Medicare Program; Recognition of the Community Health Accreditation Program, Inc. (CHAP) for Hospices

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2029-FN]

RIN 0938-AJ42

Medicare Program; Recognition of the Community Health

Accreditation Program, Inc. (CHAP) for Hospices

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

ACTION: Final notice.

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SUMMARY: This notice recognizes the Community Health Accreditation

Program, Inc. (CHAP) as a national accreditation organization for

hospices that request participation in the Medicare program. We believe

that accreditation of hospices by CHAP demonstrates that all Medicare

hospice conditions of participation are met or exceeded. Thus, we grant

deemed status to those hospices accredited by CHAP. The proposed notice

included the application from the Joint Commission for Accreditation of

Healthcare Organizations (JCAHO). We have separated the final notices

to appropriately process each application and will issue a separate

final notice containing the decision for JCAHO under HCFA-2039-FN.

EFFECTIVE DATE: This final notice is effective April 20, 1999 through

November 20, 2003.

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

SUPPLEMENTARY INFORMATION:

I. Background

A. Laws and Regulations

Under the Medicare program, eligible beneficiaries may receive

covered palliative services in a hospice provided certain requirements

are met. The regulations specifying the Medicare conditions of

participation for hospice care are located in 42 CFR part 418. These

conditions implement section 1861(dd) of the Social Security Act (the

Act), which specifies services covered as hospice care and the

conditions that a hospice program must meet in order to participate in

the Medicare program.

Generally, in order to enter into an agreement with Medicare, a

hospice must first be certified by a State survey agency as complying

with the conditions or standards set forth in part 418 of the

regulations. Then, the hospice is subject to routine surveys by a State

survey agency to determine whether it continues to meet Medicare

requirements. There is an alternative, however, to surveys by State

agencies.

Current section 1865(b)(1) of the Act permits ``accredited''

hospices to be exempt from routine surveys by State survey agencies to

determine compliance with Medicare conditions of participation.

Accreditation by an accreditation organization is voluntary and is not

required for Medicare certification. Section 1865(b)(1) of the Act

provides that, if a provider is accredited by a national accreditation

body that has standards that meet or exceed the Medicare conditions,

the Secretary can ``deem'' that hospice as having met the Medicare

requirements.

We have rules at part 488 that set forth the procedure we use to

review applications submitted by national accreditation organizations

requesting our approval. A national accreditation organization applying

for approval must furnish to us information and materials listed in the

regulations at Sec. 488.4. The regulations at Sec. 488.8 (``Federal

review of accreditation organizations'') detail the Federal review and

approval process of applications for recognition as an accrediting

organization. On April 26, 1996, however, new legislation entitled

``Omnibus Consolidated Rescissions and Appropriations Act of 1996''

(Pub. L. 104-134) was enacted.

Section 1865(b)(3)(A) of the Act, as amended by section 516 of Pub.

L. 104-134, requires us to publish a notice in the Federal Register

within 60 days after receiving an accreditation organization's written

request that we make a determination regarding whether its

accreditation requirements meet or exceed Medicare requirements.

Section 1865(b)(3)(A) of the Act also requires that we identify in the

notice the organization and the nature of the request and allow a 30-

day comment period. This section further 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 application.

B. Proposed Notice

On September 11, 1998, we published a proposed notice (63 FR 48735)

announcing the requests of CHAP and JCAHO for our approval as national

accreditation organizations for hospices. In the notice, we detailed

the factors on which we would base our evaluation. (We inadvertently

gave the citation for the regulations governing our evaluation as

Sec. 488.8, ``Federal review of accreditation organizations,'' rather

than as Sec. 488.4, ``Application and reapplication procedures for

accreditation organizations.'') Under section 1865(b)(2) of the Act and

our regulations at Sec. 488.4, our review and evaluation of the CHAP

application were conducted in accordance with the following factors:

A determination that CHAP is a national accreditation

body, as required by the Act.

A determination of the equivalency of CHAP's requirements

for a hospice to our comparable hospice requirements.

A review of CHAP's survey processes to determine the

following:

--The comparability of CHAP's processes to those of State agencies,

including survey frequency; its ability to investigate and respond

[[Page 19377]]

appropriately to complaints against accredited facilities; whether

surveys are announced or unannounced; and the survey review and

decision-making process for accreditation.

--The adequacy of the guidance and instructions and survey forms CHAP

provides to surveyors.

--CHAP's procedures for monitoring providers or suppliers found to be

out of compliance with program requirements. (These procedures are used

only when CHAP identifies noncompliance.)

The composition of CHAP's survey team, surveyor

qualifications, the content and frequency of the in-service training

provided, the evaluation systems used to assess the performance of

surveyors, and potential conflict-of-interest policies and procedures.

CHAP's data management system and reports used to assess

its surveys and accreditation decisions, and its ability to provide us

with electronic data.

CHAP's procedures for responding to complaints and for

coordinating these activities with appropriate licensing bodies and

ombudsmen programs.

CHAP's policies and procedures for withholding or removing

accreditation from a facility that fails to meet its standards or

requirements.

A review of all types of accreditation status CHAP offers

and an assessment of the appropriateness of those for which CHAP seeks

deemed status.

A review of the pattern of CHAP's deemed facilities (that

is, types and duration of accreditation and its schedule of all planned

full and partial surveys).

The adequacy of CHAP's staff and other resources to

perform the surveys, and its financial viability.

CHAP's written agreement to--

--Meet our requirements to provide to all relevant parties timely

notifications of changes to accreditation status or ownership, to

report to all relevant parties remedial actions or immediate jeopardy,

and to conform its requirements to changes in Medicare requirements;

and

--Permit its surveyors to serve as witnesses for us in adverse actions

against its accredited facilities.

We received no comments on our proposed notice.

II. Review and Evaluation

Our review and evaluation of the CHAP application, which were

conducted as detailed above, yielded the following information.

Differences between the Community Health Care Program, Inc. (CHAP) and

Medicare Conditions and Survey Requirements

We compared the standards contained in the CHAP 1997 ``Standards of

Excellence for Hospice Organizations'' with CHAP's survey process

outlined in its training materials and ``Hospice Surveyor Operations

Manual,'' which incorporates our 1994 guidelines to the Medicare

hospice conditions and survey procedures. In 13 areas CHAP has made the

following revisions or clarifications:

No surveys prior to enrollment form verification. State

survey agencies do not conduct health and safety inspections until a

hospice has submitted a ``Medicare and Other Federal Health Care

Program General Enrollment Health Care Provider/Supplier Application''

(Form HCFA-855) that the servicing fiscal intermediary has reviewed and

approved. CHAP has provided written assurance that ``It is CHAP's

policy not to conduct a deemed status accreditation survey until an

organization is properly enrolled in the Medicare program.'' In

addition, CHAP has added a blanket statement that an organization must

meet not only ``All state licensure laws, Certificate of Need (CON)

requirements or other state regulations and standards,'' but ``Federal

requirements'' as well.

Unannounced surveys (Reference Sec. 488.4(a)(3)(v)).

Current CHAP procedures contain the following statement regarding

unannounced surveys for Medicare-certified home health agencies: ``All

visits to Medicare home health agencies will be unannounced. The

specific timing of the visit is determined by the CHAP's Board of

Review and no one from the applicant organization will be informed of

the dates.'' We expect that a similar statement will be added for

Medicare-certified hospices that elect the deemed status option. CHAP

has agreed to add this language to its hospice procedures.

Core services. Medicare requires that substantially all

core services (nursing, medical social services, and counseling

services) be provided directly by hospice employees, the only exception

being during times of peak patient loads or under extraordinary

circumstances. CHAP responded by revising its standards to require that

a hospice program employ sufficient staff to provide all core services

or provide documentation describing unusual or extraordinary

circumstances necessitating the use of contracted staff for these

services.

Notification when required services are not provided.

Medicare-certified hospices are required by section 1861(dd)(1) of the

Act to provide routinely the following services: nursing care, medical

social services, and counseling. CHAP has agreed that when it becomes

aware that any Medicare-certified hospice is not providing one or more

of these core services, we shall be promptly notified.

Change of status notification. We require prompt

notification from the accreditation organizations regarding hospice

changes of ownership, hospice mergers, hospice site expansions,

withdrawals from accreditation, and involuntary terminations from

accreditation by the accreditation organization, because those actions

require certification and enrollment actions by us, the fiscal

intermediary, or the State survey agency. CHAP has stipulated in

writing that its ``home care policy and practice to provide prompt

notification to HCFA of changes in ownership, mergers, site expansion,

withdrawals or involuntary termination'' will be applied to the hospice

program.

Accreditation survey review and decision-making process

(Reference Sec. 488.4(a)(3)(iii)). CHAP has responded to two requests

we made for clarification regarding current CHAP terminology in its

accreditation application under the heading, ``CHAP Accreditation

Policies and Procedures'':

--Deferral of action. CHAP has confirmed that facilities in

deferral are not considered accredited.

--Warnings. CHAP has confirmed that it issues a warning to an

accredited entity that ``has made limited progress regarding required

actions and recommendations or has demonstrated a decline in meeting

CHAP standards since the last appraisal based on a site visit or

progress report.'' We have also received assurance that the time frames

for reaching a decision on whether or not to withdraw accreditation for

these entities are comparable to those we use for State-surveyed

facilities.

Contracted services.

--Some of the requirements in Sec. 418.56 did not appear to be included

in CHAP standards. CHAP provided clarifying cross references and

revised pages, demonstrating that its standards do incorporate all of

the requested requirements.

--The requirement for retaining fiscal responsibility needed to be

included for all contracted services, not just inpatient care

contracts. CHAP revised its standard to read, ``the hospice program

retains professional

[[Page 19378]]

management and fiscal responsibilities for patient care when services

are provided under arrangement with contractors.''

Millennium updates. CHAP has provided us with its plans to

ensure that deemed hospices maintain equipment and systems to sustain

the quality of patient care through the millennium updates.

Data exchange. CHAP has assured us that it has the ability

to provide us with timely electronic survey data and validation of

survey findings for all Medicare-certified hospices that have elected

the deemed status option.

Qualified social worker. Medicare requires that medical

social services be provided by a qualified social worker under the

direction of a physician. Medicare defines a hospice social worker at

Sec. 418.3 as ``a person who has at least a bachelor's degree from a

school accredited or approved by the Council on Social Work

Education.'' CHAP's standard required that social work services be

provided by a qualified social worker or social worker assistant. CHAP

has provided revised language for its related standard to require that

``social work services are provided under the direction of a physician

by a person who has at least a bachelor's degree from a school

accredited or approved by the Council on Social Work Education'' and

that the services are in agreement with the patient's plan of care.

Home health aide supervision. Medicare requires at

Sec. 418.94(a) that a registered nurse visit the home site at least

every 2 weeks when aide services are being provided and that the visit

include an assessment of the aide services. In addition, Medicare

requires that a registered nurse provide written instructions for

patient care. CHAP's standard required that nursing and home health

aide services always be provided under the supervision of a qualified

registered nurse, available at all times, but made no reference to

biweekly, direct (in-person) supervision and assessment. CHAP responded

by clarifying how these requirements were covered at HIII.1d4(c) in its

``Standards of Excellence for Hospice Organizations'': ``Written

instructions prepared by an RN are provided to paraprofessional staff

for care plan compliance.'' CHAP further stipulates at HIII.1d4(b) that

a home health aide's performance is evaluated by a registered nurse

every 2 weeks.

Inpatient care.

--The Medicare standard requires at Sec. 418.98(c) that the total

number of inpatient care days used by Medicare beneficiaries not exceed

20 percent of the total number of hospice days for this group of

beneficiaries in any 12-month period preceding a certification survey.

We could not find this standard in the application. CHAP responded by

clarifying how this requirement was covered at HII6.a1 in its

``Standards for Excellence for Hospice Organizations'': ``The hospice

program reviews total inpatient days routinely in any 12 month period

to prevent Medicare clients from exceeding 20% of the total number of

hospice days.''

--Another Medicare standard requires at Sec. 418.100(a) that hospices

providing inpatient care directly provide 24-hour nursing services that

are sufficient to meet total nursing needs and that are in accordance

with the patient's plan of skilled care. We asked CHAP to provide

evidence that this standard was included in its requirements. CHAP

responded by clarifying how this requirement was covered at Item 17 of

HIII.1i in its ``Standards for Excellence for Hospice Organizations'':

``Inpatient facilities provide 24 hour nursing services, including a

registered nurse on each shift, which are sufficient to meet total

nursing needs and which are in accordance with the patient plan of

care.''

Storage of drugs. Medicare standards require at

Sec. 418.100(k)(6) that separately locked compartments be provided for

storage of Schedule II drugs and other drugs subject to abuse. CHAP's

standard did not include ``other drugs subject to abuse'' in the list

of drugs to be stored in separately locked compartments. CHAP revised

its standard by adding ``Separately locked compartment for Schedule II

drugs and other drugs subject to abuse (multidose containers)'' at

H.III.4 in CHAP's ``Standards of Excellence for Hospice

Organizations.''

In addition to these changes, CHAP provided a revised crosswalk

(table showing the match between CHAP's standards and ours)

incorporating all the changes necessitated by our requests.

III. Results of Evaluation

We completed a standard-by-standard comparison of CHAP's conditions

or requirements for hospices to determine whether they met or exceeded

Medicare requirements. We found that, after requested revisions were

made, CHAP's requirements for hospices did meet or exceed our

requirements. In addition, we visited the corporate headquarters of

CHAP to validate the information it submitted and to verify that its

administrative systems could adequately monitor compliance with its

standards and survey processes and that its decision-making

documentation and processes met our standards. We also observed a

survey in real time to see that it met or exceeded our standards. As a

result of our review of the documents and observations, we requested

certain clarifications to CHAP's survey and communications processes.

These clarifications were provided as indicated above, and changes were

made to the documentation in the applications. Therefore, we recognize

CHAP as a national accreditation organization for hospices that request

participation in the Medicare program, effective April 20, 1999 through

November 20, 2003.

IV. Paperwork Reduction Act

This document does not impose any information collection and record

keeping requirements subject to the Paperwork Reduction Act (PRA).

Consequently, it does not need to be reviewed by the Office of

Management and Budget (OMB) under the authority of the PRA. The

requirements associated with granting and withdrawal of deeming

authority to national accreditation, codified in part 488, ``Survey,

Certification, and Enforcement Procedures,'' are currently approved by

OMB under OMB approval number 0938-0690, with an expiration date of

August 31, 1999.

V. Regulatory Impact Statement

We have examined the impacts of this notice as required by

Executive Order 12866 and the Regulatory Flexibility Act (RFA) (P.L.

96-354). Executive Order 12866 directs agencies to assess all costs and

benefits of available regulatory alternatives and, when regulation is

necessary, to select regulatory approaches that maximize net benefits

(including potential economic, environmental, public health and safety

effects; distributive impacts; and equity). The RFA requires agencies

to analyze options for regulatory relief for small businesses. For

purposes of the RFA, States and individuals are not considered small

entities.

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

a regulatory impact analysis for any notice that may have a significant

impact on the operations of a substantial number of small rural

hospitals. Such an analysis must conform to the provisions of section

604 of the RFA. For purposes of section 1102(b) of the Act, we consider

a small rural hospital as a hospital that is located outside of

[[Page 19379]]

a Metropolitan Statistical Area and has fewer than 50 beds.

This notice merely recognizes CHAP as a national accreditation

organization for hospices that request participation in the Medicare

program. As evidenced by the following data for the cost of surveys,

there are neither significant costs nor savings for the program and

administrative budgets of Medicare. Therefore, this notice is not a

major rule as defined in Title 5, United States Code, section 804(2)

and is not an economically significant rule under Executive Order

12866.

Therefore, we have determined, and the Secretary certifies, that

this notice will not result in a significant impact on a substantial

number of small entities and will not have a significant effect on the

operations of a substantial number of small rural hospitals. Therefore,

we are not preparing analyses for either the RFA or section 1102(b) of

the Act.

In fiscal year 1996, there were 2,148 certified hospices

participating in the Medicare program. We conducted 258 initial

surveys, 322 recertification surveys (both at a cost of $634,904), and

145 complaint surveys.

In fiscal year 1997, there were 2,270 certified hospices. This was

an increase of 122 facilities. We conducted 180 initial surveys, 354

recertification surveys (both at a cost of $330,686), and 237 complaint

surveys.

In fiscal year 1998, there were 2,290 certified hospices. This was

an increase of 20 facilities. We conducted 126 initial surveys, 196

recertification surveys (both at a cost of $360,783), and 201 complaint

surveys.

As the data above indicate, the number of hospices and the cost for

conducting hospice surveys by State agencies are increasing. There was

a 6.6 percent increase in hospices within 3 years (fiscal years 1996

through 1998). The fiscal year 1999 appropriation for hospice survey

activities was not increased, and these surveys were included within

the lowest priority category. This appropriation does not allow

sufficient resources for some regions to meet the survey demand,

especially for resurvey activity, which remains a small proportion of

eligible facilities (less than 9 percent for a maximum resurvey once

every 12 years). Hospices accredited by CHAP would be surveyed every 3

years. The numbers of participating providers continue to increase. In

an effort to better assure the health, safety, and services of

beneficiaries in hospices already certified, as well as to provide

relief to State budgets in this time of tight fiscal constraints, we

deem hospices accredited by CHAP 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 reviewed by OMB.

Authority: Section 1865(b)(3)(A) of the Social Security Act (42

U.S.C. 1395bb(b)(3)(A)).

(Catalog of Federal Domestic Assistance Program No. 93.773,

Medicare--Hospital Insurance)

Dated: March 1, 1999.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing Administration.

[FR Doc. 99-9802 Filed 4-19-99; 8:45 am]

BILLING CODE 4120-01-P