[Federal Register Volume 70, Number 57 (Friday, March 25, 2005)]
[Proposed Rules]
[Pages 15266-15274]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-5916]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 482

[CMS-3122-P]
RIN 0938-AM88


Medicare and Medicaid Programs; Hospital Conditions of 
Participation: Requirements for History and Physical Examinations; 
Authentication of Verbal Orders; Securing Medications; and 
Postanesthesia Evaluations

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

ACTION: Proposed rule.

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SUMMARY: In this proposed rule, we propose revisions to four of the 
current hospital conditions of participation (CoPs) for approval or 
continued participation in the Medicare and Medicaid programs. We are 
proposing changes to the CoP requirements related to: Completion of a 
history and physical examination in the medical staff and the medical 
record services CoPs; authentication of verbal orders in the nursing 
service and the medical record services CoPs; securing medications in 
the pharmaceutical services CoP; and completion of the postanesthesia 
evaluation in the anesthesia services CoP. These proposals respond to 
concerns within the medical community that the current Medicare 
hospital CoPs are contrary to current practice and are unduly 
burdensome. The changes specified in this proposed rule are consistent 
with current medical practice and will reduce the regulatory burden on 
hospitals.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on May 24, 2005.

ADDRESSES: In commenting, please refer to file code CMS-3122-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of three ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.cms.hhs.gov/regulations/ecomments. (Attachments should be in Microsoft Word, WordPerfect, or 
Excel; however, we prefer Microsoft Word.)
    2. By mail. You may mail written comments (one original and two 
copies) to the following address ONLY: Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Attention: CMS-3122-
P, P.O. Box 8010, Baltimore, MD 21244-8010.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-9994 in advance to schedule your arrival 
with one of our staff members.

Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., 
Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-
1850.

(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 persons wishing to retain a proof of filing by stamping 
in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    Submission of comments on paperwork requirements. You may submit 
comments on this document's paperwork requirements by mailing your 
comments to the addresses provided at the end of the ``Collection of 
Information Requirements'' section in this document.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Patricia Chmielewski, (410) 786-6899. 
Jeannie Miller, (410) 786-3164.

SUPPLEMENTARY INFORMATION: Submitting Comments: We welcome comments 
from the public on all issues set forth in this rule to assist us in 
fully considering issues and developing policies. You can assist us by 
referencing the file code CMS-3122-P and the specific ``issue 
identifier'' that precedes the section on which you choose to comment.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. After the close of the 
comment period, CMS posts all electronic comments received before the 
close of the comment period on its public website. 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, (410) 786-9994.
    Copies: To order copies of the Federal Register containing this 
document, send your request to: New Orders, Superintendent of 
Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
of the issue requested and enclose a check or money order

[[Page 15267]]

payable to the Superintendent of Documents, or enclose your Visa or 
Master Card number and expiration date. Credit card orders can also be 
placed by calling the order desk at (202) 512-1800 (or toll-free at 1-
888-293-6498) or by faxing to (202) 512-2250. The cost for each copy is 
$10. As an alternative, you can view and photocopy the Federal Register 
document at most libraries designated as Federal Depository Libraries 
and at 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 web site address is: http://www.gpoaccess.gov/fr/index.html.

I. Legislative and Regulatory Background

A. General

    In the December 19, 1997 Federal Register (62 FR 66726), we 
published a proposed rule entitled ``Medicare and Medicaid Programs; 
Hospital Conditions of Participation (CoPs); Provider Agreements and 
Supplier Approval'' (HCFA-3745-P) which specified our proposal to 
comprehensively revise the entire set of hospital CoPs. 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.
    Sections 1861(e)(1) through 1861(e)(8) of the Act define the term 
``hospital'' and list the requirements that a hospital must meet to be 
eligible for Medicare participation. Section 1861(e)(9) of the Act 
specifies that a hospital must also meet such other requirements as the 
Secretary of Health and Human Services (the Secretary) finds necessary 
in the interest of the health and safety of the hospital's patients. 
Under this authority, the Secretary has established in regulations, at 
Part 482, the requirements that a hospital must meet to participate in 
the Medicare program.
    Compliance is determined by State survey agencies (SAs) or 
accreditation organizations. The 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 State 
Operations Manual (SOM) (Centers for Medicare & Medicaid Services (CMS) 
Publication No. 7). The SOM contains the regulatory language of the 
CoPs as well as interpretive guidelines and survey procedures that give 
guidance on how to assess provider compliance. Under Sec.  489.10(d), 
the SAs determine whether a hospital meets the CoPs and make 
corresponding recommendations to us about a hospital's certification, 
(that is, whether a hospital has met the standards required to provide 
Medicare and Medicaid services and receive Federal and State 
reimbursement).
    Under section 1865 of the Act, hospitals that are accredited by the 
Joint Commission on the Accreditation of Healthcare Organizations 
(JCAHO), the American Osteopathic Association (AOA), and other national 
accreditation programs approved by us are deemed to meet the 
requirements in the CoPs. Therefore, accredited hospitals are not 
routinely surveyed by SAs for compliance with the CoPs but are deemed 
to meet most of the hospital CoPs based on their accreditation. (See 42 
CFR Part 488, ``Survey Certification, and Enforcement Procedures''). 
However, all Medicare- and Medicaid-participating hospitals are 
required to be in compliance with our CoPs regardless of their 
accreditation status.

B. Finalizing Provisions of the December 19, 1997 Proposed Rule (HCFA-
3745-P)

    In the December 19, 1997 proposed rule, we proposed to revise all 
CoPs specified in Part 482. While our initial intention was to finalize 
the December 19, 1997 proposed rule in its entirety, delays within CMS, 
(then the Health Care Financing Administration (HCFA)) led us to re-
evaluate this objective in light of concerns expressed by providers 
that we move forward with certain final rules in the interest of public 
health and safety. Our strategy to address CoPs deemed of particular 
urgency by providers was to finalize or ``carve-out'' specific CoPs as 
separate final rules. To date, we have finalized the following hospital 
CoPs: Organ, Tissue and Eye Procurement CoP (see the June 22, 1998 
Federal Register, 63 FR 33856); Patients' Rights (see the July 2, 1999 
Federal Register, 64 FR 36069); Anesthesia Services--CRNA supervision 
(see the November 13, 2001 Federal Register, 66 FR 56762); Fire Safety 
Requirements for Certain Health Care Facilities (see the January 10, 
2003 Federal Register, 68 FR 1374); and, Quality Assessment Performance 
Improvement (see the January 24, 2003 Federal Register, 68 FR 3435).
    Beginning in 2003, we began to develop a final rule to address 
public comments provided on the December 19, 1997 proposed rule for the 
following four requirements: (1) Completion of a history and physical 
examination in the medical staff and the medical record services CoPs; 
(2) authentication of verbal orders in the nursing service and the 
medical record services CoPs; (3) securing medications in the 
pharmaceutical services CoP; and (4) completion of the postanesthesia 
evaluation in the anesthesia services CoP.
    Our decision to carve out these four requirements has evolved in 
large measure as a result of our continuing dialogue with the health 
care community. Through various CMS-sponsored provider forums such as 
the Physicians' Regulatory Issues Team (PRIT) (a team of subject matter 
experts who work within the government to reduce the regulatory burden 
on Medicare participating physicians), our open door forums, and 
written correspondence by a variety of organizations and individuals, 
we were made aware that providers overwhelmingly believe that the 
existing regulations for these requirements no longer reflect current 
health care practice. In addition, public comments received on the 
December 19, 1997 proposed rule strongly supported the revisions we 
proposed for these selected CoPs.

C. Changes as a Result of the Enactment of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (MMA)

    On December 8, 2003, the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 (MMA) was enacted. Section 902(a) of the 
MMA specifies that the Secretary, in consultation with the Director of 
the Office of Management and Budget (OMB), is required to establish and 
publish a regular timeline for the publication of final regulations 
based on the previous publication of a proposed regulation or an 
interim final regulation. Section 902 further provides that the 
timeline may vary among different regulations, but shall not be longer 
than 3 years except under exceptional circumstances.
    Although we do not believe that this law operates retroactively, 
out of an abundance of caution, we are applying the provisions of 
section 902(a) of the MMA to this rule since our publication of the 
December 19, 1997 rule was not finalized. Had section 902(a) of MMA not 
been enacted, the CoP provisions stipulated in this proposed rule would 
have been stipulated in a final regulation. However, with the passage 
of section 902 of the MMA, we believe it is in the spirit of the 
legislation to publish a new proposed regulation.

[[Page 15268]]

II. Provisions of This Proposed Rule

A. Overview

    In the interest of public health and safety, we propose changing 
the current requirements for completion of the initial inpatient 
medical history and physical examination, authentication of verbal 
orders, securing of medications, and completion of a postanesthesia 
evaluation within the hospital CoPs. This proposed rule responds to the 
health care community's primary concern that the current regulations 
are contrary to current health care practice and unduly burdensome. In 
order to be consistent with current health care practice, reduce 
regulatory burdens, and ensure patient safety, we are proposing to 
revise aspects of the current medical staff, nursing services, medical 
record services, pharmaceutical services, and anesthesia services CoPs.
    We have developed this proposed rule taking into consideration 
comments received in response to the December 19, 1997 proposed rule as 
well as ongoing concerns expressed by the health care community since 
1998 via the following public forums: Physicians' Regulatory Issues 
Team, (PRIT), our open door forums, written correspondence, and general 
questions. It is our intent to finalize this proposed rule within the 
3-year publication timeframe specified in the MMA.
1. Completion of the Medical History and Physical Examination
    The current medical history and physical examination requirement 
has been an ongoing focus and point of contention for the American 
Medical Association (AMA) and the American Podiatric Medical 
Association, Inc. (APMA). The current regulatory requirement states 
that a physical examination and medical history be done no more than 7 
days before or 48 hours after an admission for each patient by a doctor 
of medicine or osteopathy, or, for patients admitted only for 
oromaxillofacial surgery, by an oromaxillofacial surgeon who has been 
granted such privileges by the medical staff in accordance with State 
law. These professional groups continue to challenge the timeframe for 
completion of the medical history and physical examination, as well as 
who is permitted to complete the history and physical examination. 
Questions have intensified as a result of the JCAHO's revised standard 
that states a history and physical examination performed within 30 days 
before admission may be used in the patient's medical record, provided 
any changes in the patient's condition are documented in the medical 
record at the time of admission. We believe that expanding the current 
requirement for completion of a medical history and physical 
examination from no more than 7 days before admission to within 30 days 
before admission supports safe patient care as long as the hospital 
ensures documentation of the patient's current condition in the medical 
record within 24 hours after admission.
    On January 28, 2002, our Survey and Certification Group issued a 
memorandum (referenced as S&C-02-15) to the Associate Regional 
Administrators and State Survey Agency Directors addressing our 
position on hospital admission and presurgical history and physical 
examination requirements and the timing of the history and physical 
examination for hospital admissions. (A copy of the memorandum can be 
found on our Web site at http://www.cms.hhs.gov/medicaid/survey-cert/012802.asp). This proposed rule would codify the guidance provided in 
the January 28, 2002 memorandum, and published in the June 2003 issue 
of the Open Door Forum Newsletter.
    In addition, we have received communications from the President of 
APMA and other podiatrists regarding their concerns that doctors of 
podiatric medicine are currently not permitted to perform a history and 
physical examination. This proposed rule addresses this concern as 
well.
    We propose to revise the current medical staff requirement at Sec.  
482.22(c)(5) to specify that a medical history and physical examination 
must be completed no more than 30 days before or 24 hours after 
admission for each patient by a physician (as defined in section 
1861(r) of the Act) or other qualified individual who has been granted 
these privileges by the medical staff in accordance with State law, and 
that the medical history and physical examination must be placed in the 
medical record within 24 hours after admission. We also propose 
revising the current Medical Records CoP at Sec.  482.24(c)(2)(i) to 
reflect that a medical history and physical examination must be 
completed no more than 30 days before or 24 hours after admission, and 
placed in the patient's medical record within 24 hours after admission. 
We also propose revising Sec.  482.22(c)(5) and Sec.  482.24(c)(2)(i) 
to require that when a medical history and physical examination is 
completed within the 30 days before admission, the hospital must ensure 
that an updated medical record entry documenting an examination for any 
changes in the patient's current condition is completed. This updated 
examination must be completed and documented in the patient's medical 
record within 24 hours after admission.
2. Authentication of Verbal Orders
    In the December 19, 1997 proposed rule, we solicited comments on 
authentication of medical record entries. Many in the hospital industry 
supported modifying and even eliminating the requirement. Many 
commenters believed that authentication does not add value to the 
quality of the medical record, especially after the service has been 
delivered or after the patient has been discharged. Other commenters 
believed that the absence of authentication leads to questions of 
accountability. In a related issue, we also solicited comments on the 
issue of whether a timeframe should be specified for signing verbal 
orders. Current requirements at Sec.  482.23(c)(2)(ii) state that 
verbal orders for the administration of drugs or biologicals must be 
signed or initialed by the prescribing practitioner as soon as 
possible.
    A key CMS goal is to protect the health and safety of patients. We 
believe that an authentication requirement is necessary to protect the 
health and safety of patients. Unless all medical record entries are 
authenticated, patient safety, quality of care, accountability and 
integrity of the patient medical record are comprised.
    When a medical record entry is authenticated, the person 
authenticating the entry is assuming accountability for a service 
provided and verifying that the entry is complete and accurate. The 
authentication requirements decrease the risk of errors that could 
jeopardize a patient's health and safety by ensuring that all medical 
record entries, including verbal orders, are communicated and 
documented completely and accurately. The current regulations use the 
terms ``telephone orders'' and ``oral orders.'' For the purposes of 
this proposed rule, the term ``verbal orders'' is used to encompass 
both telephone and oral orders.
    Authentication requirements enhance the accountability of a 
practitioner for verbal orders. Accountability means that the person 
who signed the entry is responsible for the care of the patient, and 
has verified that the order has been recorded completely and 
accurately. It does not mean that the person who authenticates a verbal 
order is necessarily the person who gave it. Authentication 
requirements also protect practitioners carrying out verbal orders by 
preventing those giving the

[[Page 15269]]

orders from later denying that the order was made.
    Hospitals and practitioners perceive our current requirement that 
the prescribing practitioner must authenticate verbal orders as soon as 
possible as unnecessarily burdensome. We continue to receive questions 
from hospitals about authentication of verbal orders when the 
prescribing practitioner is not available (for example, the prescribing 
practitioner gives a verbal order, and then is ``off duty'' for a 
weekend or an extended period of time). The current regulation does not 
address the ability of a covering practitioner to authenticate a verbal 
order for the prescribing practitioner.
    Based on discussions with the health care community concerning 
authentication and verbal orders, we are proposing a temporary 
exception to the authentication requirement, which will provide 
hospitals with flexibility while still maintaining an appropriate level 
of accountability.
    We propose to retain and revise the current requirement for 
authentication of medical record entries at Sec.  482.24(c)(1). This 
proposed provision states that all patient record entries must be 
legible, complete, dated, timed and authenticated in written or 
electronic form by whomever is responsible for providing or evaluating 
a service provided. Additionally, we would retain the current 
requirement that all orders, including verbal orders, must be dated, 
timed, and authenticated promptly by the prescribing practitioner, with 
the exception being that from the effective date of the final rule, to 
5 years following the effective date of the final rule, all orders, 
including verbal orders, must be dated, timed, and authenticated 
promptly by the prescribing practitioner or another practitioner who is 
responsible for the care of the patient as specified under Sec.  
482.12(c) and authorized to write orders by hospital policy in 
accordance with State law, even if the order did not originate with him 
or her.
    We believe this temporary revision to the authentication 
requirement will maintain an appropriate level of accountability while 
providing hospitals with flexibility until the advancement of health 
information technology is sufficient to allow the originating physician 
to authenticate his or her own orders in an efficient manner. Prior to 
the conclusion of the 5-year period, we will reevaluate this 
requirement, taking into account the advancement of health information 
technology.
    We frequently receive questions about the timeframe for 
authentication of verbal orders and how we define ``as soon as 
possible.'' Some States have laws requiring authentication of verbal 
orders within 24 to 48 hours. Other State laws, however, do not address 
timeframes for authentication of verbal orders at all, and they defer 
to hospital policy. There is no consistency on this issue in the 
absence of a Federal requirement. Therefore, we propose revising Sec.  
482.24(c)(1)(iii) to require that all verbal orders must be 
authenticated based upon Federal and State law. We further propose that 
if there is no State law that designates a specific timeframe for 
authentication of verbal orders, then verbal orders must be 
authenticated within 48 hours. We invite public comment on this 
proposed approach to the timeframe for authentication of verbal orders. 
Hospitals would no longer be burdened by the requirement that verbal 
orders must be signed by the practitioner who gave the order. Any 
practitioner responsible for the care of the patient who is authorized 
by hospital policy and permitted by State law to independently write a 
specific order would be permitted to authenticate a verbal order, even 
if the order did not originate with him or her. In the interest of 
public health and safety, the proposed requirement would also establish 
a consistent timeframe for the authentication of verbal orders when 
State law does not specify a timeframe for such orders.
    We also propose to revise related nursing service requirements at 
Sec.  482.23(c)(2) that address documentation of orders for drugs and 
biologicals. We propose that with the exception of influenza and 
pneumococcal polysaccharide vaccines, which may be administered per 
physician-approved hospital policy after an assessment of 
contraindications, orders for drugs and biologicals be documented and 
signed by a practitioner who is responsible for the care of the patient 
as specified under Sec.  482.12(c) and authorized to write orders by 
hospital policy in accordance with State law. This proposed requirement 
would provide hospitals, in conjunction with their medical staff, the 
ability to determine who may authenticate verbal orders for whom, as 
well as identify and implement systems and processes that meet the 
safety needs of their patient population.
    As stated earlier, authentication requirements serve to protect 
practitioners carrying out verbal orders by preventing those giving the 
orders from later denying that the order was made. However, we are 
requesting comments on whether there are recurring problems with 
prescribing practitioners denying that they gave a verbal order after 
the verbal order was carried out. We are also requesting public comment 
on the perceived impact of this proposed rule on this potential issue. 
We expect that a hospital's governing body and administration would 
address any issues through the hospital's Quality Assessment and 
Performance Improvement Program and credentialing process.
    We propose retaining the current requirements at Sec.  
482.23(c)(2)(iii) that state that verbal orders are to be used 
infrequently. The use of verbal orders should not be a common practice. 
Verbal orders should be used only to meet the urgent care needs of the 
patient when it is not feasible for the ordering practitioner to 
immediately communicate the order in written or electronic form. Verbal 
orders are not to be used for the convenience of the ordering 
practitioner. We also propose retaining the current requirement that 
when verbal orders are used, they must only be accepted by persons that 
are authorized to do so by hospital policies and procedures, consistent 
with State and Federal law.
3. Securing Medications
    We have had ongoing dialogue with the American Society of 
Anesthesiologists (ASA) and the JCAHO regarding the current requirement 
that all drugs and biologicals be kept in a locked storage area. The 
dialogue has centered on locked anesthesia carts in the operative 
suite. Anesthesiologists take issue with the fact that anesthesia carts 
containing non-controlled drugs must be kept locked or under constant 
observation inside a secure operative suite. Anesthesiologists contend 
that it is standard practice for the anesthesiologist to set up an 
anesthesia cart in advance preparation for use in the operative suite. 
They contend that the same is true for epidural carts in a labor and 
delivery suite. This practice is supported by the ASA. (See the ASA 
Position Statement approved by the ASA Executive Committee, October 
2003, entitled ``Security of Medications in the Operating Room.'')
    We have also had ongoing dialogue with the JCAHO and have received 
numerous questions from the healthcare community regarding patient 
self-administration of medications. It is current practice for 
hospitals to give patients access to urgently needed drugs, such as 
nitroglycerine tablets and inhalers, at the bedside. It is also current 
practice to place selected nonprescription medications at the bedside 
for the patient's use (for example, lotions and creams, rewetting

[[Page 15270]]

eye drops.) Hospitals have also developed formalized patient medication 
self-administration programs for select populations of patients in 
collaboration with the medical staff, nursing, and pharmacy that 
include the development of the necessary hospital policies and 
procedures to ensure patient safety and security of medications. The 
current hospital CoPs do not contemplate medications at the patient's 
bedside as the current requirement mandates that all medications be in 
locked storage.
    Therefore, we propose to revise the provision at Sec.  482.25(b)(2) 
to require that all drugs and biologicals be kept in a secure area, and 
locked when appropriate. We propose that drugs listed in Schedules II, 
III, IV, and V of the Comprehensive Drug Abuse Prevention and Control 
Act of 1970 must be kept locked within a secure area. We further 
propose that only authorized personnel may have access to locked areas. 
We believe this addresses the identified issues, affords hospitals 
flexibility in implementation, and is more patient-focused and outcome 
oriented than the current requirements.
    We do not expect the proposed revision to alter the appropriate 
safety mechanisms that hospitals use to control medications and ensure 
the health and safety of its patients. All controlled substances need 
to be securely locked. These drugs must be tightly controlled and 
accounted for as required by Federal law and regulations. Non-
controlled drugs, however, do not necessarily need to be locked. They 
may be secured, and locked when appropriate, to prevent diversion or 
tampering with the medications. A medication is considered secure if 
unauthorized persons are prevented from obtaining access. Medications 
should not be stored in areas that are readily accessible to 
unauthorized persons. For example, medications left in an unlocked 
drawer in a patient waiting area or patient examination room would not 
be considered secure. However, if medications are kept in a private 
office, or other area where patients and visitors are not allowed 
without the supervision or presence of a health care professional (for 
example, procedure room), they are considered secure, even if not 
locked. Areas restricted to authorized personnel only would generally 
be considered ``secure'' areas. If medication security becomes a 
problem, the hospital is expected to evaluate its current medication 
control policies and procedures, and implement the necessary systems 
and processes to ensure that the problem is corrected and that patient 
health and safety are maintained.
4. Completion of the Postanesthesia Evaluation
    The medical community has repeatedly requested that we modify the 
current hospital anesthesia regulation that requires the individual who 
administers the anesthesia to write the follow up report. The medical 
community requested that CMS allow the postanesthesia report to be 
written by an individual qualified to administer anesthesia. This issue 
has been identified as particularly important by the PRIT, open door 
forums participants and through general questions submitted to CMS. 
Discussions with the health care community continue to indicate that 
the current postanesthesia evaluation requirement at Sec.  482.52(b)(3) 
is: (1) Not consistent with the current preanesthesia evaluation 
requirement; (2) not reflective of current practice; and (3) an 
unnecessary burden for hospitals and practitioners that provide 
anesthesia. This requirement has also been a priority issue for the 
American Medical Association (AMA). These ongoing discussions have 
served as the impetus for us to propose revisions to this requirement 
in the current anesthesia services CoP. The proposed revision of this 
regulation would be consistent with the current regulation at Sec.  
482.52(b)(1) addressing preanesthesia reports. This requirement states, 
``A preanesthesia evaluation by an individual qualified to administer 
anesthesia under paragraph (a) of this section performed within 48 
hours prior to surgery.'' Implementation of the proposed change 
allowing the postanesthesia evaluation report to be written by an 
individual qualified to administer anesthesia would give hospitals 
greater flexibility in meeting the needs of patients and impose less 
burden than the current requirement.

B. Summary of the Proposed Rule

Condition of Participation: Medical Staff (Sec.  482.22)

Section 482.22(c)(5)

    This proposed requirement would expand the timeframe for completion 
of the patient's medical history and physical examination and would 
expand the number of permissible professional categories of individuals 
who may perform the medical history and physical examination. It would 
require that each patient receive a medical history and physical 
examination, to be completed no more than 30 days before or 24 hours 
after admission, and placed in the patient's medical record within 24 
hours after admission. A physician (as defined in section 1861(r) of 
the Act), or other qualified individual who has been granted these 
privileges by the medical staff in accordance with State law, could 
complete the medical history and physical examination. In addition, 
when a medical history and physical examination is completed within the 
30 days before admission, the hospital would be required to ensure that 
an updated medical record entry documenting an examination for any 
changes in the patient's current condition is completed. This updated 
examination would be completed and documented in the patient's medical 
record within 24 hours after admission.
Condition of Participation: Nursing Services (Sec.  482.23)

Section 482.23(c)(2)

    This proposed requirement would clarify that with the exception of 
influenza and pneumococcal polysaccharide vaccines, which may be 
administered per physician-approved hospital policy after an assessment 
of contraindications, orders for drugs and biologicals would be 
documented and signed by a practitioner who is responsible for the care 
of the patient as specified under Sec.  482.12(c) and authorized to 
write these orders by hospital policy in accordance with State law.

Section 482.23(c)(2)(i) and (c)(2)(ii)

    This proposed requirement would reinforce the current regulations 
that verbal orders are to be used infrequently, and, when used, be 
accepted only by persons authorized by hospital policy and procedures 
consistent with Federal and State law.

    Condition of Participation: Medical Record Services (Sec.  482.24)

Section 482.24(c)(1)

    This proposed requirement would maintain and reinforce the current 
regulation for authentication of all medical record entries. It would 
require that all patient medical record entries be legible, complete, 
dated, timed, and authenticated in written or electronic form by the 
person responsible for providing or evaluating a service provided.

Section 482.24(c)(1)(i)

    This proposed provision would require that all orders, including 
verbal orders, be dated, timed, and authenticated promptly by the 
prescribing practitioner, except as noted in subsection (ii).

[[Page 15271]]

Section 482.24(c)(1)(ii)

    This proposed provision would permit a temporary exception to the 
requirement that all orders, including verbal orders, be dated, timed, 
and authenticated promptly by the prescribing practitioner. For a 
period of 5 years beginning with the effective date of the final rule, 
verbal orders would not need to be signed by the prescribing 
practitioner but could be authenticated by another practitioner 
responsible for the care of the patient. We believe this requirement 
would reduce burden and provide flexibility and clarity for hospitals 
in meeting the requirements for authentication of verbal orders.

Section 482.24(c)(1)(iii)

    This proposed provision would specify that all verbal orders be 
authenticated based on Federal and State law. If there were no State 
law that designates a specific timeframe for the authentication of 
verbal orders, then verbal orders would need to be authenticated within 
48 hours.
    In addition, a consistent timeframe for authentication of verbal 
orders would be established to ensure patient health and safety when 
State law does not designate a specific timeframe for the 
authentication of verbal orders and defers to hospital policy.

Section 482.24(c)(2)(i) and (c)(2)(ii)

    The proposed requirements would be revised to be consistent with 
the changes in the Medical staff CoP. These regulations specify 
documentation requirements for medical history and physical 
examinations. The two proposed provisions would require evidence of the 
following: (1) A medical history and physical examination completed no 
more than 30 days before or 24 hours after admission. The medical 
history and physical must be placed in the patient's medical record 
within 24 hours after admission; (2) an updated medical record entry 
documenting an examination for any changes in the patient's condition 
when the medical history and physical examination was completed within 
30 days before admission. This updated examination would need to be 
completed and documented in the patient's medical record within 24 
hours after admission.
Condition of Participation: Pharmaceutical Services (Sec.  482.25)

Section 482.25(b)(2)(i)

    This proposed provision would specify that all drugs and 
biologicals be kept in secure areas, and locked when appropriate.

Section 482.25(b)(2)(ii)

    This proposed provision would require that scheduled drugs (II, 
III, IV, and V), as outlined in the Comprehensive Drug Abuse Prevention 
and Control Act of 1970, must be locked within a secure area.

Section 482.25(b)(2)(iii)

    This proposed requirement states that only authorized personnel 
would have access to locked areas.
Condition of Participation: Anesthesia Services (Sec.  482.52)

Section 482.52(b)(3)

    This proposed requirement would permit the postanesthesia 
evaluation for inpatients to be completed and documented by any 
individual qualified to administer anesthesia. Implementation of this 
standard would give hospitals greater flexibility in meeting the needs 
of patients and decrease hospital and practitioner burden.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act (PRA) of 1995, we 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 by OMB, section 3506(c)(2)(A) of the PRA of 1995 requires that 
we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    Therefore, we are soliciting public comments on each of these 
issues for the information collection requirements discussed below.
    The following information collection requirements and associated 
burdens are subject to the PRA.

Condition of Participation: Medical Staff (Sec.  482.22)

    Paragraph (c) requires that a hospital have bylaws that include 
specified information. This proposed rule would revise some of the 
contents required in the bylaws.
    The burden associated with these proposed requirements is the time 
spent by the hospital to revise their bylaws. We believe that this 
proposed requirement reflects customary and usual business practice. 
Thus, the burden is not subject to the PRA in accordance with section 
1320.3(b)(2). In addition, we estimate that there are fewer than 10 new 
hospitals per year that would have to comply, on a one-time basis, with 
this requirement. Information collection requirements affecting fewer 
that 10 entities are exempt from the PRA.

Condition of Participation: Nursing Services (Sec.  482.23)

    Proposed paragraph (c) of this section would require with the 
exception of influenza and pneumococcal polysaccharide vaccines, which 
may be administered per physician-approved hospital policy after an 
assessment of contraindications, orders for drugs and biologicals be 
documented and signed by a practitioner who is responsible for the care 
of the patient and authorized to write orders by hospital policy in 
accordance with State law.
    The burden associated with these proposed requirements is the time 
spent by the practitioner in documenting and signing orders. We believe 
that these proposed requirements reflect customary and usual business 
and medical practice. Thus, the burden is not subject to the PRA in 
accordance with section 1320.3(b)(2).

Condition of Participation: Medical Record Services (Sec.  482.24)

    Proposed paragraph (c) of this section would require that all 
patient medical record entries be legible, complete, dated, timed and 
authenticated in written or electronic form by the person responsible 
for providing or evaluating the service provided.
    All orders, including verbal orders, would have to be dated, timed, 
and authenticated promptly by the prescribing practitioner, except for 
a 5-year period of time beginning with the effective date of the final 
rule. During this 5-year time period, all orders, including verbal 
orders must be dated, timed and authenticated promptly by a 
practitioner who is responsible for the care of the patient as 
specified under Sec.  482.12(c) and authorized to write orders by 
hospital policy in accordance with State law. This exception is time 
limited in anticipation that the advancement of health information 
technology will facilitate a prescribing practitioner authenticating 
his or her own orders.

[[Page 15272]]

    Verbal orders would be required to be authenticated based upon 
Federal and State law. If there were no State law that designated a 
specific timeframe for the authentication of verbal orders, then verbal 
orders would need to be authenticated within 48 hours. Records must 
include evidence of a medical history and physical examination 
completed no more than 30 days before or 24 hours after admission, and 
placed in the patient's medical record within 24 hours after admission. 
When the medical history and physical examination are completed within 
30 days before admission, the hospital must ensure that documentation 
of an examination of the patient's current condition is placed in the 
medical record within 24 hours after admission.
    The burden associated with these proposed requirements would be the 
time spent in signing and dating medical record entries and in placing 
evidence of a history and physical examination in the patient's 
records. We believe that these requirements reflect customary and usual 
business and medical practice. Thus, the burden is not subject to the 
PRA in accordance with section 1320.3(b)(2).

Condition of Participation: Anesthesia Services (Sec.  482.52)

    Under proposed paragraph (b)(3) of this section, with respect to 
inpatients, a postanesthesia evaluation is to be completed and 
documented by an individual qualified to administer anesthesia within 
48 hours after surgery.
    The burden associated with these proposed requirements would be the 
time spent in documenting the evaluation. We believe that these 
requirements reflect customary and usual medical practice. Thus, the 
burden is not subject to the PRA in accordance with section 
1320.3(b)(2).
    We have submitted a copy of this proposed rule to OMB for its 
review of the proposed information collection requirements described 
above. These requirements are not effective until they have been 
approved by OMB.
    If you comment on any of these information collection and record 
keeping requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic 
Operations and Regulatory Affairs, Regulations Development and 
Issuances Group, Attn: Jim Wickliffe, CMS-3122-P Room C5-14-03, 7500 
Security Boulevard, Baltimore, MD 21244-1850; and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Christopher Martin, CMS Desk Officer, CMS-3122-P, 
[email protected] Fax (202) 395-6974.

IV. Response to Comments

    Based on the large number of public comments we normally receive on 
Federal Register documents, 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.

V. Regulatory Impact Statement

    We have examined the impact of this proposed rule as required by 
Executive Order 12866 (September 1993, Regulatory Planning and Review), 
the Regulatory Flexibility Act (RFA) (September 19, 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). A regulatory impact 
analysis (RIA) must be prepared for major rules with economically 
significant effects ($100 million or more in costs/savings any one 
year). This proposed rule would impose minimal additional costs on 
hospitals. In fact, hospitals may realize some minimal cost savings. We 
believe the cost of implementing these provisions borne by hospitals 
would be limited to a one time cost associated with completing minor 
revisions to portions of the medical staff bylaws, and policies and 
procedures related to the requirements for history and physical 
examinations, authentication of verbal orders, securing medications, 
and postanesthesia evaluations, as well as communicating these changes 
to affected staff. The changes contained within this proposed rule are 
consistent with current practice, would decrease existing burden, and 
would provide hospitals with more flexibility in meeting CoP 
requirements. Although we believe that implementation of this proposed 
rule will result in greater efficiencies for hospitals, we do not 
believe that the proposed changes will result in significant savings 
near the $100 million threshold. We believe these benefits will offset 
the implementation costs that a hospital would incur, and, therefore, 
be budget neutral. Therefore, we have determined that it is not 
considered a major rule and no RIA is required. There are no proposed 
requirements for hospitals to initiate new processes of care, 
reporting, or increases in the amount of time spent providing or 
documenting patient care services. However, we lack data to quantify 
the effects of this proposed rule. We invite public comment on the 
impact on hospitals and practitioners. 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 government jurisdictions. Most hospitals and most 
other providers and suppliers are small entities, either by nonprofit 
status or by having receipts of $6 million to $29 million or less 
annually (65 FR 69432). For purposes of the RFA, all hospitals are 
considered to be small entities. However, the nature of this proposed 
rule is such that no additional regulatory burden will be placed upon 
hospitals. Instead, burden would be decreased for hospitals by this 
proposed regulation. Therefore, no regulatory relief options are 
considered.
    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 do not anticipate that 
the operations of a substantial number of small rural hospitals will be 
significantly impacted.
    We are not preparing analyses for either the RFA or section 1102(b) 
of the Act because we have determined that this proposed rule would 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. However, we lack data to quantify the 
effects of this proposed rule on small entities or small rural 
hospitals. We invite public comment on the impact of this proposed rule 
on small entities and 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 1 year by State, local, or tribal governments, 
in

[[Page 15273]]

the aggregate, or by the private sector, that exceeds the inflation 
adjusted threshold of $110 million. This proposed rule would place no 
additional burden for implementation on State, local, or tribal 
governments or 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. We have examined this proposed rule and have determined 
that it would 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, the 
Office of Management and Budget reviewed this proposed rule.

List of Subjects in 42 CFR Part 482

    Grant programs--health, Hospitals, Medicaid, 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, part 482 as 
set forth below:

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, 
unless otherwise noted (42 U.S.C. 1302 and 1395hh).

    2. Section 482.22 is amended by revising paragraph (c)(5) to read 
as follows:


Sec.  482.22  Condition of participation: Medical staff.

* * * * *
    (c) * * *
    (5) Include a requirement that a medical history and physical 
examination be completed no more than 30 days before or 24 hours after 
admission for each patient by a physician (as defined in section 
1861(r) of the Act), or other qualified individual who has been granted 
these privileges by the medical staff in accordance with State law. The 
medical history and physical examination must be placed in the 
patient's medical record within 24 hours after admission. When the 
medical history and physical examination are completed within 30 days 
before admission, the hospital must ensure that an updated medical 
record entry documenting an examination for any changes in the 
patient's condition is completed. This updated examination must be 
completed and documented in the patient's medical record within 24 
hours after admission.
* * * * *
    3. Section 482.23 is amended by revising paragraph (c)(2) to read 
as follows:


Sec.  482.23  Condition of participation: Nursing services.

* * * * *
    (c) * * *
    (2) With the exception of influenza and pneumococcal polysaccharide 
vaccines, which may be administered per physician-approved hospital 
policy after an assessment of contraindications, orders for drugs and 
biologicals must be documented and signed by a practitioner who is 
authorized to write orders by hospital policy and in accordance with 
State law, and who is responsible for the care of the patient as 
specified under Sec.  482.12(c).
    (i) If verbal orders are used, they are to be used infrequently.
    (ii) When verbal orders are used, they must only be accepted by 
persons who are authorized to do so by hospital policy and procedures 
consistent with Federal and State law.
* * * * *
    4. Section 482.24 is amended by--
    A. Revising paragraph (c)(1).
    B. Revising paragraph (c)(2)(i).
    The revisions read as follows:


Sec.  482.24  Condition of participation: Medical record services.

* * * * *
    (c) * * *
    (1) All patient medical record entries must be legible, complete, 
dated, timed, and authenticated in written or electronic form by the 
person responsible for providing or evaluating the service provided, 
consistent with hospital policies and procedures.
    (i) All orders, including verbal orders, must be dated, timed, and 
authenticated promptly by the prescribing practitioner, except as noted 
in paragraph (c)(1)(ii) of this section.
    (ii) For the period from the effective date of the final rule, to 5 
years following the effective date of the final rule, all orders, 
including verbal orders, must be dated, timed, and authenticated by the 
prescribing practitioner or another practitioner who is responsible for 
the care of the patient as specified under Sec.  482.12(c) and 
authorized to write orders by hospital policy in accordance with State 
law.
    (iii) All verbal orders must be authenticated based upon Federal 
and State law. If there is no State law that designates a specific 
timeframe for the authentication of verbal orders, then verbal orders 
must be authenticated within 48 hours.
    (2) * * *
    (i) Evidence of--
    (A) A medical history and physical examination completed no more 
than 30 days before or 24 hours after admission. The medical history 
and physical examination must be placed in the patient's medical record 
within 24 hours after admission.
    (B) An updated medical record entry documenting an examination for 
any changes in the patient's condition when the medical history and 
physical examination are completed within 30 days before admission. 
This updated examination must be completed and documented in the 
patient's medical record within 24 hours after admission.
* * * * *
    5. Section 482.25 is amended by revising paragraph (b)(2) to read 
as follows:


Sec.  482.25  Condition of participation: Pharmaceutical services.

* * * * *
    (b) * * *
    (2)(i) All drugs and biologicals must be kept in a secure area, and 
locked when appropriate.
    (ii) Drugs listed in Schedules II, III, IV, and V of the 
Comprehensive Drug Abuse Prevention and Control Act of 1970 must be 
kept locked within a secure area.
    (iii) Only authorized personnel may have access to locked areas.
* * * * *
    6. Section 482.52 is amended by revising paragraph (b)(3) to read 
as follows:


Sec.  482.52  Condition of participation: Anesthesia services.

* * * * *
    (b) * * *
    (3) With respect to inpatients, a postanesthesia evaluation must be 
completed and documented by an individual qualified to administer 
anesthesia as specified in paragraph (a) of this section within 48 
hours after surgery.
* * * * *

(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)


[[Page 15274]]


    Dated: September 1, 2004.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: December 2, 2004.
Tommy G. Thompson,
Secretary.
[FR Doc. 05-5916 Filed 3-24-05; 8:45 am]
BILLING CODE 4120-01-P