[Federal Register Volume 73, Number 207 (Friday, October 24, 2008)]
[Notices]
[Pages 63480-63483]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-25193]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-2896-FN]


Medicare and Medicaid Programs; Conditional Approval of the Joint 
Commission's Continued Deeming Authority for Critical Access Hospitals

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

ACTION: Conditional Notice of Approval.

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SUMMARY: This notice announces our decision to conditionally approve, 
with a probationary period, the Joint Commission's request for 
continued recognition as a national accreditation program for critical 
access hospitals (CAHs) seeking to participate in the Medicare or 
Medicaid programs.

DATES: Effective Date: This conditional notice of approval is effective 
November 21, 2008 through November 21, 2011, with a 180-day 
probationary period through May 20, 2009.

FOR FURTHER INFORMATION CONTACT: Cindy Melanson, (410) 786-0310, 
Patricia Chmielewski (410) 786-6899.

SUPPLEMENTARY INFORMATION:

I. Background

    Under the Medicare program, eligible beneficiaries may receive 
covered services in a CAH provided certain requirements are met. 
Sections 1820(c)(2)(B) and 1861(mm) of the Social Security Act (the 
Act) establish distinct criteria for facilities seeking designation as 
a CAH. Under this authority, the minimum requirements that a CAH must 
meet to participate in Medicare are set forth in regulations at 42 CFR 
part 485, subpart F (Conditions of Participation: Critical Access 
Hospitals (CAHs)) which determine the basis and scope of CAH covered 
services. Conditions for Medicare payment for CAHs can be found at 42 
CFR 413.70. Applicable regulations concerning provider agreements are 
at 42 CFR part 489 (Provider Agreements and Supplier Approval) and 
those pertaining to facility survey and certification are at part 488, 
subparts A and B.

A. Verifying Medicare Conditions of Participation

    In general, we approve a CAH for participation in the Medicare 
program if it is participating as a hospital at the time it applies for 
CAH designation, and it is in compliance with parts 482 (Conditions of 
Participation for Hospitals) and 485, subpart F (Conditions of 
Participation: Critical Access Hospital (CAHs)).
    For a CAH to enter into a provider agreement, a State survey agency 
must certify that the CAH is in compliance with the conditions or 
standards set forth in section 1820 of the Social Security Act and part 
485 of our regulations. Thereafter, the CAH is subject to ongoing 
review by a State survey agency to determine whether it continues to 
meet the Medicare requirements. There is, however, an alternative to 
State compliance surveys. Accreditation by a nationally-recognized 
accreditation program can substitute for ongoing State review.
    Section 1865(b)(1) of the Act provides that, if a provider entity 
demonstrates through accreditation by an approved national 
accreditation organization that all applicable Medicare conditions are 
met or exceeded, we may ``deem'' those provider entities as having met 
the requirements. Accreditation by an

[[Page 63481]]

accreditation organization is voluntary and is not required for 
Medicare participation.
    If an accreditation organization is recognized by the Secretary as 
having standards for accreditation that meet or exceed Medicare 
requirements, a provider entity accredited by the national accrediting 
body's approved program may be deemed to meet the Medicare conditions. 
A national accreditation organization applying for approval of deeming 
authority under part 488, subpart A must provide us with reasonable 
assurance that the accreditation organization requires the accredited 
provider entities to meet requirements that are at least as stringent 
as the Medicare conditions. Our regulations concerning re-approval of 
accrediting organizations are set forth at section Sec.  488.4 and 
Sec.  488.8(d)(3). The regulations at Sec.  488.8(d)(3) require 
accreditation organizations to reapply for continued approval of 
deeming authority every six years, or sooner as we determine. The Joint 
Commission's term of approval as a recognized accreditation program for 
CAHs expires November 21, 2008.

II. Deeming Applications Approval Process

    Section 1865(b)(3)(A) of the Act, recodified under the Medicare 
Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275, 
July 15, 2008)(MIPPA) as section 1865(a)(3)(A), provides a statutory 
timetable to ensure that our review of deeming applications is 
conducted in a timely manner. The Act provides us with 210 calendar 
days after the date of receipt of a complete application to conduct our 
survey activities and application review process. Within 60 days of 
receiving a complete application, we must publish a notice in the 
Federal Register that identifies the national accreditation body making 
the request, describes the request, and provides no less than a 30-day 
public comment period. At the end of the 210-day period, we must 
publish an approval or denial of the application.

III. Provisions of the Proposed Notice and Response to Comments

    On May 23, 2008, we published a proposed notice (73 FR 30107) 
announcing the Joint Commission's request for re-approval as a deeming 
organization for CAHs. In the proposed notice, we detailed our 
evaluation criteria. Under section 1865(b)(2) of the Act (now section 
1865(a)(2))and our regulations at Sec.  488.4 (Application and 
reapplication procedures for accreditation organizations), we conducted 
a review of the Joint Commission application in accordance with the 
criteria specified by our regulation, which include, but are not 
limited to the following:
     An onsite administrative review of Joint Commission's (1) 
Corporate policies; (2) financial and human resources available to 
accomplish the proposed surveys; (3) procedures for training, 
monitoring, and evaluation of its surveyors; (4) ability to investigate 
and respond appropriately to complaints against accredited facilities; 
and, (5) survey review and decision-making process for accreditation;
     A comparison of the Joint Commission's CAH accreditation 
standards to our current Medicare CAH conditions for participation; 
and,
     A documentation review of the Joint Commission's survey 
processes to:
    [cir] Determine the composition of the survey team, surveyor 
qualifications, and the ability of the Joint Commission to provide 
continuing surveyor training;
    [cir] Compare the Joint Commission's processes to those of State 
survey agencies, including survey frequency, and the ability to 
investigate and respond appropriately to complaints against accredited 
facilities;
    [cir] Evaluate the Joint Commission's procedures for monitoring 
providers or suppliers found to be out of compliance with the Joint 
Commission program requirements. The monitoring procedures are used 
only when the Joint Commission identifies noncompliance. If 
noncompliance is identified through validation reviews, the survey 
agency monitors corrections as specified at Sec.  488.7(d);
    [cir] Assess the Joint Commission's ability to report deficiencies 
to the surveyed facilities and respond to the facility's plan of 
correction in a timely manner;
    [cir] Establish the Joint Commission's ability to provide us with 
electronic data and reports necessary for effective validation and 
assessment of the Joint Commission's survey process;
    [cir] Determine the adequacy of staff and other resources;
    [cir] Review the Joint Commission's ability to provide adequate 
funding for performing required surveys;
    [cir] Confirm the Joint Commission's policies with respect to 
whether surveys are announced or unannounced; and,
    [cir] Obtain the Joint Commission's agreement to provide us with a 
copy of the most current accreditation survey together with any other 
information related to the survey as we may require, including 
corrective action plans.
    In accordance with section 1865(a)(3)(A) of the Act, the May 23, 
2008 proposed notice (73 FR 30107) also solicited public comments 
regarding whether the Joint Commission's requirements met or exceeded 
the Medicare conditions of participation (CoPs) for CAHs. We received 
one public comment in response to our proposed notice.
    Comment: This commenter expressed serious concerns related to the 
Joint Commission statutory deeming authority for hospitals set forth in 
1865(a) of the Social Security Act. This commenter contends that the 
Joint Commission's special deeming authority for hospitals has led to a 
significant decline in hospital quality.
    Response: On July 15, 2008, Congress enacted MIPPA. Section 125 of 
this Act revoked the Joint Commission's previously unique irrevocable 
statutory deeming authority for hospitals, and includes a 24-month 
transition period. Effective July 15, 2010, the Secretary may recognize 
the Joint Commission as a national accreditation body for hospitals 
based on terms and conditions, and upon submission of such information, 
as the Secretary may require. In order to be considered for approval as 
a nationally recognized accreditation program for hospitals, the Joint 
Commission will have to submit an application in accordance with our 
requirements at Sec.  488.4, so that we can ensure that their 
requirements for hospital accreditation meet or exceed those of 
Medicare's. The Joint Commission's hospital program will be subject to 
the same initial and periodic CMS review as all other accreditation 
organization's deemed programs. However, we note that the Joint 
Commission has always been required by section 1865(b) of the Act (now 
section 1865(a)) to apply for deeming authority for CAHs, subject to 
the same terms and conditions as all other national accrediting 
organizations. Consequently, we note that the commenter's observations 
are not directly related to this application for continued deeming 
authority for CAHs. The Joint Commission last was granted recognition 
as an approved accreditation organization for CAHs for a six year term 
effective November 21, 2002 (67 FR 54657, August 23, 2002).

IV. Provisions of the Final Notice

A. Differences Between the Joint Commission's Standards and 
Requirements for Accreditation and Medicare's Conditions and Survey 
Requirements

    We compared the Joint Commission's accreditation requirements and 
survey process with the Medicare CAH CoPs

[[Page 63482]]

and survey process as outlined in the State Operations Manual (SOM). 
Our review and evaluation of the Joint Commission's deeming 
application, which were conducted as described in section III of this 
final notice, yielded the following:
     The Joint Commission amended their policies to eliminate 
the use of supplemental findings. All survey findings will be 
identified as a requirement for improvement, and will, therefore, 
require resolution through the evidence of standards compliance 
process;
     The Joint Commission modified its evidence of standards 
compliance process (ESC) to ensure that accepted ESCs contain the 
critical information necessary to provide assurance that an identified 
deficiency had been adequately corrected;
     The Joint Commission modified its survey report to clearly 
identify whether an identified deficient practice represented 
condition-level noncompliance or standard-level noncompliance;
     The Joint Commission developed and conducted training on 
the CMS documentation requirements for its surveyors to ensure that 
issues cited would provide a clear and detailed description of the 
deficient practice and relevant finding;
     The Joint Commission modified its policies regarding 
complaint investigation activities to comply with the requirements at 
Sec.  488.4(a)(6) and chapter five of the SOM;
     To meet the Medicare requirements related to unannounced 
surveys at 2700A of the SOM, the Joint Commission modified its 
electronic application process to no longer allow the CAH to indicate 
``avoid dates'' or ``a ready month'' in which organizations could 
receive an accreditation survey for deemed status;
     The Joint Commission revised its accreditation decision 
letters to ensure they are accurate and contain all the required 
elements necessary for the CMS Regional Office to render a decision 
regarding deemed status of a CAH;
     The Joint Commission modified its policies regarding 
condition-level noncompliance identified during an initial 
certification survey for participation in Medicare in accordance with 
section 2005A of the SOM;
     The Joint Commission added language to its standards, and 
interpretive guidance to address the requirements at Sec.  485.610(e) 
(off-campus and co-location requirements) and Sec.  485.635(e) 
(rehabilitation therapy services);
     To meet the Medicare requirements at Sec.  485.616(a) 
(agreements with network hospitals), the Joint Commission amended its 
standards to include a requirement for CAHs that are part of a rural 
health network to have an agreement with at least one hospital;
     To meet the Medicare requirements at Sec.  485.618(c)(2) 
(blood storage facilities) and Sec.  485.635(c)(4)(i) (contractual and 
arranged services), the Joint Commission amended its standards to 
clarify that the governing body must approve all services provided at 
the CAH through contractual agreements;
     To meet the Medicare requirements at Sec.  485.623(b)(5), 
the Joint Commission revised several of its elements of performance 
(EP) to address the ventilation, lighting, and temperature control in 
pharmaceutical, patient care, and food preparation areas;
     To meet the Medicare requirements at Sec.  485.623(c)(1), 
the Joint Commission modified its standards and EPs to address training 
of staff on handling emergencies;
     To meet the Medicare requirements at Sec.  485.623(d)(3), 
the Joint Commission added language to the appendix of the CAH manual 
to clarify the provision of waivers related to life safety code (LSC);
     To meet the Medicare requirements at Sec.  485.623(d)(4), 
the Joint Commission added an EP to address the requirement that the 
CAH must maintain written evidence of regular inspection and approval 
by state and local fire control agencies;
     To meet the Medicare requirements at Sec.  485.623(d)(7), 
the Joint Commission amended its crosswalk to include language related 
to requirements of alcohol-based hand rubs;
     The Joint Commission added language to its standards to 
address the requirements at Sec.  485.627(b) (disclosure of ownership 
and control);
     To meet the Medicare requirements at Sec.  485.635(d)(2), 
the Joint Commission added language to its standards to address the 
requirements related to the physician assistants (specifically, 
supervision and evaluation of nursing care);
     To meet the Medicare requirements at Sec.  485.639(c), the 
Joint Commission added language to its standards to address who may 
administer anesthesia;
     To meet the Medicare requirements of Sec.  12.25(e), the 
Joint Commission added language to the CAH manual that states that CAHs 
are not permitted to have satellite facilities;
     To meet the Medicare requirements at Sec.  412.27(a), the 
Joint Commission added language to its standards to include provisions 
related to admission of psychiatric patients;
     To meet the Medicare requirements at Sec.  412.27(c)(4), 
the Joint Commission added language to its standards to address the 
requirements related to progress notes;
     To meet the Medicare requirements at Sec.  412.27(d)(5), 
the Joint Commission added language to its standards to address the 
responsibilities of the social work staff;
     To address the requirement that a doctor manage or 
coordinate a patient's general medical condition at Sec.  482.12(c)(4), 
the Joint Commission added language to its standards for a distinct 
part unit(s) (DPU);
     To address the requirements related to budget and capital 
expenditures at Sec.  482.12(d)(2)-(5), the Joint Commission added 
language to its standards for DPUs;
     To address the requirements related to the governing 
body's responsibility to review and resolve grievances at Sec.  
482.13(a)(2), the Joint Commission added language to its standards for 
DPUs;
     To address the requirements of the patient's right to 
access records at Sec.  482.13(d)(2), the Joint Commission added 
language to the standards for DPUs;
     To address the requirements related to duties and 
privileges of the medical staff at Sec.  482.22(c)(2), the Joint 
Commission added language to its standards for DPUs;
     To address the requirements related to autopsies at Sec.  
482.22(d), the Joint Commission added language to its standards for 
DPUs; and,
     To address the requirements related to the availability of 
a registered nurse at Sec.  482.23(b), the Joint Commission added 
language to its standards for DPUs.
    Since the Joint Commission's last application for deeming authority 
for CAHs in 2002, CMS revised the CAH requirements August 11, 2004 (60 
FR 49272) to include a new condition at Sec.  485.647. This condition 
of participation outlines the eligibility requirements for CAHs that 
wish to have a DPU. Under this condition, a CAH can provide inpatient 
psychiatric or rehabilitation services in a DPU so long as the services 
furnished in this DPU comply with the hospital requirements specified 
at Sec.  482, the requirements for excluded hospital units at Sec.  
412.25, and the additional requirements at Sec.  412.27 for excluded 
psychiatric units; and Sec. Sec.  412.29 and 412.30 for excluded 
rehabilitation units.
    As a result, the Joint Commission had to address all of the DPU 
requirements

[[Page 63483]]

at Sec.  485.647, including a crosswalk addressing the Medicare 
hospital CoPs at Sec.  482, as part of its application for renewal of 
CAH deeming authority. Given the Joint Commission's unique statutory 
deeming authority for hospitals as set forth in former section 1865(a) 
of the Act, the Joint Commission had previously not been subject to a 
comparability review of its hospital accreditation program in 
accordance with the requirements at Sec. Sec.  488.4 and 488.8. Review 
of the Joint Commission revised accreditation standards for hospitals 
revealed that significant gaps remain between the Joint Commission 
standards and the Medicare hospital CoPs.
    In accordance with Sec.  488.8(d)(3), every six years, or sooner as 
determined by CMS, an approved accreditation organization must reapply 
for continued approval of deeming authority. CMS notifies the 
organization of the materials the organization must submit as part of 
the reapplication procedure. An accreditation organization that is not 
meeting the requirements of this subpart, as determined through a 
comparability review, must furnish CMS, upon request and at any time, 
with the reapplication materials CMS requests. CMS will establish a 
deadline by which the materials are to be submitted.
    In accordance with Sec.  488.8(f)(3)(i), if we determine that an AO 
has failed to adopt requirements comparable to CMS requirements, we may 
grant a conditional approval of the AO's deeming authority for a period 
of up to 180 days to adopt comparable requirements. Within 60 days 
after the end of this period, CMS will make a final determination as to 
whether or not the Joint Commission's CAH accreditation requirements 
are comparable to CMS requirements and issue an appropriate notice that 
includes reasons for our determination no later than July 19, 2009. If 
the Joint Commission has not made improvements acceptable to CMS during 
this period, CMS may remove recognition of deemed authority for its CAH 
program effective up to 30 days from the date we provide written notice 
to the Joint Commission that its CAH deeming authority will be removed. 
In addition, because of our concern about DPU standards, once the Joint 
Commission has implemented their revised CAH DPU standards, we will 
conduct a survey observation at the next available opportunity to 
validate proper application of the standards.

B. Term of Approval

    Based on the review and observations described in section III of 
this final notice, specifically remaining significant gaps between the 
Joint Commission hospital standards for DPUs and Medicare hospital 
CoPs. We have determined that the Joint Commission's accreditation 
standards for CAH DPUs require further revision and subsequent review. 
We are confident that with additional time, the Joint Commission will 
make the necessary revisions to their DPU standards and implement these 
revised standards to ensure that the Joint Commission's accreditation 
program for CAH DPUs meets or exceeds the Medicare requirements as 
stated at Sec.  485. Therefore, we conditionally approve the Joint 
Commission as a national accreditation organization for CAHs that 
request participation in the Medicare program, effective November 21, 
2008 through November 21, 2011, with a 180 day probationary period 
through May 20, 2009.

V. 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 (44 U.S.C. 35).

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

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

    Dated: September 11, 2008.
Kerry Weems,
Acting Administrator, Centers for Medicare & Medicaid Services.
 [FR Doc. E8-25193 Filed 10-23-08; 8:45 am]
BILLING CODE 4120-01-P