[Federal Register Volume 66, Number 189 (Friday, September 28, 2001)]
[Notices]
[Pages 49677-49679]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24327]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2099-FN]
RIN 0938-ZA13


Medicare Program; Approval of Deeming Authority for Critical 
Access Hospitals by the American Osteopathic Association (AOA)

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final notice.

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SUMMARY: This final notice announces our decision to approve the 
American Osteopathic Association's (AOA) initial application as a 
national accrediting organization for critical access hospitals (CAHs) 
seeking to participate in the Medicare program. Following our 
evaluation of the organizational and programmatic capabilities of the 
AOA, we determined that AOA standards for CAHs meet or exceed the 
Medicare conditions of participation. Therefore, CAHs accredited by the 
AOA will be granted deemed status under the Medicare program.

EFFECTIVE DATE: This final notice is effective December 27, 2001, 
through December 27, 2007.

FOR FURTHER INFORMATION CONTACT: Irene H. Dustin (410) 786-0495.

SUPPLEMENTARY INFORMATION:

I. Background

Statutory Provisions and Regulations

    Under the Medicare program, eligible beneficiaries may receive 
covered services in a critical access hospital (CAH), provided that the 
CAH meets certain requirements. Sections 1820(c)(2)(B) and 1861(mm) of 
the Social Security Act (the Act) establish distinct criteria for 
facilities seeking CAH designation. Under this authority, the minimum 
requirements that a CAH must meet to participate in Medicare are set 
forth in regulations at 42 CFR part 485, subpart F (Conditions of 
Participation: Critical Access Hospitals (CAHs)) which determine the 
basis and scope of CAH covered services. Conditions for Medicare 
payment for critical access services are in Sec. 413.70. Applicable 
regulations concerning provider agreements are at part 489 (Provider 
Agreements and Supplier Approval) and those pertaining to facility 
survey and certification are at part 488, subparts A and B.

Verifying Medicare Conditions of Participation

    In general, we approve a CAH for participation in, or coverage 
under the Medicare program, if it is participating as a hospital at the 
time it applies for CAH designation, and is in compliance with parts 
482 (Conditions of Participation for Hospitals), and 485, subpart F 
(Conditions of Participation: Critical Access Hospitals (CAHs)). 
Section 403 of the Balanced Budget Refinement Act of 1999 expanded 
these criteria to allow a limited number of additional facilities to 
become eligible for CAH designation under certain circumstances. 
Specifically, a rural health clinic previously downsized from an acute 
care hospital, or a closed hospital that requests to reopen as a CAH, 
need only meet the provisions of part 485, subpart F at the time they 
apply for CAH designation to be eligible to participate in Medicare.
    For a hospital to enter into a provider agreement, a State survey 
agency must certify that the hospital is in compliance with the 
conditions or standards set forth in the statute and part 482 of our 
regulations. Then, the hospital is subject to ongoing review by a State 
survey agency to determine whether it continues meeting Medicare 
requirements. There is, however, an alternative to State compliance 
surveys. Certification by a nationally-recognized accreditation program 
can substitute for ongoing State review.
    Section 1865(b)(1) of the Act provides that, if a provider is 
accredited by a national accreditation body under standards that meet 
or exceed the Medicare conditions of participation, the Secretary can 
``deem'' the provider as meeting the Medicare requirements for those 
conditions. Accreditation is voluntary and not required for 
participation in Medicare; providers have the option to undergo State 
surveys or pursue accreditation. Prior to this application for deeming 
status by the AOA, there has been no national accreditation 
organization for CAHs.

II. Deeming Application Approval Process

    Section 1865(b)(3)(A) of the Act provides a statutory timetable to 
ensure that our review of deeming applications is conducted in a timely 
manner. Regulations provide us with 210 calendar days to complete our 
survey activities and application review process. Within sixty days of 
receiving a completed application, we must publish a notice in the 
Federal Register that identifies the national accreditation body making 
the request, describes the nature of the request, and provides no less 
than a 30-day public comment period.

III. Proposed Notice

    On April 16, 2001, we published a proposed notice in the Federal 
Register at 66 FR 19509 announcing the AOA's request for approval as a 
deeming organization for CAHs. In the notice, we detailed our 
evaluation criteria. Under section 1865(b)(2) of the Act and 42 CFR 
488.4, we conducted a review of the AOA application in accordance with 
the criteria specified by our regulation, which includes, but is not 
limited to the following:
     An onsite administrative review of AOA's (1) corporate 
policies; (2) financial and human resources available to accomplish the 
proposed surveys; (3) procedures for training, monitoring, and 
evaluation of its surveyors, (4) ability to investigate and respond 
appropriately to complaints against accredited facilities; and (5) 
survey review and decision-making process for accreditation.
     A comparison of AOA's CAH accreditation standards to our 
current Medicare conditions of participation standards.
     A documentation review of AOA's processes to:
     Determine the composition of the survey team, surveyor 
qualifications, and the ability of AOA to provide continuing surveyor 
training.
     Compare AOA's processes to that of State agencies, 
including survey frequency, and the ability to investigate and respond 
appropriately to complaints against accredited facilities.
     Evaluate AOA's procedures for monitoring providers or 
suppliers found out of compliance with AOA program requirements.
     Assess AOA's ability to report deficiencies to the 
surveyed facilities and respond to the facility's plan of correction in 
a timely manner.
     Establish AOA's ability to provide us with electronic data 
in ASCII-comparable code and reports necessary for effective validation 
and assessment of AOA's survey process.

[[Page 49678]]

     Determine the adequacy of staff and other resources.
     Review AOA's ability to provide adequate funding for 
performing required surveys.
     Confirm AOA's policies on whether surveys are announced or 
unannounced.
     Obtain AOA's agreement to provide us with a copy of the 
most current accreditation survey together with any other information 
related to the survey as we may require, including corrective action 
plans.

    In accordance with section 1865(b)(3)(A) of the Act, the proposed 
notice also solicited public comments regarding whether AOA's 
requirements met or exceeded the Medicare conditions of participation 
for CAHs. We received no public comments in response to our proposed 
notice.

IV. Provisions of the Final Notice

A. Differences Between AOA and Medicare's Conditions and Survey 
Requirements

    We compared the standards contained in the AOA's published ``2000-
2001 Standards Manual of Accreditation Requirements for Critical Access 
Facilities'' and its survey process in the ``2000-2001 Healthcare 
Facilities Accreditation Survey Team Handbook'' with the Medicare CAH 
conditions of participation and CMS's ``State and Regional Operations 
Manual.'' Our review and evaluation of the AOA's deeming application, 
which were conducted as described in section III of this notice, 
yielded the following:
     The AOA provided an updated crosswalk (a table showing the 
match between their standards and our standards) of the following 
recommended revisions or clarifications to their requirements to ensure 
that the requirements meet or exceed CMS requirements.
     AOA adjusted language to consistently refer to Critical 
Access Hospitals as opposed to Critical Access Facilities.
     AOA modified their standards to require that a doctor of 
medicine or osteopathy provide medical supervision of the health care 
staff in addition to providing for the health care staff in order to 
meet requirements at Sec. 485.631(b)(1)(i).
     AOA added a cross-reference in their crosswalk to the AOA 
Accreditation Requirements Manual to indicate the location of CMS 
regulation at Sec. 485.610 regarding status and location.
     AOA added a standard to the crosswalk to include a 
description of personnel requirements for emergency services provided 
by the CAH, consistent with Sec. 485.618(d).
     AOA added language to their standards to clarify that a 
CAH must document in its records any extraordinary circumstances that 
would excuse the CAH from compliance with the requirement for biweekly 
physician assessments, as required by Sec. 485.631(b)(2).
     AOA corrected their standard to read ``services provided 
by the critical access hospital'' rather than ``services provided by 
the pharmacy,'' in order to meet the requirement in 
Sec. 485.635(a)(3)(iii).
     AOA added language to their standards to address the CAH's 
periodic review of the overall utilization of its services, including 
at least the number of patients served and the volume of services, as 
specified in Sec. 485.641(a)(1)(i).
     AOA addressed our regulations at Sec. 485.650 for number 
of beds and length of stay in their Accreditation Requirements Manual. 
For clarification, AOA cross-referenced this regulation in their 
crosswalk.
     AOA standards previously indicated resurvey of a CAH every 
3 years. AOA modified their standards to indicate in the resurvey 
requirements that a follow-up visit one year after the initial 
accreditation survey is required. After the one-year-follow-up, CAHs 
will be re-surveyed every three years.
     AOA modified its manual to require that CAHs meet the 
requirements of Chapter 12 (New Health Care Occupancy), or Chapter 13 
(Existing Health Care Occupancy) of the 1985 edition of the Life Safety 
Code (LSC) of the National Fire Prevention Association (NFPA) in 
accordance with Sec. 485.623(d). AOA added to their application a 
crosswalk between AOA's LSC standards and ours found at 
Sec. 485.623(d). Further, AOA added language specifying that facilities 
must be inspected by AOA and that self-assessment by the CAH does not 
meet or exceed our requirements. AOA may use their own staff or may 
provide this service under arrangement with qualified entities.

B. Term of Approval

    Based on the review and observations described in section III of 
this final notice, we have determined that the AOA's requirements for 
CAHs meet or exceed our requirements. Therefore, we recognize the AOA 
as a national accreditation organization for CAHs that request 
participation in the Medicare program, effective December 27, 2001 
through December 27, 2007.

V. Collection of Information Requirements

    This final notice does not impose any information collection and 
recordkeeping requirements subject to the Paperwork Reduction Act 
(PRA). Consequently, it does not need to be reviewed by the Office of 
Management and Budget (OMB) under the authority of the PRA. The 
requirements associated with granting and withdrawal of deeming 
authority to national accreditation organizations, in part 488, 
``Survey, Certification, and Enforcement Procedures,'' are currently 
approved by OMB under OMB approval number 0938-0690, with an expiration 
date of June 30, 2002.

VI. Regulatory Impact Statement

    We have examined the impact of this notice as required by Executive 
Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L. 98-354). 
Executive Order 12866 directs agencies to assess all costs and benefits 
of available regulatory alternatives and, when regulation is necessary, 
to select regulatory approaches that maximize net benefits (including 
potential economic, environmental, public health and safety effects; 
distributive impacts; and equity). The RFA requires agencies to analyze 
options for regulatory relief for small businesses. For purposes of the 
RFA, States and individuals are not considered small entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis for any notice that may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
604 of the RFA. For purposes of section 1102(b) of the Act, we consider 
a small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 100 beds.
    This final notice recognizes the AOA as a national accreditation 
organization for CAHs that request participation in the Medicare 
program. There are neither significant costs nor savings for the 
program and administrative budgets of Medicare. Therefore, this notice 
is not a major rule as defined in Title 5, United States Code, section 
804(2) and is not an economically significant rule under Executive 
Order 12866. We have determined, and the Secretary certifies, that this 
notice will not result in a significant impact on a substantial number 
of small entities and will not have a significant effect on the 
operations of a substantial number of small rural hospitals. Therefore, 
we are

[[Page 49679]]

not preparing analyses for either the RFA or section 1102(b) of the 
Act.
    In accordance with the provisions of Executive Order 12866, this 
notice was not reviewed by the Office of Management and Budget. In 
accordance with Executive Order 13132, we have determined that this 
notice will not significantly affect the rights of States, local or 
tribal governments.

    Authority: Section 1865 of the Social Security Act (42 U.S.C. 
1395bb).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; No. 93.773 Medicare--Hospital Insurance Program; 
and No. 93.774, Medicare--Supplemental Medical Insurance Program)

    Dated: September 10, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 01-24327 Filed 9-27-01; 8:45 am]
BILLING CODE 4120-01-P