Medicare and Medicaid Programs; Survey, Certification and Enforcement Procedures, 20564-20581 [2013-07950]

Agencies

• Centers for Medicare & Medicaid Services
• DEPARTMENT OF HEALTH AND HUMAN SERVICES

[Federal Register Volume 78, Number 66 (Friday, April 5, 2013)]
[Proposed Rules]
[Pages 20564-20581]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-07950]



[[Page 20564]]

=======================================================================
-----------------------------------------------------------------------

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 488 and 489

[CMS-3255-P]
RIN 0938-AQ33


Medicare and Medicaid Programs; Survey, Certification and 
Enforcement Procedures

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

ACTION: Proposed rule.

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

SUMMARY: This proposed rule would revise the survey, certification, and 
enforcement procedures related to CMS oversight of national 
accreditation organizations (AOs). These revisions would implement 
certain provisions under the Medicare Improvements for Patients and 
Providers Act of 2008 (MIPPA). The proposed revisions would also 
clarify and strengthen our oversight of AOs that apply for, and are 
granted, recognition and approval of an accreditation program in 
accordance with the Social Security Act.

DATES: To be assured consideration, comments must be received at one of 
the addresses provided below, no later than 5 p.m. on June 4, 2013.

ADDRESSES: In commenting, please refer to file code CMS-3255-P. Because 
of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to https://www.regulations.gov . Follow the instructions 
under the ``More Search Options'' tab.
    2. By regular mail. You may mail written comments to the following 
address only: Centers for Medicare & Medicaid Services, Department of 
Health and Human Services, Attention: CMS-3255-P, P.O. Box 8016, 
Baltimore, MD 21244-8016.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address only: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-3255-P, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-8016.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 in advance to schedule your 
arrival with one of our staff members.
    Comments mailed to the addresses indicated as appropriate for hand 
or courier delivery may be delayed and received after the comment 
period.
    For information on viewing public comments, see the beginning of 
the SUPPLEMENTARY INFORMATION section.

FOR FURTHER INFORMATION CONTACT: Cindy Melanson, (410) 786-0310; 
Patricia Chmielewski, (410) 786-6899; or Marilyn Dahl, (410) 786-8665.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments 
received before the close of the comment period are available for 
viewing by the public, including any personally identifiable or 
confidential business information that is included in a comment. We 
post all comments received before the close of the comment period on 
the following Web site as soon as possible after they have been 
received: https://www.regulations.gov. Follow the search instructions on 
that Web site to view public comments.
    Comments received timely will also be available for public 
inspection as they are received, generally beginning approximately 3 
weeks after publication of a document, at the headquarters of the 
Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 
a.m. to 4 p.m. To schedule an appointment to view public comments, 
phone 1-800-743-3951.

Acronyms

ADI--Advanced Diagnostic Imaging Services
AO--Accrediting Organization
ASC--Ambulatory Surgical Center
CAH--Critical Access Hospital
CfC--Condition for coverage
CFR--Code of Federal Regulations
CMHC--Community Mental Health Center
CMS--Center for Medicare & Medicaid Services
CoP--Condition of Participation
CORF--Comprehensive Outpatient Rehabilitation Facility
EMTALA--Emergency Medical Treatment and Labor Act
GAO--Government Accountability Office
HHA--Home Health Agency
HHS--Department of Health and Human Services
MIPPA--Medicare Improvements for Patients and Providers Act of 2008
NF--Nursing Facility
OIG--Office of the Inspector General
OPT--Provider of outpatient physical therapy and speech language 
pathology services
RHC--Rural Health Clinic
Social Security Act--the Act
SNF--Skilled Nursing Facility
TJC--The Joint Commission

I. Background

    To participate in the Medicare program, providers and suppliers of 
health care services, must be substantially in compliance with 
specified statutory requirements of the Social Security Act (the Act), 
as well as any additional regulatory requirements related to the health 
and safety of patients specified by the Secretary of the Department of 
Health and Human Services (HHS). These health and safety requirements 
are generally called conditions of participation (CoPs) for most 
providers, requirements for skilled nursing facilities (SNFs), 
conditions for coverage (CfCs) for ambulatory surgical centers (ASCs) 
and other suppliers, and conditions for certification for rural health 
clinics (RHCs). A provider or supplier that does not substantially 
comply with the applicable health and safety requirements risks having 
its participation in the Medicare program terminated.
    In accordance with section 1864 of the Act, state health 
departments or similar agencies, under an agreement with CMS, survey 
health care providers and suppliers to ascertain compliance with the 
applicable CoPs, CfCs, conditions of certification, or requirements, 
and certify their findings to us. Based on these state survey agency 
certifications, we determine whether the provider or supplier 
qualifies, or continues to qualify, for participation in the Medicare 
program.
    Section 1865(a) of the Act allows health care facilities, except 
kidney

[[Page 20565]]

transplant centers, end stage renal dialysis facilities, and suppliers 
of medical equipment and supplies, to demonstrate compliance with 
Medicare CoPs, requirements, CfCs, or conditions for certification 
through accreditation by a CMS-approved program of a national 
accreditation body. If an accrediting organization (AO) is recognized 
by the Secretary as having standards for accreditation that meet or 
exceed Medicare requirements, any provider or supplier accredited by 
the AO's CMS-approved accreditation program may be deemed by us to meet 
the Medicare conditions or requirements.
    We are responsible for the review, approval and subsequent 
oversight of national AOs' Medicare accreditation programs, and for 
ensuring providers or suppliers accredited by the AO meet the quality 
and patient safety standards required by the Medicare CoPs, 
requirements, CfCs, and conditions for certification. Any national AO 
seeking approval of an accreditation program in accordance with section 
1865(a) of the Act must apply for and be approved by CMS for a period 
not to exceed 6 years. The AO must reapply for renewed CMS approval of 
an accreditation program before the date its approval period expires. 
This allows providers or suppliers accredited under the program to 
continue to be deemed to be in compliance with the applicable Medicare 
CoPs, requirements, CfCs, and conditions for certification. Regulations 
implementing these provisions are found at 42 CFR 488.1 through 488.9.
    In accordance with Sec.  488.8(f), if we determine that an AO's 
accreditation program requirements are no longer comparable to Medicare 
requirements we may open a deeming authority review and give the AO up 
to 180 days to adopt comparable requirements. If at the end of the 
deeming authority review period, the AO's accreditation program has 
failed to adopt comparable requirements, we may give the AO conditional 
approval with a probationary period for up to one year. Within 60 days 
after the end of any probationary period, we will make a final 
determination as to whether or not an accreditation program continues 
to meet the Medicare requirements and will issue an appropriate notice 
(including reasons for the determination) to the AO and affected 
providers or suppliers.
    Section 1834(e) of the Act requires that, beginning January 1, 
2012, Medicare payment may only be made for the technical component of 
advanced diagnostic imaging (ADI) services for which payment is made 
under the fee schedule established in section 1848(b) of the Act to a 
supplier who is accredited by an accrediting organization designated by 
the Secretary. Currently, oversight of these accrediting organizations 
is limited to requirements at Sec.  414.68, and these accrediting 
organizations are not subject to the more expansive oversight 
requirements at 488, subpart A.

II. Provisions of the Proposed Rule

    Section 125 of the Medicare Improvement for Patients and Providers 
Act of 2008 (MIPPA) (Pub. L. 110-275, enacted on July 15, 2008) removed 
legal distinctions between the Joint Commission (TJC) hospital 
accreditation program and all other accreditation programs approved by 
CMS in accordance with section 1865 of the Act. In this proposed rule, 
we are proposing corresponding changes to the regulations in part 488, 
subpart A, which implement section 1865 of the Act.
    The Secretary has endorsed the recommendations of the HHS Office of 
Inspector General (OIG), and the Government Accountability Office (GAO) 
to strengthen our oversight and ensure greater accountability of AOs 
and instructed CMS to respond appropriately \1\. AOs and their CMS-
approved accreditation programs significantly impact the health and 
safety of patients and the quality of care provided in Medicare-
participating facilities across the country. We currently have 19 
approved accreditation programs offered by seven national AOs. In 
fiscal year 2011, accredited facilities deemed to meet Medicare 
standards accounted for over 11,000 Medicare-participating facilities 
(not including accredited clinical laboratories.
---------------------------------------------------------------------------

    \1\ HCFA's Approval and Oversight of Private Accreditation 
Organizations (HEHS-99-197R), September 30, 1999. https://www.gao.gov/products/HEHS-99-197R
    CMS Needs Additional Authority to Adequately Oversee Patient 
Safety in Hospitals (GAO-04-850) July 20, 2004. https://www.gao.gov/new.items/d04850.pdf
    Hospital Oversight in Medicare: Accreditation and Deeming 
Authority. May 6, 2005 https://www.nhpf.org/library/issue-briefs/IB802_Accreditation_05-06-05.pdf
    Moffett, M. & Bohara, A. Hospital Quality Oversight by the Joint 
Commission on Accreditation of Healthcare Organizations. Vol 31, No. 
4 (Fall 2005) pp 629-647.
---------------------------------------------------------------------------

    All 19 CMS-approved AO accreditation programs received an extensive 
review in accordance with the application and reapplication process 
described at part 488 in recent years. The application and 
reapplication review process provides us the opportunity to conduct a 
comprehensive evaluation of an AO's performance and ability to assure 
that providers or suppliers meet or exceed the applicable Medicare 
standards. The review process also provides the opportunity to evaluate 
compliance with the other requirements of subpart A of part 488.
    The high volume of comprehensive AO application and reapplication 
reviews that we have conducted has provided us with an abundance of 
opportunities to apply the existing AO approval regulations in a 
variety of circumstances. Throughout each review, we worked closely 
with the AOs, provided education and extensive feedback, and clarified 
expectations for the AOs. This experience has helped us to identify 
areas of our regulations in need of revision to more clearly articulate 
the requirements for all AOs with a CMS-approved accreditation program, 
as well as new AOs seeking initial CMS approval.
    Furthermore, as we have taken actions to exercise more oversight of 
existing CMS-approved AO programs, we have become aware of the need to 
clarify, reorganize, and amend our regulations to support a more 
efficient and effective oversight process. In several situations 
involving serious and pervasive areas of non-compliance identified in 
CMS-approved AO accreditation programs, we found it necessary to invoke 
our oversight authorities under the existing regulations. In each case, 
we required the AO to implement corrective action(s) to ensure 
comparability with the Medicare requirements. Actions that we normally 
take include opening a deeming review outside the normal reapplication 
process, and issuing a conditional approval with a probationary period. 
In the course of taking these actions, we identify the need to revise 
and expand our enforcement tools to strengthen our ability to address 
serious and pervasive areas of AO non-compliance with the Medicare 
requirements; ensure that the AO takes the necessary corrective actions 
to address the area(s) of non-compliance; and ensure continuing 
compliance and comparability with Medicare requirements.
    We propose expanding the scope of the accrediting organizations' 
oversight regulations at Sec.  488, subpart A to include accrediting 
organizations with CMS-approved accreditation programs for ADI 
services. The current oversight regulations for accrediting 
organizations for the technical component of ADI services at Sec.  
414.68 would remain unchanged. This proposed expansion is part of our 
initiative to broaden our quality oversight of both the CMS-approved 
accrediting organizations as

[[Page 20566]]

well as the suppliers of ADI services. As part of this effort, we 
anticipate future rule making to develop and implement Medicare health 
and safety standards for suppliers of these services. Prior to 
embarking upon this rule making process, we anticipate consulting with 
key stakeholders to shape the notice of proposed rulemaking. We note 
that, under section 135 of MIPPA, state survey agencies do not play a 
role in the oversight of suppliers of the technical component of ADI 
services, and we do not have the statutory authority to create such a 
role.
    We propose to clarify that, when a state survey agency substantial 
allegation validation survey, that is, a complaint survey, of an 
accredited provider or supplier finds substantial non-compliance with 
one or more of Medicare's conditions or requirements, we have the 
flexibility in terms of its next steps. Currently we may either proceed 
immediately to enforcement action based on that complaint survey, or 
may instead require the state survey agency to conduct another, full 
survey which assesses compliance with all of the CoPs or CfCs for that 
type of provider or supplier. We are proposing not only to retain this 
flexibility but also to expand it, so that we could require the state 
survey agency to conduct another, more comprehensive survey, but not a 
full survey assessing compliance with all the CoPs or CfCs. This 
clarification supports the ability for us to make efficient use of 
survey resources while maintaining an effective enforcement process 
that is appropriate for each specific case.

A. Definitions (Sec.  488.1)

    Section 488.1 sets forth definitions for terms used in part 488. We 
are proposing revisions at Sec.  488.1 as follows:
     We propose deleting the definition of ``accredited 
provider or supplier.'' Use of this language has caused confusion both 
internally and externally. National AOs offer a variety of 
accreditation programs. However, not all programs are CMS-approved 
accreditation programs for the purpose of Medicare participation.
     We propose deleting the language, ``AOA stands for the 
American Osteopathic Association.'' The proposed revisions to subpart A 
would no longer refer to any specific AO. The proposed revisions 
instead are broader, referencing national AOs generically.
     We propose expanding the definition of ``certification'' 
to include the RHC conditions; clarify that each provider or supplier 
must meet its respective conditions or requirements to be certified; 
and deleting the language ``for SNFs and NFs'' to eliminate redundancy.
     We propose revising the definition of ``conditions for 
coverage'' for increased clarity and specificity.
     We propose adding a definition of ``conditions for 
certification'' to include the terminology for standards that RHCs must 
meet to participate in the Medicare program.
     We propose adding a definition of ``deemed status'' to 
increase clarity and reduce ambiguity when referring to the status of 
providers and suppliers accredited under a CMS-approved accreditation 
program and who are participating in Medicare via this accreditation.
     We propose revising the definition of ``full review'' to 
clarify that the regulations at part 488 apply to all providers and 
suppliers, not just hospitals.
     We propose adding a definition of ``immediate jeopardy'' 
at Sec.  488.1 that would apply generically to all providers and 
suppliers subject to the certification requirements at part 488.
     We propose deleting the language, ``JCAHO stands for the 
Joint Commission on Accreditation of Healthcare Organizations,'' since 
the proposed revisions to subpart A do not refer to any specific AO.
     We propose adding a definition of ``national accreditation 
organization'' to specify that CMS requires a program seeking initial 
approval to already be fully implemented and operational nationally.
     We propose expanding the definition of ``provider of 
services or provider'' to include a clinic, rehabilitation agency or 
public health agency that furnishes outpatient physical therapy or 
speech language pathology services. This proposed change is consistent 
with the language at section 1861(p)(4) of the Act.
     We propose revising the definition of ``reasonable 
assurance by deleting the language ``taken as a whole.'' This proposed 
change would clarify the requirement that an AO's CMS-approved 
accreditation program has standards that meet or exceed the applicable 
Medicare conditions or requirements consistent with language at section 
1865(a)(1) of the Act.
     We propose updating the definition of ``state survey 
agency'' for added clarity and precision.
     We propose revising the definition of ``substantial 
allegation of non-compliance'' to correct a previous error.
     We propose modifying the definition of ``supplier'' to 
make it consistent with the definition of supplier as amended by 
section 901 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (Pub. L. 108-173).
     We propose deleting the definition of ``validation review 
period.'' The concept of a fixed review period would not be used in the 
proposed revisions at Sec.  488.8.

B. Statutory Basis (Sec.  488.2)

    Section 488.2 sets forth the statutory basis for provider and 
supplier requirements. We propose revising this section by adding 
pertinent statutory citations and revising the statutory citation at 
section 1883 of the Act by replacing the title ``Requirements for 
hospitals that provide SNF care'' with ``Requirements for hospitals 
that provide extended care services'' to be consistent with the 
statutory language.

C. Conditions of Participation; Conditions for Coverage; Conditions for 
Certification; and Long-Term Care Requirements (Sec.  488.3)

    Section 488.3 sets forth the conditions or requirements that a 
prospective provider or supplier must meet to be approved for 
participation in or coverage under the Medicare program. We propose 
revising Sec.  488.3 to include the requirements RHCs must meet to 
participate in Medicare; the statutory citations for CAHs, RHCs, 
hospitals that provide extended care services, hospices, comprehensive 
outpatient rehabilitation facilities (CORFs), community mental health 
centers (CMHCs), providers of outpatient physical therapy and speech 
language pathology services (OPTs), and advanced diagnostic imaging 
services (ADIs); and the regulatory references for RHCs, CORFs, CMHCs, 
CAHs, OPTs, and ADIs. In addition, we propose to revise Sec.  488.3(b) 
to address all providers or suppliers of services subject to 
certification. This proposal would also authorize the Secretary to 
consult with state survey agencies and other organizations, which would 
include all AOs and other national standard-setting organizations to 
develop Conditions of Participation. We are not proposing any policy 
changes to this program.

D. CMS-Approved National Accreditation Programs for Providers and 
Suppliers (Sec.  488.4)

    We propose to revise Sec.  488.4 as part of our effort to 
reorganize the application and reapplication process, delete 
redundancy, and reorganize the accreditation requirements in a more 
logical sequence. We are proposing revisions at Sec.  488.4 as follows:

[[Page 20567]]

     Proposed Sec.  488.4(a) would replace the requirements 
currently set out at Sec.  488.6(a), with some modifications. The 
current regulation specifically lists the eligible provider and 
supplier accreditation programs under which AOs may provide us with 
reasonable assurance that the AO's requirements are at least as 
stringent as the Medicare conditions or requirements. We propose 
eliminating references to specific types of provider and supplier 
accreditation programs by simply stating that CMS-approved 
accreditation program for providers and suppliers with the exception of 
kidney transplant centers, end stage renal dialysis facilities, and 
suppliers of medical equipment and supplies may provide reasonable 
assurance to CMS that it requires providers and suppliers it accredits 
to meet the requirements that are at least as stringent as the Medicare 
conditions or requirements. Also, this section addresses national 
accreditation programs for hospitals other than those offered by TJC 
and AOA, as well as accreditation programs for other types of providers 
and suppliers. We propose deleting the reference to ``requirements 
concerning hospitals accredited by the JCAHO or AOA'' since the 
proposed changes are broader and would not specify any particular AO.
     Proposed Sec.  488.4(b) would be a new provision, making 
it explicit that an AO's CMS-approved accreditation program would be 
approved in its entirety. Under this provision, an AO would not be 
permitted to make a recommendation to us for deemed status for a 
provider or supplier unless that provider or supplier satisfied all of 
the AO's requirements for accreditation. This would include both the AO 
accreditation program standards that may exceed the Medicare standards, 
as well as those that meet the Medicare standards.

E. Application and Reapplication Procedures for National Accreditation 
Organizations (Sec.  488.5)

    We propose to revise Sec.  488.5 to clarify the requirement that a 
prospective AO and its accreditation program be national in scope. We 
also propose moving the regulatory language currently at Sec.  488.4 to 
Sec.  488.5 with modifications as part of our effort to reorganize the 
accreditation requirements in a more logical sequence.
    Specifically, we propose the following revisions:
     Proposed Sec.  488.5(a) would replace the requirement 
currently set out at Sec.  488.4(a). It would be revised to clarify 
that these provisions would apply to both initial applications for a 
new accreditation program, as well as re-approval of an existing CMS-
approved accreditation program. The proposed revision further would 
clarify that each application for approval would pertain to a single 
provider/supplier-specific accreditation program.
     Proposed Sec.  488.5(a)(1) would replace the requirement 
currently set out at Sec.  488.4(a)(1), concerning the AO's 
identification in its application of the type of provider or supplier 
for which it is seeking approval. We propose revising this requirement 
to clarify that each application for our approval would be separate and 
distinct from applications for our approval of accreditation programs 
for other types of providers or suppliers.
     Proposed Sec.  488.5(a)(2) would require an AO seeking 
initial CMS approval of a new accreditation program or renewed approval 
of an existing program to demonstrate that the program met the 
definition of a ``national accrediting organization.'' Section 1865 of 
the Act applies only to programs of national accreditation bodies. 
Demonstration must be specific to each accrediting program for which 
new or renewed CMS approval is sought. For example, an AO which has one 
or more existing CMS-approved programs that seek our initial approval 
of a new accreditation program must also demonstrate that the new 
program has been implemented nationally. This proposal implements the 
``national'' requirement in the statute and sets forth a methodology 
for determining how an AO would meet the ``national'' qualification in 
the regulations.
     Proposed Sec.  488.5(a)(3) would replace the requirement 
currently set out at Sec.  488.4(a)(2), concerning the requirement that 
an AO submit a detailed comparison of its standards to Medicare 
requirements, and clarify the components of an acceptable crosswalk.
     Proposed Sec.  488.5(a)(4) would replace the requirement 
currently set out at Sec.  488.4(a)(3), which addresses the requirement 
that the AO must provide a detailed description of its survey process 
in its application for our approval of an accreditation program. The 
language of this provision would remain unchanged.
     Proposed Sec.  488.5(a)(4)(i), would replace the 
requirement currently set out at Sec.  488.4(a)(3)(i), concerning the 
frequency of surveys. The proposed revisions reflect existing CMS 
policy and would not impose any new requirements on AOs, but would be 
added to clarify the requirement.
     Proposed Sec.  488.5(a)(4)(ii) is a new provision that 
would ensure surveys conducted by AOs were comparable to the Medicare 
requirements, and would implement section 1865(a)(2) of the Act.
     Proposed Sec.  488.5(a)(4)(iii) would replace the 
requirement currently set out at Sec.  488.4(a)(3)(ii). The language of 
this requirement would be unchanged and addresses the content and 
frequency of survey personnel training.
     Proposed Sec.  488.5(a)(4)(iv) would replace the 
requirement currently set out at Sec.  488.8(a)(2)(ii), requiring an AO 
to crosswalk its survey deficiency citations to the comparable Medicare 
requirements. This proposed provision is being modified for clarity to 
ensure consistency with existing policy and to ensure that our 
oversight of the AOs is effective. In addition, we are proposing that 
the language, ``and the ability to investigate and respond 
appropriately to accredited facilities,'' be redesignated to proposed 
Sec.  488.5(a)(7).
     Proposed Sec.  488.5(a)(4)(v) would replace the 
requirement currently set out at Sec.  488.4(a)(3)(iii), concerning the 
survey review and accreditation decision-making process. We would 
delete language that would be redundant with language being 
incorporated into the proposed revised regulatory language at Sec.  
488.5(a)(8).
     Proposed Sec.  488.5(a)(4)(vi), currently set out at Sec.  
488.4(a)(3)(iv), would specify that the AO's provider or supplier 
notification procedures meet or exceed those required for state survey 
agencies. This language represents existing CMS policy and would not 
impose any new requirements on AOs, but would be added to clarify the 
requirement and provide more specific and precise language.
     Proposed Sec.  488.5(a)(4)(vii) is a new proposed 
provision regarding the AOs timeline and procedures for monitoring the 
facilities found to be out of compliance. This language reflects 
existing CMS policy and would not impose any new requirements on AOs, 
but would be added to clarify the requirement and provide more specific 
and precise language. Further, the proposed provision would be 
consistent with the requirement at section 1865(a)(2) of the Act.
     Proposed Sec.  488.5(a)(4)(viii) would replace the 
requirement currently set out at Sec.  488.8(a)(3), which requires the 
AO to provide a copy of its most recent accreditation survey for a 
specified provider or supplier, together with any other information 
related to the survey that we may require. We propose modifying this 
provision for consistency and clarity.
     Proposed Sec.  488.5(a)(4)(ix) is a new proposed provision 
regarding AO notification to us when the AO

[[Page 20568]]

identifies an immediate threat to the health and safety of patients, 
that is, a situation that constitutes an immediate jeopardy as that 
term is defined in Sec.  489.3. This provision would ensure that we are 
notified of situations that may put the health and safety of patients 
receiving care in Medicare-participating facilities at serious risk of 
harm, and would require us to take immediate action to enforce these 
provisions.
     Proposed Sec.  488.5(a)(5) would replace the requirement 
currently set out at Sec.  488.4(a)(4)(i). The language of this 
provision is unchanged and addresses the requirement that the AO 
provide us with detailed information about its surveyors.
     Proposed Sec.  488.5(a)(6) would replace the requirement 
currently set out at Sec.  488.4(a)(4)(i). This provision addresses the 
requirement for the AO to furnish information about the size and 
composition of its survey teams. The proposed expanded provisions would 
recognize that, within a given accreditation program, there can be 
great variation in the size and complexity of individual health care 
facilities. We believe that a uniform size and composition for the AO's 
survey teams would not be appropriate.
     Proposed Sec.  488.5(a)(6) is a new proposed provision 
that would help ensure that an AO maintained an adequate number of 
trained surveyors to meet the demand for surveys, both initial and re-
accreditation surveys. There have been instances where an AO could not 
maintain the required re-accreditation survey schedule interval for its 
existing accredited deemed status facilities because it was focusing 
its resources on meeting the demand of new customers for initial 
Medicare accreditation surveys. These AOs lacked sufficient personnel 
resources to handle both existing and new workloads.
     Proposed Sec.  488.5(a)(7) would replace the requirement 
currently set out at Sec.  488.4(a)(4)(ii) concerning the AO's 
education and experience requirements for its surveyors. The proposed 
revisions would explicitly require documentation of these surveyor 
requirements.
     Proposed Sec.  488.5(a)(8) would replace the requirement 
currently set out at Sec.  488.4(a)(iii) concerning in-service training 
of AO survey personnel. The language of this provision would be revised 
to explicitly state that the AO must provide documentation describing 
the content and frequency of this in-service training.
     Proposed Sec.  488.5(a)(9) would replace the requirement 
currently set out at Sec.  488.4(a)(4)(iv) concerning evaluation 
systems used by the AO to monitor the performance of individual 
surveyors and survey teams. This provision would be revised to 
explicitly state that an AO must provide documentation describing these 
evaluation systems.
     Proposed Sec.  488.5(a)(10) would replace the requirement 
currently set out at Sec.  488.4(a)(4)(v), concerning the AO's policies 
on the involvement of personnel in the survey or accreditation decision 
process who have a financial or professional affiliation with the 
provider or supplier. The provision would be modified to ensure that 
the AO has policies to avoid such potential conflicts of interest that 
could undermine the integrity of its accreditation program.
     Proposed Sec.  488.5(a)(11) would replace the requirement 
currently set out at Sec.  488.4(a)(5). This provision addresses the 
requirement that the AO provide information on its data management 
system in its application. We would reorganize the regulatory text to 
contain the provisions currently set out at Sec.  488.5(a)(6)(i) and 
Sec.  488.5(a)(6)(ii). In proposed Sec.  488.5(a)(6), we would retain 
existing language requiring an AO to submit a description of its data 
management and analysis system regarding its surveys and accreditation 
decisions. The description would have to include the submission of the 
information set out at proposed Sec.  488.5(a)(11)(i) and Sec.  
488.5(a)(11)(ii), which includes provider or supplier and survey 
information, and accreditation decisions.
     Proposed Sec.  488.5(a)(11)(i) would require submission of 
a detailed description of how the AO uses its data system to assure 
compliance with the Medicare requirements. This new proposed language 
would replace existing language, which is being deleted. The existing 
language proposed for deletion is both too specific and too limiting in 
elaborating on what information would adequately convey how the AO uses 
its data management system for compliance purposes. The proposed 
language would make clear that we are seeking information on how the AO 
uses its data management systems to meet the various requirements of 
this subpart.
     Proposed Sec.  488.5(a)(11)(ii) would modify the 
regulatory text currently at Sec.  488.4(b)(1), which requires an AO to 
include in its application a written presentation of its ability to 
submit information electronically ``in ASCII comparable code.'' The 
reference to ASCII comparable code is outdated and insufficient. The 
proposed modifications are necessary to ensure that we have the 
required data to provide effective oversight of an approved 
accreditation program. We are also proposing to delete Sec.  
488.8(a)(2)(v), which is a redundant requirement related to electronic 
data submission in ASCII-comparable code.
     Proposed Sec.  488.5(a)(12) would replace the requirement 
currently set out at Sec.  488.4(a)(6). The language of this provision 
would remain unchanged and addresses the AO's procedures for responding 
to and investigating complaints.
     Proposed Sec.  488.5(a)(13) would replace requirements 
currently set out at Sec.  488.4(a)(7), with modifications. The current 
provision requires AOs to submit information to us regarding their 
policies and procedures for withholding, or removing accreditation 
status for facilities that fail to meet the AOs' standards or 
requirements. The AO must also report to us any other actions taken by 
the AO in response to its determination of non-compliance with its 
standards and requirements. We propose to expand this provision to 
require submission of the AOs' policies and procedures related to 
granting accreditation status and assignment of less than full 
accreditation status. Since the granting of full or less than full 
accreditation statuses are essential components of an AO's 
accreditation decision process, it is necessary for us to receive 
information on the policies and procedures pertaining to these types of 
decisions as well.
     Proposed Sec.  488.5(a)(13)(i) would replace the 
requirement currently set out at Sec.  488.4(a)(8). The current 
regulation addresses the requirement that AOs provide us a description 
of all types and categories of accreditation offered under its 
accreditation program. We would modify this provision by deleting 
language and terminology specific to one particular AO. Further, the 
current provision seems to require the AO to submit information on its 
accreditation programs that fall outside the parameters of its Medicare 
accreditation programs. Since we do not approve accreditation programs 
unrelated to Medicare, we believe that there is no reason to require 
AOs to submit such information to us, nor for us to have and review 
this non-relevant information.
     Proposed Sec.  488.5(a)(13)(ii) would address the 
requirement, currently found at Sec.  488.4(b)(3)(i), for an AO to 
agree, as a condition of approval, to notify us of any provider or 
supplier that has had its accreditation revoked, withdrawn, or revised, 
or has had any remedial or adverse action taken against

[[Page 20569]]

it. The current regulation requires the AO to notify us in writing 
within 30 days of its action. We propose to reduce this timeframe since 
AOs transmit such information to us electronically. The 30-day 
timeframe was based on information being sent to us via hard copy mail. 
Given the instantaneous nature of the electronic notification, as well 
as our need to learn of such adverse actions as soon as possible to 
initiate enforcement action as applicable, we believe it would be 
reasonable to require that the AO provide notice to us within three 
business days of its having taken the adverse action.
     Proposed Sec.  488.5(a)(14) would replace the requirement 
currently set out at Sec.  488.4(a)(9) concerning submission of 
information on currently accredited facilities as part of the AO's 
application. This provision would be modified for clarity. Proposed 
Sec.  488.5(a)(15) would create a new requirement for an AO seeking 
renewed approval for a currently CMS-approved accreditation program. It 
would require such an AO to demonstrate, as a condition of acceptance 
of its application for renewal, that it demonstrated growth as 
evidenced by having accredited at least 50 health care facilities under 
its CMS-approved accreditation program. We believe that an established 
AO accreditation program that has not been able to accredit a minimum 
of 50 health care facilities since receiving initial CMS approval has 
failed to demonstrate sufficient infrastructure and scale to be 
sustained over a long period of time. Although we are willing to be 
flexible in accepting applications for initial approval from new 
national accreditation programs that are comparatively small, we 
believe that an established CMS-approved program that has not been able 
to accredit at least 50 healthcare facilities during the four-year 
period since its initial approval would have failed to demonstrate long 
term national viability. Further, we have limited resources available 
to conduct the detailed, comprehensive review of the AO's application 
required under section 1865(a)(2) of the Act. We believe these federal 
resources are best focused on those larger accreditation programs 
responsible for oversight of the quality of care provided in hundreds 
of accredited healthcare facilities, serving millions of patients, 
rather than on an accreditation program connected with a relatively 
small number of Medicare beneficiaries.
     Proposed Sec.  488.5(a)(16) would replace the requirement 
currently set out at Sec.  488.4(a)(10), which addresses the 
requirement for AOs to provide us with a list of accreditation surveys 
scheduled to be performed. We propose to revise this requirement to 
limit the schedule the AO must provide to surveys expected to be 
conducted during the six month period following submission of an 
application for CMS approval. Since we must complete the entire 
application review and publish a final notice announcing our decision 
within a 210 day statutory timeframe, it is not useful for a survey 
schedule to be submitted for a later timeframe. We use this survey 
schedule to plan our survey observation as part of our review. This 
requirement applies to both initial and renewal applications and is 
separate and apart from the requirement at proposed Sec.  488.5(a)(11), 
regarding an approved program, for an AO to submit survey schedules as 
part of the data it agrees to provide us for our ongoing oversight.
     Proposed Sec.  488.5(a)(17) would replace the requirement 
currently set out at Sec.  488.4(b)(2), which requires an AO to provide 
a resource analysis demonstrating that it has the resources to support 
its accreditation program. The proposed modifications would more 
clearly identify the type of documentation an AO must provide to 
demonstrate the adequacy of its resources.
     Proposed Sec.  488.5(a)(18) is a new provision that would 
address requirements related to AO written notification and timeframes 
regarding currently deemed providers or suppliers when the AO elected 
to terminate its CMS-approved accreditation program voluntarily. This 
provision would be necessary so that we could give affected state 
survey agencies and CMS Regional Offices adequate advance notice 
regarding the providers or suppliers affected by such a termination. In 
such a case, providers or suppliers would subsequently need to be 
surveyed and approved by the State survey agency, unless the providers 
or suppliers sought and received accreditation from another CMS-
approved AO.
     Proposed Sec.  488.5(a)(19) would replace the requirement 
currently set out at Sec.  488.4(b)(3)(iii). This provision addresses 
the timeframe for AO notification to us regarding proposed changes in 
accreditation requirements. We are proposing to modify the regulation 
by expanding the timeframe to provide adequate time for us to conduct a 
comprehensive, detailed review of the AO's proposed changes. We are 
also proposing language clarifying that any proposed changes in a CMS-
approved accreditation program may not be implemented by the AO before 
we approve such changes. This would ensure that the accreditation 
program continued to meet or exceed the Medicare requirements.
     Proposed Sec.  488.5(a)(20) would replace the requirement 
currently set out at Sec.  488.4(b)(3)(iv), concerning AO submission of 
changes to its standards within 30 days of a change in our 
requirements. We propose modifying the regulation text by deleting 
references to specific timeframes. This would provide us the 
flexibility to consider other factors when determining an appropriate 
timeframe for AOs to revise their program and submit the changes to us. 
These factors may include: the effective date of the applicable final 
rule, the effective date of our revised interpretive guidance or survey 
process, and the scope and magnitude of our changes that require 
corresponding AO changes. AOs would benefit from our having the 
flexibility to provide them longer timeframes for response, when 
appropriate. In addition, we propose adding language to ensure the AO 
program continues to meet or exceed the Medicare requirements, and 
specify the consequences for an AO's failure to submit timely 
comparable changes.
     Proposed Sec.  488.5(a)(21) would replace the requirement 
currently set out at Sec.  488.4(b)(3)(v), which concerns the 
requirement for the AO to permit its surveyors to serve as witnesses if 
CMS takes an adverse action based on accreditation findings. We propose 
modifying the regulation by adding language to clarify the scope of the 
requirement.
     Proposed Sec.  488.5(b) would replace the requirement 
currently set out at Sec.  488.4(c). The language of this provision 
addresses the requirement that if we determine additional information 
is necessary to make a determination for approval or denial of an AO's 
application for deeming authority, the AO will be afforded the 
opportunity to provide the additional information. We propose deleting 
the language ``deeming authority.'' This language has been a source of 
confusion both internally and externally. It has led healthcare 
facilities and others to think that the AO awards deemed status and 
participation in Medicare. This proposed change clarifies that we have 
the authority to grant ``deemed status,'' not the AO.
     Proposed Sec.  488.5(c)(1) would replace the requirement 
currently set out at Sec.  488.4(f), which addresses the provision that 
an AO may withdraw its application at any time before the final notice 
is published in the Federal Register. We propose to modify this

[[Page 20570]]

provision by adding language clarifying that only an initial 
application can be withdrawn.
     Proposed Sec.  488.5(c)(2) is a new requirement that 
addresses situations where an AO wishes to voluntary terminate its CMS-
approved accreditation program. If an AO decides to voluntarily 
terminate its CMS-approved accreditation program, it must notify us of 
its decision and provide an effective date of termination. We will 
publish in the Federal Register a notice that includes the reason for 
the termination and the effective date. In accordance with the 
requirements at proposed Sec.  488.8(e), the AOs must notify, in 
writing each of its providers or suppliers of its decision no later 
than 30 calendar days after the notice is published in the Federal 
Register. Proposed Sec.  488.5(d) would replace the requirement 
currently set out at Sec.  488.4(h), which addresses the ability of an 
AO whose request for approval of an accreditation program has been 
denied to resubmit its application if certain requirements are met. We 
would modify this provision by redesignating paragraph (i) to paragraph 
(e).
     Proposed Sec.  488.5(d)(1) through Sec.  488.5(d)(3), and 
Sec.  488.5(e) would replace the requirement currently set out at Sec.  
488.4(h)(1) through Sec.  488.4(h)(3)(i). The language of these 
provisions would be unchanged and addresses the requirements that an AO 
must meet to resubmit its application for CMS approval of an 
accreditation program after an initial request has been denied.
     Proposed Sec.  488.5(f) is a new proposed provision, 
titled ``Notice and Comment,'' that would incorporate the timeframes 
for review of an AO request for CMS approval of an accreditation 
program that are set forth in section 1865(b) of the Act. The text 
currently at Sec.  488.5 is being proposed for deletion because section 
125 of MIPPA requires us to eliminate the separate provisions for TJC 
hospital accreditation.
     Proposed Sec.  488.5(f)(1) would replace the requirement 
currently set out at Sec.  488.8(b)(1), concerning publication of a 
proposed notice announcing our receipt of an AO application in the 
Federal Register. To better capture the purpose of a proposed versus a 
final notice, this provision would be revised by deleting language 
describing how the AO's accreditation program provides reasonable 
assurance that entities accredited by the organization meet the 
Medicare requirements, and moving it to the provision concerning the 
final notice at proposed Sec.  488.5(f)(2)(i). In addition, language 
would be added related to the timeframe for public comment consistent 
with section 1865 of the Act.
     Proposed Sec.  488.5(f)(2) would replace the requirement 
currently set out at Sec.  488.8(b)(2), which requires us to publish a 
final notice announcing our decision to approve or disapprove an AO's 
accreditation program in the Federal Register. In accordance with 
section 1865(a)(3)(A) of the Act, the final notice must be published no 
later than 210 days after our receipt of a complete application. The 
language of the regulations would be streamlined and simplified to more 
clearly communicate existing requirements.
     Proposed Sec.  488.5(f)(2)(i) would replace the 
requirement currently set out at Sec.  488.8(b)(1), Sec.  488.8(b)(2), 
and Sec.  488.8(c), which address the contents of the final notice. We 
propose modifying the current timeframe requirement to be consistent 
with the provisions of section 1865(a)(3)(A) of the Act. Once a 
national AO's accreditation program is approved by us and this decision 
is published in the Federal Register, we may approve any provider or 
supplier that is surveyed or accredited for Medicare participation on 
or after the effective date of the final Notice (assuming that all 
other federal requirements have been met).

F. Providers or Suppliers That Participate in the Medicaid Program 
Under a CMS-Approved Accreditation Program (Sec.  488.6)

    We propose to broaden and revise the standard's title as a 
conforming change consistent with section 125 of MIPPA. Proposed 
regulations at Sec.  488.6 would replace the requirement currently set 
out at Sec.  488.5(b), which states that eligibility for Medicaid 
participation can be established through Medicare deemed status for 
providers and suppliers that are not required under Medicaid 
regulations to comply with any requirements other than Medicare 
participation requirements.

G. Release and Use of Accreditation Surveys (Sec.  488.7)

    We propose revising this standard's title to be more reflective of 
the standard's content. Proposed Sec.  488.7 would replace the 
requirement currently set out at Sec.  488.6(c)(1), which states that 
an accredited provider or supplier must authorize its AO to release a 
copy of its most current accreditation survey, together with any 
information related to the survey that CMS may require (including 
corrective action plans) to us and the state survey agency. The 
proposed revised requirement would be for the deemed provider to 
authorize release of a copy of its most recent accreditation survey to 
us. We are also taking this opportunity to clarify that we recognize 
that, in accordance with the Patient Safety Act and Quality Improvement 
Act (PSQIA) (Pub. L. 109-41) and implementing regulations at 42 CFR 
Sec.  3.206(b)(8)(i) and (ii), an AO may not further disclose patient 
safety work product it receives when such work product complies with 
the requirements for patient safety work product protected under the 
PSQIA. Other proposed changes are part of our effort to reorganize and 
clarify the regulations, as follows:
     Proposed Sec.  488.7(a) would replace the requirement 
currently set out at Sec.  488.6(c)(2). The language of this 
requirement remains unchanged and addresses the requirement that we may 
determine that a provider or supplier does not meet the Medicare 
conditions on the basis of our own analysis of the accreditation survey 
or any other information related to the survey.
     Proposed Sec.  488.7(b) would replace the requirement 
currently set out at Sec.  488.5(c)(3) regarding our authority and 
discretion to disclose an AO survey and information related to the 
survey when the accreditation survey is related to an enforcement 
action taken by CMS. All other disclosures of AO survey information are 
prohibited under section 1865(b), with the exception of surveys of 
HHAs. This provision would be revised to clarify requirements for 
release of survey information.

H. On-Going Review of Accreditation Organizations (Sec.  488.8)

    We propose modifying the title of this standard with language that 
is more specific and clarifies that our oversight of accreditation 
programs is continuous. We propose further revisions at Sec.  488.8 
consistent with our effort to reorganize, streamline and clarify the 
regulations, as follows:
     Proposed Sec.  488.8(a) would replace the requirement 
currently set out at Sec.  488.8(d), which address the continuing 
federal oversight of equivalency of an AO and removal of deeming 
authority. The proposed revisions would ensure consistency with section 
1875(b) of the Act, which authorizes continuing Secretarial oversight 
of accreditation organization activities with respect to Medicare 
participating entities and yearly reports to Congress concerning such 
activities. The proposed revisions would replace the concept of a 
``validation'' review with the broader concept of an ongoing AO 
``performance'' review. We also propose to remove reference to a ``20 
percent'' rate of disparity at current Sec.  488.8(d)(2)(i) as a 
threshold for

[[Page 20571]]

triggering a validation review that could result in termination of an 
AO's program approval. Our experience over the past few years has 
demonstrated that, although the rate of disparity between AO and State 
survey agency surveys of the same facility within a 60 day time period 
may be one reliable measure of some aspects of AO performance, a single 
measure used in isolation does not provide a complete and accurate 
picture of AO performance. As described in the CMS annual report to 
Congress, ``Review of Medicare's Program for Oversight of Accreditation 
Organizations,'' we employ a multi-faceted approach that utilizes not 
only the disparity rate, but a number of other quantitative measures of 
AO performance, as well as the results of our periodic qualitative 
reviews of AO standards or of AO renewal applications to develop a 
comprehensive assessment of an AO's performance. We believe it is not 
appropriate to include in the regulation a requirement, based on only 
one data point, which would trigger an automatic, formal review of an 
AO's accreditation program's continuing approval. Likewise, we believe 
our ability to open a formal review of an AO program should not be 
limited by tying such review to one data point. As a result, we propose 
deleting the specific reference in the regulation to a 20 percent 
disparity rate triggering a formal validation review. We propose 
instead to provide at Sec.  488.8(a) for an ongoing performance review 
of approved AO programs, and identify at proposed Sec.  488.8(a)(2) the 
disparity rate as only one of several components that may trigger a 
performance review. Further, we propose in Sec.  488.8(c) to provide 
for a formal accreditation program review when a performance review 
reveals evidence of substantial non-compliance. We believe that the 
proposed revision will enable us to continue to make use of the 
disparity rate in our ongoing assessment of AO performance, but to also 
make use of other performance indicators that enable us to reach a more 
comprehensive assessment of the quality of an AO's program. This 
revision would also make clearer that a formal accreditation program 
review could be opened as the result of a variety of serious compliance 
concerns.
     Proposed Sec.  488.8(a)(1) through Sec.  488.8(a)(3) are 
new proposed provisions which would be added to clarify that we 
evaluate AO performance by looking at various aspects of their 
practices.
     Proposed Sec.  488.8(b) would revise the requirement 
currently set out at Sec.  488.8(d)(1), which addresses CMS 
comparability reviews. The proposed revisions would clarify our current 
practice.
     Proposed Sec.  488.8(b)(1) would revise the requirement 
currently set out at Sec.  488.8(d)(1)(i), which address the need for a 
comparability review when we impose new requirements or change our 
survey process. We propose adding language which would provide us the 
flexibility to consider multiple factors when determining an 
appropriate timeframe for AOs to revise their accreditation program and 
submit revisions to CMS. These factors may include: the effective date 
of any final rule which would affect the substantive standards which 
are applied to various providers and suppliers; the effective date of 
any revised interpretive guidance or survey process affecting 
accredited providers or suppliers; and the scope and magnitude of such 
changes. In addition, the proposed new language would set out the 
consequences if an AO failed to submit comparable changes in a timely 
manner. These provisions would parallel proposed revisions at Sec.  
488.5(a)(12)(ii).
     Proposed Sec.  488.8(b)(2) would revise the requirement 
currently set out at Sec.  488.8(d)(1)(ii) concerning circumstances in 
which an AO proposes to adopt new requirements or changes its survey 
process. Under the current regulations, an AO must provide written 
notification to CMS at least 30 days in advance of the effective date 
of any proposed changes in its accreditation requirements or survey 
process. We propose expanding the timeframes to allow adequate time for 
us to conduct a comprehensive, detailed review of the AO's proposed 
changes. In addition, we propose adding language to clarify that the AO 
may not implement any changes to its CMS-approved accreditation program 
prior to receiving CMS approval. The purpose of the proposed new 
language would be to ensure continuing comparability of the AO's 
accreditation program with the Medicare requirements. These changes 
would parallel comparable changes at proposed Sec.  488.5(a)(12)(i).
     Proposed Sec.  488.8(c) and Sec.  488.8(c)(1) would revise 
the requirement currently set out at Sec.  488.8(e), which states that 
if a comparability or validation review indicates that an AO is not 
meeting the Medicare requirements, we will provide written notice to 
the AO indicating that its accreditation program approval may be in 
jeopardy and that an accreditation program review is being initiated. 
We propose revising the standard's title to more accurately reflect the 
language of the standard that follows and deleting redundant language. 
We would also add language to broaden the regulation and allow us to 
consider other aspects of AO performance that may warrant the opening 
of a review of a CMS-approved accreditation program. For example, if 
during a validation review, a question arose as to the ability of an AO 
to conduct re-accreditation surveys in a timely manner, or to provide 
us with timely and accurate data regarding deemed facilities, we would 
add this matter to the review. We further propose separating the one 
standard into two separate standards to more clearly articulate the 
circumstances that may trigger the opening of a review of a CMS-
approved accreditation program and the written notice CMS must provide 
the AO upon opening such a review.
     Proposed Sec.  488.8(c)(1)(i) would relocate the 
requirement currently set out at Sec.  488.8(e)(1), which requires that 
our notice include a statement of the requirements, instances, rates or 
patterns of discrepancies that were found in the course of a 
comparability or validation review, as well as other related 
documentation associated with the review. We propose deleting language 
and replacing it with broader language that more clearly describes 
current practices related to an accreditation program review. The 
proposed revisions would address the information that we would be 
required to include in the written notice that we send the AO 
indicating that an accreditation program review is being initiated.
     Proposed Sec.  488.8 (c)(1)(ii) would revise the 
requirement currently set out at Sec.  488.8(e)(3), which requires that 
the notice of our comparability or validation review include a 
description of the process available if the AO wishes an opportunity to 
explain or justify the findings made during such review. The proposed 
language would clarify that the AO would not be limited to only one 
opportunity to offer factual information and documentation. Instead, 
such opportunities would be available throughout the accreditation 
program review process.
     Proposed Sec.  488.8(c)(1)(iii) would revise the 
requirement currently set out at Sec.  488.8(e)(4), which describes the 
possible enforcement actions that we may take based on findings from a 
validation review. We propose deleting the language, ``from the 
validation review,'' and replacing it with the conforming language, 
``based on the findings of the accreditation program review.''
     Proposed Sec.  488.8(c)(1)(iv) would revise the 
requirement currently set out

[[Page 20572]]

at Sec.  488.8(f)(2). The current provision states that if CMS 
determines, following the accreditation program review, that the AO 
failed to adopt requirements comparable to CMS's, or to submit new 
requirements in a timely manner, the AO may be given conditional CMS 
approval of its accreditation program with a probationary period of up 
to 180 days to adopt comparable requirements. To clarify the existing 
requirements, we propose revising this provision to include the actions 
an AO would have to take to address the identified deficiencies, 
including a timeline for implementation not to exceed 180 calendar days 
from the date of issuance of the electronic version of the CMS letter, 
indicating that an accreditation program review is being initiated.
     Proposed Sec.  488.8(c)(2) would revise the requirement 
currently set out at Sec.  488.8(f)(1). The current provision requires 
CMS to conduct a review of an AO's accreditation program if the 
comparability or validation reviews produce findings that an AO has 
failed to adopt requirements comparable to Medicare. The language of 
this provision would be modified for increased clarity by utilizing 
current terminology.
     Proposed Sec.  488.8(c)(3) would replace the requirement 
currently set out at Sec.  488.8(f)(2). The current provision provides 
us authority to grant conditional approval of deeming authority with a 
probationary period of up to 180 days to adopt comparable requirements 
when the AO has failed to adopt requirements comparable to CMS's, or 
has failed to submit new requirements in a timely manner during a 
deeming review. We propose expanding the language to clarify that the 
probationary period of up to 180 calendar days would apply only when an 
AO has not adopted the necessary comparable changes to its existing 
CMS-approved accreditation program by the end of the 180-calendar-day 
accreditation program review. It further would clarify that an 
accreditation program review probationary period could not extend 
beyond the AO's term of approval. Finally, it would clarify the 
differences between an accreditation program review and renewal 
application review related to a probationary period, versus a 
conditional approval with a probationary period.
     Proposed Sec.  488.8(c)(3)(i) would revise the requirement 
currently set out at Sec.  488.8(f)(4), which states that within 60 
days after the end of any probationary period, we will make a final 
determination as to whether or not an accreditation program continues 
to meet the Medicare requirements and will issue an appropriate notice 
to the AO and affected providers or suppliers. We propose clarifying 
this provision by deleting the language, ``make a final determination'' 
and replacing it with, ``issue a written determination.'' We further 
propose deleting the language, ``criteria described at paragraph (a)(1) 
of this section,'' and replacing it with, ``requirements of this 
subpart.''
     Proposed Sec.  488.8(c)(3)(ii) would revise the 
requirement currently set out at Sec.  488.8(f)(5) concerning the 
requirement that if the AO has not made improvements acceptable to us 
by the end of the probationary period, we will remove its approval 
effective 30 days from the date that it provides written notice to the 
AO. We propose modifying this provision by expanding the timeframe to 
account for the process required in order to publish a notice in the 
Federal Register.
     Proposed Sec.  488.8(c)(3)(iii) would revise the 
requirement currently set out at Sec.  488.8(f)(7), which instructs us 
to publish a notice in the Federal Register when necessary, withdrawing 
its approval of an AO's accreditation program, including a 
justification for its decision. We propose clarifying this provision by 
specifying the timeframe for publication of this notice.
     Proposed Sec.  488.8(d) would revise the requirement 
currently set out at Sec.  488.8(g), which state that when we determine 
that continued approval of an AO's accreditation program poses an 
immediate jeopardy to the patients of the entities accredited by that 
organization, or such continued approval otherwise constitutes a 
significant hazard to the public health, we may immediately withdraw 
approval of that AO's accreditation program. We propose clarifying this 
provision by deleting the language, ``deeming authority'' and replacing 
it with the conforming change, ``CMS-approved accreditation program.''
     Proposed Sec.  488.8(e) is a new provision that would 
address an AO's responsibility to notify its providers or suppliers in 
the event that CMS withdraws approval of its accreditation program or 
the AO voluntarily terminates its program. This new, proposed provision 
would be necessary to ensure that providers or suppliers affected by an 
AO's loss of CMS approval for an accreditation program would be 
informed that they were no longer deemed to meet the Medicare 
requirements. Notification would afford affected providers or suppliers 
an opportunity to seek accreditation through another CMS-approved AO 
accreditation program, or participate in Medicare under the state 
survey agency's jurisdiction.
     Proposed Sec.  488.8(f) would revise the requirement 
currently set out at Sec.  488.8(h), which provides an AO that is not 
satisfied with CMS's determination to withdraw approval of its 
accreditation program the opportunity to request a reconsideration of 
that determination in accordance with subpart D of this part. We 
propose clarifying this provision by deleting the language, ``deeming 
authority'' and replacing it with the conforming change, ``CMS-approved 
accreditation program.''
     Proposed Sec.  488.8(g) would revise the requirement 
currently set out at Sec.  488.8(f)(8). The current requirement states 
that after we remove approval of an AO's accreditation program, an 
affected provider's or supplier's deemed status continues in effect for 
60 days after removal of approval. It further states that we may extend 
the period for an additional 60 days if it determines that the provider 
or supplier submitted an application within the 60 day timeframe to 
another approved AO or to us so that compliance with Medicare 
conditions can be determined. We propose revising this provision by 
expanding the timeframe for continued deemed status of an affected 
provider or supplier if certain criteria are met, and the provider or 
supplier provides notice to the state survey agency to avoid 
duplication of services by the state survey agency and the AO.
     Proposed Sec.  488.8(h) would replace the requirement 
currently set out at Sec.  488.8(f)(9), which states that a provider's 
or supplier's failure to comply with the timeframes set forth will 
jeopardize its participation in the Medicare program and, where 
applicable, the Medicaid program. The language of this proposed 
provision would remain unchanged.
     Proposed Sec.  488.8(i) would revise the requirement 
currently set out at Sec.  488.9. This provision addresses the onsite 
observation of an AO's operations. We propose modifying this provision 
and adding language that provides greater specificity and clarity. In 
addition, we propose expanding the provision to give us greater 
flexibility in the timing of onsite visits to improve our oversight of 
approved AO accreditation programs.

I. Validation Surveys (Sec.  488.9)

    We propose revising the title of this section because proposed 
Sec.  488.9 sets out the language currently at Sec.  488.7 that 
addresses validation surveys. The regulatory language would remain 
unchanged with the exception of: deleting language related to a plan of

[[Page 20573]]

correction that no longer reflects current state survey agency 
practice; and deleting language regarding compliance with the Life 
Safety Code that would be duplicative of proposed language at Sec.  
488.12(a)(2). In addition, we are proposing minor changes to conform 
this section to the rest of the proposed rule.

J. State Survey Agency Review: Statutory Provisions (Sec.  488.10)

    We propose to revise Sec.  488.10 to implement section 125 of MIPPA 
(revising section 1865(a) of the Act) to clarify that our proposed 
regulations apply to several types of providers and suppliers, not just 
hospitals. The regulation currently at Sec.  488.10(c) addresses the 
authority of the Secretary to enter into agreements with state survey 
agencies for the purpose of conducting validation surveys. It further 
states, ``Section 1865(d) provides that an accredited hospital which is 
found after a validation survey to have significant deficiencies 
related to the health and safety of patients will no longer be deemed 
to meet the conditions of participation.'' We propose revising this 
provision by separating it into two separate provisions, Sec.  
488.10(c) and Sec.  488.10(d). We propose modifying this provision by 
updating the regulatory citation to implement changes associated with 
section 125 of MIPPA. We further propose modifying this provision by 
adding broader language to make it clear that the regulations would 
apply to all national AOs with CMS-approved accreditation programs, and 
all provider or supplier types.

K. State Survey Agency Functions (Sec.  488.11)

    We propose to revise Sec.  488.11(b) by deleting the word, 
``accredited,'' and replacing it with ``deemed'' as a conforming change 
for increased clarity. We also propose deleting the citation, ``Sec.  
488.7,'' and replacing it with ``Sec.  488.9.'' This change would be 
consistent with the proposed reorganization of the requirements.

L. Effect of Survey Agency Certification (Sec.  488.12)

    Section 488.12 addresses provider or supplier certification 
recommendations made by the state survey agency to CMS. Section 
488.12(a)(2) addresses whether an accredited hospital is deemed to meet 
the Medicare CoPs or is subject to a full review by the state survey 
agency. We propose modifying this provision by inserting broader 
language to make it clear that the revised regulations not only pertain 
to hospitals exclusively, but to all deemed providers and suppliers. We 
further propose modifying this provision for clarity and conforming 
changes.

M. Loss of Accredited Status (Sec.  488.13)

    Section 488.13 is a new proposed section entitled, ``Loss of 
Accreditation.'' We believe that this proposed section is necessary to 
address the consequences of a provider's or supplier's loss of 
accreditation, either voluntary or involuntary, from an AO's CMS-
approved accreditation program. Voluntary loss of accreditation occurs 
when a provider or supplier chooses to withdraw from a CMS-approved 
accreditation program. Involuntary loss of accreditation occurs when an 
AO terminates a provider's or supplier's accreditation due to non-
compliance with the AO's CMS-approved accreditation program 
requirements, or the provider's or supplier's non-payment of AO fees. 
The proposed additions address the timing of a state survey agency 
survey in such circumstances.

N. Providers or Suppliers, Other Than SNFs and NFs, With Deficiencies 
(Sec.  488.28)

    We propose to revise Sec.  488.28(a) to state that in immediate 
jeopardy situations involving providers or suppliers other than nursing 
homes or SNFs, the Secretary may require a shorter timeframe for a 
provider or supplier to come into compliance. This is consistent with 
our longstanding enforcement policy regarding immediate jeopardy 
situations with respect to provider types other than long term care 
facilities. We believe it would be beneficial to make this practice 
explicit in this proposed rule.

O. Statutory Basis (Sec.  489.1)

    We propose to revise Sec.  489.1(b), which addresses the scope of 
part 489. This proposed revision would expand the scope of these 
provisions to indicate that suppliers are subject to certification, as 
well as providers. Currently Sec.  489.1(b) indicates that the 
regulations at Sec.  489.13, governing the effective date of the 
provider agreement or supplier approval, are applicable not only to 
providers but also to suppliers that require certification in 
accordance with Sec.  488.3 and Sec.  488.12 to participate in 
Medicare. Various supplier-specific rules in this chapter that require 
certification also establish requirements related to termination of the 
supplier's participation agreement with the Medicare program. However, 
only some of these rules provide for termination of the agreement where 
the supplier places restrictions on the persons it will accept for 
treatment and fails to either exempt Medicare beneficiaries or apply 
the restrictions in the same way for Medicare beneficiaries as all 
other persons seeking care in the supplier facility. We believe that 
this non-discrimination provision should also apply as a basis for 
termination of all Medicare-certified suppliers.
    Likewise, neither the certified supplier-specific rules governing 
termination of their agreements, nor the current termination of 
provider agreement rules at Sec.  489.53 provide for termination of the 
supplier agreement where the certified supplier denies immediate access 
to state surveyors or other authorized entities or refuses to allow 
photocopying of its records. Currently, the only enforcement remedy in 
the face of such denial or refusal by a certified supplier would be 
exclusion of the certified supplier from Medicare by the OIG pursuant 
to 42 CFR Sec.  1001.1301(a). It would be quicker and more efficient 
for us to handle such a denial or refusal of access to the certified 
supplier facility or photocopying of its records in the same manner as 
is currently used for providers, that is, CMS termination of the 
Medicare agreement.
    Accordingly, we propose amending Sec.  489.1(b) to expand the 
enumeration of provisions of part 489 that apply to certain suppliers, 
as well as providers. Because these provisions would apply only to 
those types of suppliers that require certification and not to all 
suppliers, we are including language in the proposed revised Sec.  
489.1(b) describing which types of suppliers would be affected, using 
the same language currently found at Sec.  489.13. This language would 
indicate that the affected types of suppliers participate in Medicare 
based on surveys conducted by the state survey agency or CMS surveyors, 
or on the basis of accreditation by CMS-approved AO.
    We propose redesignating the current language in Sec.  489.1(b), 
which makes the effective date rules at Sec.  489.13 applicable to 
suppliers as well as providers, as new paragraph Sec.  489.1(b)(1). 
Further, we propose adding a new paragraph at Sec.  489.1(b)(2) 
indicating that the termination provisions at Sec.  489.53(a), Sec.  
489.53(a)(2), and Sec.  489.53(a)(13) and proposed new Sec.  
489.53(a)(18) (discussed below) would apply to suppliers as well as 
providers.

P. Definitions (Sec.  489.3)

    The regulations at Sec.  489.3 define the term ``immediate 
jeopardy'' as a situation in which the provider's non-compliance with 
one or more requirements of participation has

[[Page 20574]]

caused, or is likely to cause, serious injury, harm, impairment, or 
death to a resident. This definition is identical to the one at Sec.  
488.301, which, in that context, applies only to long term care 
facilities, that is, nursing facilities (NFs) and SNFs. However, the 
regulation at Sec.  489.53(d) addresses exceptions permitted for the 
required notice of termination which we must provide to the provider or 
supplier. This regulation permits exceptions in the case of immediate 
jeopardy situations in hospitals that have violated the Emergency 
Medical Treatment and Labor Act (EMTALA) requirements at Sec.  
489.24(a) through (e), as well as to immediate jeopardy situations in 
SNFs. We propose to revise the definition of immediate jeopardy at 
Sec.  489.3 to clarify that it has the meaning found in proposed new 
Sec.  488.1, which applies to all types of providers and suppliers 
subject to certification.

Q. Termination by CMS (Sec.  489.53)

    We propose to revise Sec.  489.53(a), which addresses the basis for 
us to terminate a Medicare provider agreement. We propose deleting the 
language ``with any provider'' from the heading for this provision 
since we are proposing that several of the termination provisions apply 
to suppliers, as well as providers. We propose retaining language 
stating that we may terminate the agreement with any provider if we 
find that any of the failings enumerated in Sec.  489.53(a) is 
attributable to that provider. We further propose adding language 
indicating that we may, in addition to applying the various provisions 
in this chapter governing the termination of agreements with suppliers, 
terminate agreements with those suppliers that fail to comply with the 
requirements set out in Sec.  489.53(a)(13) and proposed new Sec.  
489.53(a)(18).
    We propose adding language in Sec.  489.53(a)(2) to indicate that 
when a provider or supplier places restrictions on the persons accepted 
for treatment services without either exempting Medicare beneficiaries 
from such restrictions, or applying the restrictions to Medicare 
beneficiaries in the same manner as to all other persons seeking care, 
this may be grounds for termination of the Medicare agreement. The 
current language at Sec.  489.53(a)(2) applies only to providers.
    We propose adding language at Sec.  489.53(a)(13) to indicate that 
failure by a provider or supplier to permit photocopying of any records 
or other information by, or on behalf of us, as necessary, to determine 
or verify compliance with participation requirements, may be grounds 
for terminating the Medicare agreement. The current language at Sec.  
489.53(a)(13) applies only to providers.
    Further, we propose adding a new Sec.  489.53(a)(18) to state 
explicitly that denial of immediate access to a state survey agency or 
other authorized entity for the purpose of determining, in accordance 
with Sec.  488.3, whether the provider or supplier meets the applicable 
requirements, conditions of participation, conditions for coverage, or 
conditions for certification, may be grounds for termination of the 
provider agreement or supplier approval. Consistent with the definition 
at 42 CFR 1001.1301(a)(2), we interpret ``failure to grant immediate 
access'' to mean the failure to grant access at the time of a 
reasonable request or to provide a compelling reason why access may not 
be granted.
    Finally, we propose a technical correction to Sec.  
489.53(d)(2)(i). Section 489.53(d) governs the timeframe for provision 
of a minimum 15-day advance notice of termination of a provider 
agreement by us to the affected provider, while subsection (d)(2) 
governs exceptions to the general timeframe in situations involving 
immediate jeopardy. The first exception, at Sec.  489.53(d)(2)(i), 
applies to hospitals that have been determined by us to have an EMTALA 
violation which poses an immediate jeopardy. In these cases, we are 
required to give the hospital a preliminary notice of termination in 23 
days if the hospital does not correct its identified deficiencies or 
refute the finding, and a final notice of termination at least 2, but 
not more than 4, days before the effective date of termination. We are 
proposing clarifying that this exception to the timing notice provision 
applies to a hospital that has been found to be in violation of any of 
the EMTALA requirements found at Sec.  489.24, paragraphs (a) through 
(f). The current regulation refers to hospitals with emergency 
departments found in violation of Sec.  489.24, paragraphs (a) through 
(e). This proposed clarification would not change current EMTALA 
citation or enforcement practices.

R. Table of Current Location and Proposed Location of Regulations Text

    Table 1 identifies the current location, as well as the proposed 
location of the regulations text associated with this proposed rule.

   Table 1--Current Location and Proposed Location of Regulations Text
------------------------------------------------------------------------
             Current location                     Proposed location
------------------------------------------------------------------------
Sec.   488.3(b)(1)........................  Sec.   488.3(b).
Sec.   488.4(b)...........................  Sec.   488.5(a).
Sec.  Sec.   488.4(b)(3) and                Sec.   488.5(a)(8)(ii).
 488.4(b)(3)(i).
Sec.   488.4(b)(3)(vii)...................  Sec.   488.5(a)(4)(ix).
Sec.   488.4(b)(3)(viii)..................  Sec.   488.5(a)(12)(ii).
Sec.   488.4(d)...........................  Sec.   488.9.
Sec.   488.4(e)...........................  Sec.   488.5(f)(1).
Sec.   488.6(a)...........................  Sec.   488.4(a).
Sec.   488.4..............................  Sec.   488.5.
Sec.   488.4(a)...........................  Sec.   488.5(a).
Sec.   488.4(a)(1)........................  Sec.   488.5(a)(1).
Sec.   488.4(a)(2)........................  Sec.   488.5(a)(3).
Sec.   488.4(a)(3)........................  Sec.   488.5(a)(4).
Sec.   488.4(a)(3)(i).....................  Sec.   488.5(a)(4)(i).
Sec.   488.(a)(3)(ii).....................  Sec.   488.5(a)(4)(iii).
Sec.   488.8(a)(2)(ii)....................  Sec.   488.5(a)(4)(iv).
Sec.   488.4(a)(3)(iii)...................  Sec.   488.5(a)(4)(v).
Sec.   488.4(a)(3)(iv)....................  Sec.   488.5(a)(4)(vi).
Sec.   488.8(a)(3)........................  Sec.   488.5(a)(4)(viii).
Sec.   488.4(a)(4)(i).....................  Sec.   488.5(a)(5).
Sec.   488.4(a)(4)(i).....................  Sec.   488.5(a)(6).
Sec.   488.4(a)(4)(ii)....................  Sec.   488.5(a)(7).
Sec.   488.4(a)(4)(iii)...................  Sec.   488.5(a)(8).
Sec.   488.4(a)(4)(iv)....................  Sec.   488.5(a)(9).
Sec.   488.4(a)(4)(v).....................  Sec.   488.5(a)(10).
Sec.   488.4(a)(5)........................  Sec.   488.5(a)(11).
Sec.   488.4(b)(1)........................  Sec.   488.5(a)(11)(ii).
Sec.   488.4(a)(6)........................  Sec.   488.5(a)(12).
Sec.   488.4(a)(7)........................  Sec.   488.5(a)(13).
Sec.   488.4(a)(8)........................  Sec.   488.5(a)(13)(i).
Sec.   488.4(b)(3)(i).....................  Sec.   488.5(a)(13)(ii).
Sec.   488.4(a)(9)........................  Sec.   488.5(a)(14).
Sec.   488.4(a)(10).......................  Sec.   488.5(a)(16).
Sec.   488.4(b)(2)........................  Sec.   488.5(a)(17).
Sec.   488.4(b)(3)(iii)...................  Sec.   488.5(a)(19).
Sec.   488.4(b)(3)(iv)....................  Sec.   488.5(a)(20).
Sec.   488.4(b)(3)(v).....................  Sec.   488.5(a)(21).
Sec.   488.4(c)...........................  Sec.   488.5(b).
Sec.   488.4(f)...........................  Sec.   488.5(c).
Sec.   488.4(h)...........................  Sec.   488.5(d).
Sec.   488.4(h)(1)-Sec.   488.4(h)(3)(i)..  Sec.   488.5(d)(1)-Sec.
                                             488.5(d)(3), Sec.
                                             488.5(e).
Sec.   488.8(b)(1)........................  Sec.   488.5(f)(1).
Sec.   488.8(b)(2)........................  Sec.   488.5(f)(2).
Sec.   488.8(b)(1), Sec.   488.8(b)(2),     Sec.   488.5(f)(2)(i).
 Sec.   488.8(c).
Sec.   488.5(b)...........................  Sec.   488.6.
Sec.   488.6(c)(1)........................  Sec.   488.7.
Sec.   488.6(c)(2)........................  Sec.   488.7(a).
Sec.   488.5(c)(3)........................  Sec.   488.7(b).
Sec.   488.8(d)...........................  Sec.   488.8(a).
Sec.   488.8(d)(1)........................  Sec.   488.8(b).
Sec.   488.8(d)(1)(i).....................  Sec.   488.8(b)(1).
Sec.   488.8(d)(1)(ii)....................  Sec.   488.8(b)(2).
Sec.   488.8(e)...........................  Sec.   488.8(c)-Sec.
                                             488.8(c)(1).
Sec.   488.8(e)(1)........................  Sec.   488.8(c)(1)(i).
Sec.   488.8(e)(3)........................  Sec.   488.8(c)(1)(ii).
Sec.   488.8(e)(4)........................  Sec.   488.8(c)(1)(iii).
Sec.   488.8(f)(2)........................  Sec.   488.8(c)(1)(iv).
Sec.   488.8(f)(1)........................  Sec.   488.8(c)(2).
Sec.   488.8(f)(2)........................  Sec.   488.8(c)(3).
Sec.   488.8(f)(4)........................  Sec.   488.8(c)(3)(i).
Sec.   488.8(f)(5)........................  Sec.   488.8(c)(3)(ii).
Sec.   488.8(f)(7)........................  Sec.   488.8(c)(3)(iii).
Sec.   488.8(h)...........................  Sec.   488.8(d).
Sec.   488.8(g)...........................  Sec.   488.8(e).

[[Page 20575]]

 
Sec.   488.8(f)(8)........................  Sec.   488.8(f).
Sec.   488.8(f)(9)........................  Sec.   488.8(f)(1).
Sec.   488.9..............................  Sec.   488.8(g).
Sec.   488.7..............................  Sec.   488.9.
Sec.   488.10(d)..........................  Sec.   488.10(b).
------------------------------------------------------------------------

III. Collection of Information Requirements

    While this rule does contain information collection requirements, 
we believe they are exempt under 5 CFR 1320.3(c)(4). The requirements 
would affect less than 10 entities in a 12-month period. The 
requirements in the document have been in existence since September 
2008. Since implementation, there have only been a total of seven 
entities that meet the criteria necessary to become accrediting 
organizations, with the seventh having just been added as recently as 
September 2008. Should the number of eligible entities approach or 
exceed 10, we will prepare an information collection request for OMB 
approval. As required by the Paperwork Reduction Act of 1995, we will 
announce the information collection request via the required Federal 
Register notices and allow the public ample time to review the request 
and submit comments.

IV. Response to Comments

    Because of the large number of public comments we normally receive 
on Federal Register documents, we are not able to acknowledge or 
respond to them individually. We will consider all comments we receive 
by the date and time specified in the DATES section of this preamble, 
and, when we proceed with a subsequent document, we will respond to the 
comments in the preamble to that document.

V. Regulatory Impact Statement (or Analysis)

    We have examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
This rule does not reach the economic threshold and thus is not 
considered a major rule.
    The RFA requires agencies to analyze options for regulatory relief 
of small entities. For purposes of the RFA, small entities include 
small businesses, nonprofit organizations, and small governmental 
jurisdictions. Most hospitals and most other providers and suppliers 
are small entities, either by nonprofit status or by having revenues of 
$7.0 million to $35.5 million in any 1 year. Individuals and states are 
not included in the definition of a small entity. We are not preparing 
an analysis for the RFA because we have determined, and the Secretary 
certifies, that this proposed rule will not have a significant economic 
impact on a substantial number of small entities.
    In addition, section 1102(b) of the Social Security Act requires us 
to prepare a regulatory impact analysis if a rule may have a 
significant impact on the operations of a substantial number of small 
rural hospitals. This analysis must conform to the provisions of 
section 603 of the RFA. For purposes of section 1102(b) of the Act, we 
define a small rural hospital as a hospital that is located outside of 
a Metropolitan Statistical Area for Medicare payment regulations and 
has fewer than 100 beds. We are not preparing an analysis for section 
1102(b) of the Act because we have determined, and the Secretary 
certifies, that this proposed rule will not have a significant impact 
on the operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2013, that 
threshold level is currently approximately $141 million. This proposed 
rule has no consequential effect on state, local, or tribal governments 
or on the private sector.
    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 488

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirements.

42 CFR Part 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR chapter IV as set forth 
below:

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
1. The authority citation for part 488 continues to read as follows:

    Authority:  Secs. 1102, and 1871 of the Social Security Act, 
unless otherwise noted (42 U.S.C 1302 and 1395(hh)); Section 6111 of 
the Patient Protection and Affordable Care Act (Pub. L. 111-148).

0
2. Section 488.1 is amended by--
0
A. Revising the definitions of ``Certification,'' ``Full review,'' 
``Provider of services or provider,'' ``Reasonable assurance,'' ``State 
survey agency,'' ``Substantial allegation of non-compliance,'' and 
``Supplier.''
0
B. Removing the definitions of ``Accredited provider or supplier,'' 
``AOA,'' ``JCAHO,'' and ``Validation review period.''
0
C. Adding the definitions of ``Conditions for certification,'' ``Deemed 
status,'' ``Immediate jeopardy,'' and ``National accrediting 
organization.''
    The revisions and additions read as follows:


Sec.  488.1  Definitions.

* * * * *
    Certification means a determination made by the state survey agency 
that providers and suppliers are in compliance with the applicable 
conditions of participation, conditions for coverage, conditions for 
certification, or requirements.
* * * * *
    Conditions for certification means the health and safety standards 
RHCs must meet to participate in the Medicare program.
    Deemed status is awarded by CMS when a provider or supplier has 
voluntarily applied for, and received, accreditation from a CMS-
approved national accrediting organization; been recommended by the 
national accrediting organization for Medicare participation; has met 
all other

[[Page 20576]]

requirements for participation in the Medicare program as determined by 
CMS; and, is participating in the Medicare program on the basis of 
CMS's acceptance of the accrediting organization's recommendation. 
Deemed status is an alternative to regular surveys by the state survey 
agency to determine whether or not it continues to meet the Medicare 
requirements.
    Full review means a survey of a provider or supplier for compliance 
with all of the Medicare conditions or requirements applicable to that 
provider or supplier type.
    Immediate jeopardy means a situation in which the provider's or 
supplier's non-compliance with one or more Medicare requirements, 
conditions of participation, conditions for coverage or certification 
has caused, or is likely to cause, serious injury, harm, impairment, or 
death to a resident or patient.
* * * * *
    National accrediting organization means an organization that 
accredits health care facilities under a specific program and whose 
accredited healthcare facilities under each program are widely located 
geographically across the United States.
    Provider of services or provider refers to a hospital, critical 
access hospital, skilled nursing facility, nursing facility, home 
health agency, hospice, comprehensive outpatient rehabilitation 
facility, or a clinic, rehabilitation agency or public health agency 
that furnishes outpatient physical therapy or speech pathology 
services.
* * * * *
    Reasonable assurance means that an accrediting organization has 
demonstrated to CMS's satisfaction that its accreditation program 
requirements meet or exceed the Medicare program requirements.
* * * * *
    State survey agency refers to the state health agency or other 
appropriate state or local agency CMS uses to perform survey and review 
functions provided for in sections 1864, 1819(g), and 1919(g) of the 
Act.
    Substantial allegation of non-compliance means a complaint from any 
of a variety of sources (that is, patient, relative, or third party), 
including complaints submitted in person, by telephone, through written 
correspondence, or in newspaper or magazine articles, that, if 
substantiated, could or may affect the health and safety of patients or 
raise doubts as to a provider's or supplier's compliance with any 
Medicare condition of participation, condition for coverage, condition 
for certification, or other requirements.
    Supplier means unless the context otherwise requires, a physician 
or other practitioner, a facility, or other entity (other than a 
provider of services) that furnishes items or services. For the 
purposes of this part, the term does not include suppliers of durable 
medical equipment and supplies, kidney transplant centers, or end stage 
renal dialysis facilities.
0
3. Section 488.2 is amended by--
0
A. Adding the following statutory provisions in numerical order.
0
B. Revising the description of section 1883 of the Social Security Act.
    The additions and revisions read as follows:


Sec.  488.2  Statutory basis.

* * * * *
    1138(b)--Requirements for organ procurement organizations and organ 
procurement agencies.
* * * * *
    1820--Requirements for CAHs.
    1832(a)(2)(C)--Requirements for Organizations that provide 
outpatient physical therapy and speech language pathology services.
    1832(a)(2)(F)--Requirements for ASCs.
    1832(a)(2)(J)--Requirements for partial hospitalization for CMHCs.
    1843(e)--Requirements for Advanced Diagnostic Imaging (ADI) 
services.
    1861(e)--Requirements for hospitals.
* * * * *
    1861(p)(4)--Requirements for rehabilitation agencies.
* * * * *
    1861(aa)--Requirements for RHCs and FQHCs.
    1861(cc)(2)--Requirements for CORFs.
    1861(dd)--Requirements for hospices.
    1861(ff)(3)(A)--Requirements for CMHCs.
* * * * *
    1863--Consultation with state agencies, accrediting bodies, and 
other organizations to develop conditions of participation, conditions 
for coverage, conditions for certification, and requirements for 
providers or suppliers.
* * * * *
    1875(b)--Requirements for performance review of CMS-approved 
accreditation programs.
    1881--Requirements for ESRDs.
    1883--Requirements for hospitals that furnish extended care 
services.
* * * * *
0
4. Section 488.3 is revised to read as follows:


Sec.  488.3  Conditions of participation, conditions for coverage, 
conditions for certification and long term care requirements.

    (a) Basic rules. To be approved for participation in, or coverage 
under, the Medicare program, a prospective provider or supplier must 
meet the following:
    (1) Meet the applicable statutory definitions in section 1138(b), 
1819, 1820, 1832(a)(2)(C), 1832(a)(2)(F), 1832(a)(2)(J), 1834(e), 1861, 
1881, 1883, 1891, 1913 or 1919 of the Act.
    (2) Be in compliance with the applicable conditions, certification 
requirements, or long term care requirements prescribed in part 405 
subparts U or X, part 410 subpart E, Sec.  410.33, Sec.  414.68, part 
416, part 418 subpart C, parts 482 through 485, part 491 subpart A, or 
part 494 of this chapter.
    (b) Special conditions--The Secretary may consult with state 
agencies and other organizations to develop conditions of 
participation, conditions for coverage, conditions for certification, 
and long term care requirements.
    (1) The Secretary may, at a state's request, approve health and 
safety requirements for providers or suppliers in the state that exceed 
Medicare program requirements.
    (2) If a state or political subdivision imposes requirements on 
institutions (that exceed the Medicare program requirements) as a 
condition for the purchase of health services under a state Medicaid 
plan approved under title XIX of the Act, (or if Guam, Puerto Rico, or 
the Virgin Islands does so under a state plan for Old Age Assistance 
under title I of the Act, or for Aid to the Aged, Blind, and Disabled 
under the original title XVI of the Act), the Secretary imposes similar 
requirements as a condition for payment under Medicare in that state or 
political subdivision.
0
5. Section 488.4 is revised to read as follows:


Sec.  488.4  General rules for a CMS-approved accreditation programs 
for providers and suppliers.

    (a) A national accrediting organization can apply to CMS for 
approval to accredit providers and suppliers (except for kidney 
transplant centers, ESRD facilities, and suppliers of medical equipment 
and supplies) as meeting or exceeding the Medicare conditions or 
requirements. The following requirements apply when a national 
accrediting organization approved by CMS provides reasonable assurance 
to CMS that it requires providers or suppliers (except for kidney 
transplant centers, ESRD facilities, and suppliers of

[[Page 20577]]

medical equipment and supplies) it accredits to meet requirements that 
meet or exceed the Medicare conditions or requirements:
    (1) When a provider or supplier demonstrates full compliance with 
all of the accreditation program requirements of the national 
accrediting organization's CMS-approved accreditation program, the 
national accrediting organization may recommend to CMS to grant deemed 
status to the provider or supplier.
    (2) CMS may deem the provider or supplier to be in compliance with 
the applicable Medicare conditions or requirements. The provider or 
supplier is subject to validation surveys under Sec.  488.9.
    (b) [Reserved]
0
6. Section 488.5 is revised to read as follows:


Sec.  488.5  Application and re-application procedures for national 
accrediting organizations.

    (a) Information submitted with application. A national accrediting 
organization applying to CMS for approval or re-approval of an 
accreditation program under Sec.  488.4 must furnish CMS with all of 
the following information and materials to demonstrate that the program 
provides reasonable assurance that the entities accredited under the 
program meet or exceed the applicable Medicare conditions or 
requirements. This information must include the following:
    (1) Documentation that demonstrates the organization meets the 
definition of a ``national accrediting organization'' under Sec.  488.1 
as it relates to the accreditation program.
    (2) The type of provider or supplier accreditation program for 
which the organization is requesting approval or re-approval.
    (3) A detailed crosswalk (in table format) that identifies, for 
each of the applicable Medicare conditions or requirements, the exact 
language of the organization's comparable accreditation requirements 
and standards.
    (4) A detailed description of the organization's survey process to 
confirm that a provider or supplier meets or exceeds the Medicare 
program requirements. This description must include all of the 
following information:
    (i) Frequency of surveys performed and agreement by the 
organization to re-survey every accredited provider or supplier, 
through unannounced surveys, no later than 36 months after the previous 
accreditation survey, including an explanation of how the accrediting 
organization will maintain the schedule it proposes. If there is a 
statutorily-mandated survey interval of less than 36 months, the 
organization must indicate how it will adhere to the statutory 
schedule.
    (ii) Documentation demonstrating the comparability of the 
organization's survey process and surveyor guidance to those required 
for state survey agencies conducting federal Medicare surveys for the 
same provider or supplier type, as specified in the CMS State 
Operations Manual (Pub. No. 100-07).
    (iii) Copies of the organization's survey forms, guidelines, and 
instructions to surveyors.
    (iv) Documentation demonstrating that the organization's survey 
reports identify, for each finding of non-compliance with accreditation 
standards, the comparable Medicare conditions of participation, 
conditions for coverage, conditions for certification, or requirements.
    (v) Description of the organization's accreditation survey review 
process.
    (vi) Description of the organization's procedures and timelines for 
notifying surveyed facilities of non-compliance with the accreditation 
program's standards.
    (vii) Description of the organization's procedures and timelines 
for monitoring the provider's or supplier's correction of identified 
non-compliance with the accreditation program's standards.
    (viii) A statement acknowledging that, as a condition for CMS 
approval of a national accrediting organization's accreditation 
program, the organization agrees to provide CMS with a copy of the most 
recent accreditation survey for a specified provider or supplier, 
together with any other information related to the survey as CMS may 
require (including corrective action plans).
    (ix) A statement acknowledging that the accrediting organization 
will provide timely notification to CMS when an accreditation survey or 
complaint investigation identifies an immediate jeopardy as that term 
is defined at Sec.  489.3 of this chapter. Using the format specified 
by CMS, the accrediting organization must notify CMS within 1 business 
day from the date the accrediting organization identifies the immediate 
jeopardy.
    (5) The criteria for determining the size and composition of the 
organization's survey teams for the type of provider or supplier to be 
accredited, including variations in team size and composition for 
individual provider or supplier surveys.
    (6) The overall adequacy of the number of the organization's 
surveyors, including how the organization will increase the size of the 
survey staff to match growth in the number of accredited facilities 
while maintaining re-accreditation intervals for existing accredited 
facilities.
    (7) A description of the education and experience requirements 
surveyors must meet.
    (8) A description of the content and frequency of the 
organization's in-service training it provides to survey personnel.
    (9) A description of the organization's evaluation systems used to 
monitor the performance of individual surveyors and survey teams.
    (10) The organization's policies and procedures for avoiding 
potential conflicts of interest by precluding individuals who are 
professionally or financially affiliated with a provider or supplier 
from participating in the survey or accreditation decision process with 
respect to that provider or supplier.
    (11) A description of the organization's data management and 
analysis system with respect to its surveys and accreditation 
decisions, including all of the following:
    (i) A detailed description of how the organization uses its data to 
assure the compliance of its accreditation program with the Medicare 
program requirements.
    (ii) A statement acknowledging that the organization agrees to 
submit timely, accurate, and complete data to support CMS's evaluation 
of the accrediting organization's performance. The organization must 
submit to CMS the data according to the instructions and timeframes CMS 
specifies. Data submissions include, but are not limited to, accredited 
provider or supplier demographic information, survey schedules, survey 
findings, and notices of accreditation decisions.
    (12) The organization's procedures for responding to, and 
investigating, complaints against accredited facilities, including 
policies and procedures regarding coordination of these activities with 
appropriate licensing bodies and ombudsmen programs.
    (13) The organization's accreditation status decision-making 
process, including its policies and procedures for granting, 
withholding, or removing accreditation status for facilities that fail 
to meet the accrediting organization's standards or requirements, 
assignment of less than full accreditation status or other actions 
taken by the organization in response to non-compliance with its 
standards and requirements. The organization must furnish the 
following:
    (i) A description of all types and categories of accreditation 
decisions associated with the program for which

[[Page 20578]]

approval is sought, including the duration of each.
    (ii) A statement acknowledging that the organization agrees to 
notify CMS (in a manner CMS specifies) of any provider or supplier-
specific accreditation decisions, including but not limited to the 
following: accreditation revoked, withdrawn, or revised; or has had any 
remedial or adverse action taken against it, within 3 business days 
from the date the organization takes an action.
    (14) A list of all facilities currently accredited by the 
organization under the program for which CMS approval is sought, 
including the type and category of accreditation currently held by each 
provider or supplier, and the expiration date of each provider's or 
supplier's current accreditation.
    (15) CMS considers applications for re-approval of a national 
accrediting organizations accreditation program if the accrediting 
organization demonstrates it has accredited at least 50 providers or 
suppliers under its current CMS-approved accreditation program.
    (16) A schedule of all accreditation surveys expected to be 
conducted by the organization during the 6-month period following 
submission of the application.
    (17) The three most recent audited financial statements of the 
organization that demonstrate that the organization's staffing, 
funding, and other resources are adequate to perform the required 
surveys and related activities.
    (18) A statement that it will provide written notification to all 
providers or suppliers accredited under a CMS-approved accreditation 
program at least 90 calendar days in advance of the effective date of a 
decision by the organization to voluntarily terminate its CMS-approved 
accreditation program.
    (19) A statement that it will provide written notification to CMS 
at least 60 calendar days in advance of the effective date of any 
proposed changes in the organization's CMS-approved accreditation 
program requirements, including an agreement not to implement the 
changes before receiving CMS's approval.
    (20) A statement that, in response to a notice from CMS of a change 
in the applicable conditions or requirements or in the survey process, 
the organization will provide CMS with proposed corresponding changes 
in the organization's requirements for its CMS-approved accreditation 
program to ensure continued comparability with the CMS conditions or 
requirements or survey process. The organization must comply with the 
following requirements:
    (i) The proposed changes must be submitted within 30 calendar days 
or by the date specified in the CMS notice, whichever is later.
    (ii) The organization may not implement the proposed changes before 
receiving CMS's approval.
    (21) A statement acknowledging that, as a condition for CMS's 
approval of an accreditation program, the organization will agree to 
require its surveyors to serve as witnesses in a legal proceeding if 
CMS takes an adverse action against a provider or supplier on the basis 
of the organization's accreditation survey findings.
    (b) Additional information needed. If CMS determines that 
additional information is necessary to make a determination for 
approval or denial of the organization's initial application or re-
application for CMS's approval of an accreditation program, CMS will 
notify the organization and afford it an opportunity to provide the 
additional information.
    (c)(1) Withdrawing an application. An accrediting organization may 
withdraw its initial application for CMS's-approval of its 
accreditation program at any time before CMS publishes the final notice 
described in paragraph (f)(2) of this section.
    (2) Voluntary termination of a CMS-approved accreditation program. 
An accrediting organization may voluntarily terminate its CMS-approved 
accreditation program at any time. The AO must notify CMS of its 
decision to voluntarily terminate its approved accreditation program 
and provide an effective date of termination. CMS will publish in the 
Federal Register a notice that includes the reasons for the termination 
and the effective date. In accordance with the requirements at Sec.  
488.8(e), the AOs must notify, in writing each of its providers or 
suppliers of its decision.
    (d) Requesting reconsideration of a disapproval. If an accrediting 
organization has requested, in accordance with subpart D of this part, 
a reconsideration of CMS's determination that its request for approval 
of an accreditation program is denied, it may not submit an initial 
application for approval of an accreditation program for another type 
of provider or supplier until the hearing officer's final decision is 
rendered.
    (e) Re-submitting a request. Except as provided in paragraph (d) of 
this section, an organization whose request for CMS's approval or re-
approval of an accreditation program has been denied may resubmit its 
application if the organization completes all of the following:
    (1) Revises its accreditation program to address the issues related 
to the denial of its previous request.
    (2) Demonstrates that it can provide reasonable assurance that its 
accredited facilities meet the applicable Medicare program 
requirements.
    (3) Resubmits the application in its entirety.
    (f) Public notice and comment. CMS publishes a notice in the 
Federal Register when the following conditions are met:
    (1) Proposed notice. When CMS receives a complete application from 
a national accrediting organization seeking CMS's approval of an 
accreditation program, it publishes a proposed notice. The proposed 
notice identifies the organization and the type of providers or 
suppliers to be covered by the accreditation program and provides 30 
calendar days for the public to submit comments to CMS.
    (2) Final notice. When CMS decides to approve or disapprove a 
national accrediting organization's application, it publishes a final 
notice within 210 calendar days from the date CMS determines the 
accrediting organization's application was complete. The final notice 
specifies the basis for the CMS decision.
    (i) Approval or re-approval. If CMS approves or re-approves the 
accrediting organization's accreditation program, the final notice 
describes how the accreditation program provides reasonable assurance 
that the providers or suppliers accredited by the organization under 
that program meet the applicable Medicare requirements. The final 
notice specifies the effective date and term of the approval (which may 
not be later than the publication date of the notice and which will not 
exceed 6 years).
    (ii) Disapproval. If CMS does not approve the accrediting 
organization's accreditation program, the final notice describes how 
the organization fails to provide reasonable assurance that the 
providers or suppliers accredited by the organization under that 
program meet the applicable Medicare requirements. The final notice 
specifies the effective date of the decision.
0
7. Section 488.6 is revised to read as follows:


Sec.  488.6  Providers or suppliers that participate in the Medicaid 
program under a CMS-approved accreditation program.

    A provider or supplier that has been granted ``deemed status'' by 
CMS by virtue of its accreditation from a CMS-approved accreditation 
program is eligible to participate in the Medicaid program.

[[Page 20579]]

Sec.  488.9  [Removed]

0
8. Section 488.9 is removed.


Sec.  488.7  [Redesignated as Sec.  488.9]

0
9. Section 488.7 is redesignated as new Sec.  488.9.
0
10. New section 488.7 is added to read as follows:


Sec.  488.7  Release and use of accreditation surveys.

    A Medicare participating provider or supplier deemed to meet 
program requirements in accordance with Sec.  488.4 must authorize its 
accrediting organization to release to CMS a copy of its most current 
accreditation survey and any information related to the survey that CMS 
may require (including, but not limited to, corrective action plans).
    (a) CMS may determine that a provider or supplier does not meet the 
applicable Medicare conditions or requirements on the basis of its own 
investigation of the accreditation survey or any other information 
related to the survey.
    (b) With the exception of home health agency surveys, general 
disclosure of an accrediting organization's survey information is 
prohibited under section 1865(b) of the Act. CMS may publically 
disclose an accreditation survey and information related to the survey, 
upon written request, to the extent that the accreditation survey and 
survey information are related to an enforcement action taken by CMS.
0
11. Section 488.8 is revised to read as follows:


Sec.  488.8  Ongoing review of accrediting organizations.

    (a) Performance review. In accordance with section 1875(b) of the 
Act, CMS evaluates the performance of each CMS-approved accreditation 
program on an ongoing basis. This review includes, but is not limited 
to the following:
    (1) Review of the organization's survey activity.
    (2) Analysis of the results of the validation surveys under Sec.  
488.9(a)(1), including the rate of disparity between certifications of 
the accrediting organization and certifications of the state survey 
agency.
    (3) Review of the organization's continued fulfillment of the 
requirements in Sec.  488.5(a).
    (b) Comparability review. CMS assesses the equivalency of an 
accrediting organization's CMS-approved program requirements to the 
comparable CMS requirements if the following conditions exist:
    (1) CMS imposes new requirements or changes its survey process.
    (i) CMS provides timely notice of the changes to the affected 
accrediting organization.
    (ii) CMS specifies a timeframe, not less than 30 calendar days, for 
the accrediting organization to submit its proposed equivalent changes, 
including an implementation timeframe, for CMS review and approval.
    (iii) After approval of the proposed changes, CMS determines 
whether the changes were implemented within the approved timeframe.
    (iv) If an organization fails to submit timely comparable changes, 
CMS may open an accreditation program review in accordance with 
paragraph (c) of this section.
    (2) An accrediting organization proposes to adopt new requirements 
or to change its survey process.
    (i) An accrediting organization must provide written notice to CMS 
at least 60 calendar days before the proposed effective date of any 
proposed changes in its accreditation requirements or survey process.
    (ii) The accrediting organization must not implement any changes 
before receiving CMS's approval.
    (c) CMS-approved accreditation program review. If a comparability 
or performance review reveals evidence of substantial non-compliance of 
an accrediting organization's CMS-approved accreditation program with 
the requirements of this subpart, CMS may initiate an accreditation 
program review.
    (1) If an accreditation program review is initiated, CMS provides 
written notice to the organization indicating that its CMS-approved 
accreditation program approval may be in jeopardy and that an 
accreditation program review is being initiated. The notice provides 
all of the following information:
    (i) A statement of the instances, rates or patterns of non-
compliance identified, as well as other related information, if 
applicable.
    (ii) A description of the process to be followed during the review, 
including a description of the opportunities for the accrediting 
organization to offer factual information related to CMS's findings.
    (iii) A description of the possible actions that may be imposed by 
CMS based on the findings of the accreditation program review.
    (iv) The actions the accrediting organization must take to address 
the identified deficiencies including a timeline for implementation not 
to exceed 180 calendar days after receipt of the notice that CMS is 
initiating an accreditation program review.
    (2) CMS reviews the accrediting organization's plan of correction 
for acceptability.
    (3) If CMS determines as a result of the accreditation program 
review or a review of an application for renewal of an existing CMS-
approved accreditation program that the accrediting organization has 
failed to meet any of the requirements of this subpart, CMS may place 
the accrediting organization's CMS-approved accreditation program on 
probation for a period up to 180 calendar days to implement corrective 
actions, not to exceed the accrediting organization's current term of 
approval. In the case of a renewal application where CMS has placed the 
accreditation program on probation, CMS indicates that any approval of 
the application is conditional while the program is placed on 
probation.
    (i) Within 60 calendar days after the end of any probationary 
period, CMS issues a written determination to the accrediting 
organization as to whether or not a CMS-approved accreditation program 
continues to meet the requirements of this subpart, including the 
reasons for the determination.
    (ii) If CMS has determined that the accrediting organization does 
not meet the requirements, CMS withdraws approval of the CMS-approved 
accreditation program. The notice of determination provided to the 
accrediting organization includes notice of the removal of approval, 
reason for the removal, including the effective date determined in 
accordance with paragraph (c)(3)(iii) of this section.
    (iii) CMS publishes in the Federal Register a notice of its 
decision to withdraw approval of a CMS-approved accreditation program, 
including the reasons for the withdrawal, effective 60 calendar days 
from the date of publication of the notice.
    (d) Immediate jeopardy. If at any time CMS determines that the 
continued approval of a CMS-approved accreditation program of any 
accrediting organization poses an immediate jeopardy to the patients of 
the entities accredited under that program, or the continued approval 
otherwise constitutes a significant hazard to the public health, CMS 
may immediately withdraw the approval of a CMS-approved accreditation 
program of that accrediting organization and publishes a notice of the 
removal, including the reasons for it, in the Federal Register.
    (e) Notification of providers or suppliers. An accrediting 
organization whose CMS approval of its accreditation program has been 
withdrawn or the organization voluntarily terminates its program must 
notify, in writing, each of

[[Page 20580]]

its providers or suppliers of withdrawal of deemed status no later than 
30 calendar days after the notices is published in the Federal 
Register.
    (f) Request for reconsideration. Any accrediting organization 
dissatisfied with a determination to withdraw CMS approval of its 
accreditation program may request a reconsideration of that 
determination in accordance with subpart D of this part.
    (g) Continuation of deemed status. After CMS removes approval of an 
accrediting organization's accreditation program, an affected 
provider's or supplier's deemed status continues in effect for 180 
calendar days after the removal of the approval if the provider or 
supplier submits an application to another CMS-approved accreditation 
program within 60 calendar days from the date of publication of the 
removal notice in the Federal Register. The provider or supplier must 
provide written notice to the state survey agency that it has submitted 
an application for accreditation with deemed status with another CMS-
approved accrediting organization within this same 60-calendar day 
timeframe. Failure to comply with the timeframe requirements specified 
in this section will place the provider or supplier under the state 
survey agency's authority for continued participation in Medicare and 
on-going monitoring.
    (h) Onsite observations of accrediting organization operations. As 
part of the application review process, the ongoing review process, or 
the continuing oversight of an accrediting organization's performance, 
CMS may conduct at any time an onsite inspection of the accrediting 
organization's operations and offices to verify the organization's 
representations and to assess the organization's compliance with its 
own policies and procedures. The onsite inspection may include, but is 
not limited to, the review of documents, auditing meetings concerning 
the accreditation process, observation of surveys, the evaluation of 
survey results or the accreditation decision-making process, and 
interviews with the organization's staff.
0
12. Newly designated Sec.  488.9 is revised to read as follows:


Sec.  488.9  Validation surveys.

    (a) Basis for survey. CMS may require a survey of an accredited 
provider or supplier to validate the accrediting organization's CMS-
approved accreditation process. These surveys are conducted on a 
representative sample basis, or in response to substantial allegations 
of non-compliance.
    (1) For a representative sample, the survey may be comprehensive 
and address all Medicare conditions or requirements, or it may be 
focused on a specific condition(s) as determined by CMS.
    (2) For a substantial allegation, the state survey agency surveys 
for any condition(s) or requirement(s) that CMS determines is related 
to the allegations.
    (b) Selection for survey. (1) A provider or supplier selected for a 
validation survey must cooperate with the state survey agency that 
performs the validation survey.
    (2) If a provider or supplier selected for a validation survey 
fails to cooperate with the state survey agency, it will no longer be 
deemed to meet the Medicare conditions or requirements, but will be 
subject to a review by the state survey agency in accordance with Sec.  
488.10(a), and may be subject to termination of its provider agreement 
under Sec.  489.53 of this chapter.
    (c) Consequences of a finding of non-compliance. (1) If a CMS 
validation survey results in a finding that the provider or supplier is 
out of compliance with one or more Medicare conditions or requirements, 
the provider or supplier will no longer be deemed to meet the Medicare 
conditions or requirements and will be subject to ongoing review by the 
state survey agency in accordance with Sec.  488.10(a) until the 
provider or supplier demonstrates compliance.
    (2) CMS may take actions with respect to the deficiencies 
identified in the state validation survey in accordance with Sec.  
488.24, or may first direct the state survey agency to conduct another 
survey of the provider's or supplier's compliance with specified 
Medicare conditions or requirements before taking the enforcement 
actions provided for at Sec.  488.24.
    (3) If CMS determines that a provider or supplier is not in 
compliance with applicable Medicare conditions or requirements, the 
provider or supplier may be subject to termination of the provider or 
supplier agreement under Sec.  489.53 of this chapter or of the 
supplier agreement in accordance with the applicable supplier 
conditions and any other applicable intermediate sanctions and 
remedies.
    (d) Re-instating deemed status. An accredited provider or supplier 
will be deemed to meet the applicable Medicare conditions or 
requirements in accordance with this section if all of the following 
requirements are met:
    (1) It withdraws any prior refusal to authorize its accrediting 
organization to release a copy of the provider's or supplier's current 
accreditation survey.
    (2) It withdraws any prior refusal to allow a validation survey, if 
applicable.
    (3) CMS finds that the provider or supplier meets all applicable 
Medicare conditions of participation, conditions for coverage, 
conditions of certification, or requirements.
    (e) Impact of adverse actions. The existence of any performance 
review, comparability review, deemed status review, probationary 
period, or any other action by CMS, does not affect or limit conducting 
any validation survey.
0
13. Section 488.10 is amended by revising paragraphs (b) through (d) to 
read as follows:


Sec.  488.10  State survey agency review: Statutory provisions.

* * * * *
    (b) Section 1865(a) of the Act provides that if an institution is 
accredited by a national accrediting organization recognized by the 
Secretary, it may be deemed to have met the applicable conditions or 
requirements.
    (c) Section 1864(c) of the Act authorizes the Secretary to enter 
into agreements with state survey agencies for the purpose of 
conducting validation surveys in institutions accredited by an 
accreditation program recognized by the Secretary.
    (d) Section 1865(c) provides that an accredited institution that is 
found after a validation survey to have significant deficiencies 
related to health and safety of patients will no longer meet the 
applicable conditions or requirements.
0
14. Section 488.11 is amended by revising paragraph (b) to read as 
follows:


Sec.  488.11  State survey agency functions.

* * * * *
    (b) Conduct validation surveys of deemed facilities as provided in 
Sec.  488.9.
* * * * *
0
15. Section 488.12 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  488.12  Effect of survey agency certification.

* * * * *
    (a) * * *
    (2) A provider or supplier accredited under a CMS-approved 
accreditation program remains deemed to meet the Medicare conditions or 
requirements, or will be placed under the jurisdiction of the state 
survey agency and subject to further enforcement actions in accordance 
with the provisions at Sec.  488.9.
* * * * *
0
16. Section 488.13 is added to read as follows:

[[Page 20581]]

Sec.  488.13  Loss of accreditation.

    If an accrediting organization notifies CMS that it is terminating 
a provider or supplier due to non-compliance with its CMS-approved 
accreditation requirements, the state survey agency will conduct a full 
review in a timely manner.
0
17. Section 488.28 is amended by revising paragraph (a) to read as 
follows:


Sec.  488.28  Providers or suppliers, other than SNFs and NFs, with 
deficiencies.

    (a) If a provider or supplier is found to be deficient in one or 
more of the standards in the conditions of participation, conditions 
for coverage, or conditions for certification or requirements, it may 
participate in, or be covered under, the Medicare program only if the 
provider or supplier has submitted an acceptable plan of correction for 
achieving compliance within a reasonable period of time acceptable to 
the Secretary. In the case of an immediate jeopardy situation, the 
Secretary may require a shorter time period for achieving compliance.
* * * * *

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
18. The authority citation for part 489 is revised to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395(hh).

0
19. Section 489.1 is amended by revising paragraph (b) to read as 
follows:


Sec.  489.1  Statutory basis.

* * * * *
    (b) Although section 1866 of the Act speaks only to providers and 
provider agreements, the following rules in this part also apply to the 
approval of supplier entities that, for participation in Medicare, are 
subject to a determination by CMS on the basis of a survey conducted by 
the state survey agency or CMS surveyors; or, in lieu of a state survey 
agency or CMS-conducted survey, accreditation by an accrediting 
organization whose program has CMS approval in accordance with Sec.  
488.4 at the time of the accreditation survey and accreditation 
decision, in accordance with the following:
    (1) The effective date rules specified in Sec.  489.13.
    (2) The requirements specified in Sec.  489.53(a)(2), (13), and 
(18), related to termination by CMS of participation in Medicare.
* * * * *
0
20. Section 489.3 is amended by revising the definition of ``Immediate 
jeopardy'' to read as follows:


Sec.  489.3  Definitions.

* * * * *
    Immediate jeopardy means a situation in which the provider's or 
supplier's non-compliance with one or more requirements, conditions of 
participation, conditions for coverage, or certification has caused, or 
is likely to cause, serious injury, harm, impairment, or death to a 
resident or patient.
* * * * *
0
21. Section 489.53 is amended by--
0
A. Revising paragraphs (a) introductory text, (a)(2), (a)(13).
0
B. Adding reserved paragraph (a)(17).
0
C. Adding paragraph (a)(18).
0
D. Revising paragraph (d)(2)(i) introductory text.
    The additions and revisions read as follows:


Sec.  489.53  Termination by CMS.

    (a) Basis for termination of agreement. CMS may terminate the 
agreement with any provider if CMS finds that any of the following 
failings is attributable to that provider, and may, in addition to the 
applicable requirements in this chapter governing the termination of 
agreements with suppliers, terminate the agreement with any supplier to 
which the failings in paragraphs (a)(2), (a)(13), and (a)(18) of this 
section are attributable:
* * * * *
    (2) The provider or supplier places restrictions on the persons it 
will accept for treatment and it fails either to exempt Medicare 
beneficiaries from those restrictions or to apply them to Medicare 
beneficiaries the same as to all other persons seeking care.
* * * * *
    (13) The provider or supplier refuses to permit photocopying of any 
records or other information by, or on behalf of, CMS, as necessary to 
determine or verify compliance with participation requirements.
* * * * *
    (17) [Reserved]
    (18) The provider or supplier fails to grant immediate access upon 
a reasonable request to a state survey agency or other authorized 
entity for the purpose of determining, in accordance with Sec.  488.3, 
whether the provider or supplier meets the applicable requirements, 
conditions of participation, conditions for coverage or conditions for 
certification.
* * * * *
    (d) * * *
    (2) * * *
    (i) Hospitals. If CMS finds that a hospital is in violation of 
Sec.  489.24 (a) through (f), and CMS determines that the violation 
poses immediate jeopardy to the health or safety of individuals who 
present themselves to the hospital for emergency services, CMS--
* * * * *
    CMS-3255-P

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

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

    Dated: November 15, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: March 13, 2013.
Kathleen Sebelius,
Secretary.
[FR Doc. 2013-07950 Filed 4-4-13; 8:45 am]
BILLING CODE 4120-01-P