[Federal Register Volume 67, Number 226 (Friday, November 22, 2002)]
[Notices]
[Pages 70437-70439]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-29363]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2154-FN]


Medicare and Medicaid Programs; Application by the Joint 
Commission on Accreditation of Healthcare Organizations for Continued 
Deeming Authority for Ambulatory Surgical Centers

AGENCY: Centers for Medicare & Medicaid Services, HHS.

ACTION: Final notice.

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SUMMARY: This notice announces our decision to re-approve the Joint 
Commission on Accreditation of Healthcare Organizations (JCAHO) as a 
national accreditation program for Ambulatory Surgical Centers (ASCs) 
seeking to participate in the Medicare program. Following our 
evaluation of the organizational and programmatic capabilities of 
JCAHO, we have determined that JCAHO standards for ASCs meet or exceed 
the Medicare conditions for coverage. Therefore, ASCs accredited by 
JCAHO will receive deemed status under the Medicare program.

EFFECTIVE DATE: This final notice is effective December 20, 2002 
through December 20, 2008.

FOR FURTHER INFORMATION CONTACT: Cindy Melanson, (410) 786-0310.

SUPPLEMENTARY INFORMATION:

I. Background

    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) authorizes the Secretary of the 
Department of Health and Human Services (the Secretary) to establish 
distinct criteria for facilities seeking designation as ASCs. Under 
this authority, the Secretary has set forth in regulations minimum 
requirements that an ASC must meet in order to participate in Medicare. 
The regulations concerning supplier agreements are at 42 CFR part 489 
and those pertaining to the survey and certification of facilities are 
at 42 CFR part 488. The regulations at 42 CFR part 416 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.
    Generally, in order to enter into an agreement, an ASC must first 
be certified by a State survey agency as complying with the conditions 
or requirements set forth in part 416 of our regulations. Then, the ASC 
is subject to regular surveys by a State survey agency to determine 
whether it continues to meet these requirements. There is an 
alternative, however, to surveys by State agencies.
    Section 1865(b)(1) of the Act provides that, if a provider entity 
demonstrates through accreditation that all applicable Medicare 
conditions are met or exceeded, the Centers for Medicare & Medicaid 
Services (CMS) shall ``deem'' those provider entities to have met the 
requirements. Accreditation by an accreditation organization is 
voluntary and is not required for Medicare participation.
    If an accreditation organization is recognized by the Secretary as 
having standards for accreditation that meet or exceed Medicare 
requirements, any provider entity accredited by the national 
accrediting body's approved program would be deemed to meet the 
Medicare conditions. A national accreditation organization applying for 
approval of deeming authority under part 488, subpart A must provide us 
with reasonable assurance that the accreditation organization requires 
the

[[Page 70438]]

accredited provider entities to meet requirements that are at least as 
stringent as the Medicare conditions. Our regulations concerning 
reapproval of accrediting organizations are set forth at Sec.  488.4 
and Sec.  488.8(d)(3). The regulations at Sec.  488.8(d)(3) require 
accreditation organizations to reapply for continued approval of 
deeming authority every 6 years or sooner as determined by CMS. The 
Joint Commission on Accreditation of Healthcare Organization's (JCAHO) 
current term of approval as a recognized accreditation program for ASCs 
expires December 19, 2002.

A. Deeming Application Approval Process

    Section 1865(b)(3)(A) of the Act provides a statutory timetable to 
ensure that our review of deeming applications is conducted in a timely 
manner. The Act provides us with 210 calendar days after the date of 
receipt of an application to complete our survey activities and 
application review process. Within 60 days of receiving a completed 
application, we must publish a notice in the Federal Register that 
identifies the national accreditation body making the request, 
describes the nature of the request, and provides no less than a 30-day 
public comment period. At the end of the 210-day period we must publish 
an approval or denial of the application.

II. Proposed Notice

    On June 28, 2002, we published a proposed notice at 67 FR 43612 
announcing the JCAHO's request for reapproval as a deeming organization 
for ASCs. In this notice we detailed our evaluation criteria. Under 
section 1865(b)(2) of the Act and Sec.  488.4, we conducted a review of 
the JCAHO application in accordance with the criteria specified by our 
regulation, which include, but are not limited to the following:
    [sbull] An onsite administrative review of JCAHO's (1) corporate 
policies; (2) financial and human resources available to accomplish the 
proposed surveys; (3) procedures for training, monitoring, and 
evaluation of its surveyors, (4) ability to investigate and respond 
appropriately to complaints against accredited facilities; and (5) 
survey review and decision-making process for accreditation.
    [sbull] A comparison of JCAHO's ASC accreditation standards to our 
current Medicare ASC conditions for coverage.
    [sbull] A documentation review of JCAHO's survey processes to:

+ Determine the composition of the survey team, surveyor 
qualifications, and the ability of JCAHO to provide continuing surveyor 
training.
+ Compare JCAHO's processes to those of State survey agencies, 
including survey frequency, and the ability to investigate and respond 
appropriately to complaints against accredited facilities.
+ Evaluate JCAHO's procedures for monitoring providers or suppliers 
found to be out of compliance with JCAHO program requirements. The 
monitoring procedures are used only when the JCAHO identifies 
noncompliance. If noncompliance is identified through validation 
reviews, the survey agency monitors corrections as specified at Sec.  
488.7(d).
+ Assess JCAHO's ability to report deficiencies to the surveyed 
facilities and respond to the facility's plan of correction in a timely 
manner.
+ Establish JCAHO's ability to provide us with electronic data in 
ASCII-comparable code and reports necessary for effective validation 
and assessment of JCAHO's survey process.
+ Determine the adequacy of staff and other resources.
+ Review JCAHO's ability to provide adequate funding for performing 
required surveys.
+ Confirm JCAHO's policies with respect to whether surveys are 
announced or unannounced.
+ Obtain JCAHO's agreement to provide us with a copy of the most 
current accreditation survey together with any other information 
related to the survey as we may require, including corrective action 
plans.

    In accordance with section 1865(b)(3)(A) of the Act, the proposed 
notice also solicited public comments regarding whether JCAHO's 
requirements met or exceeded the Medicare conditions of coverage for 
ASCs. We received no public comments in response to our proposed 
notice.

III. Provisions of the Final Notice

A. Differences Between JCAHO and Medicare's Conditions and Survey 
Requirements

    We compared the standards contained in JCAHO's ``Comprehensive 
Accreditation Manual for Ambulatory Care'' (CAMAC) and its survey 
process in the ``Ambulatory Surgery Centers Request for Continued 
Deeming Handbook'' with the Medicare ASC conditions for coverage and 
CMS'' State and Regional Operations Manual. Our review and evaluation 
of JCAHO's deeming application, which were conducted as described in 
section III of this notice, yielded the following:
    [sbull] In order to meet the requirements of Sec.  488.4(a)(4)(ii), 
JCAHO provided the education and experience requirements surveyors must 
meet. JCAHO surveyors must have 5 years of recent experience in an 
appropriate health care setting and a minimum of a Master's degree in 
an appropriate discipline.
    [sbull] JCAHO addressed our regulations at Sec.  488.4(a)(4)(v) by 
providing JCAHO's policy that no one may conduct a survey if they have 
had a relationship with the facility in the last 3 years. All JCAHO 
employees are required to sign a conflict-of-interest statement upon 
hire.
    [sbull] JCAHO provided a list of all full and partial ASC 
accreditation surveys scheduled to be performed by the organization in 
2002 to satisfy our requirements at Sec.  488.4(a)(10).
    [sbull] In reference to the CMS final rule published in the Federal 
Register November 13, 2001 (66 FR 56762), the Joint Commission 
recognized that the exception permitting certified registered nurse 
anesthetists (CRNAs) to administer anesthesia without supervision of a 
physician when requested by the Governor of a State, in consultation 
with the State's Board of Medicine and Nursing was not addressed. JCAHO 
will reference the role of and supervisory requirements for CRNAs in 
the next revision of the CAMAC. The crosswalk of the JCAHO standards to 
the Medicare Conditions will also be amended. JCAHO will also notify 
current and prospective ASCs seeking deemed status of this revised CMS 
requirement in JCAHO's official communication vehicle, Perspectives, 
which is published monthly.
    [sbull] JCAHO recognizes CMS' expectation that an ASC is by 
definition an ambulatory health care occupancy with or without regard 
to size of the facility as incorporated in Sec.  416.44(b). JCAHO 
agrees to survey ASCs seeking deemed status with this requirement and 
will add language to the CAMAC. In addition, JCAHO will review the 
application for survey submitted by ASCs to JCAHO and, as appropriate, 
will make this requirement more prominent to avoid any 
misunderstandings.
    [sbull] JCAHO addressed our regulations at Sec.  416.44 by 
recognizing that assessing compliance with the life safety code (LSC) 
is a JCAHO responsibility. In the evaluation of the LSC, the JCAHO 
surveyor physically inspects and evaluates the ASC's physical plant 
(both above and below the ceiling) in relationship to the requirements 
of the LSC. As an adjunct survey assessment technique and tool, the 
JCAHO uses and evaluates the organization's Statement of Condition 
(SOC) and Plan for Improvement (PFI) during the on-site inspection; 
however, the SOC/PFI is not

[[Page 70439]]

used in lieu of nor does it replace, the on-site evaluation of the 
ASC's physical plant. In addition, JCAHO strongly supports CMS in the 
proposed adoption of the 2000 edition of the LSC for all providers. The 
JCAHO is in the process of adopting the 2000 edition of the LSC for all 
programs and expects to have this process completed consistent with 
CMS'' adoption of the code.

B. Term of Approval

    Based on the review and observations described in section III of 
this final notice, we have determined that JCAHO's requirements for 
ASCs meet or exceed our requirements. Therefore, we recognize the JCAHO 
as a national accreditation organization for ASCs that request 
participation in the Medicare program, effective December 20, 2002 
through December 20, 2008.

IV. 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.

V. Regulatory Impact Statement

    We have examined the impacts of this final 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 (as amended by Executive Order 13258, which 
merely reassigns responsibility of duties) 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). The RFA 
requires agencies to analyze options for regulatory relief for small 
businesses. 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 final notice recognizes JCAHO as a national accreditation 
organization for ASCs that request participation in the Medicare 
program. There are neither significant costs nor savings for the 
program and administrative budgets of Medicare. Therefore, 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. We have determined, and the Secretary certifies, that this 
notice will not result in a significant impact on a substantial number 
of small entities and will not have a significant effect on the 
operations of a substantial number of small rural hospitals. Therefore, 
we are not preparing analyses for either the RFA or section 1102(b) of 
the Act.
    In an effort to better assure the health, safety, and services of 
beneficiaries in ASCs already certified as well as provide relief to 
State budgets in this time of tight fiscal restraints, we deem ASCs 
accredited by JCAHO as meeting our Medicare requirements. Thus, we 
continue our focus on assuring the health and safety of services by 
providers and suppliers already certified for participation in a cost-
effective manner.
    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 final notice will not have an effect on 
the governments mentioned nor on the private sector.
    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 requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final notice will not have a substantial effect on 
State and local governments. In accordance with the provisions of 
Executive Order 12866, this notice was not reviewed by the Office of 
Management and Budget. In accordance with Executive Order 13132, we 
have determined that this notice will not significantly affect the 
rights of States, local, or tribal governments.

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

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

    Dated: November 2, 2002.
Thomas Scully,
Administrator, Centers for Medicare & Medicaid Services.
[FR Doc. 02-29363 Filed 11-21-02; 8:45 am]
BILLING CODE 4120-01-P