[Federal Register Volume 72, Number 181 (Wednesday, September 19, 2007)]
[Rules and Regulations]
[Pages 53628-53649]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-18458]



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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 424, 488, and 489



Establishment of Revisit User Fee Program for Medicare Survey and 
Certification Activities; Final Rule

  Federal Register / Vol. 72, No. 181 / Wednesday, September 19, 2007 / 
Rules and Regulations  

[[Page 53628]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 424, 488, and 489

[CMS-2268-F]
RIN 0938-AO96


Establishment of Revisit User Fee Program for Medicare Survey and 
Certification Activities

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

ACTION: Final rule.

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SUMMARY: This final rule will establish a system of revisit user fees 
applicable to health care facilities that have been cited for 
deficiencies during initial certification, recertification, or 
substantiated complaint surveys and require a revisit to confirm that 
corrections to previously-identified deficiencies have been remedied. 
Consistent with the President's long-term goal to promote quality of 
health care and to cut the deficit in half by fiscal year (FY) 2009, 
the FY 2007 Department of Health and Human Services' (HHS) budget 
request included both new mandatory savings proposals and a requirement 
that user fees be applied to health care providers that have failed to 
comply with Federal quality of care requirements. The ``Revisit User 
Fees'' will affect only those providers or suppliers for which a 
revisit is required to confirm that previously-identified failures to 
meet federal quality of care requirements have been remedied. The fees 
are estimated at $37.3 million annually and will recover the costs 
associated with the Medicare Survey and Certification program's revisit 
surveys. The fees will take effect on the date of publication of the 
final rule and will be in effect until the date that the continued 
authority provided by Congress expires. At the time of publication of 
this regulation the applicable date is September 30, 2007. If no 
legislation is enacted, the fees are not retroactive to the beginning 
of the fiscal year. Any provider or supplier that has a revisit survey 
conducted on or after the date of publication will be assessed a 
revisit user fee and will be notified of the assessment upon data 
system reconciliation which can occur following the closing of the 
fiscal year. The fees will be available to CMS until expended. The 
revisit user fee is included in the President's proposed FY 2008 
budget. We note through the publication of this final rule that if 
authority for the revisit user fee is continued, we will use the 
current fee schedule in this rule for the assessment of such fees until 
such time as a new fee schedule notice is proposed and published in 
final form.

DATES: Effective Date: These regulations are effective on September 19, 
2007.

FOR FURTHER INFORMATION CONTACT: Carla McGregor, (410) 786-0663

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background

A. Overview

    In the June 29, 2007 Federal Register (72 FR 35673), we published 
the proposed rule entitled, ``Establishment of Revisit User Fee Program 
for Medicare Survey and Certification Activities'' and provided for a 
60 day comment period. This rule sets forth final requirements and the 
final Fee Schedule for providers and suppliers who require a revisit 
survey as a result of deficiencies cited during an initial 
certification, recertification, or substantiated complaint survey.
    The Centers for Medicare & Medicaid Services (CMS) has in place an 
outcome-oriented survey process that is designed to determine whether 
existing Medicare-certified providers and suppliers or providers and 
suppliers seeking initial Medicare certification are actually meeting 
statutory and regulatory requirements, conditions of participation, or 
conditions for coverage. These health and safety requirements apply to 
the environments of care and the delivery of services to residents or 
patients served by these facilities and agencies. The Secretary of the 
Department of Health and Human Services (``HHS'') has designated CMS to 
enforce the conditions of participation/coverage and other requirements 
with these programs. The revisit user fee will be assessed for revisits 
conducted in order to determine whether deficiencies cited as a result 
of carrying out CMS's survey process obligations have been corrected.

B. Requirements for Issuance of Regulations

    Section 20615(b) of The Continuing Appropriations Resolution 
(``Continuing Resolution'') budget bill passed by the Congress and 
signed by the President directed HHS to implement the revisit user fees 
in FY 2007. Section 20615(b) states as follows:

    The Secretary of Health and Human Services shall charge fees 
necessary to cover the costs incurred under `Department of Health 
and Human Services, Centers for Medicare and Medicaid Services, 
Program Management' for conducting revisit surveys on health care 
facilities cited for deficiencies during initial certification, 
recertification, or substantiated complaints surveys. Not 
withstanding section 3302 of title 31, United States Code, receipts 
from such fees shall be credited to such account as offsetting 
collections, to remain available until expended for conducting such 
surveys (Pub. L. 110-5, H.J.Res.20, Sec.  20615(b)(2007)).

    As directed by the Secretary, in the June 29, 2007 Federal Register 
(72 FR 35673), CMS established revisit user fees for revisit surveys 
and put forth in regulation the definitions, criteria for determining 
the fee, the fee schedule, collection of fees, reconsideration process 
for revisit user fees, enforcement and regulatory language addressing 
enrollment and billing privileges, and provider agreements. In the 
proposed rule, cost projections were based on FY 2006 actual data and 
were expected to amount to $37.3 million on an annual basis. These 
calculations were included in section IV Regulatory Impact Analysis in 
the proposed rule (72 FR 35678).
    The fees will take effect on the date of publication of the final 
rule and will be in effect until the date that the authority provided 
by the Congress expires. At the time of publication of this regulation 
the applicable date is September 30, 2007. As discussed thoroughly in 
the proposed rule, based on the Congress' knowledge of section 1864(e) 
of the Social Security Act and already established survey and 
certification activities, the unambiguous nature of section 20615(b) of 
the Continuing Resolution, and the principles of lex posterior derogate 
legi priori or ``last-in-time'' rule, the Secretary has the authority 
to implement this revisit user fee and establish a final fee schedule. 
See 72 FR 35674-35675 (discussing section 1864(e) of the Social 
Security Act).

II. Summary of the Proposed Provisions and Response to Comments

    In the June 29, 2007 Federal Register (72 FR 35673), we published 
the proposed rule entitled, ``Establishment of Revisit User Fee Program 
for Medicare Survey and Certification Activities'' and provided for a 
60 day comment period.
    We received a total of 74 comments from various providers, 
suppliers, health care associations, and individual health care 
professionals and other individuals. The comments ranged from general 
support of the survey process or general opposition to the proposed 
provisions to very specific questions or comments regarding the 
proposed new revisit user fee.

[[Page 53629]]

    Brief summaries of each proposed provision, a summary of the public 
comments we received and our responses to the comments are set forth 
below. Comments related to the paperwork burden and the impact analyses 
are addressed in the Collection of Information and the Regulatory 
Impact Analysis sections in this preamble.

General Comments

1. Time Period for Levying Fees
    Comment: Several commenters suggested that CMS should not allow 
user fees for nursing home revisits beyond the end of the fiscal year. 
The commenters believe that nursing homes bear the brunt of the overall 
survey process because surveys are conducted annually for nursing homes 
and as such CMS should ensure that the fee is not renewed.
    Response: The President's HHS budget for FY 2007, as enacted by the 
Congress, directs the HHS Secretary to implement the revisit user fees 
during FY 2007. Since the provisions for the revisit user fee were put 
forth through the annual appropriations process, continuation of the 
fees under this regulation beyond September 30, 2007 will depend on 
Congressional renewal or extension of the time period under which fees 
may be assessed. While nursing homes have the most frequent surveys, 
they also have the largest number of revisits. Revisits in nursing 
homes represent the largest single source revisit costs. While there 
would be cost to some--but not all--nursing homes as a result of the 
revisit fees, nursing homes also benefit from being able to reassure 
prospective nursing home residents and their families that the nursing 
home is federally certified and that there is an objective and 
independent system of oversight to assure quality. The revisit survey 
is an essential element of that quality assurance system. We also note 
that the revisit fees are not restricted to nursing homes, but apply to 
almost all providers and suppliers that require a revisit to confirm 
that identified deficiencies are remedied.
2. Authority to Assess a Revisit User Fee
    Comment: A few commenters expressed concern that revisit fees would 
be imposed when the authority granted to levy fees expires on September 
30, 2007 and that there does not appear to be legislation pending that 
would extend CMS' authority to impose these fees beyond FY 2007. One 
commenter stated that if the Congress does not extend this authority, 
then it appears that this rule will be void. Another commenter 
disagrees with CMS interpretation of section 1864(e) of the Social 
Security Act (the Act) as giving HHS the ``authority to assess revisit 
user fees.'' The commenter felt that clearly the inclusion and specific 
wording in this section within the Act indicates Congress intended that 
the Secretary ``may not impose'' any fee on any facility for any survey 
(revisit or otherwise) for determining compliance ``with any 
requirement of this title.''
    Response: We are frequently expected to implement legislation that 
is promulgated by the Congress and therefore has the force of law, as 
in the passed FY 2007 appropriations bill. We strive to implement the 
provisions in an efficient and effective manner once it becomes law. 
The commenter is correct that the current authority to impose the 
revisit user fee expires for revisits occurring after September 30, 
2007, unless otherwise authorized via legislation or through the FY 
2008 appropriations bill, as examples. The revisit user fee is included 
in the President's proposed FY 2008 budget. We acknowledge the 
commenter's disagreement with the Congress' intent as it relates to 
authority to impose any fee based on the Social Security Act. However, 
as we discussed in the Proposed Rule, we believe that Congress intended 
to give the Secretary authority to implement this revisit user fee 
program when Congress enacted section 20615(b) of the Continuing 
Resolution.
3. ``Good Performers Versus Poor Performers''
    Comment: Several commenters believed that those nursing homes 
considered to be providing excellent care would be required to pay a 
revisit user fee along with nursing homes that are considered poor 
performers. The commenters believe that even minor infractions 
uncovered during an annual survey for these higher quality nursing 
homes would still lead to the imposition of a revisit user fee. A 
commenter questioned whether or not those facilities going above and 
beyond to provide higher level care through higher costs of operations 
should be subjected to this user fee in the same manner as those 
facilities that are performing at the bare minimum requirements with 
lower costs of operations if the goal is to promote a better health 
care environment.
    Response: We believe that many nursing homes will pay no revisit 
user fees because they consistently provide high quality care, have no 
deficiencies identified through the survey process, and therefore will 
require no revisits. Other nursing homes may require some revisits but 
with minimal costs because the deficiencies are not serious, and the 
revisit may be accomplished through an offsite survey. We have 
established a much lower fee for offsite surveys since actual costs to 
the survey program for these revisit surveys are much less than the 
costs for onsite surveys, and the user fee is intended only to recoup 
average actual costs. We believe we have designed the user fee program 
to result in a positive correlation between quality of care and amount 
of the fees--the better the quality of care, the lower the fees. We 
also expect that the prospect of fees for revisits will promote greater 
compliance with federal quality of care requirements, thereby making 
for fewer revisits and fewer fees over time.
4. Revisit User Fee Compared to Penalty
    Comment: Several commenters believe the revisit user fee 
constitutes a penalty regardless of whether cited deficiencies are 
appealed and overturned. They also stated that the revisit user fee 
imposed additional penalties that may be assessed.
    Response: The revisit user fee does have some similarities to a 
quality of care penalty in so far as the revisit user fee only applies 
to providers or suppliers for which deficiencies have been identified. 
There are differences, however, between the revisit user fee and 
traditional penalties. For example, a traditional penalty, such as a 
civil monetary penalty, is assessed according to the scope and severity 
of individual deficiencies that have been identified. A penalty amount 
would be independent of the cost for the time required by surveyors to 
revisit the provider in order to confirm that corrections have been 
made. In contrast, the revisit user fee is designed only to replace the 
average actual cost associated with the revisits themselves. Second, 
currently only nursing homes are subject to civil monetary penalties; 
no other Medicare-certified providers or suppliers affected by this 
regulation are subject to CMS CMPs for quality of care deficiencies at 
this time. Among nursing homes, only approximately 12 percent of 
nursing homes are levied a CMP in any particular year, on average. If a 
revisit survey is required, a user fee will be assessed; however this 
does not necessarily mean a CMP will be levied as well.
5. Revisit User Fee Compared to Taxes
    Comment: One commenter stated that the revisit user fee amounted to 
a new tax. Another commenter felt that the revisit user fee was an 
example of extortion and that the funding to

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administer the survey process including revisits is already in place. 
They equated this fee to have the same effect as if the IRS was to 
impose a fee when the individual's tax return is flagged for an audit. 
A commenter felt the fee would amount to financial impropriety on the 
part of the government.
    Response: We believe that the commenter's characterization of the 
revisit user fee as a ``tax'' is not accurate. Taxes are typically 
imposed regardless of whether the taxed parties actually use the 
services that the tax makes possible. Taxes must be paid regardless of 
the extent of government services that are accessed. In contrast, the 
revisit user fee will be levied only for those who fail to comply fully 
with their responsibilities to provide quality care and to abide by 
federal quality of care and related requirements under the Medicare 
Provider Agreement and applicable regulations and laws for providers 
and suppliers. Such failure obliges CMS to incur revisit survey costs 
that would not otherwise have been incurred. The revisit user fee 
amount is calibrated to match the additional resources required, on 
average, for the surveyors to verify compliance with known federal 
requirements subsequent to the provider's or supplier's initial failure 
to meet those requirements fully.
6. Effects on Resident or Patient Care
    Comment: Several commenters raised concern that the assessment and 
payment of the user fee would remove several thousand dollars per 
facility that otherwise would be available for resident care. Another 
commenter felt the ethics of this proposal would adversely affect the 
citizens of a State. The commenter felt that the revisit user fee was 
unfair. Other commenters stated, in various ways, that the revisit user 
fee would remove valuable resources that would otherwise be expended 
for patient and employee resources. They felt that a direct drawdown 
from funds used for patient care would occur, resulting in no 
improvement to the quality of resident care. Finally, they felt that 
there would be a direct adverse fiscal impact on smaller more 
financially challenged facilities.
    Response: CMS believes the providers and suppliers are the 
controlling agents in managing the quality of care of services provided 
in their healthcare facilities. Providers and suppliers may avoid 
revisit fees by ensuring sustained compliance with federal quality of 
care requirements. The revisit user fees simply compensate for the 
costs of confirming that previously-identified problems have been 
remedied. The certainty that a revisit will occur is a substantial 
incentive for a provider to make the necessary corrections; therefore, 
we believe that this quality assurance function will improve care and 
safety for Medicare beneficiaries. In addition, we believe the 
imposition of revisit user fees will likely encourage a sustained 
commitment to management systems that improve quality of care provided 
to all clients served by the provider. CMS does not believe that the 
revisit user fee should harm quality of care provided, but can instead 
become a valuable, additional incentive to encourage providers and 
suppliers to commit to sustained compliance with federal quality of 
care requirements. The quality of care message is that providers and 
suppliers will have no user fees when quality of care meets the 
appropriate federal standards. To the extent that there are 
deficiencies, providers and suppliers will have only small fees to the 
extent that the deficiencies are not serious or widespread. If quality 
problems do occur, providers and suppliers will have greater incentives 
to ensure that quality lapses are corrected more quickly than in the 
past, since the revisit fees will be less if only one revisit is 
required.
7. State Practices and Incentives for Revisits
    Comment: Several commenters expressed a concern that State survey 
teams would be instructed to find more violations if a revisit user fee 
were in place, thus increasing the number of revisit surveys. One 
commenter also raised the concern that the facility will have to pay a 
revisit user fee for a revisit survey although the State may not 
consider the deficiency severe. Another commenter raised concern that 
there would be tremendous potential for abuse, that surveyors lacked 
experience and that there existed too much financial control of the 
facilities in the hand of the state surveyors. This commenter also 
expressed concern as to whether there would be adequate monitoring of 
State agencies for potential abuse of this program. Two commenters 
believed the fee would increase the number of revisits currently being 
done, putting an extra burden on staff as well as required additional 
time for State surveyors. One commenter felt that the nursing home 
revisits would increase to 100 percent because of what they consider a 
financial incentive.
    Response: We agree that any potential conflict of interest, and any 
appearance of conflict of interest, must be addressed in the design and 
operation of any user fee program. A number of safeguards will prevent 
any such potential conflict from becoming a serious reality. First, the 
revisit user fees will be collected nationally by CMS through a 
contractor rather than by individual States. CMS makes allocations to 
States based on the effects of inflation and on overall survey and 
certification workload and performance for all survey and certification 
functions, with revisits comprising just one of many functions. The 
national survey and certification budget may not exceed the level 
established by Congress, regardless of the level of revisit fee 
collections. Second, all States must conduct revisits according to 
policies and procedures established by CMS. Those policies and 
procedures are publicly available in CMS' State Operations Manual (SOM) 
and in numbered Survey & Certifications policy memoranda published on 
the CMS Web site. Such policies and procedures define the circumstances 
under which revisit surveys, both onsite and offsite, occur and when 
they do not occur. CMS Regional Offices monitor State implementation of 
the policies and procedures. We intend to increase CMS monitoring for 
revisits. Third, States incur substantial costs in order to conduct 
revisits. Such costs are not lightly undertaken, since there are 
formidable natural and governmental constraints on a State survey 
agency's ability to make use of any added funds that might conceivably 
become available even if there were a direct fiscal connection between 
revisits and the amount of money the State survey agency were to 
receive. The single largest cost to a State survey agency, for example, 
is personnel. The ability of a State survey agency to hire new staff 
(even when new revenue becomes available) is either very limited or 
there is a long delay between the availability of such funds and the 
hiring of a surveyor. Once hired, the surveyor must typically undergo 
about six months of training and observing before being entrusted to 
conduct surveys. These constraints make it unlikely that a State survey 
agency would incur the upfront staffing costs of conducting revisits 
that were not required, or would seek to identify more deficiencies 
simply to justify a revisit and hope that at some vague future date the 
added costs might be recognized by CMS. To the extent that the revisit 
user fee does create any type of new incentive, we expect that the main 
incentive will be for providers and suppliers to maintain compliance 
with federal quality of care and safety requirements, since such 
compliance offers a clear pathway to the avoidance of revisit fees.

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    Comment: One commenter stated that the proposed rule would increase 
fees for facilities that had follow-up for routine licensure/
certification surveys as well as complaint visits.
    Response: Revisit user fees will apply only to surveys that occur 
after an initial certification, recertification, or substantiated 
complaint survey has identified deficiencies. State licensures issues 
that a State survey agency might address during a survey or a revisit 
survey are separate activities not connected with the assessment of a 
revisit user fee. Surveyor time spent on State-only issues must also be 
cost-accounted for by State survey agencies to ensure that such costs 
are not billed to the federal government. Thus, a survey or revisit 
survey based solely on State licensure requirements would not create 
the assessment of a revisit user fee. Only the need to conduct revisit 
surveys regarding Federal conditions of participation, requirements, or 
conditions for coverage would trigger a revisit user fee.
    Comment: One commenter observed that State and federal regulations 
require nursing facilities to report allegations of abuse and other 
issues to the State survey agency. The commenter expressed concern that 
such mandatory reports will result in a visit from the Survey Agency 
inspectors, usually without any finding of regulatory deficiencies. The 
financial impact of the proposal could be very burdensome for many 
nursing facilities.
    Response: An initial visit to investigate a complaint, such as the 
allegation of abuse and or neglect mentioned by the commenter would not 
trigger a revisit user fee. A revisit would be required only if a 
deficiency is identified as a result of that complaint investigation. 
The user fee would not apply to the initial complaint investigation; it 
would apply only to the revisit once the provider has alleged to the 
State survey agency that it has addressed the deficiency identified in 
the original complaint investigation. Complaint investigations that 
find no deficiencies will not require any revisits and will therefore 
not occasion any revisit fees.
8. Revenue Seeking--Government Responsible for Funding Survey Process
    Comments: Several commenters felt that this proposed rule and the 
assessment of revisit user fees was a revenue seeking mechanism, that 
it was a way to fund and pay for the survey process. Many of these same 
commenters felt that the obligation of the survey process and the 
conducting of revisit surveys was that of the Federal government, and 
or the State Health Departments. The government has mandated these 
surveys and as such the quality assurance checks are its obligation. 
One commenter felt that the Federal government's role is to raise these 
funds, as been often done through Federal taxes, although not 
advocating a Federal tax increase, it is through these like efforts the 
commenter suggested that funds should be derived to pay for the survey 
process.
    Response: The revisit user fee is designed simply to pay for actual 
costs of conducting revisits, on average, rather than as a revenue 
generating instrument that might be unconnected with the government 
activity for which the revisit user fee is assessed. In addition, the 
revisit user fees offer the ancillary benefit of encouraging providers 
and suppliers to commit to sustained compliance with Federal quality of 
care requirements and ensure that quality lapses are remedied quickly.
9. Creating Positive Incentives
    Comment: Although some commenters felt the revisit user fee was 
punitive in nature and not proactive, several commenters did support 
added incentives to increase patient and resident safety, quality of 
care, and compliance to standards. A couple of commenters went on to 
state that a positive incentive would serve to strengthen the 
relationship between regulators and providers and would establish CMS 
as a partner rather than an adversary of the long-term care community. 
A few commenters indicated strong support of the Medicare survey 
process as one method to assure only providers and suppliers that offer 
high quality services participate in the Medicare program. One 
commenter went as far as offering three goals for which the collected 
user fees should be directed, which included improving consistency of 
the survey process, ensuring complete, provider-specific training for 
surveyors, and improving communication between State survey agencies 
and the provider community on survey rules and expectations. This 
commenter went on to state that fees derived for these survey program 
improvements should not be used to merely supplant the normal funding 
stream but dedicated to specific programs.
    Response: The intent of the revisit user fee program is to recover 
the costs associated with conducting follow-up visits for deficiencies 
cited during initial certification, recertification, and substantiated 
complaint surveys. Although the commenter offers three additional goals 
for the collected revisit user fee, we believe that those admirable 
goals go beyond Congress' intended purpose of the revisit user fee 
program.

Part 424--Conditions for Medicare Payment

Subpart P--Requirements for Establishing and Maintaining Medicare 
Billing Privileges

Section 424.535 Revocation of Enrollment and Billing Privileges in the 
Medicare Program

    We proposed to amend Sec.  424.535(a)(1) by adding a new sentence 
to the criteria for which a provider or supplier may be determined not 
in compliance and for which we may revoke enrollment and billing 
privileges in the Medicare program. We proposed to add that the 
provider or supplier may also be determined not to be in compliance if 
it has failed to pay any user fees as assessed under part 488 of this 
chapter. The paragraph will continue to read that all providers and 
suppliers are granted an opportunity to correct the deficient 
compliance requirement before a final determination to revoke billing 
privileges occurs.
    Comment: Some commenters tied in the discussion of revocation of 
billing and the termination for nonpayment as proposed in Sec.  
488.30(f) and Sec.  489.53(a)(16). One commenter felt that termination 
for nonpayment within 30 days is power disproportionate to the offense 
and is unrelated to quality of care and safety issues. Another 
commenter felt that this provision is reason not to participate in 
Medicare, or to care for Medicare patients.
    Response: While we proposed that a provider or supplier may also be 
determined not to be in compliance if a revisit user fee payment has 
not been received within 30 calendar days after receipt of the notice 
that payment is due, we also state at Sec.  424.535(a)(1) that all 
providers and suppliers are granted an opportunity to correct the 
deficient payment compliance before a final determination is made to 
revoke billing privileges. We further note that a payment-due notice 
from CMS is preceded by a survey or complaint investigation that has 
found deficiencies, a correction period afforded to the provider or 
supplier, a revisit to confirm compliance, then a later issuance of the 
payment-due notice, followed by the formal 30-day advance notice to the 
provider. As soon as a revisit occurs, each provider or supplier will 
know that a revisit user fee will follow at a later date, will know the 
amount of the fee due from the fee schedule published in this rule, and 
will know that the payment will be due

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within 30 calendar days. While the rule specifies that enforcement 
action may occur if the bill has not been paid within 30 calendar days, 
the total amount of planning time available to the provider or supplier 
will have totaled much more than the 30 calendar day period before any 
enforcement action may occur. Finally, the revocation of billing and 
enrollment privileges is not an immediate action upon the failure of a 
provider or supplier to remit the assessed revisit user fee. In this 
final rule we therefore retain the time frames for which action will 
occur regarding this process and retain the amended language to Sec.  
424.535(a)(1) as final.

Part 488--Survey, Certification, and Enforcement

Subpart A--General Provisions

Section 488.30 Revisit User Fee for Revisit Surveys

    We proposed a new Sec.  488.30 which set forth proposed regulations 
that identifies the circumstances under which providers or suppliers be 
assessed a user fee for revisit surveys connected with deficiencies 
identified during surveys for initial certification, recertification, 
or substantiated complaints. This proposed paragraph identifies the 
assessment of fees, criteria for which the proposed fee schedule will 
be based, and collection of fees.

Section 488.30(a)--Definitions

    We proposed in Sec.  488.30(a) to define terms associated with this 
paragraph. Those terms included: ``certification,'' ``complaint 
surveys,'' ``substantiated complaint survey,'' ``provider of 
services,'' ``provider,'' ``supplier,'' and ``revisit survey.'' Many of 
the comments received for Sec.  488.30(a) dealt less with the wording 
in the definitions and more with the survey and certification 
activities and its process.

Certification (Initial or Recertification)

    We proposed that ``certification'' (both initial and 
recertification) would include those activities as defined in Sec.  
488.1. ``Certification'' as currently defined in Sec.  488.1 is a 
``recommendation made by the State survey agency on the compliance of 
providers and suppliers with the conditions of participation, 
requirements (SNFs and NFs), and conditions for coverage.''
    Comment: One commenter proposed that home health agencies and 
hospice facilities be removed from initial certifications since it can 
take 2 or more years to get initial certifications. Another commenter 
proposed that the revisit user fee should be expanded to include 
initial surveys of ESRD facilities to allow more timely surveys that 
now are delayed due to CMS budget, staff shortages, and other 
priorities.
    Response: Both commenters are referring to the issue of initial 
certification surveys conducted for new providers or suppliers, rather 
than the revisit surveys themselves.
    While we appreciate the suggestion from one commenter that CMS 
charge a fee for initial surveys so as to eliminate the current backlog 
of unsurveyed and uncertified potential Medicare providers, we are 
neither authorized by Congress nor prepared to charge such fees at this 
time.
    We also do not accept the suggestion from the other commenter that 
home health agencies and hospices simply be exempt from initial 
certification due to the survey backlog. We are not authorized to make 
such exemption. We also believe an exemption would be inadvisable, as 
it would permit those providers to begin to serve Medicare 
beneficiaries without any assurance that they meet quality of care and 
safety requirements. The proliferation of new home health and hospices 
in a few States have also given rise to considerable concerns of fraud, 
a concern that CMS is responding to through various anti-fraud 
initiatives recently announced by the Secretary.
    We do expect that the revisit user fee will indirectly help to 
resolve the problem of surveying and certifying new providers. Revisit 
costs represent a minority but still substantial portion of overall 
survey and certification expenses. By defraying such costs through the 
user fees, the States will then be in a better position to conduct tier 
III and tier IV priority work, and will be able to conduct more initial 
surveys than they have been able to conduct recently.
    While we appreciate the comments, to adhere to the Congress intent 
within the Continuing Resolution, we will not assess a fee for initial 
certification, nor at this time can we remove providers or suppliers 
based on when initial certifications are conducted. We will retain the 
proposed definition of ``certification'' as final.

``Complaint Surveys''

    We proposed that complaint surveys are those surveys conducted on 
the basis of a ``substantial allegation of noncompliance,'' as defined 
in Sec.  488.1. The term ``substantial allegation of noncompliance'' 
means:

    A complaint from any of a variety of sources (including 
complaints submitted in person, by telephone, through written 
correspondence, or in newspaper or magazine articles) that if 
substantiated, would affect the health and safety of patients and 
raises doubts as to a provider's or supplier's noncompliance with 
any Medicare condition. (42 CFR Sec.  488.1)

    We further noted that the Continuing Resolution included the term 
``substantiated complaints surveys.'' We proposed that ``substantiated 
complaint survey'' means a complaint survey that results in the proof 
or finding of noncompliance at the time of the survey, a finding that 
noncompliance was proven to exist, but was corrected prior to the 
survey, and includes any deficiency that is cited during a complaint 
survey, whether or not the deficiency was the original subject of the 
substantial allegation of noncompliance.
    We proposed that a user fee would be assessed for revisit surveys 
conducted to evaluate the extent to which deficiencies identified 
during a substantiated complaint survey have been corrected.
    Comment: Commenters requested clarification on the term 
``substantial allegation of noncompliance,'' and felt that the 
definition as a basis for the revisit fee is vague and open-ended.
    Response: CMS proposed the definition for ``complaint surveys'' to 
mean those surveys conducted on the basis of a substantial allegation 
of noncompliance, as defined in Sec.  488.1. ``Substantial allegation 
of noncompliance'' has been the term used in current survey, 
certification, and enforcement procedures and as such we intended to 
maintain a level of consistency by utilizing this definition as a means 
to define ``complaint surveys.'' It is this process that generates the 
action for which an investigation into the complaint should occur. It 
is the substantiation of this complaint survey that will determine if a 
revisit survey should be conducted and as a result a revisit user fee 
should be assessed. As we provided in the discussion of the proposed 
rule ``substantiated complaint survey'' means a complaint survey that 
results in (1) the proof or finding of noncompliance at the time of the 
survey, (2) a finding that noncompliance was proven to exist, but was 
corrected prior to the survey, and (3) includes any deficiency that is 
cited during a complaint survey, whether or not the deficiency was the 
original subject of the substantial allegation of noncompliance. If any 
of these 3 situations are determined and a revisit is required as a 
result of the situation, then a revisit user fee will be assessed. It 
will not simply be based on whether the complaint was substantiated. A 
complaint may be substantiated without

[[Page 53633]]

being determined to be non-compliant with the regulations. The 
substantiation of a complaint is a separate issue from the 
determination of compliance with the regulations and thus the 
triggering of a revisit user fee.
    Comment: One commenter contends that accepting complaints from a 
variety of sources is overly broad and permits the process to go 
forward at great length. Another commenter felt that there is nothing 
to prevent disgruntled employees from submitting complaints 
anonymously, especially once they learn that the user fee will punish 
the facility. Commenters felt that this provides incentive for 
surveyors to substantiate the compliant that triggered the revisit or 
substantiate another deficiency.
    Response: We do not expect that either the quantity of complaints 
received or the source of the complaints will affect revisit user fees 
to any measurable extent. The revisit user fee does not apply to any 
complaint investigation. Only complaints which have been substantiated 
as showing non-compliance with Federal requirements will result in 
citation of a deficiency. Only those deficiencies that require a 
revisit survey will then trigger a revisit user fee. When multiple 
complaints are received near the same point in time, State survey 
agencies typically bundle those together in one complaint 
investigation, this investigation is followed by a revisit survey only 
if one or more of the complaints is substantiated and the agency finds 
noncompliance to such an extent that a revisit is called for according 
to CMS policy. Finally, the volume of complaints reaching CMS are to 
some extent affected by the extent that the provider or supplier has an 
effective system of inviting complaints internally, and responding to 
complaints effectively such that beneficiaries or their families feel 
that there is less need to file complaints with CMS or any external 
party. We believe that beneficiary complaints represent a very 
important source of feedback for providers, suppliers, CMS and States. 
We hope such feedback can be effectively used by us and others to 
identify areas of health care that merit serious attention.
    Comment: One commenter disagreed that a ``substantiated complaint 
survey'' can cite any deficiency regardless of whether that deficiency 
was the original subject of the complaint. Two commenters raised 
concerns that a revisit user fee will be imposed even in cases where a 
``substantiated complaint'' is corrected prior to the survey or that 
CMS would require a revisit user fee in this instance and this would 
discourage a facility's internal quality assurance. A commenter raised 
the questions as to whether a substantiated complaint included 
condition and standard levels or just condition level. This commenter 
proposes that it just include condition level since those levels result 
in non-certification or decertification.
    Response: CMS published condition of participation, condition for 
coverage and other regulatory requirements typically take the form of 
specific standards, with multiple standards related to a common topic 
comprising a broader ``condition.'' Revisit surveys are almost always 
required for condition-level deficiencies and are also often required 
for standard-level deficiencies, depending on the extent and 
seriousness of the noncompliance identified. As we provided in the 
discussion of the proposed rule, ``substantiated complaint survey'' 
means a complaint survey that results in (1) the proof or finding of 
noncompliance at the time of the survey, (2) a finding that 
noncompliance was proven to exist, but was corrected prior to the 
survey, and (3) includes any deficiency that is cited during a 
complaint survey, whether or not the deficiency was the original 
subject of the substantial allegation of noncompliance. If any of these 
3 situations are determined and a revisit is required as a result of 
the situation then a revisit user fee is assessed.
    Although we disagree in part with the commenter who indicated that 
any deficiency can not be cited during a complaint survey, we reiterate 
and clarify that under our current policy for conducting complaint 
surveys, we do require that if a State surveyor in the course of 
conducting the complaint survey observes a situation that warrants 
further investigation, that the State must seek input from the CMS 
regional office to request permission to further pursue this additional 
situation. See U.S. Centers for Medicare & Medicaid Services. State 
Operations Manual, ``Complaint Procedures.'' ONLINE. 2006. CMS. 
Available: http://www.cms.hhs.gov/manuals/downloads/som107c05.pdf 
(``SOM-Complaint'').
    With regard to the two commenters'' concern that a finding that 
noncompliance was proven to exist, but was corrected prior to the 
survey, this situation alone would not trigger a revisit user fee. In 
addition, because a substantiated complaint survey can include the 
above criteria we do not believe at this time that we should make a 
distinction between a condition level deficiency and a standard level 
deficiency. As a continued part of the survey and certification process 
a complaint may be substantiated without being determined to be non-
compliant with the regulations. The substantiation of a complaint is a 
separate issue from the determination of compliance with the 
regulations and thus the triggering of a revisit user fee.
    We appreciate the comments, however to adhere to consistency across 
current survey and certification policy, we will retain the definition 
of ``complaint surveys'' to mean those surveys conducted as the basis 
of a substantial allegation of noncompliance, as defined in Sec.  488.1 
as final.

``Provider of Services, Provider, or Supplier''

    We proposed to retain the terms ``provider of services,'' 
``provider,'' or ``supplier'' as defined in Sec.  488.1. We proposed 
that all ``provider of services,'' ``providers,'' or ``suppliers,'' as 
defined in Sec.  488.1, will be subject to user fees, unless otherwise 
exempted through the final rule. We proposed that a ``provider of 
services'' or ``provider'' that may be assessed a user fee, as it 
applies in this proposed rule, includes a hospital, critical access 
hospital, skilled nursing facility, dually-participating nursing 
facility (``SNF/NF''), home health agency (``HHA''), and hospice. 
Transplant centers would also be subject to user fees and have been 
defined in Sec.  482.70 of this chapter. We proposed that ``providers 
of services'' or ``providers'' that will not be assessed a revisit user 
fee as defined in the proposed rule to be comprehensive outpatient 
rehabilitation facilities, transplant centers, and providers of 
outpatient physical therapy or speech pathology services. These 
providers are excluded from this rule because they are not subject to a 
routine survey process as are other service providers. We stated that 
Medicaid-only ``providers of services'' or ``providers'' will not be 
assessed a user fee.
    We proposed a ``supplier'' that may be assessed a user fee, as it 
applies in the proposed rule includes an end-stage renal disease 
center, a rural health clinic (``RHC''), and an ambulatory surgical 
center (``ASC''). ASCs must have an agreement with CMS to participate 
in Medicare and must meet conditions for coverage as defined in Part 
416 of this chapter.
    ``Suppliers'' that would not be assessed a user fee under the 
proposed rule are independent laboratories, portable x-ray centers, 
physical therapists in independent practice, Federally Qualified Health 
Centers (FQHCs), and chiropractors. These

[[Page 53634]]

suppliers are excluded because they are not subject to a routine survey 
process as are other suppliers. We stated that Medicaid-only 
``suppliers'' will not be assessed a user fee.
    The proposed rule would not interfere with user fees associated 
with clinical laboratories as established by the Congress, which passed 
the Clinical Laboratory Improvement Amendments (CLIA) in 1988 and 
established that outpatient clinical laboratory services are paid based 
on a fee schedule in accordance with section 1833(h) of the Act.
    We received several comments regarding our definition of ``provider 
of services,'' ``provider,'' or ``supplier'' and we have included them 
below.
    Comment: One commenter indicated that Chiropractors status among 
the Allied Health Care professions remains in dispute, this commenter 
contends that Chiropractors should be excluded from any Medicare 
provider list.
    Response: Our current regulations found in Sec.  488.1 include 
Chiropractors as identified as a supplier. This particular definition 
section also has extensive implications in various parts of the 
Medicare and Medicaid program and although we appreciate the 
commenter's concern, we do not propose to remove chiropractors from the 
definition of supplier. We do reiterate that Chiropractors are not 
subject to the revisit user fees.
    Comment: One commenter believed that the implementation of this 
rule should not coincide with the publication of the final rule for 
ESRD conditions of coverage. This commenter felt that revisits and 
assignment of fees could very well be excessive during the ``learning 
curve'' of the new regulation; if CMS has such discretion the commenter 
suggests that this final rule should state that revisit user fees for 
ESRD facilities will not apply for the first 12 months of 
implementation of new conditions for coverage.
    Response: The commenter is referring to the future publication of 
the final CMS rule revising the Conditions for Coverage for end stage 
renal disease facilities (ESRD). New rules or substantial revisions of 
new rules are typically promulgated with future effective dates. 
Considerable educational communications usually precede the effective 
date, during which providers or suppliers have an opportunity to become 
familiar with the rule and make necessary changes before the survey 
process holds them accountable. Currently, ESRD surveys are conducted 
about once every three to five years. We therefore believe that there 
will be reasonable opportunities for providers to adjust to the new 
rules before they are affected by surveys and the later revisits that 
might follow some surveys. Finally, although we appreciate the 
commenter's suggestion, we do not have the discretion at this time to 
exclude ESRD facilities from this final rule. ESRD facilities and 
revisits costs were included within the President's budget projections 
and mandated by the Congress.
    Comment: One commenter expressed concern that religious nonmedical 
health care institutions (RHNCIs) would be subject to the revisit user 
fees.
    Response: We appreciate the comment received. We inadvertently did 
not include religious nonmedical health care institutions (RHNCIs) in 
the definitions. RHNCIs should have been included, as they are subject 
to the survey and certification process. To adhere to the intent of the 
Congress and maintain consistency of definitions across Medicare and 
Medicaid programs, we will retain the definitions as proposed with the 
exception that we will include RHNCIs in the definition. However, in 
the fee schedule in this final rule we exempt them from the user fee 
program due to the very small number of such facilities and their 
relatively unusual nature. Any change to the exemption status would be 
preceded by publication of a Federal Register notice. The final 
definition of ``provider of services,'' ``provider,'' or ``supplier'' 
will read ``Provider of services, provider, or supplier'' as defined in 
Sec.  488.1, and ambulatory surgical centers, transplant centers, and 
religious nonmedical health care institutions subject to Sec.  416.2, 
Sec.  482.70, and Sec.  403.702 of this chapter, respectively, will be 
subject to user fees unless otherwise exempted.

``Revisit Survey''

    In the Proposed Rule CMS defined the term ``revisit survey'' to 
mean a survey performed with respect to a provider or supplier cited 
for deficiencies during an initial certification, recertification, or 
substantiated complaint survey and which is designed to evaluate the 
extent to which previously cited deficiencies have been corrected. We 
further proposed that for purpose of this rule revisit surveys include 
both offsite and onsite. We also reiterated that regulations 
established in Sec.  488.26 of this same part provided regulatory 
requirements for conditions of participation, conditions for coverage, 
or other regulatory requirements. Specifically Sec.  488.26 of this 
part states that the compliance determination is made by the State 
survey agency and includes a survey process that assesses compliance 
with Federal health, safety, and quality standards.
    We received only a few comments regarding the term ``revisit 
surveys'' and received the majority of comments under this section 
reflecting commenters concern regarding the survey process and the 
manner in which revisit user fees will be assessed.
1. ``Revisit Survey'' Term
    Comment: Several commenters requested that we redefine the term 
``revisit survey'' so that the definition does not include desk reviews 
or offsite surveys, that the offsite (desk) reviews be defined, that 
fees only be imposed if the survey is done in accordance with already 
established policies per provider type, that the definition include 
criteria about when onsite revisits are required, and that we limit the 
fees to ``onsite revisit surveys.''
    Response: We included offsite revisit surveys (desk reviews) 
because we wished to retain the option of the offsite revisit surveys 
where warranted, since the cost to providers and suppliers under the 
revisit fee program will be substantially less than for onsite revisit 
surveys. The function of onsite and offsite (desk review) revisit 
surveys is the same. We interpret both types to constitute revisits 
within the meaning intended by Congress. The Continuing Resolution 
requires fees to be assessed that are necessary to cover the costs 
incurred for conducting revisit surveys on health care facilities cited 
for deficiencies found during initial certification, recertification, 
or substantiated complaint surveys. As we observed, we do not interpret 
this to mean onsite revisit surveys only. Within the current survey 
process itself there are distinctions made for when an onsite or 
offsite revisit survey should occur and distinctions are made by 
provider and supplier type. See U.S. Centers for Medicare & Medicaid 
Services. State Operations Manual, ``Survey and Enforcement Process for 
Skilled Nursing Facilities and Nursing Facilities,'' Online. 2004. CMS. 
Available: http://www.cms.hhs.gov/manuals/downloads/som107c07.pdf, and 
also ``Additional Program Activities,'' Online. 2007. CMS. Available: 
http://www.cms.hhs.gov/manuals/downloads/som107c03.pdf.
    We disagree that revisit surveys should only be those that were 
conducted onsite, as there are situations in which offsite reviews are 
required to verify that the contents of the plan of correction or the 
corrective action took place. We do, however, agree that a review of a 
plan of correction that does not require verification beyond the plan

[[Page 53635]]

of correction document itself would not constitute an offsite revisit 
survey (as defined here), and thus the provider or supplier would not 
be assessed a revisit user fee in such a circumstance. A provider or 
supplier will be assessed a revisit user fee for an offsite revisit 
survey if the deficiency or deficiencies cited are of a nature that the 
content of the plan of correction and the statements made by the 
provider or supplier require verification and offsite follow-up to 
ensure that the corrective action has brought the provider back into 
compliance with federal requirements.
    We appreciate the comments received; however on the term ``revisit 
survey,'' based on our discussion we will retain the proposed 
definition of ``revisit survey'' as final.
2. Survey Process
    CMS discussed the current revisit policy and survey and 
certification process already established for all providers and 
suppliers. We identified current policy for skilled nursing facilities 
and dually-participating nursing facilities, performed at the 
discretion of CMS or the State. This revisit policy indicates 
circumstances for which onsite revisits must occur for certifying 
compliance and circumstances when onsite revisits are discretionary. 
Likewise, CMS generally permits only two revisits for hospitals, home 
health agencies, hospices, ambulatory surgical centers, rural health 
clinics, and end-stage renal disease centers. Of these two revisits 
permitted by CMS, one revisit should occur within 45 calendar days of 
the initial certification, recertification, or substantiated complaint 
survey, and one revisit subject to CMS approval, between the 46th and 
90th calendar days. See 72 FR 35676 (discussing revisit policy, 
including discussion on revisits related to Immediate Jeopardy).
2A. Survey Process: Skilled Nursing Facilities and Dually-Participating 
Nursing Facilities
    Comment: Several commenters contended that the survey process is 
inconsistent and subjective, and proposed that the revisit user fees be 
postponed until these process issues are resolved. Another commenter 
felt that revisit user fees represent punishment, especially when 
deficiencies are erroneously cited. Two commenters requested assurances 
that only legitimate deficiencies will be cited, that unnecessary 
revisits will not be conducted, and that revisits will not be conducted 
solely for the purpose of collecting user fees. One commenter felt that 
the proposed rule will complicate the subjectivity and variability that 
will always be part of the survey process. Another commenter indicated 
that the survey process is broken and subjective, and as such, fees for 
revisits would be unfair until those problems are resolved.
    Response: CMS continuously works with States to ensure that surveys 
are applied as consistently as possible. CMS also operates a national 
internal consistency program in which validation surveys are conducted 
by Federal surveyors to promote optimum consistency. For example, 
Federal surveyors conduct validation surveys on a 5% sample of nursing 
home surveys to check the accuracy and adequacy of State surveys. CMS 
then works with the States to adjust for any significant disparities. 
The issue of consistency is also monitored as part of CMS's review of 
State performance. Because no system is perfect, nursing homes have an 
opportunity to request review of any cited deficiency through a 
structured informal dispute resolution process. CMS takes the issue of 
consistency seriously, and we continue to develop additional methods to 
analyze and address consistency issues, one example is the new Quality 
Indicator Survey (QIS) process that has been pilot-tested in five 
States. The QIS process utilizes customized software and is designed as 
a staged process for use by surveyors to systematically review 
requirements and objectively investigate all triggered regulatory areas 
in an effort to meet several objectives, one of which is to improve 
consistency and accuracy of quality of care and quality of life problem 
identification. We believe that the revisit user fee will help address 
those limitations and make more feasible a number of additional 
consistency improvements that are underway.
    Comment: One commenter feared that there are no constraints to 
prevent a surveyor from citing an already corrected problem in order to 
trigger a revisit. One commenter believed that the survey process is 
already stressful for facility staff and this will only be made worse 
for employees who fear any mistake could trigger a revisit and its 
associated fee.
    Response: If a problem has already been corrected at the time of a 
standard survey or complaint investigation, the survey itself can 
confirm that the correction has brought the provider or supplier back 
into compliance with federal requirements and the surveyor would 
document such a determination. In such a case no revisit would be 
required unless the correction failed to assure compliance. We 
appreciate that the survey process can be inherently stressful for 
employees. We do not believe, however, that the amount of the revisit 
fee is so much as to add measurably to the pre-existing stress level 
for employees. The cost of a revisit fee can be compared favorably to 
the larger cost to beneficiaries from poor quality of care, or to the 
larger financial cost to providers from serious non-compliance with 
federal requirements, such as civil monetary penalties or termination 
of the provider agreement. Only in the case of multiple revisits would 
we expect the cumulative cost of revisits fees to become a significant 
expense for a particular provider. A large number of revisits would 
occur when there is a persistent pattern of poor quality and documented 
inability of a provider or supplier to sustain compliance with federal 
requirements. Such providers face more serious consequences than 
revisit user fees. We believe that the plain language of the Continuing 
Resolution mandates that a fee be collected whenever a revisit occurs 
as a result of a deficiency found during initial certification, 
recertification, or substantiated complaint surveys. Documentation 
requirements supporting deficiency citations are not being diminished, 
eliminated or otherwise changed by this proposed rule to create the 
scenario raised by the commenter.
    Comment: One commenter proposed that onsite revisits be 
discretionary for single ``G'' level deficiencies. Another commenter 
indicated that it is unclear what level deficiency would necessitate a 
revisit. A few commenters believed that oversight of correction of some 
deficiencies could be done offsite and requested clarification about 
when onsite revisits are required.
    Response: Our current policy requires onsite revisits for condition 
level citations. The current policy governing revisit surveys is 
described in our online state operations manual. We will, however, 
consider policy issues raised by several of the commenters for future 
reconsideration. Some professional discretion on the part of State 
survey agencies will always be required. CMS provides review and 
oversight of State survey agencies through the CMS regional offices. 
Our internal quality assurance system provides for regional office up-
front input or subsequent review when there is concern regarding 
whether the revisit survey should be conducted onsite or offsite. 
However we have always maintained that a condition level citation 
requires an onsite revisit survey. ``G'' level deficiencies in nursing 
homes are serious and are cited only when one or more nursing home

[[Page 53636]]

residents have been harmed. We will continue to conduct revisits in 
such circumstances.
2B. Survey Process: Hospitals, Home Health Agencies, Hospices, 
Ambulatory Surgical Centers, Rural Health Clinics, and End-Stage Renal 
Disease Centers
    Comment: One commenter felt that although survey teams work off the 
same worksheets, there is variation in how different survey teams 
assess similar situations. Therefore, the commenter felt that requiring 
a ``revisit'' fee for all resurveys (either onsite or offsite) will 
increase the number of times that home health agencies will contest the 
survey findings, which then they may enter into an informal dispute 
resolution process not only to avoid the revisit fee but also to 
respond to the issue of survey variation.
    Response: CMS continuously works with States to ensure that surveys 
are as consistently applied as possible. CMS also operates a national 
internal consistency program in which validation surveys are conducted 
by Federal surveyors to promote optimum consistency. It is possible 
that the revisit user fees may have the ancillary effect of increasing 
the extent to which providers or suppliers dispute the findings of 
surveys or complaint investigations. We believe this may occur whether 
the revisits are offsite or onsite. We will monitor the effect of the 
revisit fees to determine if any future adjustments are advisable.
    Comment: One commenter requested clarification on whether user fees 
will be imposed on accredited providers or suppliers for a revisit 
following a sample validation survey.
    Response: We will not charge a fee for a validation survey of a 
provider or supplier that has been duly accredited by a CMS-approved 
accrediting organization and deemed to meet Medicare requirements. 
While we believe that a revisit fee pursuant to a validation survey has 
basis, it is absent in the language of the Continuing Resolution. We 
would view this as similar to a revisit survey conducted for a non-
accredited provider; we did not however specify such a charge in the 
proposed rule. We will therefore not charge a revisit user fee in this 
final rule for a revisit that follows a validation survey, provided 
that the deemed status of the provider or supplier has not been removed 
by CMS. However, any survey, including a validation survey, that finds 
noncompliance with a Condition (compared to just a Standard), typically 
requires removal of deemed status and a full survey of a provider. When 
an accredited facility is found not to be in substantial compliance 
with the Medicare Conditions of Participation or Conditions for 
Coverage, it must remain under the jurisdiction of the State Survey 
Agency until the State Survey Agency verifies through revisits that the 
facility has corrected its deficiencies and demonstrated substantial 
compliance. We believe in this case, the removal of deemed status that 
initiated with a validation survey, that then remains under the 
jurisdiction of the State survey agency is equivalent to any other 
provider or supplier seeking recertification. In this case a provider 
or supplier cited for a deficiency during a recertification survey that 
requires a revisit survey would be assessed a revisit user fee.
    Comment: One commenter requested clarification as to whether a full 
survey following a substantiated complaint survey in a deemed provider 
or supplier is a revisit as defined in proposed Sec.  488.30(a).
    Response: A full survey that is conducted pursuant to a complaint 
investigation of an accredited facility that has found condition-level 
noncompliance is viewed as a revisit for the purposes of the revisit 
fee. As discussed in the response above, noncompliance with a Federal 
condition typically requires a removal of deemed status and a full 
survey of a provider. The purpose of this full survey is two-fold: To 
verify correction of the condition-level deficiencies identified on the 
complaint investigation, and also to confirm that the facility is in 
substantial compliance with all of the pertinent conditions for 
participation before the State survey agency returns jurisdiction over 
the facility to the accreditation organization. Thus we believe the 
activities of the survey fall within the purposes of a revisit survey.
    We appreciate all the comments received regarding our current 
survey process for all providers and suppliers. CMS will maintain the 
current policy process for the immediate future. We will take all of 
these comments under consideration as we continue to work with States 
and our national consistency program to provide continued oversight and 
regulatory compliance guidance.

Section 488.30(b)--Criteria for Determining the Fee

    We proposed in Sec.  488.30(b) to provide the criteria for 
determining the user fee. We proposed that for initial implementation 
of revisit user fees, we will use the criteria in proposed Sec.  
488.30(b)(1)(i) and (ii): That a provider or supplier will be assessed 
a revisit user fee based on the average cost per revisit survey per 
provider or supplier type and the type of the revisit survey (onsite or 
offsite). If costs change significantly in any future period for which 
authority for the revisit user fee exists, we would publish a Federal 
Register notice providing a revised fee schedule to the extent that 
fees may be affected.
    We also proposed that exceptions to the assessment of a revisit 
user fee will be identified based on the type of visit conducted. For 
example, we proposed that neither a provider nor a supplier will be 
assessed a fee if the visit is considered a ``State monitoring visit'' 
unless the visit also meets the definition of a revisit, if the visit 
is to confirm Medicare provider or supplier compliance with Life Safety 
Code (LSC) requirements, if the visit is to conduct a Federal 
Monitoring Survey, such as a Federal look-behind survey. See 72 FR 
35677 (discussing ``state monitoring visit,'' LSC, and Federal 
Monitoring Surveys).
    We also proposed in Sec.  488.30(b)(1)(iii) through (b)(1)(v) that 
CMS may adjust revisit user fees to account for the provider or 
supplier's size, typically determined by capacity (such as the number 
of beds), the number of follow-up revisits resulting from uncorrected 
deficiencies, and/or the seriousness and number of deficiencies (such 
as the scope and severity of cited deficiencies and the number of 
deficiencies cited at each scope and severity level), as these criteria 
pertain to particular provider types. Variance in provider/supplier 
size, the number of follow-up revisits, and the type and number of 
deficiencies cited may have an impact on the survey hours needed for a 
revisit. We also proposed in Sec.  488.30(b)(2) that CMS may adjust the 
fees to account for any regional differences in cost.
    We received a variety of comments for this section, the majority of 
which discussed quality of care and the concern that the user fee might 
cause adverse incentives. We summarized all of these comments and 
responded to them under the general comments section of this final 
rule. The comments discussing the specific criteria proposed in Sec.  
483.30(b) are provided below.
    Comment: A few commenters stated that additional information was 
needed about how the various factors (for example, a provider's size, 
number of revisits, scope and severity of deficiencies) will impact the 
amount being assessed. They asked whether CMS would notify providers in 
advance of the actual amount that would be assessed, and whether 
providers would be notified about how these factors were specifically 
used to assess a given fee.

[[Page 53637]]

    Response: We believe that the adjustment criteria outlined in this 
regulation can be important factors affecting the number of survey 
hours that would be required in a revisit survey and therefore the cost 
of such revisit survey. However, the final fee schedule published in 
this rule does not make use of all the potential factors that might 
otherwise be used because we believe many of the factors require more 
analysis. Of the criteria listed in 488.30(b), CMS is only using 
488.30(b)(1)(i) and (ii) for the immediate future.
    If Congressional authority for the revisit fee is renewed or 
extended, and CMS changes the overall methodology for calculating and 
collecting these fees, CMS will implement these changes through notice 
and comment rulemaking in the Federal Register. If Congressional 
authority for the revisit fee is renewed or extended but CMS will not 
being implementing any methodological changes, CMS will publish 
proposed and final notices in the Federal Register to announce and 
solicit comment on planned updates, adjustments, or changes to the 
criteria used, if changes are to be made.
    For example, CMS does not plan to use criterion set forth at 
488.30(b)(2)--regional differences in cost--in the immediate future. 
However, if CMS should decide to use it in the future, CMS will publish 
a notice in the Federal Register announcing CMS's intention to do so, 
describing how CMS intends to use and operationalize 488.30(b)(2), and 
to solicit public comment. Similarly, for technical adjustments or 
updates to the fee schedule (e.g. adjustments for cost of living 
increases), CMS will issue public notices in the Federal Register.
    On the other hand, if CMS should decide in the future to use a 
completely different criterion not described in these rules, CMS will 
publish a notice of proposed rulemaking announcing this change in 
methodology.
    Such future notices would address the commenters' concern regarding 
provider or supplier size, for example, and how the number of beds or 
the number of patients or residents served might affect a revisit fee.
    In this final rule we do reserve the right to adjust fees based on 
the number of follow-up revisits conducted either decreasing or 
increasing fees based on the costs that are incurred by state survey 
agencies to conduct these multiple follow-ups. Any change to the 
current fee schedule in which the same revisit user fee is applied for 
each revisit, will be preceded by Federal Register notice of the 
planned change. In this regulation we are providing the information 
needed for each provider or supplier to know the amount that they would 
be charged if a revisit occurs. These criteria incorporate the average 
cost per provider or supplier for conducting a revisit survey and the 
type of revisit survey conducted (onsite or offsite). We would charge 
the same fee each time a revisit occurs, so if a revisit revealed that 
the facility had not achieved full compliance and if a second revisit 
were required, the provider would be charged the same amount again for 
the second revisit.
    Comment: One commenter suggested that the fee should be based on 
the total or estimated hours of service, not by the actions performed 
during a survey. Another commenter suggested that a ``cap'' be placed 
on the total amount of user fees associated with a single revisit and 
associated with a given provider. One commenter acknowledged the intent 
of the proposed change and encouraged CMS to adjust revisit user fees 
according to particularities of the states, such as staff travel time, 
etc.
    Response: We proposed in the June 29, 2007 Proposed Rule to use 
criteria (b)(1)(i) (average cost per provider or supplier type) and 
(b)(1)(ii) (revisit type: Onsite or offsite), and have retained those 
criteria in this final rule and fee schedule. We agree with the 
commenter that the fee should be based on the total or estimated hours 
of service. We have utilized an average cost per provider or supplier 
based on the average costs per hour for conducting revisit surveys. We 
appreciate the comment regarding suggesting a ``cap'' on the total 
amount of fees associated with a single revisit. We believe the 
methodology in this rule conforms to the ``cap'' idea. As discussed in 
the proposed rule, providers or suppliers will be assessed one fee per 
revisit. As discussed in the Proposed Rule, when offsite preparation is 
required, as it is in many cases, the provider or supplier would not be 
assessed a separate revisit fee for this offsite preparation. Instead, 
the entire preparation and actual onsite revisit will count as an 
onsite revisit survey.
    Based on current data analysis, CMS proposed to implement the 
revisit user fee utilizing only criteria identified in Sec.  
488.30(b)(1)(i) and (1)(ii). We appreciate the commenters encouragement 
to look at differences in State costs for the revisits. In proposed 
Sec.  488.30(b)(2) we reserved the right to adjust the fees to account 
for regional differences in costs. It is our intent to conduct further 
analysis on these additional criteria in proposing future fee 
schedules. In this rule, the final fee schedule is based on a simpler 
flat-rate methodology per provider type. If regional cost differences 
were invoked in any future change to the fee schedule, we would publish 
a proposed and final notice in advance of any such changes.
    Comment: One commenter identified that CMS, on July 17, 2007, 
stated that certain provider types in California's Orange, Riverside, 
San Bernardino and Los Angeles Counties would be under a 2 year 
demonstration to re-enroll in Medicare, as well as be subject to a 
survey should the provider have had a Change of Ownership within the 
last 2 years. The commenter asked that providers not be assessed a fee 
if the visit is associated with this demonstration.
    Response: We agree with the commenter and have specified that 
neither a provider nor a supplier will be assessed a fee if the visit 
is considered a ``State Monitoring visit'' unless the visit also meets 
the definition of a revisit survey in this rule. In this case, a Change 
of Ownership action, and other actions involved in this particular 
State demonstration, are considered a ``State Monitoring visit'' for 
purposes of this final regulation and final fee schedule. Therefore, 
providers and or suppliers participating in the two year demonstration 
would be exempt being assessed a revisit user fee if the revisit is 
associated with visits conducted solely on behalf of this demonstration 
and to the extent that they do not involve deficiencies in compliance 
with the Conditions of Participation or Coverage.
    We appreciate all of the commenters' suggestions on our proposed 
criteria sections, and have clarifications in response to a number of 
the commenters' concerns. We intend to provide the requested detail in 
incorporating additional criteria when calculating any changes to the 
fee schedule for revisit user fees, if authority is provided by the 
Congress and through the notice and rulemaking process described 
earlier. We believe we have addressed concerns raised in this section, 
therefore we will retain the proposed language in Sec.  483.30(b)(1) 
and (b)(2) as final. We accordingly have calculated the final fee 
schedule based on selected criteria. The final fee schedule will 
utilize criteria in Sec.  488.30(b)(1)(i) and (b)(1)(ii) as proposed 
and finalized by this rule.

Section 488.30(c)--Fee Schedule

    We proposed in Sec.  488.30(c) that CMS will publish in the Federal 
Register the proposed and final notices of a uniform fee schedule 
before it adopts this schedule. The proposed and final notices would 
set forth the amounts of

[[Page 53638]]

the assessed fees based on the criteria as identified in paragraph (b) 
of this subpart. In future notices, any changes to the amounts of the 
assessed fees would include for example, adjustments based on increases 
to cost of living, labor and overhead costs. The proposed rule also 
constituted publication of the proposed fee schedule.
    We based user fee calculations in the proposed rule and fee 
schedule on the type of revisit (onsite vs. offsite); the type of 
provider or supplier; the average number of hours that a revisit 
requires; and the average per hour cost of a revisit. We have 
identified the revisit survey costs below under section IV, Regulatory 
Impact Analysis.
    We have received varying comments raised under this section. The 
majority of these comments referenced concerns also raised under 
general comments, the current survey process, and the criteria for 
determining the fee. We believe we have addressed these concerns in 
other sections. Comments received on Sec.  488.30(c) are below:
    Comment: One commenter believed that the Federal Register notice 
contained a number of labels displaying data regarding estimated costs 
and 2006 frequencies of revisit surveys, the commenter felt that based 
on the proposed language in Section 488.30(b) that CMS intends to 
exercise considerable latitude in the actual levying of fees in a 
specific situation. Another commenter felt that it is unfair to 
providers to impose fees without advance notification of the actual 
costs based on any adjustment criteria.
    Response: We will publish in the Federal Register the proposed and 
final notices of a uniform fee schedule before we adopt this schedule. 
Both notices would set forth the amounts of the assessed fees based on 
the criteria as identified in section 488.30(b). It will also specify 
which of the criteria listed in 488.30(b)(1)-(2) will be used and how 
they will be operationalized.
    In response to the nature of these comments, we have clarified the 
regulatory language and thus adopt as final that Sec.  488.30(c) will 
read: ``CMS must publish in the Federal Register the proposed and final 
notices of a uniform fee schedule before it assesses revisit user fees. 
The notices must set forth which criteria will be used and how, as well 
as the amounts of the assessed fees based on the criteria, as 
identified in paragraph (b) of this subpart.'' Language placed in bold 
for emphasis on the changes. We also note through the publication of 
this final rule that if authority for the revisit user fees is 
continued, we will use the current fee schedule in this rule for the 
assessment of such fees until such time as a new fee schedule notice is 
proposed and published in final form.
    The final fee schedule is identified below in Table A. Summation of 
data and calculations regarding this final fee schedule is discussed in 
section V, Regulatory Impact Analysis summary below.

            Table A.--Final Fee Schedule for Revisits Surveys
                          [Onsite and offsite]
------------------------------------------------------------------------
                                      Fee assessed per  Fee assessed per
              Facility                offsite  revisit   onsite  revisit
                                           survey            survey
------------------------------------------------------------------------
SNF & NF............................              $168            $2,072
Hospitals...........................               168             2,554
HHA.................................               168             1,613
Hospice.............................               168             1,736
ASC.................................               168             1,669
RHC.................................               168               851
ESRD................................               168             1,490
------------------------------------------------------------------------

Section 488.30(d)--Collection of Fees

    We proposed in Sec.  488.30(d)(1) that fees for revisit surveys 
under this paragraph may be deducted from amounts otherwise payable to 
the provider or supplier. We also proposed that fees will be deposited 
as an offset collection to be used exclusively for survey and 
certification activities conducted by State survey agencies pursuant to 
section 1864 of the Act or by CMS, and will be available for CMS until 
expended. We also proposed that CMS may devise other collection methods 
as it deems appropriate. In determining these methods, CMS will 
consider efficiency, effectiveness, and convenience for the providers, 
suppliers, and CMS. In the Proposed Rule we stated that Methods may 
include: Credit card; electronic fund transfer; check; money order; and 
offset of collections from claims submitted.
1. Sec.  488.30(d)(1)--Collection Methods
    Comments: Several commenters indicated that regarding the proposed 
language that fees for revisits be deducted from amounts otherwise 
payable to the provider, they raised concern that there were no 
specifics as to whether these fees would be deducted all at once or on 
a schedule.
    Response: In the proposed language CMS identified a number of 
methods for the collection of the revisit user fee. For the immediate 
future, we will utilize a bill pay system. Providers or suppliers who 
are assessed a fee will receive a notice in the mail which will include 
the amount of the assessed revisit fee and the revisit survey for which 
the fee is assessed. Included in the notice is the obligation that 
payment is expected to be remitted within 30 calendar days of the date 
of the notice. As a means of clarification and to expand on payment 
methods that may be beneficial to providers and suppliers and based on 
the various comments, CMS will modify the last sentence of Sec.  
488.30(d)(1) by adding ``any method allowed by law, including credit 
card; electronic fund transfer; check; money order; offset collection 
from claims submitted.'' We will include all necessary details within 
this coupon notice, including to whom to direct questions, and payment 
remittance information. In addition, as a result of various comments 
regarding the time frame for when we may collect fees, and the concerns 
regarding the schedule of these fees, we will include an additional 
subparagraph Sec.  488.30(d)(3) to this section that indicates: ``Fees 
for revisit surveys will be due for any revisit surveys conducted 
during the time period for which authority to levy a revisit user fee 
exists.''
    Comments: One commenter indicated that they would prefer that if 
fees are needed, then providers should be charged an up-front fee that 
does count

[[Page 53639]]

towards approved expenses of doing business/cost report based on bed 
size.
    Response: The revisit user fees are limited to fees for revisit 
surveys conducted as a result of deficiencies cited during an initial 
certification, recertification and substantiated complaint surveys. The 
fee will only be applied when revisits are needed to assure substantial 
compliance that requirements are met. Although we appreciate the 
commenters statement, Congress' clear intent was that CMS assess a fee 
only for revisits required as a result of deficiencies cited. It would 
be out of the scope of our authority to assess fees for upfront survey 
costs.
2. Sec.  488.30(d)(2)--Cost Report
    Comment: One commenter raised concern regarding our statement: ``At 
no time is the individual provider's cost borne by other patients.'' 
The commenter felt our statement disregards the nature of medical 
transactions and that these revisit user fees, if extracted from the 
provider's income stream, would directly impact the range and quality 
of the services rendered by competing on a cash basis with all other 
spending priorities in the practice.
    Response: Each revisit user fee will arise from a provider's 
documented failure to comply with federal requirements for quality of 
care or safety. We hope that a provider would not respond to a fee 
arising from such failure by decreasing quality of care. Such an action 
could simply give rise to more quality compromises, more complaints, 
more surveys or complaint investigations, more revisits, and more fees. 
The result would not make economic or medical sense. We appreciate the 
commenter's concern that a provider might respond to a revisit fee by 
reducing services. This would represent a business decision on the part 
of the provider. An alternative would be to invest in remedial action 
so that quality would be improved and the prospect of future revisits 
and revisit fees would be reduced. We hope that providers will adopt 
the alternative approach.
    Comment: Some commenters objected to the fee, but stated that if 
the fee were adopted then it should be considered an allowable cost on 
the cost report. The commenters expressed concern as to where the funds 
would come from if the fees were not permitted as an allowable cost on 
the cost report, particularly, in an industry already struggling to 
continue to provide services.
    Response: We proposed in Sec.  488.30(d)(2) that fees for revisit 
surveys under this section are not allowable items on a cost report, as 
identified in part 413, subpart B of this chapter, under title XVIII of 
the Act. The revisit user fee will be levied only as a result of a 
provider's failing to meet basic quality of care or safety standards 
that are required as a condition of participation or coverage in the 
Medicare program. As such, it is not appropriate for a revisit user fee 
to be an allowable item for a cost report. To do so would lead to both 
cost-shifting and the counterintuitive result that more quality 
breakdowns could lead to more payment. For these reasons, the Secretary 
has put in place the necessary mechanism for which cost-shifting would 
be prevented. In addition, a significant number of providers and 
suppliers are reimbursed through the prospective payment system; as a 
result, only a small group of providers as compared to the overall 
number of providers and suppliers receive cost based reimbursements.
    While the user fee program is simply intended to defray costs of 
the revisits, we believe that the design of the user fee program we 
finalize will result in a positive correlation between quality of care 
and amount of the fees--the better the quality of care, the lower the 
fees. We also expect that the prospect of fees for revisits will 
promote greater compliance with federal quality of care requirements, 
thereby making for fewer revisits and fewer fees over time.
    Comment: A commenter stated that as a result of the financial 
burden of the revisit user fee, the expense for the payment of this fee 
would be cost-shifted to private pay residents. The commenter stated 
that, if the fee were to be advanced this should include a requirement 
that would ensure increased Medicaid/Medicare reimbursement to avoid 
shifting burden of added costs to private-pay residents. Another 
commenter felt that the fee would also amount to a shifting of funds 
and as a result either the money is withheld from the hospital up front 
as part of budget cuts or the hospital has to pay it back as part of 
their CMS certification process.
    Response: We proposed in Sec.  488.30(d)(2) that fees for revisit 
surveys under this section are not allowable items on a cost report, as 
identified in part 413, subpart B of this chapter, under title XVIII of 
the Act. Part 413 identifies CMS' formulating methods for making fair 
and equitable reimbursement for services rendered to beneficiaries of 
the program. Payment is to be made on the basis of current costs of the 
individual provider, rather than costs of a past period or a fixed 
negotiated rate. This cost report also designs this reimbursement 
formulation so that the individual provider's costs are not borne by 
other patients.
    CMS believes that the assessed revisit user fee is not an allowable 
item for a cost report, as it should not be figured into the services 
provided to beneficiaries, nor should it be a cost shared amongst non-
Medicare patients. CMS employs several checks and balances to deter 
this from occurring. CMS believes that this proposed language in Sec.  
488.30(d)(2) would prevent the inclusion of the revisit user fee costs 
in any future cost reports. This section will only apply to a small 
group of providers who receive cost-based reimbursement. A significant 
amount of providers and suppliers are reimbursed through the 
prospective payment system (PPS).
    As a result of comments received to Sec.  488.20(d)(1) and (d)(2) 
and CMS' further consideration, we will modify the proposed language of 
Sec.  488.30(d)(1) and retain the proposed language of Sec.  
488.30(d)(2) as final. The proposed last sentence of Sec.  488.30(d)(1) 
will be modified to read: ``Any method allowed by law, including credit 
card; electronic fund transfer; check; money order; offset collection 
from claims submitted.'' The remainder of the proposed language will be 
retained as final.

Section 488.30(e)--Reconsideration Process for Revisit User Fees

    We proposed in Sec.  488.30(e) that a reconsideration process shall 
be available to providers or suppliers that have been assessed a 
revisit user fee if a provider or supplier believes an error of fact, 
such as a clerical error, has been made. We also proposed that a 
request for reconsideration must be received by CMS within seven 
calendar days from the date identified on the revisit user fee 
assessment notice.
    Comment: Several commenters believe that a reconsideration process 
should be available for surveyor errors and substantial errors of 
interpretation, and that it should not be limited to just clerical 
errors. Another commenter indicated that the reconsideration process 
should include unfounded citations. One commenter asked for 
clarification on what was meant by ``error of fact,'' as a basis for 
requesting a reconsideration. Another commenter asked whether a 
provider could request a reconsideration of a fee if they were in the 
process of appealing deficiencies.
    Response: The reconsideration process for revisit user fees is 
intended only for those situations in which a provider or supplier 
believes that an error of fact has been made in the application of the 
revisit user fee. These errors of fact would include such things

[[Page 53640]]

as clerical errors, billing for a fee already paid, inadvertent billing 
for a revisit following a validation survey of a deemed provider, or 
assessment of a fee when there was no revisit conducted. A request for 
reconsideration of an assessed revisit user fee is a separate process 
from any informal dispute resolution or appeal of the underlying 
deficiency citations.
    Comment: Several commenters thought that limiting the window for 
revisit user fee reconsideration request to seven calendar days was 
unrealistic and requested that the timeframe for reconsideration 
requests be expanded to 30 calendar days. Another commenter requested 
that the timeframe for a reconsideration request be extended to 10 
calendar days, and other commenters suggested a 14 or 15 calendar day 
window. However, one commenter thought that the seven day window was 
reasonable.
    Response: We proposed that a request for reconsideration must be 
received by CMS within seven calendar days from the date identified on 
the revisit user fee assessment notice. CMS has considered the 
commenters' suggestions for extending the timeframe for submitting a 
reconsideration request and we have agreed to expand the timeframe for 
reconsideration requests to 14 calendar days from the date identified 
on the revisit user fee assessment notice. We will, therefore, change 
the timeframe for submitting a reconsideration request to 14 calendar 
days in the final rule. The time trigger date is the date when the 
assessment notice is prepared and sent. The revisit survey must have 
occurred prior to our assessment of a revisit user fee.
    Comment: Several commenters suggested that, where a reconsideration 
determines that a revisit user fee was charged in error, any payments 
made should be refunded immediately, instead of applying the payment to 
future assessments of fees. One commenter suggested that refunds should 
be made within 30 days, whereas another commenter suggested 60 calendar 
days of approval of a reconsideration request. Commenters thought that 
actions related to fees should remain pending until the outcome of the 
reconsideration, and that a fee should not be paid until a facility 
exhausts its appeals; upon successful reconsideration, a provider would 
receive written confirmation that a fee is null and void.
    Response: We believe that given the proposed timeframe for 
submitting a reconsideration request and the regulatory obligation of 
payment (within 30 calendar days), there would be a limited possibility 
that payment would be sent without CMS providing a response to the 
reconsideration. We, however, believe that regulatory clarification is 
warranted based on the type of comments received. We have modified the 
proposed text to include separate subparagraphs Sec.  488.30(e)(1)(i) 
and (ii), (e)(2), and (e)(3). The modified language of Sec.  488.30(e) 
will read as follows:

    (e) Reconsideration process for revisit user fees.
    (1) CMS will review a request for reconsideration of an assessed 
revisit user fee--
    (i) If a provider or supplier believes an error of fact has been 
made in the application of the revisit user fee, such as clerical 
errors, billing for a fee already paid, or assessment of a fee when 
there was no revisit conducted, and
    (ii) If the request for reconsideration is received by CMS 
within 14 calendar days from the date identified on the revisit user 
fee assessment notice.
    (2) CMS will issue a credit toward any future revisit surveys 
conducted, if the provider or supplier has remitted an assessed 
revisit user fee and for which a reconsideration request is found in 
favor of the provider or supplier. If in the event that CMS judges 
that a significant amount of time has elapsed before such a credit 
is used, CMS will refund the assessed revisit user fee amount paid 
to the provider or supplier.
    (3) CMS will not reconsider the assessment of revisit user fees 
that request reconsideration of the survey findings or deficiency 
citations that may have given rise to the revisit, the revisit 
findings, the need for the revisit itself, or other similarly 
identified basis for the assessment of the revisit user fee.

    We believe that the potential that a provider or supplier would be 
assessed a revisit user fee due to clerical error would be rare, when 
this is viewed through the overall survey process and checks and 
balances inherent in the survey and certification process. We believe 
that in the rare case that this assessment should occur, we have 
provided providers and suppliers with an opportunity to request a 
reconsideration. We, indicated, however, in Sec.  488.30(e)(3) that 
``we will not reconsider the assessment of revisit user fees that 
request reconsideration of the survey findings or deficiency citations 
that may have given rise to the revisit, the revisit findings, the need 
for the revisit itself, or other similarly identified basis for the 
assessment of the revisit user fee.'' We also, based on comments 
received, have provided providers and suppliers a greater window for 
submission of requests for reconsideration from 7 calendar days to 14 
calendar days. We are including additional language in Sec.  
488.30(e)(2) that identifies that we will issue a credit toward any 
future revisit surveys conducted if a provider or supplier has remitted 
an assessed revisit user fee and for which a reconsideration request is 
found in favor of the provider or supplier as we discussed in the 
preamble text of the Proposed Rule. We further clarify that we ``in the 
event that CMS judges that a significant amount of time has elapsed 
before such a credit is used, CMS will refund the assessed revisit user 
fee amount paid to the provider or supplier.'' In regards to the 
commenters' specific suggestion that refunds should be made within 30 
calendar days, or commenters that suggested 60 calendar days, CMS will 
make a concerted effort to respond to requests for reconsideration 
within a timely manner and notify providers or suppliers that the 
reconsideration was determined in their favor, as applicable prior to 
the time frame for which they must remit payment. However, in those 
cases where remittance has occurred and the provider or supplier has 
not experienced an additional revisit survey and is then due a refund, 
CMS is committed to developing a system that would ensure efficient 
refund of any monies collected in error. CMS' present bill pay system 
would require more than 30 to 60 calendar day processes. We estimate 
that this cause for a refund may occur in less than 5% of all overall 
cases. At this time, CMS does not have the requisite data in which to 
provide specific amounts of provider or suppliers falling into this 
category, however we believe it will be an even lower percentage 
provided all the inherent checks and balances in our current survey and 
certification process.
    Comment: Several commenters requested that CMS clarify the time 
frame for when a reconsideration decision will be made, and one 
commenter requested that CMS include a deadline in the regulation for 
responding to reconsideration requests. One commenter proposed that 
reconsiderations be resolved within 30 days of a reconsideration 
request.
    Response: CMS is cognizant of the providers' 30 calendar day time 
frame for submitting payment and will ensure that reconsiderations are 
resolved in a timely manner. CMS will make a concerted effort to 
respond to request for reconsideration within a timely manner and 
notify provider or suppliers that the reconsideration was determined in 
their favor, prior to the time frame for which they must remit payment.
    We appreciate comments received on time frames, refund methodology, 
and notification. As a result of suggestions, we have modified Sec.  
488.30(e) to include

[[Page 53641]]

within 14 calendar days for requests for reconsideration. Section 
488.30(e) will read in final as discussed above.

Section 488.30(f)--Enforcement

    We proposed in Sec.  488.30(f) that if the full revisit user fee 
payment is not received within 30 calendar days or a request for 
reconsideration is not received within seven calendar days from the 
date the provider or supplier receives written notice of assessment, 
CMS may terminate the facility's provider agreement and enrollment in 
the Medicare program or the supplier's enrollment and participation in 
the Medicare program, and the provider or supplier may not seek 
Medicare payment, nor be considered a Medicare participating provider 
or supplier. We have changed the seven calendar day time period for 
filing of a reconsideration request to fourteen calendar days. 
Otherwise, CMS will adhere to the termination process as identified in 
Sec.  489, subpart E, of this chapter.
    Comment: Some commenters connected the discussion of revocation of 
billing and the termination for nonpayment as proposed in Sec.  
488.30(f) and Sec.  489.53(a)(16). One commenter felt that termination 
for nonpayment within 30 days is power disproportionate to the offense 
and is unrelated to quality of care and safety issues. Another 
commenter felt that this provision is reason not to participate in 
Medicare, or to care for Medicare patients.
    Response: While we proposed that a provider or supplier may also be 
determined not to be in compliance if a revisit user fee payment has 
not been received within 30 calendar days from the date identified on 
the assessment notice, we also state at Sec.  424.535(a)(1) that all 
providers and suppliers are granted an opportunity to correct the 
deficient payment compliance before a final determination is made to 
revoke billing and enrollment privileges. We further note that a 
payment-due notice from CMS is preceded by a survey or complaint 
investigation that has found deficiencies, a correction period afforded 
to the provider or supplier, a revisit to confirm compliance, then a 
later issuance of the payment-due notice, followed by the formal 30-day 
advance notice to the provider. As soon as a revisit occurs, each 
provider or supplier will know that a revisit user fee will follow at a 
later date, will know the amount of the fee due from the fee schedule 
published in this rule, and will know that the payment will be due 
within 30 calendar days. While the rule specifies that enforcement 
action may occur if the bill has not been paid within 30 calendar days, 
the total amount of planning time available to the provider or supplier 
will have totaled much more than the 30-calendar day period before any 
enforcement action may occur. Finally, the revocation of billing and 
enrollment privileges is not an immediate action upon the failure of a 
provider or supplier to remit the assessed revisit user fee. In this 
final rule we therefore retain the time-frames for which action will 
occur regarding this process and retain the amended language to Sec.  
424.535(a)(1) as final.
    Comment: A commenter indicated that the definition of revisit 
survey should be revised to limit it to those revisits in which the 
cited deficiency includes and is subject to an enforcement action under 
Subpart B of Part 489.
    Response: We have not included the commenter's suggestion to revise 
the term revisit survey to include ``is subject to an enforcement 
action under subpart B of Part 489.'' Subpart B of part 489 governs 
provider agreements, not enforcement actions. However, we do agree with 
the premise of the commenter's suggestion and thus have modified 
language in Sec.  488.30(f) to include cross references to the 
appropriate subpart and subsection of part 489 (governing termination) 
and to a subsection of part 424 (governing revocation of enrollment and 
billing privileges).
    Section 488.30(f) will be modified to read as applicable components 
``pursuant to Sec.  489.53(a)(16) of this chapter'' and ``pursuant to 
Sec.  424.535(a)(1) of this chapter.'' We retain the remainder of the 
proposed language in Sec.  488.30(f) as final.

Part 489--Provider Agreements and Supplier Approval

Subpart B--Essentials of Provider Agreements

Section 489.20 Basic Commitments

Section 489.20(u)

    We proposed to add to Sec.  489.20 an additional paragraph that 
would require a provider to agree to pay revisit user fees when and if 
assessed.
    We did not receive comments regarding this additional paragraph. 
However, due to technical changes, paragraph (u) is designated as 
paragraph (w) and we will retain the proposed language as final.

Subpart E--Termination of Agreement and Reinstatement After Termination

Section 489.53 Termination by CMS

Section 489.53(a)(16)

    We proposed to add a new paragraph (16) to Sec.  489.53(a) that 
would create an additional basis for termination if a provider has 
failed to pay a revisit user fee when and if assessed.
    We did not receive comments regarding this additional paragraph and 
thus we retain the proposed language in Sec.  489.53(a)(16) as final.

III. Provisions of the Final Rule

    In this final rule we are adopting the provisions as set forth in 
the June 29, 2007 proposed rule with the following revisions:
    All additional language proposed in Sec.  424.535, Revocation of 
enrollment and billing privileges in the Medicare Program will be 
retained as final.
    All proposed definitions in Sec.  488.30(a) are adopted as final, 
except for an addition to the definition of ``provider of services, 
provider or supplier.'' The final definition now includes religious 
nonmedical health care institutions.
    All proposed language in Sec.  488.30(b)(1) and (b)(2) criteria for 
determining the fee is adopted as final.
    Language proposed in Sec.  488.30(c) Fee schedule is modified by 
removing term ``will'' and inserting the term ``must'' where 
applicable, we also removed ``adopts this schedule'' and added 
``assesses revisit user fees'' for clarification. In addition we 
include that the clarifying language ``which criteria will be used and 
how, as well as * * *,'' the remainder of the language is adopted as 
final.
    The last sentence of the language proposed in Sec.  488.30(d)(1) 
has been modified for clarification to state that ``CMS may consider 
any method allowed by law, including: Credit care; electronic fund 
transfer; check; money order; and offset collections from claims 
submitted, the remainder of this paragraph is retained as final. All 
proposed language in Sec.  488.30(d)(2)-- the prohibition of inclusion 
of the revisit user fee on a provider cost report--is adopted as final. 
We have added a new subparagraph and new language as a result of 
various comments regarding the time frame for when we may collect fees, 
and the concerns regarding the schedule of these fees, Sec.  
488.30(d)(3) will read: ``Fees for revisit surveys will be due for any 
revisit surveys conducted during the time period for which authority to 
levy a revisit user fee exists.''

[[Page 53642]]

    Language proposed in Sec.  488.30(e) reconsideration process for 
revisit user fees will be modified by changing the formatting of the 
paragraph to include paragraphs (e)(1)(i), (e)(1)(ii), (e)(2), and 
(e)(3). Language in paragraph (e)(1)(i) previously proposed as first 
sentence in paragraph (e) is retained as final. We have modified 
paragraph (e)(1)(ii) by changing that a request for reconsideration 
must be received by CMS within 14 calendar days instead of the 7 
calendar days as proposed. We have added a new paragraph (e)(2) that 
identifies when CMS will issue a credit or a refund of an assessed 
revisit user fee in the rare case of a provider or supplier remitting 
payment and ultimately a reconsideration is decided within their favor. 
We have added a new paragraph (e)(3) that identifies that a request for 
reconsideration of the revisit user fee may not include reconsideration 
of the survey findings or deficiency citations that may have given rise 
to the revisit, the revisit findings, or the need for the revisit 
itself.
    All proposed language in Sec.  488.30(f) Enforcement is adopted as 
final with the addition of language identifying the interconnection of 
changes made to both Sec. Sec.  424.535(a)(1) and 489.53(a)(16). The 
language will read in final: ``If the full revisit user fee payment is 
not received within 30 calendar days from the date identified on the 
revisit user fee assessment notice, CMS may terminate the facility's 
provider agreement (pursuant to Sec.  489.53(a)(16) of this chapter) 
and enrollment in the Medicare program or the supplier's enrollment and 
participation in the Medicare program (pursuant to Sec.  424.535(a)(1) 
of this chapter).
    All proposed new paragraphs to Sec.  489.20 and Sec.  489.53 are 
adopted as final.

Waiver of 30-Day Delay in the Effective Date

    We ordinarily provide a 30-day delay in the effective date of the 
provisions of a rule in accordance with the Administrative Procedure 
Act (APA) 5 U.S.C. 553(d). However, the delay in the effective date may 
be waived as, in pertinent part, ``provided by the agency for good 
cause found and published with the rule'' 5 U.S.C. 553(d)(3). The 
Secretary finds that good cause exists to make effective the revisit 
user fee and the corresponding fee schedule immediately upon display 
and publication in the Federal Register.
    The good cause exception to the 30 day effective date delay 
provision of section 553(d) of the APA is read to be broader than the 
good cause exception to the notice and comment provision of section 
553(b) of the APA.
    The legislative history of the APA indicates that the purpose for 
deferring the effectiveness of a rule under section 553(d) was to 
``afford persons affected a reasonable time to prepare for the 
effective date of a rule or rules or to take other action which the 
issuance may prompt.'' S. Rep. No. 752, 79th Cong., 1st Sess. 15 
(1946); H.R. Rep. No. 1980, 79th Cong., 2d Sess. 25 (1946). In this 
case, affected parties do not need time to adjust their behavior before 
this rule takes effect. With or without a revisit fee, a provider or 
supplier must be found to have corrected significant deficiencies in 
order to avoid termination. Additionally, the application of a fee for 
the revisit does not place appreciable administrative burdens on the 
affected providers or suppliers. We do not expect appreciable cost to 
State survey agencies because CMS is undertaking the billing and 
collection of the revisit user fee.
    CMS identified in the proposed rule the immediacy of this revisit 
user fee program and the limited nature of the Continuing Resolution. 
Specifically, the Continuing Resolution requires CMS to implement the 
revisit fee program in fiscal year 2007. Accordingly, providers and 
suppliers have been on notice for some time that these fees would be 
imposed, and do not need additional time to be prepared to comply with 
the requirements of this regulation. We believe that given the short 
time frame that CMS has to collect fees before the authority of the 
Continuing Resolution expires, there is good cause to waive the 30 day 
effective date.

IV. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the 
Paperwork Reduction Act of 1995.

V. Regulatory Impact Analysis

A. Overall Impact

    We have examined the impacts of this 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 (as amended by Executive Order 13258, which 
merely reassigns responsibility of duties) directs agencies to assess 
all costs and benefits of available regulatory alternatives and, 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 any 1 year). 
This final rule is not a major rule. The aggregate costs will total 
approximately $37.3 million in any 1 year.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Individuals and States are not included in the 
definition of a small entity. Small businesses are small entities, 
either by nonprofit status or by having revenues of $6.5 million to 
$31.9 million or less in any 1 year for purposes of the RFA. In the 
June 29, 2007 Federal Register, CMS issued a proposed rule identifying 
its limited information to separate and identify specific providers and 
suppliers that may be subject to a revisit user fee by the requirements 
described for purposes of the RFA. CMS also identified its limited 
information on the total revenues collected by provider or supplier 
type. CMS does collect information regarding Medicare and Medicaid 
claims submitted, however this would not provide the requisite 
requirements for the RFA regarding total revenues. CMS also identified 
that it does collect National level information which includes personal 
health care expenditures and payments. Personal health care as we 
discussed in the proposed rule includes hospital care, professional 
services, nursing and home health care, all of which cover those 
services provided by the provider and suppliers who may be assessed a 
revisit user fee.
    Based on the information provided within the proposed rule a few 
commenters felt that the user fee would add what they consider 
financial strains on an already strained nursing home industry, 
especially to stand alone, not-for-profits. Additionally, two 
commenters stated that the economic implication must be considered, 
including the potential impact on wages for employees within healthcare 
facilities. Another commenter requested that CMS in this section take 
into account State differences, citing their State's increased costs 
for all their home health and hospice providers, who are subject to 
increased fees in general and

[[Page 53643]]

felt this user fee would disproportionately impact these providers in 
their State. Another commenter felt that Home Health Agencies have been 
adversely impacted by stagnant and declining reimbursement from both 
Medicare and Medicaid in the past years.
    CMS specified in the proposed rule that the providers and suppliers 
that may be assessed a revisit user fee fall into the category of 
revenues collected under personal health care funds. As such CMS 
calculated that the overall impact of the estimated $37.3 million that 
will be assessed for revisit user fees would only amount to 2.3 percent 
of the $1,560.2 million personal health care revenues collected and 
only 1.9 percent of all national health care expenditures of which 
personal health care expenditures are included.
    Although we do not deny that the revisit user fee would require a 
payment from a provider or supplier who is assessed a fee due to the 
need for a revisit survey, we do not believe it will have such an 
economic impact that it would create additional financial strains on 
providers and suppliers. We believe that many providers and suppliers 
will pay no fees because they consistently provide high quality care, 
have no deficiencies identified through the survey process, and 
therefore will require no revisits. Thus, this rule will have minimal 
financial impact on those providers and suppliers. In addition, we 
appreciate the commenters' concern regarding their specific State's 
financial situation.
    For the immediate future, we have calculated the user fee by 
provider type and by average number of hours required for a revisit 
survey. It is our intent that we will consider other criteria as 
identified in Sec.  488.30(b), which includes regional differences when 
proposing and finalizing future fee schedules. Based on our information 
gathered, we have determined, and the Secretary certifies, that this 
rule will not have a significant impact on small entities based on the 
overall effect on revenues.
    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 a Metropolitan 
statistical Area (superseded by Core Based Statistical Areas) and has 
fewer than 100 beds. This final rule affects those small rural 
hospitals that have been cited for a deficiency based on noncompliance 
with required conditions of participation and for which a revisit is 
needed to make sure that the deficiency has been corrected.
    Based on the information provided as a requirement for Section 
1102(b) of the Act, some commenters raised concerns that these fees 
will be very expensive for various rural providers or suppliers, not 
just rural hospitals, but also small rural Home Health Agencies and 
long-term care facilities in rural communities, and that CMS could be 
affecting the availability of care in rural areas. One commenter asked 
why hospitals should be exempt from the fee just because the fee may 
have a significant impact on them; while another commenter raised what 
they identified as unfairness in the frequency of surveys conducted 
annually for long-term care facilities versus 3 years for hospitals.
    Hospitals are not exempt from the revisit user fees. While 
hospitals are surveyed less frequently than nursing homes, hospitals 
are subject to CMS complaint investigations similar to nursing home 
complaint investigations as well as other providers and suppliers. CMS 
is statutorily obligated to conduct a regulatory impact analysis for 
small rural hospitals as part of its rule making process. As such, we 
have reviewed data affecting these rural hospitals, and upon that 
review have determined that of all hospitals identified, 285 revisits 
or 3.9 percent were conducted in rural hospitals to ensure that 
deficiencies identified were corrected. Based on the effective time 
period of this proposed rule, less than 3 percent of all hospitals may 
in fact be assessed a revisit user fee in this current fiscal year (FY 
2007), we estimate that less than 1 percent of rural hospitals will be 
impacted by this rule.
    The statutory analysis that is required does not indicate that 
small rural hospitals would be exempt from regulatory requirements. 
Rather, it requires only that the rule making agency must determine the 
overall financial impact on small rural hospitals. We do not make a 
distinction on the quality-of-care provided to residents or patients by 
either urban or rural location. Federal regulations call for all 
residents and patients to receive adequate care. The revisit user fee 
will only be assessed as a result of deficiencies cited with respect to 
providers or suppliers not fully complying with Federal requirements.
    With regard to the survey frequency, nursing homes are mandated by 
statute to be certified annually, whereas CMS policy calls for 
hospitals (both accredited and non-accredited) to be certified or 
deemed certified on a 3 year cycle.
    In addition, we appreciate the commenters' concern regarding the 
potential impact on various rural communities. For the immediate 
future, we have calculated the user fee by provider type and by average 
number of hours required for a revisit survey. It is our intent that we 
will consider other criteria as identified in Sec.  488.30(b), which 
includes regional differences and facility size when proposing and 
finalizing future fee schedules. Based on our information gathered, we 
have determined, and the Secretary certifies, that this rule will not 
have a significant impact on 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 require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. That threshold 
level is currently approximately $120 million. This rule will have no 
mandated effect on State, local, or tribal governments and the impact 
on the private sector is estimated to be less than $120 million and 
will only effect those Medicare providers or suppliers for which a 
revisit user fee is assessed based on the need to conduct a revisit 
survey to ensure deficient practices that were cited have been 
corrected.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This final rule will not substantially affect State or 
local governments. This final rule establishes user fees for providers 
and suppliers for which CMS has identified deficient practices and 
requires a revisit to assure that corrections have been made. Therefore 
we have determined that this final rule will not have a significant 
affect on the rights, roles, and responsibilities of State or local 
governments.

B. Impact on Providers/Suppliers

    The source of the data used to estimate the number and cost of 
revisit surveys is CMS's Online Survey, Certification and Reporting 
(OSCAR) database. OSCAR is the repository of information about CMS and 
State survey agency survey actions. Data collected include the dates of 
surveys, survey findings, and the length of time that surveyors spent 
conducting the survey. State survey agencies record survey time

[[Page 53644]]

on the CMS-670 form. Data from the CMS-670 form are entered into OSCAR 
by the State survey agency. CMS analyzed average survey time length 
using actual data from FY 2006.
    Based on information entered into OSCAR, we proposed user fees in 
accordance with the type of revisit survey (onsite vs. offsite); the 
type of provider or supplier; the average number of hours that a 
revisit survey requires; and the average per hour cost of a revisit 
survey.
Overall Effect on Providers and Suppliers
    We estimate that there are potentially 47,804 providers and 
suppliers affected by the revisit user fee, although we expect only 
some of those providers will be charged a revisit user fee in any one 
particular year. We based this estimate on FY 2006 actual data. Table B 
below presents the key information. Of those providers and suppliers, 
34.8 percent required and received a revisit survey in FY 2006, 
including both onsite and offsite revisits. As identified in the 
proposed rule, providers and suppliers that required a revisit survey 
ranged widely across facility types from 87.9 percent for skilled 
nursing facilities (``SNFs'')/nursing facilities (``NFs'') to 2.8 
percent for ambulatory surgical centers. We did not include transplant 
centers in FY 2006 and 2007 calculations due to lack of available cost 
and revisit data at this time. Transplant centers will be newly 
surveyed providers starting in FY 2008, and will be subject to revisit 
fees at the hospital rate.

                  Table B.--Percentage of Providers/Suppliers That Had a Revisit Survey FY 2006
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of      Percent of
                                                                                    providers/       provider/
                                                       Total       Total revisit  suppliers that  suppliers that
                                                    providers/     survey for FY     required        required
                                                   suppliers\1\   2006 (onsite &  revisit survey  revisit survey
                                                                     offsite)        (onsite &       (onsite &
                                                                                     offsite)        offsite)
----------------------------------------------------------------------------------------------------------------
SNF/NF \2\......................................          15,172          29,426          13,350            87.9
Hospitals\3\....................................           7,139             853             594             8.3
HHAs............................................           8,901           1,585           1,320            14.8
Hospices........................................           3,077             307             246             7.9
ASC.............................................           4,735             188             133             2.8
RHC.............................................           3,828             216             204             5.3
ESRD............................................           4,952             929             781            15.7
                                                 ---------------------------------------------------------------
    Total.......................................          47,804          33,504          16,662            34.8
----------------------------------------------------------------------------------------------------------------
\1\ Online Survey, Certification and Reporting (OSCAR) database (via PDQ, Provider Summary Table), includes
  providers considered active at any time in the fiscal year.
\2\ Total number does not include Medicaid-only Nursing Facilities.
\3\ Total includes accredited and non-accredited hospitals, as well as psychiatric hospitals, and critical
  access hospitals.

    Comments: One commenter observed that, in CMS' impact analysis and 
fee proposals, CMS chose to include critical access hospitals in a 
single grouping with all other hospitals, even though section 1861(e) 
of the Social Security Act states that the term hospital does not 
include, unless the context otherwise requires, a critical access 
hospital (as defined in section 1861(mm)(1)). The commenter stated that 
because critical access hospitals are typically smaller and less 
complex organizations than most other hospitals, the context clearly 
does not require their inclusion with hospitals in this analysis and 
that it would seem that the average length of an onsite revisit survey, 
and the corresponding assessed fee, would be less than that of other 
hospitals. CMS should at least present the relevant data on critical 
access hospitals.
    Response: We included critical access hospitals in our hospital 
average fee due to their similar functions and surveying process. We 
believe this issue raised by commenters has merit which will require 
further analysis and we will consider looking at critical access 
hospitals in future fee schedules as its own distinct entities. We 
agree that revisit time may be affected by many factors in addition to 
size of the facility. We have adopted a relatively straightforward 
method of calculating the user fee. If the Congress renews or extends 
the authority to collect the revisit user fee for any considerable time 
period, we intend to build into the fee schedule a means to take into 
account facility size and location to the extent that we find such 
factors make a significant difference in the time and actual cost of 
the revisits.
Frequency and Duration of Revisit Surveys
    There are many differences across providers and suppliers in the 
frequency and duration of revisit surveys. Skilled nursing facilities/
nursing facilities accounted for 83 percent of total onsite revisit 
surveys conducted in FY 2006 following the identification of 
deficiencies from standard surveys. Home health agencies accounted for 
6 percent of onsite revisit surveys in FY 2006, while ESRDs and 
hospitals accounted for 8 percent, 4 percent each. Hospice facilities, 
ambulatory surgical centers, and rural health clinics combined 
comprised the remaining 3 percent of revisits. The average length of an 
onsite revisit survey varied from 7.6 hours for rural health clinics to 
22.8 hours for hospitals. In comparison, offsite revisit surveys 
conducted averaged one and a half hours (1.5) across all providers and 
suppliers.
Fee Schedule for Onsite Revisit Surveys
    We will base the final fee schedule on the average length of time 
required for revisit surveys by provider or supplier type in FY 2006. 
Averages were calculated separately by type of provider or supplier, 
and the hours for revisit surveys were separated by either standard 
health surveys, complaint surveys, or offsite surveys. A cost of $100 
per hour was incurred in FY 2005, which was the basis of the cost 
estimates in the Continuing Resolution. We project that the actual 
current cost based on inflation factors and processing expenses is $112 
per hour and we will use this projected cost in setting the fee 
schedule. In order to obtain this inflation factor, CMS utilized FY 
2005 annual expenditures derived from CMS-435 form that captures a 
State's cumulative expenditures and divided this by information 
obtained from CMS-670 form that identifies State's workload hours or 
survey hours,

[[Page 53645]]

as discussed above. The product of this calculation resulted in dollars 
per hour or cost incurred for conducting surveys. CMS then took this 
number and multiplied this by a composite rate of inflation that was 
obtained from percentage change calculations identified in annual and 
semi-annual indexes prepared by the U.S. Department of Labor's Consumer 
Price Index for Wage Earners and Clerical Workers (CPI-W). See U.S. 
Department of Labor, Bureau of Labor Statistics. Summary of Annual and 
Semi-Annual Indexes. ONLINE. 2007. Bureau of Labor Statistics. 
Available: http://www.bls.gov/ro3/fax_9125.htm [22 Feb 2007]. In our 
fee schedule, the $112 average cost per hour is then multiplied by the 
average hours for the revisit surveys to achieve the average fee cost 
per onsite revisit survey as identified in Table C below. For the 
present, we will not adjust fees based on the length of individual 
revisit surveys, but will assess a flat fee per revisit survey, based 
on provider or supplier type. We expect these costs to increase 
annually to incorporate economic changes, cost of living increases, 
labor and overhead costs expenses if authority for the revisit fee is 
continued in the future.
    All revisit user fees will be assessed after publication of this 
final rule.

 Table C.--Revisit User Fee Assessment Based on Average Length of Onsite
                           Revisit Surveys\*\
------------------------------------------------------------------------
                                          Average length   Fee assessed
                                            of  onsite      per revisit
                Facility                      revisit     survey  (hrs x
                                           survey (hrs)        $112)
------------------------------------------------------------------------
SNF/NF..................................            18.5          $2,072
Hospitals\**\...........................            22.8           2,554
HHA.....................................            14.4           1,613
Hospice.................................            15.5           1,736
ASC.....................................            14.9           1,669
RHC.....................................             7.6             851
ESRD....................................            13.3          1,490
------------------------------------------------------------------------
\*\ This includes onsite revisit surveys according to both Standard
  Health Surveys and Complaint Surveys.
\**\ Transplant center revisits will be charged at the hospital rate.

Proposed Fee Schedule for Offsite Revisit Surveys
    For offsite revisit surveys, we expect a revisit user fee of $168 
assessed regardless of provider or supplier type. Based again on 
recorded survey time on the CMS-670 form, it was assessed that offsite 
revisit surveys on average take one and a half hours (1.5) across all 
providers and suppliers. We calculated the base hourly fee of $112 
multiplied by an average of one and a half hours to arrive at the $168 
fee assessed per offsite revisit survey.
    All revisit user fees will be assessed after publication of this 
final rule and fee schedule.
Costs for All Revisit User Fees Assessed
    We expect the combined costs for all providers and suppliers for 
all revisit surveys in FY 2007 to total approximately $37.3 million, 
with onsite revisit surveys amounting to approximately $34.6 million 
and offsite revisit surveys totaling approximately $2.7 million. 
However, actual fees assessed in FY 2007 will be much less than this 
annual amount, since we will not charge for revisits that occur prior 
to publication of this final regulation. The rule will take effect the 
date of publication. In order to give maximum consideration to the 
fiscal impact of the rule that would occur if it were in force for an 
entire year, we provide here both annual and quarterly estimates of the 
impact as listed below in Tables D and E. If authority for the revisit 
user fees is continued beyond FY 2007, we will use the current fee 
schedule in this rule for the assessment of fees until a new fee 
schedule notice is proposed and published as final.
    In Table D below, we provide the projected quarterly costs based on 
the fee schedule of this final rule. We expect the combined costs for 
all providers and suppliers for all onsite revisit surveys for one 
quarter to total approximately $8.6 million. We first utilized the 
total number of onsite revisit surveys for FY 2006, took the expected 
revisit user fees assessed per revisits as calculated in Table B above 
estimated by provider or supplier and multiplied this number by the 
number of onsite revisit surveys expected for one quarter. We then 
totaled all providers and suppliers to achieve the total quarterly 
costs for all onsite revisit surveys.

                         Table D.--Estimated Quarterly Costs for Onsite Revisit Surveys
----------------------------------------------------------------------------------------------------------------
                                                                   Fee assessed                     Total costs
                                                     Number of      per onsite       Number of      for onsite
                    Facility                      onsite revisit  revisit survey  onsite revisit      revisit
                                                    surveys  (FY    (hrs x $112)   surveys est.     surveys for
                                                       2006)       (See Table B)   for quarter*       quarter
----------------------------------------------------------------------------------------------------------------
SNF & NF........................................          14,288          $2,072           3,572      $7,401,184
Hospitals.......................................             575           2,554             144         367,776
HHA.............................................           1,068           1,613             267         430,671
Hospice.........................................             256           1,736              64         111,104
ASC.............................................              95           1,669              24          40,056
RHC.............................................             149             851              37          31,487
ESRD............................................             698           1,490             175         260,750
ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½
    Total.......................................          17,129  ..............           4,283      8,643,028
----------------------------------------------------------------------------------------------------------------
*Total number of onsite revisit surveys divided by 4 and rounded up based on FY 2006 actual data.


[[Page 53646]]

    We expect the combined costs for all providers and suppliers for 
all offsite revisit surveys to total $687,960 on a quarterly basis. In 
Table E below, we first estimated by provider or supplier the number of 
offsite revisit surveys expected for one quarter and multiplied this 
number by the expected revisit user fee of $168 per offsite revisit 
survey as discussed above. We then totaled all providers and suppliers 
to achieve the total costs for all offsite revisit surveys for one 
quarter.

                         Table E.--Estimated Quarterly Costs for Offsite Revisit Surveys
----------------------------------------------------------------------------------------------------------------
                                                     Number of     Fee assessed      Number of      Total costs
                                                      offsite       per offsite       offsite       for offsite
                    Facility                          revisit     revisit survey      revisit         revisit
                                                   surveys  (FY     ($112 x 1.5    surveys est.     surveys for
                                                       2006)           hrs)        for quarter*       quarter
----------------------------------------------------------------------------------------------------------------
SNF & NF........................................          15,138            $168           3,785        $635,880
Hospitals.......................................             278             168              70          11,760
HHA.............................................             517             168             129          21,672
Hospice.........................................              51             168              13           2,184
ASC.............................................              93             168              23           3,864
RHC.............................................              67             168              17           2,856
ESRD............................................             231             168              58           9,744
ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½
    Total.......................................          16,375  ..............           4,095        687,960
----------------------------------------------------------------------------------------------------------------
*Total number of offsite revisit surveys divided by 4 and rounded up based on FY 2006 actual data.

    As shown in Table F below, we provide the total costs expected had 
the rule been in effect for an entire FY 2007, as well as the costs we 
would expect to offset in the final quarter of the fiscal year if the 
rule were in effect for the entire last quarter of FY 2007 or an entire 
quarter in the future.

Table F.--Total Costs Combined for All Revisit Surveys per Fiscal Year &
                                 Quarter
------------------------------------------------------------------------
                                              FY 2007      One quarter*
------------------------------------------------------------------------
Onsite Revisit Surveys..................     $34,565,760      $8,643,028
Offsite Revisit Surveys.................       2,751,000         687,960
ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½ï¿½
    Total Costs All Revisits............      37,316,760      9,330,988
------------------------------------------------------------------------
*One quarter's costs are based on quarterly revisit surveys rounded up
  to the nearest whole number as shown in Tables D & E; multiplying
  Table F last quarter numbers in column 2 by 4 would create a slightly
  larger cost than identified in FY 2007 column 1 above.

    As discussed above, we have excluded Medicaid-only facilities (such 
as Intermediate Care Facilities for the mentally Retarded (ICFs/MR)), 
comprehensive outpatient rehabilitation facilities, providers of 
outpatient physical therapy or speech pathology services, independent 
laboratories, portable x-ray centers, physical therapists in 
independent practice, federally qualified health centers, 
chiropractors, Religious nonmedical health care institutions (RNHCIs) 
in all proposed rate-setting calculations.
    We also expect that the revisit user fee will have some effect in 
motivating providers and suppliers to improve quality, or if quality 
problems do occur, to ensure that quality lapses are corrected more 
quickly than in the past. Both of these positive effects would result 
in fewer revisit surveys being necessary. However, CMS does acknowledge 
that the revisit user fee may have a counter effect of prompting long-
term care facilities to engage in the informal dispute resolution 
process to dispute State survey agency decisions more frequently in 
order to avoid the assessment of a fee.
    We received a wide variety of comments on the discussion of the 
impact of this rule on providers and suppliers and we have summarized 
these comments below.
1. Unfairness in Charging Same Fees
    Comments: A commenter stated that it is unfair to charge the same 
revisit fee, regardless of the seriousness or number of deficiencies.
    Response: We appreciate the commenters' implicit suggestion that 
the amount of the revisit fee should be scaled to reflect differences 
in the number and seriousness of the deficiencies identified. This rule 
provides the basis to take such factors into greater account in the 
future. If the Congress renews or extends the user fee authority beyond 
FY 2007, we plan to examine this idea in more depth and act on it if it 
is determined to be feasible and correlated well with actual revisit 
cost. In the fee schedule in this final rule we take some small steps 
in the direction of acknowledging that more deficiencies or 
deficiencies of greater severity may take more revisit time. Under the 
current design in this rule, many providers will pay no fees because 
they consistently provide high quality care, have no deficiencies 
identified through the survey process, and therefore will require no 
revisits. Other providers may require some revisits but with minimal 
costs because the deficiencies are not serious, and the revisit may be 
accomplished through an offsite revisit survey. We have established a 
much lower fee for offsite revisit surveys since actual costs to the 
survey program for offsite revisit surveys are much less than the costs 
for onsite revisit surveys, and the user fee is intended only to recoup 
average actual costs. We believe we have designed the user fee program 
to result in a positive correlation between quality of care and amount 
of the fees--the better the quality of care, the lower the fees. We 
also expect that the prospect of fees for revisits will promote greater 
compliance with federal quality of care requirements, thereby making 
for fewer revisits and fewer fees over time.

[[Page 53647]]

2. Equalized Rate State
    Comments: A few commenters noted that North Dakota is an equalized 
rate state, meaning that nursing homes cannot charge a per diem rate 
for private pay residents that exceed the per diem rate that Medicaid 
pays. Revenues are limited and funds could be better spent to improve 
the quality of care.
    Response: In North Dakota nursing homes are the only Medicaid 
providers mandated to have equalization of rates. Equalization of rates 
means nursing facilities are prohibited from charging private paying 
residents more than the rate set by Medicaid. Medicaid controls and 
sets the rate for all nursing home residents except the 5 percent 
controlled by Medicare. The legislature sets the rate equal to the 
equalization rate. This final rule will only apply to Medicare 
providers and suppliers and to dually-participating nursing facilities.
3. Charges Should Not Be Based on Averages
    Comment: A commenter felt that, rather than charging on an average 
fee basis by provider type, the charges should be based on the specific 
number of hours required to do the onsite visit and be based on the 
actual hourly salary cost of the surveyor, plus limited overhead. This 
would help ensure that the fees will not exceed actual cost and will be 
specific to the level of effort involved in the visit.
    Response: We disagree. CMS does use a national average actual cost 
per hour (surveyors salaries, associated overheads and miscellaneous 
costs for travel, office space and equipment rentals, etc.) in 
calculating the average hours and costs for each provider type; Skilled 
Nursing Homes, HHA, Hospice, etc. revisits. However, we use average 
costs per provider type and do not individualize the fee to the exact 
number of revisit hours for any one provider, since we judge such 
extremely specific pricing to be so administratively expensive at this 
point in time that it would detract significantly from the fiscal 
benefits of the revisit user fee.
    Comment: A few commenters argued that fees should reflect the 
actual cost of conducting each providers survey, rather than being 
based on national average costs for each type of provider.
    Response: We recognize that there are differences among States and 
among particular facilities that lead to different costs of conducting 
revisit surveys. At this time, CMS has determined to charge an average 
fee per provider type, but will consider changing the fee schedule in 
the future to account for differences among particular providers.
4. Fees Are Excessive
    Comment: A few commenters felt that the size of the fee was 
excessive.
    Response: The size of the revisit fee is sufficient to cover the 
costs that state survey agencies incur in conducting the surveys. We do 
not believe that the amount of the revisit user fee will be very 
significant except for those providers that have a persistent problem 
sustaining compliance with federal requirements and may have many 
revisits as a result. CMS's expectation is that all providers remain in 
compliance with federal regulations at all times. These federal 
regulations establish minimally acceptable standards. The user fee will 
cover the costs that the state agency incurs in ensuring that 
violations of federal regulations have been corrected. The correction 
of many minor deficiencies can be evaluated by an offsite revisit 
survey, which will result in a nominal charge.

C. Final Fee Schedule

------------------------------------------------------------------------
                                           Fee assessed    Fee assessed
                Facility                    per offsite     per onsite
                                          revisit survey  revisit survey
------------------------------------------------------------------------
SNF & NF................................            $168          $2,072
Hospitals...............................             168           2,554
HHA.....................................             168           1,613
Hospice.................................             168           1,736
ASC.....................................             168           1,669
RHC.....................................             168             851
ESRD....................................             168           1,490
------------------------------------------------------------------------

D. Alternatives Considered

    The revisit user fee in the Continuing Resolution addresses 
important resource issues in the Medicare survey and certification 
programming budget. To implement this revisit user fee process, CMS is 
required to promulgate a proposed regulation and proposed fee schedule. 
CMS has attempted through a variety of methods to encourage ways of 
providers and suppliers to improve quality and thus decrease the need 
to conduct revisit surveys for deficiencies cited prior to the 
inclusion of a revisit user fee included in the FY 2007 Continuing 
Resolution. CMS continues to conduct outreach and educational efforts, 
quality analysis studies, and review of current regulatory requirements 
to focus in on health and safety measures. In its outreach efforts, CMS 
staff continues to present at trade association meetings representing 
home health agencies, hospices, skilled nursing facilities/nursing 
facilities, and other large accreditation organizations. CMS staff 
speaks to new developments within survey and certification policy, 
updating of regulations, and expectations that CMS has for those 
providing services to its Medicare beneficiaries. CMS in its continued 
outreach and educational efforts surrounding health and safety 
requirements regularly posts and shares any modification of policies or 
program on its CMS survey and certification Web site and through its 
survey and certification online course delivery systems. See U.S. 
Centers for Medicare & Medicaid Services. ``Certification & 
Compliance.'' ONLINE. 2007. CMS. Available: http://www.cms.hhs.gov/SurveyCertificationEnforcement/01_Overview.asp. CMS also devoted a 
substantial part of the work of the Quality Improvement Organizations 
(QIOs) to educate providers and suppliers on best practices and 
expectations for meeting Federal health and safety requirements. 
Despite these efforts, there continue to be many providers and 
suppliers that fail to meet Medicare conditions of participation, 
conditions for coverage or requirements and require revisit surveys to 
ensure compliance with Federal quality of care requirements. In 
addition, costs for these revisits continue to increase. CMS believes 
that the assessment of revisit user fees, as directed in the Continuing 
Resolution, is a piece of the larger efforts to address health care 
providers and suppliers that have failed to comply with Federal quality 
of care requirements.
    In accordance with Executive Order 12866, this rule has been 
reviewed by the Office of Management and Budget.

[[Page 53648]]

List of Subjects

42 CFR Part 424

    Emergency medical services, Health facilities, Health professions, 
Medicare, Reporting and recordkeeping requirements.

42 CFR Part 488

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

42 CFR Part 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.

0
For the reasons set forth in the preamble, the Centers for Medicare & 
Medicaid Services amends 42 CFR Chapter IV, parts 424, 488, and 489 as 
set forth below:

PART 424--CONDITIONS FOR MEDICARE PAYMENT

0
1. The authority citation for part 424 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).

Subpart P--Requirements for Establishing and Maintaining Medicare 
Billing Privileges

0
2. Section 424.535 is amended by revising paragraph (a)(1) introductory 
text to read as follows:


Sec.  424.535  Revocation of enrollment and billing privileges in the 
Medicare program.

    (a) * * *
    (1) Noncompliance. The provider or supplier is determined not to be 
in compliance with the enrollment requirements described in this 
section, or in the enrollment application applicable for its provider 
or supplier type, and has not submitted a plan of corrective action as 
outlined in part 488 of this chapter. The provider or supplier may also 
be determined not to be in compliance if it has failed to pay any user 
fees as assessed under part 488 of this chapter. All providers and 
suppliers are granted an opportunity to correct the deficient 
compliance requirement before a final determination to revoke billing 
privileges.
* * * * *

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
1. The authority citation for part 488 is revised to read as follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act, 
unless otherwise noted (42 U.S.C. 1302 and 1395(hh)); Pub.L. 110-5, 
H.J. Res. 20, Sec.  20615(b)(2007).

Subpart A--General Provisions

0
2. Part 488, subpart A is amended by adding a new Sec.  488.30 to read 
as follows:


Sec.  488.30  Revisit user fee for revisit surveys.

    (a) Definitions. As used in this section, the following definitions 
apply:
    Certification (both initial and recertification) means those 
activities as defined in Sec.  488.1.
    Complaint surveys means those surveys conducted on the basis of a 
substantial allegation of noncompliance, as defined in Sec.  488.1.
    Provider of services, provider, or supplier has the meaning defined 
in Sec.  488.1, and ambulatory surgical centers, transplant centers, 
and religious nonmedical health care institutions subject to Sec.  
416.2, Sec.  482.70, and Sec.  403.702 [C8] of this chapter, 
respectively, will be subject to user fees unless otherwise exempted.
    Revisit survey means a survey performed with respect to a provider 
or supplier cited for deficiencies during an initial certification, 
recertification, or substantiated complaint survey and that is designed 
to evaluate the extent to which previously-cited deficiencies have been 
corrected and the provider or supplier is in substantial compliance 
with applicable conditions of participation, requirements, or 
conditions for coverage. Revisit surveys include both offsite and 
onsite review.
    Substantiated complaint survey means a complaint survey that 
results in the proof or finding of noncompliance at the time of the 
survey, a finding that noncompliance was proven to exist, but was 
corrected prior to the survey, and includes any deficiency that is 
cited during a complaint survey, whether or not the cited deficiency 
was the original subject of the complaint.
    (b) Criteria for determining the fee.
    (1) The provider or supplier will be assessed a revisit user fee 
based upon one or more of the following:
    (i) The average cost per provider or supplier type.
    (ii) The type of revisit survey conducted (onsite or offsite).
    (iii) The size of the provider or supplier.
    (iv) The number of follow-up revisits resulting from uncorrected 
deficiencies.
    (v) The seriousness and number of deficiencies.
    (2) CMS may adjust the fees to account for any regional differences 
in cost.
    (c) Fee schedule. CMS must publish in the Federal Register the 
proposed and final notices of a uniform fee schedule before it assesses 
revised revisit user fees. The notices must set forth which criteria 
will be used and how, as well as the amounts of the assessed fees based 
on the criteria as identified in paragraph (b) of this subpart.
    (d) Collection of fees.
    (1) Fees for revisit surveys under this section may be deducted 
from amounts otherwise payable to the provider or supplier. As they are 
collected, fees will be deposited as an offset collection to be used 
exclusively for survey and certification activities conducted by State 
survey agencies pursuant to section 1864 of the Act or by CMS, and will 
be available for CMS until expended. CMS may devise other collection 
methods as it deems appropriate. In determining these methods, CMS will 
consider efficiency, effectiveness, and convenience for the providers, 
suppliers, and CMS. CMS may consider any method allowed by law, 
including: Credit card; electronic fund transfer; check; money order; 
and offset collections from claims submitted.
    (2) Fees for revisit surveys under this section are not allowable 
items on a cost report, as identified in part 413, subpart B of this 
chapter, under title XVIII of the Act.
    (3) Fees for revisit surveys will be due for any revisit surveys 
conducted during the time period for which authority to levy a revisit 
user fee exists.
    (e) Reconsideration process for revisit user fees.
    (1) CMS will review a request for reconsideration of an assessed 
revisit user fee--
    (i) If a provider or supplier believes an error of fact has been 
made in the application of the revisit user fee, such as clerical 
errors, billing for a fee already paid, or assessment of a fee when 
there was no revisit conducted, and
    (ii) If the request for reconsideration is received by CMS within 
14 calendar days from the date identified on the revisit user fee 
assessment notice.
    (2) CMS will issue a credit toward any future revisit surveys 
conducted, if the provider or supplier has remitted an assessed revisit 
user fee and for which a reconsideration request is found in favor of 
the provider or supplier. If in the event that CMS judges that a 
significant amount of time has elapsed before such a credit is used, 
CMS will refund the assessed revisit user fee amount paid to the 
provider or supplier.
    (3) CMS will not reconsider the assessment of revisit user fees 
that

[[Page 53649]]

request reconsideration of the survey findings or deficiency citations 
that may have given rise to the revisit, the revisit findings, the need 
for the revisit itself, or other similarly identified basis for the 
assessment of the revisit user fee.
    (f) Enforcement. If the full revisit user fee payment is not 
received within 30 calendar days from the date identified on the 
revisit user fee assessment notice, CMS may terminate the facility's 
provider agreement (pursuant to Sec.  489.53(a)(16) of this chapter) 
and enrollment in the Medicare program or the supplier's enrollment and 
participation in the Medicare program (pursuant to Sec.  424.535(a)(1) 
of this chapter).

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
3. The authority citation for part 489 continues to read as follows:

    Authority: Secs. 1102, 1819, 1861, 1864(m), 1866, 1869, and 1871 
of the Social Security Act, 42 U.S.C. 1302, 1395i-3, 1395x, 
1395aa(m), 1395cc, 1395ff, and 1395hh).

Subpart B--Essentials of Provider Agreements

0
4. Section 489.20 is amended by adding a new paragraph (w) to read as 
follows:


Sec.  489.20  Basic commitments.

* * * * *
    (w) To comply with Sec.  488.30 of this chapter, to pay revisit 
user fees when and if assessed.

0
5. Section 489.53 is amended by adding a new paragraph (a)(16) to read 
as follows:


Sec.  489.53  Termination by CMS.

    (a) * * *
    (16) It has failed to pay a revisit user fee when and if assessed.
* * * * *

(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: September 7, 2007.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: September 12, 2007.
Michael O. Leavitt,
Secretary.
[FR Doc. E7-18458 Filed 9-18-07; 8:45 am]
BILLING CODE 4120-01-P