[Federal Register Volume 67, Number 212 (Friday, November 1, 2002)]
[Notices]
[Pages 66642-66645]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-27782]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2141-FN]


Medicare and Medicaid Programs; Approval of the American 
Osteopathic Association for Deeming Authority for Ambulatory Surgical 
Centers

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

ACTION: Final notice.

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SUMMARY: This final notice announces the approval of the American 
Osteopathic Association (AOA) for recognition as a national 
accreditation program for ambulatory surgical centers (ASCs) that 
request certification to participate in the Medicare or Medicaid 
programs. We have found that accreditation of ASCs by this organization 
will demonstrate that all Medicare ASC Conditions for Coverage are met 
or exceeded, and, thus, ASCs accredited by AOA will be granted deemed 
status to participate in the Medicare program.

EFFECTIVE DATE: This final notice is effective January 30, 2003.

FOR FURTHER INFORMATION CONTACT: Laura A. Weber, (410) 786-0227.

SUPPLEMENTARY INFORMATION: Copies: To order copies of the Federal 
Register containing this document, send your request to: New Orders, 
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faxing to (202) 512-2250. The cost for each copy is $9. As an 
alternative, you can view and photocopy the Federal Register document 
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many other public and academic libraries throughout the country that 
receive the Federal Register.
    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. The website address is: http://www.access.gpo.gov/nara/index.html.

I. Background

Determining Compliance of Ambulatory Surgical Centers-Surveys and 
Deeming

    Under the Medicare program, eligible beneficiaries may receive 
covered services in an ambulatory surgical center (ASC) provided that 
the ASC meets certain requirements. Section 1832(a)(2)(F)(i) of the 
Social Security Act (the Act) includes requirements that an ASC have an 
agreement in effect with the Secretary and that it meet health, safety, 
and other standards specified by the Secretary in regulations. 
Requirements concerning supplier agreements are located in 42 CFR part 
489, and those pertaining to the survey and certification of facilities 
are set forth in 42 CFR part 488.
    In 42 CFR part 416, we specify the conditions that an ASC must meet 
in order to participate in the Medicare program, the scope of covered 
services, and the conditions for Medicare payment for facility 
services.
    For an ASC to enter into an agreement, a State survey agency must 
first certify that the ASC complies with our conditions or 
requirements. Following that certification, the ASC is subject to 
routine monitoring by a State survey agency to ensure continuing 
compliance. As an alternative to surveys by State agencies, section 
1865(b)(1) of the Act provides that, if the Secretary finds that, 
through accreditation by a national accreditation body, a provider 
entity demonstrates that all of our applicable conditions and 
requirements are met or exceeded, the Secretary will deem that the 
provider entity has met the applicable Medicare requirements.
    In making our finding as to whether the accreditation organization 
demonstrates that all Medicare conditions or requirements are met or 
exceeded, we consider factors such as the organization's accreditation 
requirements, its survey procedures, its ability to provide adequate 
resources for conducting required surveys and supplying information for 
us in enforcement activities, its monitoring procedures for providers 
entities found to be out of compliance with conditions or requirements, 
and its ability to provide us with necessary data for validation.
    It has been brought to our attention that some ASCs are under the 
mistaken impression that, once we have granted deeming authority to an 
accreditation organization, then ASCs must be accredited by such an 
organization to receive Medicare certification. Accreditation by an 
accreditation organization is voluntary, and we do not require that 
accreditation for Medicare certification.
    The American Osteopathic Association (AOA) was the fourth 
accreditation organization to apply for deeming authority for ASCs. The 
three other accreditation organizations already granted deeming 
authority are the Joint Commission on the Accreditation of Healthcare 
Organizations (JCAHO), the Accreditation Association of Ambulatory 
Health Care (AAAHC), and The American Association for the Accreditation 
of Ambulatory Surgery Facilities, Inc. (AAAASF).
    The AOA is defined as a national accrediting body in section 
1865(b)(1) of the Act, and was granted deeming authority by us for 
hospitals (65 FR 8727, published February 22, 2000). This was taken 
into consideration in the evaluation of this application for ASC 
deeming authority.
    The AOA previously applied to us for deeming authority, which we 
announced in the Federal Register on March 14, 2001 (66 FR 14906). 
However, the organization withdrew its application before a final 
decision was made. We received a revised complete application from AOA 
on April 18, 2002 and published notice of that receipt on May 24, 2002 
(67 FR 36611).

II. Determining Compliance--Surveys and Deeming

    A national accrediting organization may request the Secretary to 
recognize its program as employing standards that meet or exceed 
Medicare's standards. The Secretary then examines the national 
accreditation organization's requirements to determine if they meet or 
exceed Medicare standards. If the Secretary recognizes an accreditation 
organization in this manner, any provider accredited by the national 
accrediting body's program that we have approved for that service will 
be ``deemed'' to meet the Medicare Conditions for Coverage.
    The regulations specifying the Medicare Conditions for Coverage for 
ASCs are located in 42 CFR part 416. These conditions implement section 
1832(a)(2)(F)(i) of the Act, which provides for Medicare Part B 
coverage of facility services furnished in connection with surgical 
procedures specified by the Secretary under section 1833(i)(1)(a) of 
the Act.

III. Provisions of the Proposed Notice

    The proposed notice, published on May 24, 2002 (67 FR 36611), 
announced the application of AOA for deemed status for its 
accreditation program for ASCs. Under section 1865(b)(2) of the Act and 
our regulations in Sec.  488.8 (Federal review of accreditation 
organizations), our review and evaluation of a national accreditation 
organization was conducted in accordance with, but not necessarily 
limited to, the following factors:
    [sbull] The equivalency of an accreditation organization's 
requirements for an entity to our comparable requirements for that 
entity.
    [sbull] The organization's survey process to determine the 
following:
    --The composition of the survey team, surveyor qualifications, and 
the ability of the organization to provide continuing surveyor 
training.
    --The comparability of its processes to those of State agencies, 
including survey frequency, and the ability to investigate and respond 
appropriately to complaints against accredited facilities.
    --The organization's procedures for monitoring providers or 
suppliers found by the organization to be out of compliance with 
program requirements. These monitoring procedures are used only when 
the organization identifies noncompliance. If noncompliance is 
identified through validation reviews, the survey agency monitors 
corrections as specified in Sec.  488.7(d).
    --The ability of the organization to report deficiencies to the 
surveyed facilities and respond to the facility's plan of correction in 
a timely manner.
    --The ability of the organization to provide us with electronic 
data in ASCII comparable code, and reports necessary for effective 
validation and assessment of the organization's survey process.
    --The adequacy of staff and other resources, and its financial 
viability.
    --The organization's ability to provide adequate funding for 
performing required surveys.
    --The organization's policies with respect to whether surveys are 
announced or unannounced.
    [sbull] The accreditation organization's agreement to provide us 
with a copy of the most current accreditation survey together with any 
other information

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related to the survey as we may require (including corrective action 
plans).

IV. Analysis of and Responses to Public Comments

    We did not receive any comments to the proposed notice published in 
the Federal Register (67 FR 36611) on May 24, 2002.

V. Provisions of the Final Notice

A. Deeming Approval Review and Evaluation

    We evaluated the AOA's standards and survey process to determine if 
facilities accredited by AOA met Medicare Conditions for Coverage. We 
did a standard-by-standard comparison of the applicable conditions or 
requirements to determine which of them met or exceeded Medicare 
requirements.
    We compared the standards contained in the AOA's ``Ambulatory 
Surgical Center (ASC) Manual'' and its survey process in the 
``Ambulatory Surgical Center Surveyor Handbook'' with the Medicare ASC 
Conditions for Coverage and our State and Regional Operations Manual. 
Our review and evaluation of AOA's deeming application, which were 
conducted as described in this notice, yielded the following 
clarifications:
    [sbull] AOA provided an updated listing of its accredited ASC 
facilities.
    [sbull] AOA adjusted language to refer consistently to the entities 
as ASCs as opposed to hospitals in its documents.
    [sbull] AOA modified its standards to meet fully the requirements 
of the Medicare Conditions for Coverage.
    [sbull] AOA modified its survey policy to ensure that ASC surveys 
are unannounced.
    [sbull] AOA modified its requirements to indicate that any ASC 
seeking to participate in Medicare by virtue of an AOA accreditation 
must meet the ``Accreditation with Medicare Certification,'' which 
requires that all State licensure requirements are satisfied in 
addition to meeting all AOA standards.
    [sbull] AOA adjusted its standards to require written confirmation 
of primary source verifications with regard to medical staff 
credentialing.
    [sbull] AOA adjusted its standard to conform with all applicable 
requirements of each State Nurse Practice Act to specify what duties a 
registered nurse may be allowed to perform in the area of 
pharmaceutical services.
    [sbull] AOA agrees to notify us of all accreditation decisions 
made.
    Review of AOA's application raised issues concerning the 
comparability of the AOA's ASC accreditation standards with the 
Medicare Conditions for Coverage for ASCs. We requested that the AOA 
demonstrate compliance with the Medicare ASC Conditions for Coverage 
and submit supplemental information to clarify its policies and 
procedures. Upon our final review of this information, we have 
determined that the AOA's ASC accreditation program meets the Medicare 
Conditions for Coverage for ASCs.

B. Term of Approval

    Based on the review and observations described in this final 
notice, we have determined that AOA's requirements for ASCs meet or 
exceed our requirements. We reserve the right to observe an AOA ASC 
survey to determine the compliance of AOA surveyors to the policies and 
procedures, as there were none scheduled during the review of this 
application. In addition, the AOA must seek approval of all standards 
pertaining to the Life Safety Code (LSC) when we move to the LSC 2000 
Edition, which we intend to implement in Spring 2003. We therefore 
recognize the AOA as a national accreditation organization for ASCs 
that request participation in the Medicare program, effective for a 6-
year period beginning January 30, 2003.

VI. Collection of Information Requirements

    This final notice does not impose any information collection and 
record keeping requirements subject to the Paperwork Reduction Act 
(PRA). Consequently, it does not need to be reviewed by the Office of 
Management and Budget (OMB) under the authority of the PRA. The 
requirements associated with granting and withdrawal of deeming 
authority to national accreditation organizations, codified in 42 CFR 
part 488, ``Survey, Certification, and Enforcement Procedures,'' are 
currently approved by OMB under OMB approval number 0938-0690.

VII. Regulatory Impact Statement

    We have examined the impact 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, 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).
    The RFA requires agencies to analyze options for regulatory relief 
for small businesses, nonprofit organizations, and government agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $6 
million to $29 million or less in any 1 year (for details, see the 
Small Business Administration's publication that set forth size 
standards for health care industries at 65 FR 69432). Approximately 73 
percent of ASCs are considered small businesses with total revenues of 
$8.5 million or less according to the Small Business Administration's 
data. For purposes of the RFA, States and individuals are not 
considered small entities.
    Also, section 1102(b) of the Act requires the Secretary to prepare 
a regulatory impact analysis for any notice that may have a significant 
impact on the operations of a substantial number of small rural 
hospitals. Such an analysis must conform to the provisions of section 
604 of the RFA. For purposes of section 1102(b) of the Act, we consider 
a small rural hospital as a hospital that is located outside of a 
Metropolitan Statistical Area and has fewer than 100 beds.
    This notice merely recognizes AOA as a national accreditation 
organization that has requested approval for deeming authority for ASCs 
that are participating in the Medicare program. Since these provider 
entities must be routinely monitored to determine compliance with 
Medicare requirements, we believe that this organization's 
accreditation program has the potential to reduce both the regulatory 
and administrative burdens associated with the Medicare program 
requirements.
    This notice is not a major rule as defined in Title 5, United 
States Code, section 804(2) and is not an economically significant rule 
under Executive Order 12866.
    Therefore, we have determined, and the Secretary certifies, that 
this final notice will not result in a significant impact on small 
entities and will not have an effect on the operations of small rural 
hospitals. Therefore, we are not preparing analyses for either the RFA 
or section 1102(b) of the Act.
    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

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notice will have no consequential effect on State, local, or tribal 
governments. We believe the private sector costs of this notice will 
fall below this threshold as well.
    In accordance with Executive Order 13132, this notice will not 
significantly affect the rights of States and will not significantly 
affect State authority.
    In accordance with the provisions of Executive Order 12866, this 
notice was reviewed by the Office of Management and Budget.

    Authority: Section 1865(b)(3)(A) of the Social Security Act (42 
U.S.C. 1395bb(b)(3)(A)).

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program; and No. 93.774, Medicare--Supplementary Medical 
Insurance Program)
    Dated: October 7, 2002.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-27782 Filed 10-31-02; 8:45 am]
BILLING CODE 4120-01-P