[Federal Register Volume 67, Number 226 (Friday, November 22, 2002)]
[Proposed Rules]
[Pages 70358-70363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29076]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, 476, and 484

[CMS-3055-P]
RIN 0938-AK68


Medicare Program; Photocopying Reimbursement Methodology

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

ACTION: Proposed rule.

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SUMMARY: This proposed rule would increase the rate of reimbursement 
for expenses incurred by prospective payment system (PPS) hospitals for 
photocopying medical records requested by Quality Improvement 
Organizations (QIOs), formerly known as Utilization and Quality Control 
Peer Review Organizations (PROs). We would increase the rate from 7 
cents per page to 12 cents per page, in accordance with the formula for 
calculating this rate to reflect inflationary changes in the labor and 
supply cost components of the formula.
    This proposed rule would also provide for the periodic review and 
adjustment of the per-page reimbursement rate to account for

[[Page 70359]]

inflation and changes in technology. The methodology for calculating 
the per-page reimbursement rate would remain unchanged.
    We also propose to provide for the payment of the expenses of 
furnishing photocopies to QIOs, to other providers subject to a PPS 
(for example, skilled nursing facilities and home health agencies), in 
accordance with the rules established for reimbursing PPS hospitals for 
these expenses.

DATES: We will consider comments if we receive them at the appropriate 
address, as provided below, no later than 5 p.m. on January 21, 2003.

ADDRESSES: In commenting, please refer to file code CMS-3055-P. 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-3055-P, PO Box 8010, Baltimore, MD 21244-8010.
    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.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Valerie Mattison Brown, (410) 786-
5958.

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 (410) 786-9994.
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I. Background

    Section 1866(a)(1)(F) of the Social Security Act (the Act) requires 
a hospital, as a condition of Medicare participation, to enter into an 
agreement with a quality improvement organization (QIO), for the peer 
review of Medicare services provided by the hospital. (Note: QIOs were 
formerly known as peer review organizations (PROs). We published a 
final rule with comment period on May 24, 2002 (67 FR 36539) changing 
the name to QIOs.) Our regulations at 42 CFR 476.78 provide that health 
care facilities that submit Medicare claims must cooperate in the 
conduct of QIO reviews, including providing the QIO with information 
necessary to its determinations. This often includes providing the QIO 
with photocopies of patients' medical records.
    We published a final rule on October 20, 1992 in the Federal 
Register (57 FR 47779), following notice-and-comment rulemaking, which 
established a formula for calculating the rate of reimbursement for 
these photocopy costs incurred by hospitals. Using this formula, we set 
the rate at 7 cents per-page. The regulation requires us to determine a 
fixed payment amount per page by adding per-page labor costs and per-
page supply costs. The regulation also provides for Medicare payment 
for the costs of first class postage for mailing records to QIOs. As 
discussed in detail in the October 20, 1992 final rule (57 FR 47779), 
the payment established by Sec.  476.78 represents an additional 
payment to hospitals under the prospective payment system (PPS) for 
photocopy costs. Payment for the equipment and overhead costs 
associated with furnishing the QIO with required documentation is made 
under other Medicare payment provisions for capital-related costs and 
inpatient operating costs.
    The formula for calculating the per-page reimbursement rate for 
photocopies is set forth at Sec.  476.78(c), which provides:

    Photocopying reimbursement methodology for prospective payment 
system hospitals. Hospitals subject to the prospective payment 
system are paid for the photocopying costs that are directly 
attributable to the hospitals' responsibility to the QIOs to provide 
photocopies of requested hospital records. The payment is in 
addition to payment already provided for these costs under other 
provisions of the Social Security Act and is based on a fixed amount 
per page as determined by CMS as follows:
    (1) Step one. CMS adds the annual salary of a photocopy machine 
operator and the costs of fringe benefits as determined in 
accordance with the principles set forth in OMB circular A-76.
    (2) Step two. CMS divides the amount determined in paragraph 
(c)(1) of this section by the number of pages that can be reasonably 
expected to be made annually by the photocopy machine operator to 
establish the labor cost per page.
    (3) CMS adds to the per-page labor cost determined in paragraph 
(c)(2) of this section the per-page costs of supplies.

    Using this formula we established the per-page rate of 7 cents in 
the October 20, 1992 final rule. The validity of this rule and its 
reimbursement methodology were challenged in a certified class action 
by Medicare-participating hospitals, in the U.S. Court of Appeals for 
the Ninth Circuit. Queen of Angels/ Hollywood Presbyterian Medical 
Center v. Shalala, 65 F.3d 1472, 1476 (9th Cir. 1995). The Court of 
Appeals upheld the validity of our photocopy reimbursement methodology 
and sustained the lawfulness of the 7 cents per page rate established 
in the rule.
    Due to increases in labor and supply costs, we are proposing to 
increase the reimbursement rate from 7 cents per page to 12 cents per 
page in accordance with the established court-approved methodology set 
forth in Sec.  476.78(c).

Current Photocopy Reimbursement Rate

    Under the current regulation, we apply a uniform per-page rate on a 
nationwide basis to all PPS hospitals that have QIO agreements. We base 
the calculation on labor and supply costs. The calculation in the 
current rule, as discussed in the preamble to the October 20, 1992 
rule, is based on the following:
    [sbull] An operator will copy approximately 364,320 pages annually.

[[Page 70360]]

    [sbull] The salary level of an operator is equivalent to a GS-5 
experienced midlevel secretary ($17,686) plus 27.9 percent fringe 
benefits ($4,934) for a total salary of $22,620.
    [sbull] Paper costs are 0.5 cents per page ($25 per case of paper 
with 5,000 sheets in a case).
    [sbull] Toner and developer costs are 0.5 cents per page.
    [sbull] The total cost per page is 7 cents.

II. Provisions of the Proposed Regulations

    We propose to increase the rate of QIO-related photocopy 
reimbursement from 7 cents to 12 cents per page. We calculated this 
rate by updating the salary, fringe benefits, and supply figures used 
in the October 20, 1992 final rule. In accordance with the methodology 
at Sec.  476.78(c), we considered the following factors in calculating 
the proposed rate: (1) The labor costs associated with photocopying and 
(2) the costs of supplies.

A. Labor Costs

    Labor costs were calculated consistent with the methodology at 
Sec.  476.78(c), first, by adding the annual salary of a photocopy 
machine operator with the costs of fringe benefits, and second, by 
dividing that sum by the number of pages that can reasonably be 
expected to be made in a year.

B. Annual Salary of a Photocopy Machine Operator

    In the October 20, 1992 rule, we adopted the salary level for an 
experienced (GS-5) midlevel secretary in the Federal government as 
representative of that of a photocopy machine operator. Use of this 
figure approximated or exceeded the actual salary information for 
individuals performing these tasks that had been submitted by various 
commenters. Furthermore, we determined that use of this salary level 
yielded payments that were more than adequate to ensure a sufficient 
skill level. The annual salary of $17,686 used in the October 20, 1992 
rule was derived from the U.S. Office of Personnel Management's 1992 
General Schedule.
    In this proposed rule, we would continue to deem the salary of a 
Federal GS-5 midlevel secretary as representative of a photocopy 
operator's salary; however, we would update the figure to take into 
account increases in the payment rate of a midlevel secretary. Thus, we 
are using the GS-5 annual salary of $28,727 derived from the U.S. 
Office of Personnel Management's 2002 General Schedule to calculate the 
revised rate.

C. Fringe Benefits

    In the October 20, 1992 final rule, we ascribed the fringe benefits 
of an employee to be 27.9 percent of the employee's salary, which was 
the standard percentage dictated by the cost principles set forth in 
the Office of Management and Budget (OMB) Circular A-76. While there 
may be other yardsticks to measure this component of costs, we find 
this to be a reasonable resource since the thrust of this OMB circular 
is to help the government compare potentially incurred costs to 
determine whether the costs can be more economically incurred 
internally or through contract with a commercial source. Therefore, we 
continue to use OMB Circular A-76 to calculate the annual fringe 
benefit cost. Accordingly, fringe benefits were calculated in this 
proposed rule based on 29.7 percent of the GS-5 salary as outlined in 
the OMB Circular A-76 Transmittal Memorandum 19--FY 2000 estimate. 
Thus, the annual fringe benefit cost is $8,532 ($28,727 * 29.7 
percent).

D. Number of Pages Copied Annually

    In this proposed rule, we are using 364,320 pages per year in the 
calculation of the annual labor cost. In the October 20, 1992 rule, we 
determined that 364,320 was the number of pages that could reasonably 
be expected to be copied in a year. Earlier, in the proposed rule 
``Changes to Peer Review Organizations Regulations'', published on 
March 16, 1988 at 53 FR 8654, we had proposed the use of 748,000 pages 
per year in the calculation of the annual labor cost. This initial 
figure was determined based on copying documents at a rate of six pages 
per minute for each hour in an 8 hour day, 5 days a week, 52 weeks per 
year. The estimate was based on hand feeding of documents into the 
photocopying machine for duplication, although we recognized that there 
are many photocopying tasks that may be accomplished through automatic 
feeds. Automatic feeds greatly increase the number of pages that can be 
generated by a machine on an hourly basis, and as a result, greatly 
decrease the cost of photocopying per page.
    In response to comments received on the March 16, 1988 proposed 
rule (53 FR 8654), we revised the 748,000 figure in the October 20, 
1992 final rule to account for time spent by the photocopy machine 
operator in search and retrieval tasks, and time away from work on 
annual vacation, sick, and holiday leave. This resulted in a reduction 
from 748,000 to 364,320 in our estimate of the number of pages that may 
be reasonably expected to be made annually, and a corresponding 
increase in the per-page labor rate.
    We are unaware of any significant changes in technology since the 
October 20, 1992 final rule (57 FR 47779) that would lead to either a 
significant decrease or increase in the annual number of pages that may 
be copied. Nor are we aware of any changes that would significantly 
increase or decrease the time allocated to search and retrieval tasks. 
Therefore, we continue to use the 364,320 figure to calculate the per-
page labor cost in this proposed rule.

E. Calculation of Per-Page Labor Costs

    To determine the per-page labor cost, the total of salary ($28,727) 
and fringe benefits ($8,532) costs, which amount to $37,259, was 
divided by 364,320 pages, the number of copies made in a year, 
resulting in an annual labor cost per page of 10 cents ($37,259/364,320 
pages).

F. Supply Costs

    In the October 20, 1992 final rule, supply costs were calculated 
based on 0.5 cents per page for paper and 0.5 cents per page for toner 
and developer. The paper cost was based on a cost of $25 per case of 
paper with 5,000 sheets in a case. The costs of toner and developer 
vary widely depending on the type of photocopy machine used. However, 
based on comments from hospitals and a large hospital association, it 
was determined at that time that a reasonable amount for toner and 
developer was 0.5 cents per page.
    The total proposed supply cost is 2.3 cents per page. This is based 
on a per-page paper cost of 0.5 cents and a developer and toner 
cartridge cost of 1.8 cents per page. The paper costs were calculated 
based on $23 per case of paper with 5,000 sheets in a case. This 
equates to 0.5 cents per page ($23/5,000).
    As previously stated, in the October 20, 1992 rule the toner and 
developer costs of 0.5 cents per page were determined on the basis of 
comments received on the proposed rule. In this rule, we have used an 
objective methodology to calculate the per-page cost for toner and 
developer that can also be used in future updates. We calculated these 
costs using estimates of the costs for toner cartridges and developer 
drums contained in the GSA supply catalogue, and on the basis of a 
photocopy machine producing 364,320 pages annually.

[[Page 70361]]

G. Payment Rate Per Page

    Consistent with Sec.  476.78(c)(3), the payment rate per page is 
the total of the per-page labor cost and the per-page supply cost, 
which is equivalent to 12 cents. The established calculation 
methodology actually results in a cost of 12.3 cents per page, however, 
consistent with CMS policy and generally accepted mathematics 
principles, we chose to round down to 12 cents. We believe this 
decision is both reasonable and supportable, based on the fact that the 
higher amount substantially exceeds all published OMB inflation 
indexes, including the CPI-Wage index (photocopying expense is largely 
comprised of labor costs).

H. Future Updates to Rate of Photocopy Reimbursement

    In addition to updating the rate of reimbursement for photocopies, 
we also propose to amend the existing regulation to permit the rate to 
be adjusted without undergoing notice-and-comment rulemaking each time 
it needs to be adjusted to reflect inflationary or technology changes.
    We intend to review and adjust the rate periodically in accordance 
with the same factors considered in establishing the rate in the 
October 20, 1992 final rule and the updated rate in this proposed rule. 
This review will include an examination of the labor and supply 
components of the formula, and we will update the rate as necessary to 
account for significant inflationary changes to these components.
    Absent some compelling reason, in future updates, we will continue 
to deem the salary and fringe benefits of a Federal government GS-5 
midlevel secretary as representative of the salary and fringe benefits 
of a photocopy machine operator and use those values to calculate the 
reimbursement rate. Also, absent some compelling reason or major 
technological change that would lead to a significant increase or 
decrease in the number of pages that can be made annually, we will not 
change the number of pages used in calculating the rate.

I. Reimbursement to Other PPS Providers of the Cost of Photocopying

    We also propose to provide for the payment of the expenses of 
furnishing photocopies to QIOs, to other providers subject to a PPS 
(for example, skilled nursing facilities (SNFs) and home health 
agencies (HHAs)), in accordance with the rules established at Sec.  
476.78 for reimbursing PPS hospitals for these expenses.
    Current regulations do not address reimbursement for providers 
other than hospitals for costs of photocopying medical records in 
cooperation with QIO review activities because in the past QIO review 
of providers other than hospitals was relatively insignificant. To the 
extent that this review activity took place, it was minimal, and the 
related costs were included on the provider's cost report. SNFs, HHAs, 
and other providers have recently converted from the cost-based 
reimbursement system to a PPS. Because QIO review of these providers 
has been minimal or nonexistent, costs related to this activity are not 
adequately reflected in the base PPS rate. Therefore, we believe it is 
appropriate to provide for a means of paying for these costs when they 
occur. To accomplish this change, we propose to replace the more narrow 
term ``hospitals'' with ``providers,'' in Sec.  476.78(b)(2) and (c), 
to include other providers subject to a PPS.
    Additionally, we propose revising the payment provisions for SNFs 
and HHAs by adding a paragraph at Sec.  413.355 and Sec.  484.265, that 
authorizes reimbursement for the costs of photocopying and mailing 
medical records required for QIO review, to SNFs and HHAs.
    We also propose amending Sec.  476.78(d) to provide that, as with 
other disputes regarding Medicare payment to providers, disputes 
concerning payments for costs related to QIO review under Sec.  476.78 
and the other payment provisions of the Medicare statute and 
regulations must be presented in accordance with the administrative and 
judicial review requirements of section 1878 of the Act and subpart R 
of 42 CFR part 405.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act (PRA) of 1995, agencies are 
required to provide 60-day notice in the Federal Register and solicit 
public comment before a collection of information requirement is 
submitted to the Office of Management and Budget (OMB) for review and 
approval. In order to fairly evaluate whether an information collection 
should be approved, section 3506(c)(2)(A) of the PRA of 1995 requires 
that we solicit comment on the following issues:
    [sbull] Whether the information collection is necessary and useful 
to carry out the proper functions of the agency;
    [sbull] The accuracy of the agency's estimate of the information 
collection burden;
    [sbull] The quality, utility, and clarity of the information to be 
collected; and
    [sbull] Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Section 476.78 of this regulation contains information collection 
requirements. In summary, Sec.  476.78 requires providers to submit 
information to the QIO during the conduct of a QIO review. Because this 
information is collected during the conduct of an audit, investigation, 
and/or an administrative action, we believe these collection 
requirements are not subject to the PRA as stipulated under 5 CFR 
1320.4.
    If you have any comments on any of these information collection and 
record keeping requirements, please mail the original and 3 copies 
directly to the following:

Centers for Medicare and Medicaid Services, Office of Information 
Services, Standards and Security Group, Division of CMS Enterprise 
Standards,
    Room N2-14-26, 7500 Security Boulevard, Baltimore, MD 21244-1850. 
Attn: John Burke CMS-3055-P; and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Allison Eydt, CMS Desk Officer, CMS-3055-P.

IV. 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, if we proceed with a subsequent 
document, we will respond to the major comments in the preamble to that 
document.

V. Regulatory Impact Statement

    We have examined the impacts of this proposed rule as required by 
Executive Orders 12866 (September 1993, Regulatory Planning and Review) 
and the Regulatory Flexibility Act (RFA) (September 19, 1980 Pub. L. 
96-354).
    Executive Order 12866 directs agencies to assess all costs and 
benefits of available regulatory alternatives and when regulation is 
necessary, to select regulatory approaches that maximize net benefits 
(including potential economic, environmental, public health and safety 
effects, distributive impacts, and equity). A regulatory impact 
analysis (RIA) must be prepared for rules that constitute significant 
regulatory action, including rules that have an economic effect of $100 
million

[[Page 70362]]

or more annually. This proposed rule is not a major rule in terms of 
the aggregate costs involved.
    The 53 separate QIO contracts are awarded on a staggered 3-year 
basis. Current sixth scope of work contracts provide photocopy 
reimbursement costs of 7 cents per page. The total dollars budgeted 
were $8.6 million per year and the 3-year costs were $25.9 million. We 
estimate by the time this regulation is published in final, 19 QIOs 
will have completed their 6th round contracts and the other 34 will 
have less than 153 months (combined) out of a total of 636 months (for 
all 53 QIOs) remaining in the final year of their 6th round contracts. 
This translates to 24 percent of the final 6th round year. As such, we 
project this regulation will increase the costs in the last (i.e., 
current) year of the 6th scope of work by $1.5 million above the 
previous budgeted level of $8.6 million, to a total of $10.1 million. 
However, in future years--based on the full 12 months and all 53 QIOs 
under contract--the increase will be nearly $6.2 million annually.
    Thus, we have determined that this proposed rule is not a major 
rule with economically significant effects because it would not result 
in increases in total expenditures of $100 million or more per year. We 
have also determined that it does not otherwise constitute significant 
regulatory action.
    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 governmental agencies. 
Most hospitals and most other providers and suppliers are small 
entities, either by nonprofit status or by having revenues of $5 
million to $25 million or less annually (see 65 FR 69432). Individuals 
and States are not included in the definition of a small entity.
    We generally prepare a regulatory flexibility analysis that is 
consistent with the RFA unless we certify that a rule will not have a 
significant impact on a substantial number of small entities. We have 
not prepared an analysis for the RFA because we have determined, and 
certify, that this proposed rule would have no significant economic 
impact on small entities. The proposed regulation would not impose any 
economic or operational regulatory burdens on small entities. The 
regulation would only assist providers in performing the tasks required 
under the QIO program sixth scope of work, by increasing the 
reimbursement for providing copies of documents to the QIOs.
    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 have not prepared an 
analysis for section 1102(b) of the Act because we have determined that 
this proposed regulation would not have a significant impact on the 
operations of small rural hospitals for the reasons stated above in our 
discussion of the RFA.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in an expenditure in 
any 1 year by State, local, or tribal governments, in the aggregate, or 
by the private sector, of $110 million or more. We have determined that 
this proposed rule would not result in such an expenditure. Rather, the 
proposed rule would benefit providers by increasing the photocopy 
reimbursement rate.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a rule that imposes substantial 
direct compliance costs on State and local governments, preempts State 
law, or otherwise has Federalism implications. We have reviewed this 
proposed rule under the threshold criteria of Executive Order 13132 and 
have determined that it would not have a substantial direct effect on 
the rights, roles, and responsibilities of States or local governments.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.

42 CFR Part 413

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

42 CFR Part 476

    Grant programs--health, Health care, Health facilities, Health 
professions, Quality Improvement Organizations (QIO), reporting and 
recordkeeping requirements.

42 CFR Part 484

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV to read as 
follows:

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

    1.The authority citation for part 412 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.  412.115, revise paragraph (c) to read as follows:


Sec.  412.115  Additional payments.

* * * * *
    (c) QIO photocopy and mailing costs. An additional payment is made 
to a hospital in accordance with Sec.  476.78 of this chapter for the 
costs of photocopying and mailing medical records requested by a QIO.

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES

    1. The authority citation for part 413 continues to read as 
follows:

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and 
(n), 1871, 1881, 1883, and 1886 of the Social Security Act (42 
U.S.C. 1302, 1395d(d), 1395f(b), 1395l(a), (i), and (n), 1395hh, 
1395rr, 1395tt, and 1395ww).

    2. Add a new Sec.  413.355 to read as follows:


Sec.  413.355  Additional payment: QIO photocopy and mailing costs.

    An additional payment is made to a skilled nursing facility in 
accordance with Sec.  476.78 of this chapter for the costs of 
photocopying and mailing medical records requested by a QIO.

PART 476--UTILIZATION AND QUALITY CONTROL REVIEW

    1. The authority citation for part 476 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.  476.78, revise the introductory text to paragraph (b); 
revise paragraphs (b)(2), (b)(4), and the introductory text to 
paragraph (c); add new paragraph (c)(4);

[[Page 70363]]

and revise paragraph (d) to read as follows:


Sec.  476.78  Responsibilities of health care providers.

* * * * *
    (b) Cooperation with QIOs. Health care providers that submit 
Medicare claims must cooperate in the assumption and conduct of QIO 
review. Providers must--
* * * * *
    (2) Provide patient care data and other pertinent data to the QIO 
at the time the QIO is collecting review information that is required 
for the QIO to make its determinations. The provider must photocopy and 
deliver to the QIO all required information within 30 days of a 
request. QIOs pay providers paid under the prospective payment system 
for the costs of photocopying records requested by the QIO in 
accordance with the payment rate determined under the methodology 
described in paragraph (c) of this section and for first class postage 
for mailing the records to the QIO. When the QIO does postadmission, 
preprocedure review, the facility must provide the necessary 
information before the procedure is performed, unless it must be 
performed on an emergency basis.
* * * * *
    (4) When the provider has issued a written determination in 
accordance with Sec.  412.42(c)(3) of this chapter that a beneficiary 
no longer requires inpatient hospital care, it must submit a copy of 
its determination to the QIO within 3 working days.
* * * * *
    (c) Photocopying reimbursement methodology for prospective payment 
system providers. Providers subject to the prospective payment system 
are paid for the photocopying costs that are directly attributable to 
the providers' responsibility to the QIOs to provide photocopies of 
requested provider records. The payment is in addition to payment 
already provided for these costs under other provisions of the Social 
Security Act and is based on a fixed amount per page as determined by 
CMS as follows:
* * * * *
    (4) CMS will periodically review the photocopy reimbursement rate 
to ensure that it still accurately reflects provider costs. CMS will 
publish any changes to the rate in a Federal Register notice.
    (d) Appeals. Reimbursement for the costs of photocopying and 
mailing records for QIO review is an additional payment to providers 
under the prospective payment system, as specified in Sec. Sec.  
412.115, 413.355, and 484.265 of this chapter. Thus, appeals concerning 
these costs are subject to the review process specified in part 405, 
subpart R of this chapter.

PART 484--HOME HEALTH SERVICES

    1. The authority citation for part 484 continues to read as 
follows:

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

    2. Add a new Sec.  484.265 to read as follows:


Sec.  484.265  Additional payment.

    An additional payment is made to a home health agency in accordance 
with Sec.  476.78 of this chapter for the costs of photocopying and 
mailing medical records requested by a QIO.

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

    Dated: March 27, 2002.
Thomas A. Scully,
Administrator, Center for Medicare & Medicaid Services.
    Approved: August 8, 2002.
Tommy G. Thompson,
Secretary.
[FR Doc. 02-29076 Filed 11-21-02; 8:45 am]
BILLING CODE 4120-01-P