[Federal Register Volume 66, Number 219 (Tuesday, November 13, 2001)]
[Rules and Regulations]
[Pages 56762-56769]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-28439]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 416, 482, and 485

[CMS-3070-F]
RIN 0938-AK95


Medicare and Medicaid Programs; Hospital Conditions of 
Participation: Anesthesia Services

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

ACTION: Final rule.

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SUMMARY: This final rule amends the Anesthesia Services Condition of 
Participation (CoP) for hospitals, the Surgical Services Condition of 
Participation for Critical Access Hospitals (CAH), and the Surgical 
Services Condition of Coverage for Ambulatory Surgical Centers (ASCs), 
and, with its publication, withdraws the January 18, 2001 final rule 
(66 FR 4674). This final rule maintains the current physician 
supervision requirement for certified registered nurse anesthetists 
(CRNAs), unless the Governor of a State, in consultation with the 
State's Boards of Medicine and Nursing, exercises the option of 
exemption from this requirement consistent with State law.

DATES: The rule published in the Federal Register on January 18, 2001 
(66 FR 4674) was delayed at 66 FR 15352 (March 19, 2001) and was 
further delayed at 66 FR 27598 (May 18, 2001) is withdrawn as of 
November 13, 2001. The amendments set forth in this final rule are 
effective November 13, 2001.

FOR FURTHER INFORMATION CONTACT: Stephanie Dyson, (410) 786-9226. 
Jeannie Miller, (410) 786-3164.

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I. Background

A. Legislation

    Sections 1861(e)(1) through (e)(8) of the Social Security Act (the 
Act) provide that a hospital participating in the Medicare program must 
meet certain specified requirements. Section 1861(e)(9) of the Act 
specifies that a hospital also must meet such other requirements as the 
Secretary finds necessary in the interest of the health and safety of 
the hospital's patients. Section 1820 of the Act contains criteria for 
application for States establishing a Critical Access Hospital. 
Sections 1832(a)(2)(F)(i) and 1833(i) provide coverage requirements for 
ASCs. Section 1861(bb) of the Act, provides definitions for certified 
registered nurse anesthetists (CRNAs) and their services.

B. General

    On December 19, 1997, we published a proposed rule entitled, 
``Hospital Conditions of Participation, Provider Agreements and 
Supplier Approval,'' (62 FR 66726) in the Federal Register. The CoPs 
are the requirements that hospitals must meet to participate in the 
Medicare and Medicaid programs. The CoPs are intended to protect 
patient health and safety and to ensure that high quality care is 
provided to all patients. We proposed, among other things, to let State 
law determine which professionals would be permitted to administer 
anesthetics, and the level of supervision required for practitioners in 
each category, recognizing States' traditional domain in establishing 
professional licensure and scope-of-practice laws. Policy surrounding 
the proposal was based on the principle that States traditionally 
regulate practitioner scope-of-practice, and was also based on the lack 
of evidence to support maintaining a special Federal requirement for 
physician supervision of CRNAs that would have the effect of 
superseding State requirements. We also stated that a fundamental 
principle was to facilitate flexibility in how a hospital would meet 
our performance expectations, and to eliminate structure and process 
requirements unless there was evidence that they improved desired 
outcomes for patients.
    The final rule was published on January 18, 2001 (66 FR 4674) and 
was to have been effective March 19, 2001. In accordance with the 
proposed rule, the January 2001 final rule changed the physician 
supervision requirement for CRNAs furnishing anesthesia services in 
hospitals, ASCs, and CAHs. Under that rule, State laws would control 
which professionals would be permitted to administer anesthesia and the 
level of supervision required for CRNAs. It did not prohibit, limit, or 
restrict in any way the practice of medicine by a physician or 
anesthesiologist. Hospitals, ASCs, and CAHs retained the ability to 
exercise stricter standards than those required by State law.
    On March 19, 2001, the effective date was delayed 60 days in 
accordance with the memorandum to the President from the Chief of 
Staff, dated January 20, 2001, and published in the Federal Register 
(see 66 FR 15352). On May 18, the rule was further delayed for 180 
days, until November 14, 2001, in order to explore alternatives for 
implementation (see 66 FR 27598). In reviewing the January 2001 final 
rule, we identified two important questions that were not raised and 
thus not addressed previously.
     One question concerned the States' reliance on Medicare 
physician supervision requirements in establishing State scope-of-
practice laws and monitoring practices. In some cases, State laws and 
regulations may have been written with the assumption that Medicare 
would continue its longstanding policy requiring physician supervision 
of the anesthesia care provided by CRNAs. Eliminating Medicare 
requirements now could change supervision practices in some States 
without allowing States to consider their individual situations. In the 
absence of Federal regulations, we were concerned that States might 
have promulgated different laws or different monitoring practices.
     The second question was whether a prospective study or 
monitoring should be undertaken to assess the impact in those States 
where CRNAs practice without physician supervision. The literature we 
reviewed indicated that the anesthesia-related death rate is extremely 
low, and that the

[[Page 56763]]

administration of anesthesia in the United States is safe relative to 
surgical risk. However, in the absence of clear research evidence it is 
impossible to definitively document outcomes related to independent 
CRNA practice.
    Both were legitimate implementation questions; thus, in addition to 
delaying the effective date of the January final rule, we published a 
new proposed rule on July 5, 2001 (66 FR 35395), which proposed an 
alternative method for implementing the independent practice proposal 
in lieu of proposing an immediate removal of the requirement. Our 
alternative proposal was to--
    (1) Establish an exemption from the physician supervision 
requirement by recognizing a Governor's written request to us attesting 
that, after consultation with the State's Boards of Medicine and 
Nursing on issues related to access to and the quality of anesthesia 
services, and consistent with State law, he or she is aware of the 
State's right to an exemption from the requirement and has determined 
that it is in the best interests of the State's citizens to exercise 
this exemption, and
    (2) Have the Agency for Healthcare Research and Quality (AHRQ), 
with input from HCFA and that of other stakeholders, including 
anesthesiologists and CRNAs, design and conduct a prospective study or 
monitoring effort to assess outcomes of care issues relating to CRNA 
practice and involvement. One approach that we sought comment on was to 
create a voluntary registry that could prospectively monitor these 
practices.
    The State survey agencies (SAs), in accordance with section 1864 of 
the Social Security Act (the Act), survey hospitals to assess 
compliance with the CoPs. The SAs conduct surveys using the 
instructions in the State Operations Manual (SOM), (Health Care 
Financing Administration (HCFA) Publication No. 7). The SOM contains 
the regulatory language of the CoPs as well as interpretive guidelines 
and survey procedures and probes that elaborate on regulatory intent 
and give guidance on how to assess provider compliance. Under 
Sec. 489.10(d), the SAs determine whether hospitals have met the CoPs 
and report their recommendations to us.
    Under the authority of section 1865 of the Act and the regulations 
at Sec. 488.5, hospitals accredited by the Joint Commission on 
Accreditation of Healthcare Organizations (JCAHO) or the American 
Osteopathic Association (AOA) are deemed to meet the requirements in 
the CoPs, and therefore are not routinely surveyed for compliance by 
the SAs.

C. Recognizing State Laws and Professional Scope of Practice

    The Congress has specified which non-physician health professionals 
may receive separate payment for their professional services (such as 
CRNAs and nurse practitioners). In addition, the Congress left the 
function of licensing these health professionals to the States. 
Medicare recognizes the scope of practice established by the States for 
these health professionals. This rule establishes a shared commitment 
to quality care among States, Medicare providers, and us. States are in 
the best position to assess the evidence and consider data relevant to 
their own situations (for example, physician access, hospital and 
patient characteristics and needs of rural areas) about the best way to 
deliver anesthesia care. Hospitals can always exercise stricter 
standards than required by State law. We will conduct a review of the 
effects on the quality of anesthesia care furnished to Medicare 
beneficiaries resulting from the greater flexibility provided to States 
and hospitals under this rule, by allowing governors to exercise their 
ability to opt-out of the supervision requirement.

II. Provisions of the Proposed Anesthesia CoP

    We proposed several changes to the January 18 final rule that was 
to have become effective on November 14, 2001. The proposed changes 
were included in our proposed rule published on July 5, 2001 (66 FR 
35395) and affected the physician supervision requirements for 
certified registered nurse anesthetists furnishing anesthesia services 
in hospitals (42 CFR 482.52), critical access hospitals (42 CFR 
485.639), and ambulatory surgical centers (42 CFR 416.42) that 
participate in the Medicare and Medicaid programs. Under the final 
rule, the current physician supervision requirement would be 
maintained, unless the governor of a State, in consultation with the 
State's Boards of Medicine and Nursing, exercises the option of 
exemption from this requirement, consistent with State law. These 
proposed changes are an integral part of our efforts to improve the 
quality of care furnished through Federal programs, while at the same 
time recognizing a State's traditional domain in establishing 
professional licensure and scope-of-practice laws. It will give States 
the flexibility to improve access and address safety issues.
    We solicited comments on whether a prospective study or monitoring 
should be undertaken to assess the impact of those states where CRNAs 
practice without physician supervision, or where physicians practice 
without the assistance of CRNAs.

III. Analysis of and Responses to Public Comments

    We received over 28,500 comments on the proposed anesthesia 
requirements. These comments were from hospitals, professional 
organizations, accrediting bodies, practitioners, and other 
individuals. Summaries of the public comments received and our 
responses to those comments are set forth below.

A. Outcome Study/Registry

    We asked for comments on whether a prospective study or monitoring 
should be undertaken to assess the impact in those States where CRNAs 
practice without physician supervision, or where physicians practice 
without the assistance of CRNAs.
    Comment: Commenters were in favor of, and supported our efforts to 
undertake a prospective anesthesia outcome study. Overwhelmingly, 
commenters expressed that a study was preferred over a registry, 
stating that a study would settle many issues with a greater degree of 
certainty than the registry as a registry would not yield sufficient 
scientific data. The majority of commenters were opposed to a voluntary 
registry, stating this method of study carries a heavy bias and would 
not yield definitive scientific data for use by CMS and the nation's 
governors. However, there were a large number of commenters that 
thought a study was unfair, discriminatory (assuming it would 
exclusively study CRNA practice), expensive, and time consuming. 
Alternatives were offered such as studying the impact of the removal of 
the requirement that physicians supervise CRNAs in those States that 
have opted out of the Federal requirement.
    Response: We have chosen not to pursue a registry at this time. 
Instead, AHRQ will conduct a study of anesthesia outcomes in those 
States that choose to opt-out of the CRNA supervision requirement 
compared to those States that have not.
    Comment: One commenter questioned the ethics of the proposed study, 
and asked if patients should be requested to give informed consent for 
excluding a physician anesthesiologist from their care.
    Response: We are not proposing to carry out any independent 
demonstration, which affects patient choice regarding anesthesia 
professionals. The study would rely on data collection from practices 
in use in

[[Page 56764]]

the States, according to State law and hospital policy.

B. Boards of Medicine and Nursing

    In the proposed rule, we proposed that the governor must consult 
with the State's Board of Medicine and Nursing in determining if it is 
in the best interest of that particular state to exercise the option of 
exemption from the physician supervision requirement.
    Comment: Overall the majority of commenters questioned the extent 
of involvement of the Boards of Medicine and Nursing, and requested 
clarification and procedures detailing the means by which Boards of 
Medicine and Nursing act to advise the governor under the rule. 
Commenters stated that if implemented, this would create an extremely 
difficult political situation because many governors will not want to 
be involved in battles between nurses and physicians, or, potentially, 
battles between nursing and medical boards. Commenters also stated that 
such a consultation should involve more than a perfunctory 
communication with the State boards, and said that ``ideally,'' a 
governor and the State boards should be required to all agree to opt-
out, while some commenters suggested the need for governors to obtain 
concurrence from only the Board of Medicine. In the absence of 
concurrence, some commenters suggested, at a minimum, the Boards should 
be required to provide written comments on a governor's petition, which 
should be available for public inspection. Commenters opposed to the 
proposed rule, urged CMS to reconsider if there is any useful purpose 
in the governor consulting with these entities.
    Response: The proposed consultation with the Boards of Medicine and 
Nursing is to ensure appropriate involvement of parties on both sides 
of the issue. We purposefully were not prescriptive in detailing 
processes or steps that should be undertaken. In addition, the 
particular factors that are pertinent in reaching a sound policy 
decision will invariably vary from State to State (for example, access 
to anesthesia services in rural areas). We agree governors should be 
given the discretion and maximum flexibility to decide with whom they 
should consult, and this regulation does not prevent governors from 
consulting with others should they find it necessary.
    In addition, we realize States have experience in promulgating laws 
and soliciting opinion of various types from various professional 
organizations. For example, in 1997, Oregon passed a Law (SB 412--69th 
Congress) requiring the State Board of Nursing to adopt scope of 
practice for CRNAs, and establish procedures for issuing certification 
of special competency for a CRNA. This law, which allows CRNAs to 
deliver specified services in hospitals without medical collaboration, 
and allows CRNAs to deliver specified services in ASCs if no 
anesthesiologist is available, was a direct result of collaboration and 
compromise between the Oregon Medical Association, the Oregon 
Association of Hospitals and Health Systems, the Oregon Association of 
Nurse Anesthetists, and the Oregon Society of Anesthesiologists. 
Therefore, we do not agree that CMS should set standards, guidelines, 
or criteria for a consultation process to be used by any State. We are 
giving the States flexibility to develop a process that works best for 
its particular situation and unique needs.
    Comment: A few commenters stated that requiring Boards of 
Medicine's input would place one profession (medicine) in a position to 
dictate how another profession (nursing) should be regulated. 
Commenters further argued that requiring Boards of Medicine's input 
would have obvious ``anti-competitive implications,'' and could 
encourage behavior that would hinder their ability to practice without 
physician supervision. Commenters in opposition to the opt-out method 
stated this is a cumbersome process that, by mandating consultation 
with the Board of Medicine, allows physicians to ``initiate their brand 
of grass roots politics.''
    Response: CMS is not asking the governor to allow one profession to 
make judgements regarding the scope of practice of another. As noted 
above, the governors are using this consultation to gather information 
that may or may not be used in making a decision regarding the delivery 
of anesthesia services. This consultation serves as an opportunity for 
participants on both sides of the issue to have their opinions, issues 
and concerns heard, first hand, by the individual or designee 
responsible for making the decisions regarding whether to opt-out of 
the Federal supervision requirement.

C. State Law Determination

    The proposed rule gave the governor the ability to exercise the 
right of exemption from the physician supervision requirement of CRNAs, 
if it was in the best interest of that particular State and if it was 
consistent with State law.
    Comment: The majority of comments focused on the interpretation of 
existing States' scope-of-practice laws. Commenters requested 
clarification and the promulgation of documented procedures detailing 
the means by which State law would be determined, and suggested that 
CMS provide steps and guidance to accomplish this. They argued that a 
more specific process should be established for determining whether 
opting-out is consistent with State law. One commenter suggested 
revising the regulations text to require the governor to attest that 
the opt-out is consistent ``with all relevant State laws,'' arguing 
that in most States, several statutory codes or regulations ``issued 
pursuant thereto'' bear on the issue whether a nurse anesthetist may 
practice with or without supervision by or in collaboration with a 
physician and are thus germane to the issue of whether opt-out is 
consistent with State law.
    Response: We recognize there is a difference of opinion of those 
parties on both sides of this issue, regarding what State law is, but 
we believe the governors are best suited to make determinations in this 
area. Anesthesiologists have argued that only one State, New Hampshire, 
allows CRNAs to practice without physician supervision. 
Anesthesiologists further argue that the American Association of Nurse 
Anesthetists (AANA) calculated the number of States permitting 
independent CRNA practice based solely on nursing regulations and 
ignored the mandate of the ``medical acts,'' hospital regulations, and 
controlled-substance laws. Conversely, the AANA argues that 39 states 
do not have a physician ``supervision'' requirement for CRNAs scope of 
practice laws or regulations. The AANA further states if one takes into 
account State hospital licensing laws or regulations, 30 States still 
do not require physician supervision. They continue by stating if 
clinical ``direction'' requirements are considered in addition to 
supervision, 31 States do not have physician supervision or directions 
requirements for CRNAs in nursing or medical laws or regulations. And 
last, taking into account State hospital licensing laws or regulations, 
20 States still do not require physician supervision or direction 
requirements.
    Objective interpretation of this issue was provided by a 1998 
Journal of the American Medical Association (JAMA) article. In this 
article, Cooper, Henderson, and Dietrich concluded that 18 States 
permit CRNAs to practice ``independently.'' (Cooper, Richard A., 
Henderson, Tim, Dietrich, Craig L., ``Roles of Nonphysican Clinicians 
as Autonomous Providers of Patient Care.'' JAMA. 1998; 270:795-802, at 
page 797 in Table 2). The ASA challenged the findings of this article, 
contending its

[[Page 56765]]

figures were incorrect. The authors of this article reasserted (in a 
letter published at page 511 of the February 10, 1999 issue of JAMA), 
that their findings are correct. The authors stated in their letter 
that they used data collection from not only the nonphysician clinician 
organizations, but also the Health Policy Tracking service at the 
National Conference of State Legislatures and the Internet Web sites of 
individual States. It was from these sources, they stated ``we have 
concluded that CRNAs have the authority to practice independent of 
physician supervision in 18 states.''
    Under this final rule, CRNAs would be allowed to practice without 
physician supervision where State law permits subject to the governor's 
attestation. Likewise, CRNAs would have to be supervised by a physician 
where such oversight is required by State law or hospital policy. It 
would not allow a CRNA to practice outside the scope of authority 
granted by State law, nor would it prohibit, limit, or restrict in any 
way the practice of medicine by a physician or anesthesiologist. We 
emphasize that if State law establishes a more stringent rule on 
administration of anesthesia, hospitals would be required to comply 
with State law. In addition, hospitals can always exercise stricter 
standards than required by State law. The final rule would not require 
hospitals under any circumstance, to eliminate physician supervision if 
they deem this appropriate. Again, we believe that the governor is best 
suited to determine whether an opt-out is consistent with State law.
    Comment: Commenters suggested that we strengthen the requirement by 
mandating a written opinion of a State attorney general to support any 
opt-out decision, arguing that determination of the issue of 
``consistent with State law'' will require examination of the nursing 
code, medical code, various institutional codes, codes for controlled 
substances, and reconciliation of the terms of each code to the others. 
These commenters concluded that this is a task ``normally'' performed 
by the State attorney general.
    Response: States have their own regulatory and administrative 
structures and rules in place, and we respect the authority of States 
to meet regional/local needs. State authorities are experienced at 
regulating the licensing, education, training, and skills of the 
professionals practicing under their purview, without the burden of 
prescriptive Federal regulations. The Congress has left this licensure 
function to States, and Medicare recognizes the scope of practice for 
which health professionals are licensed by States. Given this, we 
believe States have the responsibility for clarifying their laws and 
seeking opinion, if needed, on definition of terms such as 
collaboration, direction or the allowance of CRNAs to practice without 
physician supervison. This one exception to Medicare's standards for 
deferring to States on health professionals licensure matters, does not 
require further unnecessary burdensome restrictions such as mandatory 
solicitation of the attorney general's opinion.
    Comment: Commenters requested that CMS provide procedural 
safeguards to ensure that the State governors, in their exercise of 
their discretion, would observe existing State laws in regards to 
physician supervision.
    Response: This administration strongly believes in deferring to 
State authority whenever possible. The proposed strategy strikes an 
appropriate balance between the equally important goals of maintaining 
patient safety and encouraging state innovation and flexibility, 
especially in areas where States have historically had a strong role. 
We are not restricting or limiting the legislative or regulatory 
process at a State level. If governors feel it is in the best interest 
of their State to allow CRNAs to practice without supervision, they do 
have the authority to promulgate laws allowing such practice.

E. Governors' Authority to ``Opt-out''

    The proposed rule would give governors the ability to exercise the 
option of exemption from the requirement of physician supervision of 
CRNAs.
    Comment: A number of commenters who do not support the July 5, 2001 
proposed rule remain opposed to the governors' opt-out authority, 
stating they do not believe safety standards should differ from State 
to State. These commenters argue that if governors are allowed to opt 
out, there will be differences and disparities among the various 
States, resulting in inequality of care across the country. As a 
result, they stated that Medicare beneficiaries would lose an important 
Federal guarantee for minimum standards of anesthesia care, and instead 
would be subjected to a variety of State laws. Some of these commenters 
stated that they accepted the idea that this is a compromise between 
Federal safety-oriented regulations and the protection of States' 
rights, but acceptable only if accompanied by stringent regulations 
guiding this process.
    Response: This rule establishes a shared commitment to quality care 
among us, the States, and Medicare providers. The final rule broadens 
the overall flexibility of States by permitting individuals and 
authorities closer to patient care delivery to make decisions about the 
best way to deliver health care services. States are in the best 
position to assess the evidence and consider data relevant to their own 
situations (for example, physician access, hospital and patient 
characteristics and needs of rural areas) about the best way to deliver 
anesthesia care. It will effectively provide greater discretion to 
State authorities that are experienced at regulating the licensing, 
education, training, and skills of the professionals practicing under 
their purview, without the burden associated with duplicative 
regulatory oversight. Allowing States to make determinations about 
health care professional standards of practice, and hospitals to make 
decisions regarding the delivery of care, assures that those closest 
to, and who know the most about, the health care delivery system are 
accountable for the outcomes of that care.
    Comment: Although commenters believe States should not be able to 
opt-out, it was strongly suggested that CMS strengthen the regulation 
text and provide stringent provisions, which should include 
``procedural safeguards'' to assure that the rules' opt-out conditions 
are strictly satisfied. Commenters believed this process is flawed and 
needs to be fine-tuned and clarified in order to be workable in a 
practical way. Commenters in support of the July 5, 2001 proposed rule, 
supported the concept of a governor's right to opt-out of the physician 
supervision requirement, but only under what was described as the 
``limiting conditions'' of the proposed rule. Those commenters 
objecting to the opt-out stated that the decision would be arbitrary, 
and that governors would succumb to political pressure. Questions were 
raised such as, ``can a governor opt-out for a single hospital or 
surgical center, or class of institutions?''
    Response: In the proposed rule, we stated the governor was best 
able to make a determination of need and safety for his/her particular 
State. Further, we believe a Federal regulation permitting opt-out for 
particular classes of institutions or particular facilities would be 
confusing, and therefore we are not creating a cumbersome process of 
only allowing specific hospitals or classes of institutions on the 
Federal level. However, this does not prevent the governor from 
requesting an opt-out on behalf of such facilities at the State level. 
This regulation does not and should not impede the State's ability to

[[Page 56766]]

create laws and/or regulations that fit its needs. Oregon, for example, 
has a law that allows CRNAs to practice without physician collaboration 
in hospitals, and requires collaboration with physicians in ASCs, but 
will allow independent practice in this setting if a physician is not 
available. We understand that States are unique and have different 
needs and priorities, and we are giving those closest to that care the 
ability to make appropriate decisions.
    Comment: It was suggested that CMS create uniform criteria for 
determining whether opting-out is in ``the best interest of the State's 
citizens.'' Commenters feared that without set criteria, such 
determinations would be ``whimsical,'' and not based on objective 
findings of fact. Commenters suggested using criteria such as 
permitting opt out when it would--
    (1) Materially improve patient access to anesthesia services, or 
when patient access to anesthesia is quantitatively improved, and
    (2) Not materially decrease the quality of anesthesia services and 
patient care in a State, or quality of anesthesia services and patient 
outcomes are not quantitatively decreased.
    Others argued the governors must determine that there is an 
``unusual situation'' where physicians may not be available to provide 
the necessary supervision.
    Response: We are not categorizing specific situations or instances 
by which the governor has the ability to opt out. As mentioned in the 
proposed rule, the governor is acting in the best interest of his/her 
State, within the parameters of State law, and with consideration for 
patient safety.
    Comment: Commenters opposed to the opt-out alternative argue that 
Governors are poorly equipped to review the literature and make 
scientifically valid conclusions. Some commenters suggested that 
allowing States to make their own decisions would result in 
inconsistency among States and that the Federal Government can best 
make a single decision for the nation, while others stated governors 
should be allowed to exercise exceptions that are narrowly tailored to 
address specific State needs and circumstances.
    Response: Our fundamental findings have not changed, as we have 
stated earlier. Our policy surrounding the January 2001 final rule was 
based on the principle that States traditionally regulate 
practitioners' scope-of-practice. This final rule judiciously maintains 
the current physician supervision requirement as sought by some, yet 
permits States to opt-out of the requirement if desired, a change to 
the existing requirement that is consistent with the position of those 
seeking deference to State law and regulation. It is not unusual to 
find differences in State law. States make decisions based upon their 
unique needs and specifications.
    Comment: Some commenters suggested the need for CMS to develop and 
implement a specific process relating to the opt-out. Commenters 
suggested there needs to be a better understanding of the steps a 
governor must take prior to opting-out. However, these commenters did 
not believe further prescriptive Federal regulation is necessary, just 
clarification. For example, commenters questioned if the governor will 
have to provide a notice for public inspection, and observe a waiting 
period of up to 60 days after making this determination, arguing that 
some additional processes should be required, such as a notice in the 
Federal Register, for adequate public input, and to facilitate a 
transition to opt-out status. Commenters argued that without these 
requirements, the potential exists for gubernatorial action without the 
benefit of input by Medicare and Medicaid beneficiaries, providers, and 
other interested citizens. One commenter cited proposed changes in 
statewide methods and standards for setting Medicaid payment rates to 
be used as a precedent, stating that there is precedent for notice and 
opportunity to comment. Other suggestions were to require a governor to 
provide appropriate notice to a State's residents prior to submitting a 
request to opt-out, and to hold at least one public hearing on the 
matter. In short, commenters wanted the Federal Government to ensure 
the governor's decision is made in a public forum. They also wished to 
have an adequate amount of time for facility and providers to prepare. 
In contrast, a few commenters believed that no further details need to 
be included in the regulation as it would only increase the paperwork 
burden for the hospital, and not guarantee improved quality of patient 
care.
    Response: It is not the role of the Federal Government to prescribe 
how State law and practice decisions are articulated to State 
residents. We do not want to apply unnecessary multiple standards when 
the overarching principle is that the governor has the authority to act 
according to his or her assessment of the needs and safety of the 
citizens of that particular State. We recognize that States need to 
establish a realistic workable process to notify their citizens, public 
and health care providers of change in scope-of-practice. However, we 
are opposed to incorporating stringent guidelines that could possibly 
make this a cumbersome, burdensome process. States currently have 
mechanisms and administrative rules in place for public notification 
such as hearings, notices, executive orders, statement of needs, notice 
of periodic review of rules, and notice of proposed rulemaking, that 
can be applied to this situation.
    Comment: If the opt-out process is adopted, the gubernatorial 
attestation process should be simple, and not involve burdensome 
administrative requirements or roadblocks.
    Response: We agree. The governor's letter to the Administrator of 
CMS will be accepted on face value, with no independent CMS scrutiny or 
analysis of the governors' underlying rationale.
    Comment: Commenters emphasized this exemption would establish an 
unusual situation where a Medicare CoP would not apply to all 
participating hospitals nationwide. Commenters further questioned if 
this proposal was consistent with the intent of Congress as expressed 
in Section 1861(e)(9) of the Social Security Act (the Act), stating it 
would give the governor absolute veto power of existing State laws.
    Response: First, surgery and anesthesia services are optional 
services for hospitals, so anesthesia CoP does not apply to all 
hospitals, only those that offer these services. Second, this rule does 
not change the requirement that hospitals must have physicians 
available at all times and that all Medicare patients are under the 
care of a physician as defined in Section 1861(r) of the Act. 
Therefore, the patient's medical and/or surgical care continues to be 
the responsibility of his or her assigned physician.
    Comment: Many commenters told us they were adamantly opposed to the 
proposed standard permitting a withdrawal of the opt-out at any time. 
Commenters argued the ability of a governor to rescind a previously 
granted opt-out at any time would leave the State's hospitals, ASCs, 
CAHs, providers, healthcare workers and patients in constant turmoil 
and uncertainty. Commenters stated this could perpetually put hospitals 
in limbo concerning CRNA supervision requirements, and also questioned 
CMS's ability to validate compliance with such a system. Commenters 
further argued that other issues need to be considered, such as 
potential study or monitoring efforts being undermined, or constant 
pressure from State medical and anesthesiologist societies. It was 
suggested, that once opt-outs were

[[Page 56767]]

granted, the opt-outs stay in place, and that any subsequent action be 
pursued through the States' existing state legislative/and or 
regulatory process. Alternatively, it was suggested that once opt-out 
were granted, it be required to stay in place for at least a year 
before it could be withdrawn at a governor's request.
    Response: We agree that citizens and the health care community 
should be kept abreast of such changes. As stated earlier, States 
already have administrative rules in place governing public 
notification, and we are not imposing prescriptive burdensome 
guidelines or interfering with State authority in this area. Since this 
rule permits governors to opt-out of the Federal supervision 
requirement at any time, we believe governors should be able to rescind 
the opt-out at their decision.
    Comment: One commenter stated their State (Oregon) is seeking a 
more permanent solution, like the one published in the January 18, 2001 
final rule. The commenter stated that the opt-out method of the July 5, 
2001 proposed rule would be cumbersome and redundant as the State has a 
``CRNA Practice Act'' (which allows hospitals to utilize CRNA services 
with or without physician supervision, in hospitals), signed into law 
in 1997, and includes consultation with the Boards of Medicine and 
Nursing as well as the Hospital Association and other stakeholders.
    Response: Oregon and any other States that have such laws should 
experience decreased burden associated with this final rule. The 1997 
Oregon law encompassed some of the same processes outlined in this 
final rule (for example, consultation with professional organizations, 
and the ability for CRNAs to practice independently in hospitals, after 
consideration of patient safety and benefits to its citizens). We 
applaud the past efforts in Oregon, and believe the State will continue 
to make prudent decisions regarding the delivery of anesthesia services 
that are in the best interest of the citizens of the State.

F. Waivers

    Comment: Deferring to State law and reverting to the January 18, 
2001 final rule would be the wisest course and the best public policy 
decision. If CMS does not revert back to the January 18, 2001 final 
rule, then it should provide automatic waivers for all States that do 
not require physician supervision of CRNA, and consider a 
scientifically-valid study, or monitoring effort in such States. 
Commenters stated this is a far better approach than the proposed opt-
out/exemption process. Commenters argued this proposed rule politicizes 
the supervision issue, and makes it much more difficult to produce a 
pool of States with no Federal supervision requirement that could be 
studied. Commenters also requested this automatic waiver for those 
States that remove their supervision requirements subsequent to the 
group of States initially granted automatic waivers.
    Response: There is no evidence to suggest that governors in States 
with current laws and practices allowing unsupervised CRNA practice 
would not opt-out of the Federal supervision requirement.

G. Access

    Comment: Commenters in support of the proposed rule, stated that 
rural access should not be considered a valid argument in removing 
physician supervision, stating this argument does not supercede patient 
safety, which can only be provided through physician supervision.
    Response: We are sensitive to the issue of access of anesthesia 
services for beneficiaries. This rule will give States the flexibility 
to improve access in states that consider this an important issue. 
Regarding patient safety, this final rule is consistent with our 
efforts to improve the quality of care furnished through Federal 
programs, while at the same time recognizing States' traditional domain 
in establishing professional licensure and scope-of-practice laws.

H. Utilization of Anesthesiologist Assistants

    Comment: A commenter questioned the increasing utilization of 
anesthesiologist assistants (AAs), and wanted clarification of a method 
to study outcomes related to their services. Commenters pointed out 
that anesthesiologists are beginning to employ AAs who have 2 years or 
less of post high school training, and question if this decision is 
based on safety.
    Response: This regulation is not meant to change the scope-of-
practice of AAs or the manner in which they function, nor does this 
regulation seek authority to allow AAs to practice without physician 
supervision. This concern is out of the scope of this regulation.

IV. Provisions of the Final Rule

    This final rule implements changes suggested in our July 5, 2001 
proposed rule (66 FR 35395) and clarifies several issues concerning the 
administration of anesthesia about which we solicited comments in the 
proposed rule. These changes affect the physician supervision 
requirements for certified registered nurse anesthetists furnishing 
anesthesia services in hospitals (42 CFR 482.52), critical access 
hospitals (42 CFR 485.639), and ambulatory surgical centers (42 CFR 
416.42) that participate in the Medicare and Medicaid programs. Under 
this final rule, the current physician supervision requirement will be 
maintained, unless the governor of a State, in consultation with the 
State's Boards of Medicine and Nursing, exercises the option of 
exemption from this requirement, consistent with State law. We believe 
these changes will improve the quality of care furnished through 
Federal programs, while recognizing the States' traditional domain in 
establishing professional licensure and scope-of-practice laws.

V. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

VI. Waiver of the 30-Day Delay of Recission Effective Date

    In accordance with Section 553(d) of the Administrative Procedure 
Act (5 U.S.C. Section 553(d)), final rules ordinarily are not effective 
until at least 30 days after their publication in the Federal Register. 
This 30-day delay in effective date can be waived, however, if an 
agency finds for good cause that the delay is impracticable, 
unnecessary, or contrary to the public interest, and the agency 
incorporates a statement of the finding and its reasons in the rule 
issued.
    On July 5, 2001, we proposed changes to the final rule on CRNA 
practice published on January 18, 2001, which was to become effective 
November 14, 2001. We find good cause to waive the 30-day delay in the 
effective date of the provision in this rule rescinding the January 18, 
2001 final rule. Failure to waive the delay in effective date would 
create an anomalous situation in which the provisions of the January 
18, 2001 final rule would be in effect for only a few days before being 
explicitly amended on the effective date of today's final rule. The 
rescission is an integral operational part of this final rule. A delay 
in the effective date for the rescission would be impractical to 
administer because facility guidance and quality monitoring are not 
designed to accommodate rapid changes in applicable standards. 
Therefore, we find

[[Page 56768]]

that a 30-day delay in the effective date of the rescission is 
impracticable, unnecessary, and contrary to the public interest.

VII. Regulatory Impact Analysis

A. Overall Impact

    We have examined the impacts of this rule as required by Executive 
Order 12866 and the Regulatory Flexibility Act (RFA) (Public Law 96-
354). Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and, if regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more annually). This rule is not 
considered to have a significant economic impact on hospitals and, 
therefore, is not considered a major rule. There are no requirements 
for hospitals, CAHs, and ASCs to initiate new processes of care, 
reporting, or to increase the amount of time spent on providing or 
documenting patient care services. This proposed rule would provide 
hospitals, CAHs, and ASCs with more flexibility in how they provide 
quality anesthesia services, and encourage implementation of the best 
practice protocols.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having annual 
receipts of $5 million to $25 million or less annually (65 FR 69432). 
For purposes of the RFA, all non-profit hospitals, CAHs, and other 
hospitals with revenues of $25 million or less annually are considered 
to be small entities. Ambulatory surgical centers with revenues of $7.5 
million or less annually are also considered to be small entities. 
Individuals and States are not included in the definition of small 
entities. In addition, section 1102(b) of the Act requires us to 
prepare a regulatory impact analysis if a rule may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. This analysis must conform to the provisions of section 603 
of the RFA. For purposes of section 1102(b) of the Act, we define a 
small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 100 beds.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined, and we certify, that this rule 
will not have a significant economic impact on a substantial number of 
small entities or a significant impact on the operations of a 
substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in an expenditure in any one year by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, that exceeds the inflation-adjusted threshold of $110 
million. This rule places no additional costs for implementation on the 
governments mentioned. It will allow the governors, through a letter to 
us, to opt-out of the physician supervision requirement of CRNAs and 
allow the CRNAs to practice independently where State law permits. If a 
letter to opt-out is submitted, we estimate each State will bear an 
additional burden of 4 hours for consultation and administrative 
preparation of the letter. This change is consistent with our policy of 
respecting State control and oversight of health care professions by 
deferring to State laws to regulate professional practice.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct compliance costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. We have examined this proposed rule and have determined 
that this rule will not have a negative impact on the rights, rules, 
and responsibilities of State, local, or tribal governments.
    In accordance with the provisions of Executive Order 12866, this 
final rule was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 416

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

42 CFR Part 482

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

42 CFR Part 485

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

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services withdraws the rule amending 42 CFR chapter IV 
published in the Federal Register on January 18, 2001 (66 FR 4674) and 
amends 42 chapter IV as follows:

PART 416--AMBULATORY SURGICAL SERVICES

    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).


    2. In Sec. 416.42, revise paragraph (b), and add a new paragraph 
(d) to read as follows:


Sec. 416.42  Condition for coverage--Surgical services.

* * * * *
    (b) Standard: Administration of anesthesia. Anesthetics must be 
administered by only--
    (1) A qualified anesthesiologist; or
    (2) A physician qualified to administer anesthesia, a certified 
registered nurse anesthetist (CRNA) or an anesthesiologist's assistant 
as defined in Sec. 410.69(b) of this chapter, or a supervised trainee 
in an approved educational program. In those cases in which a non-
physician administers the anesthesia, unless exempted in accordance 
with paragraph (d) of this section, the anesthetist must be under the 
supervision of the operating physician, and in the case of an 
anesthesiologist's assistant, under the supervision of an 
anesthesiologist.
* * * * *
    (d) Standard: State exemption. (1) An ASC may be exempted from the 
requirement for physician supervision of CRNAs as described in 
paragraph (b)(2) of this section, if the State in which the ASC is 
located submits a letter to CMS signed by the Governor, following 
consultation with the State's Boards of Medicine and Nursing, 
requesting exemption from physician supervision of CRNAs. The letter 
from the Governor must attest that he or she has consulted with State 
Boards of Medicine and Nursing about issues related to access to and 
the quality of anesthesia services in the State and has concluded that 
it is in the best interests of the State's citizens to opt-out of the 
current physician supervision

[[Page 56769]]

requirement, and that the opt-out is consistent with State law.
    (2) The request for exemption and recognition of State laws, and 
the withdrawal of the request may be submitted at any time, and are 
effective upon submission.

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

    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), unless otherwise noted.


    2. In Sec. 482.52, revise paragraph (a), and add a new paragraph 
(c) to read as follows:


Sec. 482.52  Condition of participation: Anesthesia services.

* * * * *
    (a) Standard: Organization and staffing. The organization of 
anesthesia services must be appropriate to the scope of the services 
offered. Anesthesia must be administered only by--
    (1) A qualified anesthesiologist;
    (2) A doctor of medicine or osteopathy (other than an 
anesthesiologist);
    (3) A dentist, oral surgeon, or podiatrist who is qualified to 
administer anesthesia under State law;
    (4) A certified registered nurse anesthetist (CRNA), as defined in 
Sec. 410.69(b) of this chapter, who, unless exempted in accordance with 
paragraph (c)of this section, is under the supervision of the operating 
practitioner or of an anesthesiologist who is immediately available if 
needed; or
    (5) An anesthesiologist's assistant, as defined in Sec. 410.69(b) 
of this chapter, who is under the supervision of an anesthesiologist 
who is immediately available if needed.
* * * * *
    (c) Standard: State exemption. (1) A hospital may be exempted from 
the requirement for physician supervision of CRNAs as described in 
paragraph (a)(4) of this section, if the State in which the hospital is 
located submits a letter to CMS signed by the Governor, following 
consultation with the State's Boards of Medicine and Nursing, 
requesting exemption from physician supervision of CRNAs. The letter 
from the Governor must attest that he or she has consulted with State 
Boards of Medicine and Nursing about issues related to access to and 
the quality of anesthesia services in the State and has concluded that 
it is in the best interests of the State's citizens to opt-out of the 
current physician supervision requirement, and that the opt-out is 
consistent with State law.
    (2) The request for exemption and recognition of State laws, and 
the withdrawal of the request may be submitted at any time, and are 
effective upon submission.

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

    1. The authority citation for part 485 continues to read as 
follows:

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


    2. In Sec. 485.639, paragraph (c) is revised and new paragraph (e) 
is added to read as follows:


Sec. 485.639  Condition of participation: Surgical services.

* * * * *
    (c) Administration of anesthesia. The CAH designates the person who 
is allowed to administer anesthesia to CAH patients in accordance with 
its approved policies and procedures and with State scope-of-practice 
laws.
    (1) Anesthesia must be administered by only--
    (i) A qualified anesthesiologist;
    (ii) A doctor of medicine or osteopathy other than an 
anesthesiologist; including an osteopathic practitioner recognized 
under section 1101(a)(7) of the Act;
    (iii) A doctor of dental surgery or dental medicine;
    (iv) A doctor of podiatric medicine;
    (v) A certified registered nurse anesthetist (CRNA), as defined in 
Sec. 410.69(b) of this chapter;
    (vi) An anesthesiologist's assistant, as defined in Sec. 410.69(b) 
of this chapter; or
    (vii) A supervised trainee in an approved educational program, as 
described in Secs. 413.85 or 413.86 of this chapter.
    (2) In those cases in which a CRNA administers the anesthesia, the 
anesthetist must be under the supervision of the operating practitioner 
except as provided in paragraph (e) of this section. An 
anesthesiologist's assistant who administers anesthesia must be under 
the supervision of an anesthesiologist.
* * * * *
    (e) Standard: State exemption.
    (1) A CAH may be exempted from the requirement for physician 
supervision of CRNAs as described in paragraph (c)(2) of this section, 
if the State in which the CAH is located submits a letter to CMS signed 
by the Governor, following consultation with the State's Boards of 
Medicine and Nursing, requesting exemption from physician supervision 
for CRNAs. The letter from the Governor must attest that he or she has 
consulted with the State Boards of Medicine and Nursing about issues 
related to access to and the quality of anesthesia services in the 
State and has concluded that it is in the best interests of the State's 
citizens to opt-out of the current physician supervision requirement, 
and that the opt-out is consistent with State law.
    (2)The request for exemption and recognition of State laws and the 
withdrawal of the request may be submitted at any time, and are 
effective upon submission.

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

    Dated: October 11, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: October 19, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 01-28439 Filed 11-9-01; 8:45 am]
BILLING CODE 4120-01-P