Medicare Program; Partial Hospitalization Services in Community Mental Health Centers

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 400, 410, 413, 489, and 498

[BPD-736-IFC]

RIN 0938-AF53

Medicare Program; Partial Hospitalization Services in Community

Mental Health Centers

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Interim final rule with comment period.

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SUMMARY: This rule sets forth the coverage criteria and payment

methodology for partial hospitalization services in community mental

health centers. The purpose of this rule is to establish regulations

governing this coverage under the provisions of section 4162 of the

Omnibus Budget Reconciliation Act of 1990.

DATES: Effective date: These rules are effective February 11, 1994.

Comment date: Comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. on April

12, 1994.

ADDRESSES: Mail an original and three copies of comments to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: BPD-736-IFC, P.O. Box 7517,

Baltimore, MD 21207-0517.

If you prefer, you may deliver your written comments to one of the

following addresses:

Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,

Washington, DC 20201, or

Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore,

MD 21207.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code BPD-736-IFC. Comments received timely will be available

for public inspection as they are received, generally beginning

approximately 3 weeks after publication of a document, in room 309-G of

the Department's offices at 200 Independence Avenue, SW., Washington,

DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.

(phone: (202) 690-7890).

If you wish to submit comments on the information collection

requirements contained in this interim final rule with comment period,

you may submit comments to: Allison Herron Eydt, HCFA Desk Officer,

Office of Information and Regulatory Affairs, room 3002, New Executive

Office Building, Washington, DC 20503.

FOR FURTHER INFORMATION CONTACT: Regina Walker, (410) 966-6735.

SUPPLEMENTARY INFORMATION:

I. Background

Community mental health centers (CMHCs) provide treatment and

services to mentally ill individuals, including the elderly and

children, residing in the community. The Community Mental Health

Centers Act (Pub. L. 88-164, enacted October 31, 1963) created a

Federal grant program to help States in the construction of CMHCs. The

Community Mental Health Centers Amendments of 1975 (Pub. L. 94-63,

enacted July 29, 1975) specified requirements for CMHCs. The Community

Mental Health Centers Extension Act of 1978 (Pub. L. 95-622, enacted

November 9, 1978) expanded CMHC services to include programs for the

prevention and treatment of alcohol and drug abuse and rehabilitation

of alcohol and drug abusers.

The Public Health Service (PHS) has primary responsibility for

regulating CMHCs. Section 1916(c)(4) of the PHS Act (42 U.S.C. 300x-

4(c)(4)) requires a CMHC to provide specialized outpatient services;

24-hour-a-day emergency care services; day treatment, other partial

hospitalization services, or psychosocial rehabilitation services;

screenings to determine appropriateness of admission to State mental

health facilities; and consultation and education services.

According to the National Council of Community Mental Health

Centers, there are approximately 2,310 CMHCs funded through block

grants to States, and 80 percent of them provide partial

hospitalization services. Before the Omnibus Budget Reconciliation Act

of 1990 (OBRA '90), Public Law 101-508, enacted on November 5, 1990,

partial hospitalization services provided by CMHCs were not covered

under the Medicare program.

Medicare coverage of partial hospitalization services provided by a

hospital to its outpatients became effective December 22, 1987, under

section 1861(ff) of the Social Security Act (the Act), which defines

partial hospitalization services. Section 1861(ff) of the Act was

enacted by section 4070(b)(2) of the Omnibus Budget Reconciliation Act

of 1987 (Pub. L. 100-203) and corrected by section 411(h)(1)(B) of the

Medicare Catastrophic Coverage Act of 1988 (Pub. L. 100-360). Hospital

outpatient departments do not need to qualify as CMHCs to continue to

provide partial hospitalization services.

II. Legislative Changes

Section 4162 of OBRA '90 amended sections 1861(ff) and 1832(a)(2)

of the Act to extend Medicare coverage and payment to partial

hospitalization services provided by CMHCs on or after October 1, 1991.

Section 4162(a) of OBRA '90 amended section 1861(ff) of the Act

concerning partial hospitalization services as follows:

Paragraph (ff)(3), which describes a partial

hospitalization program, was redesignated as subparagraph (ff)(3)(A)

and amended to include a partial hospitalization program provided by a

CMHC.

Subparagraph (ff)(3)(B) was added to define the term CMHC

as an entity that provides the services described in section 1916(c)(4)

of the Public Health Service Act and meets applicable licensing or

certification requirements for CMHCs in the State in which it is

located.

Section 4162(b)(1) of OBRA '90 made conforming changes to section

1832(a)(2) of the Act, which describes the scope of benefits covered

under Supplementary Medical Insurance Benefits for the Aged and

Disabled (Part B) of Medicare, by adding subsection (a)(2)(J) which

refers to partial hospitalization services provided by a CMHC as

described in section 1861(ff)(3)(A) of the Act.

Section 4162(b)(2) of OBRA '90 amended the term ``provider of

services'' described in section 1866(e) of the Act to permit a CMHC to

enter into a Medicare provider agreement but only with respect to

providing partial hospitalization services to Medicare beneficiaries as

described in section 1861(ff)(1) of the Act.

The provisions of section 4162 of OBRA '90 are effective for

services furnished on or after October 1, 1991. The following Medicare

manual instructions have been issued covering partial hospitalization

services in CMHCs:

A. Medicare Intermediary Manual, Part 3--Claims Process, and Medicare

Outpatient Physical Therapy and Comprehensive Outpatient Rehabilitation

Facility Manual, (the same transmittal number and issue date were used

for both manual issuances) Transmittal No. IM-92-1, issued March 1992:

New Procedures--Effective Date: October 1, 1991, concerning partial

hospitalization services provided by CMHCs and bill review instructions

for these services.

B. Medicare Provider Reimbursement Manual, Part 1, Transmittal No. 366,

issued March 1992: New Implementing Instructions--Effective Date:

October 1, 1991, concerning CMHCs as providers of services, the interim

rates for partial hospitalization services provided in CMHCs, and the

interim rate for the initial reporting period for these services in

CMHCs.

III. Current Regulations

Pertinent regulations regarding partial hospitalization services

appear in title 42 of the Code of Federal Regulations (CFR) at the

following locations:

A. Part 410 specifies the benefits, conditions for payment and

limitations on services available under Medicare Part B. Section 410.2

contains a definition of partial hospitalization services.

B. Part 424 contains the specific conditions and limitations applicable

to providers under Medicare Part B. Section 424.24(a) specifies that

partial hospitalization services are not exempt from physician

certification requirements. Section 424.24(e) describes the physician

certification and plan of treatment requirements for partial

hospitalization services.

IV. Provisions of This Interim Final Rule With Comment Period

In accordance with the provisions of section 4162 of OBRA '90, we

are making the changes described below to the Medicare regulations in

title 42 of the CFR. In addition, we are making other minor technical

and conforming changes.

In Sec. 400.202 (Definitions specific to Medicare), we are revising

the definition of ``Provider'' to include a CMHC that has in effect an

agreement to participate in Medicare, but only to provide partial

hospitalization services. We are also revising this definition by

adding ``occupational therapy'' to the list of covered services

furnished by a clinic, rehabilitation agency or public health agency.

These revisions are made in accordance with section 1866(e) of the Act,

which includes a CMHC as a ``provider of services'' but only with

respect to providing partial hospitalization services. Section 1866(e)

of the Act also lists ``occupational therapy'' as a covered service

provided by the aforementioned facilities.

We are revising Sec. 410.2 (Definitions for purposes of Part B of

Medicare) as follows:

We are rearranging the definitions in alphabetical order.

To improve readability we are revising the definition of

``partial hospitalization services'' by removing the list of services

contained in the current definition and adding a cross-reference to a

new Sec. 410.43 which lists the services. Under the revised definition,

partial hospitalization services means a distinct and organized

intensive ambulatory treatment program that offers less than 24-hour

daily care and provides the services specified in Sec. 410.43. This

definition applies to Part B partial hospitalization services provided

by both hospitals and CMHCs.

The definition of ``nominal charge provider''

inadvertently contains the definition for ``participating'', which

includes a definition of a ``nonparticipating'' provider under

Medicare. To correct this, we are removing the definition of

``participating'' provider (including ``nonparticipating'' provider)

and listing it as a separate definition in this section. Concurrently,

in accordance with section 1866(e) of the Act concerning Medicare

provider agreements, we are revising the definition of

``participating'' provider to include a CMHC as a provider of services

that has entered into a Medicare provider agreement, but only to

provide partial hospitalization services.

We are also adding a definition for a CMHC. We define a

CMHC as an entity that provides: Outpatient services, including

specialized outpatient services for children, the elderly, individuals

who are chronically mentally ill, and residents of its mental health

service area who have been discharged from inpatient treatment at a

mental health facility; 24-hour-a-day emergency care services; day

treatment or other partial hospitalization services, or psychosocial

rehabilitation services; screening for patients being considered for

admission to State mental health facilities to determine the

appropriateness of such admission; and consultation and education

services. The definition specifies that a CMHC must also meet

applicable licensing or certification requirements for CMHCs in the

State in which it is located.

This new definition is based upon section 1861(ff)(3)(B) of the

Act, which defines a CMHC as an entity that: (1) Provides the services

described in section 1916(c)(4) of the PHS Act; and (2) meets

applicable State licensing or certification requirements. In the CMHC

definition at Sec. 410.2, we are listing the required services as they

appear in section 1916(c)(4) of the PHS Act.

In Sec. 410.3 (Scope of benefits), we are revising subparagraph

(a)(2) to include partial hospitalization services provided by a CMHC

as services covered under Part B of Medicare. This revision is made in

accordance with section 1832(a)(2)(J) of the Act, which includes

partial hospitalization services in a CMHC in the scope of Medicare

Part B benefits.

In a new Sec. 410.43 (Partial hospitalization services: Conditions

and exclusions.), in paragraph (a), we list the services that are

described as partial hospitalization services, based on section

1861(ff)(2) of the Act. We specify that to be considered a partial

hospitalization service, a service must be reasonable and necessary for

the diagnosis or active treatment of the individual's condition and

reasonably expected to improve or maintain the individual's condition

and functional level and to prevent relapse or hospitalization. In

addition, the service must be one of the following:

Individual and group therapy with physicians or

psychologists or other mental health professionals to the extent

authorized under State law.

Occupational therapy requiring the skills of a qualified

occupational therapist.

Services of social workers, trained psychiatric nurses,

and other staff trained to work with psychiatric patients.

Drugs and biologicals furnished for therapeutic purposes,

subject to the limitations described in Sec. 410.29.

Individualized activity therapies that are not primarily

recreational or diversionary.

Family counseling, the primary purpose of which is

treatment of the individual's condition.

Patient training and education, to the extent the training

and educational activities are closely and clearly related to the

individual's care and treatment.

Diagnostic services.

Other items and services as specified by HCFA, excluding

meals and transportation.

Some services in this description are separately covered and paid

as the professional services of independent practitioners. In order to

determine how to handle the services of certain nonphysician

practitioners, we have examined the statutory provisions that

established the hospital outpatient department coverage of partial

hospitalization services, since the Congress built upon these

provisions to extend Medicare Part B coverage to a CMHC as a provider

of partial hospitalization services. Also applicable, therefore, are

the statutory provisions governing the methodology by which physicians

and others are paid for their services furnished in hospital settings.

Below we reference four sections of the Act, which, while

pertaining expressly to the services of a professional in the context

of a hospital, we believe serve as a model for the coverage of the

services of a clinical psychologist (CP) and a physician assistant (PA)

when those professionals furnish services in a CMHC.

Section 1861(b)(4) of the Act excludes medical or surgical

services furnished by a physician, resident or intern, and services

furnished by a CP and PA from the term ``inpatient hospital services''.

(Services of a certified nurse midwife and a certified registered nurse

anesthetist are also excluded from the definition of inpatient hospital

services, but our focus is on CPs and PAs because the other

nonphysician practitioners are less likely to furnish services in a

CMHC, based on the types services that are covered as partial

hospitalization services.)

Section 1832(a)(2)(B) of the Act excludes from the scope

of medical and other health services furnished by a provider, physician

services and services of certain nonphysician practitioners, including

CPs. (A CMHC is considered a ``provider of services'' under section

1866(e)(2) of the Act for the purpose of providing partial

hospitalization services.) This means these services are excluded from

the scope of outpatient hospital services and partial hospitalization

services because they are separately paid for by Medicare Part B under

section 1832(a)(1) of the Act.

Sections 1862(a)(14) and 1866(a)(1)(H) of the Act specify

that services by a physician and a CP and PA are not included in

payments made to a hospital (either on an inpatient or outpatient

basis) for certain services. Consequently, these services that are

``unbundled'' from hospital payment can be billed directly by a CP and

the employer of a PA to Medicare Part B, and are paid separately.

Before 1986, the bundling provisions referred solely to inpatient

services. However, section 9343(c)(2)(B) of the Omnibus Budget

Reconciliation Act of 1986 (Pub. L. 99-509) amended section

1866(a)(1)(H) of the Act by striking the phrase ``an inpatient'' and

inserting the phrase ``a patient''. Therefore, the reference to

``unbundled'' services pertains to services furnished either to

inpatients or outpatients.

Sections 1861(ii) and 1861(s)(2)(K)(i) of the Act enable a CP and

PA to furnish services that would otherwise be furnished by a

physician. Accordingly, since these practitioners' services are

separately covered and no longer considered to be part of a hospital's

services, including its partial hospitalization services, we are

providing that the services of a CP and PA are also unbundled when

furnished in a CMHC. Thus, these practitioners can bill Medicare Part B

directly for their professional services furnished to hospital patients

and to CMHC partial hospitalization patients.

Consequently, we are adding a new Sec. 410.43(b) to our regulations

to specify that the following services are not paid as partial

hospitalization services:

Physician services that meet the criteria of part 405,

subpart F for payment on a fee schedule basis in accordance with part

414.

Clinical psychologist services, as defined in section

1861(ii) of the Act, that are furnished after December 31, 1990.

Physician assistant services, as defined in section

1861(s)(2)(K)(i) of the Act, that are furnished after December 31,

1990.

Accordingly, when furnishing services to partial hospitalization

patients in a CMHC, the professionals specified in Sec. 410.43(b) may

bill Medicare Part B for their services by submitting their claims

directly to the Medicare Part B carrier. The CMHC can also serve as a

billing agent for these professionals, by billing the Part B carrier on

their behalf for their professional services furnished at the CMHC.

Conversely, there are some independent practitioners whose services

are bundled when furnished to hospital patients; for example, clinical

social workers (CSWs). In accordance with section 1861(hh)(2) of the

Act, a CSW is not authorized to bill directly for services furnished to

patients in a hospital and skilled nursing facility that are Medicare

participating. Therefore, for CSWs or other practitioner's services

that remain bundled when furnished in the hospital setting, we are

providing that these services are also bundled in the CMHC setting.

Accordingly, the CMHC must bill intermediaries for nonphysician

practitioner services listed under Sec. 410.43(a), and the

intermediaries will make payment for the services to the CMHC on a

reasonable cost basis.

To accommodate the new partial hospitalization services benefit in

a CMHC and to allow for future expansion of part 410, we are

redesignating existing subpart E regarding payment of supplementary

medical insurance benefits as subpart I, adding and reserving subparts

F through H for future regulations, and adding a new subpart E

concerning partial hospitalization services provided in a CMHC.

In the new subpart E in Sec. 410.110, we specify the requirements

for coverage of partial hospitalization services in a CMHC. We state

that Medicare Part B covers partial hospitalization services when they

are furnished directly by, or under arrangements made by, a CMHC as

defined in Sec. 410.2 that has in effect a provider agreement to

participate in Medicare. In this context, ``under arrangements''

describes situations in which: (1) A CMHC makes contractual

arrangements with another entity or practitioners to come into the CMHC

to furnish partial hospitalization services; and (2) Medicare makes

payment for the services to the CMHC. We have provided that a CMHC can

provide partial hospitalization services under arrangements based on

section 1861(ff) of the Act, which treats a CMHC and a hospital as

comparable providers of partial hospitalization services. Since a

hospital is permitted to furnish services under arrangements, we

believe that a CMHC should be treated similarly in this respect. As

noted above, we believe that the Congress intended that the scope of

the partial hospitalization benefit in a CMHC would generally follow

the scope of the benefit as we have implemented it for hospital

providers. We especially invite comment on this approach of using the

precedents established for hospital providers of partial

hospitalization services as a model for Part B coverage and payment of

the same services in a CMHC context.

In Sec. 410.110(a), we require that partial hospitalization

services be prescribed by a physician and furnished under the general

supervision of a physician. We considered whether the services of a

full time physician were required to implement the statutory

requirement under section 1861(ff)(1) of the Act for physician

supervision of partial hospitalization services under a written plan of

treatment. We recognize that such a requirement could cause hardship to

CMHCs because some of these entities are unable to employ physicians on

a full-time basis because of the expense involved. Therefore, because

we believe that less than direct supervision by a full-time physician

in a CMHC would not jeopardize a patient's health or treatment program,

and there would be a number of professionals involved in the care of

the patient who have been authorized to furnish services that would

otherwise be furnished by a physician, we are requiring general

physician supervision. This means that a physician must at least be

available by telephone but is not required to be present on the

premises of the CMHC at all times.

Physician certification is required under the procedures for

payment of claims to providers of partial hospitalization services

under section 1835(a)(2)(F) of the Act. Hence, in Sec. 410.110(b), we

require that physician certification of the need for partial

hospitalization services in a CMHC comply with the certification

requirements in existing Sec. 424.24(e)(1). These requisites, which

apply to partial hospitalization services provided by hospitals, are

that:

A physician certifies that the individual would require

inpatient psychiatric care in the absence of partial hospitalization

services.

The partial hospitalization services are being or were

furnished while the individual is or was under the care of a physician.

The services are or were furnished under a written plan of

treatment.

In Sec. 410.110(c), we specify that the CMHC partial

hospitalization services must be furnished under a plan of treatment as

described in existing Sec. 424.24(e)(2). This requirement is also based

on sections 1861(ff)(1) and 1835(a)(2)(F) of the Act which require that

partial hospitalization services be furnished under an individualized,

written plan of treatment established and periodically reviewed by a

physician (in consultation with appropriate staff participating in such

a program). The plan must set forth: (1) The physician's diagnosis; (2)

the type, amount, duration, and frequency of the services; and (3) the

goals for treatment. These same plan of treatment requirements apply to

partial hospitalization services provided by a hospital.

Existing Sec. 410.150, which specifies to whom payment is made,

will now be included under redesignated subpart I (Payment of SMI

(Supplementary Medical Insurance) Benefits). We add a new

Sec. 410.150(b)(13) to apply the specific rules governing Medicare Part

B payments to a CMHC. The rules are that Medicare Part B pays a CMHC on

an individual's behalf, for partial hospitalization services provided

by the CMHC, or by others under arrangements made with them by the

CMHC. We are reserving Sec. 410.150(b)(12) for future use.

Section 4162 of OBRA '90 does not explicitly address payment

requirements for partial hospitalization services provided by a CMHC.

The applicable statutory references regarding payment of SMI benefits

are contained in sections 1833 and 1835 of the Act.

Section 1833 of the Act describes payment for Medicare Part B

services and section 1835 of the Act specifies the procedures for

payment of claims of providers of services.

Specifically, section 1833(a)(2)(B) of the Act governs payment for

partial hospitalization services provided by a CMHC. In accordance with

this section, payment to a CMHC for partial hospitalization services is

to be made:

(1) At the lesser of: (a) The reasonable cost of such services, as

determined under section 1861(v) of the Act; or (b) the customary

charges with respect to such services, less the amount a provider may

charge as described in clause (ii) of section 1866(a)(2)(A) of the Act

(``coinsurance''), but in no case may the payment for such other

services exceed 80 percent of such reasonable cost; or

(2) If such services are provided by a public provider of services,

or by another provider which demonstrates to the satisfaction of the

Secretary that a significant portion of its patients are low-income

(and requests that payment be made under this clause), free of charge

or at nominal charges to the public, payment is made at 80 percent of

the amount determined in accordance with section 1814(b)(2) of the Act;

that is, the provider's ``reasonable cost''.

Section 1833(a)(2)(B) of the Act also provides that if (and for so

long as) the conditions described in section 1814(b)(3) of the Act are

met, payment is made in the amounts determined under the reimbursement

system described in such section. We believe that this provision is not

applicable to CMHC payment since section 1814(b)(3) of the Act

addresses payment to hospital providers in a State with a demonstration

project involving an approved State reimbursement cost control system.

We are revising the heading of Sec. 410.155 from ``Psychiatric

services limitations: Expenses incurred for physician services and CORF

services.'' to ``Outpatient mental health treatment limitation.'' since

this section focuses on treatment services and not diagnostic services.

For clarity, we are also revising Sec. 410.155(b) to specify the

services subject to the outpatient mental health treatment limitation

in Sec. 410.155(c), which reflects section 1833(c) of the Act. These

are services for the treatment of a mental, psychoneurotic, or

personality disorder furnished to an individual who is not an inpatient

of a hospital and include the following:

(1) CORF services.

(2) Physicians' services that meet the criteria of part 405,

subpart F for payment on a fee schedule basis in accordance with part

414.

(3) Physician assistant services, as defined in section

1861(s)(2)(K)(i) of the Act, that are furnished after December 31,

1990.

(4) Clinical psychologist services, as defined in section 1861(ii)

of the Act, that are furnished after December 31, 1990.

Section 1833(c) of the Act exempts partial hospitalization services

that are not directly furnished by a physician from the outpatient

mental health treatment limitation. The nonphysician practitioners

specified in Sec. 410.155(b) who furnish services to partial

hospitalization patients in a CMHC are furnishing services that would

otherwise be furnished by physicians and, like physicians, may bill

Medicare directly for Part B services. The professional services

furnished by these practitioners in a CMHC are not partial

hospitalization services and, therefore, are subject to the outpatient

mental health treatment limitation of Sec. 410.155. A discussion of the

professional services of these practitioners and the method of payment

for their services was presented in more detail in the explanation of

Sec. 410.43(b) presented earlier in this preamble.

Conversely, services furnished by any nonphysician practitioner not

shown in Sec. 410.43(b) (for example, a clinical social worker) to a

partial hospitalization patient in a CMHC are considered partial

hospitalization services and, therefore, are not subject to the

outpatient mental health treatment limitation.

In a newly added Sec. 410.172, we specify the conditions for

payment of partial hospitalization services in a CMHC. In paragraph

(a), we state that Medicare Part B pays for partial hospitalization

services provided in a CMHC only if a written request for payment is

filed by the CMHC. (The form to be used is UB-92, HCFA 1450.) In

Sec. 410.172(b), we require that partial hospitalization services in a

CMHC are provided in accordance with the conditions described in

Sec. 410.110, which require that the services must be:

Prescribed by a physician and furnished under the general

supervision of a physician (section 1861(ff)(1) of the Act);

Subject to certification by a physician in accordance with

Sec. 424.24(e)(1) (section 1835(a)(2)(F) of the Act); and

Furnished under a plan of treatment that meets the

requirements of Sec. 424.24(e)(2) (section 1861(ff)(1) of the Act).

In part 413, subpart A, concerning the general rules of reasonable

cost reimbursement, we are adding CMHCs to the list of providers

described in Sec. 413.1 as authorized to receive Medicare payment for

services provided to beneficiaries. In Sec. 413.13(b) under the rules

for applying the principle of lesser of costs or charges, we are adding

CMHCs to the list of providers under the general rule regarding payment

under reasonable cost reimbursement, but only with regard to providing

partial hospitalization services. OBRA '90 did not address payment to a

CMHC. However, as presented earlier in the discussion of the changes to

Sec. 410.150, the general payment principles of section 1833(a) apply

to a CMHC, and they are the basis for our changes to part 413.

In part 489 concerning provider agreements under Medicare, in

Sec. 489.2 (Scope of part), we list a CMHC as a provider of services

authorized to participate in Medicare, but only for purposes of

providing partial hospitalization services in accordance with section

1866(e)(2) of the Act. As a provider of partial hospitalization

services, a CMHC is subject to the rules governing Medicare provider

agreements. To conform the newly designated Sec. 489.2(c)(1) to section

1866(e)(1) of the Act, we are also adding ``occupational therapy'' to

the list of covered services furnished by clinics, rehabilitation

agencies, and public health agencies.

Under the basic requirements in Sec. 489.10 and the reasons for

denying participation in Medicare in Sec. 489.12, we are making a

technical change in the references to the civil rights requirements. In

accordance with 45 CFR part 84, appendix A, subpart A, Medicare Part B

does not constitute Federal financial assistance, and, thus, these

providers are not subject to the civil rights requirements.

Although we are not revising Sec. 489.11 (Acceptance of a provider

as a participant), the provisions of this section apply to a CMHC. We

are in the process, however, of developing a new provider agreement

specific to a CMHC. In the interim, if a CMHC desires to participate in

the Medicare program, it must submit a letter requesting approval as a

CMHC. The letter requesting approval as a CMHC is considered an

official application and must be accompanied by a signed attestation

statement that the CMHC complies with all Federal requirements

described in section 1861(ff)(3)(B) of the Act and conforms to the

provisions of section 1866 of the Act concerning Medicare provider

agreements. If HCFA determines that the CMHC meets all Federal

requirements, the CMHC receives notification of approval and the CMHC

is assigned a provider number.

In Sec. 489.13 (Effective date of agreement), we are modifying

paragraphs (a) and (b) to refer to a new paragraph (c) that specifies

the effective date of a provider agreement with a CMHC. Since a CMHC is

not subject to an onsite survey by a Federal or State agency surveyor

(see 42 CFR part 488), the effective date of its provider agreement is

based on receipt of its request to participate in Medicare and

compliance with all Federal requirements. In order to assure coverage

of these CMHC services on the effective date of the law, we are

providing that, for requests for Medicare participation received before

July 1, 1992, if the CMHC met all Federal requirements by October 1,

1991, and the CMHC selects this date as the effective date, the

agreement is effective for services provided on or after October 1,

1991, the statutory effective date for coverage of partial

hospitalization benefits in a CMHC (section 4162 of OBRA '90) (or such

later date as requested by the provider). If Federal requirements were

not met on October 1, 1991, the agreement is effective on the date the

requirements are met. For requests for Medicare participation received

after June 30, 1992, the agreement is effective on the date the CMHC

meets all Federal requirements but not before the date HCFA receives

the application. The June 30 and July 1, 1992, dates are the same dates

contained in the certification package that was sent to all CMHCs

requesting participation in the Medicare program.

Section 1866(e) of the Act includes a CMHC as a provider of

services but only for purposes of providing partial hospitalization

services. Therefore, we are amending part 498 concerning appeals

procedures for determinations that affect participation in the Medicare

program. Specifically, in Sec. 498.2 (Definitions), we are adding CMHC

to the definition of ``Provider''. (This is the same definition that

appears at revised Sec. 400.202.) Thus, a CMHC is entitled to a hearing

and judicial review of the hearing decision if it is dissatisfied with

a determination that it is not a provider, or with any determination

described in section 1866(b)(2) of the Act that gives the Secretary the

authority to refuse participation in Medicare to a provider failing to

meet certain conditions. As a conforming change to the definition of

``Provider'' at Sec. 489.2, we are adding ``occupational therapy'' to

the list of covered services furnished by clinics, rehabilitation

agencies, and public health agencies in accordance with section

1866(e)(1) of the Act. For ease of reference, we are also eliminating

the separate definition of ``prospective supplier'' but incorporating

its contents as it currently appears in this section into the

definition of ``Supplier.'' This format is consistent with other

definitions throughout Chapter IV of Title 42.

V. Collection of Information Requirements

Regulations at Secs. 410.172, 413.20, and 489.11 contain

information collection or recordkeeping requirements or both that are

subject to review by the Office of Management and Budget (OMB) under

the Paperwork Reduction Act of 1980 (44 U.S.C. 3501 et seq.). Section

410.172 concerns information collection requirements related to

submitting the UB-92 form (HCFA-1450), the written request for payment

that CMHCs must submit when billing for partial hospitalization

services. We have determined that the annual burden for collecting this

information is 4.9 hours per CMHC. Thus, based on an estimate of 2,000

participating CMHCs, the annual burden for submission of the UB92 is

approximately 9,870 hours (4.9 hours per year x 2,000 CMHCs). The

information collection requirements in Sec. 410.172 have been approved

by OMB (control number 0938-0279).

Section 413.20 concerns information collection and recordkeeping

requirements associated with the requirement that CMHCs submit an

annual cost report in order to receive Medicare payment for partial

hospitalization services. We have determined that the annual burden for

this cost reporting requirement is 140 hours per CMHC. Therefore, the

estimated annual burden for CMHCs is 280,000 hours (140 hours per year

x 2,000 CMHCs). Additionally, Sec. 489.11 contains information

collection and recordkeeping requirements related to the application

and signed attestation statement that CMHCs must submit to request

approval to participate in the Medicare program as a provider of

partial hospitalization services. The CMHC must attest that it complies

with the Federal requirements described in section 1861(ff)(3)(B) of

the Act and conforms to the provisions of section 1866 of the Act

concerning Medicare provider agreements. The annual burden for

completing the application and attestation statement is 10 minutes per

CMHC. Therefore, the annual burden for CMHCs is approximately 333 hours

(10 minutes per year x 2,000 CMHCs). The information collection and

recordkeeping requirements associated with Secs. 413.20 and 489.11 have

been sent to OMB for approval in accordance with the Paperwork

Reduction Act and will not be effective until OMB approval is received.

Organizations and individuals desiring to submit comments on the

information collection and recordkeeping requirements in Secs. 413.20

or 489.11 should direct then to the OMB official whose name appears in

the ADDRESSES section of this preamble.

VI. Waiver of Proposed Rulemaking and of Delayed Effective Date

In accordance with the statutory effective date of October 1, 1991,

coverage of partial hospitalization services in a CMHC has been

available to Medicare beneficiaries since that date. Nonetheless,

because the Secretary is exercising discretion in implementing section

4162 of OBRA '90, ordinarily we would publish a notice of proposed

rulemaking and afford a period for public comment. However, section

4207(j) of OBRA '90 permits the Secretary to issue interim final

regulations with a comment period (without prior notice and comment) to

implement any of the provisions of OBRA '90 that affect the Medicare

and Medicaid programs. Therefore, we are using that authority to

publish this interim final rule with comment period.

VII. Response to Comments

Because of the large number of items of correspondence we normally

receive on a interim final rule with comment period, we are not able to

acknowledge or respond to them individually. However, we will consider

all comments that we receive by the date and time specified in the

DATES section of this preamble, and we will respond to the comments in

the preamble to the final rule.

VIII. Impact Statement

Unless the Secretary certifies that a proposed rule would not have

a significant economic impact on a substantial number of small

entities, we generally prepare a regulatory flexibility analysis that

is consistent with the Regulatory Flexibility Act (RFA) (5. U.S.C. 601

through 612). For purposes of the RFA, all CMHCs are considered to be

small entities.

Also, section 1102(b) of the Act requires the Secretary to prepare

a regulatory impact analysis if an interim final rule with comment

period 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 and has fewer than

50 beds.

This interim final rule with comment period implements the

provisions of section 4162 of OBRA '90, which were effective October 1,

1991. Before enactment of OBRA '90, partial hospitalization services

furnished by a CMHC were not covered under the Medicare program.

According to the National Council of Community Mental Health

Centers, there were 2,310 CMHCs as of 1990, but only 80 percent of

them, 1,848, would have qualified to provide partial hospitalization

services. The average budget for each CMHC for FY 1990 was $3 million,

with only 2 percent being paid by Medicare for eligible beneficiaries

for services furnished by psychiatrists, services incident to

psychiatrist's services, and services that the CMHC billed for on

behalf of clinical psychologists. In addition, very few of the elderly

are in partial hospitalization programs because of the limited capacity

that a CMHC has for Medicare patients. We estimate that, as a result of

the expansion of coverage to include partial hospitalization services,

Medicare payments to CMHCs will increase the first year by 10 percent

over the amount previously paid by Medicare. Thus, the cost of the

additional benefit for FY 1990 would be calculated as follows:

Number of CMHCs qualified to provide partial

hospitalization services............................. 1,848

Average Medicare payment under existing

provisions........................................... x $60,000

-----------------

Estimated FY 1990 Medicare payments................. $110,880,000

Estimated increase in Medicare payments....... x .10

-----------------

Total cost of partial hospitalization benefit

rounded to nearest $5 million........................ $10,000,000

In order to project this estimate forward, we assume continuing

increases of 7 percent per year in the number of CMHCS. Based on this

assumption, the projected costs of this benefit for FYs 1994 through

1998 are as follows:

Estimated Medicare Costs--Partial Hospitalization Services in CMHCs

[In millions of dollars]*

------------------------------------------------------------------------

FY 1994 FY 1995 FY 1996 FY 1997 FY 1998

------------------------------------------------------------------------

$15......................... $15 $15 $15 $20

------------------------------------------------------------------------

*Rounded to the nearest $5 million.

It is estimated that the records maintenance and the record

extraction time needed to complete the CMHC cost report, required to

determine rates for partial hospitalization services, would be

approximately 140 hours, which should not place an undue burden on a

CMHC. The cost report for a CMHC is based on the same cost report that

is currently used by comprehensive outpatient rehabilitation facilities

or facilities furnishing outpatient physical therapy services. It is a

simplified report required by the Medicare program that requests CMHC

costs in order for the intermediaries to calculate payment for partial

hospitalization services. Most of the records needed are currently

maintained by a CMHC.

Coverage of partial hospitalization in a CMHC provides the elderly

with another alternative for treatment of mental illnesses. Not only

will CMHC patient volume and revenue increase, but the CMHC's role as a

health care provider will be enhanced due to the expanded scope of

mental health services covered by the Medicare program.

In conclusion, we are not preparing analyses for either the RFA or

section 1102(b) of the Act since we have determined, and the Secretary

certifies, that this interim final rule with comment period will not

result in a significant economic impact on a substantial number of

small entities and will not have a significant economic impact on the

operations of a substantial number of small rural hospitals.

List of Subjects

42 CFR Part 400

Grant programs-health, Health facilities, Health maintenance

organizations (HMO), Medicaid, Medicare, Reporting and recordkeeping

requirements.

42 CFR Part 410

Health facilities, Health professions, Kidney diseases,

Laboratories, Medicare, Rural areas, X-rays.

42 CFR Part 413

Health facilities, Kidney diseases, Medicare, Puerto Rico,

Reporting and recordkeeping requirements.

42 CFR Part 489

Health facilities, Medicare, Reporting and recordkeeping

requirements.

42 CFR Part 498

Administrative practice and procedure, Health facilities, Health

professions, Medicare, Reporting and recordkeeping requirements.

42 CFR chapter IV is amended as follows:

A. Part 400, subpart B is amended as follows:

PART 400--INTRODUCTIONS; DEFINITIONS

1. The authority citation for part 400 continues to read as

follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42

U.S.C. 1302 and 1395hh) and 44 U.S.C. chapter 35.

2. In Sec. 400.202, the introductory text is republished and the

definition for ``Provider'' is revised to read as follows:

Sec. 400.202 Definitions specific to Medicare.

As used in connection with the Medicare program, unless the context

indicates otherwise--

* * * * *

Provider means a hospital, an RPCH, a skilled nursing facility, a

comprehensive outpatient rehabilitation facility, a home health agency,

or a hospice that has in effect an agreement to participate in

Medicare, or a clinic, a rehabilitation agency, or a public health

agency that has in effect a similar agreement but only to furnish

outpatient physical therapy, or speech pathology services, or a

community mental health center that has in effect a similar agreement

but only to furnish partial hospitalization services.

* * * * *

B. Part 410 is amended as follows:

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

1. The authority citation for part 410 is revised to read as

follows:

Authority: Secs. 1102, 1832, 1833, 1834, 1835, 1861(r), (s),

(aa), (cc), and (ff), 1871, and 1881 of the Social Security Act (42

U.S.C. 1302, 1395k, 1395l, 1395m, 1395n, 1395x(r), (s), (aa), (cc),

and (ff), 1395hh, and 1395rr).

Subpart I--Payment of SMI Benefits

Sec.

410.150 To whom payment is made.

410.152 Amounts of payment.

410.155 Outpatient mental health treatment limitation.

410.160 Part B annual deductible.

410.161 Part B blood deductible.

410.163 Payment for services furnished to kidney donors.

410.165 Payment for rural health clinic services and ambulatory

surgical center services: Conditions.

410.170 Payment for home health services, for medical and other

health services furnished by a provider or an approved ESRD

facility, and for comprehensive outpatient rehabilitation facility

(CORF) services: Conditions.

410.172 Payment for partial hospitalization services in CMHCs:

Conditions.

410.175 Alien absent from the United States.

3. Section 410.2 is revised to read as follows:

Sec. 410.2 Definitions.

As used in this part--

Community mental health center (CMHC) means an entity that--(1)

Provides outpatient services, including specialized outpatient services

for children, the elderly, individuals who are chronically mentally

ill, and residents of its mental health service area who have been

discharged from inpatient treatment at a mental health facility;

(2) Provides 24-hour-a-day emergency care services;

(3) Provides day treatment or other partial hospitalization

services, or psychosocial rehabilitation services;

(4) Provides screening for patients being considered for admission

to State mental health facilities to determine the appropriateness of

such admission;

(5) Provides consultation and education services; and

(6) Meets applicable licensing or certification requirements for

CMHCs in the State in which it is located.

Nominal charge provider means a provider that furnishes services

free of charge or at a nominal charge, and is either a public provider

or another provider that (1) demonstrates to HCFA's satisfaction that a

significant portion of its patients are low-income; and (2) requests

that payment for its services be determined accordingly.

Partial hospitalization services means a distinct and organized

intensive ambulatory treatment program that offers less than 24-hour

daily care and furnishes the services described in Sec. 410.43.

Participating refers to a hospital, SNF, HHA, CORF, hospice, that

has in effect an agreement to participate in Medicare; or a clinic,

rehabilitation agency, or public health agency that has a provider

agreement to participate in Medicare but only for purposes of providing

outpatient physical therapy, occupational therapy, or speech pathology

services; or a CMHC that has in effect a similar agreement but only for

purposes of providing partial hospitalization services, and

nonparticipating refers to a hospital, SNF, HHA, CORF, hospice, clinic,

rehabilitation agency, public health agency, or CMHC, that does not

have in effect a provider agreement to participate in Medicare.

Sec. 410.3 [Amended]

4. In Sec. 410.3(a)(2), the phrase ``and comprehensive outpatient

rehabilitation facilities (CORFs).'' is revised to read ``comprehensive

outpatient rehabilitation facilities (CORFs), and partial

hospitalization services provided by community mental health centers

(CMHCs).''.

5. A new section Sec. 410.43 is added under subpart B to read as

follows:

Sec. 410.43 Partial hospitalization services: Conditions and

exclusions.

(a) Partial hospitalization services are services that--

(1) Are reasonable and necessary for the diagnosis or active

treatment of the individual's condition;

(2) Are reasonably expected to improve or maintain the individual's

condition and functional level and to prevent relapse or

hospitalization; and

(3) Include any of the following:

(i) Individual and group therapy with physicians or psychologists

or other mental health professionals to the extent authorized under

State law.

(ii) Occupational therapy requiring the skills of a qualified

occupational therapist.

(iii) Services of social workers, trained psychiatric nurses, and

other staff trained to work with psychiatric patients.

(iv) Drugs and biologicals furnished for therapeutic purposes,

subject to the limitations specified in Sec. 410.29.

(v) Individualized activity therapies that are not primarily

recreational or diversionary.

(vi) Family counseling, the primary purpose of which is treatment

of the individual's condition.

(vii) Patient training and education, to the extent the training

and educational activities are closely and clearly related to the

individual's care and treatment.

(viii) Diagnostic services.

(b) The following services are separately covered and not paid as

partial hospitalization services:

(1) Physicians' services that meet the criteria of part 405,

subpart F of this chapter for payment on a fee schedule basis in

accordance with part 414 of this chapter.

(2) Physician assistant services, as defined in section

1861(s)(2)(K)(i) of the Act, that are furnished after December 31,

1990.

(3) Clinical psychologist services, as defined in section 1861(ii)

of the Act, that are furnished after December 31, 1990.

6. Subpart E is redesignated as subpart I.

Subpart E--[Redesignated as Subpart I]

7. A new subpart E consisting of Sec. 410.110 is added to read as

follows:

Subpart E--Community Mental Health Centers (CMHCs) Providing

Partial Hospitalization Services

Sec. 410.110 Requirements for coverage of partial hospitalization

services by CMHCs.

Medicare part B covers partial hospitalization services furnished

by or under arrangements made by a CMHC if they are provided by a CMHC

as defined in Sec. 410.2 that has in effect a provider agreement under

part 489 of this chapter and if the services are--

(a) Prescribed by a physician and furnished under the general

supervision of a physician;

(b) Subject to certification by a physician in accordance with

Sec. 424.24(e)(1) of this subchapter; and

(c) Furnished under a plan of treatment that meets the requirements

of Sec. 424.24(e)(2) of this subchapter.

8. Subparts F through H are added and reserved as follows:

Subparts F through H--[Reserved]

9. In Sec. 410.150, the heading of paragraph (a) is republished,

paragraph (a)(2) is revised, the introductory text of paragraph (b)

introductory text is republished, and a new paragraph (b)(13) is added

to read as follows:

Sec. 410.150 To whom payment is made.

(a) General rules.

* * * * *

(2) The services specified in paragraphs (b)(5) through (b)(13) of

this section must be furnished by a facility that has in effect a

provider agreement or other appropriate agreement to participate in

Medicare.

(b) Specific rules. Subject to the conditions set forth in

paragraph (a) of this section, Medicare Part B pays as follows:

* * * * *

(13) To a community mental health center (CMHC) on the individual's

behalf, for partial hospitalization services furnished by the CMHC (or

by others under arrangements made with them by the CMHC).

10. In Sec. 410.155, the section heading and paragraph (b) are

revised to read as follows:

Sec. 410.155 Outpatient mental health treatment limitation.

* * * * *

(b) Services subject to limitation. The mental health treatment

limitation applies to the following services furnished for the

treatment of a mental, psychoneurotic, or personality disorder, when

the services are furnished to an individual who is not an inpatient in

a hospital:

(1) CORF services.

(2) Physicians' services that meet the criteria of part 405,

subpart F of this chapter for payment on a fee schedule basis in

accordance with part 414 of this chapter.

(3) Physician assistant services, as defined in section

1861(s)(2)(K)(i) of the Act, that are furnished after December 31,

1990.

(4) Clinical psychologist services, as defined in section 1861(ii)

of the Act, that are furnished after December 31, 1990.

* * * * *

11. A new Sec. 410.172 is added to read as follows:

Sec. 410.172 Payment for partial hospitalization services in CMHCs:

Conditions.

Medicare Part B pays for partial hospitalization services furnished

in a CMHC on behalf of an individual only if the following conditions

are met:

(a) The CMHC files a written request for payment on the HCFA form

1450 and in the manner prescribed by HCFA; and

(b) The services are furnished in accordance with the requirements

described in Sec. 410.110.

C. Part 413 is amended as follows:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR

END-STAGE RENAL DISEASE SERVICES

1. The authority citation for part 413 continues to read as

follows:

Authority: Secs. 1102, 1814(b), 1815, 1833(a), (i) and (n),

1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42

U.S.C. 1302, 1395f(b), 1395g, 1395l(a), (i) and (n), 1395x(v),

1395hh, 1395rr, 1395tt, and 1395ww); sec. 104(c) of Pub. L. 100-360,

as amended by sec. 608(d)(3) of Pub. L. 100-485 (42 U.S.C. 1395ww

(note)) and sec. 101(c) of Pub. L. 101-234 (42 U.S.C. 1395ww(note)).

2. In Sec. 413.1, the introductory text of paragraph (a)(1) is

republished; a new paragraph (a)(1)(viii) is added; and paragraph

(a)(2) is revised to read as follows:

Sec. 413.1 Introduction.

(a) Scope.

(1) General summary. This part sets forth regulations governing

Medicare payment for services furnished to beneficiaries by--

* * * * *

(viii) Community mental health centers (CMHCs) but only for

purposes of furnishing partial hospitalization services.

(2) Applicability. The principles of payment and the related

policies described in this part apply to HCFA, to the fiscal

intermediaries acting as payers of claims on HCFA's behalf, to the

Provider Reimbursement Review Board, and to the hospitals, SNF, HHAs,

CORFS, ESRD facilities, OPTs, OPAs, histocompatibility laboratories,

and CMHCs receiving payment under this part.

Sec. 413.13 [Amended]

3. In Sec. 413.13(b)(1), the phrase ``and OPTs'' is revised to read

``OPTs, and CMHCs but only for purposes of providing partial

hospitalization services,''.

D. Part 489 is amended as follows:

PART 489--PROVIDER AND SUPPLIER AGREEMENTS UNDER MEDICARE

1. The authority citation for part 489 continues to read as

follows:

Authority: Secs. 1102, 1861, 1864(m), 1866, and 1871 of the

Social Security Act (42 U.S.C. 1302, 1395x, 1395aa(m), 1395cc, and

1395hh).

2. In Sec. 489.2, the introductory text to paragraph (b) is

republished, a new (b)(8) is added, and paragraph (c) is revised to

read as follows:

Sec. 489.2 Scope of part.

* * * * *

(b) The following providers are subject to the provisions of this

part:

* * * * *

(8) Community mental health centers (CMHCs).

(c)(1) Clinics, rehabilitation agencies, and public health agencies

may enter into provider agreements only for furnishing outpatient

physical therapy, and speech pathology services.

(2) CMHCs may enter into provider agreements only to furnish

partial hospitalization services.

Sec. 489.10 [Amended]

3. In Sec. 489.10(b), the phrase ``The provider must meet the

requirements of:'' is revised to read ``The provider must meet the

applicable civil rights requirements of:''.

Sec. 489.12 [Amended]

4. In Sec. 489.12(c), the phrase ``45 CFR parts 80, 84, and 90.''

is revised to read ``45 CFR parts 80, 84, and 90, subject to the

provisions of Sec. 489.10.''.

5. Section 489.13 is revised to read as follows:

Sec. 489.13 Effective date of agreement.

(a) All Federal requirements are met on the date of the survey.

Except as provided in paragraph (c) of this section, the agreement

is effective on the date the onsite survey is completed (or on the day

following the expiration date of a current agreement) if, on the date

of the survey, the provider meets all Federal health and safety

conditions of participation or level A requirements (for SNFs), and any

other requirements imposed by HCFA.

(b) All Federal requirements are not met on the date of the survey.

Except as provided in paragraph (c) of this section, if the

provider fails to meet any of the requirements specified in paragraph

(a) of this section, the agreement is effective on the earlier of the

following dates:

(1) The date on which the provider meets all requirements.

(2) The date on which the provider submits a correction plan

acceptable to HCFA or an approvable waiver request, or both.

(c) Community mental health center (CMHC). The effective date of a

provider agreement with a CMHC is determined as follows:

(1) Request for Medicare participation received before July 1,

1992.

(i) If all Federal requirements were met by October 1, 1991, the

agreement is effective October 1, 1991, or such later date as requested

by the CMHC.

(ii) If all Federal requirements were not met by October 1, 1991,

the agreement is effective on the date the CMHC meets all Federal

requirements.

(2) Request for Medicare participation received after June 30,

1992. The agreement is effective on the date the CMHC meets all Federal

requirements, but not before the date HCFA receives the application.

E. Part 498 is amended as follows:

PART 498--APPEALS PROCEDURES FOR DETERMINATIONS THAT AFFECT

PARTICIPATION IN THE MEDICARE PROGRAM

1. The authority citation for part 498 is revised to read as

follows:

Authority: Secs. 205(a), 1102, 1861(aa), 1866, 1869(c), 1871,

and 1872 of the Social Security Act (42 U.S.C. 405(a), 1302,

1395x(aa), 1395cc, 1395ff(c), 1395hh, and 1395ii), unless otherwise

noted.

2. In Sec. 498.2, the introductory text is republished, the

definition for ``Prospective supplier'' is removed and definitions for

``Provider'' and ``Supplier'' are revised to read as follows:

Sec. 498.2 Definitions.

As used in this part--

* * * * *

Provider means a hospital, skilled nursing facility (SNF),

comprehensive outpatient rehabilitation facility (CORF), home health

agency (HHA), or hospice, that has in effect an agreement to

participate in Medicare; or a clinic, rehabilitation agency, or public

health agency that has in effect a similar agreement but only to

furnish outpatient physical therapy, occupational therapy, or

outpatient speech pathology services, or a community mental health

center (CMHC) that has in effect a similar agreement but only to

provide partial hospitalization services, and prospective provider

means any of the listed entities that seeks to participate in Medicare

as a provider.

Supplier means an independent laboratory, supplier of portable X-

ray services, rural health clinic (RHC), Federally qualified health

center (FQHC), ambulatory surgical center (ASC), organ procurement

organization (OPO), or end-stage renal disease (ESRD) treatment

facility that is approved by HCFA as meeting the conditions for

coverage of its services, and prospective supplier means any of the

listed entities that seeks to be approved for coverage of its services

under Medicare. (However, for purposes of the sanctions and penalties

that may be imposed by the OIG, the term supplier has the meaning

specified in Sec. 1001.2 of this title.)

(Catalog of Federal Domestic Assistance Program No. 93.774,

Medicare--Supplementary Medical Insurance Program)

Dated: September 15, 1993.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

Approved: October 26, 1993.

Donna E. Shalala,

Secretary.

[FR Doc. 94-2680 Filed 2-10-94; 8:45 am]

BILLING CODE 4120-01-P