[Federal Register Volume 67, Number 125 (Friday, June 28, 2002)]
[Notices]
[Pages 43613-43616]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-16410]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-3082-NC]


Medicare Program; Revised Evaluation Criteria for the End-Stage 
Renal Disease (ESRD) Networks

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

ACTION: Notice with comment period.

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SUMMARY: This notice describes the criteria we will use to evaluate the 
performance of the ESRD Network Organizations. We are required by the 
Social Security Act to publish standards, criteria, and procedures used 
to evaluate the performance of ESRD Network Organizations under the 
Medicare program to ensure the effective administration of ESRD program 
benefits.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on August 27, 2002.

ADDRESSES: In commenting, please refer to file code CMS-3082-NC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission. Mail written comments (one original and 
three copies) to the following address only: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services,Attention: 
CMS-3082-NC, P.O. Box 3016, Baltimore, MD 21244-3016.
    Please allow sufficient time for mailed comments to be timely 
received in the event of delivery delays.
    If you prefer, you may deliver (by hand or courier) your written 
comments (one original and three copies) to one of the following 
addresses: Room 443-G, Hubert H. Humphrey Building, 200 Independence 
Avenue, SW., Washington, DC 20201, or Room C5-14-03, 7500 Security 
Boulevard,Baltimore, MD 21244-1850.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and could be considered late.
    (Because access to the interior of the HHH Building is not readily 
available to persons without Federal government identification, 
commenters are encouraged to leave their comments in the CMS drop slots 
located in the main lobby of the building. A stamp-in clock is 
available for commenters wishing to retain a proof of filing by 
stamping in and retaining an extra copy of the comments being filed.)

[[Page 43614]]

    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Linda Okimoto, (410) 786-6877.

SUPPLEMENTARY INFORMATION:
    Inspection of Public Comments: 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, please call Yolanda Hayes at (410) 786-7195.

I. Background

    The Social Security Amendments of 1972 (Pub. L. 92-603) extended 
Medicare coverage to individuals with end-stage renal diseases (ESRD) 
that require maintenance dialysis treatments or kidney transplantation. 
The ESRD Amendments of 1978 (Pub. L. 95-292) amended title XVIII of the 
Social Security Act (the Act) by adding section 1881. Section 1881(c) 
of the Act authorized the establishment of, among other things, ESRD 
network areas and Network Organizations under the Medicare program, to 
ensure the effective administration of the ESRD program benefits. This 
amendment provided an approach for Network operation and performance as 
well as other quality assurance issues that relate to treatment of 
ESRD. Section 9335(d)(1) of the Omnibus Budget Reconciliation Act of 
1986 (Pub. L. 99-509) amended section 1881(c) of the Act to require us 
to publish in the Federal Register criteria, standards, and procedures 
with which to evaluate an applicant organization's ability to perform, 
or actual performance of, required network functions.
    Section 1881(c)(2) of the Act requires the Network Organizations to 
perform the following functions:
     Encourage participation in vocational rehabilitation 
programs, and develop criteria and standards relating to this 
participation.
     Evaluate the procedures used by facilities and providers 
in the network to assess patients for placement in appropriate 
treatment modalities.
     Implement a procedure for evaluating and resolving patient 
grievances.
     Conduct onsite reviews of facilities and providers using 
standards of care established by the Network Organization to ensure 
proper medical care, as a medical review board or as we have 
determined.
     Collect, analyze, and validate the data that are necessary 
to prepare the required annual report to the Secretary and to ensure 
the maintenance of a national ESRD registry.
     Identify facilities and providers that are not cooperating 
toward meeting network goals, and assist those facilities and providers 
in developing plans for correction, as well as report on those 
facilities and providers that are not providing appropriate care.
     Submit an annual report to the Secretary on July 1 of each 
year.

II. Current Evaluation Criteria

    The criteria, standards, and procedures that we used to evaluate 
the performance of Network Organizations have not been revised since 
they were published on October 2, 1987 in the Federal Register (52 FR 
37018). The criteria, standards, and procedures were based on reviewing 
individual cases to identify errors in treatment. To respond to the 
need to improve the quality of care of Medicare ESRD patients, we 
reshaped the role of the ESRD Networks program approach to quality 
assurance and improvement. This approach, implemented July 1, 1994 by 
the ESRD networks, has been named the ESRD Health Care Quality 
Improvement Program (HCQIP). HCQIP gives us, along with the Networks an 
opportunity to demonstrate that health care furnished to Medicare renal 
beneficiaries can be measurably improved. HCQIP is based on the 
principle that the Networks can do more to improve the quality and cost 
effectiveness of care by bringing typical care into line with the best 
practices rather than by inspecting individual cases to identify 
erroneous treatment. We are also planning to publish a proposed rule to 
update the ESRD conditions for coverage of suppliers of end-stage renal 
disease services (found at 42 CFR 405) in the Federal Register.
    The goals for updating the ESRD conditions, which were implemented 
in 1976, include: Transitioning to a more patient centered focus; 
reflecting the current standards of practice; shifting from a 
procedural approach to a more outcome oriented approach; and improving 
the quality of care. Clinical performance measures are important in 
meeting these goals and will be proposed in the rule.
    In its June 2000 report entitled ``External Quality Review of 
Dialysis Facilities--A Call for Greater Accountability,'' the Office of 
Inspector General (OIG) made two main recommendations to CMS: (1) CMS 
should hold individual dialysis facilities fully accountable for the 
quality of care they provide; and (2) CMS should hold the Networks and 
State survey agencies fully accountable for their performance in 
overseeing the quality of care furnished by dialysis facilities. Under 
its first recommendation, OIG suggested that CMS focus its efforts on 
two central areas: (1) How effectively Network Organizations draw on 
standardized performance data to improve the overall clinical 
performance of facilities in their region and ensure that poor 
performers meet minimum standards of care; and (2) how effectively 
Network Organizations use a complaint system as a quality of care 
safeguard.

III. Measuring ESRD Network Organizations Performance

    Currently, the ESRD Network Organizations are awarded contracts for 
1 base year and 2 option years. The current contracts were effective 
July 1, 2000. In conjunction with the ESRD Network Organizations, we 
have developed in-depth evaluation criteria based on contract tasks and 
deliverables. In addition, a score calculator was developed to score 
each Network Organization based on the results of the evaluation 
elements. The final scores are used to determine how well a Network 
Organization has performed and if a performance improvement plan or 
other action (that is, termination) is warranted. The four contract 
task categories to be scored are the following:
     Quality Improvement.
     Community Information and Resources.
     Administration.
     Information Management.
    The tasks listed above are specified in the Network Organization's 
Statement of Work, which can be found on the web site at: http://www.hcfa.gov/quality/5d2.htm. 
    The Quality Improvement section contains performance indicators 
that pertain to the Network Organization's quality improvement 
projects, clinical performance measures, and other quality improvement 
activities.
    The Community Information and Resources section contains elements 
that pertain to the Network Organization's provision of educational 
information and technical assistance, and its resolution of difficult 
situations and grievances.
    The Administration section contains elements that pertain to the 
organizational structure of the Network, the Network staff, required 
administrative reports, the Network's

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internal quality control program, our meetings, cooperative activities 
with State agencies and Peer Review Organizations, and sanctions and 
referrals.
    The Information Management section contains elements on 
maintaining, updating, validating, and submitting data.
    The Network Organization must meet the performance standards for 
each of the four contract task areas to be eligible for a 
noncompetitive renewal in the next contract cycle. The success of the 
Network Organization's work in the four contract task areas will be 
judged on the basis of subjective, qualitative assessments.

IV. Standards for Minimum Performance

    Included in the evaluation criteria document that is assessed by 
the project officers are indicators to judge the performance of the 
Network Organization on improving current clinical performance 
measures. Since the regional office project officers evaluate ESRD 
Network Organizations on an annual basis, the intention is to compare 
the current year's performance to that of the past total 3-year 
contract. The ESRD Network Organization's work will be judged to have 
been successful for each of the categories only if it conducts the work 
in accordance with the requirements set forth in Parts 1 through 9 of 
the ESRD Manual and its ESRD contract.
    The Network Organization must score at least 80 percent on the 
overall score with a minimum of 80 percent in each of the major 
contract category areas to meet the standards for minimum performance 
level. If the initial assessment suggests that the Network Organization 
has scored at least 80 percent on its overall score, but has not met or 
exceeded the 80 percent minimum criteria scoring for one or more of the 
four contract areas, it will have passed the evaluation, but its 
performance of the contract area(s) will be subject to a performance 
improvement plan. If the Network Organization does not achieve at least 
80 percent on its overall score, it will fail the evaluation and will 
be subject to a performance improvement plan and a more in-depth 
assessment of its contract performance up to and including possible 
nonrenewal or contract termination.

Task-Specific Standards

1. Quality Improvement

a. Quality Improvement Projects
    The Network Organization is required to implement two Quality 
Improvement Projects (QIPs) during its 3-year contract period. We will 
evaluate the success of the Network Organization's work in two ways. We 
will assess whether the Network Organization has achieved measurable 
improvement on the quality indicators, particularly when the projects 
have employed project tools and indicators that have previously been 
well developed. In the event that a project fails to achieve measurable 
improvement, we will use as a second standard of success the amount of 
knowledge that has been gained through the experience of the project. 
We will consider these projects successful only if the Network 
Organization completed the proposed projects according to its narrative 
project plans. This includes all dimensions of the plans, including, 
but not limited to populations and facilities including all aspects of 
study design, intervention, analyses, and timelines. The project 
officer must have approved all significant changes to the project 
(deviations from the project plan) in advance. In the final evaluation 
of a project, contractual compliance in completion of QIPs is defined 
as adherence to the approved project plan, including any modifications 
agreed to by the Network and the project officer before their 
implementation, including timelines and milestones.
b. Clinical Performance Measures and Other Quality Improvement 
Activities
    The Network Organization will be required to submit a plan to its 
regional office Project Officer that specifies what types of activities 
are planned for each of the targeted clinical performance outcome 
measures and the rationale for its decision. The project officer will 
assess the success of the Network Organization's efforts on the level 
of activity relating to attaining or maintaining these target 
performance levels.

2. Community Information and Resources

    The project officer will continuously review the work of the 
Network Organization under Community Information and Resources 
primarily on the required quarterly reports and through reports 
generated from the Standard Information Management System (SIMS) 
reporting system. The Network Organization's work will be judged to be 
successful for each of the categories and mandated activities only if 
it conducts the work in accordance with the requirements in its 
contractual statement of work and Parts 2, 6, and 7 of the ESRD Network 
Organization Manual.

3. Administration

    The Network Organization must have an organizational structure, 
basic administrative staff, and infrastructure to operate its statutory 
requirements and other work activities, as required in its contract. 
The project officer will continuously review the work of the Network 
Organization under this contract task area primarily on the required 
administrative reports. The principal evaluation element for this task 
will be the timeliness and completeness of all required reports.

4. Information Management

    The project officer will continuously review the work of the 
Network Organization to perform data management and reporting 
activities using SIMS. We use the data collected by the Networks to 
report various dialysis facility characteristics and specific quality 
measures on its Dialysis Facility Compare website (http://www.medicare.gov/Dialysis/Home.asp). The Network Organization will be 
determined to be successful if it conducts the work in accordance with 
the requirements set forth in Part 4 of the ESRD Network Organizations 
Manual, and its data management system provides for collection, 
analyses, verification, and timely reporting.

V. Response to Comments

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

VI. Regulatory Impact Statement

    We have examined the impacts of this notice as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
the Regulatory Flexibility Act (RFA) (September 16, 1980 Pub. L. 96-
354), section 1102(b) of the Social Security Act, the Unfunded Mandates 
Reform Act of 1995 (Pub. L. 104-4), and Executive Order 13132.
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and,

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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). We 
have determined that this notice is not a major rule because it does 
not impose a significant economic impact to preferred provider 
organizations or the Medicare program.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and government agencies. For 
purposes of the RFA, most preferred provider organizations are 
considered to be small entities, either by nonprofit status or by 
having revenues of $6 to $29 million or less annually. (For details, 
see the Small Business Administration's regulation that set forth size 
standards for health care industries (65 FR 69432).) The criteria 
described in this notice will not significantly impact the ESRD Network 
Organizations that are considered small entities because the notice 
reflects what is already being done. Individuals and States are not 
included in the definition of a small entity.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a notice 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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a Metropolitan 
Statistical Area and has fewer than 100 beds.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule that may result in expenditure in any 1 year by State, 
local, or tribal governments, in the aggregate, or by the private 
sector, of $110 million. This notice will not mandate any requirements 
for State, local, or tribal governments.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a notice with comment that imposes 
substantial direct requirement costs on State and local governments, 
preempts State law, or otherwise has Federalism implications. We have 
reviewed this notice under these requirements and have determined that 
it will not impose substantial direct requirement costs on State or 
local governments.
    In accordance with Executive Order 12866, this notice was reviewed 
by the Office of Management and Budget.

    Authority: Section 1881 of the Social Security Act (42 U.S.C. 
1395rr).

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

    Dated: December 19, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.

    Editorial note: This document was received at the Office of the 
Federal Register June 25, 2002.

[FR Doc. 02-16410 Filed 6-27-02; 8:45 am]
BILLING CODE 4120-01-P