arizona that is an insurance plan.
    We recognize that some small entities such as rural-based 
physicians and free-standing education clinics run by approved entities 
may find the 12-month collection of data and the start-up fees required 
by the ADA to be a burden to their business operations. The approximate 
cost for an entity to get accredited, based on current ADA figures, is 
$850, which includes all application costs. The subsequent triennial 
fee is also $850. Additional items, such as recordkeeping costs and 
other overhead costs, have not been factored into the cost of becoming 
an approved entity. We estimate that there will be a total of 819 
approved entities when this rule is implemented and that the number of 
approved entities will increase by 100 every year until utilization 
should drop affecting the number of new applicants for accreditation. 
The additional private sector cost through 2005 will be $1,121,150.
    We acknowledge that some existing programs that are currently 
accredited by their State or local agency may find it a burden to 
become accredited by a national organization. However, we expect that 
at least four other organizations in addition to the ADA will apply to 
us for recognition and that these entities may find the quality 
standards of these organizations to be substantially equivalent to the 
existing State or local standards.
    The CDC has a cooperative agreement with the 50 States, all United 
States territories, and the District of Columbia. This cooperative 
agreement provides funding for these geographic entities to perform a 
variety of diabetes-related activities. Ten of the States use a portion 
of their funds to administer their State diabetes self-management 
training accreditation programs. Under this final rule, there will be 
no loss of revenue from this cooperative agreement for any of these 
geographic entities. The States that currently use funds from the 
cooperative agreement to administer their State diabetes self-
management

[[Page 83148]]

training programs can either choose to become an organization or choose 
to fund other diabetes-related activities, including the development of 
educational programs for the use of approved entities that desire to 
obtain national accreditation in order to qualify for Medicare payment 
under this benefit.
    One way we are trying to lessen the burden on rural and small 
entities is by postponing the requirement for the CDE to be part of the 
diabetes self-management multidisciplinary team. Diabetes education 
programs are allowed to use a registered nurse instead of a CDE for 3 
years from the effective date of the regulation. This final rule 
requires that diabetes educators and dietitians complete 12 hours of 
approved diabetes-related continuing education every 2 years. The 
approximate cost of obtaining these credits is $300. (This estimate is 
based on diabetes-related training information that we received from 
the American Association of Diabetes Educators.) Existing programs will 
have 3 years from the publication of this final rule to provide 
outpatient diabetes self-management training while preparing to meet 
our standard concerning the CDE.
    We estimate that there will be 819 approved education programs when 
this final rule is fully implemented. Each approved entity will need a 
CDE 3 years from February 27, 2001. We estimate that 1019 approved 
education programs will be available at the time the CDE requirement 
goes into effect. The initial certification of a CDE costs $250 and 
another $300 every 2 years to maintain certification. The initial CDE 
certification will cost approximately $254,750 (1019 * $250) per year 
for CDE certification starting 3 years from February 27, 2001.
    Under the continuing education requirement, a CDE, RN, or a 
registered dietitian must complete 12 credits every 2 years. The costs 
associated with this final rule will be approximately $150 every year. 
In the first year, the estimated total cost for continuing education 
for all CDEs/RNs and dietitians will be $245,700 (819 * 2 * $150 ) for 
all programs. These costs may be less for those rural areas that have a 
single individual who is qualified both as a registered dietitian and 
as a CDE to meet the multidisciplinary team requirement.

D. Conclusions

    We anticipate that this final rule will improve the health of 
Medicare beneficiaries with diabetes by furnishing them with the skills 
and knowledge necessary to effectively manage their diabetic condition. 
We recognize that there may be some burden on existing and new entities 
because of the requirement that they must be accredited by a national 
accreditation body. However, we must ensure that Medicare pays only for 
those programs that are of the highest quality. We believe that the 
overall burden to these entities is worth the benefit that will be 
gained by both Medicare beneficiaries and the Medicare program.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.
    We have reviewed this final rule, under the threshold criteria of 
Executive Order 13132, Federalism. We have determined that it does not 
significantly affect the rights, roles, and responsibilities of States.

List of Subjects

42 CFR Part 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 414

    Administrative practice and procedure, Health facilities, Health 
professions, Kidney diseases, Medicare, Reporting and recordkeeping 
requirements, Rural areas, X-rays.

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare.

42 CFR Part 480

    Health care, Health professional, Health record, Peer Review 
Organizations (PRO), Penalties, Privacy, Reporting and recordkeeping 
requirements.

42 CFR Part 498

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare.

    For the reasons set forth in the preamble, 42 CFR Chapter IV is 
amended as set forth below:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

    A. Part 410 is amended as follows:
    1. The authority citation for part 410 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh), unless otherwise indicated.

    2. In Sec. 410.1, paragraph (a) is revised to read as follows:


Sec. 410.1  Basis and scope.

    (a) Statutory basis. This part is based on the indicated provisions 
of the following sections of the Act:
    (1) Section 1832--Scope of benefits furnished under the Medicare 
Part B supplementary medical insurance (SMI) program.
    (2) Section 1833 through 1835 and 1862--Amounts of payment for SMI 
services, the conditions for payment, and the exclusions from coverage.
    (3) Section 1861(qq)--Definition of the kinds of services that may 
be covered.
    (4) Section 1865(b)--Permission for HCFA to approve and recognize a 
national accreditation organization for the purpose of deeming entities 
accredited by the organization to meet program requirements.
    (5) Section 1881--Medicare coverage for end-stage renal disease 
beneficiaries.
* * * * *

    3. New subpart H, consisting of Secs. 410.140 through 410.146, is 
added to read as follows:
Subpart H--Outpatient Diabetes Self-Management Training and Diabetes 
Outcome Measurements
Sec.
410.140   Definitions.
410.141   Outpatient diabetes self-management training.
410.142   HCFA process for approving national accreditation 
organizations.
410.143   Requirements for approved accreditation organizations.
410.144   Quality standards for deemed entities.
410.145   Requirements for entities.
410.146   Diabetes outcome measurements.

Subpart H--Outpatient Diabetes Self-Management Training and 
Diabetes Outcome Measurements


Sec. 410.140  Definitions.

    For purposes of this subpart, the following definitions apply:
    ADA stands for the American Diabetes Association.
    Approved entity means an individual, physician, or entity 
accredited by an approved organization as meeting one of the sets of 
quality standards described in Sec. 410.144 and approved by HCFA under 
Sec. 410.141(e) to furnish training.
    Deemed entity means an individual, physician, or entity accredited 
by an approved organization, but that has not yet been approved by HCFA 
to furnish and receive Medicare payment for the training. Upon being 
approved by HCFA under Sec. 410.141(e) to furnish training, HCFA refers 
to this entity as an ``approved entity''.
    NSDSMEP stands for the National Standards for Diabetes Self 
Management Education Programs.

[[Page 83149]]

    Organization means a national accreditation organization.
    Rural means an area that meets one of the following conditions:
    (1) Is not urbanized (as defined by the Bureau of the Census) and 
that is designated by the chief executive officer of the State, and 
certified by the Secretary, as an area with a shortage of personal 
health services.
    (2) Is designated by the Secretary either as an area with a 
shortage of personal health services or as a health professional 
shortage area.
    (3) Is designated by the Indian Health Service as a health service 
delivery area as defined in Sec. 36.15 of this title.
    Training means outpatient diabetes self-management training.


Sec. 410.141  Outpatient diabetes self-management training.

    (a) General rule. Medicare Part B covers training defined in 
Sec. 410.140 if all of the conditions and requirements of this subpart 
are met.
    (b) Conditions for coverage. The training must meet the following 
conditions:
    (1) Training orders. Following an evaluation of the beneficiary's 
need for the training, it is ordered by the physician (or qualified 
nonphysician practitioner) (as defined in Sec. 410.32(a)) treating the 
beneficiary's diabetes.
    (2) Plan of care. It is included in a comprehensive plan of care 
established by the physician (or qualified nonphysician practitioner) 
treating the beneficiary for diabetes that meets the following 
requirements:
    (i) Describes the content, number of sessions, frequency, and 
duration of the training as written by the physician (or qualified 
nonphysician practitioner) treating the beneficiary.
    (ii) Contains a statement specified by HCFA and signed by the 
physician (or qualified nonphysician practitioner) managing the 
beneficiary's diabetic condition. By signing this statement, the 
physician (or qualified nonphysician practitioner) certifies that he or 
she is managing the beneficiary's diabetic condition and the training 
described in the plan of care is needed to ensure therapy compliance or 
to provide the beneficiary with the skills and knowledge to help manage 
the beneficiary's diabetes. The physician's (or qualified nonphysician 
practitioner's) statement must identify the beneficiary's specific 
medical conditions (described in paragraph (d) of this section) that 
the training will address.
    (iii) Provides that any changes to the plan of care are signed by 
the physician (or qualified nonphysician practitioner) treating the 
beneficiary.
    (iv) Is incorporated into the approved entity's medical record for 
the beneficiary and is made available, upon request, to HCFA.
    (3) Reasonable and necessary. It is reasonable and necessary for 
treating or monitoring the condition of a beneficiary who meets the 
conditions described in paragraph (d) of this section.
    (c) Types and frequency of training--(1) Initial training.--General 
rule. (i) Medicare Part B covers initial training that meets the 
following conditions:
    (A) Is furnished to a beneficiary who has not previously received 
initial training under this benefit.
    (B) Is furnished within a continuous 12-month period.
    (C) Does not exceed a total of 10 hours.
    (D) Except as permitted under paragraph (c)(1)(ii) of this section, 
9 hours of the training are furnished in a group setting consisting of 
2 to 20 individuals who need not all be Medicare beneficiaries.
    (E) Is furnished in increments of no less than one-half hour.
    (F) May include 1 hour of individual training for an assessment of 
the beneficiary's training needs.
    (ii) Exception. Medicare covers training on an individual basis for 
a Medicare beneficiary who meets any of the following conditions:
    (A) No group session is available within 2 months of the date the 
training is ordered.
    (B) The beneficiary's physician (or qualified nonphysician 
practitioner) documents in the beneficiary's medical record that the 
beneficiary has special needs resulting from conditions, such as severe 
vision, hearing, or language limitations that will hinder effective 
participation in a group training session.
    (2) Follow-up training. After receiving the initial training 
described in paragraph (c)(1) of this section, Medicare covers follow-
up training that meets the following conditions:
    (i) Consists of no more than 2 hours individual or group training 
for a beneficiary each year.
    (ii) Group training consists of 2 to 20 individuals who need not 
all be Medicare beneficiaries.
    (iii) Is furnished any time in a calendar year following the year 
in which the beneficiary completes the initial training.
    (iv) Is furnished in increments of no less than one-half hour.
    (v) The physician (or qualified nonphysician practitioner) treating 
the beneficiary must document, in the referral for training and the 
beneficiary's medical record, the specific medical condition (described 
in paragraph (d) of this section) that the follow-up training must 
address.
    (d) Beneficiaries who may be covered. Medicare Part B covers one 
course of initial training for a beneficiary who has one or more of the 
following medical conditions present within the 12-month period before 
the physician's order for the training:
    (1) New onset diabetes.
    (2) Inadequate glycemic control as evidenced by a glycosylated 
hemoglobin (HbA1C) level of 8.5 percent or more on two consecutive 
HbA1C determinations 3 or more months apart in the year before the 
beneficiary begins receiving training.
    (3) A change in treatment regimen from no diabetes medications to 
any diabetes medication, or from oral diabetes medication to insulin.
    (4) High risk for complications based on inadequate glycemic 
control (documented acute episodes of severe hypoglycemia or acute 
severe hyperglycemia occurring in the past year during which the 
beneficiary needed emergency room visits or hospitalization).
    (5) High risk based on at least one of the following documented 
complications:
    (i) Lack of feeling in the foot or other foot complications such as 
foot ulcers, deformities, or amputation.
    (ii) Pre-proliferative or proliferative retinopathy or prior laser 
treatment of the eye.
    (iii) Kidney complications related to diabetes, when manifested by 
albuminuria, without other cause, or elevated creatinine.
    (e) Who may furnish services. Training may be furnished by a 
physician, individual, or entity that meets the following conditions:
    (1) Furnishes other services for which direct Medicare payment may 
be made.
    (2) May properly receive Medicare payment under Sec. 424.73 or 
Sec. 424.80 of this chapter, which set forth prohibitions on assignment 
and reassignment of benefits.
    (3) Submits necessary documentation to, and is accredited by, an 
accreditation organization approved by HCFA under Sec. 410.142 to meet 
one of the sets of quality standards described in Sec. 410.144.
    (4) Provides documentation to HCFA, as requested, including 
diabetes outcome measurements set forth at Sec. 410.146.


Sec. 410.142  HCFA process for approving national accreditation 
organizations.

    (a) General rule. HCFA may approve and recognize a nonprofit or 
not-for-

[[Page 83150]]

profit organization with demonstrated experience in representing the 
interest of individuals with diabetes to accredit entities to furnish 
training.
    (b) Required information and materials. An organization requesting 
HCFA's approval and recognition of its accreditation program must 
furnish to HCFA the following information and materials:
    (1) The requirements and quality standards that the organization 
uses to accredit entities to furnish training.
    (2) If an organization does not use the HCFA quality standards or 
the NSDSMEP quality standards described in Sec. 410.144(a) or (b), a 
detailed comparison including a crosswalk between the organization's 
standards and the HCFA quality standards described in Sec. 410.144(a).
    (3) Detailed information about the organization's accreditation 
process, including all of the following information:
    (i) Frequency of accreditation.
    (ii) Copies of accreditation forms, guidelines, and instructions to 
evaluators.
    (iii) Descriptions of the following:
    (A) The accreditation review process and the accreditation status 
decision making process.
    (B) The procedures used to notify a deemed entity of deficiencies 
in its outpatient diabetes self-management training program and 
procedures to monitor the correction of those deficiencies.
    (C) The procedures used to enforce compliance with the 
accreditation requirements and standards.
    (4) Detailed information about the individuals who perform 
evaluations for the organization, including all of the following 
information:
    (i) The education and experience requirements for the individuals 
who perform evaluations.
    (ii) The content and frequency of continuing education furnished to 
the individuals who perform evaluations.
    (iii) The process used to monitor the performance of individuals 
who perform evaluations.
    (iv) The organization's policies and practices for participation in 
the accreditation process by an individual who is professionally or 
financially affiliated with the entity being evaluated.
    (5) A description of the organization's data management and 
analysis system for its accreditation activities and decisions, 
including the kinds of reports, tables, and other displays generated by 
that system.
    (6) A description of the organization's procedures for responding 
to and investigating complaints against an approved entity, including 
policies and procedures regarding coordination of these activities with 
appropriate licensing bodies, ombudsmen programs, and HCFA.
    (7) A description of the organization's policies and procedures for 
withholding or removing a certificate of accreditation for failure to 
meet the organization's standards or requirements, and other actions 
the organization takes in response to noncompliance with its standards 
and requirements.
    (8) A description of all types (for example, full or partial) and 
categories (for example, provisional, conditional, or temporary) of 
accreditation offered by the organization, the duration of each type 
and category of accreditation, and a statement identifying the types 
and categories that will serve as a basis for accreditation if HCFA 
approves the organization.
    (9) A list of all of the approved entities currently accredited to 
furnish training and the type, category, and expiration date of the 
accreditation held by each of them.
    (10) The name and address of each person with an ownership or 
control interest in the organization.
    (11) Documentation that demonstrates its ability to furnish HCFA 
with electronic data in HCFA-compatible format.
    (12) A resource analysis that demonstrates that its staffing, 
funding, and other resources are adequate to perform the required 
accreditation activities.
    (13) A statement acknowledging that, as a condition for approval 
and recognition by HCFA of its accreditation program, it agrees to 
comply with the requirements set forth in Secs. 410.142 through 
410.146.
    (14) Additional information HCFA requests to enable it to respond 
to the organization's request for HCFA approval and recognition of its 
accreditation program to accredit entities to furnish training.
    (c) Onsite visit. HCFA may visit the prospective organization's 
offices to verify information in the organization's application, 
including, but not limited to, review of documents, and interviews with 
the organization's staff.
    (d) Notice and comment--(1) Proposed notice. HCFA publishes a 
proposed notice in the Federal Register announcing its intention to 
approve an organization's request for HCFA approval and recognition of 
its accreditation program and the standards it uses to accredit 
entities to furnish training. The notice includes the following 
information:
    (i) The basis for approving the organization.
    (ii) A description of how the organization's accreditation program 
applies and enforces quality standards that have been determined by 
HCFA to meet or exceed the HCFA quality standards described in 
Sec. 410.144(a) or how the organization would use the NSDSMEP quality 
standards described in Sec. 410.144(b).
    (iii) An opportunity for public comment.
    (2) Final notice. (i) After considering public comments HCFA 
receives on the proposed notice, it publishes a final notice in the 
Federal Register indicating whether it has approved an organization's 
request for HCFA approval and recognition of its accreditation program 
and the standards it uses to accredit entities to furnish training.
    (ii) If HCFA approves the request, the final notice specifies the 
effective date and the term of the approval, which may not exceed 6 
years.
    (e) Criteria HCFA uses to approve national accreditation 
organizations. In deciding to approve and recognize an organization's 
accreditation program to accredit entities to furnish training, HCFA 
considers the following criteria:
    (1) The organization uses and enforces quality standards that HCFA 
has determined meet or exceed the HCFA quality standards described in 
Sec. 410.144(a), or uses the NSDSMEP quality standards described in 
Sec. 410.144(b).
    (2) The organization meets the requirements for approved 
organizations in Sec. 410.143.
    (3) The organization is not owned or controlled by the entities it 
accredits, as defined in Sec. 413.17(b)(2) or (b)(3), respectively, of 
this chapter.
    (4) The organization does not accredit any entity it owns or 
controls.
    (f) Notice of HCFA's decision. HCFA notifies the prospective 
organization in writing of its decision. The notice includes the 
following information:
    (1) Statement of approval or denial.
    (2) If approved, the expiration date of HCFA's approval and 
recognition of the accreditation program.
    (3) If denied, the rationale for the denial and the reconsideration 
and reapplication procedures.
    (g) Reconsideration of adverse decision. An organization that has 
received HCFA's notice of denial of its request for HCFA approval and 
recognition of its accreditation program to accredit entities to 
furnish training may request reconsideration of HCFA's decision in 
accordance with part 488 subpart D of this chapter.

[[Page 83151]]

    (h) Request for approval following denial. (1) Except as provided 
in paragraph (h)(2) of this section, an organization that has received 
HCFA's notice of denial of its request for HCFA approval and 
recognition of its accreditation program to accredit entities to 
furnish training may submit a new request to HCFA if it meets the 
following conditions:
    (i) Has revised its accreditation program to correct the 
deficiencies HCFA noted in its denial notice.
    (ii) Demonstrates, through documentation, the use of one of the 
sets of quality standards described in Sec. 410.144.
    (iii) Resubmits the application in its entirety.
    (2) For an organization that has requested reconsideration of 
HCFA's denial of its request for HCFA approval and recognition of its 
accreditation program to accredit entities to furnish training, HCFA 
will not consider the organization's new request until all 
administrative proceedings on the previous request have been completed.
    (i) Withdrawal. An organization requesting HCFA approval and 
recognition of its accreditation program to accredit entities may 
withdraw its application at any time.
    (j) Applying for continued HCFA approval. At least 6 months before 
the expiration of HCFA's approval and recognition of the organization's 
program, an organization must request from HCFA continued approval and 
recognition.


Sec. 410.143  Requirements for approved accreditation organizations.

    (a) Ongoing responsibilities of an approved accreditation 
organization. An organization approved and recognized by HCFA must 
undertake the following activities on an ongoing basis:
    (1) Provide to HCFA in writing, on a monthly basis, all of the 
following:
    (i) Copies of all accreditation decisions and any accreditation-
related information that HCFA may require (including corrective action 
plans and summaries of unmet quality standards described in 
Sec. 410.144).
    (ii) Notice of all complaints related to approved entities.
    (iii) Within 30 days of taking remedial or adverse action 
(including revocation, withdrawal, or revision of an approved entity's 
deemed status) against an approved entity, information describing the 
remedial or adverse action and the circumstances that led to taking the 
action.
    (iv) Notice of any proposed changes in its accreditation standards 
and requirements or evaluation process. If an organization implements 
changes without HCFA approval (other than changes to the NSDSMEP 
quality standards described in Sec. 410.144(b)), HCFA may withdraw its 
approval and recognition of the organization's accreditation program.
    (2) If an organization does not use the NSDSMEP quality standards 
described in Sec. 410.144(b), and wishes to change its quality 
standards that HCFA previously approved, the organization must submit 
its plan to alter its quality standards and include a crosswalk between 
the set of quality standards described in Sec. 410.144 and the 
organization's revised standards. If an organization implements changes 
in its quality standards without HCFA approval, HCFA may withdraw its 
approval and recognition of the organization's accreditation program.
    (3) If HCFA notifies an organization that uses the HCFA quality 
standards described in Sec. 410.144(a) that it has changed the HCFA 
quality standards, the organization must meet the following 
requirements:
    (i) Submit to HCFA, within 30 days of HCFA's notification of a 
change in the quality standards, its organization's plan to alter its 
quality standards to conform to the revised quality standards described 
in Sec. 410.144(a).
    (ii) Implement the changes to its accreditation program by the 
implementation date specified in HCFA's notification of the changes in 
the quality standards.
    (b) HCFA oversight of approved national accreditation 
organizations. HCFA, or its agent, performs oversight activities to 
ensure that an approved organization and the entities the organization 
accredits continue to meet a set of quality standards described in 
Sec. 410.144. HCFA (or its agent) uses the following procedures:
    (1) Equivalency review. HCFA compares the organization's standards 
and its application and enforcement of its standards to a set of 
quality standards (described in Sec. 410.144) and processes when any of 
the following conditions exist:
    (i) HCFA imposes new requirements or changes its process for 
approving and recognizing an organization.
    (ii) Except for an organization that uses the NSDSMEP quality 
standards, the organization proposes to adopt new standards or changes 
its accreditation process.
    (iii) The organization reapplies to HCFA for continuation of its 
approval and recognition by HCFA of its program to accredit entities to 
furnish training.
    (2) Validation reviews. HCFA validates an organization's 
accreditation process by conducting evaluations of approved entities 
accredited by the organization and comparing its results to the results 
of the organization's evaluation of the approved entities.
    (3) Onsite inspections. HCFA may conduct an onsite inspection of 
the organization's operations and offices to verify information and 
assess the organization's compliance with its own policies and 
procedures. The onsite inspection may include, but is not limited to, 
reviewing documents, auditing documentation of meetings concerning the 
accreditation process, evaluating accreditation results or the 
accreditation status decision making process, and interviewing the 
organization's staff.
    (4) Withdrawal of HCFA approval and recognition--(i) HCFA gives an 
organization written notice of HCFA's intent to withdraw its approval 
and recognition of the organization's program to accredit entities if 
HCFA determines through an equivalency review, validation review, 
onsite inspection, or HCFA's daily experience with the organization 
that any of the following conditions exist:
    (A) Except for those accrediting organizations using quality 
standards in Sec. 410.144(b), the quality standards that the 
organization applies and enforces do not meet or exceed the HCFA 
quality standards described in Sec. 410.144(a).
    (B) The organization has failed to meet the requirements for 
accreditation in Secs. 410.142 through 410.144.
    (ii) Request for reconsideration. An organization may request a 
reconsideration of HCFA's decision to withdraw its approval and 
recognition of the organization in accordance with part 488, subpart D 
of this chapter.


Sec. 410.144  Quality standards for deemed entities.

    An organization approved and recognized by HCFA may accredit an 
entity to meet one of the following sets of quality standards:
    (a) HCFA quality standards. Standards prescribed by HCFA, which 
include the following:
    (1) Organizational structure. (i) Provides the educational 
resources to support the programs offered and the beneficiaries served, 
including adequate space, personnel, budget, instructional materials, 
confidentiality, privacy, and operational support.
    (ii) Defines clearly and documents the organizational 
relationships, lines of authority, staffing, job descriptions, and 
operational policies.
    (iii) Maintains a written policy that affirms education as an 
integral component of diabetes care.

[[Page 83152]]

    (iv) Includes in its operational policies, specific standards and 
procedures identifying the amount of collaborative, interactive, skill-
based training methods and didactic training methods furnished to the 
beneficiary.
    (v) Assesses the service area to define the target population in 
order to appropriately allocate personnel and resources.
    (vi) Identifies in its operational policies, the minimal amount 
that each team member must be involved in the following:
    (A) Development of training materials.
    (B) Instruction of beneficiaries.
    (2) Environment. Maintains a safe and sanitary environment, 
properly constructed, equipped, and maintained to protect the health 
and safety of all patients and that meets all applicable fire 
protection and life safety codes.
    (3) Program staff. (i) Requires a program coordinator who is 
responsible for program planning, implementation, and evaluation.
    (ii) Requires nonphysician professional staff to obtain 12 hours of 
continuing diabetes education concerning educational principles and 
behavior change strategies every 2 years.
    (4) Team approach. (i) Except as provided in paragraph (a)(4)(ii) 
of this section for a rural area, furnishes services using a 
multidisciplinary instructional team that meets the following 
requirements:
    (A) The team includes at least a registered dietitian, as 
recognized under State law, and a certified diabetes educator (CDE), 
certified by a qualified organization that has registered with HCFA, 
who have didactic experience and knowledge of diabetes clinical and 
educational issues. (If the team includes a registered nurse, an 
approved entity may delay implementation of the requirement for a CDE 
until February 27, 2004.)
    (B) The team is qualified to teach the training content areas 
required in paragraph (a)(5) of this section.
    (C) All appropriate team members must be present during the portion 
of the training for which they are responsible and must directly 
furnish the training within the scope of their practices.
    (ii) In a rural area, an individual who is qualified as a 
registered dietitian and as a CDE that is currently certified by an 
organization approved by HCFA (or until February 27, 2004 an individual 
who is qualified as a registered dietitian and as a registered nurse) 
may furnish training and is deemed to meet the multidisciplinary team 
requirement in paragraph (a)(4)(i) of this section.
    (5) Training content. Offers training and is capable of meeting the 
needs of its patients on the following subjects:
    (i) Diabetes overview/pathophysiology of diabetes.
    (ii) Nutrition.
    (iii) Exercise and activity.
    (iv) Diabetes medications (including skills related to the self-
administration of injectable drugs).
    (v) Self-monitoring and use of the results.
    (vi) Prevention, detection, and treatment of acute complications.
    (vii) Prevention, detection, and treatment of chronic 
complications.
    (viii) Foot, skin, and dental care.
    (ix) Behavior change strategies, goal setting, risk factor 
reduction, and problem solving.
    (x) Preconception care, pregnancy, and gestational diabetes.
    (xi) Relationships among nutrition, exercise, medication, and blood 
glucose levels.
    (xii) Stress and psychosocial adjustment.
    (xiii) Family involvement and social support.
    (xiv) Benefits, risks, and management options for improving glucose 
control.
    (xv) Use of health care systems and community resources.
    (6) Training methods. (i) Offers individual and group instruction 
for effective training.
    (ii) Uses instructional methods and materials that are appropriate 
for the target population, and participants being served.
    (iii) Uses primarily interactive, collaborative, skill-based 
training methods and maximizes the use of interactive training methods.
    (7) Review of plan of care and goals. (i) Reviews each 
beneficiary's plan of care.
    (ii) Develops and updates an individual assessment, in 
collaboration with each beneficiary, that includes relevant medical 
history, present health status, health service or resource utilization, 
risk factors, diabetes knowledge and skills, cultural influences, 
health beliefs and attitudes, health behaviors and goals, support 
systems, barriers to learning, and socioeconomic factors.
    (iii) Based on the assessment, develops, in collaboration with each 
beneficiary, an individual education plan. Includes in the education 
plan, the goals for education, the periodic updates, the specific 
amount of interactive, collaborative, skill-based training methods and 
didactic training methods that have been and will be furnished.
    (iv) Documents the results, including assessment, intervention, 
evaluation and follow-up in the beneficiary's medical record.
    (v) Forwards a copy of the documentation in paragraph (a)(7)(ii) 
through (iv) of this section to the referring physician (or qualified 
nonphysician practitioner).
    (vi) Periodically updates the beneficiary's referring physician (or 
qualified nonphysician practitioner) about the beneficiary's 
educational status.
    (8) Educational intervention. Offers appropriate and timely 
educational intervention based on referral from the beneficiary's 
physician (or qualified nonphysician practitioner) and based on 
periodic reassessments of health status, knowledge, skills, attitudes, 
goals, and self-care behaviors.
    (9) Performance measurement and quality improvement. Establishes 
and maintains an effective internal performance measurement and quality 
improvement program that focuses on maximizing outcomes by improving 
patient safety and quality of care. The program must meet the following 
requirements:
    (i) Stresses health outcomes (for example, improved beneficiary 
diabetes control, beneficiary understanding, or beneficiary compliance) 
and provides for the collection, analysis, and reporting of data that 
permits measurement of performance outcomes, or other quality 
indicators.
    (ii) Requires an entity to take the following actions:
    (A) Evaluate itself on an annual basis as to its effectiveness in 
using performance measures.
    (B) Improve its performance on at least one outcome or quality 
indicator each year.
    (10) Quality improvement. Has an agreement with a PRO to 
participate in quality improvement projects defined by the PRO, or if a 
program elects not to participate in a PRO project, it must be able to 
demonstrate a level of achievement through a project of its own design 
that is comparable to or better than the achievement to be expected 
from participation in the PRO quality improvement project.
    (b) The National Standards for Diabetes Self-Management Education 
Programs. The set of quality standards contained in the NSDSMEP or any 
NSDSMEP standards subsequently revised.
    (c) Standards of a national accreditation organization that 
represents individuals with diabetes. Standards that meet or exceed the 
HCFA quality standards described in paragraph (a) of this section that 
have been developed by a national

[[Page 83153]]

organization (and approved by HCFA) that is either a nonprofit or not-
for-profit organization with demonstrated experience in representing 
the interest of individuals, including health care professionals and 
Medicare beneficiaries, with diabetes.


Sec. 410.145  Requirements for entities.

    (a) Deemed entities. (1) Except as permitted in paragraph (a)(2) of 
this section, an entity may be deemed to meet a set of quality 
standards described in Sec. 410.144 if the following conditions are 
met:
    (i) The entity has submitted necessary documentation and is fully 
accredited (and periodically reaccredited) by an organization approved 
by HCFA under Sec. 410.142.
    (ii) The entity is not accredited by an organization that owns or 
controls the entity.
    (2) Before August 27, 2002 HCFA may deem an entity to meet the 
NSDSMEP quality standards described in Sec. 410.144(b), if the entity 
provides the Medicare contractor that will process its claims with a 
copy of a current certificate the entity received from the ADA that 
verifies the training program it furnishes meets the NSDSMEP quality 
standards described in Sec. 410.144(b).
    (b) Approved entities. An entity may be approved to furnish 
training if the entity meets the following conditions:
    (1) Before submitting a claim for Medicare payment, forwards a copy 
of its certificate or proof of accreditation from an organization 
approved by HCFA under Sec. 410.142 indicating that the entity meets a 
set of quality standards described in Sec. 410.144, or before August 
27, 2002, submits documentation of its current ADA recognition status.
    (2) Agrees to submit to evaluation (including onsite inspections) 
by HCFA (or its agent) to validate its approved organization's 
accreditation process.
    (3) Authorizes its approved organization to release to HCFA a copy 
of its most recent accreditation evaluation, and any accreditation-
related information that HCFA may require.
    (4) At a minimum, allows the PRO (under a contract with HCFA) 
access to beneficiary or group training records.
    (c) Effective dates--(1) Deemed to meet quality standards. Except 
as permitted in paragraph (c)(2) of this section, the date on which an 
entity is deemed to meet a set of quality standards described in 
Sec. 410.144 is the later of one of the following dates:
    (i) The date HCFA approves and recognizes the accreditation 
organization to accredit entities to furnish training.
    (ii) The date an organization accredits the entity to meet a set of 
quality standards described in Sec. 410.144.
    (2) Approved to furnish training. HCFA covers the training 
furnished by an entity beginning on the later of one of the following 
dates:
    (i) The date HCFA approves the deemed entity as meeting the 
conditions for coverage in Sec. 410.141(e).
    (ii) The date the entity is deemed to meet a set of quality 
standards described in Sec. 410.144.
    (d) Removal of approved status--(1) General rule. HCFA removes an 
entity's approved status for any of the following reasons:
    (i) HCFA determines, on the basis of its own evaluation or the 
results of the accreditation evaluation, that the entity does not meet 
a set of quality standards described in Sec. 410.144.
    (ii) HCFA withdraws its approval of the organization that deemed 
the entity to meet a set of quality standards described in 
Sec. 410.144.
    (iii) The entity fails to meet the requirements of paragraphs (a) 
and (b) of this section.
    (2) Effective date. The effective date of HCFA's removal of an 
entity's approved status is 60 days after the date of HCFA's notice to 
the entity.


Sec. 410.146  Diabetes outcome measurements.

    (a) Information collection. An approved entity must collect and 
record in an organized systematic manner the following patient 
assessment information at least on a quarterly basis for a beneficiary 
who receives training under Sec. 410.141:
    (1) Medical information that includes the following:
    (i) Duration of the diabetic condition.
    (ii) Use of insulin or oral agents.
    (iii) Height and weight by date.
    (iv) Results and date of last lipid test.
    (v) Results and date of last HbA1C.
    (vi) Information on self-monitoring (frequency and results).
    (vii) Blood pressure with the corresponding dates.
    (viii) Date of the last eye exam.
    (2) Other information that includes the following:
    (i) Educational goals.
    (ii) Assessment of educational needs.
    (iii) Training goals.
    (iv) Plan for a follow-up assessment of achievement of training 
goals between 6 months and 1 year after the beneficiary completes the 
training.
    (v) Documentation of the training goals assessment.
    (b) Follow-up assessment information. An approved entity may obtain 
information from the beneficiary's survey, primary care physician 
contact, and follow-up visits.

    B. Part 414 is amended as follows:

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

    1. The authority citation for part 414 continues to read as 
follows:

    Authority: Secs. 1102, 1871, and 1881(b)(1) of the Social 
Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(1)).

    2. A new Sec. 414.63 is added to read as follows:


Sec. 414.63  Payment for outpatient diabetes self-management training.

    (a) Payment under the physician fee schedule. Except as provided in 
paragraph (d) of this section, payment for outpatient diabetes self-
management training is made under the physician fee schedule in 
accordance with Secs. 414.1 through 414.48.
    (b) To whom payment may be made. Payment may be made to an entity 
approved by HCFA to furnish outpatient diabetes self-management 
training in accordance with part 410, subpart H of this chapter.
    (c) Limitation on payment. Payment may be made for training 
sessions actually attended by the beneficiary and documented on 
attendance sheets.
    (d) Payments made to those not paid under the physician fee 
schedule. Payments may be made to other entities not routinely paid 
under the physician fee schedule, such as hospital outpatient 
departments, ESRD facilities, and DME suppliers. The payment equals the 
amounts paid under the physician fee schedule.
    (e) Other conditions for fee-for-service payment. The beneficiary 
must meet the following conditions:
    (1) Has not previously received initial training for which Medicare 
payment was made under this benefit.
    (2) Is not receiving services as an inpatient in a hospital, SNF, 
hospice, or nursing home.
    (3) Is not receiving services as an outpatient in an RHC or FQHC.

    C. Part 424 is amended as follows:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

    1. The authority citation for part 424 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


    2. In Sec. 424.44, a new paragraph (d) is added to read as follows:


Sec. 424.44  Time limits for filing claims.

* * * * *

[[Page 83154]]

    (d) Outpatient diabetes self-management training. HCFA makes 
payment in half-hour increments to an entity for the furnishing of 
outpatient diabetes self-management training on or after the approval 
date HCFA approves the entity to furnish the services under part 410, 
subpart H of this chapter.

    D. Part 480 is amended as follows:

PART 480--ACQUISITION, PROTECTION, AND DISCLOSURE OF PEER REVIEW 
INFORMATION

    1. The authority citation for part 480 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


    2. In Sec. 480.111, new paragraph (d) is added to read as follows:


Sec. 480.111  PRO access to records and information of institutions and 
practitioners.

* * * * *
    (d) A PRO may reimburse for requested information at the rate of 
$.10 per page for photocopying plus first class postage. The 
photocopying amount includes the cost of labor, supplies, equipment, 
and overhead.

    E. Part 498 is amended as follows:

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT 
PARTICIPATION IN THE MEDICARE PROGRAM AND FOR DETERMINATIONS THAT 
AFFECT THE PARTICIPATION OF ICFS/MR AND CERTAIN NFS IN THE MEDICAID 
PROGRAM

    1. The authority citation for part 498 continues to read as 
follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).


Sec. 498.2  [Amended]

    2. In Sec. 498.2, the definition of ``supplier'' is amended to add 
the words ``an entity approved by HCFA to furnish outpatient diabetes 
self-management training,'' following ``(OPO),''.

(Catalog of Federal Domestic Assistance Program No. 93.774, 
Medicare--Supplementary Medical Insurance Program)

    Dated: October 2, 2000.
Michael M. Hash,
Acting Administrator, Health Care Financing Administration.
    Approved: October 20, 2000.
Donna E. Shalala,
Secretary.
[FR Doc. 00-32703 Filed 12-28-00; 8:45 am]
BILLING CODE 4120-01-P