Medicare Program; Recognition of the American Association for Accreditation of Ambulatory Surgery Facilities, Inc. for Ambulatory Surgical Centers Program

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2008-FN]

RIN 0938-AI90

Medicare Program; Recognition of the American Association for

Accreditation of Ambulatory Surgery Facilities, Inc. for Ambulatory

Surgical Centers Program

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

ACTION: Final notice.

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SUMMARY: This notice announces the approval of the American Association

for the Accreditation of Ambulatory Surgery Facilities, Inc. (AAAASF)

as an accreditation organization acknowledged by the Medicare program.

We have found that AAAASF's standards for ambulatory surgical centers

(ASCs) meet or exceed those established by the Medicare program. ASCs

accredited by AAAASF will receive deemed status under the Medicare

program.

EFFECTIVE DATE: This final notice is effective December 2, 1998,

through December 2, 2004.

FOR FURTHER INFORMATION CONTACT: Joan Berry, (410) 786-7233.

SUPPLEMENTARY INFORMATION:

I. Background

A. Determining Compliance of Ambulatory Surgical Centers--Surveys and

Deeming

In order to participate in the Medicare program, ambulatory

surgical centers (ASCs) must meet conditions for coverage specified in

regulations that implement Title XVIII of the Social Security Act (the

Act). ASCs enter into a Medicare participation agreement but generally

only after they are certified by a State survey agency as complying

with the ASC conditions for coverage set forth in the Act and

regulations. ASCs are subject to routine surveys by State agencies to

determine whether they continue to meet these requirements; an ASC that

does not meet these requirements is considered out of compliance and

risks having its participation in the Medicare program terminated.

Section 1865 of the Act includes a provision that permits ASCs to

be exempt from routine surveys by the State survey agencies to

determine compliance with the Medicare conditions of coverage.

Specifically, section 1865(b) of the Act provides that if we find that

accreditation of a provider entity by a national accrediting body

demonstrates that all Medicare conditions or requirements are met or

exceeded, we would (for certain providers, including ASCs) ``deem''

these entities as meeting the applicable Medicare conditions. In order

to enter the Medicare program under this deeming authority, the

entities must meet the regulatory requirements at 42 CFR 489.13

(``Effective date of agreement or approval''). Under our regulations at

Sec. 416.40 (``Condition for coverage--Compliance with State licensure

law''), an ASC must still meet the State's licensure requirements.

However, certification by Medicare is still required to receive payment

regardless of whether the certification is by us or the accrediting

body.

In making our finding as to whether the standards of an

accreditation body demonstrate comparability with all Medicare

conditions or requirements, we consider factors such as the body's

accreditation requirements, its survey procedures, its ability to

provide adequate resources for conducting required surveys and

supplying information for use in enforcement activities, its monitoring

procedures for provider entities found to be out of compliance with the

conditions or requirements, and its ability to provide us with

necessary data for validation.

As suppliers, ASCs are included by definition of provider entity in

section 1865(b)(4) of the Act. Thus, if we were to recognize an ASC

accreditation organization's program as demonstrating that all the

Medicare ASC conditions of coverage are met, the ASCs accredited under

the approved Medicare program would be considered or ``deemed'' to meet

the same conditions for which the accreditation standards have been

recognized. The American Association for the Accreditation of

Ambulatory Surgery Facilities, Inc. (AAAASF) is the third accreditation

organization that we have approved for ASCs. The other two

accreditation organizations are the Joint Commission on the

Accreditation of Healthcare Organizations (JCAHO) and the Accreditation

Association for Ambulatory Health Care (AAAHC).

It has been brought to our attention that some ASCs are under the

mistaken impression that once deemed authority is granted by HCFA to an

accreditation organization, then ASCs must be accredited by such a body

to receive Medicare certification. Accreditation by an accreditation

organization is voluntary and not required by HCFA for Medicare

certification.

B. Deeming Authority Process

On November 23, 1993, we published a final rule (58 FR 61816) that

set forth the procedure that we would use to review and approve

national accreditation organizations that wish to be recognized as

providing reasonable assurance that Medicare conditions of coverage are

met (Sec. 488.4, ``Application and reapplication procedures for

accreditation organizations''). A national accreditation organization

(Accreditation organization) applying for approval of deeming authority

must furnish to us information and materials listed in our regulations

at Sec. 488.4. Our regulations at Sec. 488.8 (``Federal review of

accreditation organizations'') detail the Federal review and approval

process of applications for deeming authority. On April 26, 1996,

however, new legislation entitled ``Making Appropriations for Fiscal

Year 1996 to Make a Further Down Payment Toward a Balanced Budget and

for Other Purposes (Pub. L. 104-134)'' was enacted.

Section 516 of Public Law 104-134 amended section 1865 of the Act

in a number of ways. The legislation removed the requirements that

accreditation organizations provide reasonable assurance that entities

accredited by them would meet Medicare conditions coverage or

requirements. In revised section 1865(b)(1) of the Act, organizations

are now required to demonstrate that their accredited entities would

meet or exceed all of the applicable Medicare conditions. Section

1865(b)(4) includes suppliers (for example, ASCs) under the provider

entities that we may consider for deemed status. We are required to

publish a proposed notice in the Federal Register 60 days after the

receipt of a written request for deemed status by a national

accreditation body. After review of the national accreditation body's

application, the statute requires that we publish a notice of our

approval or disapproval within 210 days after we receive a complete

package of information and the organization's deeming application.

We received an application from AAAASF on November 18, 1997 and in

accordance with the statute, this final notice should have been

published by June 16, 1998. However, HCFA was waiting for AAAASF to

submit required materials on a quality improvement project for their

training program before approving its deeming authority. AAAASF chose

to delay the publication date, rather than be denied deemed status and

have to reapply for deemed authority. Regulations at Sec. 488.8(c)

[[Page 66555]]

specify that the deeming authority for AAAASF will take effect 90 days

from the publication of this final notice. Thus, AAAASF cannot award

deemed accreditation to a supplier and request HCFA certification

before the end of that 90-day period.

C. Ambulatory Surgical Center Conditions for Coverage and Requirements

The regulations specifying the Medicare conditions for coverage for

ASCs are located in part 416. These conditions implement section

1832(a)(2)(F)(i) of the Act, which provides for Medicare Part B

coverage of facility services furnished in connection with surgical

procedures specified by us under section 1833(i)(1) of the Act.

II. Provisions of the Proposed Notice

The proposed notice announced the application of AAAASF for deemed

status for its accreditation program only to the extent that it

accredits ASCs.

Under section 1865(b)(2) of the Act and our regulations at

Sec. 488.8 (``Federal review of accreditation organizations''), our

review and evaluation of this national accreditation organization was

conducted in accordance with, but was not necessarily limited to, the

following factors:

The equivalency of an accreditation organization's

requirements for an entity to be certified compared to our requirements

for certification.

The organization's survey process to determine the

following:

* The composition of the survey team, surveyor qualifications, and

the ability of the organization to provide continuing surveyor

training.

* The comparability of the organization's process to that of State

agencies, including survey frequency, and the ability to investigate

and respond appropriately to complaints against accredited facilities.

* The organization's procedures for monitoring providers or

suppliers found to be out of compliance with program requirements. If

noncompliance is identified through validation reviews, the survey

agency monitors corrections as specified at Sec. 488.7(b)(2).

* The ability of the organization to report deficiencies to the

surveyed facilities and respond to the facility's plan of correction in

a timely manner.

* The ability of the organization to provide us with electronic

data in ASCII comparable code and reports necessary for effective

validation and assessment of the organization's survey process.

* The adequacy of staff and other resources.

* The organization's ability to provide adequate funding for

performing required surveys.

* The organization's policies with respect to whether surveys are

announced or unannounced.

The accreditation organization's agreement to provide us

with a copy of the most current accreditation survey together with any

other information related to the survey that we may require (including

corrective action plans).

We met with representatives of AAAASF to evaluate its accreditation

standards and survey process to determine if the organization

demonstrated that its accredited facilities met Medicare conditions. We

did a standard by standard comparison of the applicable conditions or

requirements to determine which of them met or exceeded Medicare

requirements. The representatives responded to our concerns by

proposing to change the organization standards for its member ASCs

needing Medicare certification. We subsequently received revised survey

guidelines and amended standards for their member ASCs requesting

Medicare certification.

A. Differences Between the American Association for the Accreditation

of Ambulatory Surgery Facilities, Inc. and Medicare Conditions and

Survey Requirements

We compared the standards contained in the AAAASF's 1994 Standards

Manual for accreditation of ambulatory surgery facilities and its

survey process in the 1994 Inspectors Manual to the Medicare ASC

conditions and survey procedures. In 18 areas the AAAASF has made the

following revisions:

Exclusivity Requirement--AAAASF has included a statement

on ASC surgical exclusivity as an integral part of its application

package.

Unannounced Surveys--AAAASF has added language to the on-

site inspection information to include a declaration that all surveys

will be unannounced. In order to accommodate the need to assure that

key staff are on hand for surveys without notification of the facility,

AAAASF has agreed to request that the facility send staffing schedules

on a regular basis once their application is complete.

Frequency of Surveys--AAAASF resurveys an ASC every 3

years. Our original requirement was to survey ASCs every year. In

practice, our resurveys have been averaging almost 3 years. Both the

JCAHO and AAAHC have 3-year resurvey cycles. Therefore, we accept

AAAASF's 3-year resurvey cycle.

State and Local Laws--AAAASF has agreed to assure that

out-of-state inspectors receive adequate information on certification,

licensure, and scope of practice requirements of that State.

Reasonable Assurance--AAAASF has agreed to modify its

process to build in a review of the past history of facilities that

already have Medicare certification through the State.

Fraud and Abuse--AAAASF has agreed to require that its

inspectors report any suspected instances of fraud and abuse to the

appropriate HCFA Regional Office.

Hearing Schedules and Appeals--AAAASF has specified the

dates and locations for its Accreditation Committee hearings over the

next 4 years.

Hospitalization--AAAASF has inserted the word ``local'' to

indicate those hospitals eligible to receive immediate transfers for

patients requiring emergency medical care beyond the capabilities of

the ASC.

Anesthetic Risk and Evaluation--AAAASF has added language

to indicate that a physician must examine each patient immediately

before surgery to evaluate the risk of anesthesia and the procedure to

be performed.

Recovery Room and Waiting Area--AAAASF has specified that

an ASC must have a separate recovery room and waiting area.

Emergency Personnel--AAAASF has added the requirement that

personnel trained in the use of emergency equipment and cardiopulmonary

resuscitation must be available whenever a patient is in the facility.

Other Practitioners--AAAASF has added the requirement that

if certified operating room technicians are employed that their

certification or licensure must be current. Furthermore, if uncertified

or unlicensed operating room technicians are used, it must be

permissible under State law and the technician must be personally

trained by the employing surgeon.

Organization and staffing--AAAASF has added the

requirement that a registered nurse must be available for emergency

treatment whenever a patient is in the facility.

Oral Orders--AAAASF has added a standard that requires

that oral orders for drugs and biologicals must be followed by a

written order and signed by the prescribing physician.

Laboratory and Radiologic Services--AAAASF has added the

requirement that radiologic services be obtained from a Medicare-

approved facility and that ASC laboratories must meet requirements of

part 493.

[[Page 66556]]

Furthermore, if the ASC does not provide its own laboratory services,

it must have procedures for obtaining routine and emergency laboratory

services from a certified laboratory in accordance with part 493. Any

referral laboratory must be certified in the appropriate specialties

and subspecialties of service to perform the referred tests in

accordance with the requirements of part 493.

Life Safety Code: Surgical Procedures--AAAASF agreed to

require facilities to meet State and local requirements, or the

National Fire Prevention Association (NFPA) Standards for Health Care

Facilities (NFPA 99), and Life Safety Code (NFPA 101) Chapters 12 and

13 (and appropriate references), whichever is more stringent. Language

was added to specify that their regular inspections for installation

and maintenance of surgical equipment will be at least annually. In

conformity with the NFPA requirements, AAAASF has made standby

generator as the mandatory source of emergency power and reduced the

time for such generators to reach full power from 30 to 10 seconds.

Life Safety Code: Environment--AAAASF has specified that

fire drills must be held once a month for each shift and has made smoke

detectors mandatory for all office-based ASCs.

Life Safety Code: Standards Addendum--AAAASF has specified

that facilities must be inspected at least annually by the local or

State fire control agency if this service is available. If not, AAAASF

agrees to contract with a State agency or qualified subcontractor to

perform the inspections.

Inspector Training Program--AAAASF has submitted a revised

training program that provides for consistent, national training of all

inspectors in their processes and integrates instruction in the

Medicare requirements based on either the trainer's participation in

Medicare training or using Medicare survey experts as instructors.

We have agreed to accept language that requires compliance with the

1985 edition of the Life Safety Code with an encouragement by AAAASF

that facilities comply with the 1997 Code. These standards will apply

to all facilities regardless of size.

B. Analysis and Responses to Public Comments and Provisions of the

Final Notice

We received no comments on our proposed notice. The provisions of

the proposed notice are being made final in this notice.

III. Paperwork Reduction Act

The public reporting and record keeping burden reflected in this

notice is referenced in the currently approved regulation entitled

``Granting and Withdrawal of Deeming Authority to National

Accreditation Organizations (58 FR 61816).'' The paperwork burden

referenced in the above mentioned regulation is currently approved by

the Office of Management and Budget (OMB), under OMB approval number

0938-0690, with an expiration date of 8/31/99.

IV. Regulatory Impact Statement

In fiscal year 1995, there were 2,105 certified ASCs participating

in the Medicare/Medicaid programs. We conducted 211 initial surveys,

288 recertification surveys (both at a cost of $714,069), and 24

complaint surveys. In fiscal year 1996, there were 2,219 certified

ASCs. This was an increase of 114 facilities. We conducted 180 initial

surveys, 115 recertification surveys (both at a cost of $848,125), and

one complaint survey. In fiscal year 1997, there were 2,433 certified

ASCs. This was an increase of 214 facilities. We conducted 236 initial

surveys, 252 recertification surveys (both at a cost of $1,403,000),

and seven complaint surveys. As the data above indicate, the number of

ASCs and the cost for conducting ASC surveys by State Agencies are

increasing.

As indicated above, there was a 16 percent increase in ASCs within

3 years (fiscal years 1995 through 1997). The fiscal year 1998

appropriation for ASC survey activities to HCFA was decreased as the

priority of both initial surveys and resurveys remained in the bottom

10 percent of surveys performed, but without any adjustment for

inflation. This does not allow sufficient resources for some regions to

meet the survey demand. In an effort to guarantee the continued health,

safety, and services of beneficiaries in facilities already certified

as well as provide relief to State budgets in this time of tight fiscal

restraints, we are approving deeming for ASCs accredited by AAAASF as

meeting our Medicare requirements. Thus, we continue our focus on

assuring the health and safety of services by providers and suppliers

already certified for participation in a cost effective manner.

In accordance with the provisions of Executive Order 12866, this

notice was not reviewed by the Office of Management and Budget.

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

1395bb)

(Catalog of Federal Domestic Assistance Program No. 93.778, Medical

Assistance Program; No. 93.773 Medicare--Hospital Insurance Program;

and No. 93.774, Medicare--Supplementary Medical Insurance Program)

Dated: October 19, 1998.

Nancy-Ann DeParle,

Administrator, Health Care Financing Administration.

[FR Doc. 98-32102 Filed 12-1-98; 8:45 am]

BILLING CODE 4120-01-P