[Federal Register Volume 70, Number 156 (Monday, August 15, 2005)]
[Proposed Rules]
[Pages 47759-47771]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-16160]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Part 483

[CMS-3198-P]
RIN 0938-AN95


Medicare and Medicaid Programs; Condition of Participation: 
Immunization Standard for Long Term Care Facilities

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

ACTION: Proposed rule.

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SUMMARY: The goal of this proposed rule is to increase immunization 
rates in Medicare and Medicaid participating long term care (LTC) 
facilities by requiring LTC facilities to offer each resident 
immunization against influenza annually, as well as lifetime 
immunization against pneumococcal disease. LTC facilities would be 
required to ensure that each resident receives an annual immunization 
against influenza and receives the pneumococcal immunization once, 
unless medically contraindicated or the resident or the resident's 
legal representative refuses immunization. Increasing the use of 
Medicare-funded preventive services is a goal of both CMS and the 
Centers for Disease Control and Prevention (CDC). This proposed rule is 
intended to increase the number of elderly receiving influenza and 
pneumococcal immunization and decrease the morbidity and mortality rate 
from influenza and pneumococcal diseases.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on August 30, 2005.

ADDRESSES: In commenting, please refer to file code CMS-3198-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 regular 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-3198-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 express or overnight mail. You may send 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-3198-P, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    4. 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.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Anita Panicker, (410) 786-5646. 
Jeannie Miller, (410) 786-3164. Rachael Weinstein, (410) 786-6775.

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-3198-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. CMS posts all electronic 
comments received before the close of the comment period on its public 
Web site as soon as possible after they have been received. Hard copy 
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, phone 1-800-
743-3951.

I. Background

(If you choose to comment on issues in this section, please include 
the caption ``BACKGROUND'' at the beginning of your comments.)

A. General

    The CDC's Advisory Committee on Immunization Practices (ACIP) 
reported on May 28, 2004 (http://www.cdc.gov/mmwr/preview/mmwrhtml/

[[Page 47760]]

rr5306a1.htm), that epidemics of influenza have been responsible for an 
average of approximately 36,000 deaths per year in the United States 
between 1990 and 1999. There is an added danger when it comes to people 
age 65 or older or with high risk conditions such as individuals 
residing in long term care facilities. In 2002, ACIP estimated the 
rates of influenza related hospitalization as 392 to 635 per 100,000 
among adults with one or more high risk conditions, compared to 13 to 
33 per 100,000 among those without high risk conditions.
    According to the CDC, influenza and invasive pneumococcal disease 
kill more people in the United States each year than all other vaccine-
preventable diseases combined. Influenza and pneumonia combined 
represent the fifth leading cause of death in the elderly. Immunization 
is the primary method for preventing invasive pneumococcal disease as 
well as influenza and its more severe complications. The ACIP reported 
in 2002 that the primary target group for influenza vaccination 
includes persons who are at high risk for serious complications from 
influenza, including approximately 35 million persons who are more than 
65 years of age and approximately 33 to 39 million persons less than 65 
years of age who have chronic underlying medical conditions. ACIP 
recommends that all residents of long term care facilities should be 
assessed for their needs for pneumococcal polysaccharide vaccine (PPV) 
and that people 65 or older, as well as persons less than 65 who have 
chronic illness or who are living in long term care facilities, receive 
the immunization if eligible. As the vast majority of the residents in 
nursing homes are 65 years and older, or if younger, probably have one 
or more chronic medical conditions for which the vaccine is indicated, 
one would expect that nearly all residents are candidates for 
pneumococcal vaccination. Therefore, it is vital to increase 
immunization rates to reduce and eliminate vaccine-preventable causes 
of morbidity and mortality.
    Despite the Federal government's unified efforts to increase the 
availability of safe and effective vaccines and despite substantial 
progress in reducing many vaccine-preventable diseases, many 
individuals are not receiving influenza and pneumococcal vaccines.
    Section 4107 of the Balanced Budget Act of 1997 extended the 
influenza and pneumococcal immunization campaign being conducted by CMS 
in conjunction with CDC and the National Coalition for Adult 
Immunization through fiscal year 2002, authorizing $8 million for each 
fiscal year from 1998 to 2002. Although Medicare reimbursement for 
influenza and pneumococcal immunizations was increased under this 
legislation, rates of immunization did not improve as anticipated.
    On April 30, 1999, the CDC and CMS entered into a memorandum of 
understanding (IA 99-87), to establish a program of collaboration 
between the two agencies to enhance assessment of health status and 
delivery of preventive services to beneficiaries of the Medicare 
program. One of the initial areas highlighted for collaboration was 
improving influenza and pneumococcal immunization coverage through 
``standing orders'' for those populations and in those settings 
designated as appropriate by the ACIP.
    A March 24, 2000 ACIP report recommended the use of standing orders 
programs in both outpatient and inpatient settings to increase the 
number of individuals who receive the influenza vaccine (http://www.cdc.gov/mmwr/preview/mmwrhtml/rr4901a1.htm). On October 2, 2002 (67 
FR 61808), CMS published a final rule with comment period that removed 
the physician order requirement for influenza and pneumococcal 
vaccinations from the Conditions of Participation (CoPs) for Medicare 
and Medicaid participating hospitals, (LTC) facilities, and home health 
agencies (HHAs). The final rule was effective as of its publication 
date. Although the CoPs for these provider types require a physician's 
order for drugs and biologicals that must be signed by the practitioner 
responsible for the care of the patient or resident, the CoPs make an 
exception for influenza and PPV. These vaccines now can be administered 
per a physician-approved facility or agency policy, following 
assessment of the patient or resident for contraindications. The final 
rule was a major step towards increasing the immunization rates in the 
LTC population.
    To date we do not have data on the specific immunization rates of 
nursing facility residents since the publication of this rule. Medicare 
Current Beneficiary Survey (MCBS) data shows that, the rate of 
influenza vaccination of individuals age 65 and older was 70.4 percent 
in the year 2000, 67.4 percent in 2001, 69 percent in 2002 and 70.4 
percent in 2003. MCBS data for pneumococcal vaccination for individuals 
age 65 and older was 62.7 percent in 2000, 63.3 percent in 2001, 64.6 
percent in 2002 and 66.4 percent in 2003. These rates demonstrate that 
we need to implement strategies to help us achieve the goal set by the 
Department of Health and Human Services (DHHS) Healthy People 2010, 
which set a target rate of 90 percent for influenza and pneumococcal 
vaccination for adults aged 65 years and older. Further information on 
preventive services like immunizations are available at the healthy 
aging site at http://www.cms.hhs.gov/healthyaging/2a.asp and at http://www.healthypeople.gov/.

B. Influenza Incidence and Prevention

    Numerous studies referenced by the CDC at the Morbidity and 
Mortality Weekly Report (MMWR) website show that: (1) Persons 65 years 
and older are at high risk of contracting influenza, (2) they are more 
likely than the general population to need hospitalization or to die 
from complications of influenza, and (3) immunizations are effective in 
preventing influenza and its complications in this population (http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5306a1.htm).
    In the May 2004 MMWR referenced above, the ACIP stated that while 
rates of influenza infection are high among children, rates of serious 
illness and death are highest among persons aged >=65 years and persons 
of any age who have medical conditions that place them at increased 
risk for complications from influenza. According to ACIP, the primary 
target groups recommended for annual vaccination are as follows: (1) 
Persons at increased risk for influenza-related complications (for 
example, those aged >=65 years and persons of any age with certain 
chronic medical conditions); (2) persons aged 50 to 64 years (because 
this group has an elevated prevalence of certain chronic medical 
conditions); and (3) persons who live with or care for persons at high 
risk (for example, health-care workers and individuals within a 
household who have frequent contact with persons at high risk and who 
can transmit influenza to those persons at high risk).
    The ACIP report states that vaccination is associated with 
reductions in influenza-related respiratory illness and physician 
visits among all age groups, hospitalization and death among persons at 
high risk, otitis media among children, and work absenteeism among 
adults. Although influenza vaccination levels increased substantially 
during the 1990s, further improvements in vaccine coverage levels are 
needed. Influenza vaccination remains the cornerstone for the control 
and treatment of influenza. (MMWR: Recommendations and Reports May 28, 
2004/53(RR06); 1-40 http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5306a1.htm).

[[Page 47761]]

    Although influenza affects persons of all ages, the CDC has 
identified several groups who are at increased risk for complications. 
One such group is comprised of residents of nursing homes or other 
long-term care facilities. An article in American Family Physician, 
January 1, 2002 titled, ``Influenza in the Nursing Home,'' states that 
during influenza epidemics, mortality rates among nursing home 
residents often exceed 5 percent of the nursing home population in the 
country. To lessen the impact of this infectious disease, the CDC 
recommends the influenza vaccine as the primary way of preventing the 
illness and its complications (http://www.aafp.org/afp/20020101/75.html).
    The Director of Health Care-Public Health Issues for the General 
Accountability Office (GAO) testified before the United States Senate 
Special Committee on Aging, on September 28, concerning a 2004 GAO 
study titled, ``Infectious Disease Preparedness: Federal Challenges in 
Responding to Influenza Outbreaks'' (http://www.gao.gov/new.items/d041100t.pdf). She stated that the study was conducted to identify the 
challenges in preventing the spread of the influenza virus because 
influenza is associated with an average of 36,000 deaths and more than 
200,000 hospitalizations each year in the United States. Furthermore, 
nine out of ten persons who die from influenza and one out of two who 
are hospitalized due to influenza are age 65 or older. The GAO was 
asked to conduct the study to assess issues related to supply, demand, 
and distribution of vaccine during a typical flu season and to assess 
the Federal plan to respond to an influenza pandemic. The study was 
based on a survey of physician group practices, interviews with health 
department officials in all 50 states, as well as information about CDC 
activities in the 2003-04 flu season. The GAO found that the most 
effective way to prevent influenza is by immunizing individuals against 
influenza every fall season.
    The 2004 ACIP recommendations referenced earlier state that 
influenza vaccine effectiveness varies in the elderly; however, 
influenza vaccine is still effective at preventing severe illness, 
secondary complications, and death. In the elderly population residing 
in nursing homes, the vaccine can be 50-60 percent effective in 
preventing hospitalization or pneumonia and 80 percent effective in 
preventing death, even though the effectiveness in preventing influenza 
illness often ranges from 30 percent to 40 percent.
    According to the January 1, 2002 article in American Family 
Physician referenced earlier, a number of studies have also shown that 
nursing homes with high rates of vaccinated residents have fewer 
outbreaks of influenza than nursing homes with lower vaccination rates. 
The article further states that many studies have shown that influenza 
vaccination of nursing home residents and staff can significantly 
decrease rates of hospitalization, pneumonia, and related mortality. 
Therefore, it is vital to the well being of the residents of nursing 
homes that they are offered immunization, if not medically 
contraindicated, and that facilities ensure residents receive the 
immunizations at the appropriate time to prevent the spread of the 
influenza virus.
    The February 14, 2005, article in the Archives of Internal Medicine 
titled ``Impact of Influenza Vaccination on Seasonal Mortality in the 
U.S. Elderly Population'' reports the results of the study conducted by 
Lone Simonsen and colleagues on flu vaccination rates among elderly 
(http://archinte.ama-assn.org/cgi/content/abstract/165/3/265). This 
study reports that vaccination of the elderly population against 
influenza may be less effective in preventing death among the elderly 
than previously estimated. CDC and National Institute of Health (NIH) 
jointly, in a February 15, 2005, press release (http://www.cdc.gov/flu/pdf/statementeldmortality.pdf) concluded that the Simonsen, et al. 
study does not show that the flu vaccine is ineffective at protecting 
the elderly from influenza. Rather, the study indicates that different 
research approaches result in different estimates of influenza vaccine 
effectiveness at preventing death among the elderly.
    The Simonsen, et al., study does not imply that the elderly should 
not receive influenza vaccine. Furthermore, we note that this study 
addresses the elderly population as a whole, and does not analyze the 
more vulnerable group, nursing home residents, addressed by this 
regulation and the studies of those residents summarized later in this 
preamble. The conclusions in the study are in sharp contrast to other 
peer-reviewed studies that address the same issue (see for example, 
JAMA; Chicago; Oct 22-Oct 29, 1997; 278; 16; Jane E Sisk; Alan J 
Moskowitz; William Whang; Jean D Lin et al.). The CDC and ACIP 
continually review their influenza vaccine recommendations as well as 
studies and published research in order to develop the best 
recommendations for protecting all Americans from influenza. The 
Simonsen, et al., study is a reminder that there is room for 
improvement in how we protect the elderly from influenza, and CDC and 
NIH encourage research that strengthens our ability to do so.
    The CDC continues to recommend that people aged 65 and older get 
vaccinated against influenza each year as persons aged 65 and older are 
at high risk for complications, hospitalizations, and deaths from 
influenza. In the joint press release referenced above, the CDC and 
National Institute of Health (NIH) continue to support the ACIP 
recommendation that people aged 65 and older get vaccinated against 
influenza each year.

C. Pneumococcal Disease Incidence and Prevention

    Like influenza, invasive pneumococcal disease is particularly 
prevalent and severe in those 65 years and older. This population is at 
high risk of contracting invasive pneumococcal disease, with a high 
risk of resultant complications, hospitalizations, and deaths. 
Pneumococcal immunizations are effective in preventing pneumococcal 
disease in this population.
    According to CDC's Active Bacterial Core Surveillance for 
pneumococcal disease, approximately 5,700 deaths from invasive 
pneumococcal disease (bacteremia and meningitis) are estimated to have 
occurred in the United States in 2002 (http://www.cdc.gov/ncidod/dbmd/abcs/survreports/spneu02.pdf). An article in the American Journal of 
Preventive Medicine, August 2003, titled ``Standards for Adult 
Immunization Practices'' states that overall, vaccine effectiveness 
against invasive pneumococcal disease among immunocompetent people aged 
65 years is 75 percent. Based on 1998 projections, annually, 76 percent 
of invasive pneumococcal disease cases and 87 percent of resulting 
deaths occurred in people who were eligible for pneumococcal vaccine in 
the United States. (http://www.cdc.gov/nip/recs/rev_stds_adult_AJPM.pdf)
    The ACIP and CDC recommend immunization for pneumococcal disease 
for those 65 years old or older, and for people with a serious long-
term health problem, such as heart disease, diabetes, or 
immunosuppression due to disease, organ transplantation, or medical 
treatment such as chemotherapy. The American Lung Association warns 
that people considered at high risk for invasive pneumococcal disease 
include the elderly, the very young, and those with underlying health 
problems, such as chronic obstructive pulmonary disease (COPD). 
Patients with diseases that impair the immune system, such as AIDS, or 
patients with other chronic

[[Page 47762]]

illnesses, such as asthma, or those undergoing cancer therapy or organ 
transplantation, are particularly vulnerable.
    According to CDC recommendations, usually one dose of the PPV is 
all that is needed to prevent pneumococcal disease or a person only 
needs to be immunized once in a life time. However, a second dose is 
recommended for people 65 and older who received their first dose prior 
to 65 years of age, if five or more years have passed since that dose. 
A second dose is also recommended for people with a damaged spleen or 
without a spleen, sickle-cell disease, HIV infection or AIDS, cancer, 
leukemia, lymphoma, multiplemyeloma, kidney failure or nephrotic 
syndrome, an organ or bone marrow transplant, or who are taking 
medication that lowers immunity (such as chemotherapy or long-term 
steroids).
    Accordingly, we believe it vital that facilities secure the consent 
of their residents or legal representative for vaccination and provide 
their residents with vaccinations. In some cases, this may require that 
they educate residents about the advantages of being vaccinated so that 
the residents will understand the risks of pneumococcal infections and 
will be willing to receive the vaccine. The 1997 ACIP recommendations 
state that, ``Pneumococcal polysaccharide vaccine generally is 
considered safe based on clinical experience since 1977, when the 
pneumococcal polysaccharide vaccine was licensed in the United States. 
Approximately half of the persons who receive pneumococcal vaccine 
develop mild, local side effects (for example, pain at the injection 
site, erythema, and swelling). These reactions usually persist for less 
than 48 hours. Moderate systemic reactions (for example, fever and 
myalgias) and more severe local reactions (for example, local 
induration) are rare. Severe systemic adverse effects (for example, 
anaphylactic reactions) rarely have been reported after administration 
of pneumococcal vaccine. In a recent meta-analysis of nine randomized 
controlled trials of pneumococcal vaccine efficacy, local reactions 
were observed among approximately one third or fewer of 7,531 patients 
receiving the vaccine, and there were no reports of severe febrile or 
anaphylactic reactions.'' The 1997 ACIP recommendations further state 
that pneumococcal vaccination has not been causally associated with 
death among vaccine recipients. Additional information about 
precautions and contraindications can be attained from CDC and the 
vaccine manufacturer's package insert should also be reviewed. (http://
www.cdc.gov/ mmwr/preview/mmwrhtml/00047135.htm#00002349.htm).
    CDC's March 24, 2000 MMWR states that in recent years, a rapid 
emergence of antimicrobial resistance among pneumococci, especially to 
penicillin, has occurred. Increasing pneumococcal vaccination rates 
could help prevent invasive pneumococcal disease caused by vaccine-
type, multidrug-resistant pneumococci. Outbreaks of pneumococcal 
disease caused by a single drug resistant pneumococcal serotype have 
occurred in institutional settings, including nursing homes. The same 
MMWR report states that in 1999, because of concerns about pneumococcal 
antimicrobial resistance and underuse of pneumococcal vaccine, the 
American Medical Association and several partner organizations issued a 
Quality Care Alert that supports ACIP's recommendations for 
pneumococcal vaccination. (Use of Standing Orders Programs to Increase 
Adult Vaccination Rates: MMWR 2000/49 RR01 15-26 March 24.)
    A CMS/CDC report, ``Respiratory Disease Burden in Nursing Homes'' 
(http://www.nationalpneumonia.org/sop/RDBNH_INTERIMProjectRpt_1-31-03.pdf) states that both influenza vaccine and PPV are protective to 
residents in nursing homes. Based on two years of analysis 
(multivariate/multilevel), influenza vaccine may be associated with a 
27 to 35 percent reduction in mortality, and a 44 to 52 percent 
reduction in all-cause hospitalization. Similarly, pneumococcal 
vaccination may be associated with a 20 to 26 percent reduction in 
mortality, and a 12 to 28 percent reduction in all-cause 
hospitalization in nursing home residents. The report also suggests 
that a facility-level influenza vaccination of 80 percent of residents 
may be independently associated with reduced patient hospitalization 
and death.

D. Why a Change in the Conditions of Participation Is Needed

    In January 2000, the Department of Health and Human Services 
launched Healthy People 2010, a comprehensive, nationwide health 
promotion and disease prevention agenda. ``Immunizations and Infectious 
Diseases'' is one of the focus areas. Healthy People 2010 set the 
target rate for influenza and PPV vaccination of adults aged 65 years 
and older at 90 percent. According to CMS's Adult Immunization Project 
``despite the fact that influenza and pneumococcal vaccines are 
clinically effective, cost-effective, and are Medicare Part B covered 
benefits, they remain underutilized'' (http://www.ofmq.com/user_uploads/National%20Immunization%20Project.pdf).
    Based on the 1999 National Nursing Home Survey, only 66 percent of 
nursing home residents had received the influenza vaccine in the 
previous year and only 38 percent had ever had the pneumococcal 
vaccine. The October 2004 article in the American Family Physician 
titled ``Pneumonia in Older Residents of Long-Term Care Facilities'' 
stated that, when compared to persons in the overall community, 
residents in LTC facilities have more functional disabilities and 
underlying medical illnesses and are at increased risk of acquiring 
infectious diseases (http://www.aafp.org/afp/20041015/1495.html). Risk 
factors include un-witnessed aspiration, sedative medication, and co-
morbid illnesses. Influenza-associated mortality is a major concern for 
persons with chronic diseases; this mortality increase is most marked 
in persons 65 years of age or older, with more than 90 percent of the 
deaths attributed to pneumonia and influenza occurring in persons of 
this age group.
    As noted in the October 15, 2004 article ``Pneumonia in Older 
Residents of Long-Term Care Facilities'' in the journal of American 
Family Physician, October 15, 2004, ``The number of frail older adults 
living in LTC facility is expected to increase dramatically over the 
next 30 years'' (http://www.aafp.org/afp/20041015/1495.html). The 
article further states that an estimated 40 percent of adults will 
spend some time in a LTC facility before dying. Unless control measures 
are more vigorously implemented, the number of deaths from influenza 
and pneumonia with respect to residents in LTC facilities and the 
number of consequent complications might increase significantly.
    In summary, immunizations save lives and can help avoid needless 
suffering and unnecessary costs caused by complications from various 
infectious diseases, and, as many family members and health care 
workers know, they can prevent infection of others. However, despite 
the availability of safe and effective vaccines, substantial portions 
of susceptible adults are not being immunized. To reduce morbidity and 
mortality rates, delivering appropriate vaccinations in a timely manner 
is vital. This rule would facilitate the delivery of appropriate 
vaccinations to residents in LTC facilities in a timely manner and 
increase vaccination rates, and thereby decrease the morbidity and 
mortality

[[Page 47763]]

rate of influenza and pneumococcal diseases. This rule also has the 
potential to reduce overall healthcare costs by reducing the need for 
the treatment of influenza and pneumococcal diseases and their 
complications.

E. Immunizations and LTC Facilities

    According to a June 2002 CDC summary of the National Nursing Home 
Survey, 46,000 nursing home residents (2.5 percent) had pneumonia in 
1999. The average length of stay in a LTC facility for a resident with 
pneumonia as a primary diagnosis was 124 days in 1999 (http://www.cdc.gov/nchs/data/series/sr_13/sr13_152.pdf).
    A November 2000 article in the journal Infection Control and 
Hospital Epidemiology titled ``Increasing Pneumococcal Vaccination 
Rates Among Residents of Long-Term Care Facilities,'' noted that there 
were 1,590,763 individuals over 65 years of age residing in LTC 
facilities in the United States in 1990, and the number is estimated to 
grow to 2.9 million by 2020 (Infection Control and Hospital 
Epidemiology, Volume 21 (11) (705-710) November 2000). A substantial 
increase in vaccination rates among such a large population would 
significantly decrease the number of cases of influenza and 
pneumococcal bacteremia and related death.
    A 1999 RAND report stated that the proportion of the U.S. 
population over age 65 had increased from 5 percent in 1900 to 13 
percent in 1997. This change in demographics, combined with an increase 
in average life expectancy, has highlighted the importance of 
preventive care services for older individuals. The October 1997 
Journal of the American Medical Association (JAMA) article ``Cost-
Effectiveness of Vaccination Against Pneumococcal Bacteremia Among 
Elderly People'' indicated that vaccination of elderly people against 
pneumococcal bacteremia is one of the few interventions that have been 
found to both improve health and save medical costs. Vaccination both 
reduced medical expenses and improved health for the overall age group 
of 65 years and older (JAMA; Chicago; Oct 22-Oct 29 1997; 278; 16; Jane 
E Sisk; Alan J Moskowitz; William Whang; Jean D Lin et al.). The 
article further states ``Vaccination of the 23 million elderly people 
unvaccinated in 1993 would have gained about 78,000 years of healthy 
life and saved $194 million.''
    Pneumococcal vaccination saves costs in the prevention of 
bacteremia alone and is greatly underused among the elderly population, 
on both health and economic grounds. These results support recent 
recommendations of the ACIP and public and private efforts under way to 
improve vaccination rates

F. Vaccine Shortages

    In the fall of 2004 there was a major shortage of inactivated 
influenza vaccine in the United States. One of the major manufacturers 
of the influenza vaccine informed the CDC in early October 2004 that 
none of its flu vaccine would be available for distribution in the 
United States. Because of the shortage, Federal health officials 
released new guidelines as to who should receive a flu vaccine, 
describing those at high-risk of influenza-related health complications 
as priority groups. At that time, the interim recommendations from CDC 
stated that people 65 and older, as well as all those between the ages 
of 2 to 64 with chronic medical conditions and 6-23 month old children, 
were to be prioritized for receiving influenza vaccination. Other 
groups deemed a priority were nursing homes residents. We understand 
that providers of LTC services may be concerned about how they would 
meet the requirements of this regulation should an influenza vaccine 
shortage occur in the future. In the case of a true vaccine shortage as 
declared by CDC, CMS could exercise its enforcement discretion by 
instructing the State Survey Agencies (SSAs) not to cite facilities as 
out-of-compliance with this requirement if they were unable to obtain 
vaccine for their residents.

II. Provisions of the Proposed Rule

    On May 28, 2004, the ACIP recommendations on ``Prevention and 
Control of Influenza'' (http://www.cdc.gov/mmwr/preview/mmwrhtml/rr5306a1.htm), outlined the requirements for a successful vaccination 
program, including combined publicity and education for health-care 
workers and other potential vaccine recipients; a plan for identifying 
persons at high risk; use of reminder/recall systems; and efforts to 
remove administrative and financial barriers that prevent persons from 
receiving the vaccines, including use of standing orders programs. We 
propose to add Sec.  483.25 (n), that would require LTC facilities to 
offer each resident between, October 1 through March 31, immunization 
against influenza annually, as well as lifetime immunization against 
pneumococcal disease. LTC facilities would be required to ensure that 
each resident receives an annual immunization against influenza and 
receives the pneumococcal immunization unless medically 
contraindicated, based on an assessment, or unless the resident or the 
resident's legal representative refuses consent. As an alternative, a 
second pneumococcal shot may be given 5 years after the first 
pneumococcal immunization if the vaccine was administered prior to age 
65, and only according to a practitioner recommendation.
    We are not proposing to require the development of protocols nor 
specific documentation. However, as a facility develops and implements 
immunization protocols or procedures, we expect that obtaining previous 
immunization history on each resident, when possible, would be a part 
of the process. Additionally, this rule proposes that the resident's 
immunization status be documented in the resident's medical record 
including but not limited to the information that the resident received 
influenza or/and pneumococcal immunization, or immunization was 
medically contraindicated, or immunization was refused. If the 
immunization was refused, documention must include that the resident or 
the resident's legal representative received appropriate education and 
consultation regarding the benefits of influenza and pneumococcal 
immunization. Updating and maintaining resident medical records related 
to immunization was identified as an issue by the CDC. The National 
Nursing Home Survey (NNHS), conducted in 1995 by the CDC, National 
Center for Health Statistics, indicated that a large number of nursing 
facilities did not maintain complete, easily-accessible information on 
the vaccination status of their residents. Nearly 21 percent of the 
nursing home residents did not have documentation regarding influenza 
vaccination, and 43 percent did not have documentation regarding 
pneumococcal vaccination. Thus, it was difficult to reliably estimate 
levels of influenza and pneumococcal vaccine use among nursing home 
residents in 1995. The 1995 NNHS also indicated that facilities with an 
organized immunization program had higher immunization rates than those 
without a program. To encourage the development of organized 
immunization programs in long-term care facilities, CDC created a ``how 
to'' manual. The manual outlines general recommendations for 
establishing immunization programs that should integrate seamlessly 
into the facility's overall policies and procedures for quality care. 
The manual is available on line at http://www.cdc.gov/nip/publications/long-term-care.pdf.
    The March 18, 2005 CDC manual titled ``Prevention and Control of

[[Page 47764]]

Vaccine-Preventable Diseases in Long-Term Care Facilities,'' Section 
IV, focuses on the ACIP recommendation related to ``staff immunization 
to reduce staff illnesses during the influenza season to reduce the 
spread of influenza from workers to residents'' (http://www.cdc.gov/nip/publications/long-term-care.pdf). We acknowledge the importance of 
staff immunization. In a similar vein, our infection control 
requirements at 42 CFR 483.65(b)(2) state that ``The facility must 
prohibit employees with a communicable disease or infected skin lesions 
from direct contact with residents or their food, if direct contact 
will transmit the disease.'' The intent of this regulation is to 
prevent the spread of communicable diseases from employees to 
residents.
    Influenza immunizations are given annually. ACIP (May 27, 1994) 
recommends that during October and November each year, vaccination 
should be routinely provided to all residents of chronic-care 
facilities with the concurrence of attending physicians. Consent is 
required for vaccination and can be obtained from the resident or their 
legal representative at the time of admission to the facility or 
anytime afterwards. When possible, all residents should be vaccinated 
at the beginning of the influenza season. Residents admitted after the 
influenza season begins, must be vaccinated at the time of admission 
until the end of March (ACIP, May 27, 1994). Therefore, we propose that 
all residents be offered immunization annually from October 1 through 
March 31. We hope to have this rule finalized by October 1, 2005, 
before the 2005-2006 influenza season.
    PPV is given once in a life time, with certain exceptions. This 
proposed rule recognizes the exception by including language about a 
second shot at Sec.  483.25(n)(2)(iv). This exception states, a second 
shot may be given 5 years after the first pneumococcal immunization if 
the vaccine was administered before age 65 and only according to a 
practitioner recommendation. The following is a simple algorithm ACIP 
recommends for pneumococcal polysaccharide vaccine.
[GRAPHIC] [TIFF OMITTED] TP15AU05.021

    For further information, please go to the CDC Web site listed 
below: http://www.cdc.gov/mmwr/preview/mmwrhtml/00047135.htm#00001211.gif.
    Facilities must assess residents for medical contraindications 
before immunizing them to prevent complications and adverse effects. 
ACIP recommendations (February 8, 2002) state, ``contraindications and 
precautions to vaccination dictate circumstances when vaccines must not 
be administered. The majority of contraindications and precautions are 
temporary, and the vaccination can be administered later. For example, 
persons with acute febrile conditions should not be immunized until 
their fever subsides. A medical contraindication is a condition in a 
recipient that increases the risk for a serious adverse reaction. For 
example, administering influenza vaccine to a person with an 
anaphylactic allergy to egg protein could cause serious illness in or 
death of the recipient.'' The ACIP recommendations further state that 
one universal contraindication applicable to all vaccines is a history 
of a severe allergic reaction after a prior dose of vaccine or vaccine 
constituent.
    If immunization is medically contraindicated, ACIP recommendations 
(2002) state that prophylactic use of antiviral agents is an option for 
preventing influenza among these persons. Persons who have a history of 
anaphylactic hypersensitivity to vaccine components but who are also at 
high risk for complications from influenza can benefit from the vaccine 
after appropriate allergy evaluation and desensitization. The report on 
the ``Use of Standing Orders Programs to Increase Adult Vaccination 
Rates,'' in the March 24, 2000 MMWR, states that standing orders 
protocols should also specify that vaccines be administered by 
healthcare professionals trained to (a) screen patients for 
contraindications to vaccination, (b) administer vaccines, and (c) 
monitor patients for adverse events, in accordance with State and local 
regulations.
    It is important for facilities to remember that residents have the 
right to refuse immunization. However, educating residents and family 
members regarding the benefits of receiving immunizations generally 
results in consent.

III. Collection of Information Requirements

    Under the Paperwork Reduction Act 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 Paperwork Reduction Act 
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.

[[Page 47765]]

     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.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements:
    This proposed rule requires facilities to develop protocols or 
policies and procedures. As a facility develops and implements 
immunization protocols or procedures, we expect that obtaining previous 
immunization history on each resident, when possible, would be a part 
of the process. Additionally, we expect the facility to document in the 
resident's medical record information concerning immunization history, 
contraindications etc. as a part of the process of immunizing 
residents. For example, the facility must indicate in the resident's 
medical record that the resident had received an influenza 
immunization, or that the vaccination was medically contraindicated, or 
that the immunization was refused. If the immunization was refused, 
documentation must include that the resident or the resident's legal 
representative received appropriate education and consultation 
regarding the benefits of influenza immunization.
    The initial burden associated with these requirements in the first 
year, would be related to the establishment of policies and protocols 
for implementation of the immunization rule. This would be 
approximately 5 hours of a registered nurse's time per facility i.e. 
80,695 hours for the first year (5 hours x 16,139 facilities). In 
subsequent years, we estimate that the burden associated with 
documentation of the immunization status of the resident in the medical 
records would be approximately 5 minutes of the registered nurse's 
time, which would be 134,492 hours per year (5 minutes per resident x 
100 residents per facility x 16,139 facilities.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic 
Operations and Regulatory Affairs, Regulations Development Group, Attn: 
Jim Wickliffe, CMS-3198-P, Room C4-26-05, 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-3198-P, 
Christopher [email protected]. Fax (202) 395-6974.

IV. Response to Comments

    Because of 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. Waiver of the 60-day Comment Period

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and substance 
of the proposed rule or a description of the subjects and issues 
involved. In accordance with section 1871(b)(1) of the Act, we 
routinely allow a comment period of at least 60 days on proposed rules 
that affect the Medicare program. This procedure can be waived; 
however, if an agency finds good cause that a 60-day comment period is 
impracticable, unnecessary, or contrary to the public interest, and 
incorporates a statement of the finding and its reasons in the rule 
issued. In accordance with section 1871(b)(2)(C) of the Act, we have 
shortened the comment period for this proposed rule from 60 to 15 days 
to allow us to hopefully finalize these provisions by October 1, 2005 
in time for the 2005-2006 flu season. It is our view that a 60 day 
delay in receiving public comments on this proposed rule and publishing 
the subsequent final rule will be extremely detrimental to the health 
of nursing home residents, as epidemics of influenza typically occur 
during the winter months and are responsible for an average of 
approximately 20,000 to 40,000 deaths per year in the United States. 
Influenza viruses also can cause pandemics, during which rates of 
illness and death from influenza-related complications can increase 
dramatically. Rates of infection are highest among children, but rates 
of serious illness and death are highest among persons 65 and older and 
persons of any age who have medical conditions that place them at 
increased risk for complications from influenza and pneumonia. Vaccines 
are the most effective means to protect against many complications 
related to influenza and pneumonia. The ACIP recommendations for 2004 
to 2005, to decrease the risk of influenza, state that the optimal time 
for influenza vaccinations is October through November. If this 
proposed rule is published with a 60-day comment period it is highly 
unlikely that a final rule can be issued before October, and even if 
that were possible, nursing facilities would not have the lead time 
necessary to obtain resident and/or family consent. If expedited and 
published with a 15-day comment period, this delay can be prevented and 
the rule can be effective in the 2005-2006 flu season, with the 
potential of saving many lives.
    We anticipate that the affect of this rule will be to increase 
immunization rates in nursing homes to 90 percent, which is the Healthy 
People 2010 goal. This will enable about half a million frail elderly 
individuals who are not currently immunized to be immunized. The CMS/
CDC standing orders project in 2003 found that in nursing home 
residents, influenza vaccine is associated with a 27-35 percent 
reduction in mortality, and a 44-52 percent reduction in all-cause 
hospitalizations. Similarly, pneumococcal vaccination is associated 
with a 20-26 percent reduction in mortality, and a 12-28 percent 
reduction in all-cause hospitalization. We recognize that these 
associations are not necessarily causal because the data are cross-
sectional with no correction for confounding variables. However, the 
findings are consistent with findings regarding immunization in the 
general population. Therefore, it is imperative that this proposed rule 
is published with a 15-day comment period so that a final rule can be 
published and effective in the 2005-2006 flu season. Even though 
pneumococcal vaccines can be administered throughout the year, the 
percentage of patients and residents immunized remains low. Therefore, 
this proposed rule would be a vehicle to improve immunization rates and 
would be consistent with the Healthy People 2010 objectives.
    We believe that a continued delay in implementation of this rule 
would greatly hinder increased immunization of residents in LTC 
facilities before the onset of this year's influenza season. We 
conclude that, in this instance, a 60-day comment period is unnecessary 
and contrary to public interest. We find on this basis, that there is 
good cause for waiving the 60-day comment period under section 
1871(b)(2)(C) of the Act.

[[Page 47766]]

VI. Regulatory Impact

(If you choose to comment on issues in this section, please include 
the caption ``Impact Analysis'' at the beginning of your comment.)

A. Overall Impact

    We have examined the impacts of this rulemaking 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, Executive Order 13132 
(August 4, 1999, Federalism), the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4), and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Order 12866 directs agencies to issue regulations only 
after consideration of 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 
rules with economically significant effects ($100 million or more in 
any 1 year). This proposed rule is an economically ``significant 
regulatory action'' as defined by section 3(f) of Executive Order 
12866, and a ``major rule'' as defined in the Congressional Review Act. 
We have reached this conclusion because of the substantial life-saving 
effects of the rule and its anticipated reduction in the medical costs 
associated with influenza and pneumonia. We believe that there are no 
significant costs associated with this proposed rule. It would not 
impose any mandates on State, local, or tribal governments, or the 
private sector that would result in an expenditure of $100 million in 
any given year. Since most program participants comply with the 
statutory and regulatory requirements making unnecessary the imposition 
of termination from Medicare, Medicaid and, where applicable, other 
Federal health care programs, and since Medicare generally pays the 
cost of the vaccines that are the subject of this rule we do not 
anticipate more than a minimal economic impact on nursing facilities as 
a result of this proposed rule. There is a cost to the Medicare program 
for the vaccines to the extent that they are provided to Medicare 
beneficiaries, as discussed below.
    As previously discussed in this preamble, this proposed rule would 
have a substantial life-saving effect. We have developed estimates of 
these life-saving effects, along with estimated changes in medical care 
costs, and present these estimates and the assumptions on which they 
are based in the discussion and table that follows.

Influenza

Assumptions (Benefit)
    There are approximately 2 million residents in LTC facilities. 
Sixty-five percent had documentation stating they received influenza 
immunization per the 1999 National Nursing Home Survey, National Center 
for Health Statistics, CDC. An October, 2000 article in the Journal of 
American Geriatric Society ``Influenza outbreak detection and control 
measures in nursing homes in the United States (Zadeh MM, Buxton 
Bridges C, Thompson WW, Arden NH, Fukuda K.)'' indicated that 83 
percent of LTC residents in the study received immunizations. The 
midpoint between the two reports is 74 percent. The projected 
immunization rate after regulation implementation is 90 percent.
    The 2005 influenza vaccination administration reimbursement rate is 
$18 (unweighted average of Medicare ``National Flu Biller 
Administration Codes''). The 2005 Influenza vaccine reimbursement rate 
is $10.10 (Medicare rate; 95 percent of Average Wholesale Price (AWP). 
There is a wide variation in the influenza rate year to year, due to 
the prevalent strains of influenza virus each influenza season and the 
degree to which the vaccine matches prevalent strains as well as other 
factors. Effectiveness of Influenza vaccine for preventing influenza 
illness is 30-40 percent according to ACIP (Harper SA, Fukuda K, Uyeki 
TM, Cox NJ, Bridges CB; Prevention and control of influenza: 
recommendations of the ACIP. MMWR Recomm Rep. 2004 May 28; 53(RR-6):1-
40).
    As stated above, the rate of hospitalization for the LTC population 
among those ill with influenza is 25 percent (Arden NH, et al.). The 
influenza vaccine is 50-60 percent effective in preventing 
hospitalization due to influenza in the LTC population (ACIP, May 
2004).
    According to (Arden NH, et al.) the case-fatality for influenza 
disease in the LTC population is 10 percent of the number of residents 
who become ill with influenza. The influenza vaccine is 80 percent 
effective in preventing death in LTC residents with influenza illness 
(ACIP, May 2004). The average Medicare cost per hospital discharge for 
influenza is $8,500 per the Office of the Actuary, CMS (including 
medical education, disproportionate share and other pass through). The 
data on the influenza related hospitalization of SNF residents is not 
available. SNF residents are short term stay therefore we do not think 
those numbers are sufficiently large to have a great impact on the 
overall Medicare costs.

              Table 1.--Estimated Federal Benefits Due to Increased Rate of Influenza Immunizations
----------------------------------------------------------------------------------------------------------------
                      LTC Residents                             Current          Projected         Difference
----------------------------------------------------------------------------------------------------------------
% who receive influenza immunization.....................               74%               90%               16%
Number who receive influenza immunization................         1,480,000         1,800,000           320,000
Number ill with influenza................................           133,380           123,300           (10,080)
Number hospitalized due to influenza.....................            20,358            15,030            (5,328)
Number who die from influenza complications..............             7,344             5,040            (2,304)
Direct Medicare cost of inpatient hospital treatment.....      $173,043,000      $127,755,000      ($45,288,000)
----------------------------------------------------------------------------------------------------------------

Assumptions (Cost)
    Influenza vaccine must be administered annually: however, virtually 
all influenza vaccinations administered in LTC facilities are covered 
under the Medicare Part B program. The cost to Medicare for provision 
of the influenza vaccinations is equal to the cost of the vaccines plus 
administration costs. In addition to these direct Medicare costs, an 
indirect Federal cost would be incurred from reduced savings in the 
Medicaid program. For every hospitalization of a LTC facility resident, 
Medicaid saves $1,000 for nursing home care not provided while the 
resident is in the hospital. The weighted average of the Federal 
contribution to Medicaid is 57 percent (Office of the Actuary, CMS), 
and Medicaid is a primary source of payment for 40 to 59 percent of LTC 
facility residents (1999 National Nursing

[[Page 47767]]

Home Survey) and with a mid point of 50 percent. The total federal cost 
related to the increased influenza immunizations is the total of the 
direct Medicare costs combined with the lost savings to Medicaid.

         Table 2.--Estimated Federal Impact of Increased Influenza Immunization on Medicare and Medicaid
----------------------------------------------------------------------------------------------------------------
                                                                      Current ($)    Projected ($)   Difference
----------------------------------------------------------------------------------------------------------------
Total Medicare reimbursement for cost of influenza vaccine and         41,588,000      50,580,000     $8,992,000
 administration (320,000 x $28.10)................................
Federal share of Medicaid LTC facility savings due to resident         (5,802,030)     (4,283,550)    $1,518,480
 hospital stays.*.................................................
                                                                   -----------------
    Total Federal Costs...........................................     35,785,970      46,296,450   $10,510,480
----------------------------------------------------------------------------------------------------------------
* (Number of residents hospitalized) x ($1000 cost for NH facility per hospitalization) x (57% Federal portion
  of Medicaid payments) x (50% portion of all NH patients paid by Medicaid)


  Table 3.--Net Federal Savings Due to Increased Influenza Immunization
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Estimated Federal Savings (from Table 1)................   ($45,288,000)
Estimated Federal Costs (from Table 2)..................    $10,510,480
                                                         ---------------
    Total Net Federal Savings...........................   ($34,777,520)
                                                         ===============
Lives saved per year....................................          2,304
------------------------------------------------------------------------

    In other rules, we have used an average value of a statistical life 
of $5 million to monetize the decreased mortality benefits of the rule. 
The population affected by this rule has different demographic and 
other characteristics from the populations that were addressed in these 
other rules. However, due to the lack of data on this specific 
population and in order to be consistent with previous rules, we are 
assuming a value of $5 million for the average value of a statistical 
life for this rule.
    Therefore, since we estimate 2,304 lives will be saved by the 
influenza vaccination, we estimate the value saved from saving these 
lives as $11.52 billion.
Invasive Pneumococcal Disease
Assumptions (Benefit)
    There are approximately 2 million residents in LTC facilities. The 
projected immunization rate after regulation implementation is 90 
percent. The LTC resident vaccination rate is estimated between 39 
percent (1999 National Nursing Home Survey (NNHS)) and 56 percent 
(community rate, 2003 National Health Interview Survey). Virtually all 
residents with invasive disease are hospitalized. The rate of 
pneumococcal invasive disease in unvaccinated persons aged greater than 
or equal to 65 equals 52-85/100 000, (ACIP, 1997). The case fatality 
ratio of invasive pneumococcal disease in persons aged greater than or 
equal to 65 (despite appropriate medical treatment) is 30-40 percent. 
The average cost per hospital discharge for invasive pneumococcal 
disease is $8500 (Including medical education, disproportionate share 
and other pass through) (Office of the Actuary, CMS). According to CDC 
recommendations, usually one dose of the pneumococcal polysaccharide 
vaccine (PPV) is all that is needed, for a person only needs to be 
immunized once in a life time. However, in some situations a second 
dose is recommended for people 65 and older. Therefore, expense related 
to this rule is projected to cost more at the beginning period of 
implementation.
    The 45 percent documented immunization rate in the table below 
represents data obtained in the year 1999, and since then the rate may 
have increased. Implementing the influenza immunization process is more 
challenging than implementing the similar PPV immunization process. 
Pneumococcal immunizations can be given all through the year without 
time constraints and the vaccine supplies have not been an issue. We 
anticipate that implementation of this rule would result in increase in 
immunization rate and documentation of the related data for future 
comparison. The table below is relating the years 1-5 to the current 
data.
Invasive Pneumococcal Disease
Assumptions (Benefit)

            Table 4.--Estimated Federal Benefits Due to Increased Rate of Pneumococcal Immunizations
----------------------------------------------------------------------------------------------------------------
                                                                          Projected
        LTC Residents            Current   ---------------------------------------------------------------------
                                   year        Year 1        Year 2        Year 3        Year 4        Year 5
----------------------------------------------------------------------------------------------------------------
Percent who receive                    45%          70%           75%           80%           85%           90%
 pneumococcal immunization...
Number who receive             ...........      500,000       100,000       100,000       100,000       100,000
 pneumococcal immunization
 per year....................
Cumulative number immunized        900,000    1,400,000     1,500,000     1,600,000     1,700,000     1,800,000
 (since inception of Medicare
 pneumococcal immunization
 benefits)...................
Number who develop invasive            970          742           697           651           606           560
 pneumococcal disease........
------------------------------
               Deaths from invasive pneumococcal disease (or complications related to the disease)
----------------------------------------------------------------------------------------------------------------
Benchmark--number deaths               340          340           340           340           340           340
 without increased
 immunizations...............
Number deaths following        ...........          260           244           228           212           196
 implementation of
 immunization regulation.....
Number lives saved due to      ...........           80            96           112           128           144
 pneumococcal immunization...
------------------------------

[[Page 47768]]

 
                       Direct Federal costs for treatment of invasive pneumococcal disease
----------------------------------------------------------------------------------------------------------------
Benchmark--costs without        $8,246,190   $8,246,190    $8,246,190    $8,246,190    $8,246,190    $8,246,190
 increased immunizations.....
Costs following                ...........   $6,310,740    $5,923,650    $5,536,650    $5,149,470    $4,762,380
 implementation of
 immunization regulation.....
Savings following              ...........  ($1,935,450)  ($2,322,540)  ($2,709,540)  ($3,096,720)  ($3,483,810)
 implementation of increased
 pneumococcal immunizations..
----------------------------------------------------------------------------------------------------------------

Assumptions (Cost)
    The 2005 pneumococcal vaccination administration reimbursement rate 
is $18 (unweighted average of Medicare ``National Flu Biller 
Administration Codes'') and the pneumococcal vaccine reimbursement rate 
is $23.28 (Medicare rate; 95% of AWP). The pneumococcal vaccine is 
generally administered once per beneficiary lifetime. Therefore this is 
not a recurring cost, but would cost more up front to give lifetime 
immunity to residents (for the cost estimate, we assumed 500,000 people 
would receive the vaccine in the first year and 100,000 people each 
would receive the vaccine in years two through five). The reason we 
assume the higher number the first year is because we expect all the 
eligible residents in the facilities in the first year would receive 
the pneumococcal vaccine. In the following years only the new residents 
who are eligible would need the immunization. Virtually all 
pneumococcal immunizations administered in LTC facilities are covered 
under the Medicare Part B program. For every hospitalization concerning 
Medicaid beneficiaries, Medicaid saves $1000 for nursing home care not 
provided while the resident is in the hospital. The weighted average of 
the Federal contribution to Medicaid is 57 percent (Office of the 
Actuary, CMS). Medicaid is a primary source of payment for 40 to 59 
percent in LTC (1999 National Nursing Home Survey) and the mid point is 
50 percent. The total Federal cost related to the increased 
pneumococcal immunizations is the total of the direct Medicare 
reimbursement costs combined with the lost savings to Medicaid.

            Table 5.--Federal Impact of Increased Pneumococcal Immunization on Medicare and Medicaid
----------------------------------------------------------------------------------------------------------------
                                                                        Projected ($)
                              Current year ---------------------------------------------------------------------
                                   ($)         Year 1        Year 2        Year 3        Year 4        Year 5
----------------------------------------------------------------------------------------------------------------
                   Medicare reimbursement for cost of pneumococcal vaccine and administration
----------------------------------------------------------------------------------------------------------------
Annual Medicare cost          ............   20,640,000     4,128,000     4,128,000      4,128,00     4,128,000
 following increased
 pneumococcal immunization*.
Cumulative Medicare cost       37,152,000    57,792,000    61,920,000    66,048,000    70,176,000    74,304,000
 (since inception of
 Medicare pneumococcal
 immunization benefits).....
-----------------------------
                  Federal share of Medicaid LTC facility savings due to resident hospital stays
----------------------------------------------------------------------------------------------------------------
Federal savings per year         (276,490)     (276,490)     (276,490)     (276,490)     (276,490)     (276,490)
 without increased
 immunizations**............
Federal savings per year      ............     (211,595)     (198,617)     (185,638)     (172,659)     (159,680)
 following increased
 pneumococcal immunization**
    Lost Federal savings due  ............       64,895        77,874        90,852       103,831       116,810
     to increased
     pneumococcal
     immunization...........
                             ---------------
    Total Federal Costs               Not    20,704,895     4,205,874     4,218,852     4,231,831    4,244,810
     (annual Medicare costs     Available
     + lost Federal savings)
----------------------------------------------------------------------------------------------------------------
 * Year 1 (500,000 x $41.28); Years 2-5 (100,000 x $41.28).
** (Number of residents hospitalized) x ($1000 cost for NH facility per hospitalization) x (57% Federal portion
  of Medicaid payments) x (50% portion of all NH patients paid by Medicaid).


 Table 6.--Net Federal Costs Due to Increased Pneumococcal Immunization
------------------------------------------------------------------------
 
------------------------------------------------------------------------
                                 Year 1
------------------------------------------------------------------------
Estimated Federal Savings (from Table 4)...............     ($1,935,450)
Estimated Federal Costs (from Table 5).................       20,704,895
Total Net Federal Cost in Year 1.......................       18,769,445
--------------------------------------------------------

[[Page 47769]]

 
                                Years 2-5
Estimated Federal savings (from table 4) + Estimated Federal costs (from
                                table 5)
------------------------------------------------------------------------
Total Net Federal Cost in Year 2 ($2,322,540) +               $1,883,334
 4,205,874.............................................
Total Net Federal Cost in Year 3 ($2,709,540) +                1,509,312
 4,218,852.............................................
Total Net Federal Cost in Year 4 ($3,096,720) +                1,135,111
 4,231,831.............................................
Total Net Federal Cost in Year 5 ($3,483,810) +                  761,000
 4,244,810.............................................
                                                        ----------------
    Total Net Federal Cost Years 1-5...................       24,058,202
    Lives saved Years 1-5..............................              560
------------------------------------------------------------------------

    Using the same $5 million per life value of a statistical life as 
before and since we estimate 560 lives will be saved by the 
pneumococcal vaccination, we estimate the value saved from saving these 
lives as $2.8 billion.
    For the purpose of this analysis we have considered the protective 
effects of influenza and pneumococcal immunization individually. 
However, the combined effect of both immunizations is additive in 
preventing hospitalization and deaths. The July 30, 1999 article in the 
journal ``Vaccine'' titled ``The additive benefits of pneumococcal 
vaccinations during influenza seasons among elderly persons with 
chronic lung disease'' reports that both vaccinations together 
demonstrated additive benefit as there was a 65 percent reduction in 
hospitalization for pneumonia and 81 percent reduction in death versus 
the situation when neither had been received. Also excluded in this 
analysis is the increased protection against influenza infection 
afforded by the ``herd'' effect after 80 to 90 percent of residents are 
immunized against influenza. The 2003, CMS/CDC standing orders project 
report states that a facility-level influenza vaccination of 80 percent 
and more of residents may be independently associated with reduced 
patient hospitalization and death. Further, the cost-saving effects of 
this rule, and the costs of the vaccine doses themselves, are 
respectively benefits and costs to the taxpayer. Since Medicare pays 
virtually all medical, hospital, and (starting in 2006) drug costs for 
this population, the expected savings from reduced hospitalizations 
would largely accrue to the Federal budget.
    In order to comply with this rule, facilities will develop the 
necessary policies and procedures which will be followed by staff as a 
standard practice. We estimate the time and cost related to this 
process in the following tables:

  Policy and Procedure Implementation Related to the Immunization Rule
          [This is only a one time expense for the facilities]
------------------------------------------------------------------------
   No. of LTC        Hours spent per      Total burden    Total cost per
   facilities           facility             hours            agency
------------------------------------------------------------------------
16,139..........  5 hours first year    80,695 hours     80,695 hours x
                   only.                 only first       $23.70 * =
                                         year.            $1,912,471.
------------------------------------------------------------------------
* $23.70 is the average salary of a registered nurse as per U.S.
  Department of Labor (http://www.bls.gov/oes/current/oes291111.htm#nat).

    This rule proposes that the resident's immunization status be 
documented in the resident's medical record therefore, the following 
table presents the estimated time and cost related to the 
implementation of this process.

                Documentation Time for Both Immunizations
                       [These expenses are annual]
------------------------------------------------------------------------
                     Hours spent per
   No. of LTC         resident per        Total burden    Total cost per
   facilities           facility             hours            agency
------------------------------------------------------------------------
16,139..........  16,139 x 100 **       134,492 hours..  134,492 hours x
                   residents x 5                          $23.70 * =
                   minutes = 8,069,500                    $3,187,460.
                   minutes 134,492
                   hours.
------------------------------------------------------------------------
* $23.70 is the average salary of a registered nurse as per U.S.
  Department of Labor (http://www.bls.gov/oes/current/oes291111.htm#nat).
** 100 is the average number of residents in each facility.

    The RFA (15 U.S.C. 603(a)), as modified by the Small Business 
Regulatory Enforcement Fairness Act of 1996 (SBREFA) (Pub. L. 104-121), 
requires agencies to determine whether proposed or final rules would 
have a significant economic impact on a substantial number of small 
entities and, if so, to identify in the notice of proposed rulemaking 
or final rulemaking any regulatory options that could mitigate the 
impact of the proposed regulation on small businesses. For purposes of 
the RFA, small entities include small businesses, nonprofit 
organizations, and small government jurisdictions. Most nursing 
facilities are small entities, either by nonprofit status or by having 
revenues of $11.5 million or less annually (the applicable size 
standard of the Small Business Administration). Individuals and States 
are not included in the definition of a small entity, and other medical 
care providers are not affected by this proposed rule except 
indirectly, through reduced utilization of care by individuals who do 
not, but would otherwise, require hospitalization.
    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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of

[[Page 47770]]

a Metropolitan Statistical Area and has fewer than 100 beds. We do not 
believe a regulatory impact analysis is required here because, for the 
reasons stated above, this proposed rule would not have a significant 
impact on the operations of a substantial number of 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 whose mandates may result in expenditure in any 1 year 
by State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million in 1995 dollars. This proposed rule 
would impose no mandates on State, local, or tribal governments. As 
indicated elsewhere in this analysis, costs mandated on nursing 
facilities, are minimal, and do not remotely approach this threshold.
    Executive Order 13132 on Federalism establishes certain 
requirements that an agency must meet when it publishes 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 determined that this proposed rule 
would not significantly affect the rights, roles, or responsibilities 
of the States. This proposed rule would not impose substantial direct 
requirement costs on State or local governments, preempt State law, or 
otherwise implicate federalism.

B. Anticipated Effects

1. Effects on LTC facilities
    Based on the various studies and reports referenced earlier in the 
preamble, we expect that LTC facilities would benefit from the 
implementation of this proposed rule. The various studies discussed are 
evidence that prevention of influenza and pneumonia would lower the 
level of acuity, staff time and other expenses resulting in cost 
reductions.
2. Effects on Beneficiaries
    The influenza vaccine is 50-60 percent effective in preventing 
hospitalization due to influenza in the LTC population and increased 
immunizations are expected to improve health overall for the age group 
of 65 years and older. As estimated above 2,304 lives may be saved 
annually when residents receive influenza immunizations.
    According to CDC's Active Bacterial Core Surveillance for 
pneumococcal disease, approximately 5,700 deaths from invasive 
pneumococcal disease (bacteremia and meningitis) are estimated to have 
occurred in the United States in 2002. The October 1997 Journal of the 
American Medical Association (JAMA) article ``Cost-Effectiveness of 
Vaccination Against Pneumococcal Bacteremia Among Elderly People'' 
indicated that vaccination of elderly people against pneumococcal 
bacteremia is one of the few interventions that have been found to both 
improve health and save medical costs.
3. Effects on the Medicare and Medicaid Programs
    The reports from the January 2000, CMS's Adult Immunization 
Project, indicates that ``despite the fact that influenza and 
pneumococcal vaccines are clinically effective, cost-effective, and are 
Medicare Part B covered benefits, they remain underutilized.'' 
Increased immunizations are expected to reduce the medical expenses and 
improve health overall for the age group of 65 years and older as 
reported in the Oct, 1997 JAMA article referenced earlier. As stated 
above, the rate of hospitalization for the LTC population among those 
ill with influenza is 25 percent (Arden NH, et. al.). The average cost 
per hospital discharge for influenza is $8,500 per the Office of the 
Actuary, CMS. The influenza vaccine is 80 percent effective in 
preventing death in the LTC population (ACIP, May 2004). As estimated 
above the net saving would be $34,777,520 and 2,304 lives saved when 
residents receive influenza immunizations. The net cost related to 
pneumococcal immunizations is estimated to be $ 18,821,360 the first 
year of implementation and $ 3,753,887 in the following two to five 
years and 143 lives saved.

C. Alternatives Considered

    We considered other alternatives regarding immunizing residents.
    1. One alternative would be to keep the present rules, as they are 
written. The current regulations, however, have thus far not been 
effective at assisting us in increasing the rate of immunization of 
institutionalized residents to 90 percent. Despite the Federal 
government's unified efforts to increase the availability of safe and 
effective vaccines, and despite substantial progress in reducing many 
vaccine-preventable diseases, at-risk individuals are not receiving 
influenza and pneumococcal vaccines. Section 4107 of the Balanced 
Budget Act of 1997 extended the influenza and pneumococcal immunization 
campaign being conducted by CMS in conjunction with CDC and the 
National Coalition for Adult Immunization through fiscal year 2002, 
authorizing $8 million for each fiscal year from 1998 to 2002. Although 
Medicare reimbursement for influenza and pneumococcal immunizations was 
increased under this legislation, rates of immunization did not improve 
as anticipated.
    2. Another alternative would be to educate providers on the value 
of influenza and pneumococcal vaccines without rule making. However, as 
discussed in studies cited earlier in this rule, this has not been 
effective in improving immunization rates.

D. Conclusion

    Increasing the utilization of cost-effective preventive services is 
the goal of both CMS and CDC, and this proposed rule would facilitate 
the delivery of appropriate vaccinations in a timely manner, increase 
the levels of vaccination rate, and decrease the morbidity and 
mortality rate of influenza and pneumococcal diseases. As a result, the 
economic effects of the rule are substantial and overwhelmingly 
beneficial. 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 483

    Grant programs--health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

    1. The authority citation for part 483 continues to read as 
follows:

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

Subpart B--Requirements for Long Term Care Facilities

    2. Section Sec.  483.25 is amended by adding paragraph (n) to read 
as follows:


Sec.  483.25  Quality of care.

* * * * *
    (n) Influenza and pneumococcal immunizations--(1) Influenza. The 
facility must ensure that--
    (i) Each resident is offered an influenza immunization between 
October 1 through March 31 annually, unless the immunization is 
medically contraindicated or the resident has

[[Page 47771]]

already been immunized during this time period; and
    (ii) The resident or the resident's legal representative must be 
provided the opportunity to refuse immunization. If the resident or the 
resident's legal representative refuses immunization, the facility must 
ensure the resident or the resident's legal representative receives 
appropriate education and consultation regarding the benefits of 
influenza immunization.
    (iii) The resident's immunization status is documented in the 
resident's medical record, including but not limited to; that the 
resident received an influenza immunization, or immunization was 
medically contraindicated, or immunization was refused. If the 
immunization was refused, documentation must include that the resident 
or the resident's legal representative received appropriate education 
and consultation regarding the benefits of influenza immunization.
    (2) Pneumococcal disease. The facility must ensure that--
    (i) Each resident is offered a pneumococcal immunization, unless 
the immunization is medically contraindicated or the resident has 
already been immunized; and
    (ii) The resident or the resident's legal representative must be 
provided the opportunity to refuse immunization. If the resident or the 
resident's legal representative refuses immunization, the facility must 
ensure the resident or the resident's legal representative receives 
appropriate education and consultation regarding the benefits of 
pneumococcal immunization.
    (iii) The resident's immunization status is documented in the 
resident's medical record, including but not limited to; that the 
resident received pneumococcal immunization, or immunization was 
medically contraindicated, or immunization was refused. If the 
immunization was refused, documention must include that the resident or 
the resident's legal representative received appropriate education and 
consultation regarding the benefits of pneumococcal immunization.
    (iv) Exception. As an alternative, based on an assessment and 
practitioner recommendation, a second pneumococcal shot may be given 
after 5 years following the first pneumococcal immunization if the 
vaccine was administered before age 65, unless medically 
contraindicated or the resident or the resident's legal representative 
refuses the second shot.

(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)

    Dated: May 20, 2005.
Mark B. McClellan,
Administrator, Centers for Medicare & Medicaid Services.

    Approved: August 10, 2005.
Michael O. Leavitt,
Secretary.
[FR Doc. 05-16160 Filed 8-12-05; 8:45 am]
BILLING CODE 4120-01-P