[Federal Register Volume 66, Number 208 (Friday, October 26, 2001)]
[Proposed Rules]
[Pages 54179-54186]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-25422]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 403, 416, 418, 460, 482, and 483

[CMS-3047-P]
RIN 0938-AK35


Medicare and Medicaid Programs; Fire Safety Requirements for 
Certain Healthcare Facilities

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule replaces the proposed rule of August 1, 
1990, on the same subject, which we are withdrawing. This proposed rule 
would amend the fire safety standards for hospitals, long-term care 
facilities, intermediate care facilities for the mentally retarded 
(ICFs/MR), ambulatory surgery centers (ASCs), hospices which provide 
in-patient services, religious non-medical health care institutions, 
and Programs of All-Inclusive Care for the Elderly (PACE) facilities. 
Further, this proposed rule would adopt the 2000 edition of the Life 
Safety Code (LSC) and eliminate references in our regulations to all 
earlier editions.

DATES: In order to ensure that comments will be considered, all 
comments should be mailed to the appropriate address as provided below, 
postmarked by December 26, 2001.

ADDRESSES: Mail written comments (one original and three copies) to the 
following address: Centers for Medicare & Medicaid Services, Department 
of Health and Human Services, Attention: CMS-3047-P, P.O. Box 8018, 
Baltimore, MD 21244-8010.
    If you prefer, you may deliver your written comments (one original 
and three copies) to one of the following addresses: Hubert H. Humphrey 
Building, Room 443-G, 200 Independence Avenue, SW, Washington, D.C. 
20201, or Room C5-14-03, 7500 Security Boulevard, Baltimore, Maryland 
21244.
    Because of staffing and resource limitation, we cannot accept 
comments by facsimile (FAX) transmission. In commenting, please refer 
to file code CMS-3047-P. Comments received timely will be available for 
public inspection as they are received, generally beginning 
approximately 3 weeks after publication of a document, at the 
headquarters of the Centers for Medicare & Medicaid Services, 7500 
Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of 
each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view 
public comments, contact Ms. Freddie Wilder at (410) 786-7195 or (410) 
786-0082.

FOR FURTHER INFORMATION CONTACT: Mayer Zimmerman, 410-786-6839, Jim 
Merrill, 410-786-6998, or Tamara Syrek, 410-786-3529.

SUPPLEMENTARY INFORMATION:

I. Background

A. The Proposed Rule of August 1, 1990 (55 FR 31196)

    On August 1, 1990, we published a proposed rule that would have 
applied to hospitals, long term care (LTC) facilities, and intermediate 
care facilities for the mentally retarded (ICFs/MR). It would have 
eliminated the use of the 1967 and 1973 editions of the Life Safety 
Code (LSC), which is updated and published periodically by the National 
Fire Protection Association (NFPA), a private, non-profit organization 
created in 1896, dedicated to reducing loss of life and property due to 
fire. That rule would have required all Medicare and Medicaid 
participating providers and suppliers subject to the LSC to meet either 
the 1981 or 1985 edition of the LSC, depending on the date the provider 
first entered the program. The August 1, 1990 proposed rule did not 
include references to ambulatory surgery centers (ASCs) or hospices 
because they were already required to meet either the 1981 or 1985 
edition of the LSC. Additionally, no reference was made to Programs of 
the All-Inclusive Care for the Elderly (PACE) facilities and Religious 
Non-Medical Health Care Institutions (RNHCIs) because these provider 
and supplier types did not exist when the August 1, 1990 proposed rule 
was published. However, in this proposed rule we are proposing PACE and 
RNHCIs comply with the requirements of the 2000 LSC along with other 
providers.
    We proposed deletion of the 1967 and 1973 editions of the LSC 
because they relied heavily on ``compartmentation,'' a construction 
technique that divides buildings into separate compartments or rooms so 
as to limit the spread of fire and smoke. Moreover, earlier editions of 
the LSC did not encourage the use of sprinklers. However, subsequent 
editions of the LSC have encouraged sprinklers and, as a trade-off, 
less costly construction material may be used if sprinklers are 
installed. The authors of the newer editions of the LSC no longer 
believe compartmentation is effective and rely on early detection and 
extinguishment. Further, every year fewer facilities rely on the 
concept of compartmentation, and as older, less efficient buildings are 
upgraded or replaced and newer editions of the LSC are applied, which 
use early fire detection and extinguishment rather than 
compartmentation.
    In the past, our authority to grant waivers was critical to our 
ability to continuously improve fire safety in the Medicare and 
Medicaid programs and not impose an undue burden on providers. The 
Secretary has broad authority to grant waivers to hospitals under 
Section 1861(e)(9) of the Social Security Act (the Act), and to LTC 
facilities at sections 1819(d)(2)(B) and 1919(d)(2)(B) of the Act. 
Currently, the Secretary allows for a waiver to be granted on a case-
by-case basis if specific provisions of the LSC would result in 
unreasonable hardship on the provider, and if the safety of patients

[[Page 54180]]

would not be compromised. In addition, the Secretary may accept a 
State's fire and safety code instead of the LSC if the State's fire and 
safety code adequately protects patients. Further, the NFPA's Fire 
Safety Evaluation System (FSES), an equivalency system, provides 
alternatives to meeting various provisions of the LSC, thereby 
achieving the same level of fire protection as the LSC. Application of 
the FSES for either health care or board and care, as applicable, also 
mitigated the effects of the proposed rule.
    In the August 1, 1990 proposed rule, we relied heavily on our 
waiver authority, the application of the FSES, and existing regulations 
``grandfathering'' providers that were already in compliance with the 
1967 and 1973 editions of the LSC. We asserted that the deletion of the 
references to the 1967 and 1973 editions of the LSC would not impose an 
undue burden on most facilities because the 1981 and 1985 LSC updated 
provisions were minor, and because most facilities would be able to 
comply with little expense.

B. Analysis of Comments on the August 1, 1990 Proposed Rule

    We received 52 timely comments on the August 1, 1990 proposed rule, 
from nursing homes, State health departments, associations and 
organizations representing SNFs, NFs, and ICFs/MR. Since we are 
withdrawing this NPRM, we will not detail each comment and response. We 
will summarize the major concern those parties raised about the 
proposed rule and address our approach to meeting this concern in a 
later section detailing the provisions of this new proposed rule.
    A majority of commenters expressed concern regarding the deletion 
of references to the 1967 and 1973 editions of the LSC, and requested 
that we codify specific waiver and prior compliance provisions in the 
regulations to prevent possible arbitrary and inconsistent application 
of waivers and the FSES. We do not believe it is possible to provide 
blanket waivers to an entire class of requirements because waivers and 
the FSES are intended as a response to specific situations and are 
granted on a case-by-case basis.

C. Decision To Withdraw the August 1, 1990 Proposed Rule

    Since the August 1, 1990 proposed rule was published, the 1991, 
1994, 1997 and, 2000 editions of the LSC have been published. The 1997 
edition has been adopted by the Joint Commission on the Accreditation 
of Healthcare Organizations (JCAHO), which accredits over 4,000 
hospitals, as well as ASCs, LTC facilities, and hospices that provide 
inpatient services. In addition, individual States have adopted various 
editions of the LSC.
    The 2000 edition of the LSC includes new provisions that we believe 
are vital to the health and safety of all beneficiaries. We are not 
proposing to grandfather any facility under these new provisions 
because we believe the provisions will not impose an undue burden. This 
proposed rule is intended to ensure beneficiaries continue to 
experience the highest degree of fire safety possible.
    In addition to developing a notice of proposed rulemaking (NPRM) to 
adopt the 2000 edition of the LSC, we were intending to propose a more 
efficient process to allow CMS to adopt future editions of the LSC in a 
more timely manner. We explored incorporating, by reference, the NFPA 
LSC without specific dates in the regulation text and publishing a 
Federal Register notice, instead of a NPRM, each time we planned to 
adopt the next edition. The Federal Register notice would ask for 
public comment. We worked closely with the Office of Federal Register 
(OFR) staff and counsel on our draft proposed approach; however, it has 
become clear that adoption of multiple successive editions of the LSC 
via reference is not possible. The rationale is that the changes in the 
future LSCs may be substantial, necessitating that we go through a NPRM 
and public comment period. Moreover, we can not automatically 
incorporate successive versions of the LSC because of the statutory 
restrictions of 5 U.S.C. section 552(a) and accompanying regulations at 
1 CFR part 51. All LSC editions we adopt must include a specific 
edition and a copy of the edition cited must be on file at the Office 
of the Federal Register. Based on this new information we are revising 
the draft NPRM to propose to adopt the 2000 LSC only.

II. Provisions of the Proposed Regulations

A. General Description

    We are proposing to (1) require that all providers and suppliers 
meet the provisions of the 2000 edition of the LSC with certain 
exceptions; and (2) delete references to all previous editions of the 
LSC.

B. The 2000 Edition of the Life Safety Code

    Some requirements in the 2000 edition of the LSC are substantially 
different than earlier LSC editions. We believe the standards set out 
in the 2000 edition of the LSC should be met by health care providers, 
as applicable, depending on provider type.
    We are soliciting comments regarding whether to adopt Chapter 5, 
Performance Based Option, of the LSC. We would like to know (1) are 
health care facilities using performance based design; and (2) what 
benefits the facility receives by using performance based design (i.e., 
better fire safety).
    The LSC fire safety goals establish overall outcomes to be achieved 
with regards to fire safety. These overall outcomes are communicated 
through specific requirements in the LSC. Performance based design 
option, Chapter 5, translate fire safety goals into performance 
objectives and performance criteria. Performance based design 
establishes broad goals and objectives with a team effort. The 
performance-based design is applied to make the building safe as well 
as functional. The design is specific to the building. Computer fire 
models and other calculation methods are used in combination with the 
building design specifications, specified fire scenarios and 
assumptions to calculate the overall performance criteria and whether 
it meets the fire life safety goals and is in compliance with the 
intent of the code.
    Chapter 19, Existing Health Care Occupancies, Section 19-3.6.3.2 
(exception No. 2), roller latches is the only provision of the LSC we 
propose not to adopt for any provider. A roller latch is a type of door 
latching mechanism to keep a door closed. The 2000 edition of the LSC 
prohibits the use of roller latches on corridor doors in buildings not 
fully protected by an approved sprinkler system. Exception number 2, 
however, allows for the use of roller latches notwithstanding this 
prohibition, if the latch can withstand a specific level of force 
applied to it. Nonetheless, we are proposing not to CMS adopt exception 
No. 2 regarding existing roller latches. Through fire investigations 
by, roller latches have proven to be an unreliable door latching 
mechanism requiring extensive maintenance to operate properly. Many 
roller latches in fire situations failed to provide adequate protection 
to residents in their rooms during an emergency. The estimated cost to 
be in compliance with this provision is $30,754,540 ($190 per door for 
161,866 doors). The cost estimate was derived from information given to 
us by the American Health Care Association (AHCA).

[[Page 54181]]

C. Analysis of Selected New Provisions in the 2000 Edition of the LSC

    The following are new provisions in the 2000 edition of the LSC 
from Chapter 19, ``Existing Health Care Occupancies.'' We are providing 
the LSC citation, a description of the requirement, an explanation of 
why we believe it is critical to the safety of beneficiaries to require 
it, and a brief discussion of our analysis of the burden imposed by the 
requirement. The cost estimates were derived from information given to 
us by the American Health Care Association (AHCA).
    (1) 19.1.1.4.5--Renovations, Alterations, and Modernization--This 
provision requires that renovations, alterations, and modernizations 
must comply with standards applicable to new construction when 
possible. Existing facilities that are extensively renovated must meet 
the requirements of a newly constructed facility, including the 
installation of sprinkler systems in non-sprinklered buildings. The 
Fire Analysis & Research Division of the NFPA has shown that sprinklers 
have been the most important life safety system installed in health 
care facilities. The LSC generally requires sprinkler systems in 
renovations, regardless of construction techniques or materials used in 
constructing the facility. The estimated cost of installing sprinkler 
systems in buildings that presently do not have them is $2.50 per 
square foot, or approximately $125,000 for a 50,000 square foot 
building. This requirement is not imposed on facilities not undergoing 
renovations. There is a total of 255 facilities who currently do not 
have sprinkler systems. Because a facility does not have to comply with 
this provision unless the facility chooses to renovate an existing 
building we estimate approximately 128 facilities may renovate in a 
year. The total amount to implement this provision would be $16,000,000 
annually.
    (2) 19.2.9--Emergency Lighting--This provision requires emergency 
lighting for a period of 1\1/2\ hours in health care facilities, 
enabling those inside to move about safely in an emergency. We are 
phasing in this requirement over a three year period, to allow for the 
normal replacement cycle of batteries used in emergency lighting 
systems. We believe this phase-in period will not adversely impact the 
health and safety of the beneficiaries. The cost to install this 
equipment is estimated to be $600 per light. Approximately 790 existing 
facilities do not have emergency lighting for 1\1/2\ hours. To be in 
compliance we estimate each building will need twelve emergency light 
units for a total of 9,482 units. This provision will be phased-in over 
three years. The total amount to implement this provision over a three-
year period will be $5,452,150 or $1,817,383 annually.
    (3) 19.3.1--Protection of vertical openings--Unprotected vertical 
openings (e.g., open stairwells) permit fire and toxic gases to spread 
from one level to another in a building, making evacuation difficult, 
if not impossible. The estimated cost of compliance with this 
requirement is $2,938 per vertical opening. Approximately 9,877 
vertical openings in 1,976 facilities will need to be upgraded for 
compliance. Total cost of compliance of this provision is $29,018,626.
    (4) 19.3.4.3.2--Emergency Forces Notification--This provision 
requires the fire alarm system to provide automatic notification of a 
fire to emergency forces. This is of great importance to the protection 
of all patients/residents. Any delay in the notification of fire or 
rescue personnel could adversely impact the health and safety of 
patients/residents and expose them to a fire or toxic gases created by 
the fire. Approximately 2,750 buildings at $900 per facility would need 
to be connected to a fire alarm retransmission system. The cost is 
estimated to be a total of $2,475,000.
    (5) 19.3.6.1--Corridors--This provision requires all areas in non-
sprinklered buildings must be separated from the corridor by corridor 
walls that are fire-rated. This requirement, which provides a protected 
passageway for movement during an emergency, is necessary to increase 
the safety of the beneficiaries. The cost to upgrade a facility to meet 
this requirement is estimated to be approximately $7,124 for 1,976 
buildings that currently meet the 1967 LSC and approximately $5,735 for 
46 buildings meeting the 1973 code. The total estimated cost for 
compliance is $14,341,000.
    (6) 19.7.5.2 & 19.7.5.3--Upholstered furniture--These provisions 
allow patient/resident-owned furniture to be brought into the facility 
without meeting the requirements of 10.3.2(2) and 10.3.3 (regarding 
fire resistant furniture) if a single station smoke detector is placed 
in the sleeping room where the furniture is located. This gives the 
facility a more home-like atmosphere. The cost to the facility is 
estimated at $100 per sleeping room in which patient/resident-owned 
furniture is located. We estimate approximately 18,498 smoke detectors 
will need to be installed at a total cost of $1,849,800.
    We are also proposing to retain our existing authority to waive 
provisions of the LSC, on a case-by-case basis, further reducing the 
exposure to additional cost and burden for facilities with unique 
situations that can justify the application of waivers, which we 
determine will not endanger the health and safety of patients. A waiver 
may be granted for a specific LSC requirement if: (1) We determine that 
the waiver would not adversely affect patient/staff health and safety; 
and (2) we determine that it would impose an unreasonable hardship on 
the facility to meet a specific LSC requirement. Generally, a provider 
may request a waiver from its State Agency. The State Agency will 
review the request and make a recommendation to the appropriate CMS 
Regional Office. The CMS Regional Office will review the waiver request 
and the State Agency's recommendation and make a final decision. A 
waiver cannot be granted if patient safety is compromised in any way. A 
State may request that the State LSC be applicable to all facilities 
rather than the LSC proposed in this rule. The State must submit the 
request to the appropriate CMS Regional Office and the Regional Office 
will forward the request to CMS central office for final determination.
    We will also retain our authority to apply the Fire Safety 
Evaluation System (FSES) as an alternative approach to meeting the 
requirements of the LSC, as well as accept alternative State Codes 
(discussed above) as provided in this proposed regulation.

D. Discussion of Fire Safety Requirements for Individual Providers and 
Suppliers

    In addition to the proposed changes to the requirements that affect 
all provider types, as described in sections II. A. and II. B. of this 
preamble, we propose the following changes which are specific to 
distinct types of providers:
1. Religious Nonmedical Health Care Institutions: 42 CFR 403.744  
Condition of Participation: Life Safety From Fire
    We propose to retain the provisions of the existing interim final 
regulation for Religious Nonmedical Health Care Institutions (RNHCI) 
published in the Federal Register on November 30, 1999 (64 FR 67028), 
except insofar as they conflict with the 2000 LSC and are not within 
the exceptions detailed in section II. B. of this preamble (regarding 
our exceptions to the LSC).
2. Ambulatory Surgery Centers: 42 CFR 416.44 Condition of 
Participation: Environment
    For the sake of clarity, we propose to change the terminology in 
paragraph (b)(1) of 42 CFR 416.44 to reflect that the Life Safety Code 
refers to ASCs as

[[Page 54182]]

Ambulatory Health Care Centers. We propose that all ASCs meet the 
provisions applicable to Ambulatory Health Care Centers in the 2000 
edition of the LSC, except as detailed in section II. B. of this 
preamble, regardless of the number of patients the facility serves.
    We believe the protection provided in the Ambulatory Health Care 
Centers chapter is necessary to protect the health and safety of 
patients who are incapable of caring for themselves. We do not believe 
that the Business Occupancy chapter of the LSC (applied by some 
authorities having jurisdiction to ASCs treating fewer than 4 patients 
at a time) affords an adequate level of protection to patients in an 
ASC.
    We are also proposing to retain the discretion to accept compliance 
with fire and safety codes imposed by a State, if we determine that the 
state's code will adequately protect patients in ASCs. We have included 
this provision in paragraph (b)(3) of this section.
3. Hospices: 42 CFR 418.100(d)  Condition of Participation: Hospices 
That Provide Inpatient Care Directly
    We propose that all inpatient hospices meet the provisions 
applicable to nursing homes in the 2000 edition of the LSC, with the 
exceptions discussed in section II. B. of this preamble, regardless of 
the number of patients they serve. This is not a change in 
requirements, but merely a clarification that, for LSC purposes, an 
inpatient hospice is considered a nursing home, and not another type of 
occupancy.
    We also propose not to adopt for hospices Chapter 18--Section 
3.4.5.3 of the 2000 LSC. This section requires new nursing homes to be 
equipped with corridor smoke detection systems. We believe there is no 
technical justification for this requirement because the 2000 LSC 
requires that newly constructed patient sleeping zones be provided with 
quick-response sprinklers. Quick response sprinklers activate quickly 
enough to serve a detection function, thus making corridor smoke 
detection unnecessary. The 1991 and 1994 editions of the LSC required 
quick response sprinklers in new nursing homes but did not require 
smoke detection. Therefore, we see no technical reason to require 
detection in new facilities and thus increase the cost of new 
construction without a parallel increase in safety.
    We are also proposing in paragraph (d)(3) to permit a hospice to 
meet a fire and safety code imposed by the State in lieu of the LSC if 
we determine that the State code adequately protects patients. We 
propose to do this for two reasons: (1) To afford hospices the benefit 
of meeting a state code in lieu of the federal requirements where the 
state code offers adequate protection; and (2) because we recognize 
that hospices are often located within buildings containing other 
providers already subject to this provision. For example, a hospice may 
be located entirely within a skilled nursing facility (SNF). If the SNF 
is exempt from the LSC by virtue of meeting a state code, other 
participating providers within the same building should also be 
afforded this exception.
    We also propose to delete Sec. 418.100(d)(4), the requirement that 
blind and nonambulatory patients may not be housed above the street 
level floor unless the building is fully sprinklered or has achieved a 
passing score on the Fire Safety Evaluation System (FSES) comparison, 
which is less stringent than the LSC. We are proposing this for several 
reasons. This requirement was deleted from the SNF regulations in 1989; 
however, CMS did not delete it from the parallel hospice regulations. 
In addition, the provision is redundant since any facility which meets 
the requirements of the LSC would, by definition, achieve a passing 
score on the FSES comparison.
4. Programs of All-Inclusive Care for the Elderly: 42 CFR 460.72 
Condition of Participation: Physical Environment
    We propose to retain most of the provisions of the existing interim 
final regulation for Programs of All-Inclusive Care for the Elderly 
(PACE) published in the Federal Register on November 24, 1999 (64 FR 
66234). PACE providers will continue to be required to meet LSC 
specifications for the type of facilities in which the programs are 
located (i.e., hospitals, office buildings, etc.).
    We are proposing to require the PACE center to meet the 
requirements for use of fire alarm systems in accordance with the 
occupancy section of the LSC that applies to its building. Each 
occupancy section of the LSC also requires evacuation plans, fire exit 
drills, and fire procedures, and these will be applicable to the PACE 
program.
    Moreover, we propose to retain paragraph (b)(2)(i) of 42 CFR 
460.72, which permits a PACE center to meet fire and safety 
requirements imposed by the State in lieu of the LSC if we determine 
that the State code adequately protects patients. We have done this for 
two reasons: (1) To afford a PACE center the benefit of meeting a state 
code in lieu of the federal requirements where the state code offers 
adequate protection; and (2) because we recognize that PACE centers are 
often located within buildings containing other providers already 
subject to this provision. For example, a PACE center may be located 
within a hospital. If the hospital is exempt from the LSC by virtue of 
meeting a state code, other participating providers within the same 
building should also be afforded this exemption.
    Further, in some buildings it may be impractical or impossible to 
provide a specific feature due to the construction of the building. 
Therefore, we propose to retain paragraph (b)(2)(ii), which allows for 
the waiver of specific provisions of the LSC which, if rigidly applied, 
might result in unreasonable hardship on the organization. We may waive 
specific provisions only if the waiver does not adversely affect the 
health and safety of the participants and staff.
5. Hospitals: 42 CFR 482.41  Condition of Participation: Physical 
Environment
    We propose only the changes to this section described in sections 
II. A. and II. B. of this preamble, for the reasons described therein.
6. Long Term Care Facilities: 42 CFR 483.70  Condition of 
Participation: Physical Environment
    As with hospices, we propose not to adopt Chapter 18-Section 
3.4.5.3 of the 2000 LSC for long term care (LTC) facilities such as 
skilled nursing facilities (SNFs). This section requires new nursing 
homes to have corridor smoke detection systems. We believe there is no 
technical justification for this new requirement because the 2000 LSC 
requires that new construction patient sleeping zones be provided with 
quick response sprinklers. We believe that quick response sprinklers 
activate quickly enough to serve a detection function, thus making 
corridor smoke detection unnecessary. Further, the 1991, 1994 and 1997 
editions of the LSC required quick response sprinklers in new nursing 
homes, but did not require smoke detection. Therefore, we do not see 
any technical reason to require detection in new facilities and thus 
increase the cost of new construction without a parallel increase in 
safety.
7. Intermediate Care Facilities for the Mentally Retarded: 42 CFR 
483.470  Condition of Participation: Physical Environment
    We propose to retain most of the provisions of the existing 
regulation for Intermediate Care Facilities for the Mentally Retarded 
(ICFs/MR). ICFs/MR will continue to be permitted to meet either the 
Residential Board and Care Occupancies chapter or the Health Care

[[Page 54183]]

Occupancy chapter of the Life Safety Code, as appropriate.
    We propose to retain the provision in paragraph (j)(1)(ii) that 
allows the State survey agency to apply different chapters of the LSC 
to different buildings or parts of buildings so as not to place an 
undue burden on providers to have an entire building comply with the 
more stringent provisions of the Health Care chapter when they could 
instead meet the Board and Care for part of their facility, when 
appropriate.
    We also propose that, for ICFs/MR under Board and Care, the 
Evacuation Difficulty Index (EDI) must be determined by use of the Fire 
Safety Evaluation System for Board and Care Facilities (FSES/BC). In 
referring to the EDI, we propose to delete from paragraph (j)(1)(iii) 
the reference to Appendix F, since the FSES/BC is no longer an appendix 
of the LSC, but appears as its own NFPA document in the NFPA 101A Guide 
on Alternative Approaches to Life Safety. Additionally, we propose to 
delete the reference to facilities of 16 beds or less from this 
paragraph to clarify that a larger facility could be subject to the 
Board and Care Chapter, and that its EDI would have to be calculated 
based on the FSES/BC. Again, this provision would allow certain ICFs/MR 
to meet the less restrictive Board and Care Chapter rather than the 
health care chapter.
    In paragraph (j)(2)(ii), we propose to change ``the Secretary'' to 
``CMS'' to more accurately reflect the statutory authority (this 
provision currently appears in paragraph (j)(2)(i)(B)).
    We propose in paragraph (j)(3) that waivers of specific provisions 
of the LSC apply only to facilities that meet the LSC definition of a 
Health Care occupancy. There are no waivers for facilities under Board 
and Care, since the FSES/BC affords the flexibility of alternative 
arrangements for compliance.

III. Regulatory Impact Statement

    This proposed rule, adopting the 2000 edition of the LSC, whose 
objective is to provide safety to life during fires and other 
emergencies. Adoption and use of the 2000 edition of the LSC will bring 
us up to date in requiring the latest and best technology in fire 
protection for our beneficiaries. These requirements are designed to 
protect people, both staff and beneficiaries. The 2000 edition of the 
LSC also protects property and can reduce the dollar loss associated 
with a fire. For example, this edition of the LSC requires that any new 
construction must install quick response sprinkler systems increasing 
the level of protection to our beneficiaries. By adopting the 2000 
edition of the LSC and deleting references to all older editions of the 
LSC this will decrease confusion. Currently, the provider community 
must comply with a variety of editions of the LSC. By adopting the 2000 
edition of the LSC we will eliminate any confusion as to which edition 
a health care facility must follow. This is particularly important when 
a facility has multiple buildings constructed at differing times or a 
single building with multiple wings/additions constructed at different 
times. Instead of each building complying with different editions of 
the LSC, the proposed rule will require all the buildings to comply 
with the same edition of the LSC. The use of a single edition of the 
code should also contribute to lowering the cost of complying with the 
requirements for testing and maintenance of fire protection systems.
    We have examined the impact of this proposed rule as required by 
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Pub. L. 
96-354). This proposed rule is neither expected to meet the criteria to 
be considered economically significant, nor do we believe it will meet 
the criteria for a major rule. Therefore, an initial regulatory impact 
analysis is not required.
    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 annually). The RFA requires 
agencies to analyze options for regulatory relief of small businesses. 
For purposes of the RFA, small entities include small businesses, non-
profit organizations and governmental agencies. Most hospitals and most 
other providers and suppliers are small entities, either by nonprofit 
status or by having revenues of $5 million to $25 million or less 
annually (see 65 FR 69432).
    Section 1102(b) of the Act requires us to prepare a regulatory 
impact analysis for any rule that may have a significant impact on the 
operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 603 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside a Metropolitan 
Statistical Area and has fewer than 100 beds.
    There are several reasons it was determined that this rule will not 
meet the criteria to be considered economically significant, or the 
criteria for a major rule. Each new edition of the LSC builds on prior 
editions, changes from one edition to the next have been relatively 
minor since 1985. The 1985 Code, for the first time, required newly 
constructed facilities which met the health care occupancy requirements 
and which were over 75 feet or higher to be fully equipped with 
sprinklers. The 1991, 1994, 1997 and 2000 editions require mandatory 
universal sprinklers in new construction for health care occupancies. 
While we do not know how many new facilities will be built under this 
requirement, the provision of sprinkler systems in health care 
facilities is standard practice today. In addition, for those 
facilities constructed prior to 1985, the use of the FSES and Secretary 
approved waivers has enabled older buildings to meet requirements that 
ensure patient safety from fire without undue cost burdens on 
providers. The vast majority of facilities that needed to make major 
physical environment changes to comply with LSC requirements have long 
since done so or are no longer in service. We estimate the annual 
regulatory impact of this rule to be approximately $96,356,599. While 
$96 million seems high, this cost does not take into account any waiver 
the Secretary may grant to waive provisions of the LSC. We are 
proposing to retain the existing authority of the Secretary to waive 
provisions of the LSC, further reducing the exposure to additional cost 
and burden for facilities with unique situations that can justify the 
application of waivers, and which the Secretary determines will not 
endanger the health and safety of patients. We also note that the 2000 
LSC permits the use of the FSES as an alternative approach which may 
also reduce the cost of compliance significantly. The FSES is an 
equivalency design system. The FSES may allow a facility to comply with 
the LSC without having to make changes to the facility due to other 
offsetting or compensating fire protection features that exist in the 
facility. We do not know the amount this may save a health care 
facility because each facility must be reviewed individually to 
determine compliance under the FSES.
    Finally, the cost does not estimate any reductions if the Secretary 
accepts a State's fire and safety code instead of the NFPA's LSC if the 
State's fire and safety code adequately protects patients. The cost we 
estimated, $96 million, for

[[Page 54184]]

all health care facilities to come into compliance with the 2000 LSC is 
the total cost without factoring in any waivers that may be granted 
which could significantly reduce the total amount to the industry.
    Section 202 of the Unfunded Mandates Reform Act of 1995 requires 
that agencies assess anticipated costs and benefits before issuing any 
rule that may result in an expenditure by State, local, or tribal 
governments, in the aggregate, or by the private sector, of $100 
million in any one year. This rule will not have an effect on the 
governments mentioned, and the private sector costs will not be greater 
than the $100 million threshold.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the office of Management and Budget.

IV. Federalism

    Executive Order 13132 establishes requirements an agency must meet 
when it promulgates a proposed rule (and subsequent final rule) that 
imposes substantial direct compliance costs on State and local 
governments, preempts State law, or otherwise has Federalism 
implications.
    We have examined this final rule and have determined that this 
final rule will not have a substantial direct impact on the rights, 
rules and responsibilities of State, local or tribal governments.

V. Collection of Information Requirements

    This rule does not impose any information collection and record 
keeping requirements that are subject to review by the Office of 
Management and Budget under the Paperwork Reduction Act of 1995 (44 
U.S.C. 3501 et seq.).

List of Subjects in 42 CFR

Part 403

    Health insurance, Hospitals, Intergovernmental relations, Medicare, 
Reporting and recordkeeping requirements.

Part 416

    Health facilities, Kidney diseases, Medicare, Reporting and 
recordkeeping requirements.

Part 418

    Health facilities, Hospice care, Medicare, Reporting and 
recordkeeping requirements.

Part 460

    Aged, Health, Incorporation by reference, Medicare, Medicaid, 
Reporting and record keeping requirements.

Part 482

    Grant programs-health, Hospitals, Medicaid, Medicare, Reporting and 
recordkeeping requirements.

Part 483

    Grant programs-health , Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.
    For the reasons set forth in the preamble, 42 CFR Chapter IV would 
be amended as follows:

PART 403--RELIGIOUS NON-MEDICAL HEALTH CARE INSTITUTIONS

    A. Part 403 is amended as set forth below:
    1. The authority citation for part 403 continues to read as 
follows:

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

Subpart E--Conditions of Participation: Other Services

    2. Amend Sec. 403.744 as follows:
    a. The introductory text to paragraph (a) is republished.
    b. Paragraph (a)(1) is revised.


Sec. 403.744  Condition of participation: Life safety from fire.

    (a) General. An RNHCI must meet the following conditions:
    (1) Except as otherwise provided in this section, the RNHCI must 
meet the new or existing health care occupancies provisions of the 2000 
edition of the Life Safety Code of the National Fire Protection 
Association. (The Director of the Office of the Federal Register has 
approved the NFPA 101 2000 edition of the Life Safety Code 
(issued January 14, 2000) for incorporation by reference in accordance 
with 5 U.S.C. 552(a) and 1 CFR part 51. A copy of the Code is available 
for inspection at the CMS Information Resource Center, 7500 Security 
Boulevard, Baltimore, MD and at the Office of the Federal Register, 800 
North Capitol Street NW., Suite 700, Washington, DC. Copies may be 
obtained from the National Fire Protection Association, Batterymarch 
Park, Quincy, MA 02269. If any changes in this edition of the Code are 
incorporated by reference, CMS will publish a notice in the Federal 
Register to announce the changes.) The following provisions of the 
adopted Life Safety Code do not apply to an RHNCI:
    (i) Chapter 5--Performance Based Option.
    (ii) Chapter 19.3.6.3.2, exception number 2.
* * * * *

PART 416--AMBULATORY SURGICAL SERVICES

    B. Part 416 is amended as set forth below:
    1. The authority citation for part 416 continues to read as 
follows:

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

Subpart C--Specific Conditions for Coverage

    2. Amend Sec. 416.44 by revising paragraphs (b)(1) and (b)(3) to 
read as follows:


Sec. 416.44  Condition for coverage--Environment.

* * * * *
    (b) Standard: Safety from fire. (1) Except as otherwise provided in 
this section, the ASC must meet the provisions applicable to Ambulatory 
Health Care Centers of the 2000 edition of the Life Safety Code of the 
National Fire Protection Association (which is incorporated by 
reference in Sec. 403.744(a)(1)(i) of this chapter), regardless of the 
number of patients served. The following provisions of the adopted 
edition of the LSC do not apply to an ASC:
    (i) Chapter 5--Performance Based Option.
    (ii) Chapter 19.3.6.3.2, exception number 2.
* * * * *
    (3) The provisions of the Life Safety Code do not apply in a State 
if CMS finds that a fire and safety code imposed by State law 
adequately protects patients in an ASC.
* * * * *

PART 418--HOSPICE CARE

    C. Part 418 is amended as set forth below:
    1. The authority citation for part 418 continues to read as 
follows:

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

Subpart E--Conditions of Participation: Other Services

    2. Amend Sec. 418.100 as follows:
    a. Paragraphs (d)(1) and (d)(3) are revised.
    b. Paragraph (d)(4) is removed.


Sec. 418.100  Condition of participation: Hospices that provide 
inpatient care directly.

* * * * *
    (d) Standard: Fire protection. (1) Except as otherwise provided in 
this section, the hospice must meet the

[[Page 54185]]

provisions applicable to nursing homes of the 2000 edition of the Life 
Safety Code of the National Fire Protection Association (which is 
incorporated by reference in Sec. 403.744(a)(1)(i) of this chapter), 
regardless of the number of patients served. The following provisions 
of the adopted edition of the LSC do not apply to a hospice:
    (i) Chapter 5--Performance Based Option.
    (ii) Chapter 18.3.4.5.3.
    (iii) Chapter 19.3.6.3.2, exception number 2.
* * * * *
    (3) The provisions of the Life Safety Code do not apply in a State 
if CMS finds that a fire and safety code imposed by State law 
adequately protects patients in hospices.
* * * * *

PART 460--PROGRAMS FOR ALL-INCLUSIVE CARE FOR THE ELDERLY

    D. Part 460 is amended as set forth below:
    1. The authority citation for part 460 continues to read as 
follows:

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

Subpart E--PACE Administrative Requirements

    2. Revise Sec. 460.72(b)(1) to read as follows:


Sec. 460.72  Physical Environment.

* * * * *
    (b) Fire safety-- (1) General rule. (i) Except as otherwise 
provided in this section, a PACE center must meet the occupancy 
provisions of the 2000 edition of the Life Safety Code (LSC) of the 
National Fire Protection Association (which is incorporated by 
reference in Sec. 403.744(a)(1)(i) of this chapter) that apply to the 
type of setting in which the center is located.
    (ii) The following provisions of the adopted edition of the LSC do 
not apply to PACE centers:
    (A) Chapter 5--Performance Based Option.
    (B) Chapter 19.3.6.3.2, exception number 2.
* * * * *

Subchapter E--Standards and Certification

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

    E. Part 482 is amended as set forth below:
    1. The authority citation for part 482 continues to read as 
follows:

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

Subpart C--Basic Hospital Functions

    2. Amend Sec. 482.41 by revising paragraph (b)(1) to read as 
follows:


Sec. 482.41  Condition of participation: Physical environment.

* * * * *
    (b) Standard: Life safety from fire. (1) Except as otherwise 
provided in this section, the hospital must meet the applicable 
provisions of the 2000 edition of the Life Safety Code of the National 
Fire Protection Association (which is incorporated by reference in 
Sec. 403.744(a)(1)(i) of this chapter).
    (i) The following provisions of the adopted edition of the LSC do 
not apply to hospitals:
    (A) Chapter 5--Performance Based Option.
    (B) Chapter 19.3.6.3.2, exception number 2.
* * * * *

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

    F. Part 483 is amended as set forth below:
    1. The authority citation for part 483 continues to read as 
follows:

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

Subpart B--Requirements for Long Term Care Facilities

    2. Amend Sec. 483.70 by revising paragraph (a)(1) to read as 
follows:


Sec. 483.70  Physical environment.

* * * * *
    (a) Life safety from fire. (1) Except as otherwise provided in this 
section, the facility must meet the applicable provisions of the 2000 
edition of the Life Safety Code of the National Fire Protection 
Association (which is incorporated by reference in 
Sec. 403.744(a)(1)(i) of this chapter). The following provisions of the 
adopted edition of the LSC do not apply to long term care facilities:
    (i) Chapter 5--Performance Based Option.
    (ii) Chapter 18.3.4.5.3.
    (iii) Chapter 19.3.6.3.2, exception number 2.
* * * * *

Subpart I--Conditions of Participation for Intermediate Care 
Facilities for the Mentally Retarded

    3. Amend Sec. 483.470 as follows:
    a. Paragraph (j)(1)(i) is revised.
    b. Paragraph (j)(1)(iii) is revised.
    c. Paragraph (j)(2) is revised.
    d. Paragraph (j)(3) is added.


Sec. 483.470  Condition of participation: Physical environment.

* * * * *
    (j) Standard: Fire protection--(1) General. (i) Except as otherwise 
provided in this section, the facility must meet the applicable 
provisions of either the Health Care Occupancies Chapters or the 
Residential Board and Care Occupancies Chapter of the 2000 edition of 
the Life Safety Code of the National Fire Protection Association (which 
is incorporated by reference in Sec. 403.744(a)(1)(i) of this chapter).
* * * * *
    (iii) A facility that meets the LSC definition of a residential 
board and care occupancy must have its evacuation capability evaluated 
in accordance with the Evacuation Difficulty Index of the Fire Safety 
Evaluation System for Board and Care facilities (FSES/BC).
    (2) Exceptions for all facilities. (i) The following provisions of 
the adopted LSC do not apply to a facility:
    (A) Chapter 5--Performance Based Option.
    (B) Chapter 19.3.6.3.2, exception number 2.
    (ii) If CMS finds that the State has a code imposed by State law 
that adequately protects a facility's clients, CMS may allow the State 
survey agency to apply the State's fire and safety code instead of the 
LSC.
    (3) Facilities that meet the LSC definition of a health care 
occupancy.
    (i) After consideration of State survey agency recommendations, CMS 
may waive, for appropriate periods, specific provisions of the Life 
Safety Code if the following requirements are met:
    (A) The waiver would not adversely affect the health and safety of 
the clients; and
    (B) Rigid application of specific provisions would result in an 
unreasonable hardship for the facility.
    (ii) [Reserved]
* * * * *

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395). (Catalog of Federal Domestic Assistance 
Program No. 93.773, Medicare--Hospital Insurance; and Program No. 
93.774, Medicare--Supplementary Medical Insurance Program; and 
Program No. 93.778, Medical Assistance Program)


[[Page 54186]]


    Dated: September 17, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Dated: October 1, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 01-25422 Filed 10-25-01; 8:45 am]
BILLING CODE 4120-01-P