Medicare and Medicaid Programs; Hospital Conditions of Participation; Provider Agreements and Supplier Approval

SUMMARY: This proposed rule would revise the requirements that

hospitals must meet to participate in the Medicare and Medicaid

programs. The revised requirements focus on patient care and the

outcomes of that care, reflect a cross-functional view of patient

treatment, encourage flexibility in meeting quality standards, and

eliminate unnecessary procedural requirements. These changes are

necessary to reflect advances in patient care delivery and quality

assessment practices since the requirements were last revised in 1986.

They are also an integral part of the Administration's efforts to

achieve broad-based improvements in the quality of care furnished

through Federal programs and in the measurement of that care, while at

the same time reducing procedural burdens on providers. In addition, in

an effort to increase the number of organ donations, we are proposing

changes in the interaction between hospitals and organ procurement

organizations. The proposed rule also would specify that HCFA may

terminate the participation agreement of a hospital, skilled nursing

facility, home health agency, or other provider if the provider refuses

to allow access to its facilities, or examination of its operations or

records, by or on behalf of HCFA, as necessary to verify that it is

complying with the Medicare law and regulations and the terms of its

provider agreement.

DATES: Comments will be considered if received at the appropriate

address, as provided below, no later than 5 p.m. on February 17, 1998.

ADDRESSES: Mail written comments (one original and three copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: HCFA-3745-P, P.O. Box 7517,

Baltimore, MD 21207-0517.

If you prefer, you may deliver your written comments (one original

and three copies) to one of the following addresses:

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

Washington, DC 20201, or

Room C5-09-26, Central Building, 7500 Security Boulevard, Baltimore, MD

21244-1850.

Because of staffing and resource limitations, we cannot accept

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

to file code HCFA-3745-P. 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).

For comments that relate to information collection requirements,

mail a copy of comments to: Office of Information and Regulatory

Affairs, Office of Management and Budget, Room 10235, New Executive

Office Building, Washington, DC 20503, Attn: Allison Herron Eydt, HCFA

Desk Officer.

Copies: To order copies of the Federal Register containing this

document, send your request to: New Orders, Superintendent of

Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date

of the issue requested and enclose a check or money order payable to

the Superintendent of Documents, or enclose your Visa or Master Card

number and expiration date. Credit card orders can also be placed by

calling the order desk at (202) 512-1530 or by faxing to (202) 512-

2250. The cost for each copy is $8.00. As an alternative, you can view

and photocopy the Federal Register document at most libraries

designated as Federal Depository Libraries and at many other public and

academic libraries throughout the country that receive the Federal

Register.

FOR FURTHER INFORMATION CONTACT: Frank Emerson, (410) 786-4656, Doris

Jackson, RN, (410) 786-0095, Rachael Weinstein, RN, (410) 786-6775.

SUPPLEMENTARY INFORMATION:

I. Introduction

As part of the President's and Vice President's regulatory reform

initiative, the Health Care Financing Administration (HCFA) is

committed to changing current regulations that focus largely on

requirements for measuring procedural standards. One of HCFA's key

initiatives in Reinventing Government (REGO) is to revise many of its

conditions of participation (COPs) to focus on outcomes of care and to

eliminate unnecessary procedural requirements. HCFA is working in

partnership with the rest of the health care community to institute

better, more commonsense ways of operating. On March 10, 1997 we

published a proposed rule (62 FR 11004) that includes revisions for

COPs for HHAs. Within the coming year, HCFA plans to propose revisions

to the COPs for hospitals and end stage renal disease (ESRD) facilities

and also to mount additional research in the area of ESRD to provide

the basis for future changes.

What these efforts have in common is--

1. Reinventing Government (REGO) Initiative

To meet our REGO commitment, we are focusing on an approach for all

sets of COPs that are:

Transitional toward a patient outcome based system.

Intended to stimulate improvements in processes, outcomes

of care, and patient satisfaction.

Patient centered.

Supported by patient outcomes data.

Interdisciplinary in the approach to care delivery,

reflecting the team approach to health care delivery.

The COPs generally adhere to these basic requirements, varying in

some degree due to the unique environment and patient case mix of the

provider type.

2. Transitional Framework

The transitional framework for each set of COPs--

Begins shifting the oversight focus toward patient health

outcomes and away from burdensome and costly procedural requirements,

restructures the traditional COPs along essential conditions centered

on patient care, and reflects an interdisciplinary team approach to

patient care.

Prepares the foundation for provider adoption and use of

more detailed patient outcome measures developed through private sector

experience and research.

Provides a flexible framework for incorporating better

measures as they are developed and tested.

3. Structure

The basic structure of all of the COP follows the Joint Commission

on Accreditation of Healthcare Organizations' (JCAHOs) ``Agenda for

Change.'' This structure involves reducing the number of conditions;

focusing on comprehensive assessment and patient outcomes; and

deleting,

[[Page 66727]]

where possible, process requirements that are not specifically mandated

by the statute or believed likely to produce outcomes vital to the

protection of patient safety.

Each set of COPs has the same essential four conditions that

reflect the cycle of patient-centered care. The essential four

conditions are:

Patient rights.

Patient assessment.

Care planning and coordination of services.

Quality assessment and performance improvement.

Each of the sets of COP requirements are tailored to specific

statutory requirements, the historical context of the provider type,

and the unique form of care delivery and patient case mix.

4. Professional Input

For each set of COP, national meetings of provider and practitioner

groups and beneficiary representatives were held. Our partners in State

survey agencies were also consulted about our approach and provided

comments. Each proposed set of COP reflects extensive consultation with

these groups. We recognize the importance of collaboration and

communication with the industry and invite further comment on the

proposed COP and related rules.

II. Background

A. Statutory Basis

Sections 1861(e) (1) through (8) of the Social Security Act (the

Act) provide that a hospital participating in the Medicare program must

meet certain specified requirements. Section 1861(e)(9) of the Act

specifies that a hospital also must meet such other requirements as the

Secretary finds necessary in the interest of the health and safety of

the hospital's patients. Under this authority, the Secretary has

established the requirements that a hospital must meet to participate

in Medicare in regulations at 42 CFR Part 482, Conditions of

Participation for Hospitals.

Section 1905(a) of the Act provides that Medicaid payments may be

applied to hospital services. Under regulations at 42 CFR

440.10(a)(3)(iii), hospitals generally are required to meet the

Medicare conditions of participation in order to participate in

Medicaid.

The purposes of these conditions are to protect patient health and

safety and to ensure that quality care is furnished to all patients in

Medicare-participating hospitals. Surveyors use the conditions to

determine whether a hospital qualifies for a provider agreement under

Medicare and Medicaid. Under section 1865 of the Act and 42 CFR 488.5

of the regulations, hospitals that are accredited by the Joint

Commission on Accreditation of Healthcare Organizations (JCAHO) or the

American Osteopathic Association (AOA) are not routinely surveyed for

compliance with the conditions but are deemed to meet most of the

requirements in the hospital conditions of participation based on their

accreditation. (See 42 CFR part 488, Survey and Certification

Procedures.)

B. Why Revise the Conditions of Participation

The current conditions of participation (COPs) were adopted in 1986

and for the most part have not been revised since that time. They are

organized according to the types of services a hospital may offer, and

include specific, process-oriented requirements for each hospital

service or department. Since the current conditions were developed,

however, significant innovations in hospital patient care delivery

systems and quality assessment practices have emerged, as evidenced by

the JCAHO's recent revision of its accreditation standards and redesign

of its survey process.

Moreover, as discussed above, the revision of the hospital

requirements is part of a larger effort by HCFA to bring about

improvements in the quality of care furnished to Federal beneficiaries

through a new approach to our quality of care responsibilities. The

existing hospital COPs do not provide patient-centered, outcome-

oriented standards, nor do they provide for the operation of a quality

assessment and performance improvement program. Historically, we set

requirements for participation in the Medicare program by establishing

requirements that address the structures and processes of health care.

These requirements are largely the result of professional consensus,

since there are no data supporting the link between structure and

process requirements and positive patient outcomes. The combination of

process-oriented requirements with an enforcement approach that focuses

on identifying providers that do not have the required structures and

procedures in place no longer represents the best available method for

assessing and improving hospital quality of care. Thus, we have

concluded that significant revisions to the hospital conditions of

participation are essential.

C. Transforming the Hospital Conditions of Participation

We are committed to working with affected parties to implement

revised COPs that impose the minimum burden on hospitals and allow

hospitals maximum flexibility in meeting the Federal requirements

necessary to fulfill our quality of care responsibilities. Thus, in

developing revised conditions, we have solicited suggestions from

organizations representing hospitals, practitioners, patients, and

States, including distributing an informal, preliminary draft of the

proposed hospital COPs to approximately 70 groups for comment. We have

used those comments in the development of the revised COPs contained in

this proposed rule.

The fundamental principles that guided the development of the

proposed COPs were the need to:

Focus on the continuous, integrated care process that a

patient experiences across all aspects of hospital services, centered

around patient assessment, care planning, service delivery, and quality

assessment and performance improvement.

Adopt a patient-centered approach that recognizes the

contributions of various skilled professionals and how they interact

with each other to meet the patient's needs. Thus, we would eliminate

requirements that encourage ``stovepipe'' administrative and

enforcement structures.

Stress quality improvements, incorporating to the greatest

possible extent an outcome-oriented, data-driven quality assessment and

performance improvement program. Thus, the new COPs would invest our

principal expectations for performance in an overarching requirement

that each hospital participate in its own quality assessment and

performance improvement program.

Facilitate flexibility in how a hospital meets our

performance expectations, and eliminate process requirements unless

there is consensus or evidence that they are predictive of desired

outcomes for patients.

Require that patient rights are assured.

Based on these principles, we are proposing new hospital conditions

of participation that revise or eliminate many existing requirements

and incorporate critical requirements into four ``core conditions.''

These four COPs--Patient Rights; Patient Admission, Assessment, and

Plan of Care; Patient Care; and Quality Assessment and Performance

Improvement--would focus both

[[Page 66728]]

provider and surveyor efforts on the actual care delivered to the

patient, the performance of the hospital as an organization, and the

impact of the treatment furnished by the hospital on the health status

of its patients. The first, Patient Rights, emphasizes a hospital's

responsibility to respect and promote the rights of each hospital

patient. The second proposed core COP, Patient Admission, Assessment,

and Plan of Care, reflects the critical nature of a comprehensive

assessment and a resulting plan of care in determining appropriate

treatments and accomplishing desired health outcomes. It also would

incorporate the need for a coordinated, team approach to planning care.

The third proposed core COP, Patient Care, focuses on the actual

delivery of care. Finally, the proposed Quality Assessment and

Performance Improvement COP would charge each hospital with

responsibility for carrying out a performance improvement program of

its own design to effect continuing improvement in the quality of care

furnished to its patients.

In the revised COPs, we are proposing to include process-oriented

requirements only where we believe they remain highly predictive of

ensuring desired outcomes or are necessary to deter or prevent fraud

and abuse (for example, the requirement for error-free medication

administration under the pharmaceutical services COP). Far more

frequently, however, we have eliminated process details from the

existing requirements and instead included the related area of concern

as a component that must be evaluated as part of the hospital's overall

quality assessment and performance improvement responsibilities. For

example, we would no longer specify that a hospital must make available

to medical staff a written description of its laboratory services.

However, we would continue to require that a hospital provide

laboratory services needed to meet its patients' needs and would

specify under the proposed quality assessment and performance

improvement condition that a hospital's assessment and performance

improvement program must include evaluation of its diagnostic services.

The practical effect of this approach would be to stimulate the

hospital to find its own performance problems, fix them, and

continuously strive to improve patient outcomes and satisfaction, as

well as efficiency and economy.

We believe that the proposed COPs based on these principles reflect

a fundamental change in HCFA's regulatory approach, a change that to a

large extent establishes a shared commitment between HCFA and Medicare

providers to achieve improvements in the quality of care furnished to

their patients. The proposed COPs invest hospitals with internal

responsibility for improving their performance, rather than relying on

an externally-based approach in which prescriptive Federal requirements

are enforced through the punitive aspects of the survey process. This

change would enable HCFA and the States to focus more resources on

joining with hospitals (in this case, principally non-accredited

hospitals) in partnerships for improvement. It should result in fewer

compliance surveys and the reduced need to threaten or take adverse

actions that could jeopardize a hospital's reputation, financial

viability, and participation in the Medicare and Medicaid programs.

Yet these requirements provide the Secretary and State Medicaid

agencies with more than adequate regulatory basis for compelling

improved performance or termination of participation based on failure

to correct seriously deficient performance that can or does threaten

the health and safety of patients, or seriously impairs the hospital's

capacity to provide needed care and services to patients. Under the

current regulations, termination actions are initiated based on the

evidence found during the survey. We foresee no changes in that regard

in applying the new COPs.

Thus, as with the current COPs, the enforceability of the proposed

COPs will be rooted in the evidence found during the onsite survey when

poor performance is identified and corrective action is not taken. We

believe that if there is a need to seek a provider agreement

termination based on the proposed COP, although a hospital may argue

that its performance met the regulatory standards, HCFA will be

successful at arguing that based on the evidence found during a survey

the requirements of the regulation were not met. In fact, we believe

the enforceability is strengthened by standards that establish outcome-

oriented performance expectations. When poor performance is documented

from the evidence found during a survey and compared to the performance

expectations embodied in these patient-centered, outcome-oriented COPs,

we believe the contrast between the poor performance identified and the

performance expectation of the COP will be clear.

We recognize that an important part of the successful

implementation of these proposed regulations will depend on how

effectively State and Federal surveyors are able to learn and

internalize this patient-centered, outcome-oriented approach and

incorporate it into the survey process. The proposed approach embodied

in these regulations, in fact, parallels the approach that we have

taken in survey and certification, beginning as early as 1985 (for

intermediate care facilities for the mentally retarded) and 1986 (for

nursing homes). In concert with the States, we have trained surveyors

to develop information from the survey process that leads to

conclusions about how the provider's performance has impacted--

positively and negatively--on patients, especially in terms of what the

patients actually experience. For example, for nearly a decade, nursing

home surveyors have been trained to interview residents and family

members, seeking information that contributes to their assessment of

how the nursing home's performance is experienced by the residents and

their families. Before the use of outcome-oriented surveys, surveyors

focused almost exclusively on record reviews and observing care

processes and organizational structures.

These proposed regulations contain two critical improvements that

support and extend the change to patient-centered, outcome-oriented

surveys. First, the proposed regulations are designed to enable

surveyors to focus explicitly on assessing outcomes of care, because

the regulations would specify that each individual receive the care her

or his assessed needs show is necessary, rather than requiring that

certain services and processes be in place. Also, the addition of a

strong, quality assessment and performance improvement requirement not

only stimulates the provider to continuously monitor its performance

and to find opportunities for improvement, it affords the surveyor the

opportunity to assess how effectively the provider has pursued a

continuous quality improvement agenda. All of these changes are

directed toward improving outcomes of care and satisfaction for

patients.

We have already begun the process of identifying the tasks

necessary to train surveyors and their supervisors and managers

effectively in this refined, expanded approach. In addition, HCFA is

implementing a new State survey agency quality improvement program that

is designed to help State survey agencies increase their focus on

improvement strategies in the survey and certification process. As more

sources of performance data become available, we will be helping State

survey agencies to learn how to use

[[Page 66729]]

these data effectively to target scarce survey resources and to

identify and implement opportunities for improvement (e.g., reduction

in falls or in nosocomial infection rates).

The proposed COPs are designed to decrease the regulatory burden on

hospitals and provide them with greatly enhanced flexibility. At the

same time, the proposed requirement for a program of continuous quality

assessment and performance improvement would increase performance

expectations for hospitals in terms of achieving needed and desired

outcomes for patients and increasing patient satisfaction with services

provided. We invite public comment on this fundamental shift in our

regulatory approach. We are especially interested in comments that

address how HCFA could improve this approach, what additional

flexibility could be provided, what process requirements are critical

to patient care and safety and how well HCFA's investment in the

hospital's participation in a strong continuous quality assessment and

performance improvement program of their own design will achieve our

intended goal of improving the efficiency, effectiveness and quality of

patient outcomes and satisfaction.

D. Development of National Outcome-Based Performance Measures for

Hospitals

Before proceeding to a detailed discussion of the proposed

requirements, we want to touch briefly on the prospects for standard

outcome-based performance measures for hospital services. As mentioned

above, HCFA is committed, through its Strategic Plan, to increasing the

amount and quality of information about health care to beneficiaries,

providers, plans, and the public at large. The purpose of this effort

is to improve the ability of:

Beneficiaries to make informed choices about their health

care;

Providers to improve the effectiveness and efficiency of

their services, improve the outcomes of care they provide, and increase

beneficiary satisfaction with their services;

Organizations such as health maintenance organizations and

insurance companies to choose providers, and evaluate and improve the

performance of providers with which they contract; and

The public to know more about the availability and quality

of health care services in their communities.

Through various initiatives, such as the Consumer Information

Program's mammography screening initiative, HCFA is implementing its

broad-based information strategy. A strong quality assessment and

performance improvement (QAPI) requirement in the proposed hospital

conditions of participation, as well as similar requirements in

proposed HHA, hospice, and ESRD conditions, is intended to stimulate

providers to develop and use a wide variety of information and data,

from internal and external sources, to inform their improvement

efforts. We go into more detail on this and industry efforts to

implement QAPI later in the discussion on the QAPI conditions in

section II.B.5 of the preamble.

We have proposed requiring that HHAS and we are contemplating

requiring that ESRD facilities report certain standard core data to

HCFA to serve as the basis of a national performance measures data

base, which could then be used for provider improvement, consumer

information and other purposes. We are able to suggest this for HHAs

and ESRD facilities because extensive work has been done on performance

measures in both areas. However, with hospitals the challenge is

greater and sufficient similar work has not been done on hospital

measures, as described later in section II.B.5 of this preamble

(Sec. 482.25), that could produce common agreement on measures that

would be acceptable for use on a national basis.

Therefore, we have decided not to include in the hospital COPs any

requirement for hospitals to collect and report certain standard data

items (for example, nosocomial infection rates, medication errors,

reports of falls and other injuries, restraint use, various patient

characteristic data elements, etc.) that could produce quality of care

predictors in the future. Although we eventually intend to move in that

direction in hospitals, we do not believe it is reasonable to establish

any related requirements at this time, in view of the lack of any

current consensus or science that could establish a reliable and valid

set of measures.

However, we invite comments from the public in response to the

following questions:

1. Should HCFA (either separately or in a public/private

partnership of some sort) assume a leadership role in developing and

implementing hospital-based performance measures that would serve as

the basis of a national quality assessment and performance improvement

data base?

2. If so, how should HCFA proceed to develop and implement this

system?

3. If HCFA does not assume a leadership role in this area,

individual hospitals invest in the development of multiple systems, and

those systems are later superseded by a single required system, would

the overall burden be greater than if a single system had been imposed

at the outset?

4. If HCFA does not assume a leadership role in this area and

individual hospitals adopt multiple systems that produce

nonstandardized data, to what extent would it be difficult or

impossible to use these data to make comparisons between hospitals?

5. Should HCFA require or encourage hospitals to use the

standardized measures that some accredited hospitals are using? The

advantage would be that hospitals using such standardized choices would

not have to develop their own measures and their results could be

compared to other hospitals with similar characteristics. Examples

include: (1) Number of days from initial surgery to discharge for

patients undergoing isolated coronary artery bypass graft procedures;

and (2) time from the emergency department arrival to procedure for

trauma patients undergoing specified abdominal surgical procedures.

6. Would it be appropriate for HCFA to include any ``placeholder''

language in the revised COPs concerning the eventual need for hospitals

to report relevant data, or is this premature?

7. If HCFA should include placeholder language, what changes should

we make to these proposed requirements to set the stage for the

development and implementation of such a system?

Even without a performance measure-based national system, we expect

hospitals to develop and use their own measures and other available

external information to inform their own quality assessment and

improvement programs, and to participate in any external quality

improvement programs (such as a national program to reduce the use of

inappropriate psychoactive medications in hospitals) as the Secretary

may direct.

II. Provisions of the Proposed Rule

A. Overview

Under our proposal, the hospital conditions of participation would

continue to be set forth in regulations under 42 CFR part 482. However,

since the majority of the existing requirements in part 482 would be

revised, consolidated with other requirements, or eliminated, we are

proposing a complete overhaul of the organizational scheme. The most

significant change would be our proposal to group together all COPs

directly related to patient care in Subpart B, Patient Care Activities.

Then, in Subpart C, Organizational

[[Page 66730]]

Environment, we would group together those organizational activities

the hospital must perform to support the delivery of patient care. We

believe that this proposed format would embody the patient-centered

focus of our proposed changes, emphasizing the continuous, integrated

care processes that a patient experiences across all aspects of the

hospital environment. Also, because functions and processes for

delivering patient care often require interdisciplinary teamwork

involving many hospital departments and services, the proposed

regulations would incorporate a functional framework for the COPs

rather than maintaining a stovepipe approach that gives the appearance

that patient care activities can occur in isolation.

The complete proposed new organizational format for part 482 is as

follows:

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

Subpart A--General Provisions

482.5 Basis and scope.

482.10 Condition of participation: Patient rights.

Subpart B--Patient Care Activities

482.15 Condition of participation: Patient admission, assessment,

and plan of care.

482.20 Condition of participation: Patient care.

482.25 Condition of participation: Quality assessment and

performance improvement.

482.30 Condition of participation: Diagnostic and therapeutic

services or rehabilitative services.

482.35 Condition of participation: Pharmaceutical services.

482.40 Condition of participation: Nutritional services.

482.45 Condition of participation: Surgical and anesthesia

services.

482.50 Condition of participation: Emergency services.

482.55 Condition of participation: Discharge planning.

Subpart C--Organizational Environment

482.110 Condition of participation: Administration of

organizational environment.

482.115 Condition of participation: Infection control.

482.120 Condition of participation: Information management.

482.125 Condition of participation: Human resources.

482.130 Condition of participation: Physical environment.

482.135 Condition of participation: Life safety from fire.

482.140 Condition of participation: Blood and blood product

transfusions.

482.145 Condition of participation: Potentially infectious blood

and blood products.

482.150 Condition of participation: Utilization review.

Subpart D--Requirements for Specialty Hospitals

482.155 Special provisions applying to psychiatric hospitals.

482.160 Condition of participation: Special medical record

requirement for psychiatric hospitals.

482.165 Condition of participation: Special staff requirements for

psychiatric hospitals.

482.170 Special requirements for hospital providers of long-term

care services (``swing-beds'').

We note that although we are proposing no changes to the

requirements for specialty hospitals, the existing requirements would

be redesignated numerically to accommodate the proposed changes to the

preceding COPs.

B. Discussion of Proposed Conditions

1. Basis and Scope (Sec. 482.1)

We are proposing to add a new paragraph (a)(6) to the statutory

basis section for part 482 that sets forth, under section 1138 of the

Act, requirements for hospital protocols for organ procurement and

standards for organ procurement agencies' agreements with hospitals for

organ procurements. This provision will further the authority governing

organ procurements.

2. Patient Rights (Sec. 482.10)

Under section 1861(e)(9) of the Act, an institution may be

recognized by Medicare as a hospital only if, in addition to meeting

the specific requirements in the preceding sections of that provision,

it meets such other requirements as the Secretary finds necessary in

the interest of patient health and safety. In our view, patient health

and safety cannot be protected simply by avoiding obvious risk factors

such as poor infection control practices or inadequate nurse staffing

(as documented in recent literature on the effects of Nursing on

patient outcomes such as morbidity, mortality, length of stay, and

cost--see Keeler, E., et al., ``Hospital Characteristics and Quality of

Care,'' JAMA 268 (1992): 1709-1714.; and Krakauer, H., et al.,

``Evaluation of the HCFA for the Analysis of Mortality Following

Hospitalization,'' Health Services Research 27 (1992): 317-335).

Patient rights dealing with freedom from physical or verbal abuse,

harassment, or inappropriate restraints are examples of direct

protections of patients' physical and emotional health and safety. In

addition, patients' successful recoveries from illness or injury depend

on many factors related to their psychological and emotional health,

including their general feeling of well-being. Because of the

importance of these psychological and emotional factors, we believe

patient health and safety can be protected adequately only if patient

care is delivered in an atmosphere of respect for the individual

patient's comfort, dignity, and privacy.

This view is shared by other parties involved in the development of

these conditions of participation, many of whom expressed strong

support for the inclusion of specific provisions addressing patient

rights. Therefore, we propose to set forth a new condition of

participation that would recognize explicitly that a hospital must

protect and promote certain patient rights.

The proposed condition is composed of five standards. The first

proposed standard would require that a hospital inform each patient of

his or her rights in advance of furnishing care. It also would require

that a hospital have a grievance process and must indicate who a

patient should contact if he or she desires to express a grievance. We

are not proposing a specific method as to how a hospital should notify

each patient of his or her rights, or establishing structural or

procedural expectations about how a hospital's patient grievance

process should be set up. Instead, we believe each hospital should

implement a patient rights policy that reflects its specific manner of

operations and minimizes administrative burden, as long as the hospital

meets the underlying expectation that it informs patients about their

rights and about whom to contact when patients believe these rights

have been violated.

The remaining four proposed standards under the patient rights

condition would establish a minimum set of required patient rights. In

developing these provisions, we closely examined the regulations

concerning patient rights for other provider types, such as nursing

homes and HHAs. Because the nature of patient care varies among

provider types, we are proposing only those patient rights that we

believe are appropriate and necessary in the hospital setting. Based on

the strong support from all parties involved in the development of

these proposed hospital conditions, we are proposing that a patient

should have the following rights:

The right to be informed of his or her rights, to

participate in the development and implementation of the individual's

plan of care, and to make decisions regarding that care.

[[Page 66731]]

The right to formulate advance directives and to have

those directives followed.

The right to privacy and to receive care in a safe

setting.

The right to be free from verbal or physical abuse or

harassment.

The right to confidentiality of his or her clinical

records.

The right to access information contained in his or her

clinical records within a reasonable time.

The right to be free from the use of seclusion and

restraints as a means of coercion, convenience, or retaliation by

staff. If seclusion or restraints are used (including

psychopharmacological drugs used as restraints) they must be used in

accordance with a patient's plan of care and may be used only as a last

resort and in the least restrictive manner possible, to protect the

patient or others from harm. Restraints must be removed or seclusion

ended at the earliest possible time.

We believe these proposed patient rights are clearly necessary in

the interest of patient health and safety and are for the most part

self-explanatory. We note that the rights concerning advance directives

are tied directly to the statute (section 1866(f) of the Act), and the

hospital's responsibilities in these areas are more fully described in

other sections of the regulations (see existing Sec. 489.102). However,

we believe it is appropriate to reference advance directives in the

proposed patient rights section, consistent with the reference to

advance directives in the patient rights sections of the existing

regulations for both nursing homes and HHAs.

We considered proposing a specific time period within which a

hospital would be required to provide access to requested medical

records under proposed Sec. 482.10(d)(2), but concluded that the

proposed requirement that a hospital provide access to such information

within a ``reasonable'' time is more feasible. If a former patient

requests access to 3-year-old closed medical records, which could be in

storage, a ``reasonable'' time to retrieve them likely would be longer

than if the spouse (with appropriate power of attorney) of an inpatient

requests to see the medical records of her or his spouse who is still

in the hospital. In the former case, a ``reasonable'' time might be

measured in days, whereas it could be hours in the latter example.

Thus, we believe that ``reasonable'' must be defined in terms of the

individual circumstances. Most important, we believe that

``reasonable'' means that the hospital will not frustrate the

legitimate efforts of individuals to gain access to their own medical

records and will actively seek to meet those requests as quickly as its

recordkeeping system permits. If a hospital receives complaints from

patients or their legal representatives about delays in gaining access

to properly requested records, we would expect that the hospital would

both respond quickly to resolve the complaints and consider the

complaints as an opportunity for improvement as part of its quality

assessment and performance improvement program. In summary, we believe

that the use of the word ``reasonable'' sets the proper performance

standard for the hospital without imposing an arbitrary burden, while

at the same time enabling surveyors to take action if a hospital is

systematically frustrating legitimate efforts to gain access to medical

records. We welcome comments on the appropriateness of our decision not

to propose any specific timeframe for providing access to a patient's

records.

We also strongly considered expanding the proposed patient rights

provisions (or establishing separate requirements) to provide further

detail related to a patient's right to be free from seclusion or

restraints. We recognize that the use of restraints or seclusion has

the potential to produce serious consequences for a patient's health

and safety, such as physical and psychological harm, loss of dignity,

violation of civil rights, and even death. Thus, our expectation is

that a hospital would impose restraints or seclusion only when

absolutely necessary to prevent immediate injury to the patient or

others and when no alternative means are sufficient to accomplish this

purpose. We also expect that when restraints or seclusion are used, the

plan of care should address how and when such practices are to be

employed, and patients placed under restraints or in seclusion would be

released as soon as they no longer pose an immediate threat of injury

to themselves or others. Although we have built these expectations into

the proposed patient rights provisions, the question remains whether it

would be advisable to add further, more prescriptive requirements

concerning the use of seclusion or restraints. One possibility would be

to incorporate into the regulations a series of specific requirements

governing the use of restraints and seclusion, as detailed below:

Seclusion or restraints may only be used to the extent

authorized by the signed order of a physician. Written authorization

must include the date and time of the order, and the reason for

seclusion or restraint. For restraint, the order must include the type

of restraint(s) and the number of restraint points.

Each order for seclusion or restraints must be in writing,

must be time-limited and specify start and end times. Implementing a

time-limited order does not require applying the intervention for the

entire period if the patient demonstrates a reduction or change in the

behavior that led to being placed in restraint or seclusion.

A renewal order may be issued if the physician clinically

assesses the patient face to face and determines that seclusion or

restraint continues to be necessary to prevent injury to self or

others, and there is no less restrictive method of preventing the

injurious behavior.

Orders for seclusion or restraint must never be written on

a standing or as needed basis.

Written orders for restraint and seclusion for adults must

be valid for no more than 6 hours; written orders for restraint and

seclusion for children and adolescents must be valid for no more than 2

hours.

A patient in seclusion or restraint must be checked by a

person trained in the use of restraints and seclusion at least every 15

minutes for comfort, body alignment, circulation, hydration, feeding,

and toilet needs. A patient in seclusion or restraint must have vital

signs checked a minimum of every 2 hours. Written documentation of

checks must include, at a minimum, the name of the person doing the

check, the date and time of the check, and the patient's condition.

For purposes of this proposed rule, we have opted not to set forth

these kinds of detailed requirements in the regulations but instead to

require that a hospital achieve the intended outcome that restraints or

seclusion are never imposed inappropriately, without limiting a

hospital's flexibility in how it meets this requirement. However, we

welcome comments on the prevalence of the use of restraints and

seclusion in the hospital setting and whether the above standards, or

alternative requirements, are needed to ensure patient health and

safety.

Subpart B--Patient Care Activities

3. Patient Admission, Assessment, and Plan of Care (Sec. 482.15)

The first proposed condition under proposed Subpart B, Patient Care

Activities, would combine the requirements for patient admission,

assessment, and care plan development in a single condition, which

would be followed by a separate condition on patient care. We believe

this

[[Page 66732]]

organization is in keeping with the patient centered orientation of

these regulations and would help illustrate our view that patient

assessment and planning is a prerequisite for the delivery of high

quality care.

The underlying requirements of this COP would be first that a

hospital ensure that each patient receives a comprehensive assessment

of his or her care needs, including an initial estimate of posthospital

needs, if any, and then that the hospital establish a coordinated plan

for how all relevant hospital disciplines will meet those needs. A

comprehensive assessment of patient care needs is critical for planning

patient care and achieving desired health care outcomes. Because

patient assessment activities are performed by various disciplines

within the hospital setting, coordination of the information obtained

during patient assessment activities is vital to assuring a well-

developed plan for meeting the patient's identified care needs.

Moreover, a coordinated plan for care delivery is increasingly

important in a health care environment where payment incentives

encourage shorter hospital stays. We note for an assessment to be truly

``comprehensive,'' it must address all of a patient's anticipated care

needs; thus, we believe it is appropriate to include a reference to

posthospital needs under the proposed assessment COP. The inclusion of

posthospital needs in a comprehensive assessment does not constitute an

added burden on hospitals but simply reflects current, accepted

practice in patient assessment activities. For example, in conducting a

comprehensive assessment on a 17-year-old male with no history of

medical problems who will undergo surgery to repair a fractured femur

resulting from a football injury, it would be appropriate to gather

information on who will be available to assist the patient at home, who

is available to take the patient to follow-up medical appointments, and

necessary instructions for posthospital needs (e.g., crutch walking,

body positioning, medication administration, etc). (We note that, in

accordance with section 1861(ee) of the Act, the proposed COPs would

continue to address separately the formal discharge planning procedures

required to ensure that patients receive appropriate posthospital care

and services. As explained in further detail later in this preamble, we

are proposing to retain the existing discharge planning COP (now

codified at Sec. 482.43) and redesignate it as proposed Sec. 482.55.)

Under the first proposed standard, ``Admission and comprehensive

assessment'' (proposed Sec. 482.15(a)), we propose to retain the

current flexible requirement (at existing Sec. 482.12(c)(2)) under

which patients can be admitted to the hospital by any licensed

practitioner allowed by the State to do so. Then, with respect to

assessment, we would revise the requirement under existing

Sec. 482.22(c)(5) that a physical examination and medical history be

done no more than 7 days before or 48 hours after an admission.

Instead, we propose to require that each patient receive a

comprehensive assessment that identifies the patient's condition and

care needs as well as an initial estimate of posthospital needs, if

any, at the time of admission and is placed in the patient's medical

record within 24 hours of admission.

We propose to provide the hospital and medical staff the

flexibility to define the content and activities of the comprehensive

patient assessment. We recognize that to require, for example, that

every patient have an evaluation of rehabilitation potential or

nutritional status, is not necessarily appropriate. The information to

be included in the comprehensive assessment would be determined by the

hospital based on the characteristics and needs of the specific

patient. For example, when the patient's condition or symptoms indicate

possible alcohol or drug abuse, an alcohol or drug abuse assessment

should be performed as part of a mental status assessment. Again, the

performance expectation is that a hospital would ensure that each

patient's assessment is comprehensive relative to the reason the

patient is in the hospital. We do not believe it is appropriate to

prescribe how a hospital meets this responsibility.

We are proposing that the comprehensive assessment must be

completed in a timely manner consistent with the patient's immediate

needs and placed into a patient's medical record within 24 hours of

admission. We believe that this proposed requirement sets a clear

expectation for a close, effective relationship between assessment and

care planning, a relationship that is essential to achieving desired

health care outcomes. We view the maximum 24-hour timeframe for

completion of the assessment as essential for adequate patient care and

safety, since by definition a patient being admitted to a hospital is

at a point of immediate need. The 24-hour timeframe should pose no

burden for the well-managed hospital, since in all likelihood it would

already be performing assessments within this timeframe for initial

care planning and decision making purposes.

We are also proposing a 12-hour timeframe for placement into the

patient's medical record of any assessment information collected before

admission to the hospital. For example, a patient may have had a health

history and physical examination completed in the physician's office

before admission. Allowing a copy of a previously completed health

history and physical examination to be placed in the hospital records

would eliminate duplication in the creation of these records,

especially if the findings during the physician office visit were the

basis of the admission to the hospital. Unlike under existing

regulations, which permit use of a physical examination or medical

history done within 7 days of a patient's admission, the proposed

requirements would not establish an arbitrary limit on the use of such

information. Instead, we would require that any comprehensive

assessment information recorded before admission be updated to reflect

the patient's condition on admission. That is, a hospital would be

expected to reassess the necessity of the patient's admission to the

hospital and document, as appropriate, any changes in the patient's

condition at the time of admission. We believe this requirement would

reduce the hospital's information collection burden without

compromising patient health and safety. Because, in such a case, the

history taking and physical examination activities essentially are

completed before admission, we believe that 12 hours is a reasonable

timeframe for placement of that assessment information into the medical

record. That is, it should take the hospital less time to update the

assessment information than the proposed 24-hour timeframe for a

comprehensive assessment performed after admission.

The second standard under this COP, proposed Sec. 482.15(b)(1),

would require that each patient have an initial written plan of care

that meets the needs identified in the comprehensive assessment and

that the plan of care must be placed in the medical record within 24

hours of admission. Thus, each patient would be assured of having a

comprehensive assessment and an initial care plan within 24 hours of

admission to the hospital. We believe that this 24-hour timeframe for

care planning is both reasonable and necessary, given the continuing

decreases in average lengths of stay in hospitals.

Presently, responsibility for a patient's plan of care is addressed

under various separate COPs, including governing body, medical staff,

and nursing services. In place of this

[[Page 66733]]

fragmented approach, we would focus on the need for coordination in

care planning for hospital patients by requiring that the plan include

care to be delivered by all disciplines. We would not specify which

disciplines must be involved in care planning; instead, the hospital

would have the flexibility to determine which disciplines should be

involved based on the nature of a patient's illness or injury.

Similarly, we are not proposing to require that a hospital have a

single care plan that documents interdisciplinary care planning needs,

but only that care planning by all relevant disciplines be included in

the medical record using whatever organizational structure or format

the hospital believes is appropriate.

Under proposed Sec. 482.15(b)(2), we would require that the

patient's plan of care be modified to meet any changes in the patient's

condition that affects the patient's needs. We believe this requirement

is preferable to a mandate that reassessments be conducted at specified

time intervals on all patients. Instead, each practitioner involved in

a patient's care may perform reassessments and modify the plan of care,

as needed.

We welcome comments on whether the specific proposed timeframes in

the regulation text are reasonable and consistent with current medical

practice and whether the timeframes should be used as benchmarks to

reflect patient health and safety concerns involving the timeliness of

the assessment components.

4. Patient Care (Sec. 482.20)

Patient care activities occur in all areas and departments of a

hospital. These activities are carried out by a variety of staff and

licensed practitioners from the medical, nursing, pharmacy, dietetics,

rehabilitation, and other departments and services. Rather than

describing distinct patient care responsibilities for each service or

department, we have organized these regulations to reflect the

integrated way in which a patient experiences care, by establishing a

single, unified patient care condition. Thus, by consolidating patient

care activities into one COP, the proposed regulations would no longer

support a ``stovepipe'' approach to patient care and instead foster a

hospital's efforts to integrate, coordinate, and evaluate patient care

in the same way as the patient experiences care in a contemporary

hospital setting.

Overall, the proposed patient care COP would require that each

Medicare patient be under the care of an appropriately qualified

practitioner, and that the care provided to each patient be coordinated

and based on the plan of care required under proposed Sec. 482.15. The

first standard under the proposed patient care COP (Sec. 482.20(a))

concerns the assignment of a practitioner responsible for each Medicare

patient's care. Under this standard, we would retain, with only minor

editorial changes and one substantive change (discussed below) the

current requirements in Sec. 482.12(c)(1), (3), and (4). These

requirements, while specific and detailed, are needed to implement

section 1861(e)(1) of the Act, which defines a hospital as an

institution that provides services by or under the supervision of

physicians, and section 1861(e)(4) of the Act, which requires that

every Medicare patient be under the care of a physician. It is

necessary to implement the latter requirement in a way that recognizes

the many types of practitioners who are authorized by State scope of

practice laws and hospital staff bylaws to treat patients in hospitals.

Within this standard, the only substantive change from current

requirements appears at proposed Sec. 482.20(a)(1)(vi), which would

permit a clinical psychologist to admit and treat patients receiving

qualified psychologist services (as defined in section 1861(ii) of the

Act), to the extent this is permitted under State law. This change is

needed to implement a change in section 1861(e)(4) of the Act that was

made by section 104 of Public Law 103-432, the Social Security Act

Amendments of 1994.

Proposed paragraphs (a)(2) and (3) of this standard restate current

requirements under Sec. 482.12(c)(3) and (4) concerning the presence of

doctors and their responsibilities toward patients.

The second proposed standard, delivery of patient care

(Sec. 482.20(b)), would require that each patient be provided care and

treatment interventions that are coordinated by all relevant

disciplines and conform to the plan of care. We then would require a

hospital to evaluate the patient's progress and adjust care when

appropriate progress is not being achieved. That is, in keeping with

the requirement under proposed Sec. 482.15(b)(2) that the plan of care

be modified as needed, we believe it is essential to include under this

COP the companion requirement that actual care provided also be changed

as needed, thus establishing the essential linkage between evaluation

of treatment results and care plan modification.

We also propose that patient care services are provided only on the

order of qualified practitioners with delineated clinical privileges.

This proposed provision is in keeping with the overall approach of the

patient care COP, that is, the focus on the integration and

coordination of hospital services rather than the former ``stovepipe''

approach. Thus, rather than specifying under the nutrition services COP

that therapeutic diets must be prescribed by the responsible

practitioner (now required under Sec. 482.28(b)(1)), we intend that

such department-specific requirements would be encompassed within the

hospital's overall responsibility to ensure that all patient care

services be provided in accordance with the orders of qualified

practitioners. So, if a surveyor finds evidence that therapeutic diets

were prescribed inappropriately, the hospital could then be cited for a

deficiency under this standard and, if applicable, under proposed

Sec. 482.40 (Nutrition services) if the outcome of this problem was

that patients' nutritional needs were not met.

Finally, if a hospital provides care to outpatients, it would be

responsible for ensuring that outpatient care meets the same quality of

care requirements as inpatient care and that inpatient and outpatient

services are coordinated to promote continuity of care for patients who

move between levels of care. Inpatient and outpatient care should be

coordinated, so that a patient does not experience any disruption of

care or duplication of services simply because of a change from

inpatient to outpatient status, or vice versa. We recognize that some

procedures can appropriately be done only on an inpatient basis, and we

do not intend to require that every service be available on either an

inpatient or outpatient basis. The intent of this proposed provision is

to ensure that if a service is provided in both the inpatient and

outpatient settings, the level of quality in each setting is the same,

so that there is a uniform level of care throughout the hospital. For

example, infection control procedures and practices should be followed

uniformly throughout the hospital, not merely in inpatient areas, and

we would expect a hospital to investigate adverse outcomes among

outpatients as thoroughly as those among inpatients. Thus, as noted

below, we would expect a hospital's quality assessment and performance

improvement program to encompass outpatient services, if the hospital

provides those services.

5. Quality Assessment and Performance Improvement (Sec. 482.25)

The current quality assurance condition of participation

(Sec. 482.21)

[[Page 66734]]

relies on a problem-focused approach to identify and correct problems

in patient care delivery. During the last decade, the health care

industry has moved beyond the problem-focused approach of quality

assurance in favor of focusing on systemic quality improvements, as

evidenced by the JCAHO's overhaul of its accreditation standards over

the last few years. We propose to follow suit by requiring a Medicare-

participating hospital to participate in a continuous effort to improve

its performance, incorporating to the greatest extent possible an

approach that focuses on the hospital's performance in improving

patient outcomes and satisfaction. Specifically, we are proposing a new

COP that would require that each hospital develop, implement, maintain,

and evaluate an effective data-driven quality assessment and

performance improvement program.

We do not propose to prescribe specific methodologies to achieve

this objective, with the exception of retaining the current rule on

autopsies (see below). Instead, we would specify that a hospital's

quality assessment and performance improvement program should reflect

the complexity of the hospital's organization and services. Thus, each

hospital would be free to pursue quality improvement in a manner best

suited to its individual characteristics and resources. However, every

hospital would be responsible for implementing actions that result in

performance improvements across the full range of the hospital's

services to patients. Also, we would require that a hospital's quality

assessment and performance improvement program must use objective

measures that make it possible to track performance to ensure that

improvements are sustained over time.

The proposed quality assessment and performance improvement

condition (Sec. 482.25) contains three standards, the first addressing

the scope and direction of the performance improvement program, the

second on responsibility for the program, and the third on autopsies.

The first proposed standard would require that a hospital's quality

assessment and performance improvement program include the use of

objective measures to evaluate performance changes and would delineate

the minimum items that must be included in the hospital's program.

Specifically, we would require that a hospital objectively evaluate the

following areas that we believe are critical to hospital performance:

Access to care; patient satisfaction; staff, administrative, and

practitioner performance; complaints and grievances; diagnostic and

therapeutic services provided; medication error incidents, achievement

of drug therapy goals, and incidents of adverse drug effects;

nutritional services, including, if applicable, patient's responses to

therapeutic diets and parenteral nutrition; surgery and anesthesia

services; safety issues, including infection control and physical

environment; emergency services (if provided); discharge planning

activities; and the results of autopsies. We included the first 11

items as the minimum elements of the performance improvement program

because we believe they comprise the fundamental building blocks of a

well-managed hospital, whose primary business is achieving desired

outcomes for patients and ensuring their satisfaction. We are proposing

the twelfth item, ``results of autopsies,'' because we believe that

autopsies can be an important source of information to both individual

practitioners and hospitals that can point to opportunities for

improvement in both practitioner and hospital performance. We are

asking for comments on the minimum content of the Quality Assessment

and Improvement Program as well as the twelve elements that are part of

the Whole Quality Assessment standard.

The next standard (proposed Sec. 482.25(a)(2)) would then state

that for each of the areas listed above, and any others the hospital

includes, the hospital must measure, analyze, and track quality

indicators or other aspects of performance that the hospital adopts or

develops that reflect processes of care and hospital operations. These

measures must be shown to be predictive of desired outcomes or be the

outcomes themselves. As explained below, we also would require a

hospital to use hospital-specific data, as well as Peer Review

Organization (PRO) and other relevant data, in its quality assessment

and performance improvement strategy.

Again, when we use the word ``measure,'' we mean that the hospital

must use objective means of tracking performance that enable a hospital

(and a surveyor) to identify the differences in performance between two

points in time. For example, we would not consider a hospital's

subjective statement that it is ``doing better'' in a given performance

area as a result of an improvement process to be an acceptable measure.

There must be identifiable units of measure that any reasonably

knowledgeable person would be able to distinguish as evidence of

change. Not all objective measures must have been shown to be valid and

reliable (that is, subjected to scientific development) to be useable

in improvement projects, but they must at least identify a start point

and end point stated in objective terms, most often, numbers, that

actually relate directly to the objectives and expected/desired

outcomes of the improvement project.

We do not believe it is feasible at this time to propose that a

specific set of quality indicators or objective performance measures be

used. However, systematic collection and analysis of quality indicators

or performance measures that each hospital identifies should foster the

eventual development of a data-driven system of hospital indicators.

Many hospitals are already very active in this area. We recognize that

collection and analysis of clinical outcome data may represent an

increased burden on some hospitals, particularly on the subset of

hospitals that are routinely subject to HCFA's survey process. These

non-accredited hospitals typically are smaller than JCAHO-accredited

hospitals, are located in more sparsely populated areas, and may not

have the resources for extensive data gathering and reporting. However,

rather than mandating specific performance measures, we would allow

each hospital the flexibility to identify its own measures of

performance for the activities it identifies as priorities in its

quality assessment and performance improvement strategy. With this in

mind, we believe the proposed quality assessment and performance

improvement condition would lay the foundation for specific hospital

quality indicators that might be developed by consensus in the future.

We anticipate that hospitals, both large and small, rural and

urban, will or already use a variety of performance measures to inform

their internal quality assessment and performance improvement programs.

Some of these measures may be designed by the hospital itself, while

others will be developed through research or by consensus groups or

other sources outside the hospital. Regardless, HCFA intends, through

its survey process, to assess the hospital's success in using

performance measures principally in terms of whether the hospital can

demonstrate with objective data that sustained improvements have taken

place in: (1) Actual care outcomes, patient satisfaction levels, or

other performance data, and/or (2) processes of care and hospital

operations that are predictive of improved outcomes of care and

satisfaction for patients. HCFA does not intend and would not be in a

position to judge the measures themselves; instead, we would assess

[[Page 66735]]

their utility for the hospital in its own efforts to improve its

performance.

While we recognize that there is no single system available for the

measurement of a hospital performance, we are also aware of efforts in

the hospital industry to find ways to increase the use of intra- and

inter-hospital performance measurement systems. For example, under

programs called ORYX and ORYX PLUS JCAHO plans to require hospitals to

use a defined number of performance measures that evaluate care to a

percentage of patients in an initiative to integrate performance

measures with the accreditation process. Initially, we understand these

programs set forth an initial framework for evaluating a wide range of

performance measurement systems. The specific attributes of the

measurement systems that will be evaluated include: the performance

measures and data elements (how they focus on processes and/or outcomes

related to patient care and organizational performance); the

construction of the database; the quality of the database; the extent

of risk adjustment/stratification for patient factors; performance-

related feedback; and the relevance of the performance measurement

system for accreditation.

Under this proposed rule, we would require a hospital to engage in

a quality assessment and performance improvement program that uses

objective measures, but we are not proposing that a hospital be

required to participate in a system of performance measurement with

other hospitals. However, we intend to develop such a requirement for

inclusion in our final rule, and welcome public comments addressing the

appropriateness of such a requirement or how it could best be

structured. For example, one possibility is that the final rule would

set forth the requirement as suggested above, and would include the

evaluation criteria for the system or systems the hospitals might use.

We do not envision that we would require the use of a specific system.

Again, we are not proposing any specific provisions at this time, but

we invite comment on whether HCFA should require non-accredited

hospitals to participate in one or more performance measurement systems

as part of their overall quality assessment and performance improvement

program (both internally and externally).

Example of a quality improvement project. HCFA wants to assure

hospitals, particularly smaller, more rural hospitals, that our

expectations for the use of performance measures are commensurate with

the size and resources available to the hospital. Powerful improvement

programs can be and are often premised on simple, straightforward

designs, using measures that are direct and uncomplicated. For example,

a hospital might collect information on a routine, sampled basis about

the rate of utilization of psychoactive medications that are initiated

during a hospital stay, when none were used by the patient prior to

hospitalization. This data collection could be a part of the hospital's

quality assessment and performance improvement program associated with

the proposed drug management requirements (proposed Sec. 482.35(b)).

The data could be collected manually or electronically and could be

analyzed by case mix, age, physician specific prescribing patterns, the

shift most likely to request medication orders, etc. This data would

fulfill our requirement that it be an ``objective measure'' because the

unit of measure in this example is the number of patients for whom

psychoactive medications are prescribed after admission. If this data

is taken for 1 month as a start period, and taken again 6 months later

as an end period, the differences in the number of patients for whom

psychoactive medications were prescribed after admission (both increase

and decrease) would inform the hospital staff responsible for this

project how well (or poorly) their intervention plan worked.

The hospital's quality assessment and performance improvement team

could then use that data to design a specific improvement project,

implement it, and continue to collect data to demonstrate, in a

nonstatistical way change over time (for example, a steady reduction in

orders for psychoactive medications during a hospital stay). The

performance measures for a project like this are immediate and simple

to collect, and well within the reach of any hospital. Hospitals that

have more resources could be expected to produce more sophisticated

measures that involve more complicated issues, but the key expectation

of these requirements is that the hospital make an aggressive and

continuous effort to improve its performance across the board. HCFA is

more interested in the outcomes of such an effort than in the specific

processes the hospital uses to achieve the performance improvements. We

recognize that: (1) There is not yet a wide menu of available

performance measures that have been shown to be reliable and valid that

could be offered to a hospital to use to meet these requirements; (2) a

hospital cannot control many related nonpatient care outcomes (such as

substance abuse practices of the patient, or lack of adequate support

systems to ensure lasting positive outcomes from the hospital stay,

etc.); and (3) many hospitals will need more experience with data

collection methods and in the design implementation and monitoring of

improvement projects. However, experience in many hospitals, other

health care providers, and business and industry in general has shown

convincingly that creating an expectation for continuous improvement is

a far more powerful performance incentive than maintaining a set of

process and structural requirements.

Therefore, we want to stress that our emphasis at this time is on

the improvement of processes. The process of improvement entails: (1)

Identification of an organization's critical patient care and services

components; (2) application of performance measures that are predictive

of quality outcomes that would result from delivery of the patient care

and services; and (3) continuous use of a method of data collection and

evaluation that identifies or triggers further opportunities for

improvement. We do not intend for hospitals to collect data from

performance measures for the sake of meeting a regulatory requirement.

The hospital must have the flexibility to identify the processes

targeted for improvement based on the unique needs and priorities of

the facility and its patients. Moreover, we would expect the processes

targeted for improvement to change over time as the hospital makes the

necessary improvement efforts.

As stated by W. Edwards Deming, the late quality management expert,

``* * * quality comes from * * * improvement of process(es)'' and the

degree to which improvement occurs is measured through analysis of

collected data. (Katz, Jacqueline, Managing Quality, St. Louis: Mosby

Year Book, 1992, p. 122). Likewise, the intent of this requirement is

that each hospital will engage in improvement activities, based on its

own analysis of data, that improve care outcomes and patient

satisfaction and lead to greater efficiency and economy of operation.

How to Measure Hospital Quality Improvement Efforts--Options for

Establishing a Required Minimum Level of Improvement Projects Per Year.

As the preceding discussion illustrates, even small, rural hospitals

and those without sophisticated ``research'' capabilities can develop

and manage effective quality assessment and

[[Page 66736]]

improvement programs that demonstrate sustained improvement over time.

However, we are concerned that some hospitals may make token efforts to

meet this requirement, efforts that are aimed primarily at avoiding

adverse enforcement action resulting from a survey, rather than at

improving processes and outcomes of care and satisfaction for patients.

Thus, depending on the comments we receive, we intend to develop for

the final regulation a requirement that a hospital engage in a minimum

number of improvement projects that are based upon the hospital's own

quality assessments of its performance and that show measured,

sustained results that actually benefit patients.

We are not proposing specific language in the regulation text at

this time because we recognize there are many ways in which a minimum

level of effort can be set.

We are inviting comment not only on the advisability and necessity

of such a requirement, but also on the best approaches to achieve this

minimum level of effort. At a minimum, we would require under the

quality assessment and performance improvement condition of

participation that the number of distinct successful improvement

activities to be conducted annually must be proportional to the scope

and complexity of the hospital's program. The success of the activity

would be measured in terms of demonstrated sustained improvement over

time. We intend to then supplement this underlying requirement with a

more precise explanation of what would be expected of each hospital.

Among the possible alternatives that we are considering are the

following:

(1) Require the hospital to engage in a specific number of

improvement projects equal to not less than 1 project per 1,000 patient

discharges.

(2) Require a minimum set number of projects (e.g., five) that are

hospital-wide and most broadly affect patient outcomes and

satisfaction.

(3) Require a minimum set number of projects (e.g., five) that are

not hospital-wide, but that are developed and implemented in various

areas of the hospital's range of care and services (e.g., one project

might reduce waiting time in the emergency room, another might focus on

improving the accuracy of medication administration, etc.).

(4) Require a minimum number of projects based on bed-size, rather

than discharges (e.g., 8 projects in a 600-bed hospital, 2 in a 50-bed

hospital).

(5) Rather than requiring a minimum number of projects, require the

hospital to demonstrate (e.g., to the PRO and/or survey agency) what

projects they are doing and what progress is being achieved.

(6) Again, rather than specifying minimum number of projects,

establish a minimum set of types of projects that must be done (e.g.,

hospital operational processes that are predictive of positive

outcomes, such as infection control measures, or condition-specific

projects that improve certain clinical outcomes, such as emergency room

responses to heart attack patients).

We are certain there are many other ways to approach the ``minimum

effort'' discussion. The examples noted above illustrate some of the

possible approaches to ensuring that hospitals invest substantial

efforts in quality assessment and improvement. The purpose of these

examples is to elicit comment and suggestions in this regard, and we

welcome alternative approaches. We note that although our intention is

to specify in the final rule a minimum level of effort, it is also

possible that after reviewing all the comments we may conclude that it

is neither feasible nor desirable to do so.

Other Elements of the Proposed Quality Assessment and Performance

Improvement Condition. We propose a new requirement at

Sec. 482.25(a)(3) that a hospital must use hospital-specific as well as

PRO data and any other available relevant data, as an integral part of

its quality assessment and performance improvement strategy, to develop

its improvement plans and projects. However, if a hospital elects not

to participate in an improvement project with its PRO, we propose at

Sec. 482.25(a)(4) that it must be able to demonstrate a level of

achievement through its own quality assessment and performance

improvement strategy comparable to or better than that to be expected

from such participation. Thus, we intend that each hospital have the

responsibility to engage in improvement projects that are vigorous and

needed to improve performance across the range of hospital activities

that affect patient outcomes. For example, if a PRO proposes a

cooperative project to improve the outcomes for Medicare patients with

pneumonia, and the hospital chooses not to participate, HCFA surveyors

would expect to find that projects that the hospital designed and

implemented on its own (e.g., an improvement project to reduce the use

of psychoactive medications and physical restraints as patient

management tools) achieved improvements that were demonstrably as

important as the expected outcomes that would have been expected from

the pneumonia study had the hospital chosen to participate in that

cooperative study. (In assessing the comparability of a hospital

project with a PRO project, we would consider the number of patients

affected, the projected magnitude of the benefit to individual

patients, and the actual changes achieved by the project to the changes

achieved by participants in the PRO project.)

We also would require that a hospital set priorities for

performance improvement, based on the prevalence and severity of

identified problems. Of course, we expect that a hospital will

immediately correct problems that are identified through its quality

assessment and performance improvement program that actually or

potentially affect the health and safety of patients. For example, if a

hospital's quality assessment and performance improvement process

identifies problems with accuracy of medication administration, it is

not enough for the hospital to consider this area a candidate for an

improvement program that may or may not be chosen from a priority list

of potential projects. Rather, since accuracy of medication

administration is critical to the health and safety of patients, the

hospital must intervene with a correction and improvement program

immediately. Overall, a hospital would be expected to give priority to

improvement activities that most affect clinical outcomes.

As noted above, perhaps the most fundamental change proposed in the

new quality assessment and performance COP in comparison to the present

condition on quality assurance is the focus on taking action to correct

problems identified through the hospital's quality assessment and

performance improvement program. This change is reemphasized in the

proposed requirement at Sec. 482.25(a)(6) that a hospital must take

actions based on measurement and tracking that result in demonstrable,

sustained improvements. We envision a hospital meeting this requirement

by conducting a systems/process analysis when adverse outcomes are

identified and then taking action to afford long-term correction and

improvement of the identified problems, as illustrated in the above

example concerning medication administration.

The second proposed standard under this COP, proposed

Sec. 482.25(b), basically builds on the current requirement under

Sec. 482.21 that the hospital's governing body ensures that there is an

effective, hospital-wide quality assessment and performance improvement

program, as well as on the current requirements concerning

[[Page 66737]]

medical staff responsibilities under Sec. 482.22(b) and (c). Under the

new proposed standard, we would state that the hospital governing body,

medical staff, and administration officials are responsible for

ensuring that the hospital-wide quality assessment and performance

improvement efforts address identified priorities in the hospital and

for implementing and evaluating improvement actions. We would, however,

eliminate several procedural requirements under the current medical

staffing provisions, such as those concerning the organization of the

medical staff.

Finally, in keeping with the cross-cutting, hospital-wide approach

to quality improvement that we believe represents current best

practices, the standard includes a requirement that all programs,

departments, and functions be involved in the hospital's quality

assessment and performance improvement program. This would include

services that are carried out under contract or by arrangement.

Under the third standard in this COP, we would retain the current

requirement on autopsies (existing Sec. 482.22(d)). Under this

requirement a hospital's medical staff must attempt to secure autopsies

in cases of unusual deaths or of medical, legal, or educational

interest. Although this requirement is somewhat prescriptive, we

believe it is necessary because autopsies are a valuable educational

tool that contribute to the quality of care in a hospital and, as we

stated above, can be used by the hospital to improve its performance.

6. Diagnostic and Therapeutic Services or Rehabilitative Services

(Sec. 482.30)

We are proposing to restate and consolidate current standards from

several COPs that relate to required and optional diagnostic and

therapeutic services into one COP. The condition would have four

standards. The first standard would require that a hospital be

primarily engaged in providing, by or under the supervision of one of

the practitioners described in 42 CFR 410.20(b) (which specifies by

whom physician services must be furnished to be eligible for Medicare

Part B payment), either diagnostic and therapeutic services to

inpatients, or rehabilitative services to inpatients. This standard

would implement the statutory requirement at section 1861(e)(1) of the

Act. If a hospital does not meet this standard, it would be found out

of compliance and would risk termination of its participation in the

Medicare program.

The second standard of this condition at proposed Sec. 482.30(b)

would require that a hospital furnish diagnostic radiology services, as

required under existing Sec. 482.26. We would expect a patient's

initial needs for radiology services would be identified in the

comprehensive assessment performed at admission. In addition we are

proposing that a hospital that furnishes emergency services on a full-

time basis must provide diagnostic radiology services on a full-time

basis.

Separate mention is not made in this condition of the personnel,

safety, and record standards that are now found under Sec. 482.26(b),

(c), and (d). As discussed earlier in this preamble, under our proposed

reorganization of these COPS, we try to deal with such common elements

in one place instead of repeating them for each condition. Therefore,

the personnel and safety standards accompanying these conditions are

now encompassed in the proposed Human Resources and Physical

Environment conditions, respectively.

In the next standard, proposed Sec. 482.30(c), we would require

hospitals to furnish laboratory services, including 24 hour-a-day

emergency laboratory services, as presently required under existing

regulations (see Sec. 482.27). We are also proposing to retain the

current requirement at Sec. 482.27(a) that laboratory services provided

to patients in the hospital must meet the requirements of the Clinical

Laboratory Improvement Amendments of 1988 (CLIA), as codified in 42 CFR

part 493. We propose to delete the requirements of existing

Sec. 482.27(b)(2), (3) and (4). Section 482.27(b)(3) requires the

hospital laboratory to make provisions for the proper receipt and

reporting of specimens the laboratory handles. Since this requirement

is covered under CLIA provisions, it would be redundant to place it in

the proposed hospital COP. We are requesting comment on our proposal to

eliminate the current requirements at Sec. 482.27(b)(2) which requires

that a written description of laboratory services be available to the

medical staff and at Sec. 482.27(b)(4) which requires the medical staff

and a pathologist to determine which tissue specimens require a

microscopic and/or macroscopic examination. We recognize that it is

essential for practitioners to know what laboratory services are

available for diagnosing and delivering care. However, we believe that

hospitals make their services known to their practitioners, and we are

not convinced that a regulation is necessary to assure that this

process occurs. In addition, although microscopic and macroscopic

examination of tissue specimens may provide valuable information, we

are requesting comment on whether it is necessary to have a regulation

which states who can determine what tissue specimens require these

examinations.

The fourth proposed standard at Sec. 482.30(d) would state that a

hospital may elect to offer services in addition to these required

diagnostic and therapeutic services, such as nuclear medicine, ultra

sound, rehabilitation medicine services, psychology services,

respiratory care services, speech and language pathology services,

audiology services, social work and vocational rehabilitation services,

to name a few. This listing illustrates but does not limit the range of

diagnostic and therapeutic services a hospital may provide. If the

hospital elects to offer such additional optional services, those

services must be delivered in accordance with the requirements of part

482.

7. Pharmaceutical Services (Sec. 482.35)

Overview. Under the proposed condition on pharmaceutical services,

which would replace current Sec. 482.25, we would require the hospital

to provide needed medication therapy through a safe, accurate, and

effective system that minimizes adverse drug events and evaluates the

patient's response to the therapy.

In general, we propose to adopt requirements that integrate drug

therapy services and support a coordination of services by the various

disciplines that provide them (medicine, nursing, and pharmacy). This

integration of services is intended to protect patients by establishing

a four-layer ``safety net'' to prevent adverse drug events (including

medication errors). It is intended also to detect system errors that

result from the multiple nodes in the drug distribution process:

Ordering, transcription, dispensing, and administration.

The first layer of this safety net is a peer review activity for

the identification of events that are predictive of adverse drug events

(see Sec. 482.35(a)(1)). The second layer is the detection of

medication errors (see Sec. 482.35(a) (2) and (3)). This layer focuses

on the more objective errors of transcription, dispensing, and

administration, and leaves the more subjective drug error issues to

peer review and nurse review mechanisms. The third layer of the net is

the comprehensive drug information resource, which endeavors to provide

vital drug and patient information at keys points in the drug

distribution process (see Sec. 482.35(b)(4)). The fourth layer of the

net relies on nursing personnel to review drug orders for

[[Page 66738]]

accuracy of the entire system before drugs are administered (see

Sec. 482.35(b)(5)).

As a consequence, we are proposing to delete a number of narrowly

focused, structure and process-oriented requirements, as follows:

In existing Sec. 482.25(a)--

(1) Requiring a full-time, part-time or consultant pharmacist.

(2) Requiring the pharmaceutical service to have adequate

personnel.

In existing Sec. 482.25(b)--

(1) All compounding, packaging, and supervision of drugs must be

under the supervision of a pharmacist.

(2) All drugs must be kept in a locked storage area. (Note: Locked

storage of only controlled drugs is proposed at Sec. 482.35(b)(1).)

(3) Outdated, mislabeled or otherwise unusable drugs are not

available for patient use.

(4) When the pharmacist is not available, drugs and biologicals may

only be removed from the pharmacy or drug storage area by a designated

person.

(6) Drug administration errors, adverse drug reactions and

incompatibilities are immediately reported to the attending physician

and the quality assurance program.

(9) A drug formulary system must be established by the medical

staff to assure quality pharmaceuticals at a reasonable cost.

A drug formulary is a system for determining the best quality and

least expensive drugs, listing them in a formulary, and restricting the

medical staff to the drugs listed in the formulary. This is a vastly

different document than the ``comprehensive drug information resource''

referred to under Sec. 482.25(b)(4) of this proposed rule. A drug

formulary is a cost control and quality mechanism. We do not think it

would be a wise investment of survey agency time to pursue this cost

control mechanism through enforcement of the COPs, since current

efforts at cost controls and an emphasis on managed care will probably

be far more effective at constraining drug costs in hospitals.

Finally, we plan to eliminate the explicit, process-oriented

requirements for administration of drugs, and acceptance of telephone

and other oral orders for drugs, that are now set forth in our nursing

services requirements at Sec. 482.23(c)(2).

Description of Standards. The first proposed standard has to do

with monitoring of adverse drug events (ADEs) and with eliminating or

minimizing medication errors. We believe a separate standard covering

ADE monitoring is needed because of its importance to patient care

quality and patient health and safety. This standard is based on

Journal of the American Medical Association (JAMA) papers on adverse

drug events (see Bates, D. W., et al., ``Incidence of Adverse Drug

Events and Potential Adverse Drug Events,'' JAMA, 274 (1995): 29-34,

and Leape, L. L., et al., ``Systems Analysis of Adverse Drug Events,''

JAMA, 274 (1995): 35-43).

These papers make the following salient points:

Forty-two percent of serious and life-threatening ADEs

were preventable (Bates, page 33).

Adverse drug events have multiple etiologies, but the lack

of readily accessible and current drug information along with patient

care information is a significant part of the problem with adverse drug

events (Leape, page 40).

Computerized detection programs that search for events

likely to be associated with an ADE (e.g., naloxone, an opiate

antagonist), supplemented by spontaneous reporting using the

computerized information system and a dedicated person or group with

responsibility for evaluating these events have been found to represent

an effective, relatively inexpensive method for identifying ADEs and

will probably be the strategy of the future (Bates, page 33).

The most common defects were in systems to disseminate

knowledge about drugs and to make drug and patient information readily

accessible at the time it is needed. System changes to improve

dissemination and display of drugs and patient data should make errors

in the use of drugs less likely (Leape, page 35).

We have endeavored to implement the principles established in these

papers in the first standard, ``Adverse Drug Monitoring.'' First we

propose that the facility must establish a system of evaluation of ADEs

by searching current clinical records for events that are predictive of

an ADE and reporting them to the quality assessment and performance

program for action. We have not proposed to require that a computerized

system be used by all hospitals since these regulations primarily will

affect small, rural, nonaccredited hospitals who may not have the

resources to develop such a computer system.

The second and third parts of the ADE standard deal with medication

errors. A longstanding body of research exists concerning medication

errors in hospitals. In a paper by Allan and Barker (Allan, Elizabeth

L. and Barker, Kenneth N., ``Fundamentals of Medication Error

Research,'' American Journal of Hospital Pharmacy, 47 (1990): 555-71),

the authors documented medication error studies in approximately 40

hospitals and nursing homes in the United States and Canada. These

studies covered a period of time from 1962 to 1987. The hospitals'

medication error rates ranged from a high of 20.6 percent to a low of

1.6 percent when wrong timing errors were excluded. When wrong timing

errors were included, the range was 42.9 percent to 4.4 percent.

This proposal would permit an overall medication error rate in a

hospital of no greater than 2 percent and require zero tolerance for

significant medication errors. Significant medication errors are

defined as errors that jeopardize or cause serious potential for

jeopardizing the health and safety of the patient. HCFA has used this

concept for many years in long-term care facilities, and has

considerable experience at defining what would constitute a significant

medication error. The overall error rate would include significant as

well as nonsignificant (e.g., wrong timing) errors and would result in

a deficiency citation. Setting an overall limit on medication errors,

including significant errors, does not mean significant errors are

tolerated if they remain below 2 percent. Rather, even though the

regulation provides zero tolerance for significant errors, if

significant errors do occur, and they are added to the nonsignificant

errors, a deficiency occurs where the result is greater than 2 percent.

This deficiency is in addition to the separate deficiency for the

significant errors. We are proposing the 2-percent standard because

research and expert opinion has determined that this is a reasonable

medication error rate to achieve, given modern drug packaging and drug

information systems. (See Barker, Kenneth N., et al., ``Consultant

Evaluation of a Hospital Medication System: Analysis of the Existing

System,'' American Journal of Hospital Pharmacy, 41 (1984): 2013).

In the Bates, et al, paper, adverse drug events are categorized as

follows: Ordering, Transcription, Dispensing and Administration. It is

important to point out that the medication error regulation proposal

would examine all these categories except ADEs occurring from physician

ordering questions. For this issue we would rely on the licensed nurse

(that is, a registered nurse (RN), licensed practical nurse (LPN), or

licensed vocational nurse (LVN)) review, as proposed under

Sec. 482.35(b)(5). This is necessary because physician ordering

questions dealing with the drug, the dose, the route of

[[Page 66739]]

administration, etc., frequently require consultation before a positive

determination about the occurrence of an ADE.

The second standard, ``Drug Management Procedures,'' has seven

parts. The first one requires that drugs and biologicals be kept in

secure areas; however, those drugs that are ``controlled'' must be

stored in locked areas as required by the Comprehensive Drug Abuse

Prevention and Control Act. (We are not requiring that biologicals be

stored in locked areas because this Act does not include

``biologicals'' in its provisions.) We are not requiring that the areas

where the controlled drugs are stored be double locked, since what is

usually found in most facilities is an individual with a ring of keys

containing both keys to the double locked compartment. In this case

``double locked'' is hardly an added security feature. The key to the

locked compartment should be restricted strictly to individuals who

have an identified need to access these drugs.

The requirement for the facility to maintain a record of receipt

and disposition of controlled drugs may be met in ways other than the

use of proof of use sheets for each controlled drug. For example, the

facility may use existing patient records such as the medication

administration record as a record of disposition of controlled drugs.

If the facility wishes to maintain records of receipt and disposition

of controlled drugs by using existing patient care records, it will

reduce its paperwork burden considerably.

Proposed Sec. 482.35(b)(3) requires that discrepancies in the

record of controlled drugs be reported to the individual responsible

for pharmaceutical services and to the hospital administrator.

Discrepancies in these records indicate that controlled drugs are being

used for unauthorized purposes. Proposed Sec. 482.35(b)(3) would

require that these discrepancies be reported to responsible individuals

in the hospital, who will then decide whether the local police or the

Drug Enforcement Agency should be involved.

The fourth part of the Drug Management Procedures standard would

require the hospital to establish a computerized or hard copy ability

to merge patient information with current comprehensive drug

information at the points of drug ordering, dispensing, and

administration. This system would promote the development of

information systems that bring patient information and drug information

together at critical junctures in the drug ordering and distribution

process. Comprehensive drug information resources would include the

United States Pharmacopoeia-Drug Information, American Medical

Association Drug Evaluations, and the American Hospital Formulary

Service--Drug Information. (These drug information resources are those

used to establish Medicaid drug use review under the provisions of

section 1927(g)(1)(B) of the Social Security Act. Drug information

resources would not include the Physician Desk Reference since this

reference is not considered comprehensive and was not listed in the

statute.)

The fifth part of this standard would require that before

medications are administered, a licensed nurse, or a physician if he or

she is personally administering the drug, review the patient's

information and the drug order. (The comprehensive drug information

would also be available for review if there was a need for this

information.) The purpose of this proposal is to support the

established practice of nursing personnel questioning the drug order

from the standpoint of the correctness of the order itself in relation

to specific patient and drug information that must be readily available

before or at the point of drug administration. In reviewing this

information to prevent drug errors, a nurse would be acting only within

the scope of her or his State licensure. The expectation is that the

nurse would report any potential errors in drug prescribing to the

physician, so the physician could determine whether the order needed to

be changed. This proposed requirement is consistent with current

research. Leape identified a total of 334 adverse drug events that were

identified by review of all admissions in 11 medical and surgical units

in 2 tertiary hospitals for a period of 6 months. Of the 334 adverse

drug events, 91 or 27 percent were intercepted (prevented). Of these 91

prevented adverse drug events, 86 percent were prevented by nurses and

12 percent by pharmacists. This proposed regulation is intended to

strengthen the potential for nurses and pharmacists to intercept

adverse drug events of all kinds by providing them with readily

available information necessary to prevent these events.

The sixth part of the Drug Management Procedures standard deals

with positive identification of medication. The current regulations do

not contain a requirement for positively identifying drugs brought to

the facility by the patient and then obtaining physician orders before

they can be administered. We are proposing such a requirement here

because when an individual is hospitalized it indicates a considerable

change in their status. ``Positively identified'' in the context of

this proposed rule means that a pharmacist or someone with similar drug

identification skills must make sure that the drugs brought to the

facility are in fact the same drugs that the label represents. This is

necessary because patients often mix drugs within one container, or

they separate drugs from their proper labeling. The drugs that the

individual was taking prior to this hospitalization should be reviewed

by competent medical personnel to determine if these drugs are still

necessary, or if they may interfere with other therapies that are

underway in the hospital.

Unlike current regulations, this proposed rule would make it clear

that self-administration of drugs is permitted, but only under orders

and hospital policy. This proposed rule is important for patients being

prepared for discharge. These patients should become familiar with

self-administration of drugs (especially eye drops, inhalers,

intramuscular injections), so they become well-practiced with this task

while still under competent supervision.

Regarding our seventh proposal, existing Sec. 482.25(b)(5) requires

that orders for drugs and biologicals be automatically stopped after a

reasonable period of time as predetermined by the medical staff. This

proposed rule endeavors to achieve the same objective as the current

rule, that is, the cessation of drug therapy when it is no longer

necessary. However, our proposal would not limit the hospital to the

option of automatic stop orders, which discontinue drug therapy

(especially on holidays and weekends) by administrative fiat without

any medical assessment as to whether the drug therapy has achieved its

therapeutic objectives. The proposed rule allows the hospital to

develop its own approaches for achieving this objective.

The last standard of the Pharmaceutical Services COP (proposed

Sec. 482.35(c)) deals with discharge orders for psychopharmacological

drugs. Under this standard, we would require that orders for

psychopharmacological drugs be discontinued upon the patient's

discharge unless the patient has been diagnosed (using standard

criteria for such diagnoses) with a mental illness. This will prevent

the use of these drugs (which may be temporarily necessary during a

hospitalization) from becoming routine after discharge unless a valid

reason for their use is established. This is particularly necessary in

patients

[[Page 66740]]

transferred to long-term care facilities, who can suffer considerable

adverse effects from long-term use of antipsychotic and antianxiety

drugs that may have been started in the hospital for very valid reasons

but that may no longer be valid after discharge. A study by Garrard

(Garrard, Judith, et al., ``Evaluation of neuroleptic drug use by

nursing home elderly under proposed Medicare and Medicaid

regulations,'' JAMA, 265 (1991): 463-467) showed that the rate of use

of neuroleptic (antipsychotic) drugs among nursing home admissions was:

16 percent when admitted from hospitals, 18 percent from the community,

and 21 percent from other nursing homes. Regulation of the use of these

drugs (in the absence of proper differential diagnoses) in nursing

homes have been in effect since 1990 (see 42 CFR 483.25), and we have

been criticized because similar rules were not imposed on hospital and

community practice (Thurston, Ronald G., Letters, JAMA, 265 (1991):

2962). We believe this proposed requirement represents a fair way to

address this issue, but invite public comment on alternatives for

achieving the same objective.

8. Nutritional Services (Sec. 482.40)

Currently, the food and dietetic services requirements that a

hospital must meet are found at Sec. 482.28. These requirements

emphasize the organizational aspects of a hospital's food and dietetic

services program, including provisions that specify allowable

contractual arrangements, employee qualifications, and other process-

oriented details.

We are proposing extensive revisions to these provisions under a

new nutritional services condition of participation. In keeping with

the principles discussed above, the new condition of participation

would promote a patient-centered approach to nutrition. Thus, the

introductory language for these proposed requirements states explicitly

that each patient must receive adequate nutrition, including

therapeutic diets or parenteral nutrition if needed.

The proposed condition includes only two standards. The first

standard, ``Sanitary conditions,'' requires that food provided to

patients be obtained, stored, prepared, distributed and served under

sanitary conditions. (Note that the term ``food'' is intended to

include all forms of nutrition, liquid or solid, provided to patients.)

Although this requirement is not contained in the current hospital

conditions of participation, we believe that it clearly is an

underlying necessity for any acceptable nutritional services program.

Thus, we are proposing to include it explicitly under the nutritional

services condition. The only other standard would require that menus be

prepared in advance and meet the nutritional needs of patients based on

the recommended dietary allowances of the Food and Nutrition Board of

the National Research Council, National Academy of Sciences. We believe

the Board's guidelines can appropriately be used here because they

represent accepted best practices and are already in widespread use

among hospitals.

In developing the proposed requirements, we have attempted to

incorporate straightforward statements of a hospital's

responsibilities, while eliminating procedural requirements and

avoiding unnecessary details of how the hospital should carry out its

nutritional services function. We believe that the requirements largely

incorporate current best practices in hospital nutrition services,

while eliminating several burdensome process requirements that are not

central to meeting the patient's dietary needs (such as the requirement

under current Sec. 482.28(b)(3) that a current therapeutic diet manual

approved by the dietitian and medical staff be readily available to all

medical, nursing, and food service personnel.) We considered

supplementing the requirements with additional provisions concerning

staffing requirements or qualifications. Instead, however, we decided

that the staffing requirements set forth under the proposed human

resources condition of participation are sufficiently broad to ensure

that a hospital has adequate qualified staff to carry out its

nutritional services function. Rather than prescribing how a hospital

should organize itself to meet its nutritional services

responsibilities, we prefer to allow each hospital as much flexibility

as possible in this regard, so that it can focus on incorporating its

nutritional services program into a cross-cutting approach toward

achieving optimal patient outcomes. Finally, as discussed above in

section II.B.4 of this preamble, we note that the existing requirement

under Sec. 482.28(b)(1) that a therapeutic diet be prescribed by the

responsible practitioner would now be encompassed within the hospital's

responsibility under proposed Sec. 482.20(b) to ensure that all patient

care services be provided in accordance with the orders of qualified

practitioners.

9. Surgical and Anesthesia Services (Sec. 482.45)

The proposed condition on surgical and anesthesia services would

replace the existing regulations at Sec. 482.51 (Condition of

participation: Surgical services) and Sec. 482.52 (Condition of

participation: Anesthesia services). We have decided to address both

areas under a single condition in order to simplify the organization of

part 482, and to emphasize the close relationship between surgery and

anesthesia.

In the new condition, we would delete current process-oriented

standards having to do with the organization and staffing of the

hospital's surgical and anesthesia departments or services (existing

Sec. 482.51(a) and Sec. 482.52(a)), and with hospital policies

governing surgical and anesthesia care (existing Sec. 482.51(b) and

Sec. 482.52(b)). In particular, we propose to delete the current

specific requirements regarding the types of personnel who can serve as

scrub nurses or perform circulating duties in the operating room. We

also would eliminate current rules on which practitioners can

administer anesthesia, and what level of supervision must be provided

to them. We also propose to delete current prescriptive requirements

specifying the types of equipment that must be maintained in operating

suites (existing Sec. 482.51(b)(3)). We believe those requirements

should be eliminated in favor of those that focus more directly on

outcomes.

In place of the current requirements, we propose two basic rules on

staffing. We would require that surgical procedures be performed only

by practitioners with appropriate clinical privileges, and that

anesthesia be administered only by a licensed practitioner permitted by

the State to administer anesthetics.

One effect of our proposed staffing and equipment requirement would

be to allow more flexibility to certified registered nurse anesthetists

(CRNAs) to practice without oversight by another practitioner.

Currently, the anesthesia condition (Sec. 482.52(a)(4)) requires that a

CRNA administer anesthesia only under the supervision of the operating

practitioner or of an anesthesiologist who is immediately available if

needed. To allow greater flexibility to hospitals and practitioners and

to give deference to State scope of practice law, we propose to delete

this supervision requirement and allow the CRNA to function without

supervision by another practitioner, where this is in accordance with

State law. We emphasize that CRNAs are allowed to practice in this way

only where doing so is consistent with State law. If State law

establishes a more stringent rule, the hospitals (42 CFR 482.110) would

be required to furnish care in a way that is consistent with that rule.

[[Page 66741]]

To ensure that our requirements are consistent across the settings

in which surgery may be performed, we propose also to eliminate the

supervision requirement for CRNAs in ambulatory surgical centers (ASCs)

(42 CFR 416.42) and in critical access hospitals (CAHs) (formerly rural

primary care hospitals) (RPCHs) (42 CFR 485.639) and allow the CRNA to

function without supervision by another practitioner, where this is in

accordance with State law. In addition, if State law establishes a more

stringent rule, the ambulatory surgical centers (42 CFR 416.40) and

critical access hospitals (42 CFR 485.608) would be required to furnish

care in a way that is consistent with that rule.

We believe it is critical to the health and safety of surgical

patients to have accurate information on each patient's condition

before anesthesia is administered and a surgical procedure is

undertaken. Therefore, we would require under proposed Sec. 482.45(b)

that a comprehensive assessment be performed before surgery (with a

modified assessment being permitted in emergency cases) and that a

preanesthesia evaluation be done by an individual qualified to

administer anesthesia. We also would require that a postanesthesia

evaluation for proper recovery be done by an individual qualified to

administer anesthesia. We propose to delete the current prescriptive

rule under which the postanesthesia evaluation must be done by the same

individual who administered the anesthesia.

In the standard on documentation of care, we have included

requirements for entry of specified information in the medical record.

The information that would be required includes a report of the

comprehensive or modified pre-surgical assessment, a properly executed

informed consent form, an operative report describing complications,

reactions, length of time, techniques, findings, tissues removed or

altered, a record of intraoperative anesthesia, and a report of the

postanesthesia evaluation. By ``properly executed informed consent,''

we mean only that the patient understands the information the hospital

wishes to convey. The pre-surgical assessment and informed consent form

would have to be entered in the record before surgery except in

emergency cases, while the operative report, intraoperative anesthesia

record, and a report of the postanesthesia evaluation would have to be

entered in the record promptly following surgery. (The postanesthesia

evaluation report combines the current requirements for an inpatient

postanesthesia followup report (Sec. 482.52(b)(3)), and for an

outpatient postanesthesia evaluation (Sec. 482.52(b)(4)) into a single

new requirement.) The hospital also would be required to maintain a

complete, up-to-date operating room register. We recognize that our

proposal for the documentation requirements for the surgical and

anesthesia services COP is more extensive and specific than many other

requirements in these proposals. However, such documentation is common

to current practice and imposes no additional burden to hospitals as

these documentation requirements are part of the existing COPs.

10. Emergency Services (Sec. 482.50)

We propose to delete the existing regulations at Sec. 482.2

(Condition of participation: Provision of emergency services by

nonparticipating hospitals), and to add a single new emergency services

condition that would replace both current Sec. 482.12(f) (Condition of

participation: Governing body; Standard: Emergency services) and

current Sec. 482.55 (Condition of participation: Emergency services).

We believe Sec. 482.2 need not be retained since the regulations at 42

CFR 424.101 set forth a definition of ``hospital'' that is used for

purposes of payment for services to Medicare patients that are

furnished on an emergency basis by a hospital that does not participate

in the program. By addressing the two latter areas under a single

regulation, we hope to simplify the organization of the regulations and

eliminate the need for the user of the regulations to refer to separate

sections to review the rules on closely related services. For the

reasons explained below, we also are proposing to add a separate

standard for hospitals that offer emergency services on less than a

full-time basis.

In the standard on hospitals providing full-time emergency

services, we have emphasized requirements that most directly affect the

safety of patients. These are the requirements regarding the personnel

who furnish the services, the appropriateness of the services to

patient needs, and the integration of emergency services with those of

other hospital departments. Regarding the proposed requirement for

sufficient numbers of personnel, we note that some hospitals may choose

to meet patient needs by using a comparatively smaller, but more highly

trained and skilled staff. In assessing compliance with this

requirement, our primary concern will be to determine whether emergency

service staffing is adequate to produce good treatment outcomes.

We are proposing the second standard, which is applicable only to

hospitals providing part-time emergency services, in order to allow

more flexibility to hospitals that find it necessary, because of

staffing limitations, low emergency room volumes, or other factors, to

limit the times during which emergency services can be offered. Because

of the nature of emergency services, it clearly would be desirable to

have them available on a 24-hour per day, 7-day per week basis.

However, many hospitals, particularly those that are small and are

located in remote rural areas, find it difficult to recruit and pay

staff to furnish emergency services on this schedule. To avoid a

situation in which these hospitals find it necessary to terminate

emergency services altogether, we propose that hospitals that are

located in rural areas and have fewer than 100 beds may offer emergency

services on a part-time basis. We propose to use the definition of

``rural area'' now set forth in our regulations at 42 CFR

412.62(f)(1)(ii). Under that definition, an area is considered

``rural'' if it is located outside any Metropolitan Statistical Area

(MSA) or New England County Metropolitan Area (NECMA), and outside

specified New England counties.

We emphasize that this flexibility is not intended to foster

development of dual standards of care--during its stated hours of

operation, a hospital emergency department or service must meet exactly

the same standards as full-time departments or services. However, at

the times when it chooses not to offer emergency services, the hospital

would be required to meet only the standard for hospitals that do not

offer emergency care.

Section 1867 of the Act (Examination and Treatment of Emergency

Medical Conditions and Women in Labor) imposes certain obligations on

Medicare-participating hospitals that have emergency departments. If an

individual comes to the hospital's emergency department and a request

is made on the individual's behalf for examination or treatment for a

medical condition, the hospital must provide, within the capability of

its emergency department, an appropriate medical screening examination

and, if necessary, either stabilizing treatment or an appropriate

transfer. Section 1867 of the Act does not deal explicitly with the

situation of a hospital that opens its emergency department on only a

part-time basis. However, it is our policy that a hospital that offers

emergency services on a regular, part-time basis is not considered to

have an emergency department under section 1867 at the scheduled times

when emergency

[[Page 66742]]

services are not available. At those times only, the hospital is not

subject to the requirements of section 1867 of the Act. The hospital

would remain obligated at those times to meet the requirements of

proposed Sec. 482.50(c) for appraisals of emergency cases, initial

treatment, and referral when appropriate. At all other times (that is,

when emergency care is offered), the hospital is fully responsible for

compliance with the statute (and with the implementing regulations at

42 CFR 489.24) and also would be obligated to meet the emergency

services requirements set forth in proposed Sec. 482.50(a) and (b).

We expect that a hospital offering part-time emergency services

will do so in good faith, and not ``open'' and ``close'' its emergency

department selectively, in an attempt to avoid meeting its statutory

obligations to some patients based on their perceived inability to pay.

We will continue to investigate all allegations we receive of

violations of section 1867 of the Act and will not hesitate to initiate

termination proceedings, or to refer cases to the Office of Inspector

General, if it is clear that a violation has occurred. We welcome

comments on this proposal.

The third proposed standard deals with hospitals not offering

emergency services. We propose to continue to require such a hospital

to provide for appraisal of emergencies, initial treatment, and

referral of patients when appropriate. However, we propose to delete

current process-oriented requirements having to do with the

organization of the hospital's emergency services (Sec. 482.55(a)(1))

and with policies and procedures for the medical care provided in the

emergency department (Sec. 482.55(a)(3)). We believe those requirements

should be eliminated in favor of those that focus on activities more

directly related to outcomes.

11. Discharge Planning (Sec. 482.55)

Section 1861(e)(6) of the Act requires that a hospital have in

place a discharge planning process that meets the requirements of

section 1861(ee) of the Act. Under section 1861(ee), a discharge

planning process must apply to services furnished by the hospital to

Medicare beneficiaries, and meet the guidelines and standards

established by the Secretary of HHS to ensure a timely and smooth

transition to the most appropriate type of setting for posthospital or

rehabilitative care. Section 1861(ee)(2) further requires that the

Secretary's standards and guidelines include seven specific elements,

as listed in that provision. On December 13, 1994, we published a final

rule to implement the requirements of sections 1861(e)(6) and 1861(ee)

of the Act by adding new Sec. 482.43 (Condition of participation:

Discharge planning) (59 FR 64141). For the reasons explained in the

preamble to that final rule, we elected under the authority in section

1861(e) of the Act to require a discharge planning process that applies

to all patients, not just to Medicare beneficiaries.

On October 31, 1994, Congress enacted Public Law 103-432, the

Social Security Act Amendments of 1994 (SSAA'94). Section 107 of that

legislation amended section 1861(ee)(2) effective November 1, 1995, to

require that a discharge planning evaluation for a Medicare patient

include an evaluation of the need for hospice care as well as other

posthospital care.

Congress included in the Balanced Budget Act of 1997 (BBA '97),

Public Law 105-33, enacted August 5, 1997, several amendments to

section 1861(ee)(2) to address concerns about reports of some hospitals

referring patients only to HHAs with which they have financial ties.

Subsection 4321(a) of that legislation, effective November 3, 1997,

amended the discharge planning evaluation requirements in section

1861(ee)(2)(D) and added a subparagraph (H) to section 1861(ee)(2).

These changes are consistent with patient rights, the first core

condition of patient-centered care in this regulation. As a result of

these changes a Medicare participating hospital now must: (1) Include

in a patients's discharge planning evaluation the availability of home

health services through Medicare participating HHAs which serve the

patient's geographic area and which request the hospital to be listed;

and (2) ensure that a patient's discharge plan does not specify or

otherwise limit the qualified participating HHAs and identify any HHA

with which the hospital has a ``disclosable financial interest'' if the

patient is referred to such entities.

We propose to redesignate Sec. 482.43 as new Sec. 482.55, and to

republish it with only the changes discussed below. In keeping with the

shift in focus of these regulations from process to outcome, we propose

to delete the requirement that a hospital's discharge planning policies

and procedures be specified in writing, and to add the requirement that

the discharge planning process assure that appropriate posthospital

services are obtained for each patient, as necessary.

To implement section 107 of SSAA'94, we would specify under

proposed Sec. 482.55(b)(3) that hospitals must evaluate the need for

hospice as well as other posthospital care. To implement section

4321(a) of the BBA '97 we would specify under proposed 482.55(b)(7)

that the discharge planning evaluation must include a list of home

health agencies that participate in the Medicare program and whose

services are available to the patient, serve the area in which the

patient resides, and request to be listed. Since, section 4321(a)

requires listing the availability of individuals and entities, we have

been questioned as to who those individuals and entities are. We have

determined that since section 1861(m) of the Act identifies home health

services as items or services furnished by a home health agency, or by

others under arrangement with the agency, section 4321(a) is referring

to Medicare participating home health agencies. Also in

Sec. 482.55(b)(7), we have proposed that the HHA should determine the

geographic area in which the patient resides. We believe the HHA should

determine the geographic area because the HHA is in the best position

to know its service area and presumably, would not misrepresent its

services by requesting to be listed for an area it does not serve.

Discharge planning is effective if there are resources available to the

patients at discharge. A hospital's ability to provide patients with

outside resources for posthospital care are essential to allow many

patients to stay at home which is a much less expensive alternative

than institutionalization.

Under proposed 482.55(c)(6), we propose to require that the

hospital tailor the plan, where possible, to the preferences of the

patient and family. Specifically, we would state that the discharge

plan must inform the patient (or patient's family) of their freedom to

choose among available Medicare-participating providers that are

capable of furnishing the needed services (such as SNF or HHA services)

and must, if possible, respect the patient's or family expressed

preference. Also, the discharge plan shall not specify or otherwise

limit the qualified providers that are available to the patient. The

intent of this change is to provide the patient with the freedom of

choice to determine which HHA will provide care in accordance with

Section 1802 of the Act, which states that beneficiaries may obtain

health services from any Medicare participating provider. As written,

section 1861 (ee) of the Act requires Medicare participating hospitals,

as part of their discharge evaluation, to provide patients with a list

of Medicare-certified home health agencies that serve a patient's

[[Page 66743]]

geographic area and request to be listed by the hospital.

Hospitals and managed care organizations (MCO) have expressed

concern as to whether the BBA'97 change was intended to apply to

patients in managed care plans. MCO members are limited as to what

services they may obtain from sources other than through the MCO.

Therefore, providing members with a standardized list of all HHAs in

the area can be misleading and potentially, financially harmful since

MCO enrollees may be liable for services that they obtain from sources

other than the MCO, and patients may interpret a list of HHAs that are

not available to them under their health plan to mean that they are

authorized by the MCO. This does not mean that Medicare MCO members in

particular are denied the freedom of choice they are entitled to under

section 1802 of the Act. Medicare beneficiaries exercise their freedom

of choice when they voluntarily enrolle in the MCO and agree to adhere

to the plans provisions on coverage.

To alleviate the confusion, hospitals can provide MCO patients with

a list of available and accessible HHAs approved by the MCO. Another

option is, when discussing discharge planning with patients, hospitals

can determine whether the beneficiary has made any prior commitments

through enrollment in a managed care organization. Where this is the

case, the patient should be informed of the potential consequences of

going outside the plan for services. The discharge planning process is

initiated when a patient is admitted to the hospital. The collection of

data includes verifying the patient's health insurance. At this time,

the hospital personnel responsible for discharge planning activities

can retrieve this information and initiate communication with the MCO

to coordinate available and accessible posthospital care. We solicit

the public for comments on this issue.

HCFA has received a number of questions concerning section 4321(a).

These questions include: How does the hospital compile the list of

agencies? What is the hospital's responsibility and liability for

providing a list? Is there a form for home health agencies to complete

to request placement on a hospital's list? We welcome public comments

on these questions and we will take these comments into consideration

when developing the final rule.

The process of making a choice includes being provided options to

make an informed and confident decision. Hospital providing a list of

available Medicare-certified home health agencies will assist patients

in making such decisions. Although a hospital is free to design the

list's format, the list is neither a recommendation nor endorsement by

the hospital of any particular home health agency's quality of care. If

HHAs do not meet all criteria, the hospitals are under no obligation to

place that HHA on the list. The list should be legible and should not

be used to specify or limit the choice of a HHA.

Under proposed Sec. 482.55(c)(7), we would state that the discharge

plan must identify those entities to whom the patient is referred in

which the hospital has a disclosable financial interest or those

entities which have a financial interest in the hospital. ``Disclosable

financial interest'' will be defined in the rule-making process which

implements section 1866(a)(1)(S) of the Act. In the interim, we suggest

that hospitals reference the Disclosure of Ownership and Control

provisions of 42 CFR 420 subpart C, which sets forth requirements for

providers to disclose ownership and control information and identities

of managing employees. If a hospital refers patients about to be

discharged and in need of services, only to entities it owns or

controls, then the hospital is infringing on the rights of the patient

to choose the facility they would like to go to for services. The

proposed disclosable financial interest requirement is an effort to

increase the beneficiary's awareness of the actual or potential

financial incentive a hospital may receive as a result of the referral.

This regulation supports and extends our focus on patient-centered

outcomes of care. We invite comments on this proposed requirement and

other concerns hospitals may have regarding their ability both

operationally and financially to undertake this approach.

In proposed Sec. 482.55(e), we propose to add the requirement that

the hospital's discharge planning process be an integral part of the

hospital's quality assessment and performance improvement program. We

believe this change is needed to enhance the effectiveness of the

hospital's discharge planning program and to emphasize the important

role of discharge planning in contributing to overall quality of care

in a hospital.

We are not proposing any other changes in the current discharge

planning COP. In view of the specificity of section 1861(ee) of the Act

and the relatively recent implementation of that legislation through

notice and comment rulemaking, we do not believe there is any further

benefit to the public to be obtained by again requesting public comment

on the parts of the regulation that we are republishing without change.

Thus, with the exception discussed below, we are soliciting comments

only on the proposed changes to the discharge planning requirements,

rather than on the entire discharge planning COP.

Proposed Sec. 482.55(b) (5) and (6) require that hospital personnel

must complete the required discharge planning evaluation on a timely

basis and include it in the medical record, thus ensuring that

appropriate arrangements for posthospital care are made before

discharge and avoiding unnecessary delays in discharge. We believe

these requirements, which has been carried over without change from

existing Sec. 482.43(b) (5) and (6), are useful because they emphasize

the need for prompt action to assess and act on the discharge planning

needs of patients. We note that we considered including under proposed

Sec. 482.55(c) similar requirements about the discharge plan itself;

however, we decided not to do so because we believe the existing

requirements will ensure that a discharge plan is completed and

available far enough in advance of discharge to allow it to be put into

practice. Nevertheless, it is conceivable that some may interpret the

absence of an explicit rule on the timing of the plan as an indication

that it would be acceptable to have only a partial or incomplete plan

at the time of discharge, or even to develop an after-the-fact ``plan''

that does not anticipate needs and try to meet them, but instead merely

records and attempts to rationalize the postdischarge care already

received. We welcome comments on whether the possibility of a

misunderstanding of this point is strong enough to warrant adding, in

the final rule, an explicit requirement that the discharge plan itself

must be completed on a timely basis and entered into the medical

record. We will consider the comments received on this issue, and may

add an explicit requirement on this point to the final rule.

Possible Use of the Uniform Needs Assessment Instrument. In 1986,

Congress directed the Secretary to develop a uniform needs assessment

instrument (UNAI), or instruments, to serve primarily as a standardized

means of evaluating an individual's needs for posthospital or

supportive care. Congress also envisioned the possibility of the UNAI

being used for determining whether individuals should receive services

provided under publicly funded programs (that is, linking the

individual's health status per the UNAI

[[Page 66744]]

to decisions regarding the scope and duration of services to be

covered). In addition, the UNAI was envisioned as a vehicle for

tracking individual patients across different Medicare service

providers (primarily HHAs and SNFs). Although Congress directed the

Secretary to produce the UNAI, there was no direction concerning its

implementation. Thus, there is no statutory obligation to use the UNAI

in practice.

The Secretary appointed a panel of experts, with HCFA providing the

staff support services, to develop the UNAI. The expert panel was

successful in devising a consensus tool that was brief, described the

patient's functional status, nursing and other care requirements, and

available family/care giver supports. The UNAI was seen as having

content validity and clinical utility as judged by the comments of a

group of experts and a stratified random sample of providers. The final

UNAI and a comprehensive report about its development were submitted to

the Congress in 1992. While the panel was enthusiastic about the

potential for the UNAI as a posthospital discharge planning tool and a

means of tracking a patient across provider types, the panel did not

believe the UNAI could be used to evaluate an individual's eligibility

for posthospital services under the current Medicare benefit structure.

The UNAI and the Report to Congress have been widely disseminated,

and many hospitals have chosen to begin using the tool because it

provides a useful method to organize their discharge planning

processes. Currently, HCFA is preparing to field test the UNAI in

hospitals, HHAs, and SNFs. The field test will rely on provider staff

to complete the UNAI, and will provide information on the UNAI's

reliability, validity, and administrative feasibility. HCFA's

contractor for the field test, Research Triangle Institute, is also

developing a ``high risk screener,'' which will be used to identify

those Medicare patients in need of an intensive discharge planning

evaluation and thereby reduce the number of patients who would be

subject to the UNAI. For example, a Medicare patient who has a minor

operation and will return to the home with support from an able spouse

and adult children nearby likely would pass the screener and not

receive the UNAI as part of the hospital's discharge planning effort

for that patient. However, an elderly beneficiary who suffers a severe

stroke, and has a spouse in frail health and no children nearby would

certainly fail the screener and would receive the UNAI as part of the

hospital's discharge planning for that patient.

In the preamble to our December 13, 1994 final rule on discharge

planning (59 FR 64141), we discussed our work on the UNAI, but we did

not establish a requirement for its use. Now, with a comprehensive

effort to change the hospital conditions of participation to a more

patient-centered, outcome-oriented approach, and a strong emphasis on

quality assessment and performance improvement, coupled with HCFA's

intention to use data--particularly functional assessment data--more

widely in care giving, quality improvement, and consumer information,

we are considering requiring hospitals to use the UNAI to assess

Medicare patients who are at-risk of needing posthospital services. The

purposes of imposing the UNAI as a standard hospital discharge planning

tool for Medicare patients would be to: (1) Ensure that all relevant

factors are considered in evaluating an individual's needs for

continuing care; (2) foster more uniform decisionmaking about the need

for posthospital care services; (3) direct those patients to the most

effective and efficient approach to posthospital care services; (4)

provide posthospital care service providers with more complete and

consistent baseline information about the patient in order to

facilitate continuity of care and early assessment and care planning by

the posthospital provider; and (5) enable managed care organizations

and HCFA to track the course of outcomes of individual patients across

provider types within the same health care episode. One primary benefit

of standardizing the needs assessment process is that the use of common

language and definitions enables the type of quality monitoring and

improvement efforts that depend on consistent data and health status/

outcome measures.

The establishment of common data elements will also allow the same

types of measures to be used across care settings. Another advantage

associated with using the UNAI across provider types is that we intend

that it ``map'' to other assessment tools, such as the Minimum Data Set

in SNFs and the standard core assessment data set we plan to propose

shortly for use in HHAs. Thus, if a UNAI accompanies a patient to an

HHA, the HHA can use most of the information on the UNAI to complete a

number of items on the HHA standard assessment data set. This

ultimately would decrease provider burden by streamlining the

assessment processes and eliminating the need for assessing and

reporting redundant information. It also would enable providers and

managed care entities to track and understand care outcomes more fully.

The UNAI is not a comprehensive assessment tool, nor is it adequate

for comprehensive care planning. Rather, it gives a snapshot view of

the patient's functional status and support systems in the home and

community to help caregivers direct the patient to the next source of

care and to give the continuing care provider baseline information to

make initial assessment, care planning, and service delivery more

efficient and individualized.

Although we are not now formally proposing to require use of the

UNAI, we invite comment from the hospital community, especially

discharge planners, as well as from SNFs, HHAs, and others, about the

desirability of having a standard approach to posthospital discharge

planning for Medicare patients who fail the high-risk screener. We

invite comment on the following questions, as well as any other related

comments:

(1) Would the use of a standard posthospital discharge planning

tool for Medicare patients be helpful to the hospital, the patients,

and the posthospital care providers in their efforts to ensure the

patient receives the most effective, efficient, and desirable

posthospital services necessary to address the patients' continuing

care needs? If so, why, and if not, why not?

(2) Would a proposal that limits the required use of the UNAI to

Medicare patients only (the States could impose it separately if they

wished for Medicaid patients) create duplicate or multiple systems

within a hospital and create more problems than benefits? Should the

UNAI be used for every patient over a certain age (e.g., 50) for whom

discharge planning is necessary? How would other payers (e.g., fee-for-

service or managed care plans) be affected by a Federal requirement to

use the UNAI?

Subpart C--Organizational Environment

12. Administration of Organizational Environment (Sec. 482.110)

The proposed condition on administration of organizational

environment would replace the existing regulations at Sec. 482.11

(Condition of participation: Compliance with Federal, State, and local

laws) and Sec. 482.12 (Condition of participation: Governing body).

Combining these provisions would simplify the structure of the

regulations. In addition, it would emphasize that if State or local law

provides for the licensing of hospitals, and an institution in the

State wishes to

[[Page 66745]]

participate in Medicare as a separate hospital (rather than as an

organizational unit of another provider), that institution must also

show that it is regarded as a separate entity by the State for

licensure purposes.

In developing the proposed new condition, we have relocated three

of the standards previously in the current governing body COP. These

are the standard on medical staff (Sec. 482.12(a)), the standard on

care of patients (Sec. 482.12(c)), and the standard on emergency

services (Sec. 482.12(f)). Under the cross-functional approach we are

following in these proposed rules, medical staff issues would be

covered by the proposed new condition on human resources

(Sec. 482.125), and patient care issues would be covered in the new COP

that includes patient care (Sec. 482.20). As discussed above, we

propose to create a new condition on emergency services which would

include the rules now stated under Sec. 482.12(f) with respect to

appraisal, initial treatment, and referral of emergency patients by

hospitals that do not provide emergency services.

The primary requirement under the proposed governing body COP is

that a hospital's governing body, other organized group, or an

individual (hereafter ``governing body'') is legally responsible for

the management and provision of all care furnished to hospital

patients, including the structure needed to administer the hospital

effectively. Thus, the governing body must create an environment that

helps ensure the provision of high quality care that is consistent with

patient needs and the effective administration of the hospital. In the

proposed new condition, we emphasize the responsibility of the hospital

governing body for the entire operation of the hospital, including care

furnished under contracts and arrangements, the appointment of an

administrator, the appointment of the medical staff and its bylaws, and

the implementation of effective budgeting, accounting, and quality

control programs. Although these requirements necessitate the use of

certain processes, they are essential to ensuring that the entity with

which the Secretary has entered into a participation agreement is in

fact able to ensure patient health and safety. To help ensure this

accountability, we have specified the responsibility of the governing

body for the hospital's compliance with all applicable conditions of

participation and standards. In addition, performance of these basic

organizational functions is, in our view, a minimum condition for the

creation of an environment in which appropriate patient-centered

activity can occur.

We are proposing that a hospital must notify HCFA or the State

survey agency whenever the hospital adds a new service category to the

list of services it offers (proposed Sec. 482.110(b)(2)(i)). We believe

this is necessary so that the State survey agency may determine whether

an onsite survey of the new service is necessary and to ensure that the

survey team may have the correct number and type of qualified members

when it next visits the hospital. This should then improve the speed

and efficiency with which the hospital's certification process can be

accomplished.

In addition, we are proposing to require that a hospital notify

HCFA (through its regional offices) whenever it adds a new service site

(proposed Sec. 482.110(b)(2)(ii)). For example, a hospital would need

to notify us if it were to acquire a physician's office and consider it

an offsite hospital outpatient clinic. We believe this is necessary so

that we may decide whether an onsite survey is necessary to assure that

the addition does not alter the previous certification decision

regarding the hospital. Further, HCFA would need to review the new

service site to assure that it meets the level of integration required

for inclusion of the new site as a part of the provider. This will

ensure that appropriate payment is made. We have issued instructions

outlining the criteria that must be met in order to demonstrate

integration inherent in classification of an offsite service as part of

the hospital in Program Memorandum A-96-7.

Proposed Sec. 482.110(b)(3) and (4) restate with only minor

editorial changes current requirements concerning the governing body's

responsibilities for an institutional plan and budget, as well as the

medical staff's bylaws. We propose to retain these requirements, in

accordance with section 1861(e) of the Act.

Under proposed Sec. 482.110(c), we would redesignate, with changes,

the requirements under existing Sec. 482.12(c)(5) concerning a

hospital's responsibility to identify potential organ donors. We

recognize that these provisions, in particular the requirement that a

hospital have written protocols addressing various aspects of its organ

procurement responsibilities, are more prescriptive and process-

oriented than other parts of these proposed rules. However, we believe

it is necessary to retain these regulations in their existing form to

implement section 1138 of the Act, which specifically requires written

hospital protocols for organ procurement. The changes to this section

are discussed below.

We are revising Sec. 482.110(c)(ii) (formerly

Sec. 482.12(c)(5)(i)(A)) and adding new requirements under

Sec. 482.110(c)(1)(iv) concerning organ procurement organizations

(OPOs) and hospitals. The development of these requirements is in

response to issues raised during public hearings held by the Department

on December 11 through 13, 1996, to examine the allocation policies for

liver transplantation and to receive comments regarding methods to

increase organ donation. During those hearings, it became abundantly

clear that there is a critical shortage of organs available for

lifesaving transplantation. While the science of transplantation has

made progress over the last two decades, lives that could be saved

continue to be lost because of an inadequate supply of donor organs.

For example, an estimated 12,000 to 15,000 deaths occur in the United

States each year that could yield suitable donor organs, yet in 1996 no

more than 5,400 resulted in donations. In April 1997, approximately

52,000 Americans were waiting for organ transplants. Therefore, we

believe it is appropriate to propose revisions to the current hospital

conditions relating to organ donation because we expect these revisions

will result in a significant number of lives being saved.

The existing regulations merely repeat the language in section 1138

of the Social Security Act which requires hospitals to assure that

families are advised of the right to donate or not donate organs,

encourage discretion and sensitivity to family values, and notify an

OPO of potential donors. We are proposing to revise the hospital

conditions of participation regarding organ donation to emphasize the

role and relationship of the OPO in the process. Although the proposed

changes increase the importance of the OPO, our aim is that they will

result in a more collaborative organ donation process which achieves

positive results. That is, we hope hospitals and OPOs will work

together in dealing with their individual and unique circumstances and,

using the best available practices, achieve significant increases in

the rate of organ donations.

Specifically, we are proposing to specify that the hospital must

ensure that the family is advised, in collaboration with the OPO with

which the hospital has an agreement, of their right to donate or

decline to donate (Sec. 482.110(c)(1)(ii)). This proposal is based on

research in the field of organ donation that indicates that consent to

donation is highest when the request is

[[Page 66746]]

made by the staff of the OPO rather than the hospital. OPO staff are

specialty trained medical personnel. They have training in bereavement

counseling and extensive experience in dealing with families undergoing

the loss of a loved one. They have knowledge of brain death and are

particularly skilled in making complicated medical terminology

understandable to a grieving family. Most importantly, organ donation

is their principal field, whereas hospital staff have numerous other

responsibilities. Further, donor consent rates tend to be higher when

there is a time lapse between the hospital notifying the family of a

death and the request for organ donation.

In proposing this change, we considered the possibility that we

might be viewed as holding hospitals responsible for ensuring that a

function, such as advising a family of their organ donation rights, be

performed without providing them with the ability to control the

situation. That is, the hospital cannot control the OPO and may

consider that it may be a victim of poor OPO performance. However, the

conditions of coverage for OPOs include performance standards that hold

OPOs accountable for achieving a specified number of donors and organs

based on the size of the population it serves. We believe these

performance standards will motivate OPOs to provide satisfactory

service to hospitals. Moreover, we note that the proposed hospital

conditions hold hospitals accountable for ensuring that they have

written protocols and do the following:

Identify potential organ donors as defined by the OPO with

which the hospital has an agreement;

Notify the OPO of such potential donors;

Assure, in collaboration with the OPO with which the

hospital has an agreement, that the family of each potential organ

donor knows of its option either to donate organs or tissues or to

decline to donate;

Encourage discretion and sensitivity with respect to the

circumstances, views and beliefs of the families of potential donors;

and

Ensure that the hospital works cooperatively with the OPO

with which the hospital has an agreement, in educating staff on

donation issues, reviewing death records to improve identification of

potential donors, and maintaining potential donors while necessary

testing and placement of potential donated organs take place.

We expect that if the hospitals and OPOs are not achieving the

desired results the hospitals would reevaluate and revise their

protocols. Hospitals would not be cited for a deficiency of this

standard if the hospital has appropriate protocols, regardless of the

success of OPO staff in acquiring donors.

We also are proposing to revise an existing requirement that

specifies that the hospital must notify OPOs of potential organ donors.

There is a good deal of variability among hospitals in referral

patterns. Some hospitals do not call the OPO unless they have

determined that the patient is medically suited to be a donor and the

family has consented. On the other hand, some hospitals refer all

deaths to the OPO. Most hospitals have established criteria, such as

age or absence of systemic disease, to determine if a potential donor

should be referred to the OPO.

In evaluating the organ donor shortage and the actions that

hospitals may take with regard to donor referral, we considered the

following options:

Maintain the current requirement which provides hospitals

with the flexibility to determine appropriate referrals through their

written protocols;

Require mandatory reporting of all death of patients under

age 75 to the OPOs; and

Require mandatory reporting of deaths to OPOs using

protocols defined by the OPOs.

During our analysis, we identified a number of advantages and

disadvantages to each of these alternatives before we concluded with

the proposal to require mandatory reporting of deaths to OPOs using

protocols defined by the OPO as discussed below. However, we are

specifically soliciting comments on the advantages and disadvantages of

the various options, and inviting identification of additional

alternatives and empirical data supporting various opinions, during the

public comment period.

The advantages of the current requirement, which specifies that

hospitals have a protocol for referring potential donors, are that it

provides hospitals with desired flexibility and it reiterates the

language of the statute. However, there are significant disadvantages

to this approach. The primary concern is that many hospitals have never

referred a potential donor. As noted above, we believe that there has

been a large number of potential donors that have been missed; that is,

we believe the number of potential donors is double to triple the

number of current donors. We are concerned that this flexibility has

resulted in a significant number of hospitals failing to refer all

potential donors and some hospitals not referring any donors. Some

hospitals view as potential donors only those in whom consent to donate

has already been obtained and do not even attempt to ask other families

about the possibility of donating; others refer only when they consider

the deceased to be a good candidate or when they believe the family may

consent to the donation. This leads to a loss of opportunity for

families for whom the gift of a loved one's organ may be the first step

in the healing process as well as the loss of a substantial number of

life-saving organs.

We also considered the alternative of requiring referrals of all

deaths to the OPO. The State of Pennsylvania has implemented this

practice. The resulting increase in donation in Eastern Pennsylvania

has been at least 10-percent. We believe telecommunication technology

currently exists to permit low-cost and efficient implementation of a

policy requiring referrals of all deaths. OPOs that have implemented

such programs indicate that reporting of an individual's death and

relevant medical information takes only 5 to 10 minutes of time by

hospital staff. Under such a system of mandatory death reporting, it is

reasonable to assume that no potential donor will go unidentified and

few, if any, families of potential donors will go without being given

the opportunity to donate. This system also has the advantage of

relieving hospital staff of the burden of making any assessment of

donor suitability or the families' willingness to donate. Finally, as

more families are educated about organ donation, even if they decide

not to donate, myths that inhibit organ donation may be dispelled.

Despite the major advantages to this alternative, there are

potential problems. There is clearly a significant cost involved in

providing and interpreting information on over 1 million deaths

annually. Conservative implementation estimates of this alternative are

about $4 million annually (1 million deaths times 5 minutes of hospital

and OPO time at an assumed average salary cost of $50,000), and may be

as great as $8 to $10 million. Arguably, the saving of even a single

statistical life would justify such a cost, using standard benefit-cost

analysis assumptions. Nonetheless, we recognize that these costs should

not be imposed if less costly approaches can also achieve increased

organ donation. In discussing this alternative with the OPO industry,

we have been advised by some OPOs that they are concerned about

implementing such a system because they would have to handle a large

number of unproductive referrals. That is, of the approximately 1

million deaths

[[Page 66747]]

annually, only about 12,000 to 15,000 are potential organ donors.

This proposed regulation includes the requirement that hospitals

report all potential donors using protocols as defined by the OPO. This

alternative has the advantage of providing support for OPOs in dealing

with low referral hospitals, while providing a great deal of

flexibility for OPOs to respond to local community situations and

resource limitations. As noted above, we solicit comments on

alternatives that could be more responsive to the national organ

shortage. We are also considering whether to propose in the OPO

conditions of coverage a performance standard that could be used to

determine the extent of organ donations. In principle, procedural

standards related to organ procurement could be replaced by an outcome

standard related to organ recovery. However, since we are not clear as

to how to design or implement the most cost-effective, low-cost

standard we would welcome public comment.

We are aware that this proposal, by giving the OPO responsibility

for defining potential organ donors and the protocol for referring such

donors to the OPO, raises questions about the impact that it will have

on the donation and retrieval of a variety of tissues that are also

used in patient care. Tissue transplants also are important procedures

that improve, and sometimes save, the lives of recipients. It is our

expectation that hospitals, OPOs, eye, and tissue banks will work

cooperatively and effectively to facilitate and enhance both organ and

tissue donation. We recognize that there is considerable local

variation in how these arrangements are currently carried out and how

they might be done under our proposed changes. We will appreciate

receiving comments on how these proposed changes are likely to impact

on tissue donation, as well as suggestions on what measures we could

appropriately take to maximize both tissue and organ donation.

Finally, we are proposing to add a new requirement that specifies

that hospitals work cooperatively with the designated OPO in educating

hospital staff on donation issues, reviewing death records to improve

identification of potential donors, and maintaining patients while

necessary testing and placement of potential donor organs take place

(proposed Sec. 482.110(c)(1)(iv)). We do not believe this requirement

is unduly burdensome on hospitals since all reasonable hospital costs

incurred with respect to any organ procurement effort are paid. To

further the cooperative efforts between hospitals and OPOs, we are also

proposing to add a requirement that hospitals must provide requested

data related to patients eligible for transplantation either directly

to the Department or through the Organ Procurement or Transplantation

Network. This requirement is explained further in Sec. 482.120

``Information Management''. We invite comments on the content of this

new requirement.

13. Infection Control (Sec. 482.115)

The present requirements on infection control (Sec. 482.42) were

promulgated as a separate COP largely due to the seriousness of the

problem of Nosocomial infections. Nosocomial infections subject

patients to significant additional pain and risk, prolong hospital

stays, and lead to significant additional costs in health care

spending.

We propose to maintain a separate COP on infection control because

we believe it is vital for protecting patient health and safety. We

propose to retain most of the standards under the current COP, but we

would strengthen its focus by requiring hospitals to take appropriate

actions that result in improvement when problems are identified in

their infection control programs. This is in concert with the proposed

quality assessment and performance improvement COP, of which infection

control must be an integral part.

The proposed infection control condition places accountability on

hospitals to prevent, control, and investigate infections and

communicable diseases, and take actions

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