Medicare and Medicaid Programs; Regulatory Provisions To Promote Program Efficiency, Transparency, and Burden Reduction; Part II, 27105-27157 [2014-10687]

Agencies

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

[Federal Register Volume 79, Number 91 (Monday, May 12, 2014)]
[Rules and Regulations]
[Pages 27105-27157]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-10687]



[[Page 27105]]

Vol. 79

Monday,

No. 91

May 12, 2014

Part IV





 Department of Health and Human Services





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Centers for Medicare & Medicaid Services





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42 CFR Parts 413, 416, 440 et al.





 Medicare and Medicaid Programs; Regulatory Provisions To Promote 
Program Efficiency, Transparency, and Burden Reduction; Part II; Final 
Rule

Federal Register / Vol. 79 , No. 91 / Monday, May 12, 2014 / Rules 
and Regulations

[[Page 27106]]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413, 416, 440, 442, 482, 483, 485, 486, 488, 491, and 
493

[CMS-3267-F]
RIN 0938-AR49


Medicare and Medicaid Programs; Regulatory Provisions To Promote 
Program Efficiency, Transparency, and Burden Reduction; Part II

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

ACTION: Final rule.

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SUMMARY: This final rule reforms Medicare regulations that CMS has 
identified as unnecessary, obsolete, or excessively burdensome on 
health care providers and suppliers, as well as certain regulations 
under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). 
This final rule also increases the ability of health care professionals 
to devote resources to improving patient care, by eliminating or 
reducing requirements that impede quality patient care or that divert 
resources away from providing high quality patient care. We are issuing 
this rule to achieve regulatory reforms under Executive Order 13563 on 
improving regulation and regulatory review and the Department's plan 
for retrospective review of existing rules. This is the latest in a 
series of rules developed by CMS over the last 5 years to reform 
existing rules to reduce unnecessary costs and increase flexibility for 
health care providers.

DATES: These regulations are effective on July 11, 2014, with the 
exception of amendments to 42 CFR Part 483, which are effective May 12, 
2014.

FOR FURTHER INFORMATION CONTACT: Lauren Oviatt, (410) 786-4683. We have 
also included a subject matter expert under the ``Provisions of the 
Proposed Rule and Analysis and Response to Public Comments'' section 
for each provision set out in this final rule.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Summary and Background
    A. Executive Summary of This Final Rule
    1. Purpose
    2. Summary of Major Provisions
    3. Summary of Costs and Benefits
    B. Legislative and Regulatory History
II. Provisions of the Proposed Rule and Analysis and Response to 
Public Comments
    A. Ambulatory Surgical Centers
    B. Intermediate Care Facilities for Individuals Who Are 
Intellectually Disabled
    C. Hospitals
    1. Governing Body (Sec.  482.12)
    2. Medical Staff (Sec.  482.22)
    3. Food and Dietetic Services (Sec.  482.28)
    4. Nuclear Medicine Services (Sec.  482.53)
    5. Outpatient Services (Sec.  482.54)
    6. Special Requirements for Hospital Providers of Long-Term Care 
Services (``swing-beds'') (Sec.  482.66)
    D. Transplant Centers and Organ Procurement Organizations
    1. Reports to CMS (Sec.  482.74)
    2. Transplant Outcome Review (Sec. Sec.  482.80(c) and 
482.82(c))
    3. Volume and Clinical Experience Requirements (Sec. Sec.  
482.80(c)(2) and 482.82(c)(2))
    4. Transplant Center Re-Approval Process
    5. Technical Corrections
    E. Long-Term Care Facilities
    F. Rural Health and Primary Care
    1. Critical Access Hospital (CAH) Provision of Services (Sec.  
485.635(a))
    2. CAH and RHC/FQHC (Rural Health Clinics/Federally Qualified 
Health Centers) Physician Responsibilities (Sec. Sec.  485.631(b)(2) 
and 491.8(b)(2))
    3. RHC/FQHC Definitions: Physician (Sec.  491.2)
    4. Technical Correction
    G. Solicitation of Comments on Reducing Barriers to Services in 
RHCs
    1. Telehealth Services
    2. Hospice Services
    3. Home Health Services
    4. Other Services
    H. Clinical Laboratory Improvement Amendments of 1988 (CLIA)
III. Collection of Information Requirements
IV. Waiver of Delayed Effective Date for Revisions to Sec.  483
V. Regulatory Impact Analysis

I. Summary and Background

A. Executive Summary of This Final Rule

1. Purpose
    In Executive Order 13563, ``Improving Regulations and Regulatory 
Review'', the President recognized the importance of a streamlined, 
effective, and efficient regulatory framework designed to promote 
economic growth, innovation, job-creation, and competitiveness. To 
achieve a more robust and effective regulatory framework, the President 
has directed each executive agency to establish a plan for ongoing 
retrospective review of existing significant regulations to identify 
those rules that can be eliminated as obsolete, unnecessary, 
burdensome, or counterproductive or that can be modified to be more 
effective, efficient, flexible, and streamlined. This final rule 
responds directly to the President's instructions in Executive Order 
13563 by reducing outmoded or unnecessarily burdensome rules, and 
thereby increasing the ability of health care entities to devote 
resources to providing high quality patient care.
2. Summary of the Major Provisions
    This rule reduces regulatory burden on providers and suppliers by 
modifying, removing, or streamlining current regulations that are 
excessively burdensome.
     Radiology services in ambulatory surgical centers: We are 
reducing the requirements that Ambulatory Surgical Centers (ASCs) must 
meet in order to provide radiological services to patients. Our 
requirements will reflect only those services that ASCs are permitted 
to perform. ASCs are currently subject to the full hospital 
requirements for radiology services even though they are only permitted 
to provide limited radiologic services integral to the performance of 
certain surgical procedures.
     Hospital registered dietitian privileges: We are 
permitting registered dietitians and other clinically qualified 
nutrition professionals to be privileged to order patient diets under 
the hospital conditions of participation (CoPs).
     Hospital supervision of radiopharmaceutical preparation: 
We are revising the nuclear medicine services CoP to remove the 
modifier ``direct'' from the in-house preparation supervision 
requirement. The presence of a pharmacist, MD, or DO will no longer be 
required during the delivery of off-hour nuclear medicine tests. These 
changes are based on the Society of Nuclear Medicine and Molecular 
Imaging recommendations on this issue.
     Hospital reclassification of swing-bed services: We are 
revising the requirements by relocating the swing-bed services CoP to 
Subpart D, to classify swing beds as an optional service. This revision 
allows an accredited hospital's compliance with ``swing bed'' 
requirements to be evaluated by a CMS-approved accrediting 
organization. This reduces the burden on hospitals by not requiring an 
additional State survey agency survey specifically for ``swing bed'' 
approval.
     Transplant centers reports to CMS: The CoPs require 
transplant programs to notify CMS of certain changes related to the 
center's transplant program. The current system for transplant center 
data analysis, in effect, requires the centers to submit data which CMS 
routinely receives through other sources. This creates unnecessary 
paperwork and burden on the transplant program and does not contribute 
to Federal oversight. We are eliminating this redundant data submission 
requirement.

[[Page 27107]]

     Transplant center re-approval process: The current 
transplant survey process and regulatory criteria require programs be 
subject to an automatic onsite review of compliance with key CoPs under 
a 3-year re-approval cycle under particular conditions. This leads some 
transplant programs to undergo an onsite survey that may not be 
necessary to ensure a proper level of federal oversight, and it also 
does not always provide for the most effective method to target survey 
resources where they are most needed. In addition, since we are already 
receiving the data we need to determine if a center is complying with 
outcome requirements, eliminating this automatic re-approval cycle will 
not result in any reduction in Federal oversight of the center. It 
will, however, enable us to more efficiently use our survey resources. 
In lieu of the automatic 3-year re-approval cycle, we are providing 
more flexibility in the re-approval cycle to be able to focus survey 
attention where it is most needed. We are also clarifying the 
following--(1) the review of mitigating factors process could occur at 
any time there was non-compliance with the CoPs, and (2) that 
compliance with the CoPs is a continuous requirement, as already 
specified in Sec.  488.61(c).
     Long term care sprinkler deadline extension: All buildings 
containing long term care (LTC) facilities were required to have 
automatic sprinkler systems installed throughout the building by August 
13, 2013 (Sec.  483.70(a)(8)). Based on public feedback, we understand 
that some facilities were not able to meet the 2013 deadline. In order 
to maintain access to LTC facilities, and in recognition of financing 
difficulties faced by some providers, we are allowing LTC facilities 
the opportunity to apply for a deadline extension, not to exceed 2 
years, if certain conditions apply. An additional extension may be 
granted for up to 1 year, depending on the need and particular 
circumstances.
     CAH provision of services: Critical Access Hospital (CAH) 
CoPs require that a CAH develop its patient care policies with the 
advice of ``at least one member who is not a member of the CAH staff.'' 
We believe that this provision is no longer necessary and that the 
original reasons for including this requirement (for example, lack of 
local resources and in-house expertise) have been effectively 
addressed. Also, based on our experience with CAHs and input from the 
provider community, it is a challenge for facilities to comply with 
this requirement. These challenges include the amount of time it takes 
to familiarize the non-staff member with the CAH's operations, high 
turnover, and, in many cases, the expense of paying outside personnel.
     CAH, RHC, and FQHC physician responsibilities: The 
regulations for CAHs, Rural Health Clinics (RHCs), and Federally 
Qualified Health Centers (FQHCs), require a physician to be present for 
sufficient periods of time, at least once in every 2 week period, 
except in extraordinary circumstances. Some providers in extremely 
remote areas or areas that have geographic barriers have indicated that 
they find it difficult to comply with the precise biweekly schedule 
requirement. Many rural populations have limited access to care due to 
a shortage of health care professionals, especially physicians. Recent 
improvements in, and expansion of, telemedicine services allow for 
physicians to provide certain types of care to remote facilities at 
lower costs. We are revising the CAH and RHC/FQHC regulations to 
eliminate the requirement that a physician must be onsite at least once 
in every 2-week period. CAHs and RHCS/FQHCs will continue to be 
required to have a physician onsite for sufficient periods of time 
depending on the needs of the facility and its patients.
    Clinical Laboratory Improvement Amendments Revisions: This final 
rule makes a number of clarifications and changes pertaining to CMS 
regulations governing proficiency testing referrals under the Clinical 
Laboratory Improvement Amendments of 1988 (CLIA). These changes prevent 
confusion on the part of laboratories, reduce the risk of 
noncompliance, and establish policies under which certain proficiency 
testing (PT) referrals by laboratories may not generally be subject to 
revocation of a CLIA certificate, or a two-year prohibition on 
laboratory ownership or operation that may be applied to an owner and 
an operator when a CLIA certificate is revoked.
     Treatment of proficiency testing samples: We are adding a 
clarifying statement that explicitly notes that the requirement to test 
PT samples in the same manner as patient specimens does not mean that 
it is acceptable to refer PT samples to another laboratory for testing 
even if that is the protocol for patient specimens.
     Intentional referral carve-out: We are carving out a 
narrow exception in our long-standing interpretation of what 
constitutes an ``intentional'' referral of PT samples. In these 
instances, the laboratory will be subject to alternate sanctions.
     New definitions: To clarify the stipulations of the 
intentional referral carve-out, we are also adding the following terms, 
with their definitions, to the regulation: Reflex testing, Confirmatory 
testing, and Distributive testing.
     Application of the TEST Act: We are also making a 
regulatory change, pursuant to the TEST Act, to acknowledge CMS's 
ability to substitute alternative sanctions in lieu of the two-year 
prohibition for the owner or operator when a CLIA certificate is 
revoked. In the May 2, 2014, Federal Register at 79 FR 25436, we 
published the Medicare Program; Prospective Payment System for 
Federally Qualified Health Centers; Changes to Contracting Policies for 
Rural Health Clinics; and Changes to Clinical Laboratory Improvement 
Amendments of 1988 Enforcement Actions for Proficiency Testing Referral 
final rule with comment period (the ``FQHC PPS/CLIA final rule with 
comment period''), which finalized proposals for implementing the TEST 
Act.
    Provisions That Will Remove Obsolete or Duplicative Regulations or 
Provide Clarifying Information: We are removing regulations set out in 
the Code of Federal Regulations (CFR) that have become obsolete and are 
no longer needed or enforced and clarifying other provisions.
     Hospital medical staff: We are clarifying the requirement 
that a hospital's medical staff must be composed of doctors of medicine 
or osteopathy but that it may also include, in accordance with State 
laws, including scope-of-practice laws, other categories of physicians 
(as set out at Sec.  482.12(c)) and non-physician practitioners who are 
determined to be eligible for appointment by the governing body.
     Transplant centers outcome review: The transplant center 
CoPs state that, ``[e]xcept for lung transplants, CMS will review adult 
and pediatric outcomes separately when a center requests Medicare 
approval to perform both adult and pediatric transplants.'' Changes to 
the transplant center reporting system have made the separate review 
for lung transplant data obsolete. Therefore, we are removing this 
language.
     Transplant center volume and clinical experience 
requirements: The transplant center CoPs state that ``[t]he required 
number of transplants must have been performed during the time frame 
reported in the most recent SRTR center-specific report.'' The 
Scientific Registry for Transplant Recipients (SRTR) provides 
statistical information about transplant outcomes and transplant 
programs nationwide. Under the current regulations, however, there

[[Page 27108]]

is no requirement that a certain number of transplants be performed 
during a particular period that is covered in a single SRTR center-
specific report. This has resulted in transplant centers being confused 
about the volume of transplants they are required to perform during any 
particular period of time covered by the SRTR center-specific reports. 
We are making changes to clarify the transplant volume and clinical 
experience requirements.
     RHC/FQHC definition of physician: The definition of a 
``physician'' in the RHC/FQHC regulations does not conform to the 
definition of a ``physician'' in the Medicare payment regulations. We 
are revising the regulation to eliminate possible confusion in the 
provider community by making the definition consistent with that used 
in the Medicare payment regulations.
    Final Provisions that Respond to Stakeholder Concerns: We have 
identified changes to improve clarity and respond to concerns raised by 
the public.
     Hospital governing body: We are adding a new provision to 
the ``Medical staff'' standard of the governing body CoP. This new 
provision requires a hospital's governing body to directly consult 
periodically throughout the calendar year or fiscal year with the 
individual responsible for the organized medical staff of the hospital, 
or his or her designee. For a multi-hospital system using a single 
governing body to oversee multiple hospitals within its system, this 
provision requires the single governing body to consult directly with 
the individual responsible for the organized medical staff (or his or 
her designee) of each hospital within its system in addition to the 
other requirements finalized here. We are also removing the requirement 
for a medical staff member, or members, to be on a hospital's governing 
body.
     Hospital medical staff: We are retaining the current 
regulatory provision at Sec.  482.22, but reinterpreting it to allow 
for either a unique medical staff for each hospital or for a unified 
and integrated medical staff shared by multiple hospitals within a 
hospital system. We are adding four new provisions to hold a hospital 
responsible for showing that it actively addresses its use of a system 
unified and integrated medical staff model. We are requiring that the 
medical staff members holding privileges at each separately certified 
hospital in the system have voted either to participate in a unified 
and integrated medical staff structure or to opt out of such a 
structure, and to maintain a hospital-specific separate and distinct 
medical staff for their respective hospital. We are requiring that the 
unified and integrated medical staff has bylaws, rules, and 
requirements that describe its processes for self-governance, 
appointment, credentialing, privileging, and oversight, as well as its 
peer review policies and due process rights guarantees, and which 
include a process for the members of the medical staff of each 
separately certified hospital (that is, all medical staff members who 
hold specific privileges to practice at that hospital) to be advised of 
their rights to opt out of the unified and integrated medical staff 
structure after a majority vote by the members to maintain a separate 
and distinct medical staff for their hospital. We are requiring that 
the unified and integrated medical staff is established in a manner 
that takes into account each hospital's unique circumstances, and any 
significant differences in patient populations and services offered in 
each hospital. We are also requiring that the unified and integrated 
medical staff gives due consideration to the needs and concerns of 
members of the medical staff, regardless of practice or location, and 
the hospital has mechanisms in place to assure that issues localized to 
particular hospitals are duly considered and addressed.
     Practitioners permitted to order hospital outpatient 
services: We are revising the Outpatient services CoP to allow for 
practitioners who are not on the hospital's medical staff to order 
hospital outpatient services for their patients when authorized by the 
medical staff and allowed by State law.
     Hospital diet terminology: We are updating terminology 
related to ``diets'' and ``therapeutic diets'' in the CoPs.
     Request for comment on RHC services: We sought public 
comment on potential changes we could make to regulatory or other 
requirements that could reduce barriers to the provision of telehealth, 
hospice, or home health services in an RHC. We summarize and respond to 
these public comments in this final rule.
    Technical Corrections: We are making technical corrections to some 
regulations.
     Organ Procurement Organizations (OPOs): We are making some 
technical corrections to the CoPs for OPOs.
     Intermediate Care Facilities for Individuals with 
Intellectually Disabilities (ICFs/IID): We are making some technical 
corrections to clarify state survey agency certification survey 
requirements for ICF/IIDs.
     Rural Health Clinics (RHCs): We are correcting a technical 
error in the regulations by amending Sec.  491.8(a)(6) to conform to 
section 6213(a)(3) of OBRA '89 (Pub. L. 101-239), which requires that a 
nurse practitioner (NP), physician assistant (PA), or certified nurse-
midwife (CNM) be available to furnish patient care at least 50 percent 
of the time the RHC operates.
3. Summary of Costs and Benefits
a. Overall Impact
    This final rule will create savings and reduce burden in many 
areas. Several of the changes create measurable monetary savings for 
providers and suppliers, while others create savings of time and 
administrative burden. We estimate one-time savings of $22 million for 
the sprinkler deadline extension in long term care facilities, and 
annual recurring savings of about $660 million for other provisions in 
this final rule.
b. Section-by-Section Economic Impact Estimates
    The following table summarizes the provisions for which we are able 
to provide specific estimates for savings or burden reductions (these 
estimates are uncertain and could be substantially higher or lower, as 
explained in the regulatory impact analysis section of this rule):

------------------------------------------------------------------------
                                                             Estimated
                                                            savings or
               Issue                      Frequency         benefits ($
                                                             millions)
------------------------------------------------------------------------
Ambulatory Surgical Centers:
     Radiology Services...  Recurring annually..              41
Hospitals:
     Food and dietetic      Recurring annually..             459
     services.
     Nuclear medicine       Recurring annually..              77
     services.
Transplant Centers:

[[Page 27109]]

 
     Reports to CMS&        Recurring annually..              <1
     Survey Changes.
Long Term Care Facilities:
     Sprinkler Deadline     One-time............              22
     Extension.
Rural Health:
     CAH & RHC/FQHC         Recurring annually..              76
     Physician responsibilities.
     CAH Provision of       Recurring annually..              <1
     services.
CLIA:
     PT Referral..........  Recurring annually..               2
                                                         ---------------
        Total.....................  ....................             679
------------------------------------------------------------------------

B. Legislative and Regulatory History

    In January 2011, the President issued Executive Order 13563, 
``Improving Regulation and Regulatory Review.'' Section 6 of that order 
requires agencies to identify rules that may be ``outmoded, 
ineffective, insufficient, or excessively burdensome, and to modify, 
streamline, expand, or repeal them in accordance with what has been 
learned.'' In accordance with the Executive Order, the Secretary of the 
Department of Health & Human Services (HHS) published on August 22, 
2011, a Plan for Retrospective Review of Existing Rules (https://www.whitehouse.gov/21stcenturygov/actions/21st-century-regulatory-system). As shown in the plan, the Centers for Medicare & Medicaid 
Services (CMS) has identified many obsolete and burdensome regulations 
that could be eliminated or reformed to improve effectiveness or reduce 
unnecessary reporting requirements and other costs, with a particular 
focus on freeing up resources that health care providers, health plans, 
and States could use to improve or enhance patient health and safety. 
CMS has also examined policies and practices not codified in rules that 
could be changed or streamlined to achieve better outcomes for patients 
while reducing burden on providers of care. In addition, CMS has 
identified non-regulatory changes to increase transparency and to 
become a better business partner. For example:
     We have automated our review of Health Services Delivery 
tables, which gives Medicare Advantage (MA) applicants for 
participation as MA plans immediate feedback on their deficiencies 
before submitting applications so that they can address them up-front.
     We have changed the timeframes during which a Medicare 
durable medical equipment (DME) supplier may contact a beneficiary 
concerning refilling an order from 7 days to 15 days before the 
beneficiary's refill date.
     We have streamlined the Skilled Nursing Facility Discharge 
Assessment through Minimum Data Set (MDS) 3.0 which has been designed 
to improve the reliability, accuracy, and usefulness of the MDS. The 
change included the removal of data collections in the MDS that are not 
relevant to the measurement of quality or used for reimbursement 
purposes.
    As explained in the plan, HHS is committed to the President's 
vision of creating an environment where agencies incorporate and 
integrate the ongoing retrospective review of regulations into 
Department operations to achieve a more streamlined and effective 
regulatory framework. The objectives are to improve the quality of 
existing regulations consistent with statutory requirements; streamline 
procedural solutions for businesses to enter and operate in the 
marketplace; maximize net benefits (including benefits that are 
difficult to quantify); and reduce costs and other burdens on 
businesses to comply with regulations. Consistent with the commitment 
to periodic review of the regulatory burden on providers and to public 
participation, HHS will continue to assess its existing significant 
regulations in accordance with the requirements of Executive Order 
13563.
    In accordance with these goals, we published two final rules on May 
16, 2012. The first rule, titled ``Reform of Hospital and Critical 
Access Hospital Conditions of Participation'' (77 FR 29034), finalized 
updates to the Medicare CoPs and reduces regulatory burden for 
hospitals and CAHs. The second rule, titled ``Regulatory Provisions To 
Promote Program Efficiency, Transparency, and Burden Reduction'' (77 FR 
29002), addressed burdensome regulatory requirements for a broader 
range of healthcare providers and suppliers who provide care to 
Medicare and Medicaid beneficiaries. We proposed a second set of 
burden-reducing rules on February 7, 2013 (78 FR 9216). This final rule 
is a continuation of those efforts.

II. Provisions of the Proposed Rule and Analysis and Response to Public 
Comments

A. Ambulatory Surgical Centers

    Section 1832(a)(2)(F)(i) of the Act specifies that Ambulatory 
Surgical Centers (ASCs) must meet health, safety, and other 
requirements as specified by the Secretary in regulation in order to 
participate in Medicare. The Secretary is responsible for ensuring that 
the Conditions for Coverage (CfCs) and their enforcement protect the 
health and safety of all individuals treated by ASCs, whether they are 
Medicare beneficiaries or other patients.
    To implement the CfCs, we determine compliance through State survey 
agencies that conduct onsite inspections of ASC, applying these 
requirements to the ASCs they survey. ASCs also may be deemed to meet 
Medicare CfCs if they are accredited by one of the national accrediting 
organizations that have a CMS-approved Medicare ASC accreditation 
program.
    The ASC CfCs were first published on August 5, 1982 (47 FR 34082), 
and were subsequently amended several times in the last four years. A 
final rule published on November 18, 2008 (73 FR 68502), revised four 
existing health and safety CfCs and created three new health and safety 
CfCs (42 CFR 416.41 through 416.43 and 416.49 through 416.52); a 
subsequent final rule amended the Patient rights CfC on October 24, 
2011 (76 FR 65886); and most recently a final rule published on May 16, 
2012, amended the requirements governing emergency equipment that ASCs 
must maintain (77 FR 29002).
    Section 416.49(b) of Title 42 of the Code of Federal Regulations 
outlines the radiologic services requirements that ASCs must meet in 
order to be Medicare-certified. Since ASCs are facilities that operate 
exclusively to provide a specific range of surgical procedures (see 
Sec.  416.2), they may provide radiologic services only to the extent 
that such services are an integral

[[Page 27110]]

part of the procedures they perform. Section 416.49(b)(1) states that 
the ASC must have procedures for obtaining radiological services from a 
Medicare-approved facility to meet the needs of patients. Section 
416.49(b)(2) requires that the ASC's radiologic services must meet the 
hospital CoPs for radiologic services specified in Sec.  482.26. 
However, since adopting this rule in 2008, we have learned that some of 
the hospital CoP requirements are unduly burdensome for ASCs to meet. 
In particular, the hospital CoP requirement to have a radiologist 
supervise the provision of radiologic services is unduly burdensome and 
overly aggressive, as many ASCs are having great difficulty locating a 
radiologist to supervise the minimal ASC radiologic services provided. 
The ASC CfCs were first published in 1982 and did not include a 
radiologist supervision requirement until the 2008 final rule. 
Moreover, the cost of privileging radiologists as members of an ASC's 
medical staff and paying radiologists' fees for oversight of radiology 
studies that are limited to those which are integral to a surgical 
procedure, with the results applied immediately by the operating 
physician, is often needlessly burdensome. The ASC governing body, as 
set out at Sec.  416.41, is responsible for the oversight and 
accountability for the quality assessment and performance improvement 
program, and is responsible for ensuring that all policies and services 
provide quality healthcare in a safe environment. As such, the 
provision requires that the ASC governing body be responsible for 
determining if any procedures, now or in the future, require additional 
review by a radiologist. In addition, the medical staff CfC at Sec.  
416.45 requires such governing body be accountable for the medical 
staff, and to ensure that such staff members are legally and 
professionally qualified for the positions to which they are appointed 
and for the performance of the privileges granted. This includes, if 
applicable, assessing their competency in using imaging as an integral 
part of the procedures they perform.
    In the February 7, 2013, proposed rule, we proposed to remove Sec.  
416.49(b)(1) and replace it with the requirement that radiologic 
services may only be provided when integral to procedures offered by 
the ASC and must meet the requirements specified in Sec.  482.26(b), 
(c)(2), and (d)(2). We also proposed to remove the existing language at 
Sec.  416.49(b)(2) and replace it with the requirement that an MD/DO 
who is qualified by education and experience in accordance with State 
law and ASC policies must supervise the provision of radiologic 
services. We stated that we believe these proposed changes to the ASC 
radiologic services requirements would assure the safety of these 
services while being less burdensome for Medicare-certified ASC 
facilities. We requested public comments on whether these proposed 
changes would allow for appropriate oversight of radiologic procedures 
conducted in ASCs.
    We also noted that there is a technical error in Sec.  416.42(b)(2) 
of the ASC CfCs and proposed to correct this error. Paragraph (b)(2) 
references ``paragraph (d) of this section'' but Sec.  416.42 does not 
have a paragraph (d). We proposed to correct the error by referencing 
paragraph (c) of that section instead.
    We received fifty-eight timely public comments on our proposed 
changes to the ASC radiologic services requirements. Commenters 
included individual clinicians, ASCs, organizations and national 
associations that represent ASCs, hospitals, healthcare corporations, 
the nuclear medicine industry, radiologists, and dentists. Overall, the 
majority of commenters were supportive of the goal of the proposed 
changes. Summaries of the major issues and our responses are set forth 
below.
    All of the comments, with one exception, expressed strong support 
for the proposed changes to the oversight of radiologic services in an 
ASC. Two commenters recommended an alternative supervisory approach for 
ASC radiologic services, and more than half of the commenters 
specifically recommended that oversight of radiologic services be 
directly assigned to the governing body as part of their oversight and 
operation of the ASC. We did not receive any comments in regards to the 
technical changes made to Sec.  416.42(b)(2), therefore we are 
incorporating those changes as proposed in this final rule.
    Comment: Two commenters supported the proposal to remove the 
radiologist supervision requirement in ASCs; however, they suggested 
that CMS require the supervision rules for ASCs to be the same as those 
for the Physician Fee Schedule (PFS) and the Hospital Outpatient 
Prospective Payment System (OPPS). They stated this policy change would 
allow for radiology studies to be performed under general, direct and 
personal supervision as defined in Sec.  410.32(b)(3)(i) through 
(b)(3)(iii).
    Response: The regulations referenced at Sec.  410.32(b)(3) are 
located in the Medicare payment rules at Part 410, Supplementary 
Medical Insurance Benefits General Provisions. They are part of Sec.  
410.32, which addresses the circumstances under which Medicare will pay 
for diagnostic x-ray tests, diagnostic laboratory tests, and other 
diagnostic tests. The diagnostic imaging supervision requirements are, 
therefore, not applicable to ASCs, since ASCs only furnish radiologic 
services that are integral to a surgical procedure being performed in 
the ASC.
    Comment: A majority of the commenters that supported our proposal 
to remove the radiologist supervision requirement of radiological 
services in ASCs also suggested that responsibility for radiologic 
services should be that of the governing body. Many commenters noted 
the importance for each ASC's governing body to have the flexibility to 
oversee radiologic services in keeping with the facility's policies and 
state law. Several commenters also stated that replacing the 
radiologist requirement with an MD/DO supervision requirement would not 
alleviate any financial or clinical burden, and would continue to be 
too narrow. For example, several dental facilities submitted comments 
that stated they would not be able to meet the requirement without 
significant burden, since their ASCs provide only dental services. 
These facilities do not have a MD or DO on staff, and would therefore 
continue to incur a burden to employ an extra staff member only to meet 
the radiological supervision requirements. ASCs that solely provide 
podiatry surgical services and employ only podiatrists would experience 
similar difficulties.
    Response: We agree with the suggestion of the commenters that 
requiring supervision of radiologic services to be provided by an MD or 
DO would still be too restrictive or burdensome for some ASCs. 
Accordingly, we are revising our proposed language that would have 
required a doctor of medicine or osteopathy to supervise the provision 
of radiologic services, to require the ASC governing body appoint an 
individual who has appropriate qualifications, in accordance with State 
law and ASC policies, to provide oversight of the ASC's radiologic 
services. The appointed individual would be responsible for assuring 
the ASC's compliance with the provisions of Sec.  482.26(b), (c)(2), 
and (d)(2). We note that the referenced provisions address requirements 
related to safety for patients and personnel, such as use of safety 
precautions (shielding, and appropriate storage, use and disposal of 
radioactive materials) against radiation

[[Page 27111]]

hazards; regular equipment inspection and hazard correction; regular 
review of radiation workers for the amount of radiation exposure; use 
of radiologic equipment only by qualified personnel; and maintenance of 
imaging results or records. The person appointed to oversee radiologic 
services could be someone already working in the ASC who is qualified 
in accordance with State law and ASC policies. The ASC's governing body 
will continue to be required to ensure, through the credentialing and 
privileging process, that the operating surgeon is competent to perform 
procedures in the ASC safely when using imaging as an integral part of 
the surgical procedure.
    Comment: One commenter opposed the removal of the radiologist 
supervision requirement by stating that Independent Diagnostic 
Treatment Facilities (IDTFs) and ASCs need periodic supervision. In 
addition, the commenter gave examples, such as equipment repair and 
radiation badge monitoring, that he or she considered part of the 
supervision responsibilities of the radiologist.
    Response: We understand the importance of oversight of issues 
related to safety and quality in the provision of radiological 
services. However, after reviewing all of the comments, we believe we 
have found a suitable balance for radiologic services oversight in 
ASCs, since it requires continued oversight, through the privileging 
process, of the surgeon's skill in using radiologic services during a 
procedure, and by the governing body of day-to-day operational 
responsibility for oversight of all the other aspects of the ASC's 
radiologic services by an individual qualified in accordance with state 
law and ASC policies.
    After consideration of the public comments received and discussed 
above, we are finalizing our proposed changes to Sec.  416.49(b) with 
revisions. The revised regulation text at Sec.  416.49(b)(2) in the 
final rule has been changed from ``A doctor of medicine or osteopathy 
who is qualified by education and experience in accordance with State 
law and ASC policy must supervise the provision of radiologic 
services'' to ``If radiologic services are utilized, the governing body 
must appoint an individual qualified in accordance with State law and 
ASC policies who is responsible for assuring that all radiologic 
services are provided in accordance with the requirements of this 
section.''
    Contact for ASC topics: CAPT Jacqueline Leach, USPHS, (410) 786-
4282.

B. Intermediate Care Facilities for Individuals With Intellectual 
Disabilities

    In the May 16, 2012, final rule ``Regulatory Provisions To Promote 
Program Efficiency, Transparency, and Burden Reduction,'' (77 FR 29002) 
we eliminated the requirement for time-limited agreements for 
Intermediate Care Facilities for Individuals With Intellectual 
Disabilities (ICFs/IID) and replaced it with an open-ended agreement 
which, consistent with nursing facilities, would remain in effect until 
the Secretary or a State determined that the ICF/IID no longer met the 
ICF/IID CoPs. We also added a requirement that a certified ICF/IID 
would be surveyed, on average, every 12 months with a maximum 15-month 
survey interval. This requirement provides States with more flexibility 
relative to the current process. These changes were implemented by 
revising Sec. Sec.  442.15, 442.109, and 442.110, and by removing Sec.  
442.16.
    Section 442.105 describes circumstances for when a state survey 
agency may provide an annual certification of a facility found out of 
compliance with standards for ICF/IID's. Since time-limited 
certification is no longer required for ICF/IID's, this section serves 
no purpose and is confusing. Therefore, we proposed that this section 
be deleted. We also proposed to make a corresponding change to Sec.  
442.101(d)(3) by removing a reference to Sec.  442.105.
    A revision to Sec.  442.110(b) made in the May 16, 2012 final rule 
extended the time for which a state may certify ICFs/IID with standard 
level deficiencies. However, the section inadvertently and incorrectly 
maintains time-limited certification for this sub-set of facilities. 
This is inconsistent with the revised survey regulation for ICFs/IID 
put in place in the May 16, 2012 final rule, and will create confusion 
and barriers to its successful implementation. Therefore, we proposed 
to delete Sec.  442.110 in its entirety.
    We also proposed to delete language in Sec.  442.105 and Sec.  
442.110 to make it consistent with the intent of the Burden Reduction I 
regulatory changes to standardize survey processes of ICFs/IID with 
those of nursing facilities and other certified providers with open-
ended certification periods.
    We received one comment on the proposed changes for ICFs/IID, which 
we discuss here:
    Comment: The commenter objected to the complete removal of all 
provisions found at 42 CFR 442.105 and 442.110. The commenter stated 
that, ``the current rule changes are meant to remove reference to time 
limited certifications from the ICF/IID regulations, as well as to 
eliminate language rendered anachronistic by the move to open ended 
certification agreements.'' The commenter further stated that while 
they appreciate the importance of clarifying the regulation, they 
believe that Sec.  442.105 and Sec.  442.110 contain valuable 
instructions for the surveyors that are not specified elsewhere in the 
regulation.
    Specifically, the commenter mentioned that the complete removal of 
Sec.  442.105 would remove any reference to the language in Sec.  
442.101, which states the requirements for obtaining notice of an ICF/
IID's certification before a Medicaid agency executes a provider 
agreement under Sec.  442.12, leaving only the requirement that the 
facility submit an acceptable plan of correction covering remaining 
deficiencies (standard level deficiencies). The commenter further 
stated that they believe this action removes from Federal regulation 
the specific requirement that facilities must ensure that any 
deficiencies do not jeopardize the health and safety of residents or 
limit the facility's capacity to serve them adequately. Absent this 
provision at Sec.  442.105, the commenter believes that the only 
regulatory language addressing this need is located at Sec.  442.117. 
However, the commenter states that the language at Sec.  442.117 is 
limited to only situations of immediate jeopardy. The commenter 
recommended that CMS retain all the language of Sec.  442.105 except 
Sec.  442.105(d) which refers to a prior certification period.
    Response: We appreciate the concerns of the commenter that the 
complete removal of Sec.  442.105 may limit the ability of the State 
Survey Agencies and CMS to deny certification to a facility whose 
deficiencies in the aggregate compromise the facility's ability to 
provide adequate services. However, we believe that Sec.  442.101(d)(1) 
does provide this ability through the requirement that the ICFs/IID 
must meet the CoPs for certification. Deficiencies indicating a lack of 
ability to provide adequate services are cited at a Condition level and 
the facility cannot be certified or continue certification unless 
acceptable corrections are made. We believe that the provisions of 
deleted section Sec.  442.105 are adequately covered by Sec.  
442.101(d)(1) and Sec.  442.117. Therefore we are not changing our 
proposal based on this comment and are removing Sec.  442.105 as 
proposed.
    Comment: The commenter also objected to the complete removal of 
Sec.  442.110. The commenter stated that Sec.  442.110 requires that a 
facility's

[[Page 27112]]

certification will be automatically cancelled on a specific date unless 
the State Survey Agency finds that standard level deficiencies have 
been corrected or sufficient progress toward correction has been made. 
The commenter feels that allowing a facility's continued certification 
to be predicated on correcting deficiencies found by the Survey Agency 
is an important regulatory tool and should be preserved. The commenter 
recommended that CMS retain Sec.  442.110 and revise it to state that a 
facility's certification will be automatically cancelled on a specific 
date unless the State Survey Agency finds that the deficiencies are 
corrected or sufficient progress has been made and has a new plan for 
correction that has been accepted.
    Response: We agree with the commenter that it is critical to retain 
the regulatory language which requires that a facility correct cited 
deficiencies to retain their certification; however, we do not agree 
that Sec.  442.110 must include a reference to automatic cancellation 
of certification. In response to this comment, we will retain existing 
Sec.  442.110 with revisions stating that ICFs/IID may be certified 
with standard level deficiencies under Sec.  442.101 only if: (1) the 
survey agency finds that all deficiencies have been satisfactorily 
corrected; or (2) the survey agency finds that the facility has made 
substantial progress in correcting the deficiencies and has a new plan 
of correction that is acceptable.
    Contact for ICFs/IID Topics: Martin Kennedy, 410-786-0784.

C. Hospitals

1. Governing Body (Sec.  482.12)
    On May 16, 2012, we published a final rule, entitled ``Reform of 
Hospital and Critical Access Hospital Conditions of Participation'' (77 
FR 29034). In that rule, we finalized changes to the requirements of 
the ``Governing body'' CoP, Sec.  482.12, and adopted a policy to allow 
one governing body to oversee multiple hospitals in a multi-hospital 
system. Additionally, we added a requirement for a medical staff 
member, or members, from at least one hospital in the system to be 
included on the governing body as a means of ensuring communication and 
coordination between the governing body and the medical staffs of 
individual hospitals in the system. After publication of the rule, we 
received considerable feedback that the mandate requiring medical staff 
representation on the governing body of a hospital could cause 
unanticipated complications for many hospitals. We recognized that the 
provision to include a member of the medical staff on a hospital's 
governing body creates conflicts for some hospitals, particularly 
public and not-for-profit hospitals. Issues include, but are not 
limited to, potential conflicts with some State and local laws that 
require members of a public hospital's governing body to either be 
publicly elected or appointed by the State's governor or by some other 
State or local official(s).
    Given the complexity of the issue, and in light of industry 
feedback, we reviewed this requirement and gathered the relevant 
background information on the issues raised by stakeholders. After 
consideration of the issues, we proposed to rescind part of the new 
requirement and to propose an alternative. Specifically, we proposed to 
remove the requirement for a medical staff member, or members, to serve 
on a hospital's governing body and proposed to add a requirement that 
the hospital's governing body directly consult with the individual 
responsible for the organized medical staff (or his or her designee). 
While we believe that it is important that our requirements avoid any 
unnecessary conflicts for hospitals, we believe that it is essential 
that the requirements also ensure that the medical staff perspective on 
quality of care is heard by a hospital's governing body. Therefore, we 
proposed to add a new provision to the ``Medical staff'' standard of 
the Governing body CoP at Sec.  482.12(a)(10). This new provision would 
require a hospital's governing body to directly consult with the 
individual responsible for the organized medical staff of the hospital, 
or his or her designee. At a minimum, this direct consultation would 
require a discussion of matters related to the quality of medical care 
provided to patients of the hospital and must occur periodically 
throughout the fiscal or calendar year. We indicated in the proposed 
rule that this proposed language reflects our intention to leave some 
degree of flexibility for a hospital's governing body (or a multi-
hospital system's governing body) to determine how often during the 
year its consultations with the individual responsible for the 
organized medical staff of the hospital (or his or her designee) would 
occur, and that we would expect these consultations to occur at least 
twice during either a fiscal or calendar year. Moreover, we indicated 
in the proposed rule that we would expect a hospital (or multi-hospital 
system) governing body to determine the number of consultations needed 
based on various factors specific to a particular hospital. These 
factors would include, but are not limited to, the scope and complexity 
of hospital services offered, specific patient populations served by a 
hospital, and any issues of patient safety and quality of care that a 
hospital's quality assessment and performance improvement program might 
periodically identify as needing the attention of the governing body in 
consultation with its medical staff. We also stated that we would 
expect to see evidence that the governing body is appropriately 
responsive to any periodic and/or urgent requests from the individual 
responsible for the organized medical staff of the hospital (or his or 
her designee) for timely consultation on issues regarding the quality 
of medical care provided to patients of the hospital.
    Additionally, for a multi-hospital system using a single governing 
body to oversee multiple hospitals within its system, we proposed to 
require the single governing body to consult directly with the 
individual responsible for the organized medical staff (or his or her 
designee) of each hospital within its system in addition to the other 
requirements proposed. In the proposed rule, we stated that we believe 
this proposal represents the best solution for those hospitals that 
were unintentionally burdened by the requirement finalized in the May 
16, 2012, rule, while still addressing the concerns of many 
stakeholders who responded to the final rule, many of whom firmly 
stated their belief that medical staff input on a hospital's governing 
body is essential to the continuing quality of patient care delivered 
in the hospital.
    We received a total of 83 comments from individuals, medical 
societies, professional societies, hospital associations, and national 
organizations on this proposal. The comments reflected a mixed response 
to our proposal, generally divided between the response of physician 
and physician groups and hospitals and hospital groups. Here we respond 
to specific comments:
    Comment: Commenters generally asked that CMS retain the requirement 
for a member of the medical staff to be a member of the governing body 
and felt that physician representation on the governing body was 
critical to ensure adequate medical staff input into the quality of 
medical care provided to hospital patients. Some of these commenters 
felt that any conflict with state or local laws could be resolved 
without rescinding the provision requiring a medical staff member to be 
a member of the governing body. One commenter felt the conflict created 
by the requirement was overstated.

[[Page 27113]]

    Response: We appreciate the commenters' concerns. However, as 
discussed in the preamble to the proposed rule, the existing 
requirement posed unanticipated complications for many hospitals, 
especially public and government-owned institutions. We believe it is 
important to avoid such unnecessary conflicts and complications and 
that our proposal reflects the most efficient option for doing so. We 
considered deferring to state and local law as suggested, but remained 
concerned that such deference would not adequately address and resolve 
the complications and conflicts that we are addressing. We believe our 
proposal achieves an appropriate balance between the concerns raised by 
the commenters and the problems and conflicts created by requiring 
medical staff membership on the governing body.
    Comment: A number of commenters expressed support for our proposal 
to rescind the requirement. One commenter appreciated our 
acknowledgment of the legal issues created by the existing requirement.
    Response: We appreciate the commenters' support of our proposed 
changes.
    Comment: Generally, commenters were supportive of our intent to 
ensure meaningful communication between the governing body and the 
medical staff. Several commenters supported the provision as written, 
with one stating that CMS' alternative proposal will ensure a 
hospital's governing body hears the medical staff perspective on 
quality of care while leaving appropriate flexibility in the 
composition of the hospital's governing body.
    Response: We appreciate the commenters' support of our proposed 
changes.
    Comment: We received a number of comments expressing concern that 
the proposed consultation requirement would be overly burdensome, 
particularly for multi-hospital systems with a single governing body. 
One commenter stated that for systems with large numbers of hospitals 
and a single governing board, requiring separate consultations between 
each medical staff representative and the entire governing board would 
prove unworkable. One commenter suggested instead allowing for ``a 
committee structure with representatives throughout the system and at a 
frequency that is flexible.'' Other commenters suggested various 
committee-based options and greater flexibility in achieving the 
objectives of meaningful communication between the governing body and 
the medical staff.
    Response: Our proposal gives governing bodies flexibility to 
determine the most effective and efficient way to meet the requirement. 
We believe it allows sufficient flexibility for hospitals to meet this 
requirement in a manner appropriate to each organization. As written, 
this provision does not require separate consultations with each leader 
of each medical staff and does not exclude the possibility of 
consulting with multiple medical staff leaders simultaneously using 
some form of committee structure, so long as the direct consultation 
occurs periodically throughout the fiscal or calendar year and includes 
discussion of matters related to the quality of medical care provided 
to patients of each hospital. Similar to our discussion in the preamble 
to the May 16, 2012 Final Rule (77 FR 29038), we expect hospital 
governing bodies, especially a multi-hospital system's single governing 
body, to carefully consider the unique needs of the patient populations 
served by its member hospital(s) and their respective medical staffs 
when determining the number and the type of consultations needed to 
achieve the necessary communication between the governing body and the 
medical staff. Furthermore, this proposal does not preclude medical 
staff membership on the governing body.
    Comment: One commenter felt that the proposed provision would not 
achieve the objective of meaningful communication and several 
commenters stated that ``[w]e do not accept the premise that `direct 
consultation,' no matter how frequent or in what form, is an adequate 
substitution for medical staff representation on a hospital's governing 
body.'' One commenter stated that if this proposal is implemented, 
medical staffs would be unable to comply with Sec.  482.12(a)(5) 
requiring ``that the medical staff is accountable to the governing body 
for the quality of care provided to patients.''
    Response: We believe that our proposal will provide for meaningful 
communication between the governing body and the medical staff while 
avoiding the complications created by the current requirement. We are 
confused by the comment that the implementation of this proposed 
requirement would make it impossible for medical staffs to comply with 
the current requirement at Sec.  482.12(a)(5) listed above or with 
Sec.  482.22(b), which requires the medical staff to be ``well 
organized and accountable to the governing body for the quality of the 
medical care provided to the patients.'' The finalized requirement 
merely codifies the requirements applicable to communications regarding 
the hospital's quality of patient care, which should be occurring 
regularly between the governing body and the medical staff. We do not 
see how the addition of this requirement would make the medical staff 
less accountable to the governing body for the quality of care provided 
to patients in the hospital. By requiring direct consultation, we 
believe that the medical staff would be ensured a forum in which its 
collective voice can be heard regarding patient care. If anything, the 
requirement holds the governing body accountable to the medical staff 
for providing that forum through direct consultation.
    Comment: Several commenters requested examples of compliance or 
additional clarification regarding what constitutes ``direct 
consultation.''
    Response: ``Direct consultation'' means that the governing body, or 
a subcommittee thereof, meets with the medical staff leader(s) either 
face-to-face or via a telecommunications system permitting immediate, 
synchronous communication.
    Comment: One commenter asked if having a member of the medical 
staff on the governing body would meet the consultation requirement.
    Response: As noted earlier, this proposal does not preclude 
including medical staff on the governing body, as full, non-voting, or 
ex-officio member(s). However, a hospital would meet the consultation 
requirement only if the medical staff member serving on the governing 
body is the same individual responsible for the organization and 
conduct of the hospital's medical staff, or his or her designee, and 
only if such membership includes meeting with the board periodically 
throughout the fiscal or calendar year and discussing matters related 
to the quality of medical care provided to patients of the hospital. If 
there were a change in the medical staff leadership and the bylaws 
governing terms and conditions of governing body membership did not 
allow for substitution of the new medical staff leader (or his or her 
designee) on the governing body, then the governing body would be 
expected to engage in direct consultation with the individual newly 
responsible for the organization and conduct of the medical staff (or 
his or her designee). It should be noted that if a hospital chooses to 
meet the requirement in this manner, there is nothing in the 
requirements to prohibit the hospital from including other medical 
staff members on the governing body in addition to the member 
responsible for the organization and conduct of the medical staff.

[[Page 27114]]

    After consideration of the comments discussed above, we are 
finalizing the changes to Sec.  482.12 as proposed.
2. Medical Staff (Sec.  482.22)
    Similar to the issues regarding medical staff representation on the 
governing body that were discussed in the previous section, we also 
received a considerable amount of feedback regarding our responses in 
the May 16, 2012 final rule (77 FR 29061) where we discussed our 
interpretation of the Medical staff CoP at Sec.  482.22 as requiring 
that each hospital have its own independent medical staff despite the 
arguable ambiguity of the regulatory language. After the publication of 
the May 16, 2012 final rule, it was brought to our attention that, over 
the years, this apparently ambiguous language might have led some 
stakeholders to interpret Sec.  482.22 as allowing for separately 
certified hospitals, as members of a multi-hospital system, to share a 
unified and integrated medical staff. Therefore, we proposed to amend 
the introductory paragraph of Sec.  482.22 to require that each 
hospital must have an organized and individual medical staff, distinct 
to that individual hospital, which operates under bylaws approved by 
the governing body, and which is responsible for the quality of medical 
care provided to patients of that individual hospital.
    Shortly after publication of the May 2012 final rule, it was also 
brought to our attention that some of the changes made to the hospital 
requirements at Sec.  482.22(a), ``Medical staff,'' were not clear. Our 
intent in revising the provision was to provide the flexibility that 
hospitals need under federal law to maximize their medical staff 
opportunities for all practitioners, but within the regulatory 
boundaries of their State licensing and scope-of-practice laws. We 
believe that the greater flexibility for hospitals and medical staffs 
to enlist the services of non-physician practitioners to carry out the 
patient care duties for which they are trained and licensed will allow 
them to meet the needs of their patients most efficiently and 
effectively.
    Section 482.22(a), ``Standard: Eligibility and process for 
appointment to medical staff,'' currently requires a hospital's medical 
staff to be composed of doctors of medicine or osteopathy. It also 
allows for a hospital's medical staff to include other categories of 
non-physician practitioners determined as eligible for appointment by 
the governing body, in accordance with State law, including scope-of-
practice laws. With the substitution of the term ``non-physician 
practitioners'' in the final rule (which replaced the term ``other 
practitioners''), we might have unintentionally given the impression 
that the requirements now excluded other types of practitioners 
previously included among those eligible for appointment to the medical 
staff. In our guidance prior to the issuance of this final rule, we 
stated that a medical staff could include ``other practitioners'' such 
as doctors of dental surgery or of dental medicine, doctors of 
podiatric medicine, doctors of optometry, and chiropractors, as those 
terms are defined and specified as physicians under section 1861(r) of 
the Act. Because part of Sec.  482.22(a) states that a hospital's 
medical staff must include ``doctors of medicine or osteopathy,'' other 
types of physicians, such as those listed above, are inadvertently 
excluded from the term ``medical staff.'' Similarly, the new term 
``non-physician practitioner'' therefore might also seem to exclude 
these other types of physicians simply by its use of the modifier, 
``non-physician,'' since by the definition described at section 1861(r) 
of the Act, the practitioners are ``physicians,'' they cannot also be 
considered to be ``non-physicians.'' Our intention was not to exclude 
these types of physicians from the definition described in our 
regulations. Therefore, we believe it was appropriate to propose 
revisions to Sec.  482.22(a) to clarify that the medical staff 
requirements still allow for these types of physicians as well as other 
types of non-physician practitioners to be eligible for appointment to 
a hospital's medical staff.
    At Sec.  482.22(a), we proposed to revise the current language to 
require that a hospital's medical staff must be composed of physicians 
and that it may also include, in accordance with State laws, including 
scope-of-practice laws, other categories of non-physician practitioners 
determined as eligible for appointment by the governing body. We 
indicated that the proposed substitution of the current terms, 
``doctors of medicine or osteopathy,'' with the term ``physicians,'' 
would be consistent with the statutory language. We also proposed to 
substitute ``must include'' with ``must be composed of'' since we 
believe that this more accurately reflects the fact that hospital 
medical staffs are predominantly made up of physicians and would also 
emphasize the vital positions that physicians hold on these medical 
staffs. We stated that this proposed regulatory language would require 
that the medical staff be composed of physicians. Finally, we proposed 
to retain the language allowing for other types of non-physician 
practitioners (such as Advanced Practice Registered Nurses (APRNs), 
Physician Assistants (PAs), Registered Dietitians (RDs), and Doctors of 
Pharmacy (PharmDs)) to be included on the medical staff since we 
continue to believe that these practitioners, even though they are not 
included in the statutory definition of a physician, nevertheless have 
equally important roles to play on a medical staff and in the quality 
of medical care provided to patients in the hospital.
    We received over 100 comments on our proposed changes to Sec.  
482.22 from individuals, national and State professional organizations, 
accreditation organizations, individual hospitals and multi-hospital 
systems, and national and State hospital organizations. Regarding the 
proposed requirement for a single medical staff for each individual 
hospital, there was a clear split among commenters with a pronounced 
difference of opinion on this issue between primarily physicians and 
their professional organizations on one side and hospitals, multi-
hospital systems, an accreditation organization, and hospital 
organizations on the other. For the most part, physicians and their 
organizations were supportive of the proposed changes. However, there 
were some physicians, most clearly those who stated that they had 
experience with a unified and integrated medical staff for multiple 
hospitals within a system, who were opposed to our proposed changes. On 
the other side, hospitals and their organizations, along with 
accreditation organizations, were opposed to our proposed change to 
prohibit a unified and integrated medical staff structure for a multi-
hospital system made up of separately certified member hospitals.
    On the proposed changes to the composition of the medical staff 
requirements, the comments were mixed though generally supportive of 
the changes. A number of commenter asked for further clarification of 
these changes.
    Here we respond to specific comments:
    Comment: Regarding the proposed changes to the composition of the 
medical staff, one commenter questioned whether non-physician 
practitioners and other practitioners (for example, podiatrists, 
dentists, and oral surgeons) would be granted hospital privileges and 
be allowed to practice if State law only permitted MDs and DOs to be 
medical staff members.
    Response: The requirement at Sec.  482.22(a) has always allowed 
hospitals to grant medical staff membership for non-physician 
practitioners as well as

[[Page 27115]]

other practitioners who are not MDs/DOs only if such membership is in 
accordance with State law. Although our expectation is that all 
practitioners granted privileges are also members of the medical staff, 
if State law limits the composition of the medical staff to certain 
categories of practitioners, there is nothing in the CoPs that 
prohibits hospitals and their medical staffs from establishing certain 
practice privileges for those specific categories of practitioners 
excluded from medical staff membership under State law, or from 
granting those privileges to individual practitioners in those 
categories as long as such privileges are recommended by the medical 
staff, approved by the governing body, and in accordance with State 
law. However, CMS has always expected a hospital and its medical staff 
to exercise oversight, such as credentialing and competency review, of 
those practitioners to whom it grants privileges, just as it would for 
those practitioners appointed to its medical staff.
    Comment: Several commenters expressed concerned with our referring 
to practitioners who are not MDs or DOs as ``physicians.'' One 
commenter stated that CMS was trying to undermine the traditional 
hospital medical staff leadership model composed solely or primarily of 
MDs and DOs by replacing that model with one composed largely of non-
physician practitioners who are hospital employees.
    Response: As we stated above, the changes proposed as well as the 
current requirements do not require hospitals and their medical staffs 
to appoint practitioners other than MDs and DOs to their medical 
staffs. The requirement provides hospitals and medical staffs with an 
option of medical staff appointment for practitioners who are not MDs 
or DOs, not a requirement. However, in our attempts in the proposed 
rule to correct the omission of other categories of physicians (as 
defined in Sec.  1861(r) of the Act and listed at Sec.  482.12(c)(1)) 
in this requirement, we believe, based on some of the comments 
received, we might have further confused the issue of the composition 
of the medical staff. Therefore, we are finalizing a revision to Sec.  
482.22(a) in this rule that we believe will adequately present the 
required part of this provision and that part which is only optional. 
We are revising the regulatory language to now state that the ``medical 
staff must be composed of doctors of medicine or osteopathy,'' and that 
in accordance with State law, including scope-of-practice laws, the 
medical staff ``may also include other categories of physicians (as 
listed at Sec.  482.12(c)(1)) and non-physician practitioners who are 
determined to be eligible for appointment by the governing body.'' 
[Emphasis added.]
    Comment: We received a large number of comments from individual 
physicians as well as national and State physician organizations that 
supported our proposed changes to reaffirm and make more explicit the 
requirement that each hospital to have its own medical staff, 
specifically those hospitals that are part of a multi-hospital system. 
These commenters stated they believed that allowing a multi-hospital 
system to have a unified and integrated medical staff instead of 
separate medical staffs for each hospital would destroy the concept of 
medical staff self-governance that is ``a basic requirement'' for TJC 
hospital accreditation and which is ``mandated by some states.'' 
Additionally, there were some comments from individuals as well as 
hospital leaders that stated that while they support the proposed 
requirement overall, they believed that there should be some allowance 
for hospitals within a system to share medical staff bylaws, rules, and 
regulations.
    Conversely, we also received an equally large number of comments 
from hospitals, multi-hospital systems, national and State hospital 
organizations, and individual physicians that rejected these same 
proposed changes. These commenters offered both anecdotal evidence and 
preliminary research evidence to support their arguments that unified 
and integrated medical staffs provide the best means for multi-hospital 
systems to more efficiently standardize evidence-based ``best'' 
practices (for example, innovations that have been proven to reduce 
healthcare-associated infections (HAIs), hospital-acquired conditions 
(HACs), and readmissions) across member hospitals. A number of 
commenters also disputed claims that a unified and integrated medical 
staff structure for multiple hospitals within a system would undermine 
medical staff self-governance and pointed out that there is no evidence 
that the separate-medical-staff-for-each-hospital structure improves 
the quality of patient care or protects patient safety. A few 
commenters pointed to several specific benefits that can potentially be 
derived from a unified and integrated medical staff structure 
including:
     Increased opportunity to improve peer review processes.
     Improved patient safety through shared credentialing and 
privileging.
     More efficient sharing of knowledge and innovations among 
medical staff members.
     Better physician on-call coverage for specialties.
     Consistency with the move toward accountable care 
organizations and modern care delivery systems.
     More efficient coordination of emergency preparedness and 
community health planning.
    Among the comments supporting unified and integrated medical staffs 
some stated that they believed that CMS should allow it as an option 
for hospitals that might not be using such a structure currently. One 
commenter argued that because the structure of a hospital's medical 
staff is commonly defined within medical staff bylaws, which must be 
approved by both the medical staff and the governing body, a multi-
hospital governing body cannot unilaterally force the members of its 
separate hospital medical staffs to accept a single, unified, and 
integrated medical staff. This commenter stated that the members of the 
system's separate hospital medical staffs had voted many years ago to 
structure themselves as a unified medical staff because the majority of 
medical staff members believed that this was the best way for the 
system and its medical staffs to ``achieve our goals for mutual 
integration.'' The commenter further reinforced the idea that this 
change was not forced upon the separate medical staffs by stating that 
the medical staff and its members ``were, and remain responsible for 
their self-governance.'' The commenter recommended that hospital 
systems with separately certified hospitals that wish to adopt an 
integrated medical staff structure should be required to provide for an 
election or vote on the issue to ensure that the medical staff of each 
hospital is in agreement. One commenter also noted that unified medical 
staffs ``are self-governing entities that can and do respect the 
diversity, viewpoints and concerns of medical staff members across the 
system.'' Several commenters in support of unified medical staffs 
pointed out that many unified medical staffs rely on a system of 
committees made up of representatives from the various hospitals in a 
system. These commenters argued that while the unified medical staff 
model allows for more efficient patient care coordination, the 
committees and member representatives ensure that hospital-specific 
concerns are voiced, heard, and addressed by the unified medical staff 
and the governing body.
    Other commenters pointed out the significant burden that would be 
imposed on hospitals already operating under this structure if CMS were 
to finalize the proposed requirement. They

[[Page 27116]]

pointed to the significant cost of dismantling the unified medical 
staffs under which many have been operating for several years in many 
accredited hospitals, in addition to the burden of having to establish 
new medical staffs at each such member hospital with new bylaws, rules, 
regulations, and committee structures. A few commenters also asserted 
that there might be inconsistency in CMS allowing for a single unified 
structure for a multi-hospital system's governing body (as we did in 
the May 12, 2012 final rule), but denying the same flexibility for its 
medical staff structure.
    Finally, there were several commenters who stated that they while 
they disagreed with the proposed clarifications, and believed that a 
multi-hospital system should be allowed to have a unified and 
integrated medical staff, they believed that there should be specific 
parameters limiting how many member hospitals could possibly share a 
unified medical staff within a system. Commenters suggested 
establishing a specific number of hospitals or limiting the geographic 
range by state or metropolitan statistical area.
    Response: We appreciate all of the comments received on this issue. 
After carefully considering all of the arguments for and against 
allowing a multi-hospital system to use a unified and integrated 
medical staff structure for its member hospitals, we believe that it is 
in the best interest of hospitals, medical staff members, and patients 
to modify our proposed prohibition on the use of a unified and 
integrated medical staff for a multi-hospital system and its member 
hospitals so as to enable the medical staff of each hospital to 
voluntarily integrate itself into a larger system medical staff.
    The fact that many hospital systems have been using a unified 
medical staff model for a number of years, without evidence showing 
that such a system is detrimental to patients or decreases the quality 
of care delivered, was a major factor in our decision to allow 
hospitals and their respective medical staffs the flexibility to decide 
which medical staff framework works best for their particular 
situations. The arguments against allowing this flexibility through the 
CoPs did not provide any evidence that having a single and separate 
medical staff for each hospital within a system was inherently superior 
to the unified and integrated model. We weighed this argument against 
the comments from the physician leaders and members of unified and 
integrated medical staffs who provided testimony and anecdotal evidence 
for the benefits of this type of structure. Additionally, we considered 
preliminary evidence that appears to show that hospitals using a 
unified medical staff might be achieving some success in reducing HACs, 
HAIs, and readmissions, and in improving patient safety and outcomes. 
One commenter, writing on behalf of a multi-hospital system that the 
commenter references as the largest in their State, stated that ``we 
believe the concept of a single medical staff has substantially 
contributed to our success as an integrated delivery system and has 
accelerated our quality, safety and efficiency performance.'' The 
commenter cited the system's achievements, which they believe are a 
result of this single and integrated medical staff model: Core measures 
in the top quartile with excellent value-based purchasing scores 
according to CMS; lower in-hospital mortality rates that are 
statistically significant, that is, 17 percent lower than expected; 
lower hospital readmission rates that are statistically significant, 
that is, 15 percent lower than expected; and the second lowest 
congestive heart failure readmission rate in the nation, according to 
published CMS data. We agree that it appears to be evident that a 
unified system medical staff would usually be better suited to 
standardizing best practices and implementing quality improvements than 
would the more fragmented structure of separate medical staffs.
    While we do not agree with comments that stated that a unified and 
integrated medical staff would destroy medical staff self-governance, 
we appreciate that added flexibility allowing a multi-hospital unified 
medical staff might conceivably be implemented in a manner that fails 
to achieve the desired benefits. We also received comments suggesting 
that if flexibility were permitted, CMS should place parameters or 
limitations on the use of a unified medical staff. We believe that the 
specifics should be left up to the medical staffs and governing bodies 
to determine, but agree that basic parameters are advisable to address 
the concerns of commenters and ensure due consideration of the unique 
aspects of each involved hospital (such as requiring that the hospitals 
have considered the extent to which a medical staff can be shared among 
its member hospitals as defined in hospital and medical staff policy, 
by-laws, and protocols).
    Therefore, we are revising the proposed requirement and finalizing 
it here by retaining the original and current language of the condition 
statement, which states that the hospital must have an organized 
medical staff that operates under bylaws approved by the governing body 
and is responsible for the quality of medical care provided to patients 
by the hospital. We believe that this will provide more flexibility for 
each hospital and medical staff to determine the medical staff 
framework which works best for their situation (for example, whether 
that decision is for a separate medical staff for each hospital or a 
unified and integrated medical staff for multiple hospitals with a 
system). We are also revising this CoP (at Sec.  482.22(b)) to include 
new provisions that will hold a hospital responsible for showing that 
it actively addresses its use of a unified and integrated staff model. 
Under the provisions of this final rule, the unified medical staff 
would still be composed of medical staff members from each hospital in 
the system and each member would be eligible to take on a leadership 
role on the various committees and subcommittees just as he or she 
would if he or she were part of a separate medical staff. Further, a 
medical staff and a governing body would still need to work closely 
together, with the medical staff responsible for the quality of care 
provided and accountable to the governing body. Neither the governing 
body nor the medical staff may impose its will unilaterally. They are 
dependent on each other for the hospital's success. For medical staffs 
and multi-hospital systems that choose to exercise the flexibility 
provided by this CoP (to use a unified and integrated medical staff, 
after determining that such a decision is in accordance with all 
applicable State and local laws), these new provisions are aimed at 
ensuring that--
    (1) The medical staff members of each separately certified hospital 
in the system (that is, all medical staff members who hold specific 
privileges to practice at that hospital) have voted by majority in 
accordance with medical staff bylaws, either to accept a unified and 
integrated medical staff structure according to provisions included in 
the medical staff bylaws or to opt out of such a structure and to 
maintain a separate and distinct medical staff for their respective 
hospital;
    (2) The unified and integrated medical staff has bylaws, rules, and 
requirements that describe its processes for self-governance, 
appointment, credentialing, privileging, and oversight, as well as its 
peer review policies and due process rights guarantees, and which 
include a process for the members of the medical staff of each 
separately certified hospital (that is, all medical staff members who 
hold specific privileges to practice at that hospital) to be advised of 
their rights to

[[Page 27117]]

opt out of the unified and integrated medical staff structure after a 
majority vote by the members to maintain a separate and distinct 
medical staff for their hospital;
    (3) The unified and integrated medical staff is established in a 
manner that takes into account each hospital's unique circumstances, 
and any significant differences in patient populations (such as low 
income or minority populations, rural populations, etc.) and services 
offered in each hospital (such as emergency services, psychiatric 
services, pediatric care, long term acute care, organ transplant 
services, dialysis, etc.); and
    (4) The unified and integrated medical staff gives due 
consideration to the needs and concerns of members of the medical 
staff, regardless of practice or location, and the unified and 
integrated medical staff has mechanisms in place to ensure that issues 
localized to particular hospitals are duly considered and addressed.
    Finally, we note that some commenters argued in support of a 
unified medical staff by pointing to our previous position permitting a 
single governing body for hospitals within a system. We believe that 
the CoPs pertaining to the governing body and medical staff are unique 
in their focus on governance processes. We are taking this opportunity 
to emphasize that permitting use of a system governing body or medical 
staff must not be construed as implying that compliance with any other 
hospital CoPs may also be demonstrated at the system (multi-hospital) 
level. Each separately participating hospital is required to 
demonstrate its compliance with all other hospital CoPs in order to 
participate in Medicare. Although there can be system approaches in 
many of these areas (such as infection control or quality assessment/
performance improvement programs), each individual hospital must 
demonstrate that it fulfills the applicable CoP requirements.
3. Food and Dietetic Services (Sec.  482.28)
    We proposed to revise the hospital requirements at Sec.  482.28(b), 
``Food and Dietetic Services,'' which currently requires that a 
therapeutic diet must be prescribed only by the practitioner or 
practitioners responsible for the care of the patient.
    The Interpretive Guidelines (IGs) for this requirement, which are 
contained in the State Operations Manual (SOM) for surveyors, further 
state that ``[in] accordance with State law and hospital policy, a 
dietitian may assess a patient's nutritional needs and provide 
recommendations or consultations for patients, but the patient's diet 
must be prescribed by the practitioner responsible for the patient's 
care.'' State survey agencies have applied this requirement to mean 
that registered dietitians or other clinically qualified nutrition 
professionals (RDs) cannot be granted privileges by the hospital to 
order patient diets (or to order necessary laboratory tests to monitor 
the effectiveness of dietary plans and orders, or to make subsequent 
modifications to those diets based on the laboratory tests) since these 
practitioners have never been considered to be among those in the 
hospital who are ``responsible for the care of the patient.'' The 
responsibility for the care of the patient, and the attendant hospital 
privileges that accompany this responsibility, have traditionally and 
exclusively been the provenance of the physician, more specifically the 
MD and DO, and, to a lesser extent, the APRN and PA. Understanding the 
regulatory language and its interpretation, most hospitals have taken a 
very conservative approach toward the granting of privileges, 
especially ordering privileges, to other types of non-physician 
practitioners, including RDs. Consequently, most hospitals have 
withheld ordering privileges from RDs absent a clear signal from CMS 
and the subsequent and necessary changes to the CoPs that would allow 
them to do so.
    After the publication of the October 24, 2011 proposed rule (76 FR 
65891) and the May 16, 2012 final rule (77 FR 29034), ``Medicare and 
Medicaid Programs; Reform of Hospital and Critical Access Hospital 
Conditions of Participation,'' it came to our attention that the 
regulatory language and the IGs for Sec.  482.28(b) were too 
restrictive and lacked reasonable flexibility to allow hospitals to 
extend these specific privileges to RDs in accordance with State laws. 
We believe that RDs are the professionals who are best qualified to 
assess a patient's nutritional status and to design and implement a 
nutritional treatment plan in consultation with the patient's 
interdisciplinary care team. In order for patients to receive timely 
nutritional care, the RD must be viewed as an integral member of the 
hospital interdisciplinary care team, one who, as the team's clinical 
nutrition expert, is responsible for a patient's nutritional diagnosis 
and treatment in light of the patient's medical diagnosis. In the 
February 7, 2013 proposed rule, we provided research evidence that 
supports the changes we have proposed (78 FR 9222). Without the 
proposed regulatory changes allowing hospitals to grant appropriate 
ordering privileges to RDs, hospitals would not be able to effectively 
realize improved patient outcomes and overall cost savings that we 
believe would be possible with such changes.
    It should be noted, because a few States elect not to use the 
regulatory term ``registered'' and choose instead to use the term 
``licensed'' (or no modifying term at all), or because some States also 
recognize other nutrition professionals with equal or possibly more 
extensive qualifications, we proposed to use the term ``qualified 
dietitian.'' In those instances where we have used the most common 
abbreviation for dietitians, ``RD,'' throughout this preamble, our 
intention is to include all qualified dietitians and any other 
clinically qualified nutrition professionals, regardless of the 
modifying term (or lack thereof), as long as each qualified dietitian 
or clinically qualified nutrition professional meets the requirements 
of his or her respective State laws, regulations, or other appropriate 
professional standards.
    In order for patients to have access to the timely nutritional care 
that can be provided by RDs, a hospital must have the regulatory 
flexibility either to appoint RDs to the medical staff and grant them 
specific nutritional ordering privileges or to authorize the ordering 
privileges without appointment to the medical staff, all through the 
hospital's appropriate medical staff rules, regulations, and bylaws. In 
either instance, medical staff oversight of RDs and their ordering 
privileges would be ensured. Therefore, we proposed revisions to Sec.  
482.28(b)(1) and (2) that would require that individual patient 
nutritional needs be met in accordance with recognized dietary 
practices. We would make further revisions that would allow for 
flexibility in this area by requiring that all patient diets, including 
therapeutic diets, must be ordered by a practitioner responsible for 
the care of the patient, or by a qualified dietitian or other 
clinically qualified nutrition professional as authorized by the 
medical staff and in accordance with State law. We believe that 
hospitals that choose to grant these specific ordering privileges to 
RDs may achieve a higher quality of care for their patients by allowing 
these professionals to fully and efficiently function as important 
members of the hospital patient care team in the role for which they 
were trained. In the proposed rule, we stated that we believe hospitals 
would realize significant cost savings in many of the areas affected by 
nutritional care.

[[Page 27118]]

    We received over 100 comments on our proposed changes to Sec.  
482.28 from professional organizations, accreditation organizations, 
hospitals and hospital systems, and individuals. Overall, the majority 
of commenters were supportive of the proposed changes, though there 
were a large number of commenters who were opposed to the exclusive use 
of the terms ``registered dietitian,'' ``qualified dietitian,'' or 
``RD'' for varied reasons. Here we respond to specific comments:
    Comment: As stated above, the majority of commenters were very 
supportive of the proposed changes with many citing improved patient 
care, greater efficiency in delivering dietary services, and 
significant cost savings as benefits that would be realized if the 
proposed changes were to be finalized. A few commenters provided 
references (to the same published studies that we cited) that offer 
evidence of the benefits that might be derived by hospitals if 
dietitians were granted ordering privileges as well as to guidelines, 
best practices, professional standards, and recommendations for the 
ordering of enteral and parenteral nutrition. Other commenters provided 
detailed information on the recognized training, education, and other 
qualifications that dietitians and nutrition professionals must meet in 
order to practice in their respective professions.
    Response: We appreciate the commenters' support of our proposed 
changes as well as the references to the research provided. We agree 
that these changes will benefit patients as well as the practitioners 
caring for them, and will allow hospitals to achieve greater efficiency 
and cost savings in the delivery of food and dietetic services to 
patients.
    We also appreciate the information on the professional standards 
and guidelines for enteral and parenteral nutrition therapy provided as 
well that provided on the qualifications for the various dietetics and 
nutrition professions.
    Comment: One commenter, while agreeing with the intent of the 
proposed changes and many of the statements made in the preamble in 
support of these changes, did not agree with the use of the term 
``qualified dietitian'' in the regulatory text. The commenter stated 
that ``the terminology `registered dietitian' or `RD' is the nationally 
accepted designation for a professional who has met the minimum 
educational standards, [and] taken a registration exam complete with 
mandatory continuing professional education.'' Similar to this 
commenter, a few individuals and one professional organization asked 
for CMS to use the term ``registered dietitian'' instead of ``qualified 
dietitian,'' or to clarify that the definition of qualified dietitian 
used here is consistent with the one currently found under the 
transplant center process requirements at Sec.  482.94(e), which 
defines a qualified dietitian as ``an individual who meets practice 
requirements in the State in which he or she practices and is a 
registered dietitian with the Commission on Dietetic Registration.'' 
However, many of the registered dietitians who commented simply thanked 
CMS for the proposed changes, stated their support for them, and 
acknowledged the possible benefits that might be derived from the 
regulatory changes to Sec.  482.28.
    Conversely, one commenter, who included the names of 2,480 
individuals who had signed on in support of the comment, stated that 
they cannot support ``Medicare rules that create a monopoly for RDs at 
the expense of often better-qualified nutrition professionals.'' 
Similarly, various comments from ``nutritionists,'' ``nutrition 
professionals,'' ``certified clinical nutritionists,'' and ``certified 
nutrition specialists'' argued that the rule would not serve patients 
since it excludes non-registered dietitians and other nutrition 
professionals and that the changes would create a practice monopoly for 
registered dietitians in hospitals. These commenters expressed the 
opinion that advanced degree nutrition professionals possess more 
extensive education and training backgrounds in nutrition than do 
registered dietitians. One commenter stated that they believe the 
professional organization representing registered dietitians is 
attempting to ``exclude other nutritional specialists,'' while many 
other commenters simply urged CMS to be ``forward-looking by 
incorporating the most flexible, inclusive language to increase the 
qualified nutrition workforce rather than narrowing it to one private 
credential, essentially creating a monopoly.''
    Response: Our use of the term ``registered dietitian,'' in the 
proposed regulatory language, along with our use of this term and the 
terms ``qualified dietitian'' and ``RD'' in the preamble, was not meant 
to be exclusive of other nutrition professionals qualified to practice 
in the hospital setting. We agree with commenters that the regulatory 
language for Sec.  482.28 should be inclusive of all qualified 
nutrition professionals. We do not agree with commenters who requested 
that we use the term ``registered dietitian'' or define ``qualified 
dietitian'' as an individual specifically registered with the 
Commission on Dietetic Registration. We agree that a more flexible 
approach would be the best way to ensure that patients benefit from the 
improved quality of care that these professionals can bring to hospital 
food and dietetic services. Additionally, we believe that it is best 
left to individual States to determine the regulatory processes by 
which these professions are governed and that hospitals, through their 
medical staff privileging processes, should be allowed the flexibility 
to determine the credentials and qualifications for dietitians and 
nutrition professionals, in accordance with their respective State laws 
if and when they choose to grant ordering privileges to these 
professionals. Therefore, we are revising our proposed regulatory 
language in this final rule to now require that all patient diets, 
``including therapeutic diets, must be ordered by a practitioner 
responsible for the care of the patient, or by a qualified dietitian or 
qualified nutrition professional as authorized by the medical staff and 
in accordance with State law governing dietitians and nutrition 
professionals.'' [Emphasis added.]
    Comment: A few commenters suggested that the term, ``therapeutic 
diets,'' be clarified in the requirements as including both enteral and 
parenteral nutrition support because the commenters are concerned that 
the term might be interpreted as not including these nutrition 
modalities.
    Response: While we understand the commenter's concerns, we believe 
that we have made it very clear in the preamble to this rule as well as 
in the preamble to the proposed rule that we consider all patient diets 
to be therapeutic in nature, regardless of the modality used to support 
the nutritional needs of the patient, and that the term would most 
certainly include enteral and parenteral nutrition support. Further, we 
believe that our extensive discussion of the research evidence 
supporting ordering privileges for RDs in both the proposed rule's 
preamble and its regulatory impact section leaves very little room for 
misinterpretation of this term since much of our discussion centered on 
the RD's role and expertise in ordering parenteral nutrition for 
patients.
    Comment: Several commenters supported the proposed change and 
requested that CMS apply this revision to the Medicare requirements for 
long-term care facilities and other healthcare facilities in which RDs 
and nutrition professionals play a role.
    Response: We appreciate the commenters' support and suggestions,

[[Page 27119]]

but the recommendations are outside the scope of this rule. However, we 
will keep the suggestion to extend the proposed revisions to the 
requirements for other providers and suppliers in consideration if we 
pursue future rulemaking in these areas.
    Comment: One commenter noted that while these proposed changes 
address the nutritional aspects of diet management, they do not address 
``diet texture modification, which may be recommended by speech-
language pathologists for patients with significant swallowing 
problems.'' The commenter further states that since speech-language 
pathologists ``are the professionals who typically assess individuals 
with swallowing disorders . . . they, like dieticians, should have the 
authority to order diets that reflect changes based on their expert 
recommendations.''
    Response: While we agree with the commenter that speech-language 
pathologists may be the professionals best qualified to make 
recommendations for patients with swallowing disorders, we do not 
believe that Sec.  482.28 is the appropriate place for such a change. 
Additionally, we believe that the recent changes to the medical staff 
CoP (Sec.  482.22) with regard to non-physician practitioners allow 
hospitals to determine if specific categories of practitioners, along 
with individual practitioners within those categories, should be 
granted certain privileges within the hospital, including ordering 
privileges. The changes finalized here for Sec.  482.28 in no way 
prohibit hospitals from granting specific ordering privileges to 
speech-language pathologists, or to other non-physician practitioners, 
as long as those privileges are in accordance with State laws and 
regulations, including scope-of-practice laws.
    Comment: Several commenters disagreed with CMS' assertion in the 
proposed rule that dietitians are the professionals best qualified to 
assess a patient's nutritional status and to design and implement a 
nutritional treatment plan. These commenters also disagreed with our 
statement in the proposed rule that ``physicians often lack the 
training and educational background to manage the sometimes complex 
nutritional needs of patients with the same degree of efficiency and 
skill as registered dieticians.'' These commenters further stated that 
they believe that ``in some cases, such as post-abdominal surgery care, 
the physician is best suited to determine patient diet.'' They urged 
CMS to clarify in the final rule that ``in some cases, per medical 
staff directive, the dietician must defer to or consult with the 
physician responsible for the care of the patient.'' The same 
commenters did agree with ``CMS' deference to the authorization of the 
medical staff at Sec.  482.28'' and stated that they believe that ``the 
medical staff should be the arbiter of policies regarding when a 
dietician is qualified to order patient diets in the hospital.''
    Response: We agree with the commenters that there are some cases 
where the dietitian or nutrition professional must defer to, or consult 
with, the practitioner responsible for the care of the patient, often 
the practitioner who admitted the patient. We further agree that the 
medical staff should determine which specific practitioners, including 
dietitians and nutrition professionals, are qualified for which 
specific privileges. However, we must point out that this requirement 
does not require hospitals and medical staff to grant or authorize 
specific privileges to specific practitioners, but only allows them the 
flexibility to do so if they choose, and only if State law allows for 
it.
    Comment: Another commenter asked for clarification on whether the 
proposed requirement only provides a hospital with the option of 
credentialing and privileging a dietitian.
    Response: The requirement, including the revisions we are 
finalizing here, does not require hospitals to credential and privilege 
dietitians as a condition of participation, but, as previously stated, 
allows for it as an option if consistent with State law.
    Comment: A few commenters stated that they were concerned about 
ordering diets for critically ill patients or making specific patients 
``NPO.'' They further state that they would feel comfortable ordering 
diets only if there was a ``'diet order per dietitian' order from the 
doctor.''
    Response: As we have stated, the requirement does not require 
dietitians and nutrition professionals to order diets, but only allows 
for it as an option if consistent with State law and if a hospital 
chooses to grant such privileges after considering the recommendations 
of its medical staff. An individual dietitian or nutrition professional 
would then need to apply for these ordering privileges.
    Comment: A few commenters asked for clarification on laboratory 
ordering privileges for dietitians as part of the proposed requirement. 
The commenters cited conflicts with the Medicare payment requirements 
as well as EHR incentives if dietitians were authorized to order lab 
and other diagnostic services.
    Response: As proposed, and as finalized here, the regulatory 
language did not include privileges for ordering lab or other 
diagnostic services by dietitians or nutrition professionals. However, 
the preamble to this section of the proposed rule did include a 
discussion of such privileges in the context of some of the research 
cited. Such privileges for dietitians and nutrition professionals are 
not required or specifically allowed by this requirement, but are 
instead an option left to hospitals and their medical staffs to 
determine in consideration of relevant State law as well as any other 
requirements and/or incentives that CMS or other insurers might have.
    In accordance with the comments discussed above, we are finalizing 
the proposed changes to Sec.  482.28 with the revisions to the 
regulatory language as noted above.
4. Nuclear Medicine Services (Sec.  482.53)
    The current requirement at Sec.  482.53(b)(1) requires that the in-
house preparation of radiopharmaceuticals be performed by, or under the 
direct supervision of, an appropriately trained registered pharmacist 
or a doctor of medicine or osteopathy. Direct supervision means that 
one of these professionals must be physically present in the hospital 
and immediately available during the preparation of all 
radiopharmaceuticals. Hospitals have reported to us that this 
requirement is extremely burdensome when the presence of a pharmacist 
or physician is required for the provision of off-hour nuclear medicine 
tests that require only minimal in-house preparation of 
radiopharmaceuticals. Information from stakeholders regarding this 
issue has revealed that minimal in-house preparation is required for 
most radiopharmaceuticals. Many are batch-prepared by the manufacturer 
for hospital use as a way of reducing radiation exposure of hospital 
personnel, ensuring that on-site hospital preparation of 
radiopharmaceuticals generally requires only a few final steps, if any.
    We proposed to revise the current requirement at Sec.  482.53(b)(1) 
by removing the term ``direct.'' We stated that, if finalized, the 
revised requirement would require that in-house preparation of 
radiopharmaceuticals be performed by, or under the supervision of, an 
appropriately trained registered pharmacist or doctor of medicine or 
osteopathy. We also stated that the revision to ``supervision'' from 
``direct supervision'' would allow for other appropriately trained 
hospital staff to prepare in-house radiopharmaceuticals under the 
oversight of a registered

[[Page 27120]]

pharmacist or doctor of medicine or osteopathy, but it would not 
require that such oversight be exercised by the physical presence in 
the hospital at all times of one of these professionals, particularly 
during off-hours when such a professional would not be routinely 
present.
    We stated that these changes would allow hospitals to establish 
their own policies on supervision of nuclear medicine personnel and the 
in-house preparation of radiopharmaceuticals. Absent a requirement for 
``direct'' supervision, we expect most hospitals to follow the Society 
of Nuclear Medicine and Molecular Imaging recommendations on this issue 
and to no longer require a registered pharmacist or MD/DO to be on site 
for direct supervision when radiopharmaceuticals are prepared in-house 
by staff. We stated that the proposed change would directly reduce the 
burden of the current direct supervision requirement where it is most 
needed--in-house preparation of radiopharmaceuticals for after-hours/
emergency performance of nuclear medicine diagnostic procedures (for 
example, coronary artery disease, pulmonary emboli, stroke, and 
testicular torsion). Given that an estimated 16 million nuclear 
medicine imaging and therapeutic procedures are performed each year in 
the United States, we would expect hospitals to achieve significant 
cost reductions in this area if they take advantage of the proposed 
change. We welcomed public comments on this proposed change.
    We received several comments on our proposed change to Sec.  
482.53, primarily from professional organizations, hospitals and 
hospital systems, and individual nuclear medicine technologists. All 
commenters were supportive of the proposed change with no commenters 
opposed.
    In accordance with the comments discussed above, we are finalizing 
the changes to Sec.  482.53(b)(1) as proposed.
5. Outpatient Services (Sec.  482.54)
    We proposed changes to the requirements at Sec.  482.54, 
``Outpatient services.'' Specifically, we proposed to add a new 
standard at Sec.  482.54(c), entitled ``Orders for outpatient 
services.'' We proposed these revisions so that the regulations would 
codify Interpretive Guideline (IG) changes that we recently made 
regarding the ordering of outpatient services.
    On May 13, 2011, CMS issued memorandum SC-11-28 (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/SCLetter11_28.pdf). Among other 
things, this memorandum included preliminary guidance on who may order 
hospital rehabilitation (Sec.  482.56(b)) and respiratory care services 
(Sec.  482.57(b)(3)). On November 18, 2011, the final version of the 
revised IGs for these requirements was released. Subsequently, we 
received considerable feedback that this guidance, which was intended 
to expand the categories of practitioners who could order 
rehabilitation and respiratory care services beyond physicians and 
stated that all ordering practitioners had to hold medical staff 
privileges, was actually having the opposite effect and limiting 
practitioner orders for these services. In the area of outpatient 
rehabilitation services, in particular, stakeholders informed us that 
the revised guidance was posing a barrier to care because a substantial 
percentage of these services are provided in hospital outpatient 
rehabilitation facilities to patients referred by practitioners who are 
not on the hospital's medical staff and who do not hold medical staff 
privileges. We were advised that, in many cases, the referring 
practitioners are based in other States to which patients have traveled 
to receive specialized services. Clearly, these practitioners do not 
provide care in the patient's local hospital and are not interested in 
seeking medical staff privileges merely to refer patients for 
outpatient services.
    It was not our intention to create barriers to care or to limit the 
ability of practitioners, who are appropriately licensed, acting within 
their scope of practice, and authorized under hospital policies, to 
refer patients for outpatient services. We distinguish these outpatient 
referral cases from cases where a practitioner provides care in the 
hospital, either to inpatients or outpatients, and must have medical 
staff privileges to do so. We subsequently issued new guidance on this 
rule. On February 17, 2012, CMS issued SC-12-17 (https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/SCLetter12_17.pdf), which 
clarified that outpatient services may be ordered by any practitioner 
responsible for the care of the patient, who is licensed and acting 
within his or her scope of practice in the State where he or she 
provides care to the patient, and who has been authorized by the 
medical staff and approved by the governing body to order specific 
outpatient services.
    In light of the above, as indicated in the proposed rule, we 
believed it would be appropriate to revise Sec.  482.54, the CoP 
governing outpatient services, which is silent on the issue of who may 
order such services, in order to explicitly address this issue. We 
proposed to revise the requirements to mean that orders for outpatient 
services may be made by any practitioner who is--
     Responsible for the care of the patient;
     Licensed in the State where he or she provides care to the 
patient;
     Acting within his or her scope of practice under State 
law; and
     Authorized in accordance with policies adopted by the 
medical staff, and approved by the governing body, to order the 
applicable outpatient services.

Further, we stated that these proposed requirements would apply to all 
practitioners who are appointed to the hospital's medical staff and who 
have been granted privileges to order the applicable outpatient 
services; and all practitioners not appointed to the medical staff, but 
who satisfy the above criteria for authorization by the hospital for 
ordering the applicable outpatient services and for referring patients 
for such services. These requirements would also apply to all hospital 
services that may be offered on an outpatient basis, including services 
for which there is regulatory language that, in the absence of the 
clarifying language we propose herein, would appear to impose more 
stringent limits as to the practitioners who are permitted to order 
outpatient services. For example, Sec.  482.53(c)(4) states, ``Nuclear 
medicine services must be ordered only by practitioners whose scope of 
Federal or State licensure and whose defined staff privileges allow 
such referrals.'' In practice, however, it is not unusual for 
physicians without medical staff privileges to refer their patients to 
the hospital for common outpatient nuclear medicine tests, such as 
myocardial perfusion scans used in conjunction with cardiac stress 
tests and hepatobiliary scans used in the detection of gallbladder 
disease. So long as the hospital's medical staff policies and 
procedures permit this, we do not believe our regulations should 
present a barrier. Another example concerns the administration of 
outpatient chemotherapy. In accordance with Sec.  482.23(c), concerning 
preparation and administration of drugs, ``Drugs and biologicals must 
be prepared and administered in accordance with Federal and State laws, 
the orders of the practitioner or practitioners responsible for the 
patient's care as specified under Sec.  482.12(c), and accepted 
standards of practice.'' In the absence of the clarification we stated 
that this language could be confusing, as some hospitals

[[Page 27121]]

might read it to preclude providing outpatient chemotherapy on the 
orders of a practitioner without privileges, which may or may not be 
desirable to the hospital. We believe that it is more appropriate if 
the hospital's medical staff and governing body determine what types of 
outpatient services they are comfortable with providing on the basis of 
an order (which might commonly also be called a ``referral'') from a 
practitioner who does not hold medical staff privileges.
    We expect these changes would be primarily neutral in terms of 
regulatory burden reduction for hospitals. Prior to the November 2011 
revisions to the IGs, most, if not all, hospitals were already 
operating under what was considered standard industry practice with 
regard to the ordering of, and referral for, outpatient rehabilitation 
services by practitioners who were not on the hospital's medical staff. 
Since we moved quickly to clarify our outpatient services ordering 
policy through communications with stakeholders and further revisions 
to the IGs, we believe that most hospitals did not make changes to 
their policies and procedures that would have created burdens for them. 
We cannot rule out the possibility that some hospitals were deterred by 
the specific language of other CoPs, such as those governing nuclear 
medicine or administration of drugs, but we have not received 
information that would allow us to quantify this. We stated that this 
proposed change would clearly establish in regulation CMS policy on the 
ordering and referral of all outpatient services.
    We received a total of 35 comments from individuals, medical 
societies, professional societies, hospital associations and national 
organizations on this proposal. The comments were generally supportive 
of our proposal. Here we respond to specific comments:
    Comment: Several commenters expressed support for our proposal, but 
suggested that the language be modified to add language to require that 
practitioners not appointed to the medical staff be authorized in 
accordance with both State law and policies adopted by the medical 
staff.
    Response: We appreciate the commenters' support. We also agree with 
the recommendation and have modified the proposed regulatory language 
as suggested.
    Comment: Several commenters expressed concern regarding both the 
burden and the practicality of requiring hospitals to obtain 
information about the current scope of practice for a practitioner in 
another state and then to determine if the practitioner's ordered 
services are within those parameters. These commenters believe that CMS 
should clarify the proposed requirement that the hospital must check 
the licensure status of the practitioner in the State where he or she 
provides care to the patient. They also asked if CMS expected the 
hospital to set up a credentials file for the non-medical staff 
practitioner who orders outpatient services, maintain information on 
his or her State scope of practice, and show that a determination was 
made that the ability to order the specific outpatient services was 
within his or her respective State scope of practice.
    Response: Hospitals have the flexibility to determine whether or 
not they will allow a practitioner who is not a member of the medical 
staff to order outpatient services as well as the ability to establish 
through medical staff bylaws and hospital policy other parameters for 
who will and who will not be authorized to order outpatient services. 
If a hospital is unable or unwilling to verify the respective State 
scope of practice, licensure, etc., for a practitioner, the hospital is 
not required to authorize the practitioner to order outpatient services 
in its facility. If a hospital does allow practitioners not on the 
hospital's medical staff to order hospital outpatient services, the 
hospital must be able to demonstrate compliance with the regulatory 
requirement.
    Comment: Several commenters noted that non-hospital providers of 
similar outpatient services do not have similar requirements and 
believe that hospitals should not be held to a higher requirement than 
non-hospital providers of similar services. They believe that requiring 
a higher standard of hospitals would be an unnecessary burden, increase 
hospital costs, and provide limited, or no, benefit to patients. 
Another commenter stated that the hospital CEOs with whom they have 
spoken believe that hospitals already have better policies than non-
hospital providers of the same services that are not subject to the 
same regulatory requirements.
    Response: We are aware that there are other provider types who 
provide outpatient services and we understand the commenters' concerns 
about these providers having differing regulatory requirements. These 
other providers are subject to requirements specific to their 
particular setting that also include issues such as licensure, scope of 
practice, and facility policies and procedures. We believe the 
requirements that we have established in this rule are appropriate to 
the hospital setting and are necessary to ensure the health and safety 
of patients while also ensuring that we do not create unintentional 
barriers to care or unnecessary limitations on professional practice. 
We note that this clarification to the CoP for outpatient services 
creates an option for hospitals and not a requirement. A hospital is 
required to comply with this requirement only if it chooses to allow 
practitioners who are not members of the medical staff to order 
outpatient services.
    Comment: Several commenters supported the proposed revisions as 
written. One commenter stated that they supported the clarifying change 
as there was prior confusion that membership on the medical staff is 
required to order outpatient services. Another commenter noted that 
this change will improve patient access to crucial healthcare services 
and improve the efficiency and quality of care. They believe that it 
will prevent needless delays for consumers in accessing the care they 
need, and that it will promote earlier intervention, which they believe 
will in turn improve outcomes and reduce costs.
    Response: We appreciate the commenters' support for our proposal.
    Comment: One commenter believes that this change will ``amp up 
medical spending, often for useless medical imaging and other 
diagnostic tests.''
    Response: We disagree. We understand that allowing practitioners 
who are not a member of the medical staff to order outpatient services 
has been a standard practice for many years for a majority of 
hospitals. We have not been presented with any evidence that our 
clarification will result in any increase in the number and types of 
outpatient services ordered. We believe that this clarification in 
policy will prevent the creation of new barriers to care, particularly 
for patients in rural areas. In addition, CMS has other regulatory 
mechanisms by which determinations are made as to whether specific 
outpatient services are medically reasonable and necessary.
    Comment: One commenter requested that CMS clarify what constitutes 
when a practitioner is responsible for the care of the patient asks 
whether this includes practitioners working under the supervision of, 
or in collaboration with, the treating physician as well as other 
practitioners otherwise involved in the care of the patient.
    Response: We expect that each hospital medical staff would address 
which categories of practitioners would be deemed ``responsible for 
care of the patient'' in their policies. Such practitioners could 
include: Any of the practitioners specified under Sec.  482.12(c) who 
are involved in providing medical care to the patient; any practice 
partners

[[Page 27122]]

of the patient's attending physician who might be covering the 
physician's patients for a period of time if the physician is not 
available; any hospitalists, hospital intensivists, and specialty 
physicians who might have provided care to the patient during a prior 
hospital stay; any residents/fellows under the preceptorship or 
supervision of the patient's attending physician or hospitalist, 
intensivist or specialty physician during a prior hospital stay; and 
any non-physician practitioners involved in the patient's care.
    Comment: One commenter expressed concern about complying with this 
requirement in teaching hospitals. The commenter requested that CMS 
clarify that a teaching hospital would not be considered out of 
compliance with this requirement when they allow interns, residents, 
and fellows to order outpatient service as part of their training 
program, in accordance with the hospital's medical staff bylaws, rules, 
and regulations as well as any other related legal requirements related 
to with which the hospital must comply.
    Response: We do not see a conflict between this requirement and 
interns, residents, and fellows who are acting in accordance with their 
respective State's licenses and scope-of-practice laws, and their 
respective hospital's medical staff bylaws, rules, and regulations.
    Comment: One commenter recommends that CMS specify the timeframe 
and the duration of the verification process for such orders, as they 
vary in frequency and urgency.
    Response: We expect hospitals, when presented with a referral or 
order for outpatient services from a practitioner who does not have 
privileges at that hospital and for whom the hospital has not 
previously verified the practitioner's licensure, etc. to perform such 
verification before providing the ordered outpatient services to the 
patient. In accordance with the comments discussed above, we are 
finalizing the changes to Sec.  482.54 as proposed with two minor 
revisions. On the recommendation of commenters, we are revising Sec.  
482.54(c)(4) by adding the phrase, ``State law'' so that the provision 
is now finalized to read, ``. . . authorized in accordance with State 
law and policies adopted by the medical staff, and approved by the 
governing body, to order the applicable outpatient services.'' 
Additionally, we are also revising Sec.  482.54(c)(4)(ii) by adding the 
phrase, ``the medical staff'' so that this provision is now finalized 
as applying to all practitioners ``not appointed to the medical staff, 
but who satisfy the above criteria for authorization by the medical 
staff and the hospital for ordering the applicable outpatient services 
for their patients.'' We believe that this additional revision is 
necessary to clarify that it is a hospital's medical staff that 
initially recommends authorizing these ordering privileges, after which 
the governing body, or the hospital, approves them.
6. Special Requirements for Hospital Providers of Long-Term Care 
Services (``Swing-Beds'') (Sec.  482.66)
    Currently, these requirements are located in Subpart E of Part 482, 
Requirements for specialty hospitals. As such, the requirements fall 
outside of those requirements that can be surveyed by an Accreditation 
Organization (AO), such as TJC, AOA, or DNV, as part of its CMS-
approved Medicare hospital accreditation program. We believe the 
requirements at Sec.  482.66 would be more appropriately located under 
Subpart D of Part 482, optional hospital services, since swing-bed 
services are optional hospital services for eligible rural hospitals.
    Therefore, we proposed to reassign all of the requirements for 
swing-bed services found currently at Sec.  482.66, Subpart E, to Sec.  
482.58, Subpart D. This change would allow compliance with the swing-
bed requirements to be evaluated for accredited hospitals during 
routine AO surveys. As indicated in the proposed rule, by no longer 
requiring an accredited hospital to undergo a separate survey by a 
State Survey Agency (SA) to determine continued compliance with the 
swing-bed requirements in addition to the AO survey for the other CoPs, 
this proposed change would likely reduce the burden on such a hospital. 
We welcomed public comments on this proposed change.
    We received a total of 8 comments on our proposed changes to Sec.  
482.66, primarily from accreditation organizations and hospital 
organizations. Commenters were supportive of the proposed changes. 
There were no comments opposed to the proposed changes to Sec.  482.66.
    In accordance with the comments discussed above, we are reassigning 
all of the requirements for swing-bed services found currently at Sec.  
482.66, Subpart E, to Sec.  482.58, Subpart D as proposed. We are also 
making conforming amendments to correct cross-references in Sec. Sec.  
413.24, 413.114, 440.1 and 485.606.
    Contact for all hospital topics, CDR Scott Cooper, USPHS, (410) 
786-9465.

D. Transplant Centers and Organ Procurement Organizations

1. Reports to CMS (Sec.  482.74)
    On March 30, 2007, we published the ``Hospital Conditions of 
Participation: Requirements for Approval and Re-approval of Transplant 
Centers to Perform Transplants Final Rule'' (transplant center final 
rule, 72 FR 15198). In that rule, we required that transplant centers, 
among other things, report to CMS any significant changes related to 
the center's transplant program or changes that could affect its 
compliance with the CoPs. Among other things, transplant centers must 
notify us, under Sec.  482.74(a)(2), whenever there is a decrease in 
the center's number of transplants or survival rates that could result 
in the center being out of compliance with the clinical experience 
(number of required transplants) or outcome (survival) requirements at 
Sec.  482.82.
    We routinely receive information about the number of transplants a 
center performs and survival information from all transplant centers. 
Transplant centers are required to submit these data to the Organ 
Procurement and Transplantation Network (OPTN) national database for 
transplantation. These data are provided to the Scientific Registry of 
Transplant Recipients (SRTR), which publicly releases outcome 
(survival) information every six months, after the data have been risk-
adjusted. CMS also receives more recent survival information via the 
Social Security Master Death File. CMS receives clinical experience 
data and the Social Security Master Death File quarterly, as well as 
the risk-adjusted outcomes from the SRTR data every six months. Thus, 
CMS is essentially receiving the same information from the transplant 
programs individually that we receive routinely from one or more of the 
resources cited above.
    In addition to the above, this notification requirement has also 
resulted in confusion for the transplant centers. The requirement 
states that transplant centers should notify CMS when they are out of 
compliance with a 3-year average of 10 transplants per year. Since the 
clinical experience standard is based on an average, a transplant 
center may not know if a given year's volume would be low enough to 
have the average fall below 10 per year and trigger reporting to CMS, 
particularly when the number of transplants to be performed in a future 
year is unknown.
    Further, the requirement for notification of outcomes non-
compliance is based on the difference

[[Page 27123]]

between the observed and the expected outcomes exceeding certain 
thresholds. However, the expected outcomes are not calculated until at 
least one year later when the one-year post-transplant tracking period 
for patient and graft survival is complete. The transplant program 
would not always know whether a given death or graft failure would put 
them out of compliance and require notification to CMS. Eliminating 
this notification requirement will also remove this confusion for the 
transplant centers.
    Thus, the requirement for transplant centers to report a decrease 
in the center's number of transplants or survival rates when those 
results could result in the center being out of compliance with the 
measures in Sec.  482.82 is unnecessary, confusing, and burdensome for 
transplant centers. Therefore, we proposed to eliminate the requirement 
at Sec.  482.74(a)(2) that transplant centers notify us. The removal of 
this requirement would have no impact on the quality of care to 
transplant recipients, living donors, or potential donors, because our 
identification and follow-up processes for programs that do not meet 
Sec.  482.82 remain unchanged.
    We received a total of six comments on our proposed change to Sec.  
482.74 from health care providers and institutions, as well as from two 
national associations of transplant professionals. All of the 
commenters were supportive of the proposed change. We respond to 
specific comments below:
    Comment: Most of the commenters noted that data are already 
routinely submitted to the OPTN and then these data are provided to the 
SRTR, which publicly releases outcome (survival) information every six 
months, after the data have been risk-adjusted. CMS also receives more 
recent survival information via the Social Security Master Death File. 
CMS receives clinical experience data and the Social Security Master 
Death File quarterly, as well as the risk-adjusted outcomes from the 
SRTR data every six months. Thus, CMS is essentially receiving the same 
information from the transplant programs individually that we receive 
routinely from one or more of the resources cited above. The commenters 
noted that this process is time consuming, labor intensive, and 
duplicative.
    Response: We agree with the commenters. We believe that requiring 
transplant centers to report these data that are routinely available to 
CMS is unnecessary, confusing, and burdensome for transplant centers. 
In accordance with the comments discussed above, we are finalizing the 
change to Sec.  482.74(a)(2) as proposed.
2. Transplant Outcome Review (Sec.  482.80(c) and Sec.  482.82(c))
    Sections 482.80(c), approval, and 482.82(c), reapproval, in the 
transplant center CoPs state that, ``[e]xcept for lung transplants, CMS 
will review adult and pediatric outcomes separately when a center 
requests Medicare approval to perform both adult and pediatric 
transplants.'' At the time the transplant center final rule was 
published (March 30, 2007), the adult data cohorts for lung transplants 
included transplant patients 12 years of age and older. As of June 
2010, the adult data cohort includes only those transplant patients 
that are 18 years of age and older. The age categories for lung 
transplant patients are now the same as for all of the other 
transplants reported in the SRTR center-specific reports (See OPTN/SRTR 
2010 Annual Data Report, Rockville, MD: Department of Health and Human 
Services, Health Resources and Services Administration, Healthcare 
Systems Bureau, Division of Transplantation: 2011). We are reviewing 
the adult and pediatric outcomes separately for all programs that 
request Medicare approval to perform both adult and pediatric 
transplants, including the lung transplant program. This language, 
``except for lung transplants,'' is no longer necessary. Therefore, we 
proposed to remove the exception language for lung transplants from 
Sec. Sec.  482.80(c) and 482.82(c).
    We received a total of two comments on our proposed changes to 
Sec. Sec.  482.80(c) and 482.82(c) from a health care provider and 
institution, as well as a national association of transplant 
professionals. All of the commenters were supportive of the proposed 
changes. We respond to specific comments below:
    Comment: Both of the commenters supported the proposed deletion of 
the phrase, ``except for lung transplants.'' One commenter specifically 
noted that this change clarifies that ``adult and pediatric outcomes 
will be reviewed separately for all [transplant] programs [when they] 
request Medicare approval to perform both adult and pediatric 
transplants, including lung transplant programs.''
    Response: We agree with the commenters. Since the age cohorts are 
now the same for all transplant patients, including lung transplants, 
this language is unnecessary and only causes confusion.
    In accordance with the comments discussed above, we are finalizing 
the changes to Sec. Sec.  482.80(c) and 482.82(c) as proposed.
3. Volume and Clinical Experience Requirements (Sec. Sec.  482.80(c)(2) 
and 482.82(c)(2))
    Regulations at Sec. Sec.  482.80(c)(2) and 482.82(c)(2) both state 
``[t]he required number of transplants must have been performed during 
the time frame reported in the most recent SRTR center-specific 
report.'' We proposed to modify this language to harmonize it with 
other parts of the current rule. Under the current rule, transplant 
centers are generally required, with some exceptions, to perform either 
10 transplants over a 12-month period for initial approval (Sec.  
482.80(b)) or an average of 10 transplants each year during the 
approval period (Sec.  482.82(c)(2)) (preceding reapproval). There is 
no requirement for a certain number of transplants to be performed 
during a particular period that would be covered in a single SRTR 
center-specific report. Thus, this language has resulted in transplant 
centers being confused about the number of transplants they are 
required to perform during any particular period of time covered by the 
SRTR center-specific reports. Therefore, we proposed to remove both 
Sec. Sec.  482.80(c)(2) and 482.82(c)(2), and to redesignate the 
existing paragraph (c)(3) as (c)(2) to clarify the volume and clinical 
experience requirements.
    We received a total of two comments on our proposed changes to 
Sec. Sec.  482.80(c)(2) and 482.82(c)(2) from a health care provider 
and institution, as well as two national associations (writing 
together) for transplant professionals. All of the commenters were 
supportive of the proposed changes. We respond to specific comments 
below:
    Comment: Both comments noted that the requirement was confusing and 
the proposed change would provide clarification. One of the commenters 
specifically noted that ``the SRTR uses a ``rolling'' time frame and 
[the current language] is therefore confusing.''
    Response: We agree with the commenters that the current language is 
confusing because there is no requirement for a transplant center to 
perform a certain number of transplants ``during the time frame 
reported in the most recent SRTR center-specific report.'' Removing 
this language as proposed will eliminate this confusion. In accordance 
with the comments discussed above, we are finalizing the changes to 
Sec. Sec.  482.80(c)(2) and 482.82(c)(2) as proposed.

[[Page 27124]]

4. Transplant Center Re-Approval Process
    Since the effective date of the CoPs, June 28, 2007, we have 
completed the initial surveys of all transplant programs that 
participate or seek participation in Medicare (approximately 845 
transplant centers in 245 transplant hospitals), and have started 
conducting re-approval surveys. The current process and regulatory 
criteria require, under particular conditions, an automatic onsite 
review of all CoPs under a 3-year re-approval cycle. We believe that 
onsite surveys for some of these transplant centers are advisable to 
promote the health and safety of the patients who receive a transplant 
in those centers. However, we believe that the time period between 
recertification surveys should be more flexible, certain current 
requirements for an onsite survey following evidence of a violation of 
some CMS requirements may not be necessary, and such regulatory 
requirements for selecting the facilities that would undergo an onsite 
survey do not always effectively target survey resources where they are 
most needed.
    We proposed to remove the automatic 3-year re-approval process in 
favor of a schedule in which each transplant program still has a full 
onsite recertification survey but the time interval between such 
surveys for any one program may be longer or shorter than once every 
three years. In addition, we plan to maintain, via CMS policy, a 
maximum time interval within which we expect an onsite survey to occur 
with respect to individual transplant centers. We have a variety of 
sources we use to generate targeted quality information that can be 
used to determine the circumstances and frequency under which an onsite 
survey is best conducted. Examples include previous complaint surveys, 
prior onsite survey results, issues found during surveys of the broader 
hospital CoPs, data and information from the Health Resources and 
Services Administration (HRSA) and the SRTR, notifications of program 
inactivity, key personnel changes, articles from the press about 
quality issues, and information submitted by the program through the 
mitigating factors (MF) process.
    We also proposed to (1) clarify that the review of mitigating 
factors may occur at any time if there is non-compliance with the CoPs, 
and (2) remove language stating that a transplant program is approved 
for 3 years. However, it is expected that compliance with CMS 
requirements is continuous, as is expected of all Medicare providers 
and suppliers.
    Currently the regulations require that we review each transplant 
program's data before the end of 36 months after the program's prior 
approval. The regulations require a review of most other CoPs if we 
find that there is non-compliance with the requirements at Sec.  
482.82(a) for timeliness of data submission to the OPTN, or non-
compliance with the requirements at Sec.  482.82(b) for clinical 
experience, or at Sec.  482.82(c) for patient and graft survival 
outcomes. An onsite survey for analysis of these data is the most 
common method of conducting such a review, but we have found that an 
onsite review for deficiencies in these areas is not always necessary 
if CMS determines that communication with the program and offsite 
analysis of information submitted by the hospital will suffice to make 
a final determination and/or approve a plan of correction. For 
instance, CMS regulations require that transplant programs submit 95 
percent of their OPTN forms within 90 days of their due date. On a 
quarterly basis, we receive data from the OPTN that provides us with 
the number of forms due for each program and the number that were 
submitted within the required timeframe. Based on the 3-year period 
from mid-2008 through mid-2011, 73 transplant programs had data 
submission rates below 95 percent and, if due for re-approval, would 
have required an onsite survey. Of these 73, most (43 programs) had 
average data-submission rates between 90 and 95 percent. While remedial 
action is necessary in every case, it does not follow that these 43 
programs required an automatic, onsite survey. We proposed that we can 
take action to address the non-compliance (such as through direct 
communication with hospital officials and, if necessary, application of 
remedies already available in law or regulation) while reserving for 
CMS's discretion the decision of whether or not an onsite survey is 
necessary or advisable.
    We also receive data on a quarterly basis about the number of 
transplants performed at each center. Because of this data transfer, we 
are routinely aware of the average number of transplants being 
performed by or at a given transplant program. There are circumstances 
where it would not be in the public interest to spend the resources to 
perform a full onsite transplant center survey solely because the 3-
year average volume is low. For example, if a transplant program had 
performed an average of 9.3 transplant surveys over the prior 3-year 
period (fewer than the current requirement of an average of 10 per 
year), and the most recent year indicated 14 transplants performed, 
sending a full team to do an onsite survey of all CoPs, for this reason 
alone, may not make the best use of limited resources for the hospital 
or for CMS.
    Of the approximately 845 total transplant programs, 442 are 
required to meet clinical experience requirements (that is, volume 
requirements). Pediatric transplant programs and adult heart/lung and 
adult pancreas programs do not have to meet clinical experience 
requirements (Sec. Sec.  482.80(d) and 482.82(d)). Using clinical 
experience data from October 1, 2008 through September 30, 2011, 30 
transplant programs that were required to meet experience requirements 
had performed fewer than the required number of 10 transplants per year 
on average. If due for re-approval, these 30 programs would have 
required an onsite survey regardless of any other evidence CMS may have 
had from history, recent program improvements, or the most recent 
clinical experience.
    We monitor and enforce Medicare's requirements for patient and 
graft survival rates every 6 months based on the most recent report 
from the SRTR. A program is out of compliance if its observed patient 
and graft survival is significantly lower than expected to such an 
extent that it crosses three thresholds set out in the CoPs at Sec.  
482.82: The observed minus expected is greater than 3, the observed 
divided by expected is greater than 1.5, and the one-sided p-value is 
less than .05 (Sec.  482.82(c)(3)).
    We follow up with these transplant programs through an offsite 
survey, an onsite complaint survey, or an onsite full re-approval 
survey. These follow-up activities are conducted by the CMS Regional 
Office, a federal contractor, or the State Survey Agency (acting on 
CMS's behalf). The follow-up occurs at the time of non-compliance and 
does not wait until the re-approval survey occurs. Following the 
citation of an outcomes deficiency and the establishment of a date for 
prospective termination from Medicare participation, programs may 
submit an application for mitigating factors (MF) based on non-
compliance with the outcomes CoP. We provide ample time between the 
citation and the prospectively scheduled Medicare termination date for 
the program to provide evidence and, via conference call, discussion of 
the evidence that would support the mitigating factors request. If the 
MF request is approved, we specify the time period for the MF

[[Page 27125]]

approval and remove the prospectively scheduled Medicare termination.
    We also proposed to provide at the new Sec.  488.61(c)(3)(v) an 
example of a set of mitigating factors that we would consider. We have 
granted a very small number of MF requests on the basis of the 
categories currently used as examples in the regulation, such as 
natural disasters (one case) or access to care (one case). However, we 
have more frequently granted MF requests in cases where the transplant 
center has implemented substantial program improvements that address 
root causes of past graft failures and/or patient deaths, has 
institutionalized those improvements so they may be sustained over 
time, and has been able to demonstrate recent outcomes data with 
sufficient volume and with sufficient post-transplant survival periods 
such that we conclude that the program is in present-day compliance 
with the outcomes requirements in the regulation, but for the data time 
lag inherent in the SRTR reports upon which we otherwise rely. CMS has 
approved an MF request for 35 transplant programs on this basis since 
the implementation of the regulation in 2007. Additional MF approvals 
have been made pursuant to dialogue and a binding System Improvement 
Agreement between CMS and the transplant center that the hospital will 
engage in a clear regimen of quality improvement and the hospital 
subsequently demonstrated both substantial completion of that regimen 
and improved outcomes. We believe that the addition of this example in 
the body of the regulation will provide better guidance for transplant 
centers, offer encouragement for the productive application of hospital 
staff expertise in making program improvements that increase patient 
and graft survival, and promote government transparency.
    We received a total of twelve comments from nine commenters on our 
proposed changes to Sec.  488.61(c) from health care providers, 
institutions, and associations, as well as two national associations 
for transplant professionals and one national accrediting organization. 
Overall, the majority of commenters were supportive of the proposed 
changes. We respond to specific comments below:
    Comment: Two of the commenters disagreed with our proposal to 
remove the automatic three-year re-approval process. One commenter, a 
healthcare professional, stated that the OPTN does not do a good job of 
monitoring programs that have failed to meet outcome requirements or 
have otherwise failed to maintain their programs. The commenter 
indicated that CMS should realize, after six years of routine surveys, 
that many of the programs that are not in compliance with the CoPs are 
unwilling or unable to meet the requirements in the CoPs, even knowing 
that they would be surveyed. The commenter noted that one of the 
reasons for the transplant center CoPs was because of the ``very public 
problems'' in transplant programs. The commenter also said he thought 
it was foolish for CMS to abandon its most effective tool, the routine 
survey.
    Response: We disagree with this commenter. Although we agree with 
the commenter that the onsite survey is an effective tool for ensuring 
compliance with the transplant center CoPs, we also believe onsite 
surveys are not necessary for all transplant centers. As discussed 
above, the current requirement for automatic, onsite surveys for 
transplant centers based solely on that transplant center's failure to 
be in compliance with the data submission, clinical experience, or 
outcome requirements in Sec.  482.82 is often an inefficient use of 
CMS's survey resources. Transplant centers that are not in compliance 
with these requirements certainly require CMS follow-up; however, we 
believe that the type of follow-up should be up to CMS's discretion. 
Requiring automatic, onsite surveys, regardless of the degree and type 
of non-compliance, will inevitably result in onsite surveys being 
conducted at transplant centers when another type of follow-up would 
have adequately addressed the non-compliance with a more efficient use 
of CMS' limited survey resources.
    Comment: Another commenter, a national accrediting organization, 
expressed concern over CMS not conducting on-site surveys unless the 
results of data analysis warranted such a review. Data gleaned from the 
SRTR may not be a reliable indicator of the quality of the care being 
delivered and the commenter did not believe that this should be the 
sole determinant of whether there should be an on-site survey. The 
commenter stated that the proposed method by which the data would be 
collected by CMS raises concern about whether organizations that are 
found deficient would have the opportunity to amend their practices 
before they are penalized. Transplant centers that submit unreliable 
data, which may or may not contain balancing measures to account for 
the complexities of its individual populations, risk not meeting the 
CMS threshold for quality care and potential unwarranted penalties. The 
commenter also noted that, in their experience, surveying healthcare 
facilities supports the need for validation of data and documentary 
evidence with onsite review and that they believe the proposed approach 
is inconsistent with CMS' evaluation of quality and safety of other 
high-risk healthcare programs and services.
    Response: We disagree with this commenter. We will continue to 
conduct onsite surveys of all transplant centers. We are eliminating 
the 3-year approval period, which previously included a policy that 
onsite surveys be triggered by the failure of a center to be in 
compliance with the data submission, clinical experience, or outcome 
requirements in Sec.  482.61(c). CMS is constantly enforcing the 
transplant center CoPs through the review of data from the SRTR, 
offsite surveys, and complaint surveys. In addition, as stated above, 
we will also be establishing, through CMS subregulatory policy, a 
maximum time interval within which we expect that each transplant 
center will have an onsite survey.
    Regarding the commenter's concern about the SRTR data, we are 
obligated by the OPO CfCs to use SRTR's data (at Sec.  486.318(a)(2) 
and (b)(2)). In addition to the SRTR data, we also review data from 
other sources and other information in determining when to survey OPOs. 
For example, we may conduct a survey when we receive a complaint from a 
healthcare provider or the public. We may also decide to conduct a 
survey after receiving information through another governmental agency 
or the media.
    In regards to the commenter's concern about transplant centers 
having the ability to make changes to their programs before being 
penalized by CMS, we believe that all of the transplant centers monitor 
their performance on the requirements. In addition, transplant centers 
are required to have a comprehensive, data-driven quality assessment 
and performance improvement (QAPI) program that is designed to monitor 
and evaluate the center's performance of all transplantation services 
as set forth in Sec.  482.98. Therefore, transplant centers should be 
aware of any problems in their programs and be working towards 
improving their performance.
    CMS constantly monitors and enforces the transplant center CoPs 
through the review of available data, offsite surveys, and complaint 
surveys. In addition, we are not abandoning the onsite survey process. 
Our proposal simply allows us to use discretion, based upon our 
extensive experience with transplant centers, to determine when an 
onsite survey is necessary and

[[Page 27126]]

when another type of follow-up is appropriate. Also, CMS will be 
establishing via policy a maximum time interval within which an onsite 
survey must occur.
    Comment: One commenter, a healthcare institution, noted that our 
proposed addition to the examples of mitigating factors CMS would 
consider in the re-approval of a transplant center in Sec.  488.61(c) 
should be in set forth in paragraph (c)(4), not paragraph (c)(3).
    Response: We agree with the commenter. The examples of the 
mitigating factors CMS will consider are set forth in Sec.  
488.61(c)(4) and the proposed additional example should also be located 
in that section. Therefore, we will be finalizing our additional 
example of a mitigating factor as proposed; however, we will be re-
designating it so that it is set forth at Sec.  488.61(c)(4)(v).
    After consideration of the comments discussed above, we are 
finalizing the changes to Sec.  488.61(c) as proposed, except for re-
designating proposed Sec.  488.61(c)(3)(v) as Sec.  488.61(c)(4)(v).
5. Technical Corrections
    On May 31, 2006, we published the Conditions for Coverage for Organ 
Procurement Organizations (OPOs) Final Rule (OPO final rule 71 FR 
30982). We have discovered that there were some technical errors in 
that rule. Therefore, we proposed to make the following technical 
corrections:
     Section 486.306 states, in paragraph (a), that ``An OPO 
must make available to CMS documentation verifying that the OPO meets 
the requirements of paragraphs (b) through (d) of this section . . .'' 
This section only contains paragraphs (a), (b), and (c). We proposed to 
delete the reference to ``(d)'' in paragraph (a) and insert ``(c)'' in 
its place. This paragraph would then read, ``the OPO meets the 
requirements of paragraphs (b) and (c) of this section . . .''
     Section 486.308(b)(1) reads, in part, ``if additional time 
is needed to select a successor OPO to an OPO that has been de-
certified.'' We proposed to remove the ``to'' between the two ``OPOs'' 
and replace it with ``for'' in this sentence. The paragraph would then 
read, ``if additional time is needed to select a successor OPO for an 
OPO that has been de-certified.''
     Section 486.344(d)(2)(ii) reads, in part, ``If the 
identify of the intended recipient is known. . . .'' We intended to say 
the ``identity'' of the intended recipient. We proposed to remove the 
word ``identify'' and replace it with ``identity.'' The clause would 
then read, ``If the identity of the intended recipient is known . . .''
    We received one public comment in response to these proposed 
technical corrections. That commenter supported the corrections as 
proposed. Therefore, we are finalizing these changes as proposed.
    In addition to the comments we received concerning our proposed 
changes, we also received comments that were extraneous to those 
changes. Since these comments address issues beyond the scope of this 
rule, we will not specifically respond to them here. However, we have 
reviewed these comments and will consider them in any future 
rulemaking.
    Contact for all transplant center and OPO topics: Diane Corning, 
(410) 786-8486.

E. Long-Term Care Facilities

    On August 13, 2008, we published a final rule requiring all 
buildings containing long term care facilities to have automatic 
sprinkler systems installed throughout the building (73 FR 47075). The 
deadline for meeting this requirement was August 13, 2013. The 
regulation requires that all facilities be in compliance. On August 16, 
2013, CMS issued a memorandum to State survey agencies describing 
enforcement guidelines for this requirement (see Survey & Certification 
Memorandum SC-13-55, accessible at https://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/Survey-and-Cert-Letter-13-55.pdf). Life Safety Code (LSC) 
surveys will continue to occur as part of normally-scheduled annual 
surveys, or as part of a complaint visit in which LSC deficiencies are 
noted or referred. LSC surveys that find a facility to be without a 
complete automatic sprinkler system installed in accordance with NFPA 
101, LSC, 2000 Edition and NFPA 13, Installation of Sprinkler Systems, 
1999 edition will be cited as not in compliance with CMS requirements. 
Facilities that are cited for not meeting the sprinkler requirement 
will be required to submit a plan of correction (POC) to correct the 
deficiency.
    The 2008 final rule was based on a CMS analysis of fire safety in 
nursing homes, and the agency's conclusion that fire safety protections 
would clearly be improved by ensuring that all facilities be fully 
sprinklered within a reasonable period of time. Based on recent public 
comments and input, we believe that some facilities were not able to 
meet the August 2013 deadline due to the magnitude of the enterprise 
they are undertaking (such as large scale construction of a replacement 
facility) combined with recent financial and construction constraints. 
We therefore proposed to allow certain long term care facilities to 
apply for a temporary deadline extension of the sprinkler system 
requirement, under very limited circumstances, if they are unable to 
meet the deadline. Our intent is to establish a rigorous review process 
for all deadline extension requests. Upon finalization of this rule, 
CMS will continue to cite facilities that do not meet the requirement, 
except that CMS may grant extensions of the due date to the relatively 
small number of facilities that meet the extenuating circumstances set 
forth below.
    We proposed to add a provision at Sec.  483.70(a)(8)(iii) that 
would allow long term care facilities the opportunity to apply for a 
deadline extension, not to exceed 2 years, if all of the following 
conditions apply:
     The facility is in the process of replacing its current 
building, or undergoing major modifications in all unsprinklered living 
areas and that requires the movement of corridor, room, partition, or 
structural walls or supports to improve the living conditions for 
residents, in addition to the installation of a sprinkler system;
     The facility demonstrates that it has made the necessary 
financial commitments to complete the building replacement or 
modification;
     The facility has submitted construction or modification 
plans to the State and local authorities that are necessary for 
approval of the replacement building or modification prior to applying 
for the deadline extension; and
     The facility agrees to complete interim steps to improve 
fire safety of the building while the construction is being completed, 
as determined by CMS. This could include a fire watch, installation of 
temporary exits and temporary smoke detection systems, or additional 
smoke detection systems in the area of construction, increased fire 
safety inspections, additional training and awareness by staff, and 
additional fire drills.
    An extension may be granted for up to 2 years, depending on the 
need and particular circumstances. We would determine the length of the 
extension based on the information submitted by the facility.
    We also proposed to add a provision at Sec.  483.70(a)(8)(iv) that 
would allow for a renewal of the deadline extension for an additional 
period, not to exceed 1 additional year. We proposed that a facility 
could only apply for a single extension renewal.

[[Page 27127]]

    We received a total of 13 comments on our proposed sprinkler 
deadline extension provision from individuals and organizations such as 
accrediting bodies, patient advocacy groups, health care systems, and 
LTC facilities. Overall, the majority of commenters were supportive of 
the proposed changes. Here we respond to specific comments:
    Comment: The majority of commenters supported the proposal and 
thanked us for the opportunity to comment in support of the proposal. 
Several commenters disagree with our proposal to grant extensions. One 
commenter expressed that allowing for this extension could compromise 
the safety of nursing homes patients, as they are continuing to live in 
facilities that do not have sprinklers in them during the extension 
period. In addition, one commenter felt that only facilities that are 
currently unoccupied should be able to apply for this extension to 
ensure the safety of patients and staff.
    Response: We thank the commenters who expressed support for our 
proposal and agree that this regulation is necessary in order to allow 
facilities that have run into issues the opportunity to become 
compliant while also continuing to provide the safest environment 
possible for all patients and staff.
    We understand that the commenters disagree with the proposal to 
grant extensions in certain circumstances because they feel that 
facilities have had ample time to come into compliance with the 
sprinkler requirement. Some facilities will not be able to meet the 
deadline and will need the extension to allow for the completion of 
construction. If the facilities are not given an extension it may cause 
facilities to be closed and will require patients to be moved to other 
facilities that may be further away and not as easily accessible. An 
example of unforeseen issues that may have caused a facility to be 
unable to meet the 2013 deadline may be delayed construction or 
depleting funds. For example, many providers established financial 
plans to construct a replacement facility that would comply with the 
sprinkler requirement, or to effect substantial building modifications 
that would include fund sprinkler compliance projects. However, 
following the initial CMS final rule in 2008 that mandated automatic 
sprinkler systems, a number of such facilities found their financial 
gains disappear due to the national recession, depleting the project 
funds, or making it impractical to sell an existing facility where the 
sale was necessary to fund the replacement facility. Also, challenges 
have come from the recent natural disasters such as Hurricane Irene in 
2011 and Superstorm Sandy in 2012, causing delays in project starts and 
creating a backlog of projects.
    We also understand the safety concerns of the commenters who 
disagreed with our proposal. We share their goal of improving safety 
for all long term care facility residents while continuing to assure 
resident stability and access to much needed long term care services. 
We are requiring that, as part of receiving an extension, a facility 
must implement interim fire safety measures. Interim measures may 
include the initiation of a fire watch, installation of temporary 
exits, installation of temporary smoke detection or smoke alarm 
systems, and increased fire safety training or fire drills for staff or 
other means to ensure the continued fire safety of the residents of the 
facility.
    Comment: One commenter observed that recent natural disasters, 
including Hurricane Irene and Superstorm Sandy, have significantly 
impaired the ability of some nursing homes to meet the August 13, 2013, 
deadline to achieve full sprinkler status. The commenter observed that 
recent challenges from Superstorm Sandy in late 2012 caused delays in 
project starts and a backlog of construction projects and requested 
that we provide for an additional extension one year beyond what we 
proposed.
    Response: We agree that natural disasters are a valid reason for a 
delay in compliance with the August 13th deadline. In reviewing the 
comments, we concluded that the original CMS proposal did not fully 
accommodate the significant impairments that might result from a major 
disaster. While section 1135 of the Act allows the Secretary to waive 
certain requirements in the case of a declared public health emergency, 
construction delays and financial hardships occasioned by a major 
disaster may extend far beyond the date of a declared public health 
emergency. While we still intend that any authority for an extension of 
the sprinkler deadline be narrowly construed, in this final rule we 
have added explicit recognition of a major disaster event as a 
potential basis for an extension of the due date at Sec.  
483.70(a)(8)(iii). We do believe that three years is a considerable 
amount of time in which to complete the construction, even if a 
facility is impacted by a natural disaster. Therefore, we are 
finalizing the extension timeframe as proposed.
    Comment: Some commenters have seemingly used the public comment 
process to apply for an extension, while others explicitly requested an 
explanation of the process.
    Response: We appreciate the opportunity to explain the process for 
submitting an application. As we proposed, and are finalizing in this 
rule, a facility must meet the following criteria in order to qualify 
for an extension:
    1. The facility is in the process of replacing its current 
building, or undergoing major modifications in all unsprinklered living 
areas and that requires the movement of corridor, room, partition, or 
structural walls or supports to improve the living conditions for 
residents, in addition to the installation of a sprinkler system or has 
had its planned sprinkler installation so impaired by a disaster or 
emergency, as indicated by a declaration under section 319 of the 
Public Health Service Act, that CMS finds it would be impractical to 
meet the sprinkler installation due date.
    2. The facility demonstrates that it has made the necessary 
financial commitments to complete the building replacement or 
modifications;
    3. The facility has submitted construction or modification plans to 
the State and local authorities that are necessary for approval of the 
replacement building or modification prior to applying for the deadline 
extension; and
    4. The facility agrees to complete interim steps to improve fire 
safety of the building while the construction is completed, as 
determined by CMS. This could include a fire watch, installation of 
temporary exits and temporary smoke detection systems or additional 
smoke detection system in the area of construction, increased fire 
inspections, additional training and awareness by staff, and additional 
fire drills. CMS may also require that information about these interim 
steps be posted in the facility in an informational manner accessible 
to residents and family members.
    In order to demonstrate that it meets the above criteria, a 
facility must submit certain information. The following are examples of 
information that may need to be submitted by the facility. We intend 
for this list to be merely illustrative, and note that it does not 
include all possible information that may be requested by CMS in order 
to make the final extension decision. This list is subject to change 
and the process will be described in further detail in subregulatory 
guidance.
    (1) Organization Information: The name, address, CCN, contact 
information, and other data regarding

[[Page 27128]]

the nursing home that is requesting the extension.
    (2) Type and Qualifications of Request: (a) Replacement Facility or 
(b) Major Modification, or (c) major disaster. A request from the 
facility for an extension of time to complete the installation of an 
automatic sprinkler system and the circumstances behind the request for 
an extension of time, including a description of what the facility is 
proposing (such as a replacement of the existing facility or major 
modification of the living area, or reconstruction from a major 
disaster), and an explanation of the circumstances that prevent timely 
installation of the sprinklers and that qualify the request for an 
extension approval under terms of the regulation.
    (3) Timeframe: The length of time for which the extension is 
requested.
    (4) Major Modifications: In the case of the major modification of 
the living area, a description and/or drawing of the proposed work 
shall be submitted for review, a listing of all units affected, square 
footage involved, overall estimated project cost, proposed length of 
time for the extension, correspondence to the State Licensure Authority 
concerning the proposed major modifications to the facility and their 
response to such request, an explanation of the manner in which the 
modifications will improve the environment for residents, and whether 
any residents or residents might be negatively affected by the 
modifications.
    (5) Projected Milestones: A list of project milestones for 
completion of the modifications or replacement of the facility will be 
required to be submitted for review to help in determining the length 
of the extension time required to complete the work proposed.
    (6) Financial Commitments: Documentation from financial 
institutions attesting to the facilities financial capabilities to 
complete the building replacement or modifications. This could include 
such things as final loan approvals, final grant approval or other such 
things that could enable CMS to determine the financial capabilities of 
the facility to complete the project in a timely manner.
    (7) Construction Documentation: Documentation concerning the 
submittal of construction plans and specifications for the replacement 
of an existing long term care facility or the modification of an 
existing long term care facility. This information shall include 
correspondence with State and local plan approval authorities 
indicating approval or receipt of plans for approval and the date of 
anticipated plan approval from the approving authorities. For 
facilities with partial plan approval or preliminary plan approval a 
copy of any final approval documentation will also be required to be 
submitted when received by the facility.
    (8) Interim Fire Safety Improvements: Suggestions for any enhanced 
measures that the facility has implemented or could implement to 
strengthen resident protections against fire hazard during the time 
period prior to final achievement of full sprinkler status for the 
facility.
    A facility requesting an extension of time must submit the required 
information to the appropriate CMS Regional Office and State survey 
agency. CMS Central Office will post the major substance of the 
requests on an appropriate CMS Web site (such as https://www.medicare.gov/nursinghomecompare/), together with contact 
information for any public input. When the CMS Regional Office is 
satisfied that the submitted information is complete, it will consult 
with the State survey agency and make a recommendation to CMS Central 
Office regarding the request. The CMS Regional Office will also 
recommend any interim steps to improve fire safety at the requesting 
facility. CMS Central Office will review the submitted material from 
the CMS Regional Office, consult with the State fire Marshall and the 
State Ombudsman program, and make a final determination as to whether 
or not to grant the requested time extension and what interim fire 
safety steps will be required in the facility. CMS will notify the 
requesting facility and State survey agency as to the final 
determination. While an original deficiency citation is subject to 
appeal consistent with 42 CFR Part 498, we note that CMS's discretion 
to grant an extension of the due date is not subject to judicial 
appeal.
    If a further one time only one year extension is requested, further 
documentation from the facility will be required as to why the first 
extension requested was not adequate, when completion is anticipated, 
and what is being done to insure the continued fire safety of any 
existing building that has not had an automatic fire sprinkler system 
installed.
    Comment: A commenter suggested that we allow a 3 year waiver for 
facilities purchasing a new building without sprinklers to install 
sprinklers.
    Response: Facilities are free to purchase any building that becomes 
available, however the newly purchased facility will need to be in 
compliance before it is able to complete the Medicare process and 
become a Medicare approved facility. Therefore, the facility would need 
to be fully sprinklered before any occupancy.
    Comment: A few commenters suggested changes to the criteria that a 
facility must meet in order to qualify for the extension. One commenter 
suggested that facilities applying for the extension only be required 
to show that they are working toward securing the necessary financial 
commitments. Another commenter suggested that the construction plans 
must be approved by state and local authorities in order to qualify.
    Response: We would like to thank the commenters for giving us this 
opportunity to address suggestions and clarify any statements that may 
have been confusing. Facilities have already been given 5 years to 
comply with the 2013 deadline. The extensions we proposed were 
intentionally defined to apply only in circumstances where total 
facility replacement is being effected or major modification is 
planned. We consider these plans to be ones that are likely to be most 
affected by construction delays, market, or funding issues due to the 
recent national recession. Even in these circumstances, given the 5 
year advance notice, current low interest rates, and recent improvement 
in the real estate markets, we expect that a serious intention to fully 
install sprinklers would have evidence of the necessary financial 
commitments. We recognize that financial commitments often have 
contingencies attached to them (such as a loan that is contingent upon 
sale of another property), and will take such factors into 
consideration provided that there are firm commitments in place subject 
to fulfillment of the pertinent contingencies and other relevant 
considerations. With regard to the comment regarding approval by local 
authorities, while we agree that receiving approval of construction 
plans from state and local authorities is a positive sign that a 
project is on track to be completed by the end of the extension period, 
we do not believe that such approval is absolutely necessary at the 
time that a facility applies for an extension. Therefore, we are 
finalizing the extension criteria as proposed.
    Comment: One commenter suggested various types of alternative 
sanctions to penalize facilities for being out of compliance with the 
LTC sprinkler requirement. In addition, they also suggested that 
facilities should not be allowed to receive a waiver of liability for 
any fire-related injuries that occur as a result of the facility not 
being in compliance with the sprinkler requirement.

[[Page 27129]]

    Response: We are allowing facilities to apply for an extension only 
in very limited circumstances. If a facility meets the narrow terms of 
the regulation, and fulfills the terms of any requirements that 
accompany an approval (such as enhanced procedures for added fire 
protection during the extension period), then imposition of a penalty 
would be inconsistent with CMS concurrence that the facility met the 
terms of the regulation. However, we project that most facilities that 
were not fully sprinklered, as of the time of publication of the 
proposed rule, will not meet the terms of this narrowly-construed 
extension regulation. If such facilities have not achieved full 
sprinkler status by the sprinkler due date, then they will indeed be 
subject to sanction. With regard to waivers of liability, CMS does not 
have authority to waive civil or criminal liability.
    Comment: One commenter suggested that before applying for a waiver, 
facilities should have to notify the state survey agency, state long-
term care ombudsman; state fire marshal; local fire marshal; consumer 
advocacy groups; facility residents, families and other resident 
representatives; and the public of its intent to request a waiver; the 
reasons for its request; enhanced procedures it will take to ensure the 
safety of residents until compliance with the sprinkler requirement is 
achieved; its time frame for reaching compliance; and an opportunity 
for those receiving notification to attach comments and recommendations 
to the request. In addition to submitting comments and recommendations, 
the state survey agency, state ombudsman, and state fire marshal should 
be required to sign off on the request and the facility's plans for the 
interim safety of residents until sprinklers are installed. The 
commenter suggested that CMS should consider all comments and 
recommendations when deciding whether to grant the waiver.
    Response: We agree with the value of transparency in the process of 
facilities requesting extensions, as well as the CMS approval or denial 
process. We therefore plan to engage in a process whereby facilities 
will make requests to the CMS Regional Office and State survey agency. 
CMS Central Office will post the major substance of the requests on an 
appropriate CMS Web site (such as https://www.medicare.gov/nursinghomecompare/) together with contact information for any public 
input. When the CMS Regional Office is satisfied that the submitted 
information is complete, the staff will consult with the State survey 
agency and make a recommendation to CMS Central Office regarding the 
request. The CMS Regional Office will also approve the suggested 
recommended interim fire safety steps, or recommend any interim steps 
to improve fire safety at the requesting facility. CMS Central Office 
will review the submitted material from the CMS Regional Office, and 
make a final determination as to whether or not to grant the requested 
time extension and what interim fire safety steps will be required in 
the facility. CMS will notify the requesting facility and State survey 
agency as to the final determination. We remind facilities that a 
sprinkler deadline extension from CMS would not waive relevant State or 
local fire safety laws.
    Comment: One commenter expressed concern that some facilities might 
take this required construction as an opportunity to convert facilities 
to different levels of care, such as skilled nursing and 
rehabilitation. This could cause a problem if facilities then 
involuntarily discharge current nursing home residents to make room for 
skilled nursing or rehabilitation residents.
    Response: While we understand that the commenter is concerned about 
the possibility of this occurring, we are not aware of any facilities 
that have used the construction associated with installing sprinklers 
as an opportunity to change the care level of any beds from unskilled 
to skilled, or to involuntarily discharge residents during the entirety 
of the phase-in period. Since the vast majority of LTC facilities have 
already installed sprinkler systems and have not engaged in this 
practice, we have no basis from which to conclude that the small 
minority of facilities that would qualify for this extension would 
suddenly begin doing so. Furthermore, the LTC facility regulations at 
Sec.  483.12, Admission, Transfer, and Discharge Rights, contain strict 
requirements that govern the discharge of residents that would 
effectively curb the use of involuntary discharge practices. The 
regulations states that, the facility must permit each resident to 
remain in the facility, and not transfer or discharge the resident from 
the facility unless--
     The transfer or discharge is necessary for the resident's 
welfare and the resident's needs cannot be met in the facility;
     The transfer or discharge is appropriate because the 
resident's health has improved sufficiently so the resident no longer 
needs the services provided by the facility;
     The safety of individuals in the facility is endangered;
     The health of individuals in the facility would otherwise 
be endangered;
     The resident has failed, after reasonable and appropriate 
notice, to pay for (or to have paid under Medicare or Medicaid) a stay 
at the facility. For a resident who becomes eligible for Medicaid after 
admission to a nursing facility, the nursing facility may charge a 
resident only allowable charges under Medicaid; or
     The facility ceases to operate.
    Furthermore, the regulation also requires that the long term care 
facility must notify the resident and, if known, a family member or 
legal representative of the resident of the transfer or discharge and 
the reasons for the move in writing and in a language and manner they 
understand at least 30 days before the resident is transferred or 
discharged. The written notice must include the following:
     The reason for transfer or discharge;
     The effective date of transfer or discharge;
     The location to which the resident is transferred or 
discharged;
     A statement that the resident has the right to appeal the 
action to the State;
     The name, address and telephone number of the State long 
term care ombudsman;
     For nursing facility residents with developmental 
disabilities, the mailing address and telephone number of the agency 
responsible for the protection and advocacy of developmentally disabled 
individuals established under Part C of the Developmental Disabilities 
Assistance and Bill of Rights Act; and
     For nursing facility residents who are mentally ill, the 
mailing address and telephone number of the agency responsible for the 
protection and advocacy of mentally ill individuals established under 
the Protection and Advocacy for Mentally Ill Individuals Act.
    Appendix PP of the CMS State Operations Manual (https://cms.hhs.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/som107ap_pp_guidelines_ltcf.pdf) further directs LTC facility surveyors to closely 
review the clinical records of discharged residents to determine the 
reasons for transfer/discharge. Surveyors are also directed to 
communicate with the ombudsman and ask if there were any complaints 
regarding transfer and/or discharge, as well as the results of any 
ombudsman investigations. We believe that this comprehensive package of 
regulations and survey enforcement procedures provides an appropriate 
level of protection to assure that residents are not involuntarily 
discharged for reasons related to the installation of sprinklers in LTC 
facilities.

[[Page 27130]]

    Comment: One commenter suggested public notification of 
noncompliance. The commenter suggested public notice in two different 
forms--by posting a notice in the facility and also by a special 
notification posted on Nursing Home Compare.
    Response: We appreciate the commenter's suggestion. It is important 
to note that a facility receiving a deadline extension would not be 
considered non-compliant. If the facility has applied for an extension, 
and the extension has been granted, the facility would be considered 
compliant for the duration of the facility's approved time period. 
Therefore there would be no need to post a public notification of 
noncompliance.
    Comment: One commenter suggested specific interim staffing 
requirements and monitoring efforts is required for each facility that 
is granted an extension. The commenter suggested that CMS impose the 
following requirements:
    1. Hard-wired smoke alarms that automatically alert all sections of 
the facility and notify local fire departments and other emergency 
responders. These hard-wired smoke detectors should be placed in all 
resident rooms, public areas, laundry rooms, kitchens, basements, 
attics, and utility closets where combustible materials may be stored.
    2. Enhanced staffing to ensure that the facility and all units 
within the facility are adequately staffed on all shifts.
    3. Strict state survey agency monitoring to ensure that all staff 
on all shifts, including temporary staff, are sufficiently trained in 
Life Safety Code requirements and oriented to the facility and facility 
emergency procedures.
    4. Enhanced state surveys, including Life Safety Code inspections, 
during the waiver period to ensure the facility complies with all 
interim safety requirements, including staffing levels.
    5. Immediate jeopardy citations and appropriate remedies for 
failure to be in compliance with interim Life Safety Code requirements.
    Response: We agree that each of these could be an appropriate 
temporary fire safety measure; however we do not agree that all of 
these measures are necessary in every single facility. We believe that 
the best way to address interim fire safety measures is to customize 
them to each facility. Therefore, we are finalizing the regulation text 
that the facility must agree to complete interim steps to improve fire 
safety, as determined by CMS, as proposed. We will take the commenter's 
recommendations into consideration as we consider the unique aspects of 
each extension request.
    After consideration of the comments discussed above, we are 
finalizing the proposed changes to Sec.  483.70(a)(8)(iii) and (iv) 
with the minor modifications discussed above.
    Contact for long term care sprinkler topics: Kristin Shifflett, 
(410) 786-4133.

F. Rural Health and Primary Care

    We received a total of 60 comments on our proposed regulatory 
changes for Critical Access Hospitals (CAHs), Rural Health Clinics 
(RHCs), and Federally Qualified Health Centers (FQHCs). The comments 
came from national and state professional associations, state medical 
associations, health care systems, individual and group practitioners 
and consumer advocacy organizations. Overall, the majority of 
commenters were supportive of the proposed changes. There were also 
some specific dissenting comments, and other comments that suggested 
further changes. We respond to these comments here.
1. CAH Provision of Services (Sec.  485.635(a))
    The current CoPs at Sec.  485.635(a)(2) require CAHs to develop 
their policies and procedures with the advice of a group of 
professional personnel that includes one or more doctors of medicine or 
osteopathy and one or more physician assistants, nurse practitioners, 
or clinical nurse specialists, if they are on staff. Currently, at 
least one member of the professional group must be a non-CAH staff 
member. We proposed to remove the requirement that a CAH must develop 
its patient care policies with the advice of a non-CAH staff member, 
thereby allowing CAHs flexibility in their approach to developing their 
patient care policies and procedures. Specifically, we proposed to 
remove the provision at the end of Sec.  485.635(a)(2) that states, ``. 
. . at least one member is not a member of the CAH staff.''
    Comment: All of the commenters on our proposed change to Sec.  
485.635(a)(2) agreed with removing the requirement that a CAH must 
develop its patient care policies with the advice of a non-CAH staff 
member. Several commenters stated that CAHs typically engage in network 
arrangements with other non-CAH hospitals and that those arrangements 
provide a mechanism for review and assistance with the development of 
appropriate patient care policies.
    Response: We are pleased to have received favorable comments 
regarding the elimination of this requirement. After consideration of 
the comments discussed above, we are finalizing the changes to Sec.  
485.635(a)(2) as proposed.
2. CAH and RHC/FQHC Physician Responsibilities (Sec. Sec.  
485.631(b)(1)(v), 485.631(b)(2), and 491.8(b)(2))
    The current requirements for CAHs, RHCs, and FQHCs specify that a 
physician must be present in the CAH, RHC, or FQHC for sufficient 
periods of time at least once in every 2-week period, to provide 
medical direction, medical care services, consultation, and supervision 
of other clinical staff. The regulation further requires a physician to 
be available through telecommunication for consultation, assistance 
with medical emergencies, or patient referral. Sections 1861(aa)(2)(B) 
and 1820(c)(2)(B)(iv) of the Act require supervision and oversight of 
services furnished by physician assistants and nurse practitioners in a 
CAH, RHC, and FQHC but they do not prescribe the frequency of the 
physician visits nor do they require onsite supervision. We proposed to 
revise the CAH regulations at Sec.  485.631(b)(2) and the RHC/FQHC 
regulations at Sec.  491.8(b)(2) to eliminate the requirement that a 
physician must be onsite at least once in every 2-week period (except 
in extraordinary circumstances) to provide medical care services, 
medical direction, consultation, and supervision. For CAHs, we proposed 
that a doctor of medicine or osteopathy would be required to be present 
for sufficient periods of time to provide medical direction, 
consultation, and supervision for the services provided in the CAH, and 
be available through direct radio or telephone communication for 
consultation, assistance with medical emergencies, or patient referral. 
For RHCs and FQHCs, we proposed that physicians would be required to 
periodically review the clinic or center's patient records, provide 
medical orders, and provide medical care services to the patients of 
the clinic or center.
    In the course of reviewing public comments, we determined that the 
administrative burden on physicians and facilities could be further 
reduced by making an additional similar change to Sec.  
485.631(b)(1)(v). These requirements set out a similar 2-week minimum 
interval for physicians to review and sign a sample of outpatient 
records of patients cared for by nurse practitioners, clinical nurse 
specialists, certified nurse midwives, or physician assistants, 
according to the policies of the CAH and according to the State's 
current standards of practice. Accordingly, as discussed in further 
detail below and after consideration of

[[Page 27131]]

the public comments received, we will similarly revise Sec.  
485.631(b)(1)(v) to require that a sample of outpatient records be 
reviewed ``periodically.'' We believe that removing the specified 2-
weeks requirements at Sec. Sec.  485.631(b)(1)(v) and 485.631(b)(2), 
and at Sec.  491.8(b)(2), will provide CAHs, RHCs, and FQHCs with the 
flexibility to manage patient care activities in such a way as to 
maximize staff time to provide patient access to quality care in rural 
and remote areas.
    Finally, we note that for most outpatient therapeutic CAH services 
provided to Medicare beneficiaries, a physician or appropriate non-
physician practitioner is still required to furnish direct supervision 
and be immediately available to furnish assistance and direction for 
the duration of the service, in accordance with 42 CFR 410.27(a)(1). We 
continue to believe this is an appropriate standard for Medicare 
payment under section 1861(s)(2)(B) of the Act, which requires these 
services to be furnished incident to a physician's services and applies 
to CAHs if the context otherwise requires under section 1861(e) of the 
Act (see 77 FR 68426). Unlike sections 1861(aa)(2)(B) and 
1820(c)(2)(B)(iv) of the Act, our regulation at 42 CFR 410.27(a)(1) 
does not necessarily require a physician to furnish the required 
supervision if a non-physician practitioner listed in 42 CFR 410.27(g) 
(a clinical psychologist, licensed clinical social worker, physician 
assistant, nurse practitioner, clinical nurse specialist, or certified 
nurse-midwife) is qualified to supervise the service (see the Medicare 
Benefit Policy Manual (Pub. 100-02) Ch. 6 Sec. 20.5.2). The payment 
provisions in section 1861(s)(2)(B) of the Act and 42 CFR 410.27 are 
not enforced via the survey and certification process and are not 
evaluated as part of the assessment of compliance with the CAH CoPs.
    Comment: The majority of commenters supported the proposed change 
to eliminate the ``2-week'' requirement, under Sec. Sec.  485.631(b)(2) 
and 491.8(b)(2), that a physician must be physically present once in a 
two-week period to provide medical direction, medical care services, 
consultation and supervision of other clinical staff in either the CAH, 
RHC, or FQHC.
    Many commenters stated that the increased use of telecommunications 
and telemedicine, and the use of non-physician practitioners under 
physician oversight, allow rural facilities the flexibility to schedule 
physician on-site services to better match the needs and requirements 
of the community they serve. One commenter suggested that, because of 
these technological advances, the current requirements do not improve 
the quality of care.
    Comments from a large consumer group were particularly supportive 
of the proposal because they believe it would improve consumers' access 
to care in remote and underserved areas where there may be a shortage 
of physicians. Similarly, commenters from the rural provider community 
remarked that the current requirement is unnecessarily restrictive and 
that revising it will benefit patients by allowing practitioners and 
health care providers and suppliers greater flexibility. They stated 
that providers in remote areas may find it difficult to comply with a 
biweekly schedule. One commenter remarked that physically travelling to 
outlying clinics twice each month is not an efficient use of a 
physician's time, and that it was a significant part of that 
commenter's decision not to apply for RHC status for one of its remote 
clinics.
    One commenter stated that States now have scope of practice laws 
for non-physician practitioners such as a physician assistant (PA) or a 
nurse practitioner (NP). These State laws specify the extent to which a 
PA or NP can practice independently or under remote supervision. The 
commenter also stated that, in a number of states, the existing RHC 
requirement for physician on-site availability has the practical effect 
of superseding state law and the regulations create an added cost to 
the RHC.
    Response: We appreciate the comments supporting this proposed 
change. With the development of technology that facilitates 
telemedicine, a physician should have the flexibility to use a variety 
of ways and timeframes to provide medical direction, consultation, 
supervision, and medical care services, including being on-site at the 
facility.
    The rule will allow for increased use of team-based care while 
still requiring the physician to be on-site, as appropriate, to ensure 
the delivery of quality care. Importantly, the proposed regulation 
would not preclude a State or a rural provider from establishing 
requirements for physician supervision of non-physician practitioners 
that are more stringent. As we stated in the proposed rule, for those 
CAHs that offer a range of complex services and have more than one 
physician on staff, a visit just once every 2 weeks could be 
inadequate. It is our experience that such facilities have policies and 
procedures in place to ensure quality provision and oversight of the 
services they provide.
    We note that CAHs, RHCs, and FQHCs are still required to have a 
physician who provides medical direction and is involved in the 
development of the policies and procedures, provides consultation, and 
supervises other clinical staff. The proposed change should provide 
RHCs and FQHCs with the flexibility to optimize their physician on-site 
time to effectively meet the needs of their patients.
    Comment: Several commenters requested that CMS provide additional 
guidance in the final rule regarding what expectations CMS has for an 
MD and DO's presence, given the diversity of CAHs affected. The 
commenters stated that CAHs differ greatly in terms of the size of the 
populations served and in the range and extent of services offered. One 
commenter stated that we should consider whether removal of the bi-
weekly presence is appropriate in all cases. A commenter noted that, 
for some CAHs, the presence of an MD or DO may in fact be required more 
frequently than every two weeks. Additionally, some commenters remarked 
that telecommunication may not always be an appropriate mechanism for 
delivering care, such as in the provision of surgical services when a 
physician's physical presence would be required.
    Some commenters asked CMS to clarify and further explain the 
meaning of ``sufficient periods of time,'' but others disagreed with 
the proposal entirely, stating that requiring a doctor to be present 
for ``sufficient periods of time'' is inadequate for ensuring 
appropriate supervision of medical care provided by non-physician 
practitioners.
    Response: We appreciate the commenters' remarks and requests for 
additional guidance. We expect the policies for medical oversight and 
supervision at each facility to reflect the requirements of applicable 
State law as well as the scope of services furnished.
    We believe that specifying a precise timeframe for a physician to 
visit the CAH, RHC, or FQHC, and provide the general oversight required 
under sections 1861(aa)(2)(B) and 1820(c)(2)(B)(iv) of the Act would 
not guarantee better health care. With the development of technology 
such as telemedicine, we believe a CAH, RHC, or FQHC should have the 
flexibility to use a variety of ways and timeframes for physician(s) to 
provide the necessary medical direction and oversight. For example, a 
physician supervising a RHC or FQHC might visit the facility more 
frequently than biweekly during peak seasons for certain illnesses and 
make less frequent visits during other times of

[[Page 27132]]

the year. For CAHs that offer a range of complex services, have more 
than one physician on staff, and have busy emergency departments and/or 
extensive outpatient services, a visit by a physician only once every 2 
weeks could be grossly inadequate. On the other hand, a bi-weekly on-
site visit may be unduly burdensome to a small CAH in a remote rural 
area that offers very limited services and has a low patient volume.
    We note that Sec.  485.635(a) requires a CAH and Sec.  491.9(b) 
requires the RHC or FQHC to furnish health care services in accordance 
with appropriate written policies consistent with applicable State law. 
Thus, we would not expect these facilities to offer any services 
without adequate staffing to provide those services, including staffing 
or supervision by physicians as applicable. We expect each facility to 
evaluate its services and adjust its physician schedule accordingly, as 
an appropriate physician schedule would reflect the volume and nature 
of services offered. The amount of time spent at the CAH or RHC by the 
physician to provide general oversight as well as patient care will be 
evaluated at the time of a survey for compliance with the CoPs (CAHs) 
or CfCs (RHCs). FQHCs are only required to attest to their compliance 
to the Medicare requirements but may be surveyed in response to a 
complaint. We do not envision developing specific formulas for minimum 
amounts of time a physician is required to be present at these 
facilities. Rather, we would identify for further evaluation cases 
where we find significant disproportion between the volume of services 
offered and the amount of time a physician is present.
    Comment: A few commenters suggested that more review and analysis 
is necessary before revising or eliminating this requirement, stating 
that patient safety should be carefully considered.
    Response: We agree with the commenters that patient safety 
considerations are vitally important. CMS continuously analyzes patient 
safety issues, and we have been working steadily to reduce unnecessary 
regulatory burden on providers so that resources can be freed up for 
providing quality health care. As evidenced by the Hospital and CAH 
final rule issued on May 16, 2012 (77 FR 29034), we have been 
introducing changes only after careful review of the feedback we 
receive from the provider community and other stakeholders. Patient 
safety is paramount, and we are mindful of the financial and labor 
constraints impacting health care delivery in remote and rural 
settings. We will continue to review all regulatory matters from a 
patient safety and quality of care perspective.
    Comment: Several commenters stated that, instead of revising the 
on-site review requirements to make them more flexible, quality care 
could be better ensured if CMS would work with stakeholder groups on 
the development of programs to support the few primary care physicians 
in rural and frontier areas and to recruit primary care physicians.
    Response: We are mindful of the difficulties inherent in attracting 
physicians to practice in rural settings. CMS is engaged in a multi-
pronged strategy to improve and expand the delivery of quality health 
care services. We routinely work with stakeholder groups to maximize 
access to quality health care services and maximize the ability of 
physicians to practice in rural settings. We note that The Department 
of Health and Human Services has established a number of different 
programs, such as the National Health Service Corps (NHSC), to train 
and recruit health care practitioners, including physicians, to provide 
services in rural and underserved areas. More than 40,000 primary care 
medical, dental, and mental and behavioral health professionals have 
served in the NHSC since its inception.
    In addition, we recognize the tremendous opportunity to improve and 
deliver quality health care that is presented by telemedicine 
technologies and the services these technologies support. As 
appropriate, we encourage the use of such technologies to provide 
flexibility in the delivery of health care and to increase patient 
access to care. We also recognize that non-physician practitioners will 
increasingly be relied upon to assist with the delivery of essential 
medical services.
    Comment: Another commenter asked which entities would be authorized 
to determine whether facilities are in compliance.
    Response: The authority to determine whether or not facilities are 
in compliance remains with CMS, which utilizes results of surveys 
conducted by State survey agencies or those accrediting organizations 
which have Medicare CAH or RHC accreditation programs approved by CMS 
under Part 488.
    Comment: Several commenters remarked that while the proposed rule 
introduces welcome changes to Sec.  485.631(b)(2), the rule did not 
propose to modify the very similar requirements at Sec.  
485.631(b)(1)(v) that address physician review of outpatient records. 
If left unchanged, these requirements for the bi-weekly physician 
review of outpatient records would appear to be in conflict with the 
original proposal. Commenters stated that, as proposed, the new rules 
would create a dual standard that would be confusing and would 
contribute to the administrative burden for rural healthcare facilities 
and CAHs. One commenter specifically requested clarification of 
existing requirements at Sec.  485.631(b)(1)(vi), which are related to 
the proposed regulation but were not addressed in the proposed rule. 
The requirements at Sec.  485.631(b)(1)(vi) state that a doctor of 
medicine or osteopathy is not required to review and sign outpatient 
records of patients cared for by nurse practitioners, clinical nurse 
specialists, certified nurse midwives, or physician assistants where 
State law does not require record reviews or co-signatures, or both, by 
a collaborating physician.
    The commenter suggested clarification was needed in either the 
regulatory text or in the State Operations Manual at Appendix W 
regarding this issue. The commenter stated that some jurisdictions are 
struggling with the interpretation and applicability of this CoP 
standard. The commenter suggested that, where there are no affirmative 
statements in State law explicitly requiring such record reviews, none 
should be required. The commenter stated that some States that do not 
have explicit record review requirements are in fact requiring them 
because of their confusion about the current CoP standard.
    Response: We agree with the commenters that continuing to require a 
bi-weekly schedule for physicians to review and sign a sample of 
outpatient records of patients cared for by non-physician 
practitioners, as set forth at Sec.  485.631(b)(1)(v), does not fully 
align with our initial, more limited, proposal. We believe the changes 
suggested by the commenters are appropriate and in keeping with the 
burden reducing goals of our initial proposal to eliminate the 
prescriptive 2-week physician on site visit requirement at Sec.  
485.631(b)(2).
    We also appreciate the commenter's remarks about the confusion at 
Sec.  485.631(b)(1)(vi) regarding a physician's responsibility to 
review outpatient records. Section Sec.  485.631(b)(1)(vi) states that 
a physician ``is not required to review and sign outpatient records of 
patients cared for by nurse practitioners, clinical nurse specialists, 
certified nurse midwives, or physician assistants where State law does 
not require record reviews or co-signatures, or both, by a 
collaborating physician.'' Section 485.631(b)(vi) was

[[Page 27133]]

intended to mean that, if the applicable State law does not require a 
record review or co-signature, or both, by a collaborating physician, 
then CMS would not require the periodic record review described at 
Sec.  485.631(b)(v).
    Because we recognize that there has been confusion about the 
interaction of the current requirements of Sec.  486.631(b)(v) and 
(vi), we are revising the regulatory language at Sec.  485.631(b)(1) to 
address these concerns. We believe the changes suggested by the 
commenters are appropriate and in keeping with the burden reducing 
goals of our initial proposal to eliminate the 2-week physician on site 
visit requirement at Sec.  485.631(b)(2). We agree with the commenters 
and have removed the language requiring biweekly outpatient record 
review.
    Specifically, we will delete Sec.  485.631(b)(1)(vi) and will 
revise the regulatory language at Sec.  485.631(b)(1)(v) to state that 
a Medical Doctor (MD) or Doctor of Osteopathy (DO) must 
``periodically'' review and sign a sample of outpatient records of 
patients cared for by nurse practitioners, clinical nurse specialists, 
certified nurse midwives, or physician assistants only to the extent 
required under State law where State law requires record reviews or co-
signatures, or both, by a collaborating physician. If the applicable 
State law does not require a record review or co-signature, or both, by 
a collaborating physician, then CMS does not require such periodic 
record review.
    We note that there is no regulatory requirement for the review of 
records to be performed onsite and in person. Thus, if the CAH has 
electronic medical records that can be accessed and digitally signed by 
the MD or DO, this method of review is acceptable.
    Comment: One commenter requested clarification of the term 
``outpatient,'' as used in Sec.  485.631(b)(1)(v). The commenter 
wondered whether the term ``outpatient'' referred only to hospital-
based outpatient services such as the Emergency Department.
    Response: We interpret the term ``outpatient,'' for the purposes of 
the CoPs, to mean all patients receiving CAH services other than those 
who have been admitted as an inpatient on the basis of an inpatient 
admission order. It would include patients receiving observation 
services, emergency department services, same-day surgery services, and 
any other form of ambulatory care services.
    Comment: One commenter suggested that, in addition to modifying the 
2-week onsite requirement, that CMS should include a provision that 
would explicitly state the necessity of ensuring immediate availability 
of a physician with relevant training and expertise, whereby 
``immediate availability'' would include contact by electronic or 
telephonic means, without delay, and interruptible. The contacted 
physician and means of communication should be such that it is possible 
for the physician to furnish appropriate assistance and direction 
throughout the performance of the procedure and inform the patient of 
provisions for post-procedural care, and such shall be contained in the 
standardized procedure or protocol.
    Response: The CAH conditions of participation provide a regulatory 
structure that we believe promotes and facilitates the availability of 
health care professionals, including availability using electronic 
communications, to provide care to rural communities. We note that the 
requirements at Sec.  485.618, Condition of Participation--Emergency 
Services, provides for immediate physician access in the event 
emergency care is needed. In particular, Sec.  485.618(e) requires a 
CAH to have established procedures under which a doctor of medicine or 
osteopathy is immediately available by telephone or radio contact on a 
24-hours a day basis to receive emergency calls, provide information on 
treatment of emergency patients, and refer patients to the CAH or other 
appropriate locations for treatment.
    Comment: One commenter supported the proposal but urged CMS to make 
it clear that only the frequency requirement would change; the role of 
the medical director would stay the same for a CAH, RHC, or FQHC.
    Response: We agree with the commenter's assessment and would like 
to emphasize that the role of the medical director of the CAH, RHC, or 
FQHC remains unchanged by our proposal. We are amending the regulations 
with respect to the prescribed frequency of a physician's on-site 
presence at a CAH, RHC, or FQHC.
    In accordance with the comments discussed above, we are finalizing 
the changes to Sec. Sec.  485.631(b)(2) and 491.8(b)(2), as proposed. 
We are also revising Sec.  485.631(b)(1)(v) to require that a sample of 
outpatient records be periodically reviewed.
3. RHC/FQHC Definitions: Physician (Sec.  491.2)
    We proposed to revise the definition of ``physician'' at Sec.  
491.2 to more closely conform with the definition of ``physician'' that 
appears under the rules governing payment and Medicare agreements with 
RHCs and FQHCs in Part 405 at Sec.  405.2401(b). We proposed to revise 
the definition to include (1) a doctor of medicine or osteopathy 
legally authorized to practice medicine and surgery by the State in 
which the function is performed; and (2) within limitations as to the 
specific services furnished, a doctor of dental surgery or of dental 
medicine, a doctor of optometry, a doctor of podiatry or surgical 
chiropody or a chiropractor (see section 1861(r) of the Act for 
specific limitations). Our proposal also specified that a physician 
meet the requirements of sections 1861(r), 1861(aa)(2)(B), and 
1861(aa)(3)(B) of the Act.
    We received a total of 40 comments on our proposed changes to Sec.  
491.2 from accrediting bodies, consumer advocacy organizations, 
individuals, and national health care provider organizations. Overall, 
the majority of commenters disagreed with the proposed changes. Here we 
respond to specific comments.
    Comment: An overwhelming majority of commenters stated that they 
did not want to see an expansion of the definition of a physician 
beyond an MD or DO; these comments appeared to be rooted in a concern 
for patient safety and for proper legal oversight. They expressed the 
concern that changing the definition would create a conflict in 
Sec. Sec.  491.7(a)(1) and 491.8 regarding physician responsibilities 
and the duties in performing oversight for an RHC/FQHC and providing 
medical care services. Many commenters apparently interpreted the 
proposed change as allowing a chiropractor, optometrist, or dentist to 
supervise nurse practitioners and physician assistants. For example, 
one commenter stated that they were not aware of any State that would 
permit a PA to be supervised by anyone other than a medical doctor (MD) 
or an osteopathic doctor (DO).
    The commenters expressed concern that by altering the definition of 
a physician, CMS would be extending the scope of practice for certain 
non-physician practitioners in RHCs and FQHCs, as well as eliminating 
the requirement for medical direction and oversight by MDs and DOs in 
these facilities.
    Commenters noted that, unlike the training for a dentist, 
optometrist, podiatrist, or a chiropractor, the broad curriculum for 
MDs and DOs trains medical students on all organ systems, including the 
important aspects of preventive, acute, chronic, continuing, 
rehabilitative, and end-of-life care.
    Some commenters also expressed concern that other practitioners 
with significantly less training than MDs and DOs are promoting 
themselves as ``physicians,'' resulting in confusion

[[Page 27134]]

among patients. They stated that extending the definition would 
exacerbate this problem because the public currently finds it difficult 
to differentiate among various professionals and that allowing para-
professionals to use the word ``physician'' would only complicate the 
issue.
    A few commenters requested that we revise the definition to have it 
exactly conform to the definition in 42 CFR 405.2401 to specifically 
include residents. Another commenter stated that nurse practitioners 
should be included in the definition of ``physicians'' or listed with 
physicians as a qualified provider wherever the terms ``physician'' or 
``physician services'' are used.
    Conversely, several commenters agreed with expanding the 
definition. One commenter was unclear as to what impact the definition 
change would have on the cost of services in the RHC or the ability of 
an RHC to provide services in compliance with applicable state law.
    Response: Our proposal did not--and was not intended to--change or 
remove the statutory supervision requirements at sections 
1861(aa)(2)(B) and (aa)(3) of the Act. Rather, our intent was to 
clarify that other categories of physicians are permitted to practice 
in RHCs and FQHCs to the extent allowed by the Act and by the law of 
the applicable state. The Act requires a non-physician directed clinic 
to have an arrangement with one or more physicians (an MD or DO as 
described in 1861(r)) under which provision is made for an MD or DO to 
provide periodic reviews of services furnished by physician assistants 
and nurse practitioners, and to prepare medical orders to care and 
treat patients. Also the MD or DO must be available for consultation, 
patient referrals, and for advice and assistance in the management of 
medical emergencies.
    As pointed out by a commenter, we also are not aware of any state 
that would allow anyone other than an MD or DO to supervise non-
physician practitioners (NPPs). We stated in the proposed definition 
change that, within limitations as to the specific services furnished, 
the definition of a physician (as provided in section 1861(r)) would 
also include a doctor of dental surgery or of dental medicine, a doctor 
of optometry, podiatry, or chiropractic. However, as we reviewed the 
public comments regarding the proposed revision and considered the wide 
range of comments, it became apparent to us that most commenters had 
either misinterpreted or not fully understood the proposed revision. 
Also, making this conforming change will not impact the cost of 
services in the RHC or the ability of an RHC to provide services in 
compliance with applicable state law. With respect to the comment to 
include residents in the list of physicians, we do not believe that we 
need to specifically list residents because they are already captured 
under the category of physicians.
    We believe that most of the commenters misinterpreted the proposed 
definition because we referred to the oversight functions of a doctor 
of medicine or osteopathy (MD/DO) by providing only the statutory 
citations without further discussion and that it was not apparent to 
the commenters that we were not instead proposing to change the 
oversight roles of an MD or DO. Therefore, we are clarifying our 
proposed definition of a physician in this final rule by stating the 
specific functions of a doctor of medicine or osteopathy required in 
the statute (sections 1861(aa)(2)(B) and (aa)(3) of the Act). We will 
change the definition as follows: ``Physician means the following: (1) 
As it pertains to the supervision, collaboration, and oversight 
requirements of sections 1861(aa)(2)(B) and (aa)(3) of the Act, a 
doctor of medicine or osteopathy legally authorized to practice 
medicine or surgery in the State in which the function is performed; 
and (2) Within limitations as to the specific services furnished, a 
doctor of dental surgery or of dental medicine, a doctor of optometry, 
a doctor of podiatry or surgical chiropody or a chiropractor (see 
section 1861(r) of the Act for specific limitations).''
4. Technical Correction
    We proposed to correct a technical error in the regulations by 
amending Sec.  491.8(a)(6) to conform to section 6213(a)(3) of OBRA '89 
(Pub. L. 101-239) which requires that an NP, PA, or certified nurse-
midwife (CNM) be available to furnish patient care at least 50 percent 
of the time the RHC operates.
    Comment: The few comments that we received on this proposed 
correction agreed with making the technical change in the regulation to 
conform to the statute which requires an NP, PA, or certified nurse-
midwife (CNM) to be available to furnish patient care at least 50 
percent of the time the RHC operates.
    Response: We appreciate the comments on this proposed change and 
will finalize it as proposed.
5. Comments Beyond the Scope of This Rulemaking
    Comment: One commenter recommended that CMS revise rules for 
physician supervision of outpatient therapies in CAHs to recognize the 
unique patient access issues and physician and nurse shortages in 
remote, rural areas.
    Other commenters recommended that CMS should eliminate requirements 
for physician supervision of nurse practitioners and other Advanced 
Practice Registered Nurses (APRNs). The commenters requested an 
explanation into why review of non-physician practitioners was 
necessary. One commenter explained that, in his particular state, 
advanced practice nurses are allowed to practice independently, and 
physician assistants can practice with the appropriate physician 
supervision. The commenter wondered why medical record review was 
required in CAHs, RHCs, and FQHCs. The commenter stressed that in his 
state, non-physician practitioners can even set up their own clinics 
with the right supervision, all without any medical records review.
    Some commenters stated that in many cases, Medicare coverage rules 
arbitrarily determine which ``physician'' services are restricted to 
doctors of medicine and osteopathy only and which are permissible for 
nurse practitioners and other APRNs to provide. Commenters also 
recommended that nurse practitioners should be included in the 
definition of ``physician'' or listed with physicians as a qualified 
provider wherever the terms ``physician'' or ``physician services'' are 
used.
    Some commenters favoring the proposal described their support for 
what they described as ``the agency's recognition of the ability of 
nurse practitioners and other staff to provide critical medical 
services to patients without the supervision of physicians.'' Some 
commenters expressed the view that licensed advanced nurse 
practitioners, if licensed to practice independently in their state, 
could more realistically and effectively fulfill this obligation within 
a time frame mutually agreed upon in accordance with the clinic's 
needs.
    One commenter stated most RHCs are unable to participate in 
electronic health record incentives. The commenter urges CMS to support 
passage of the Rural Health Clinic Fairness Act of 2013 (H.R. 986), a 
bill introduced in the U.S. House of Representatives on March 6, 2013.

[[Page 27135]]

    Several commenters stated that the list of medication classes in 
Part 491 may be overly specific and outdated. They suggested that we 
require the medical staff to review and agree upon a list of emergency 
supplies appropriate to the particular practice.
    One commenter recommended that CMS re-evaluate the laboratory 
requirements to determine whether the six tests required to be 
available in the RHC are relevant and appropriate.
    Response: We appreciate these comments and, while they are beyond 
the scope of this rule, we will consider these suggestions for future 
rulemaking.
    Contacts for rural health and primary care CoP/CfC issues: Mary 
Collins, (410) 786-3189.

G. Solicitation of Comment on Reducing Barriers to Services in Rural 
Health Clinics (RHCs)

    We requested comments on potential changes we could make to 
regulatory or other requirements to reduce barriers to telehealth, home 
health, hospice, or other services provided by RHCs. We requested that 
commenters include an explanation of why the service is needed, the 
barriers to providing the service, and possible solutions that comply 
with our legislative authority and the need for administrative 
accountability. We did not propose any policy changes for RHCs in these 
areas.
    We received a total of 23 comments from national and state 
professional associations, state medical societies and associations, 
individual and group practitioners, health care systems, and consumer 
advocacy organizations. Commenters were appreciative of CMS's efforts 
to eliminate unnecessary, obsolete, and excessively burdensome 
regulations, and provided many thoughtful comments and suggestions to 
remove barriers to telehealth, home health, hospice, and other services 
provided by both RHCs and Federally Qualified Health Centers (FQHCs).
1. Telehealth
    In the proposed rule, we stated that RHCs that are located in rural 
Health Professional Shortage Areas (HPSAs), or in counties outside of 
Metropolitan Statistical Areas (MSA), are authorized by law to be 
telehealth originating sites (the location of an eligible Medicare 
beneficiary at the time the service is furnished via a 
telecommunications system). We also stated that the statute authorizes 
physicians, nurse practitioners, physician assistants, certified nurse 
midwives, clinical nurse specialists, clinical psychologists, clinical 
social workers, and registered dietitians or nutrition professionals to 
be distant site providers (practitioners furnishing covered telehealth 
services), and that the statute does not include RHCs as distant site 
providers. FQHCs are also statutorily authorized to be telehealth 
originating site providers, and are also not included in the 
statutorily authorized list of distant site providers of telehealth.
    We noted that RHC practitioners may be eligible to furnish and bill 
for telehealth distant site services when they are not working as an 
RHC practitioner at the RHC, but they cannot furnish and bill for 
telehealth services while working as an RHC practitioner because RHCs 
are not authorized distant site providers. Also, these practitioners 
cannot bill Medicare Part B while they are working for a Medicare RHC 
since Medicare is paying the RHC through the Medicare RHC cost report 
an all-inclusive rate per visit that includes all direct and indirect 
costs, such as the practitioner's services, space to provide those 
services, support staff services, related supplies, records costs, and 
other services. To allow separate Medicare Part B physician fee 
schedule payments to a practitioner while that practitioner is working 
for the RHC would result in duplicate Medicare payment for the 
telehealth service; once through the Medicare RHC cost report and again 
through the Medicare Part B physician fee schedule payment. This would 
also apply to FQHCs.
    Due to the lack of resources in many rural areas for health 
services, especially mental health services, and the potential for 
telehealth to increase access to care, we asked for comments on ways to 
allow RHC practitioners to furnish distant site telehealth services in 
compliance with our statutory authority and without resulting in 
duplicate payment or increased cost reporting and compliance burdens.
    Comment: A commenter asked for a statutory citation that identifies 
any service site as an authorized distant site provider of telehealth 
services. The commenter stated that the statute does not limit distant 
site providers to specific locations, and that the statute does not 
limit payment for telehealth services to providers billing under the 
Medicare physician fee schedule. The commenter suggested that Medicare 
establish a new revenue code and pay RHCs the all-inclusive rate for 
distant site telehealth services if the service qualifies and is 
furnished by an authorized telehealth provider.
    Response: The statutory provisions related to telehealth are 
located in section 1834(m) of the Act. The Act lists specific sites 
that may serve as originating sites for telehealth, and includes RHCs 
and FQHCs. The Act defines ``distant site'' as ``the site at which the 
physician or practitioner is located at the time the service is 
provided via a telecommunications system.'' It then defines 
``physician'' as having ``the meaning of that term in section 1861(r), 
and defines ``practitioner'' as having the meaning given that term in 
section 1842(b)(18)(C).'' Since neither the definition of ``physician'' 
nor the definition of ``practitioner'' includes RHCs or FQHCs, we do 
not believe that RHCs or FQHCs are authorized under the statute to be 
distant site providers of telehealth services. Establishing a new 
revenue code would not alleviate the requirement for a service to be 
statutorily authorized in order to receive payment.
    Comment: Several commenters expressed their support of appropriate 
uses of telehealth and telemedicine services if policies are in place 
to assure quality of care. The commenters stated that the expansion of 
telehealth services should be based on analysis and evidence that shows 
improved access and outcomes without lowering quality of care or 
resulting in a two tiered system of care. They emphasized the role and 
responsibility of physicians in assuring quality of care and 
supervising non-physician practitioners and technicians furnishing 
telehealth services. The commenters recommended that we work with 
stakeholders to implement policies to ensure that physicians remain 
part of a patient's medical team and the technology is used to enhance 
the delivery of medical care.
    Response: We thank the commenters for their support of using 
technology to enhance access to health care and their emphasis on 
maintaining quality of care.
    Comment: A commenter suggested that RHCs bill an encounter code for 
a specialist or LCSW visit if the telemedicine visit is provided by the 
RHC, and that the RHC would pay the specialist or the LCSW.
    Response: We assume that this commenter is suggesting that the RHC 
be allowed to carve out the telehealth service from the RHC cost report 
and allow specialists and LCSWs to bill an encounter on the physician 
fee schedule. While we appreciate the comment, telehealth is a Medicare 
Part B service, and RHCs and FQHCs cannot bill for Part B services that 
are part of the RHC or FQHC benefit during RHC or FQHC hours of 
operation.
    Comment: A commenter expressed support for RHCs to provide distant 
site telehealth services for primary health

[[Page 27136]]

care and specialty consultation, and recommended that CMS issue 
regulations to allow RHCs to provide and adequately bill for distant 
site telehealth services.
    Response: We thank the commenter for their support of RHCs and the 
use of telehealth services. Since RHCs are not statutorily authorized 
to be distant site providers of telehealth services, we are unable to 
issue regulations that would allow RHCs to provide and bill for distant 
site telehealth services.
    Comment: A commenter suggested that we modify the definition of a 
visit at 42 CFR 405.2463 to remove the face-to-face requirement that 
could prohibit telehealth sessions from qualifying as a visit in RHCs 
and FQHCs, and revise the regulations defining ``incident to'' services 
(42 CFR 405.2413, 405.2415, and 405.2452) to include telehealth 
services. The commenter also suggested that we modify our policies to 
allow billing of two visits if a telehealth visit occurs on the same 
day as another office visit.
    Response: The commenter correctly notes that for RHCs and FQHCs to 
be reimbursed under the all-inclusive rate, there must be a face to 
face encounter between the RHC or FQHC practitioner and the patient, 
and that this requirement would need to be modified in order for RHCs 
and FQHCs to be able to bill for a telehealth visit. However, since 
RHCs and FQHCs are not statutorily authorized to serve as distant site 
providers of telehealth services, we do not believe that revising the 
face to face requirement for telehealth services in RHCs and FQHCs 
would enable RHCs and FQHCs to bill for an RHC or FQHC visit that is 
provided via telecommunications.
    The commenter also suggested that we revise the regulations 
defining ``incident to'' services so that telehealth services could be 
included in the definition of ``incident to'' services. ``Incident to'' 
services are included as costs on the cost report and are not 
separately billable as an RHC or FQHC visit. We will consider the 
commenter's suggestion as a possible topic for future rulemaking.
    Comment: A commenter proposed that we recognize RHCs as clinician 
sites for the provision of telehealth services and suggested two 
options for RHCs to be reimbursed for these services. The first option 
would be to allow RHCs to be paid under Part A and have reasonable 
costs for the telehealth equipment and connectivity defined as allowed 
charges. The second option would be to allow Medicare telehealth costs 
to be offset by Medicare Part B payment, up to 100 percent of costs, 
and treat allowed telehealth costs in excess of payment as allowable 
RHC costs.
    Response: As previously discussed, RHCs and FQHCs are not 
statutorily authorized to furnish distant site telehealth services, and 
therefore cannot bill this as an RHC or FQHC visit. RHCs and FQHCs also 
cannot bill Part B for a RHC or FQHC covered service while operating as 
an RHC or FQHC, as that would result in duplicate payments. However, we 
intend to explore whether some costs associated with telehealth 
services provided ``incident to'' an RHC or FQHC visit could be 
considered allowable costs.
    Comment: A commenter stated that telehealth services are critically 
important in rural areas and Medicare should more broadly include and 
reimburse for telehealth services in the RHC program.
    Response: We agree that telehealth services are important in rural 
areas and will continue to consider ways we could more broadly include 
and reimburse for telehealth services, especially in rural areas.
    Comment: A commenter suggested that we consider eliminating the 
HPSA/non-MSA geographical requirements for patients receiving 
telehealth services; eliminate separate billing procedures for 
telemedicine; reimburse for telehealth services furnished by physical, 
respiratory, occupational, and speech therapists, licensed professional 
counselors and therapists, and social workers; increase reimbursement 
for the originating telemedicine sites; and provide reimbursement for 
store and forward applications. The commenter also made several 
recommendations regarding the credentialing and privileging of 
telehealth providers and facilities.
    Response: Carrying out these recommendations would require 
statutory changes. Therefore we are unable to act on these suggestions.
2. Hospice
    In the proposed rule, we stated that the hospice statute (section 
1861(dd) of the Act) authorizes physicians and NPs to be attending 
physicians for Medicare beneficiaries that elect the Medicare hospice 
benefit, and that because RHCs are not statutorily authorized to be 
hospice providers, RHCs can only treat hospice beneficiaries for 
medical conditions not related to their terminal illness. FQHCs are 
also not statutorily authorized to be attending physicians for hospice 
and also can only treat hospice beneficiaries for medical conditions 
not related to their terminal illness.
    We noted that RHC practitioners may be eligible to furnish and bill 
for hospice services when they are not working as an RHC practitioner 
at the RHC, but they cannot furnish and bill for hospice services while 
working as an RHC practitioner because RHCs are not authorized hospice 
providers. Also, these practitioners cannot bill Medicare Part B while 
they are working at a RHC since Medicare is paying the RHC an all-
inclusive rate per visit that includes all direct and indirect costs, 
such as the practitioner's services, space to provide those services, 
support staff services, related supplies, records costs, and other 
services. To allow separate Medicare Part B physician fee schedule 
payments to a practitioner while that practitioner is working for the 
RHC would result in duplicate Medicare payment for the hospice 
services; once through the Medicare RHC all-inclusive rate and again 
through the Medicare Part B payment. We inadvertently omitted FQHCs 
from this discussion in the proposed rule, and note that this applies 
to them as well.
    We acknowledged that in some rural areas, the RHC may be the only 
source of health care in the community, and there may be no other 
providers available during RHC hours to provide services that are 
related to the beneficiaries' terminal illness. This also applies to 
FQHCs. We specifically asked for comments on ways to allow RHC 
practitioners to furnish hospice services in compliance with our 
statutory authority and in a way that will not result in duplicate 
payment or increased cost reporting and compliance burdens, especially 
in areas with limited hospice providers.
    Comment: Several commenters noted that some RHCs and FQHCs are 
reluctant to refer their patients to hospice care, and some 
beneficiaries may be reluctant to elect the hospice benefit, because 
they might no longer be able to receive care from their RHC or FQHC 
provider, and that this is especially problematic in rural areas where 
there may not be other available providers.
    Response: We understand this concern and are interested in 
identifying and removing barriers to hospice care, especially in rural 
communities.
    Comment: A commenter suggested that RHCs be allowed to provide 
hospice services and that reimbursement for hospice services provided 
by the RHC be treated as if that service had been provided in the RHC 
face-to-face encounter with the RHC provider.

[[Page 27137]]

    Response: We thank the commenter for the suggestion, but RHC 
practitioners are not authorized to be hospice attending physicians, 
and reimbursing RHCs for hospice care would result in duplicate payment 
because the hospice is already being paid for these services.
    Comment: Some commenters suggested that we allow RHC practitioners, 
or the RHC, to bill Part B for attending physician services furnished 
during RHC hours of operation, and carve this out of the RHC cost 
report, since they are non-RHC services.
    Response: The RHC cannot bill Part B for hospice services, as RHCs 
are not hospice providers. However, we will consider for future 
rulemaking whether there may be limited situations where RHC and FQHC 
practitioners may be allowed to furnish certain items and services 
comprising hospice-related care during RHC or FQHC hours of operation 
and carve out all costs associated with the provision of the care.
    Comment: Some commenters stated that attending physician visits are 
similar to most other physician visits that are billed under CPT 
evaluation and management codes. The commenters suggested that 
physicians or NPs that are employed by RHCs serve as a hospice 
patient's attending physician, and the RHC could bill for physician 
services using CPT codes, as they do with other physician services, so 
that the physician did not have to enroll in Part B.
    Response: We appreciate the suggestion, but RHCs and FQHCs cannot 
bill Part B for physician services unless they terminate their RHC or 
FQHC certification and enroll as a Medicare Part B provider or 
supplier.
    Comment: Some commenters stated that because PAs always work with 
physicians, and in some rural areas they may be the only practitioner 
on site, they should be authorized to provide hospice services.
    Response: PAs are important members of the health care team and we 
understand that a PA may be the only provider immediately available in 
a rural area. However, authorizing PAs to provide hospice care would 
require a statutory change.
    Comment: A commenter stated that the language in the proposed rule 
indicates that CMS is contemplating ways that RHCs could become 
qualified hospice providers, and that RHCs acting as a hospice 
organization should be required to meet the same conditions of 
participation, rules, and standards as all other Medicare-certified 
hospices.
    Response: It was not our intent to indicate that we are 
contemplating ways for RHCs to become qualified hospice providers.
    Comment: A commenter suggested that in order to ensure that RHC 
practitioners are appropriately paid for services related to a hospice 
patient's terminal diagnosis without duplication and without a special 
hospice ``carve out'', CMS could unbundle a portion of practitioner 
visits and payments that currently represent services provided for a 
hospice patient's terminal condition and then analyze the data to 
estimate an appropriate ``add-on'' that RHCs could be reimbursed for 
attending physician services on a per-capita basis. The commenter also 
suggested that CMS consider establishing a revenue code for services 
provided to hospice beneficiaries, collect data about those services on 
the cost report, modify cost reporting principals to make these 
services an allowable cost, and then account for them in the updates to 
the payment formula for RHCs.
    Response: We appreciate these suggestions; however, they would 
require statutory changes.
3. Home Health
    In the proposed rule, we stated that RHCs that are located in areas 
with a shortage of home health agencies are authorized to provide 
nursing care furnished by a registered nurse or a licensed practical 
nurse to a homebound individual, and that the care must be provided 
under a written treatment plan that is established and periodically 
reviewed by a physician, NP, or PA. We also noted that there are 
relatively few RHCs that provide this service, and we sought comments 
on whether there is a need for home health services in communities 
served by RHCs, if there are barriers to providing these services, and 
if so, what are some possible strategies to reduce or eliminate the 
barriers.
    Comment: A commenter stated that NPs are a key component in the re-
engineering of health care and vital to a coordinated care model, and 
requested that they be allowed to order and certify patients in need of 
home health care services.
    Response: We agree that NPs are important team members in the 
provision of coordinated care. However, sections 1814(a)(2)(C) and 
1835(a)(2)(A) of the Act mandate that only a physician is permitted to 
certify or recertify a patient as eligible to receive Medicare home 
health services.
    Comment: A commenter stated that one of the difficulties RHCs face 
in providing home health services is that there is a lack of definition 
on what constitutes a home health service area or a home health service 
shortage area.
    Response: We thank the commenter for identifying this issue. Unlike 
primary care, dental, or mental health shortage areas, there is 
currently no federal determination of home health shortage areas.
    Comment: A commenter suggested that home health providers and home 
health patient stakeholder communities should determine what 
constitutes a home health shortage area.
    Response: We agree that input from the community could be very 
beneficial in informing these determinations and encourage community 
input to the extent possible when considering home health services.
    Comment: A commenter suggested that CMS broaden the physician types 
eligible to establish and review home health plans of care to include 
optometrists, and suggests that by allowing more physician types to 
order appropriate home health services, barriers to care will be 
removed.
    Response: Section 1861(r) of the Act defines a physician as a 
doctor of optometry for purposes of ``outpatient physical therapy 
services'' as described at 1861(p) of the Act and ``medical or other 
health services'' as described at section 1861(s) of the Act. Section 
1861(s) of the further describes ``medical or other health services'' 
as things such as physician services (general), psychologist services, 
and nurse-midwife services. Home health services are not included the 
``medical or other health services'' section of the Act; rather, home 
health requirements are described in sections 1861(m) and (o) of the 
Act. Therefore, while we appreciate the comment, a doctor of optometry 
is not recognized by the Act as being eligible to perform home health 
services.
    Comment: A commenter noted that 42 CFR 405.2416(b) includes 
personal care services that are covered under Medicare as services that 
can be provided by RHCs and FQHCs as part of visiting nurse services 
and recommended that our manuals clarify that this is included in 
addition to skilled nursing services.
    Response: We thank the commenter for noting that this is an 
allowable service and we will review the manuals to determine whether 
any revisions are needed.
4. Other Services
    In the proposed rule, we stated that we would welcome comments on 
other barriers to providing RHC services and asked for suggestions for 
removing those barriers.

[[Page 27138]]

    Comment: Several commenters requested that we remove the 
restrictions on contracting with non-physician practitioners in RHCs, 
and expand our definition of ``employ'' to include independent 
contractors.
    Response: The proposed rule titled, ``Prospective Payment System 
for Federally Qualified Health Centers; Changes to Contracting Policies 
for Rural Health Clinics; and Changes to Clinical Laboratory 
Improvement Amendments of 1988 Enforcement Actions for Proficiency 
Testing Referral'' (CMS-1443-P), published September 23, 2013 (78 CFR 
58386), proposed to allow RHCs to contract with non-physician 
practitioners, consistent with statutory requirements that require at 
least one NP or PA be employed by the RHC (section 1861of the Act). The 
ability to contract with NPs, PAs, CNMs, CP, and CSWs will provide RHCs 
with additional flexibility with respect to recruiting and retaining 
non-physician practitioners. Until this proposal is finalized, RHCs can 
contract with physicians while nonphysicians must be employees of the 
RHC.
    Comment: Several commenters noted that FQHCs can bill Diabetes 
Self-Management Training (DSMT) as an FQHC visit, and requested that 
RHCs also be able to bill for DSMT visits.
    Response: The commenters are correct that DSMT is a billable visit 
in an FQHC but not in an RHC. Section 5114 of the Deficit Reduction Act 
of 2005 amended the Act [1861(aa)(3)] to include DSMT and Medical 
Nutrition Therapy (MNT) on the list of covered services for FQHCs when 
these services are furnished by a certified provider who meets the 
regulatory requirements. It did not add DSMT and MNT to the list of 
covered services for RHCs. Coverage by RHCs would require a statutory 
change.
    Comment: A commenter requested that we allow health care services 
to be performed in an RHC when an RHC practitioner is not present, and 
noted that services such as phlebotomy can be provided by licensed 
practitioners in unsupervised locations such as a patient home.
    Response: The RHC Conditions for Certification, at 42 CFR 
491.8(a)(6), currently require that a physician, NP, PA, CNM, clinical 
social worker, or clinical psychologist be available to furnish patient 
care services at all times the clinic or center operates. Additionally, 
the Medicare payment rate assumes that a practitioner is on-site at all 
times the RHC or FQHC is operating, and includes all the costs 
associated with the service (for example, practitioner compensation, 
overhead, equipment). Therefore, changing this policy could have an 
impact on the RHC's or FQHC's payment rate, as the costs of operating 
the RHC or FQHC would increase at a time when billable visits were not 
occurring.
    Comment: One commenter encouraged CMS to use its regulatory 
proposals and payment policy updates as an opportunity to remove 
remaining regulatory and payment barriers that are reducing consumer 
access to timely and efficient care and limiting health professionals 
from practicing to the full extent of their state practice licenses.
    Response: When barriers are identified, we will take steps to 
remove those barriers whenever possible. As the commenter did not 
specify any particular barriers, we cannot provide a more specific 
response.
    Comment: One commenter suggested that CMS allow physician assistant 
owned clinics to obtain a National Provider Identifier (NPI) number for 
purposes of billing Medicare for services.
    Response: We appreciate the comment, but Section 1842(b)(6)(C) of 
the Act prohibits PAs from enrolling in and being paid directly for 
Part B services. Therefore, Medicare Part B payment can only be made to 
a PA's employer (unless the employer is a PA or a group of PAs), and a 
PA may not directly bill Medicare Part B for Medicare-covered services.
5. Comments Outside the Scope
    We received several comments outside the scope of this solicitation 
for comments. We appreciate and will consider the commenters' 
suggestions, but we will not address the comments here.
    Contact for RHC & FQHC Comments: Corinne Axelrod, 410-786-5620.

H. Clinical Laboratory Improvement Amendments of 1988 (CLIA)

    On October 31, 1988, Congress enacted the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA), Pub. L. 100-578. The purpose of 
CLIA is to ensure the accuracy and reliability of laboratory test 
results for all Americans. Under this authority, which was codified at 
42 U.S.C. 263a, the Secretary issued regulations implementing CLIA on 
February 28, 1992 at 42 CFR Part 493 (57 FR 7002). The regulations 
specify the standards and specific conditions that must be met to 
achieve and maintain CLIA certification. CLIA certification is required 
for all laboratories, including but not limited to those that 
participate in Medicare and Medicaid, which test human specimens for 
the purpose of providing information for the diagnosis, prevention, or 
treatment of any disease or impairment, or the assessment of health, of 
human beings.
    Among other things, the regulations require laboratories conducting 
moderate or high-complexity testing to enroll in an approved 
proficiency testing (PT) program that covers all of the specialties and 
sub-specialties for which the laboratory is certified. There are 
currently 229,815 CLIA-certified laboratories. Of these laboratories, 
35,084 are required to enroll in an HHS-approved PT program and are 
subject to all PT regulations.
    Congress emphasized the importance of PT when it drafted the CLIA 
legislation. For example, in discussing their motivation in enacting 
CLIA, the Committee on Energy and Commerce noted that it ``focused 
particularly on proficiency testing because it is considered one of the 
best measures of laboratory performance'' and that proficiency testing 
``is arguably the most important measure, since it reviews actual test 
results rather than merely gauging the potential for good results.'' 
(H.R. Rep. No. 100-899, at 15 (1988)) The Committee surmised that, left 
to their own devices, some laboratories would be inclined to treat PT 
samples differently than their patient specimens, as they would know 
that the laboratory would be judged on its performance in analyzing 
those samples. For example, such laboratories might be expected to 
perform repeated tests on the PT sample, use more highly qualified 
personnel than are routinely used for such testing, or send the samples 
out to another laboratory for analysis. As such practices would 
undermine the purpose of PT, the Committee noted that the CLIA statute 
was drafted to bar laboratories from such practices, and to impose 
significant penalties on those who elect to violate those bars (H.R. 
Rep. No. 100-899, at 16 and 24 (1988).
    We proposed to make a number of clarifications and changes to the 
regulations governing PT under CLIA. PT is a valuable tool the 
laboratory can use to verify the accuracy and reliability of its 
testing. During PT, an HHS-approved PT program sends samples to be 
tested by a laboratory on a scheduled basis. After testing the PT 
samples, the laboratory reports its results back to the PT program for 
scoring. Review and analysis of PT reports by the laboratory director 
will alert the director to areas of testing that are not performing as 
expected and may also indicate subtle shifts or trends that, over time, 
could affect patient results. As there is no on-site, external proctor 
for PT testing in a laboratory, the testing relies in large part

[[Page 27139]]

on an honor system. The PT program places heavy reliance on each 
laboratory and laboratory director to self-police their analysis of PT 
samples to ensure that the testing is performed in accordance with the 
CLIA requirements. For each PT event, laboratories are required to 
attest that PT samples are tested in the same manner as patient 
specimens are tested. PT samples are to be assessed by integrating them 
into the laboratory's routine patient workload, and the testing itself 
is to be conducted by the personnel who routinely perform such testing, 
using the laboratory's routine methods. The laboratory is barred from 
engaging in inter-laboratory communication pertaining to results prior 
to the PT program's event cut-off date and must not send the PT samples 
or any portion of the PT samples to another laboratory for testing, 
even if it would normally send a patient specimen to another laboratory 
for testing.
    One type of laboratory testing is ``reflex testing.'' By reflex 
testing, we mean confirmatory or additional laboratory testing that is 
automatically requested by a laboratory under its standard operating 
procedures for patient specimens when the laboratory's findings 
indicate test results that are abnormal, are outside a predetermined 
range, or meet other pre-established criteria for additional testing. 
For patient specimen testing, reflex testing may be legitimately 
performed by the same laboratory that performed the initial testing or 
may be performed by referral of the patient specimen for testing at a 
laboratory operating under a different CLIA certificate. For PT, reflex 
testing is prohibited unless it is performed by the same laboratory 
that performed the initial testing, is included in that laboratory's 
standard operating procedure, and the results are reported as part of 
the proficiency testing program.
    Another type of laboratory testing is ``confirmatory testing.'' By 
confirmatory testing, we mean testing performed by a second analytical 
procedure that could be used to substantiate or bring into question the 
result of an initial laboratory test. For patient specimen testing, 
confirmatory testing may legitimately be performed by the same 
laboratory that performs the initial test or by a second laboratory 
operating under a different CLIA certificate than the laboratory 
performing the initial testing. For PT, confirmatory testing is 
prohibited unless it is performed by the same laboratory that performed 
the initial test, is included in that laboratory's standard operating 
procedure, and the results are reported as part of the proficiency 
testing program.
    Any laboratory that intentionally refers its PT samples to another 
laboratory for analysis risks having its certification revoked for at 
least one year, in which case, any owner or operator of the laboratory 
risks being prohibited from owning or operating another laboratory for 
two years (42 CFR 493.1840(a)(8), (b)). The phrase ``intentionally 
referred'' has not been defined by the statute or regulations, but we 
have consistently interpreted this phrase from the onset of the program 
to mean general intent, as in intention to act. Whether or not acts are 
authorized or even known by the laboratory's management, a laboratory 
is responsible for the acts of its employees. Among other things, 
laboratories need to have procedures in place and train employees on 
those procedures to prevent staff from forwarding PT samples to other 
laboratories even in instances in which they would normally forward a 
patient specimen for testing.
    PT samples are not to be referred to another laboratory under any 
circumstances. However, despite the issuance of considerable guidance 
and the near-universal inclusion of instructions in laboratory 
operations manuals, there continue to be cases where PT samples are 
forwarded to another laboratory for analysis. Laboratory staff are 
either not being made aware that the prohibition applies even in 
instances where they would normally forward a patient specimen for 
additional testing, or, due to failures in training or the lack of 
clarity of laboratory operating manuals, they fail to abide by the 
laboratory's written policies prohibiting the referral of PT samples to 
another laboratory.
    For example, some laboratories have indicated that they have been 
confused by the requirement at Sec.  493.801(b) that laboratories test 
PT samples in the same manner as patient specimens. If their standard 
operating procedure is for some types of patient specimens to be sent 
to another laboratory for reflex or confirmatory testing, they have 
erroneously believed that there would be a basis for also referring a 
PT sample. Furthermore, they have strenuously argued that their 
mistaken interpretation was innocent, and that we should find an 
improper, but not intentional, referral of a PT sample in those 
instances.
    We disagree with any assertions that such referrals are 
``improper'' but not ``intentional'' under our long-standing 
interpretation of ``intentional''. As noted above, we have consistently 
interpreted ``intentional'' to mean general intent, as in intention to 
act, and expansive case law has supported this interpretation. That 
said, we recognize that, in cases of a PT referral involving reflex or 
confirmatory testing under standard operating procedures, the 
revocation of a CLIA certificate, combined with the resulting potential 
prohibition on the owner and operator to own or operate a laboratory 
for 2 years, may create access issues for patients in need of 
laboratory services. We also note that laboratory testing protocols 
have changed over time, and reflex or confirmatory testing has become 
more prevalent, resulting in an increased risk of PT referral.
    We are mindful that all healthcare beneficiaries depend on a 
functioning PT program conducted in accordance with the regulations and 
statute to ensure that laboratories provide accurate and reliable test 
results; however, we recognize that human error can and does occur. For 
these reasons, we proposed a narrowly crafted exception from the long-
standing interpretation of ``intentional'' to allow for the imposition 
of alternative sanctions when there is a single instance of PT referral 
related to reflex, confirmatory, or, as discussed below, distributive 
testing. Laboratories are obligated to provide staff with clear 
standard operating procedures and effective training for all current 
and newly hired employees, and must ensure continued compliance with 
those procedures to prevent PT referral. Repeat PT referrals, even if 
related to reflex, confirmatory, or distributive testing, would be 
considered ``intentional'' and may be subject to the sanctions of 
revocation and ban against the owner and operator. A PT referral is a 
prohibited act and will always involve consequences.
    In addition to the already extensive campaign to highlight the bar 
on PT referrals, we have considered what more we could do to further 
ensure laboratory awareness of this prohibition. We therefore proposed 
to make two changes to the CLIA regulations relevant to PT referral. 
The first proposed change was the addition of a statement to Sec.  
493.801(b) to explicitly note that the requirement to test PT samples 
in the same manner as patient specimens does not mean that it is 
acceptable to refer PT samples to another laboratory for testing even 
if that is the standard operating procedure for patient specimens. This 
means that, in instances where the laboratory's patient testing 
standard operating procedures would normally require reflex or 
confirmatory testing at another laboratory, the laboratory should test 
the PT sample as they would a patient specimen up until the point

[[Page 27140]]

they would typically refer a patient specimen to a second laboratory 
for any form of further testing. A PT sample must never be sent to 
another laboratory under any circumstances.
    The second proposed change was to establish a narrow exception to 
our long-standing interpretation of what constitutes an ``intentional'' 
referral. We noted, however, that for all other instances in which a PT 
sample is referred, the standard for ``intentional'' would continue to 
be a general intent to act--that is, to send a PT sample to another 
laboratory for analysis. For the narrow exception to this general rule, 
we proposed that when CMS determines that a PT sample was referred to 
another laboratory for analysis, but the requested testing was limited 
to reflex, confirmatory, or distributive testing, then we would 
consider the referral to be improper and subject to alternative 
sanctions in accordance with Sec.  493.1804(c), but not intentional, 
provided that, if the specimen were a patient specimen, the referral 
would have been in full conformance with written, legally accurate, and 
adequate standard operating procedures for the laboratory's testing of 
patient specimens, and the PT referral is not a repeat PT referral. 
Alternative sanctions may include any combination of civil money 
penalties, directed plan of correction (such as required remedial 
training of staff), temporary suspension of Medicare or Medicaid 
payments, or other sanctions specified in accordance with regulation.
    By ``full conformance'' with the laboratory's written, legally 
accurate and adequate standard operating procedures we mean that the 
procedures adequately describe what is to be done, and that what is to 
be done is in conformance with applicable laws (such as the ban on 
referring PT samples to another laboratory for analysis). Furthermore, 
we mean that the referral policy does not afford any discretion to 
staff as to whether a patient specimen would be forwarded or not. For 
example, standard operating procedures do not allow for selectivity on 
the part of the laboratory staff. Rather, they require the application 
of pre-established criteria that result in a mandate to forward a 
patient specimen to another laboratory for further analysis. For 
example, if standard laboratory protocols dictate that all specimens 
showing HIV-positive test results be sent to a second laboratory for 
confirmatory testing, but we find that the individual referred only 1 
of the 2 positive HIV PT samples, we would consider the referral to be 
not in conformance with the laboratory's own standard operating 
procedure. In this instance, the laboratory may be subject to the 
sanctions of revocation and ban against the owner and operator as 
opposed to alternative sanctions.
    By providing that the referral is not a repeat PT referral, we mean 
that the referral is not a repeat PT referral as defined by Sec.  
493.2, as recently amended by the FQHC PPS/CLIA final rule with comment 
period, published in the May 2, 2014, Federal Register at 79 FR 25436. 
Specifically, there has not been an instance of identified PT referral 
in the two survey cycles prior to the time of the PT referral in 
question. Two survey cycles generally equates to a four-year period on 
average. This is not a precise calendar time period but is carefully 
recorded as a matter of actual and documented survey event dates. Both 
CMS and accrediting organizations perform initial surveys at least 3 
months but no later than 12 months from the effective date of CLIA 
certification. Subsequent routine recertification surveys are performed 
biennially. A survey cycle means the time between an initial survey and 
recertification survey or the time between a recertification survey and 
the next recertification survey, and is approximately two years. The 
time interval from the effective date of the CLIA certificate until the 
initial certification is also included as part of the initial 
certification survey cycle. Complaint and validation surveys are 
performed on a non-routine basis, and are considered to be separate 
from survey cycles for the purpose of determining the timeframe for two 
survey cycles.
    In other words, a referral would not be considered ``intentional'' 
if the CMS investigation reveals PT samples were sent to another 
laboratory for reflex, confirmatory, or distributive testing, the 
referral is not a repeat PT referral, and the referral occurred while 
acting in full conformance with the laboratory's written, legally 
accurate and adequate standard operating procedure. The key to this 
exception is the expectation that laboratories will ensure that 
improper referrals are addressed and eliminated, or we will find that 
future referrals are intentional. The exception is meant to be a one-
time exception to a finding of an intentional referral by virtue of a 
general intent to forward a PT sample to another laboratory. Upon 
learning that the laboratory's training materials, training, or staff 
capabilities are inadequate to ensure compliance with the PT referral 
requirements, we expect the laboratory to correct the problems, and 
will treat subsequent referrals as ``intentional'' in keeping with our 
long-standing practices. We believe that it is reasonable to expect 
laboratories to maintain a heightened vigilance for this time-frame to 
ensure that they do not have any repeated difficulties. We requested 
public comments on these proposed changes.
    When we were in the final steps of preparing our proposed rule for 
publication, Congress enacted the ``Taking Essential Steps for Testing 
Act of 2012'' (Pub. L. 112-202, the ``TEST Act''), on December 4, 2012. 
The TEST Act amended section 353 of the Public Health Service Act to 
provide the Secretary with discretion as to which sanctions she would 
apply to cases of intentional PT referrals. We therefore proposed to 
change the ``will'' to ``may'' in the second sentence of Sec.  
493.801(b)(4) to ensure conformance with the TEST Act, but we noted 
that other aspects of implementing the TEST Act would be addressed in 
additional rulemaking. Accordingly, in the May 2, 2014, Federal 
Register at 79 FR 25436, we published the FQHC PPS/CLIA final rule with 
comment period, which finalized additional proposals for implementing 
the TEST Act. We invited comment on the proposed change to Sec.  
493.801(b)(4) and on any suggestions or concerns the public may have 
regarding implementation of the TEST Act.
    We received a total of 17 comments on our proposed changes to the 
CLIA regulations discussed above. The comments came from a variety of 
sources, including laboratory accreditation organizations, laboratory 
professional organizations, medical societies, and health care systems. 
Overall, the commenters were supportive of the proposed changes. They 
expressed appreciation for the proposed changes to the regulations and 
for efforts to provide additional clarity around the requirement for 
laboratories to test PT samples in the same manner as patient 
specimens. Commenters applauded CMS' efforts to enable more flexibility 
in the application of penalties and corrective actions under specific 
circumstances. No commenters opposed the changes. We respond to 
specific comments below:
    Comment: We received one comment that described a laboratory 
process called ``distributive testing.'' The commenter described 
``distributive testing'' as a situation in which one laboratory may 
perform ``pre-electrophoretic testing'' for protein electrophoresis (a 
method used by laboratories to separate molecules according to their 
size and electrical charge) and a portion of the specimen is sent to a 
second laboratory, with a different CLIA certificate, to perform the

[[Page 27141]]

actual electrophoresis. Similarly, serum protein electrophoresis 
requires a total protein result as well as the electrophoretic results 
to calculate the percentage of each serum protein components in the 
five major fractions. The lab performing the electrophoresis may not 
have the instrument required to measure total protein and typically 
might send the patient specimen to another lab for this result to be 
later used in the calculation.
    The commenter asks if PT referrals that occur during such 
distributive testing are included in the exception established in this 
change.
    Response: The situation described by the commenter does not conform 
to the definition of ``reflex'' or ``confirmatory'' testing as 
described in the proposed definitions. In this scenario, the 
electrophoresis testing is not performed because pre-electrophoretic 
test results are abnormal, outside a predetermined range, or used to 
substantiate the result of an initial laboratory test. Unlike reflex 
and confirmatory testing which are conditional options based upon the 
initial test results, distributive testing is understood to be standard 
practice for all patient specimens associated with a specific test. 
However, we agree with the commenter that there are sufficient 
similarities between distributive testing and reflex and confirmatory 
testing, that it would be appropriate to include distributive testing 
in the narrow exception we proposed.
    We have therefore added a definition of distributive testing at 
Sec.  493.2 to mean laboratory testing performed on the same specimen, 
or an aliquot (portion) of it, that requires sharing it between two or 
more laboratories to obtain all data required to complete an 
interpretation or calculation necessary to provide a final reportable 
result for the originally ordered test. When such testing occurs at 
multiple locations with different CLIA certificates, it is considered 
distributive testing. We have added the term ``distributive testing'' 
to Sec.  493.801(b) and Sec.  493.801(b)(4) so that distributive 
testing is treated in the same manner as reflex or confirmatory 
testing.
    Comment: One commenter requested clarification of the term ``first 
offense'' and asks if a second offense would be charged only if the 
exact same circumstances caused a second improper referral.
    Response: While we did not use the term ``first offense'' in the 
proposed rule, it is important to note that the narrow exception is 
intended to be a one-time exception to a finding of intentional 
referral. Any instance of PT referral occurring within two survey 
cycles subsequent to an incident that meets the criteria described in 
the narrowly crafted exception, whether or not the referral involves 
reflex, distributive, or confirmatory testing, will be treated as 
``intentional'' and may result in the revocation of the CLIA 
certificate and the two-year prohibition from owning and operating a 
laboratory against the owner and operator.
    Comment: One commenter asked how CMS will handle increased 
automation incidents of PT referral.
    Response: Incidents of PT referral that are related to an automated 
laboratory process and rule-based laboratory computer systems have 
generally been associated with reflex or confirmatory testing. In these 
cases, alternative sanctions would be applied if the circumstances meet 
the defined criteria in the exception to the determination of 
``intentional'' PT referral and the incident is not a repeat PT 
referral as discussed above. If the ``automatic incident of PT 
referral'' is not a direct result of the laboratory's standard 
operating procedure for reflex or confirmatory testing or distributive 
testing, the laboratory would not meet the criteria for this exception.
    Comment: One commenter expressed concern about the sanctions 
against the director of a laboratory found to have referred a PT 
sample. The commenter believes if a laboratory's PT referral meets the 
criteria in the exception, then the laboratory director should be 
allowed to continue directorship of the laboratory without receiving 
any alternative sanctions.
    Response: Revocation of the CLIA certificate is a principal 
sanction. In the narrowly carved out exception, alternative sanctions 
are applied in lieu of the revocation of the CLIA certificate. 
Alternative sanctions may include a directed plan of correction, civil 
money penalty, state onsite monitoring, or suspension of Medicare 
payments. Alternative sanctions are enforcement actions taken against 
the laboratory and not an individual such as the laboratory director. 
Because the CLIA certificate would not be revoked as the result of a 
single instance of PT referral meeting the criteria in the narrowly 
crafted exception, the laboratory's owner and operator would not be 
subject to the two-year prohibition from owning and operating a 
laboratory as a direct result of this incident.
    Comment: One commenter asked how CMS will ensure Regional Offices 
and State Surveyors are consistent in the application of these changes 
and the associated enforcement.
    Response: CMS will continue the current process that requires all 
suspected PT referral cases be forwarded to central office for review 
by a team of experts. The team will continue to thoroughly review every 
case to determine whether the facts support a determination of PT 
referral and also if the facts in the case meet the criteria described 
in this exception. Written guidance and training will be provided to 
the Regional Offices and State Agencies.
    Comment: We received several comments that urged CMS to broaden the 
proposed exception to take in account honest mistakes made by 
individuals and other situations that should be eligible for more 
lenient enforcement.
    Response: Because each case of PT referral is unique, every 
situation cannot be anticipated and discretely defined. The narrow 
exception created in this rule recognizes that mistakes do occur and we 
are finalizing the exception as proposed with the sole addition of 
distributive testing. See also our response to the next comment.
    Comment: We received one comment that urged CMS to fully implement 
the TEST Act now rather than engaging in multiple rulemakings on same 
topic. The commenter noted that this rule does take some steps toward 
the use of discretion in PT referral cases, but expresses concern that 
the changes are too limited.
    Response: We proposed a change in the regulations that would 
acknowledge the Secretary's discretion under the TEST Act, and we 
invited comments on this proposal as well as any suggestions or 
concerns about the additional rulemaking that would be needed to 
implement the TEST Act. The TEST Act provides the Secretary with the 
ability to achieve a better correlation between the nature and extent 
of intentional PT referral and the type and scope of sanctions or 
corrective actions that are imposed. We agree with the commenter that 
we should implement the TEST Act as soon as possible. We believe that 
the TEST Act will allow for policies that are in the best interests of 
patients, as well as promote efficiency and effectiveness in corrective 
action by laboratories. We are therefore finalizing the proposal to 
change ``will'' to ``may'' in the second sentence of Sec.  
493.801(b)(4) to ensure that this section is in compliance with the 
TEST Act. In the May 2, 2014, Federal Register at 79 FR 25436, we 
published the FQHC PPS final rule, which finalized additional proposals 
for implementing the TEST Act.
    Comment: Two commenters stated that waived laboratories should be 
exempt from penalties associated with

[[Page 27142]]

PT referral since they are not required by law to participate in PT.
    Response: While this comment is outside the scope of this rule, we 
would like to emphasize that the CLIA statute (42 U.S.C. 263a) states 
that laboratories holding a certificate of waiver are only exempt from 
subsections (f) and (g) of the statute. All other subsections apply, 
including the prohibition against PT referral and the statutory 
consequences established in subsection (i). Therefore, the statutory 
requirements under subsection (i) do apply to waived laboratories. 
Furthermore, subsection (i) of the CLIA statute refers to ``any 
laboratory'' that the Secretary determines has intentionally referred 
its proficiency testing samples. For these reasons, waived laboratories 
are not exempt from the ban against the referral of PT samples and the 
penalties required when PT referral has been substantiated.
    We also note that we received other comments outside the scope of 
this rulemaking that we will not address here. We thank the commenters 
for their input and suggestions.
    After consideration of the comments discussed above, we are 
finalizing the definitions for ``confirmatory testing'' and ``reflex 
testing'' and the changes to Sec.  493.801(b) introductory text and 
Sec.  493.801(b)(4) as proposed. Also, in accordance with the comments 
above, we are finalizing a definition for ``distributive testing'' and 
adding references to distributive testing to Sec.  493.801(b) and Sec.  
493.801(b)(4).
    Contact for CLIA issues: Melissa Singer, (410) 786-0365.

III. Collection of Information Requirements

    This final rule does not impose any new information collection, 
recordkeeping, or third-party disclosure requirements. However, this 
final rule creates certain savings related to information collection, 
recordkeeping or third-party disclosure requirements. While we detail 
all of the estimated savings of this final rule in the regulatory 
impact analysis, the following paragraph provides a brief summary of 
the estimated savings associated with the currently approved 
information collection request (ICR).
    This final rule would reduce the reporting requirements for 
transplant centers and organ procurement organizations. As stated later 
in the regulatory impact analysis, we are eliminating the reporting 
requirement at 42 CFR 482.74(a)(2). The requirement is redundant as it 
is a duplication of data submission under the Paperwork Reduction Act. 
The same information is currently being collected by the Health 
Services and Resources Administration (HRSA) under OMB control number 
0915-0157. After the requisite notice and comment periods, we will 
submit a revision of the currently approved ICR for OMB review and 
approval.

IV. Waiver of Delayed Effective Date for Revisions to 42 CFR Part 483

    We ordinarily provide a 60-day delay in the effective date of the 
provisions of a major rule in accordance with the Administrative 
Procedure Act (APA) (5 U.S.C. 553(d)), which requires a 30-day delayed 
effective date, and the Congressional Review Act (5 U.S.C. 801(a)(3)), 
which requires a 60-day delayed effective date for major rules. 
However, we can waive the delay in effective date if the Secretary 
finds, for good cause, that such delay is impracticable, unnecessary, 
or contrary to the public interest, and incorporates a statement of the 
finding and the reasons in the rule issued under 5 U.S.C. 553(d)(3) and 
5 U.S.C. 808(2).
    The Secretary finds that good cause exists to make certain 
regulatory provisions effective upon publication in the Federal 
Register. Specifically, changes to 42 CFR Part 483 in this final rule 
are effective immediately upon publication. We believe it is in the 
public interest to make the LTC facility sprinkler extension provision 
immediately effective. Absent such timely action, a number of nursing 
homes will be unable to apply for, and obtain, an extension of the due 
date to achieve full sprinkler status before mandatory sanctions take 
effect, despite their taking action to build a replacement facility or 
undertake major modifications that may qualify the facility for an 
extension of time under this final rule. Instead, such facilities will 
be terminated from Medicare participation and their residents will face 
relocation, or the nursing home will suffer mandatory imposition of a 
denial of payment for new admission. Section 1819(h)(2)(D) of the Act 
requires a denial of payment for new admissions for a facility that has 
been found to be out of compliance with CMS requirements if the 
facility has not achieved substantial compliance within three months, 
and Medicare termination must be effected within six months pursuant to 
section 1819(h)(2)(C).
    Without an immediate effective date of this rule, these sanctions 
will take effect for a number of otherwise qualifying facilities that 
have been cited for noncompliance, and their residents will experience 
the effects (including relocation from facilities whose Medicare 
participation will have been terminated). While publication of the 
notice of proposed rulemaking for this regulation occurred on February 
7, 2013, well in advance of the August 13, 2013 effective date of the 
sprinkler requirement, it has not been possible to issue a final rule 
until now. As more time has elapsed, more otherwise qualifying 
facilities have been cited for noncompliance and will soon face 
mandatory sanctions.
    We also note that this rule provides discretionary authority for 
CMS to require that a facility implement additional, interim fire 
safety measures as a condition for receiving an extension. Interim 
measures may include, for example, the initiation of a fire watch, 
installation of temporary exits, installation of temporary smoke 
detection or smoke alarm systems, and increased fire safety training or 
fire drills for staff or other means to ensure the continued fire 
safety of the residents of the facility. We believe that an immediate 
effective date for all changes in this rule affecting Part 483 is in 
the best interest of nursing home residents and the public in general. 
For these reasons, we believe that a delay in the effective date of 
this provision is contrary to the public interest, and are making the 
provision effective upon publication.

V. Regulatory Impact Analysis

    We have examined the impacts 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). 
We estimate that this rulemaking is ``economically significant'' as 
measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly,

[[Page 27143]]

we have prepared a Regulatory Impact Analysis (RIA) that, to the best 
of our ability, presents the costs and benefits of the rulemaking.
    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. HHS will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A Major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This action is a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective as specified in the DATES section 
of this final rule, 60 days after date of publication in the Federal 
Register.

A. Statement of Need

    In Executive Order 13563, the President recognized the importance 
of a streamlined, effective, efficient regulatory framework designed to 
promote economic growth, innovation, job creation, and competitiveness. 
To achieve a more robust and effective regulatory framework, the 
President has directed each executive agency to establish a plan for 
ongoing retrospective review of existing significant regulations to 
identify those rules that can be eliminated as obsolete, unnecessary, 
burdensome, or counterproductive or that can be modified to be more 
effective, efficient, flexible, and streamlined. This final rule 
continues our direct response to the President's instructions in 
Executive Order 13563 by reducing outmoded or unnecessarily burdensome 
rules, and thereby increasing the ability of health care entities to 
devote resources to providing high quality patient care.

B. Overall Impact

    This final rule creates ongoing cost savings to providers and 
suppliers in many areas. Other changes clarify existing policy and 
relieve some administrative burdens. We have identified other kinds of 
savings that providers and patients will realize throughout this 
preamble. The cost-reducing savings that we were able to estimate are 
summarized in the table that follows. We requested public comments on 
all of our burden assumptions and estimates. As discussed later in this 
regulatory impact analysis, substantial uncertainty surrounds these 
estimates and we especially solicited comments on either our estimates 
of likely savings or the specific regulatory changes that drive these 
estimates. In the table that follows we present our best estimate of 
likely savings; we later address the uncertainty that surrounds these 
estimates.

                             Table 1--Section-by-Section Economic Impact Estimates *
----------------------------------------------------------------------------------------------------------------
                                                                                  Number of      Likely savings
                  Issue                                Frequency                  affected       or benefits ($
                                                                                  entities          millions)
----------------------------------------------------------------------------------------------------------------
Ambulatory Surgical Centers:
     Radiology Services..........  Recurring Annually...............             2,544                41
Hospitals:
     Food and dietetic services..  Recurring Annually...............             4,900               459
     Nuclear medicine services...  Recurring Annually...............  ................                77
Transplant Centers:
     Reports to CMS & Survey       Recurring Annually...............                60                <1
     Changes.
Long Term Care Facilities:
     Sprinkler Deadline Extension  One-time.........................               125                22
Rural Health:
     CAH & RHC/FQHC Physician      Recurring Annually...............             9,311                76
     responsibilities.
     CAH Provision of services...  Recurring Annually...............               665                <1
CLIA:
     PT Referral.................  Recurring Annually...............                 3             \a\ 2
                                                                             -----------------------------------
        Total............................  .................................  ................              $679
----------------------------------------------------------------------------------------------------------------
* This table includes entries only for those reforms that we believe would have a measurable economic effect and
  for which we were able to prepare estimates.
\a\ $2 million represents an upper bound on net societal savings because some portion of the estimated effect
  may consist of transfers from temporarily-banned lab directors to hospitals or laboratories.

    As discussed later in this analysis, our estimates are 
substantially unchanged from the proposed rule in all but three 
respects. First, since the proposed rule was issued, the Department has 
created a working group to review current regulatory impact analysis 
practices and standards on a Department-wide basis. One area of concern 
to the working group was improving the accuracy and standardizing a 
wide variety of methods and calculations currently used to estimate 
regulatory burdens or savings that involve staff time of regulated 
entities. The tentative conclusion of the working group is that 
estimates of time cost can reasonably use salary data collected for 
many occupations by the Bureau of Labor Statistics (BLS) of the 
Department of Labor, but that the hourly wage or salary cost of 
employees should be doubled to include both fringe benefits (for 
example, health insurance and retirement) and overhead costs (rent, 
utilities, and other support costs) in an estimate of total costs or 
savings. In the proposed rule we had used a factor of approximately 50 
percent. Accordingly, we are now adjusting all our estimates of 
employee time costs to use a factor of 100 percent. This is necessarily 
a rough adjustment, both because fringe benefits and overhead costs 
vary significantly from employer to employer, and because methods of 
estimating these costs also vary widely from study to study. 
Nonetheless, there is no practical alternative and we believe that 
doubling the wage or salary cost to estimate total cost is a reasonably 
accurate estimation method. Second, we have also updated wage and 
salary costs from 2012 to 2014 dollars. Both these changes increase our 
burden reduction savings estimates. Third, we are using

[[Page 27144]]

considerably more conservative estimates of likely hospital responses 
and subsequent savings in dietary management and oversight. Our primary 
estimate is now 75 percent of hospitals adopting these changes and we 
allow for the possibility that the overall response could be as low as 
15 percent. We have also reduced our estimates of the time savings 
involved. These changes reduce our burden reduction savings estimates.

C. Anticipated Effects

1. Effects on Ambulatory Surgical Centers
    The potential cost savings from the reduced ASC radiology services 
requirements are discussed in the preamble section of this rule 
addressing those reforms. We have calculated the savings based on the 
elimination of ASC requirements that are inappropriate and unnecessary 
in the ASC setting, primarily because some of the requirements are 
intended for inpatient hospital patients, which would not be applicable 
in the outpatient ASC setting. We estimate that assuming the average 
cost for affected facilities to meet the radiology services 
requirements would have been $16,000 annually ($4,000 x 4 quarters), 
the total savings will be $40.7 million ($16,000 x 2544 ASCs).
    The assumption for this estimate is based on using ASC facilities 
across the country that provide orthopedic or pain management 
procedures, which are the facilities most likely to require a 
radiologist on staff. We reached out to the Ambulatory Surgery Center 
Association for assistance on the average cost and usage of 
radiologists in ASCs across the United States. Based on a survey of 
ASCs and depending on the market, location of the ASC and frequency of 
the visits, we utilized a $4,000 average cost per quarter that ASCs are 
paying for radiologist fees. In addition, we considered the total 
number of ASCs affected by the current radiology services requirements 
at an average 48 percent, or 2,544 ASCs, based on current data and the 
total number of Medicare certified ASCs (5,300 as of December 2011).
    We received the following public comments on our estimated benefits 
to ASCs:
    Comment: Several commenters agreed with our assertion that the 
proposed regulatory change would create savings for ASCs. Commenters 
agreed that the existing requirements are overly burdensome and 
unnecessary and that the changes would create savings in the costs of 
employing a radiologist.
    Response: We agree that the existing requirements are overly 
burdensome and unnecessary and we thank the commenters for their 
support of these changes.
    Comment: Several commenters also stated that the revisions will 
reduce the substantial administrative burden of finding a radiologist. 
One commenter stated that it is ``very difficult to find a radiologist 
that is willing to assume the responsibility for the ASC. It is also 
difficult to get a radiologist here in a timely fashion to review our 
program at the intervals required. This has added both staff time and 
cost to the Center that has not added value to our patient care.'' 
Another commenter stated that ``eliminating the need for a radiologist 
would help us divert those same financial and labor resources towards 
more relevant and meaningful projects--such as infection control and 
patient safety.'' Yet another commenter stated that ASCs have reported 
great difficulty finding radiologists willing to be part of their 
medical staff, as the intra-operative imaging used at ASCs does not 
require the specialized knowledge and skill of a radiologist,'' and 
that ``many ASCs do not regularly make use of any radiology, but 
nonetheless must face the burden of appointing a radiologist to their 
medical staff because on rare occasions they have the need for imaging 
in conjunction with a procedure.''
    Response: We understand and agree with the comment. Since the final 
rule eliminates the requirement for this unnecessary supervision, these 
difficulties will disappear. We have not attempted to estimate these 
administrative savings, absent any data, but they could well be 
substantial.
    Comment: Some commenters stated that, in addition to relieving 
burden on ASCs, it will also reduce burden for the radiologist who 
otherwise has no other contact or interaction with the ASC.
    Response: We appreciate the comment, which confirms the key point 
that the existing requirement simply wastes resources. That said, it 
would double-count savings to estimate a burden reduction for 
radiologists equal to the burden reduction for ASCs. Radiologists will 
continue to obtain assignments commensurate with their skills and will 
continue to be paid for work they perform. The time they currently 
waste on useless work will become productive in other settings, but 
there is no reason to think that their amount of paid work will change. 
The obvious ``real'' savings from the useless work avoided should be 
counted only once, and we have described them as accruing to ASCs, the 
payers. Again, we think that there are benefits, in this case to 
radiologists who prefer real work to ``make-work'', that we are unable 
to measure.
    Comment: One commenter expressed concern about the new proposal to 
have an MD/DO who is qualified with appropriate education and training 
to oversee the radiologic services. The commenter questioned whether 
additional education requirements might also limit those physicians who 
would be willing to serve in this capacity, and whether this additional 
layer could potentially create added costs and be burdensome. The 
commenter believes that, ultimately, the ASC governing body should have 
this accountability.
    Response: We believe that we have addressed the commenter's 
concerns by changing the proposed provision in this final rule to 
require the governing body be responsible for appointing an individual 
that is qualified in accordance with State law and ASC policy. We have 
specifically not included qualification requirements and as stated in 
the preamble, the appointed individual may be someone already working 
in the ASC that is qualified to perform the required duties. This 
change was discussed above in section II.A. of this preamble In 
practice, we believe that ASCs already utilize such persons. 
Accordingly, we have not changed our cost estimates.
    Comment: One commenter believes that we have incorrectly identified 
savings as transfers. The commenter stated that the RIA ``suggests that 
what are clearly reductions in regulatory mandates might actually be 
``transfers'' that do not reduce costs. This is incorrect.'' The 
commenter went on to say ``it is not reasonable to assume that 
eliminating any of those unnecessary costs--costs that exist only 
because created by previous regulatory mandate--is somehow a transfer 
of money with no ``real'' economic effect.'' Finally, the commenter 
said that if we continue to make this argument we ``should produce hard 
evidence from either the economic literature or previous economic 
analyses from agencies either imposing or eliminating regulatory cost 
burdens that such burdens are properly labeled transfers, and 
demonstrate a methodology for calculating how much of such cost burden 
is a mere transfer and not either an increase or reduction in real 
economic costs.''
    Response: We were concerned about how the elimination of these 
costs should be presented, given that some of the work done by 
supervising radiologists in ASCs is redundant, and therefore not 
useful, but--according to anecdotal evidence--still prevents the

[[Page 27145]]

radiologists from using their time for other valuable activities (such 
as self-directed activities). If the information we have about 
radiologists' time use is accurate, there is no question that these 
benefits are correctly categorized as savings. If the information we 
have is not entirely accurate, the benefits should be categorized as a 
combination of societal savings and transfers from radiologists to 
ASCs.
    We agree with the commenter that elimination of these requirements 
is a reduction in ``real'' regulatory costs and not simply a change in 
``transfer'' payments, as these terms are used by regulatory 
economists, and have amended the analysis accordingly. We are aware of 
no evidence suggesting anything to the contrary, either from the 
economic literature or from prior rulemakings. That said, the point we 
were trying to make was that productive work would be substituted for 
unnecessary work (see response to preceding comment). As we believe 
that the evidence upon which we base our impact analysis is sound, we 
are categorizing these benefits as savings.
2. Effects on Intermediate Care Facilities for Individuals Who Are 
Intellectually Disabled
    Because we are finalizing only technical corrections to descriptive 
terminology, we do not estimate any costs or savings for ICFs/IID based 
on this final rule.
3. Effects on Hospitals
    There are about 4,900 hospitals that are certified by Medicare and/
or Medicaid. We use these figures to estimate the potential impacts of 
this final rule. We use the following average hourly costs for 
registered dietitians, advanced practice registered nurses, physician 
assistants, pharmacists, and physicians respectively: $57, $92, $93, 
$116, and $192 (BLS Wage Data by Area and Occupation at https://www.bls.gov/bls/blswage.htm, adjusted upward by 5 percent to inflate--
on a projected basis--to 2014 dollars and by a further 100 percent to 
include fringe benefits and overhead costs).

Ordering Privileges for Registered Dietitians (RDs) (Food and Dietetic 
Services Sec.  482.28)

    We are revising the hospital requirements at 42 CFR 482.28 (b), 
``Food and dietetic services,'' which currently requires that 
therapeutic diets must be prescribed by the practitioner or 
practitioners responsible for the care of the patients. Specifically, 
we are revising Sec.  482.28(b)(1) and (2) that would change the CMS 
requirements to allow for flexibility in this area by requiring that 
all patient diets, including therapeutic diets, must be ordered by a 
practitioner responsible for the care of the patient, or by a qualified 
dietitian or qualified nutrition professional as authorized by the 
medical staff and in accordance with State law. With these changes to 
the current requirements, a hospital will have the regulatory 
flexibility either to appoint RDs to the medical staff and grant them 
specific dietary ordering privileges (including the capacity to order 
specific laboratory tests to monitor nutritional interventions and then 
modify those interventions as needed) or to authorize the ordering 
privileges without appointment to the medical staff, all done through 
the hospital's medical staff and its rules, regulations, and bylaws. In 
either instance, medical staff oversight of RDs and their ordering 
privileges will be ensured.
    As we discussed previously in this rule, a 2010 retrospective 
cohort study \1\ of 1,965 patients at an academic medical center looked 
at the influence of RDs with ordering privileges on appropriate 
parenteral nutrition (PN) usage and showed a reduction in medically 
inappropriate PN usage, which translated to an approximately $135,233 
annual savings to the hospital after RDs were granted ordering 
privileges; included in this savings estimate were solution, materials 
and pharmacy labor costs specifically related to PN. In order to 
estimate the reduced costs that our changes to Sec.  482.28 might bring 
to hospitals, we based our calculations on this study and its finding 
of $135,233 savings for a single hospital that granted ordering 
privileges to RDs. The study presented its figures in 2003 dollars, and 
to adjust to a comparable figure in 2014 dollars we used the increase 
in the Gross Domestic Product deflator over this period. Since that 
index will be up about 25 percent, our savings estimate, rounded, is 
$169,000. We note that Peterson et al.'s cost reduction estimate 
includes only PN solution and pharmacy labor costs, not the savings 
estimates due to the time needed to administer PN by nurses, time saved 
by supervising physicians, or many other categories of potential 
savings. There may, of course, be some minor cost increasing changes, 
but we know of none that would be consequential (for example, the 
marginal cost of a day or two eating a regular hospital diet rather 
than parenteral feeding would at most be a few dollars per patient, and 
likely close to zero). Importantly, the Peterson et al study found that 
inappropriate use of PN decreased only to 27 percent of patients when 
using nutrition support teams. Other studies have found greater 
reduction.\2\ We use the Peterson et al estimates of dietary changes 
and add some, but not all, of the other likely savings to our overall 
estimate of savings.
---------------------------------------------------------------------------

    \1\ Peterson SJ, Chen Y, Sullivan CA, et al. Assessing the 
influence of registered dietician order-writing privileges on 
parenteral nutrition use. J AM Diet Assoc. 2010; 110; 1702 1711.
    \2\ See, for example, the achievements noted in the Ochoa and 
colleagues estimates, and the Trujillo and colleagues estimates, as 
cited in the Peterson et al study (page 1708). These studies found 
that with decisions made by a nutrition support team, inappropriate 
PN use could be reduced to as low as 15 percent. Other cited studies 
have found even greater effects.
---------------------------------------------------------------------------

    We estimate that possibly 5 percent (that is, 245) of all hospitals 
are out of compliance with the CoPs and already granting RDs ordering 
privileges through appointment to the medical staff or other mechanisms 
and have already realized these savings. Additionally, an October 2008 
study \3\ surveyed 1,500 clinical nutrition managers in acute 
healthcare facilities nationwide in an attempt to describe the level of 
RD independent prescriptive authority and to explore the barriers to 
obtaining that authority. The authors of the study reference current 
CMS policy, stating that: ``. . . independent prescriptive authority 
via clinical privileges would not be a CMS-accepted pathway for RDs to 
write orders.'' This mention of the CMS requirements leads us to 
believe that our requirements (included in the survey response 
``regulatory agencies'') might present a significant barrier to RDs 
obtaining dietary ordering privileges. Indeed, the results of the 
survey indicate that roughly 15 percent of the respondents cited 
``regulatory agencies'' as a barrier to obtaining independent 
prescriptive authority (or dietary ordering privileges as we refer to 
it in this rule). However, several limitations inherent in this study 
lead us to question how heavily we should rely on it for the purposes 
of estimating how many hospitals will take advantage of this allowance 
under the CoPs. The survey only looked at the perceptions of clinical 
nutrition managers regarding barriers to RD ordering privileges and did 
not survey hospital administrators or governing body members on the 
reasons why hospitals were unable to grant these privileges to RDs at 
this time. We believe that such a study, had it been performed, would 
have been much more meaningful and reliable for our

[[Page 27146]]

purposes in estimating how many hospitals would possibly implement the 
granting of ordering privileges to RDs. The authors of the study also 
state that ``. . . the limitations of this study must be considered and 
a major limitation was the small response rate (23.4 percent). . .'' 
(or only 351 respondents from the 1,500 clinical nutrition managers 
surveyed).
---------------------------------------------------------------------------

    \3\ Weil, Sharon D., Linda Lafferty, Kathryn S. Keim, Diane Sowa 
and Rebecca Dowling. Registered Dietitian Prescriptive Practices in 
Hospitals. J AM Diet Assoc. 2008; 108; 1688-1692.
---------------------------------------------------------------------------

    As a result of our concerns as to the validity of this study, we 
specifically discussed this issue with the American Hospital 
Association (AHA) and the Federation of American Hospitals (FAH), who 
both assured us that most hospitals will be eager to implement this 
change and will begin the process of granting the privileges to 
dietitians upon publication of the rule. Input from all stakeholders 
has been overwhelmingly, if not universally, supportive. Not one public 
comment identified any regulatory impediment, other than the hospital 
CoPs, to change and the comments were overwhelmingly supportive of the 
policy. Consequently, we believe this survey's results to be flawed or 
erroneous, and largely irrelevant at this point in time. However, we 
have decided to use its conclusions as the lower bound of possible 
hospital policy and practice changes based on this final rule. 
Therefore, based on this study, it is possible that as few as 15 
percent of hospitals (or only 735 hospitals) would take advantage of 
these changes to revise hospital policy and realize the estimated 
savings.
    Additionally, because there is still some degree of uncertainty 
involved in estimating how many hospitals will immediately take 
advantage of this allowance under the CoPs versus how many will elect 
to gradually phase in such changes to RD ordering privileges, we have 
chosen to present a primary estimate (based on our experience with 
hospitals and our discussions with stakeholders) in which 3,675 
hospitals (or 75 percent) elect to make these changes, though we 
believe that an upper bound estimate of nearly 95 percent of hospitals 
might ultimately implement these changes at some point in the future. 
Because 75 percent is our primary estimate, we are presenting only 
those savings estimates and numbers here and not those for the 15-
percent lower bound estimate and the 95-percent upper bound estimate. 
(Our Accounting Table, however, does allow for a wide range of possible 
lower and upper bound savings, some of which could include both upward 
and downward changes partially offsetting each other.) Our extensive 
experience with hospitals, hospital organizations, and RD professional 
organizations leads us to believe that by finalizing this change here, 
a significant number of hospitals will move to grant RDs ordering 
privileges. We also based our savings estimates on the following 
assumptions:
     The Peterson, et al., study was conducted at a 613-bed 
tertiary academic medical center; hospitals smaller than the one 
studied will have lower PN usage due to lower patient censuses and will 
thus have lower net savings;
     We adjusted the net savings relative to average bed size 
for hospitals of 164 beds (from AHA Hospital Statistics), meaning that 
average annual savings will be $36,513 per hospital using the 2003 
figure, but $45,641 after adjusting for inflation; and
     The savings are based on the impact that RD ordering 
privileges had on reducing inappropriate PN usage alone and do not 
include other positive impacts that RD ordering privileges might have 
on reducing costs to hospitals, such as potential reductions in nursing 
time needed for dietary administration when patients switch from 
inappropriate PN to enteral nutrition or a regular hospital diet.
    Based on the studies and these assumptions, we estimate a savings 
of $167,730,675 (3,675 hospitals x $45,641 in savings from reduced 
inappropriate PN usage = $167,730,675) annually.
    As noted above, the changes we are finalizing might also help 
hospitals to realize other significant savings. One 2008 study \4\ 
indicates that patients whose PN regimens were ordered by RDs have 
significantly fewer days of hyperglycemia (57 percent versus 23 
percent) and electrolyte abnormalities (72 percent versus 39 percent) 
compared with patients whose PN regimens were ordered by physicians. 
Also, a recent literature review concludes that for at least general 
surgery and trauma patients, starting enteral feeding as soon as 
possible reduces infectious complications.\5\ This will most likely 
translate into decreased length of stays for these patients as well as 
quicker recovery times and reduced incidents of readmissions after 
discharge from the hospital. However, we do not have any reasonable 
means for estimating these potential cost savings at this time.
---------------------------------------------------------------------------

    \4\ Duffy JK, Gray RL, Roberts S, Glanzer SR, Longoria SL. 
Independent nutrition order writing by registered dieticians reduces 
complications associated with nutrition support [abstract]. J Am 
Diet Assoc. 2008; 108 (suppl 1):A9.
    \5\ Caitlin S. Curtis et al, ``Enteral Feedings in Hospitalized 
Patients: Early versus Delayed Enteral Nutrition,'' Practical 
Gastroenterology, October 2009, pp. 22-30.
---------------------------------------------------------------------------

    More obviously, RDs with ordering privileges will also be able to 
provide medical nutrition therapy (MNT) and other nutrition services at 
lower costs than physicians (as well as APRNs and PAs, two categories 
of non-physician practitioners that have traditionally also devised and 
written patient dietary plans and orders). This cost savings stems in 
some part from significant differences in the average salaries between 
the professions and the time savings achieved by allowing RDs to 
autonomously plan, order, monitor, and modify services as needed and in 
a more complete and timely manner than they are currently allowed. We 
have estimated the savings that would be realized by hospitals through 
our changes in terms of the physician/APRN/PA time and salaries saved.
    Physicians, APRNs, and PAs often lack the training and educational 
background to manage the nutritional needs of patients with the same 
efficiency and skill as RDs. The addition of ordering privileges 
enhances the ability that RDs already have to provide timely, cost-
effective, and evidence-based nutrition services as the recognized 
nutrition experts on a hospital interdisciplinary team. A 2011 review 
article \6\ discusses a number of additional studies that provide 
further evidence for the significant differences in nutrition education 
that exist between physicians and RDs, along with several other studies 
supporting the cost-effectiveness and positive patient outcomes that 
hospitals might achieve by granting RDs ordering privileges.
---------------------------------------------------------------------------

    \6\ Kinn TJ. Clinical order writing privileges. Support Line. 
2011; 33; 4; 3-10.
---------------------------------------------------------------------------

    To calculate these cost savings for hospitals, we based our savings 
estimates on the following assumptions (some of which we have revised 
from those used in the proposed rule):
     Using the estimate established above, 3,675 hospitals will 
realize these savings;
     There is an average hourly cost difference of $69 between 
RDs on one side ($57 per hour) and the hourly cost average for 
physicians, APRNs, and PAs ($126 per hour) on the other;
     There are on average 7,000 inpatient hospital stays per 
hospital per year (from AHA Hospital Statistics) with each of these 
stays requiring at least one dietary plan and orders;
     The average hospital stay is about 5 days (from AHA 
Hospital Statistics);
     On average, each non-complex dietary order, including 
ordering and monitoring of laboratory tests,

[[Page 27147]]

subsequent modifications to orders, and dietary orders for discharge/
transfer/outpatient follow-up as needed, will take 8 minutes (0.13 
hours) of a physician's/APRN's/PA's/RD's time per patient during an 
average 5-day stay;
     On average, MNT or more complex dietary orders (for 
example, PN, tube feedings, patients with multiple co-morbidities, 
transition of patient from parenteral to enteral feeding, etc.), 
including ordering and monitoring of laboratory tests, subsequent 
modifications to orders, and dietary plans and orders for discharge/
transfer/outpatient follow-up as needed, will take 18 minutes (0.30 
hours) of a physician's/APRN's/PA's/RD's time per patient during an 
average 5-day stay; and
     The average number of hospital inpatient stays where the 
patient is determined to be either ``at risk for malnutrition'' or 
``malnourished'' and/or requires MNT or a more complex dietary plan and 
orders for other clinical reasons is 1,400 (or 20 percent of inpatient 
hospital stays) \7\ per hospital per year, with a remaining average of 
5,600 (or 80 percent) of hospital inpatient stays per hospital per year 
where the patient is determined to be ``not at risk for malnutrition'' 
and/or requires a less complex dietary plan and orders.
---------------------------------------------------------------------------

    \7\ Barker LA, Gout BS, Crowe TC. Hospital malnutrition: 
prevalence, identification and impact on patients and the healthcare 
system. Int J Environ Res Public Health. 2011; 8(2); 514-527.
---------------------------------------------------------------------------

    The resulting savings estimate is $291,104,100 ((3,675 hospitals x 
5,600 inpatient hospital stays x 0.13 hours of a physician's/APRN's/
PA's/RD's time x $69 per hourly cost difference) + (3,675 hospitals x 
1,400 inpatient hospital stays x 0.30 hours of a physician's/APRN's/
PA's/RD's time x $69 per hourly cost difference)) annually. These 
hourly estimates are about 57 percent higher than in the proposed rule, 
due to the improved estimate for fringe benefits and overhead costs, 
plus inflation update. However, we have reduced our estimate of hours 
saved to reflect the likelihood that physician supervision will remain 
substantial in some cases. When combined with the savings estimate of 
$167,730,675 from reduced inappropriate PN usage, this brings the total 
savings estimate from the CoP changes to $458,834,775 (or approximately 
$459 million) annually. We note again that these estimates exclude some 
categories of cost increases (for example, internal hospital meetings 
to plan changes), and some substantial categories of potential savings 
in medical treatment costs that we have no current basis for 
estimating. The net effect of these omitted calculations would be 
substantially cost saving, and therefore would have no effect on the 
overall conclusion that the net benefits of this final rule are 
positive.
    We acknowledge several additional kinds of uncertainty in our 
estimates of the provision's savings. For instance, we have assumed 
that the time physicians, APRNs or PAs save due to being relieved of 
diet-ordering duties will equal the time spent by RDs on those duties. 
RDs, being the experts in this area and more proficient in evaluating 
and treating the nutritional needs of patients, might actually need 
less time than physicians, PAs, or APRNs. As we have stated previously, 
we have based many of our assumptions and estimates on what we believe 
is the best available evidence we have from our review of the 
literature in this area. We have also based our overall assumptions and 
best estimates on our practical, ongoing experiences with hospitals in 
these matters. Finally, we have restricted our estimates to inpatient 
hospital stays and we did not include a discussion of hospital 
outpatient visits for nutritional services and the impact that these 
changes might have on hospital costs in this area. We invited public 
comments on the assumptions and estimates we put forth in the analysis 
in the proposed rule. The comments we received on the impact of this 
regulatory change are as follows:
    Comment: Several commenters agreed with our assumptions that this 
regulatory change will reduce burden on physicians and create savings 
for hospitals.
    Response: These comments support our expectation that hospitals are 
likely to exercise the flexibility that this final rule provides.
    Comment: One commenter stated that our low estimate for nutrition 
savings is ``arbitrary and implausible.'' The commenter pointed out 
that it is based on a public opinion poll taken of dietitians who are 
not regulatory experts and could not have been expected to know that it 
is an existing CMS rule, not hospital staff, which has prevented them 
from assuming duties commensurate with their expertise. The commenter 
further stated that ``the `low' estimate should be only a few percent 
below the primary estimate, and reflect the implausibility that any 
large fraction of hospitals would not take such obvious savings, even 
though faced with immense cost pressures from the Affordable Care Act 
provisions that will over time drastically reduce payments to 
hospitals.''
    Response: We agree that the previous ``low'' estimate was below the 
likely response of hospitals to the new cost-saving option we provide. 
Furthermore, in this final rule we are adding other categories of 
professionals who may establish diets, further adding to hospital 
flexibility. The commenter's point that professionals expert in the 
performance of their duties do not necessarily understand the ultimate 
legal source of regulatory requirements they experience in their daily 
work is valid and important. Nonetheless, we cannot reasonably assume 
that all hospitals will exercise the flexibility we provide, or do so 
as soon as permitted. Accordingly, we have modified our estimate.
    Comment: One commenter stated their belief that we may have 
underestimated the possible monetary benefits of this provision. For 
example, the commenter stated, a dollar estimate of what may be 
substantial patient health benefits has been omitted.
    Response: We agree that there are potentially important and 
substantial health benefits from allowing the most qualified 
professional staff to make binding judgments on patient diets. It is 
quite likely that there will be both morbidity and mortality reduction 
benefits, as predicted in the professional literature. Nonetheless, we 
have no empirical data on which to estimate this category of benefit.

Nuclear Medicine Services (Sec.  482.53)

    We proposed, and are finalizing, a change to the current 
requirement at Sec.  482.53(b)(1), which requires that the in-house 
preparation of radiopharmaceuticals be performed by, or under the 
direct supervision of, an appropriately trained registered pharmacist 
or a doctor of medicine or osteopathy. We are removing the term 
``direct'' from the current requirement. This revision allows for other 
appropriately trained hospital staff to prepare in-house 
radiopharmaceuticals under the supervision or oversight of a registered 
pharmacist or doctor of medicine or osteopathy, but it will not require 
that such supervision or oversight be exercised by the physical 
presence in the hospital of one of these professionals, particularly 
during off-hours when such a professional is not routinely present. The 
change directly reduces the burden of the current direct supervision 
requirement where it is most needed-- in-house preparation of 
radiopharmaceuticals for after-hours/emergency performance of nuclear 
medicine diagnostic procedures.
    Based on statistics from the Society of Nuclear Medicine and 
Molecular

[[Page 27148]]

Imaging, an estimated 16 million nuclear medicine imaging and 
therapeutic procedures are performed each year in the United States. We 
based our estimated savings for this change on the conservative 
assumptions that:
     Most hospitals will take advantage of this allowance on 
supervision since it is consistent with the Society of Nuclear Medicine 
and Molecular Imaging recommendations on this issue;
     The percentage of nuclear medicine procedures performed 
off-hours (7 p.m.-7 a.m.) is only 10 percent of all procedures 
performed (or 1.6 million);
     It requires 15 minutes of an MD/DO/PharmD's time for 
direct supervision; and
     The average hourly cost for these categories of 
practitioners in 2014 is $192 including fringe benefits and overhead 
costs.
    Therefore, we estimate hospitals savings will be $76.8 million for 
the change (1.6 million off-hour procedures x $192 hourly salary for 
MD/DO/PharmD x 15 minutes for direct supervision). We did not receive 
any public comments on our estimates for savings related to nuclear 
medicine services.
    We are finalizing other revisions to the Hospital CoPs, but we do 
not believe those provisions will create tangible savings for 
hospitals.
4. Effects on Transplant Centers and Organ Procurement Organizations
    Existing Sec.  482.74(a)(2) requires transplant centers to notify 
CMS whenever there was a decrease in the center's number of transplants 
or survival rates that could result in the center being out of 
compliance with the clinical experience (number of required 
transplants) or outcome (survival) requirements at Sec.  482.82. We are 
proposing to eliminate this requirement, which will reduce the burden 
to any transplant center that must currently report this information to 
CMS. This requirement functionally duplicates the data reporting and 
analysis requirements administered through the Health Resources and 
Services Administration (HRSA) of HHS, HRSA's contractor for the 
Scientific Registry for Transplant Recipients (SRTR), and a CMS-funded 
analysis of these SRTR data. These data (hereafter the SRTR data) are 
equally if not more timely, and equal if not better at identifying 
transplant center performance problems, than the data we currently 
collect directly.
    We estimate that transplant centers make about 60 notifications 
each year to CMS according to Sec.  482.74(a)(2). We believe that a 
staff member, probably the transplant center administrator, who will be 
responsible for this notification will need to review the data and 
notify the medical director of the possibility that the center's volume 
and/or survival statistics may result in failure to comply with the 
requirements in Sec.  482.82 of the CoPs. Then the transplant center 
administrator will need to make the actual submission to CMS. We 
estimate costs based on average hourly costs of $192 for the medical 
director (physician) and $116 for the administrator. These hourly costs 
include the average hourly wages for these positions, plus fringe 
benefits and overhead and an update to 2014, as previously explained. 
We believe this will require 15 minutes, or .25 hours, of the medical 
director's time at an hourly wage of $192 and 30 minutes, or .5 hours, 
of the transplant center administrator's time at an average hourly cost 
of $106 ($192 hourly cost for medical director x .25 hours = $48 (+) 
$116 hourly cost for administrator x .5 hours = $58 for a total of 
$106) for each notification to CMS. Based on our experience with 
transplant centers, we estimate that transplant centers make about 60 
of these notifications each year. Thus, the annual savings to 
transplant centers from eliminating this requirement for all transplant 
centers will be about $6,360 ($106 for each notification x 60 
notifications = $6,360).
    In addition to the savings realized by the transplant centers, the 
federal government will realize savings from both the cost of 
conducting the surveys and the cost of federal staff time in reviewing 
and maintaining the survey results. The surveys of the organ transplant 
facilities are usually conducted by both state surveyors and 
contractors paid by the Federal government. A survey requires an 
average of 182 hours to complete. Based upon our experience with 
previous surveys, we estimate that the combined average hourly cost, 
which includes fringe benefits and overhead, for the surveyors is about 
$150. Thus, to conduct a survey costs about $27,300 (182 hours x $150 
hourly cost = $27,300). By reducing the number of surveys by 10, the 
federal government will sustain an estimated annual savings of $273,000 
($27,300 for each survey x 10 surveys = $273,000).
    We expect that the changes to the transplant center survey process 
will improve federal oversight of organ transplant programs by allowing 
more effective targeting of survey and enforcement activities to those 
programs that most need such attention, and will reduce the burden of 
hospitals undergoing surveys that may not be necessary. We estimate 
that the cost of an onsite survey is $10,400 per survey multiplied by a 
reduction of 10 surveys per year for a total of $104,000 per year. The 
per-survey cost represents an estimate of the cost of personnel time 
spent during the onsite survey (hourly cost multiplied by the amount of 
time spent during a one-week onsite survey). This is consistent with 
costs reported by several transplant administrators which ranged 
between $7,334 and $15,000.
    The reduction of 10 surveys each year out of the approximately 80 
annual surveys completed each year represents a 12.5 percent reduction 
in the number of surveys. We estimate that these 10 surveys could have 
follow-up through alternative methods (for example, conference calls, 
plans of correction, etc.). This estimate is based on recent 
information that 43 programs that had non-compliance with data 
submission (that will require an onsite survey, if due for re-
approval), were only slightly below the compliance threshold of 95 
percent and effective follow-up could occur in some cases without an 
onsite survey. In addition, as part of our follow-up process every six 
months for non-compliance with patient and graft outcomes, we review 
about 15 programs every 6 months (approximately 30 programs per year). 
We estimate $104,000 in total savings for transplant hospitals each 
year.
    The federal government will also realize a savings due to the staff 
time required to review and maintain the results of these 10 surveys. 
We estimate that federal staff spend about 5 hours on each survey 
reviewing survey results and maintaining those results. Thus, for each 
survey, we estimate that the federal government will realize a savings 
of $750 (5 hours for each survey x $150 hourly cost = $750). For all 10 
surveys, we estimate the annual savings will be $7,500 ($750 for each 
survey x 10 surveys = $7,500).
    We believe that the other changes we are finalizing for transplant 
centers and OPOs (at Sec. Sec.  482.80(c), 482.82(c), 486.306, 
486.308(b)(1), and 486.344(d)(2)(ii)) will be burden neutral.
    These reforms will enable all three types of affected 
organizations--hospitals, State survey agencies, and Federal oversight 
staff--to focus resources more effectively and efficiently on detecting 
and dealing with genuine and important problems in transplant center 
performance.
5. Effects on Long Term Care Facilities
    In issuing the original 2008 rule, we anticipated that the cost of 
the sprinkler requirement will be substantially reduced by allowing a 
5-year transition

[[Page 27149]]

period (2008-2013). The extended transition period will permit the cost 
of new sprinkler systems to be subsumed (at much less expense) under a 
facility's normal (or accelerated) capital replacement schedule. Due to 
the financial recession of 2008 and problems in the real estate market, 
however, the plans for replacement or major modification for some 
nursing homes have been delayed.
    We recently received communications from a number of owners who 
plan to replace or substantially improve an existing structure, but are 
unable to do so by the August 13, 2013 deadline. In such a case, the 
owner is faced with the prospect of investing significant resources to 
install a system of automatic sprinklers in the old structure by August 
13, 2013, only to have those improvements soon superseded by the 
superior environment of the new structure. We wish to avoid the 
unnecessary costs involved in sprinklering an old structure that will 
soon be replaced. We therefore are permitting time-limited extensions 
of the due date for achieving full sprinkler status. Each case-specific 
extension will then enable more time for full sprinkler systems to be 
implemented through the capital replacement or renovation schedule that 
is feasible for the facility.
    Out of approximately 15,800 nursing homes nationwide, our 
information system indicates that there were 64 facilities as of 
February 2014 that were not sprinklered, and another 497 that were 
partially sprinklered for a total of 561 facilities. Nursing homes have 
made steady progress in sprinkler installation. For example, the 
current inventory of unsprinklered or partially sprinklered facilities 
is about 994 fewer than when the February 2013 proposed rule was 
published (561 v. 1555). However, a much higher proportion of the 
remaining nursing homes are ones that we believe are building 
replacement facilities or undergoing major modifications and would be 
reliant on an extension of time to finish such work while still 
participating in Medicare. We originally projected that 50 
unsprinklered and 75 partially sprinklered facilities would request and 
qualify for a deadline extension and we continue to believe these 
estimates are reasonable.
    In the case of a deadline extension for replacement of a nursing 
home, the unsprinklered facilities that are being replaced will still 
incur the cost of installing sprinklers in the new facility, but they 
will not need to pay twice for such installation (once in the old 
facility to meet the August 13, 2013, deadline, and again in the new 
facility). At an average estimated installation cost of $7.95 per 
square foot and an average space of 50,000 square feet, the avoided 
cost will be approximately $19,875,000 (50 facilities times 50,000 S.F. 
times $7.95). The partially sprinklered facilities may save some 
expense since they are combining the sprinkler installation with major 
modifications. We assume that the partially sprinklered facilities will 
avoid $1.00 per square foot in savings through such economies, and 
assume that the average unsprinklered area is 25,000 square feet. For 
the partially sprinklered facilities, we therefore project that the 
aggregate savings is approximately $1,875,000. The combined aggregate, 
one-time savings will total $21,750,000.
6. Effects on Rural Health and Primary Care Providers and Suppliers

CAH and RHC/FQHC Physician Responsibilities (Sec. Sec.  485.631(b)(2) 
and 491.8(b)(2))

    We are revising the CAH regulations at Sec.  485.631(b)(2) and the 
RHC/FQHC regulations at Sec.  491.8(b)(2) to eliminate the requirement 
that a physician must be on-site at least once in every 2-week period 
(except in extraordinary circumstances) to provide medical care 
services, medical direction, consultation, and supervision. Based on 
our experience with CAHs, we estimate that the smaller and more 
remotely located CAHs, which represent roughly 15 percent of the 1,330 
CAHs (that is, 200 CAHs), will be most affected by the removal of this 
provision and that its removal will produce estimated annual savings of 
nearly $3.1 million for CAHs.
    We estimate that the majority of CAHs do not incur a burden due to 
the relatively large volume of services they provide. For these higher-
volume CAHs, physicians are regularly onsite to supervise and provide 
consultation. We believe that these facilities will continue to have 
frequent physician visits (biweekly or more often), simply as a matter 
of operation. Therefore, for the majority of CAHs, we do not believe 
that eliminating the requirement for a biweekly physician visit will 
significantly reduce their financial and administrative expenses. For 
about 15 percent of CAHs, roughly 200 CAHs, we estimate the current 
burden as follows. First, we estimate that a physician, at an hourly 
cost of $192 (BLS Wage Data by Area and Occupation, including 100 
percent for benefits and overhead costs), spends 6 hours each visit and 
makes bi-weekly visits (26 visits per year) to a facility to perform 
the duties required at Sec.  485.631(b)(2). We estimate these visits 
cost $29,952 per CAH per year (6 hours per visit x 26 visits x $192 an 
hour = $29,952 per CAH per year).
    Next, we estimate current travel expenses associated with the 
biweekly requirement. We estimate that, for each visit, a physician 
drives an average of 50 miles round trip and is reimbursed at a rate of 
$0.55 (the IRS mileage reimbursement rate) per mile. Thus, each visit 
costs approximately $28 (50 miles per visit x $0.55 per mile) for a 
total annual burden of $728 per CAH ($28 per visit x 26 visits = $728 
annual cost per CAH). We understand that a small number of CAHs, such 
as those in Hawaii and Alaska, most likely incur significant additional 
cost for airfare and overnight accommodations. However, we do not have 
enough data to estimate these various costs.
    We believe that eliminating the on-site, bi-weekly physician 
supervision requirement will reduce the physician supervision burden by 
50 percent for each affected CAH. We estimate the savings as follows: 
$3.07 million for on-site visits ([$29,952 per CAH/2] x 200 CAHs = 
$2,995,200) and $72,800 in travel costs ([$728 per CAH/2] x 200 = 
$72,800).
    In addition, CAHs are required to document the events in which an 
extraordinary circumstance will prevent a doctor from visiting the CAH, 
at a minimum, once in a 2-week period. We estimate the administrative 
expenses associated with the documentation requirements at Sec.  
485.631(b)(2) to be $5,720 per year. Based on sample data from the 
Health Resources and Services Administration (HRSA), we estimate that 
such circumstances may impact about 11 percent of all presently 
required visits for this subset of 200 CAHs. We estimate that a 
clerical worker costing $40 per hour in wages, benefits, and overhead, 
will be responsible for completing the paperwork, with each incident 
taking about 0.25 hours to record. Assuming 26 visits per year per CAH, 
with approximately 11 percent of the required visits being prevented, 
thereby triggering the paperwork, we estimate that the yearly cost of 
compliance for these 200 CAHs will be $5,720 (26 visits per year per 
CAH x 11 percent x 200 CAHs x 0.25 hour x $40 per hour = $5,720 per 
year). Thus, we estimate a total annual savings for CAHs of nearly $3.1 
million ($5,720 administrative + $2,995,200 hourly + $72,800 travel = 
$3,073,720).
    For RHCs and FQHCs, we believe burden will be reduced on all such 
facilities. We estimate that, presently, to perform the duties required 
at Sec.  491.8(b)(2), each month a physician spends approximately 8 
hours (4 hours

[[Page 27150]]

each visit, twice a month) on-site at an RHC or FQHC and that these 
visits require an additional 4 hours of travel time. We estimate a 2-
hour round-trip travel time for visits to most RHCs and FQHCs, thus 
approximately 4 hours per month, and we note that many RHCs and FQHCs 
require special means of transport which may be more expensive than 
traveling by car. We estimate travel costs at $1,950 per clinic 
annually ($75 travel cost per visit x 26 visits per year = $1,950 per 
clinic per year). We estimate the costs for time spent for on-site 
visits to be $19,968 per RHC or FQHC per year (4 hours/visit x $192 an 
hour x 26 visits per year = $19,968 per year).
    By eliminating the provision, for each RHC or FQHC we estimate 
travel expenses will be reduced from $1,950 to $663 per year (an annual 
savings of $1,287). For RHCs (3,977 total), we estimate an annual 
savings of $5.1 million on travel ($1,287 per year x 3,977 = 
$5,118,399). For FQHCs (5,134 total), we estimate they will realize 
$6.6 million in annual savings on travel expenses ($1,287 per year x 
5,134 = $6,607,458).
    We further estimate that the time spent on biweekly visits will 
decrease by about one third, from $19,968 to $13,319 (a $6,649 savings) 
per year for each RHC or FQHC. For all RHCs, we estimate an annual 
savings of $26.4 million from fewer hours for on-site clinician visits 
($6,649 per year per RHC x 3,977 RHCs = $26,443,073). FQHCs will 
realize $34.1 million in annual savings from fewer hours for on-site 
clinician visits ($6,649 per year per FQHC x 5,134 FQHCs = 
$34,135,966).
    We also estimate the administrative expenses associated with the 
documentation requirements at Sec.  491.8(b)(2), which are triggered in 
the event of any ``extraordinary circumstances'' preventing any of the 
required bi-weekly physician visits. By comparison to travel and hourly 
visit costs, these expenses are relatively small. As we estimated for 
CAHs, we similarly estimate that such circumstances impact about 11 
percent of the presently required visits for all RHCs and FQHCs. We 
estimate that a clerical worker, costing $40 per hour in wages, 
benefits, and overhead, will be responsible for completing the 
paperwork, with each incident taking about 0.25 hours to record. 
Assuming 26 visits per year, with approximately 11 percent of these 
being prevented, and thereby triggering the paperwork, we estimate the 
yearly cost of compliance for RHCs and FQHCs to be $260,574 (26 visits 
x 11 percent x [3977 RHCs + 5134 FQHCs] x 0.25/hour x $40 per hour = 
$260,574 per year for RHCs and FQHCs). Eliminating the biweekly 
requirement will eliminate this particular administrative cost entirely 
for all RHCs and FQHCs, producing a total annual savings of $113,742 
for RHCs and $146,832 for FQHCs, respectively.
    In total, we believe that eliminating the provision will produce 
annual estimated savings of $31.7 million for RHCs in travel, hourly, 
and administrative costs ($5,118,399 travel + $26,443,073 hourly + 
$113,742 administrative = $31,675,214). For FQHCs, we estimate that 
eliminating the provision will produce nearly $41 million in annual 
savings. ($6,607,458 travel + $34,135,966 hourly + $146,832 
administrative = $40,890,256 per year). We note that a portion of these 
savings may be offset by equipment or other costs associated with 
increased use of telemedicine; however, we lack data with which to 
reliably estimate such costs. Thus for CAHs, RHCs, and FQHCs, we 
estimate a total annual savings of $75,639,190 million.

Provision of Services (Sec.  485.635(a))

    We are removing the requirement that CAHs consult an individual who 
is not a member of the CAH staff in the development of its patient care 
policies; instead, we will allow CAHs greater flexibility in their 
approach. We estimate that removing this requirement will result in a 
total annual savings of $266,000 for CAHs which are not part of a rural 
health network and therefore, in the absence of this final rule, will 
need to provide orientation for a volunteer to be able to serve in this 
capacity. No original estimates were made regarding this requirement, 
which was in fact initially developed for another provider type (43 FR 
30520 and 43 FR 5373), but later assumed as a requirement for CAHs in 
1997 (62 FR 46037).
    Based on our experience, we are aware that many CAHs use 
volunteers, such as current board members, community residents with a 
medical background, or others, to fulfill the current requirements at 
Sec.  485.635(a)(2). That is, many CAHs use a volunteer as the non-CAH 
staff person who provides advice and assists in the development of the 
CAH's patient care policies. In some cases, the CAH must also invest 
time to make such an individual familiar with the CAH's policies and 
procedures. Based on our experience, we estimate that a CAH typically 
spends about $50 an hour for eight hours, annually, including any time 
required for orientation, to involve an outside individual in the 
development of its patient care policies. We also estimate that 665 of 
about 1,330 CAHs are part of a rural health network and can utilize a 
non-staff individual that is part of the network to fulfill this 
requirement. Thus, we estimate the savings based on the CAHs that are 
not in a network and are therefore required to pay an individual to 
assist with developing the policies and procedures. Thus, we estimate a 
total annual savings of $266,000 ($50 x 8 hours = $400 per CAH x 665 
CAHs = $266,000).

RHC/FQHC Definition of a Physician (Sec.  491.2)

    The definition of a physician in the RHC/FQHC CoP regulations does 
not conform to the definition of a physician in the payment and 
Medicare agreement regulations in Part 405 for these types of 
suppliers. We are revising the regulation at Sec.  491.2 by stating the 
specific functions of a doctor of medicine or osteopathy required in 
the statute (sections 1861(aa)(2)(B) and (aa)(3) of the Act) to 
eliminate possible confusion in the supplier community and to 
facilitate the development of more specialized primary care clinics, 
such as those providing dental services. We believe that this change 
will allow for an expansion of patient services and for additional 
health benefits for which we do not have a basis to estimate.
7. Effects on Laboratories
    In this final rule, we are making a number of clarifications and 
changes pertaining to the regulations governing PT referral under CLIA. 
We are also responding to comments made in response to the proposed 
changes, including making further clarifications to ensure conformance 
between the TEST Act and the regulations.
    The first clarification is to add a statement to Sec.  493.801(b) 
to explicitly note that the requirement to test PT samples in the same 
manner as patient specimens does not mean that it is acceptable to 
refer PT samples to another laboratory for testing even if that is the 
protocol for patient specimens. The second change establishes a narrow 
exception in our long-standing interpretation of what constitutes an 
``intentional'' referral. In these instances, the laboratory will be 
subject to alternative sanctions in lieu of potential principal 
sanctions. Alternative sanctions may include any combination of civil 
money penalties, directed plan of correction (such as required remedial 
training of staff), temporary suspension of Medicare or Medicaid 
payments, or other sanctions specified in accordance with CMS 
regulations. Finally, we are adding

[[Page 27151]]

definitions for the following four terms to the regulation: reflex 
testing, confirmatory testing, and distributive testing.
    From 2007 through 2011 there were 41 cases of cited, intentional PT 
referral. Of these 41 cases, we estimate that 13 will have fit the 
terms of this final rule, ranging from a low of 1 in any year (in 2009) 
to a high of 5 (in 2011). Based on discussions with the most recently 
affected laboratories, we estimate that the average cost of the 
sanctions applicable under current regulations is approximately 
$578,400 per laboratory. The largest single type of cost is the expense 
to the laboratory or hospital to contract out for management of the 
laboratory, and to pay laboratory director fees, due to the 2-year ban 
of the owner and operator pursuant to revocation of the CLIA 
certificate. We have not included legal expenses in this cost estimate, 
as it is not possible to estimate the extent to which laboratories may 
still appeal the imposition of the alternative sanctions in this final 
rule. We therefore estimate the annual fiscal savings of the changes to 
range from a low of $578,400 (1 laboratory) to a high of $2.9 million 
(5 laboratories), with an annual average estimated savings of $1.7 
million (about 3 laboratories per year on average). While the macro 
savings may not be large, the costs to the individual laboratory or 
hospital that is affected can be significant.
    We note, however, that the $1.7 million estimated savings to 
laboratories may overstate or understate the provision's net societal 
benefits. To the extent that new managers or support staff are putting 
forth effort (for example, familiarizing themselves with laboratories 
that they have not previously operated) as part of new management 
arrangements, society's resources would indeed be freed for other uses 
by the regulatory change. However, because laboratory director and 
management duties would be performed (by someone) with or without the 
change, some portion of the management director fees may not represent 
actual labor costs, but would instead involve a transfer of value (for 
example, from a temporarily-banned lab director who would receive 
severance pay in the absence of the regulatory change, to the hospital 
or laboratory no longer needing to make the severance payments). We 
lack data to estimate how much of the $1.7 million total is a transfer 
of this type, rather than a net societal benefit.
8. Effects on Small Entities
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that the 
great majority of the providers that will be affected by CMS rules are 
small entities as that term is used in the RFA. The great majority of 
hospitals and most other health care providers and suppliers are small 
entities, either by being nonprofit organizations or by meeting the SBA 
definition of a small business. Accordingly, the usual practice of CMS 
is to treat all providers and suppliers as small entities in analyzing 
the effects of our rules.
    This final rule will save affected entities approximately $660 
million a year. Most of these savings will accrue to hospitals. 
Although the overall magnitude of the paperwork, staffing, and related 
cost reductions to hospitals and CAHs under this rule is economically 
significant, these savings are likely to be a fraction of one percent 
of total hospital costs. Total national inpatient hospital spending is 
approximately nine hundred billion dollars a year, or an average of 
about $150 million per hospital, and our primary estimate of the net 
effect of these proposals on reducing hospital costs is about $540 
million annually. This is an average of about $87,000 in savings for 
the 6,200 hospitals (including CAHs) that are regulated through the 
CoPs and is well under one percent of annual spending. It will be 
higher in larger hospitals, and lower in smaller hospitals, since these 
savings will be roughly proportional to patient volume.
    Under HHS guidelines for Regulatory Flexibility Analysis, actions 
that do not negatively affect costs or revenues by more than 3 percent 
a year are not economically significant. We believe that no hospitals 
of any size will be negatively affected. Accordingly, we have 
determined that this final rule will not have a significant economic 
impact on a substantial number of small entities, and certify that a 
Final Regulatory Flexibility Analysis is not required. Notwithstanding 
this conclusion, we believe that this RIA and the preamble as a whole 
meet the requirements of the RFA for such an analysis.
    In addition, section 1102(b) of the 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 604 of the RFA. For 
purposes of section 1102(b) of the Act, we define a small rural 
hospital as a hospital that is located outside of a metropolitan 
statistical area and has fewer than 100 beds. For the preceding 
reasons, we have determined that this final rule will reduce costs and 
will therefore not have a significant negative impact on the operations 
of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 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 2014, that 
is approximately $141 million. This final rule does not contain any 
mandates.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule (and subsequent final 
rule) that impose substantial direct requirement costs on State and 
local governments, preempts State law, or otherwise has Federalism 
implications. This rule will not have a substantial direct effect on 
State or local governments, preempt States, or otherwise have a 
Federalism implication.

D. Alternatives Considered

    From within the entire body of CoPs and CfCs, the most viable 
candidates for reform were those identified by stakeholders, by recent 
research, or by experts as unusually burdensome if not unchanged. This 
subset of the universe of standards is the focus of this final rule. 
For all of the provisions, we considered not making these changes. 
Ultimately, we saw no good reasons not to propose and finalize these 
burden-reducing changes. The great majority of the comments we received 
agreed with our proposals and reasoning.
    For LTC facilities, we considered the option of not making any 
changes to the rule. However, we were persuaded by the contacts we 
received that bona fide efforts were being made by the nursing homes in 
question to achieve the best results for residents. We believe that the 
benefits to residents of having new, modern and fully-equipped 
facilities are substantial, and that the public interest is served by 
avoiding wastage of funds spent on retrofitting an older structure when 
that structure is soon to be replaced or substantially improved. We 
also considered the option of granting extensions of the due date when 
a replacement or substantial renovation is not contemplated. However, 
we believe that an approach that limits extensions to situations where 
a replacement facility or substantial renovation is involved will best 
balance the advisability of timely achievement to full sprinkler status 
and the special

[[Page 27152]]

challenges involved in large-scale construction projects.
    Regarding the revisions to the CLIA regulations, we focused our 
proposals on reflex or confirmatory testing, and changes to ensure that 
the regulations are in conformance with the ``Taking Essential Steps 
for Testing Act of 2012'' (Pub. L. 112-202, the ``TEST Act''), enacted 
on December 4, 2012. In response to comments, we added distributive 
testing to the same category as reflex or confirmatory testing. Such 
cases, where the laboratory has followed its written, legally accurate 
and adequate standard operating procedure for the testing of patient 
specimens in full, and the PT referral is not a repeat PT referral, 
provide a reasonable basis for the Secretary to determine that the 
referral was not intentional. We are finalizing our proposals.

E. Uncertainty

    Our estimates of the effects of this regulation are subject to 
significant uncertainty. While the Department is confident that these 
reforms will provide flexibilities to facilities that will yield major 
cost savings, there are uncertainties about the magnitude of these 
effects. In addition, as we previously explained, there may be 
significant additional health benefits. Thus, we are confident that the 
rule will yield substantial net benefits. In this analysis we have 
provided estimates to suggest the potential savings these reforms could 
achieve under certain assumptions. We appreciate that those assumptions 
are simplified, and that actual results could be substantially higher 
or lower. Although there is uncertainty concerning the magnitude of all 
of our estimates, we do not have the data to provide probable estimates 
as to the range of possibilities, or to estimate all categories of 
possible costs and benefits, including health effects. We 
illustratively presented one possible lower bound--for food and 
dietetic services--in the proposed rule. We requested comments 
addressing this lower bound estimate, as well as the missing or 
uncertain effects of other provisions, by professional societies, 
individual providers, provider associations, academics, and others.
    Comment: We received one comment stating that we should have 
provided more ``low'' estimates than just the one we provided for the 
dietitian change. The commenter further suggested that, for other 
reforms in this rule, the low estimate should be set at some rounded 
percentage, such as 25 percent below the primary estimate, to show the 
substantial uncertainty of these estimates and to avoid misleading the 
public as to the precision that the analysis supports.
    The same commenter also stated that our proposed estimated benefits 
could be ``considerably higher'' than estimated, both through 
uncertainty and because in various places the preamble identifies 
potentially higher benefits than were assigned dollar values. The 
commenter suggested that the potential benefits of each reform be shown 
at some rounded percentage, such as 25 percent higher, as a ``high'' 
estimate in the accounting statement. Without a ``high'' estimate, the 
``primary'' estimate gives a misleading impression of greater precision 
than the analysis supports.
    Response: We agree with the comment. Unfortunately, we have no 
empirical basis for estimating with any precision either higher or 
lower savings estimates. Accordingly, we have revised our estimates to 
show potential savings both higher and lower than those in the proposed 
rule. As a judgmental estimate, we believe that savings could be at 
least 30 percent higher, or 30 percent lower, than our primary 
estimates for each category of savings. These revisions are shown in 
the accounting statement and table.

F. Accounting Statement and Table

    As required by OMB Circular A-4 (available at https://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), we have prepared an 
accounting statement. As previously explained, achieving the full scope 
of potential savings will depend on future decisions by hospitals, by 
State regulators and others. Many other factors will influence long-
term results. Therefore, we have limited our projections to a five year 
period, provided upper and lower bound estimates that, with one 
exception, are 30 percent higher and 30 percent lower than our primary 
estimate, and rounded all estimates to the nearest $10 million. The 
exception is that for the dietary reforms estimate we are using a lower 
bound uptake rate by hospitals of 15 percent, which is 80 percent less 
than our primary estimate. Thus, these upper and lower bounds allow for 
the proportion of hospitals electing to reform dietary services to be 
substantially higher or lower than our primary estimate. Also, although 
we believe there are health benefits of this final rule from improved 
diets, we have no basis for estimating those. In addition to the 
estimates previously addressed in this RIA, we are also assuming that 
the 75 percent take up rate for reforms in dietary services that we 
project as our primary estimate will not be reached in the first year, 
and base our annualized estimate on a 60 percent rate in the first 
year. The annualized estimates also reflect that the long term care 
facility savings are one-time. Accordingly, we estimate the overall 
cost savings that this rule creates will be approximately $230 million 
to $830 million per year annualized over the next 5 years. Our primary 
estimate is that annualized savings will be about $640 million. Over a 
5-year period, our primary estimate is that total cost savings will be 
approximately $3.2 billion.

                  Table 2--Accounting Statement: Classification of Estimated Costs and Savings
                                                 [$in millions]
----------------------------------------------------------------------------------------------------------------
                                                                                           Units
                                                                          --------------------------------------
             Category                 Primary       Lower        Upper                    Discount
                                      estimate      bound        bound         Year         rate        Period
                                                                             dollars     (percent)     covered
----------------------------------------------------------------------------------------------------------------
Benefits..........................                                      None
----------------------------------------------------------------------------------------------------------------
Costs:
    Annualized Monetized                  -$640        -$230        -$830         2014            7    2014-2018
     reductions in Costs..........
                                          -$640        -$230        -$830         2014            3    2014-2018
----------------------------------------------------------------------------------------------------------------
Transfers.........................                                      None
----------------------------------------------------------------------------------------------------------------


[[Page 27153]]

    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 413

    Health facilities, Kidney diseases, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 416

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements.

42 CFR Part 440

    Grant programs--health, Medicaid.

42 CFR Part 442

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare, Penalties, Privacy, 
Reporting and recordkeeping requirements.

42 CFR Part 482

    Grant programs--health, Hospitals, Medicaid, Medicare, Reporting 
and recordkeeping requirements.

42 CFR Part 483

    Grant programs--health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety.

42 CFR Part 485

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements.

42 CFR Part 486

    Grant programs--health, Health facilities, Medicare, Reporting and 
recordkeeping requirements, X-rays.

42 CFR Part 488

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

42 CFR Part 491

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements, Rural areas.

42 CFR Part 493

    Administrative practice and procedure, Grant programs--health, 
Health facilities, Laboratories, Medicaid, Medicare, Penalties, 
Reporting and recordkeeping requirements.

    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; OPTIONAL PROSPECTIVELY DETERMINED 
PAYMENT RATES FOR SKILLED NURSING FACILITIES

0
1. The authority citation for part 413 continues to read as follows:

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and 
(n), 1861(v), 1871, 1881, 1883 and 1886 of the Social Security Act 
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of 
Pub.L. 106-113 (113 Stat. 1501A-332), sec. 3201 of Pub.L. 112-96 
(126 Stat. 156), and sec. 632 of Pub. L. 112-240 (126 Stat. 2354).


Sec.  413.24  [Amended]

0
2. In Sec.  413.24, paragraph (d)(5)(i)(A) is amended by removing the 
reference ``Sec.  482.66'' and by adding in its place, the reference 
``Sec.  482.58''.


Sec.  413.114  [Amended]

0
3. In Sec.  413.114(b), the definition of ``Swing-bed hospital'' is 
amended by removing the reference ``Sec.  482.66'' and by adding in its 
place, the reference ``Sec.  482.58''.

PART 416--AMBULATORY SURGICAL SERVICES

0
4. The authority citation for part 416 continues to read as follows:

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


0
5. Section 416.42 is amended by revising paragraph (b)(2) to read as 
follows:


Sec.  416.42  Condition for coverage--Surgical services.

* * * * *
    (b) * * *
    (2) A physician qualified to administer anesthesia, a certified 
registered nurse anesthetist (CRNA), or an anesthesiologist's assistant 
as defined in Sec.  410.69(b) of this chapter, or a supervised trainee 
in an approved educational program. In those cases in which a non-
physician administers the anesthesia, unless exempted in accordance 
with paragraph (c) of this section, the anesthetist must be under the 
supervision of the operating physician, and in the case of an 
anesthesiologist's assistant, under the supervision of an 
anesthesiologist.
* * * * *

0
6. Section 416.49 is amended by revising paragraph (b) to read as 
follows:


Sec.  416.49  Condition for coverage--Laboratory and radiologic 
services.

* * * * *
    (b) Standard: Radiologic services. (1) Radiologic services may only 
be provided when integral to procedures offered by the ASC and must 
meet the requirements specified in Sec.  482.26(b), (c)(2), and (d)(2) 
of this chapter.
    (2) If radiologic services are utilized, the governing body must 
appoint an individual qualified in accordance with State law and ASC 
policies who is responsible for assuring all radiologic services are 
provided in accordance with the requirements of this section.

PART 440--SERVICES: GENERAL PROVISIONS

0
7. The authority citation for part 440 continues to read as follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302).


Sec.  440.1  [Amended]

0
8. In Sec.  440.1, in the entry for section 1913, the reference ``and 
482.66'' is removed and the reference ``and 482.58'' is added in its 
place.

PART 442--STANDARDS FOR PAYMENT TO NURSING FACILITIES AND 
INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL 
DISABILITIES

0
9. The authority citation for part 442 continues to read as follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302), unless otherwise noted.


0
10. Section 442.101(d)(3)(ii) is revised to read as follows:


Sec.  442.101  Obtaining certification.

* * * * *
    (d) * * *
    (3) * * *
    (ii) The facility submits an acceptable plan of correction covering 
the remaining deficiencies.
* * * * *


Sec.  442.105  [Removed and Reserved]

0
11. Section 442.105 is removed and reserved.

0
12. Section 442.110 is revised to read as follows:


Sec.  442.110  Certification period for ICF/IID with standard-level 
deficiencies.

    Facilities with standard-level deficiencies may be certified under 
Sec.  442.101 with a condition that the certification will continue if 
either of the following applies:

[[Page 27154]]

    (a) The survey agency finds that all deficiencies have been 
satisfactorily corrected.
    (b) The survey agency finds that the facility has made substantial 
progress in correcting the deficiencies and has a new plan of 
correction that is acceptable.

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

0
13. The authority citation for part 482 continues to read as follows:

    Authority: Secs. 1102, 1871 and 1881 of the Social Security Act 
(42 U.S.C. 1302, 1395hh, and 1395rr), unless otherwise noted.


0
14. Section 482.12 is amended by revising the introductory text and 
adding paragraph (a)(10) to read as follows:


Sec.  482.12  Condition of participation: Governing body.

    There must be an effective governing body that is legally 
responsible for the conduct of the hospital. If a hospital does not 
have an organized governing body, the persons legally responsible for 
the conduct of the hospital must carry out the functions specified in 
this part that pertain to the governing body.
    (a) * * *
    (10) Consult directly with the individual assigned the 
responsibility for the organization and conduct of the hospital's 
medical staff, or his or her designee. At a minimum, this direct 
consultation must occur periodically throughout the fiscal or calendar 
year and include discussion of matters related to the quality of 
medical care provided to patients of the hospital. For a multi-hospital 
system using a single governing body, the single multi-hospital system 
governing body must consult directly with the individual responsible 
for the organized medical staff (or his or her designee) of each 
hospital within its system in addition to the other requirements of 
this paragraph (a).
* * * * *

0
15. Section 482.22 is amended by--
0
a. Revising the introductory text and paragraph (a) introductory text.
0
b. Adding a new paragraph (b)(4).
    The revisions and addition read as follows:


Sec.  482.22  Condition of participation: Medical staff.

    The hospital must have an organized medical staff that operates 
under bylaws approved by the governing body, and which is responsible 
for the quality of medical care provided to patients by the hospital.
    (a) Standard: Eligibility and process for appointment to medical 
staff. The medical staff must be composed of doctors of medicine or 
osteopathy. In accordance with State law, including scope-of-practice 
laws, the medical staff may also include other categories of physicians 
(as listed at Sec.  482.12(c)(1)) and non-physician practitioners who 
are determined to be eligible for appointment by the governing body.
* * * * *
    (b) * * *
    (4) If a hospital is part of a hospital system consisting of 
multiple separately certified hospitals and the system elects to have a 
unified and integrated medical staff for its member hospitals, after 
determining that such a decision is in accordance with all applicable 
State and local laws, each separately certified hospital must 
demonstrate that:
    (i) The medical staff members of each separately certified hospital 
in the system (that is, all medical staff members who hold specific 
privileges to practice at that hospital) have voted by majority, in 
accordance with medical staff bylaws, either to accept a unified and 
integrated medical staff structure or to opt out of such a structure 
and to maintain a separate and distinct medical staff for their 
respective hospital;
    (ii) The unified and integrated medical staff has bylaws, rules, 
and requirements that describe its processes for self-governance, 
appointment, credentialing, privileging, and oversight, as well as its 
peer review policies and due process rights guarantees, and which 
include a process for the members of the medical staff of each 
separately certified hospital (that is, all medical staff members who 
hold specific privileges to practice at that hospital) to be advised of 
their rights to opt out of the unified and integrated medical staff 
structure after a majority vote by the members to maintain a separate 
and distinct medical staff for their hospital;
    (iii) The unified and integrated medical staff is established in a 
manner that takes into account each member hospital's unique 
circumstances and any significant differences in patient populations 
and services offered in each hospital; and
    (iv) The unified and integrated medical staff establishes and 
implements policies and procedures to ensure that the needs and 
concerns expressed by members of the medical staff, at each of its 
separately certified hospitals, regardless of practice or location, are 
given due consideration, and that the unified and integrated medical 
staff has mechanisms in place to ensure that issues localized to 
particular hospitals are duly considered and addressed.
* * * * *

0
16. Section 482.28 is amended by revising paragraphs (b)(1) and (2) to 
read as follows:


Sec.  482.28  Condition of participation: Food and dietetic services.

* * * * *
    (b) * * *
    (1) Individual patient nutritional needs must be met in accordance 
with recognized dietary practices.
    (2) All patient diets, including therapeutic diets, must be ordered 
by a practitioner responsible for the care of the patient, or by a 
qualified dietitian or qualified nutrition professional as authorized 
by the medical staff and in accordance with State law governing 
dietitians and nutrition professionals.
* * * * *

0
17. Section 482.53 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  482.53  Condition of participation: Nuclear medicine services.

* * * * *
    (b) * * *
    (1) In-house preparation of radiopharmaceuticals is by, or under 
the supervision of, an appropriately trained registered pharmacist or a 
doctor of medicine or osteopathy.
* * * * *

0
18. Section 482.54 is amended by adding paragraph (c) to read as 
follows:


Sec.  482.54  Condition of participation: Outpatient services.

* * * * *
    (c) Standard: Orders for outpatient services. Outpatient services 
must be ordered by a practitioner who meets the following conditions:
    (1) Is responsible for the care of the patient.
    (2) Is licensed in the State where he or she provides care to the 
patient.
    (3) Is acting within his or her scope of practice under State law.
    (4) Is authorized in accordance with State law and policies adopted 
by the medical staff, and approved by the governing body, to order the 
applicable outpatient services. This applies to the following:
    (i) All practitioners who are appointed to the hospital's medical 
staff and who have been granted privileges to order the applicable 
outpatient services.
    (ii) All practitioners not appointed to the medical staff, but who 
satisfy the above criteria for authorization by the medical staff and 
the hospital for

[[Page 27155]]

ordering the applicable outpatient services for their patients.


Sec.  482.66  [Redesignated as Sec.  482.58]

0
19. Redesignate Sec.  482.66 as Sec.  482.58 and transfer the section 
from Subpart E to Subpart D.


Sec.  482.74  [Amended]

0
20. Section 482.74 is amended by removing paragraph (a)(2) and 
redesignating paragraphs (a)(3) and (4) as paragraphs (a)(2) and (3) 
respectively.

0
21. Section 482.80 is amended by--
0
a. Revising paragraph (c) introductory text.
0
b. Removing paragraph (c)(2).
0
c. Redesignating paragraph (c)(3) as paragraph (c)(2).
    The revision reads as follows:


Sec.  482.80  Condition of participation: Data submission, clinical 
experience, and outcome requirements for initial approval of transplant 
centers.

* * * * *
    (c) Standard: Outcome requirements. CMS will review outcomes for 
all transplants performed at a center, including outcomes for living 
donor transplants, if applicable. CMS will review adult and pediatric 
outcomes separately when a center requests Medicare approval to perform 
both adult and pediatric transplants.
* * * * *

0
22. Section 482.82 is amended by--
0
a. Revising paragraphs (a) and (b).
0
b. Revising paragraph (c) introductory text.
0
c. Removing paragraph (c)(2).
0
d. Redesignating paragraph (c)(3) as paragraph (c)(2).
    The revisions read as follows:


Sec.  482.82  Condition of participation: Data submission, clinical 
experience, and outcome requirements for re-approval of transplant 
centers.

* * * * *
    (a) Standard: Data submission. No later than 90 days after the due 
date established by the OPTN, a transplant center must submit to the 
OPTN at least 95 percent of the required data submissions on all 
transplants (deceased and living donors) performed during the prior 3 
years. Required data submissions include, but are not limited to, 
submission of the appropriate OPTN forms for transplant candidate 
registration, transplant recipient registration and follow-up, and 
living donor registration and follow-up.
    (b) Standard: Clinical experience. To be considered for re-
approval, an organ-specific transplant center must generally perform an 
average of 10 transplants per year during the prior 3 years.
    (c) Standard: Outcome requirements. CMS will review outcomes for 
all transplants performed at a center, including outcomes for living 
donor transplants, if applicable. CMS will review adult and pediatric 
outcomes separately when a center requests Medicare approval to perform 
both adult and pediatric transplants.
* * * * *

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
23. The authority citation for part 483 continues to read as follows:

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


0
24. Section 483.5 is amended by adding paragraph (f) to read as 
follows:


Sec.  483.5  Definitions.

* * * * *
    (f) Major modification means the modification of more than 50 
percent, or more than 4,500 square feet, of the smoke compartment.

0
25. Section 483.70 is amended by adding paragraphs (a)(8)(iii) and (iv) 
to read as follows:


Sec.  483.70  Physical environment.

* * * * *
    (a) * * *
    (8) * * *
    (iii) Subject to approval by CMS, a long term care facility may be 
granted an extension of the sprinkler installation deadline for a time 
period not to exceed 2 years from August 13, 2013, if the facility 
meets all of the following conditions:
    (A) It is in the process of replacing its current building, or 
undergoing major modifications to improve the living conditions for 
residents in all unsprinklered living areas that requires the movement 
of corridor, room, partition, or structural walls or supports, in 
addition to the installation of a sprinkler system; or, has had its 
planned sprinkler installation so impaired by a disaster or emergency, 
as indicated by a declaration under section 319 of the Public Health 
Service Act, that CMS finds it would be impractical to meet the 
sprinkler installation due date.
    (B) It demonstrates that it has made the necessary financial 
commitments to complete the building replacement or modification; or 
pursuant to a declared disaster or emergency, CMS finds it impractical 
to make reasonable and necessary financial commitments.
    (C) Before applying for the deadline extension, it has submitted 
plans to State and local authorities that are necessary for approval of 
the replacement building or major modification that includes the 
required sprinkler installation, and has received approval of the plans 
from State and local authorities.
    (D) It agrees to complete interim steps to improve fire safety, as 
determined by CMS.
    (iv) An extension granted under paragraph (a)(8)(iii) of this 
section may be renewed once, for an additional period not to exceed 1 
year, if the following conditions are met:
    (A) CMS finds that extenuating circumstances beyond the control of 
the facility will prevent full compliance with the provisions in 
paragraph (a)(8)(i) of this section by the end of the first waiver 
period.
    (B) All other conditions of paragraph (a)(8)(iii) of this section 
are met.
* * * * *

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
26. The authority citation for Part 485 continues to read as follows:

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


Sec.  485.606  [Amended]

0
27. In Sec.  485.606, paragraph (a)(2) is amended by removing the 
reference ``Sec.  482.66'' and by adding in its place, the reference 
``Sec.  482.58''.

0
28. Section 485.631 is amended by revising paragraph (b)(1)(v), 
removing paragraph (b)(1)(vi), and revising paragraph (b)(2) to read as 
follows:


Sec.  485.631  Condition of participation: Staffing and staff 
responsibilities.

* * * * *
    (b) * * *
    (1) * * *
    (v) Periodically reviews and signs a sample of outpatient records 
of patients cared for by nurse practitioners, clinical nurse 
specialists, certified nurse midwives, or physician assistants only to 
the extent required under State law where State law requires record 
reviews or co-signatures, or both, by a collaborating physician.
    (2) A doctor of medicine or osteopathy is present for sufficient 
periods of time to provide medical direction, consultation, and 
supervision for the services provided in the CAH, and is available 
through direct radio or telephone communication or electronic 
communication for consultation,

[[Page 27156]]

assistance with medical emergencies, or patient referral.
* * * * *

0
29. Section 485.635 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  485.635  Condition of participation: Provision of services.

    (a) * * *
    (2) The policies are developed with the advice of members of the 
CAH's professional healthcare staff, including one or more doctors of 
medicine or osteopathy and one or more physician assistants, nurse 
practitioners, or clinical nurse specialists, if they are on staff 
under the provisions of Sec.  485.631(a)(1).
* * * * *

PART 486--CONDITIONS FOR COVERAGE OF SPECIALIZED SERVICES FURNISHED 
BY SUPPLIERS

0
30. The authority citation for Part 486 continues to read as follows:

    Authority: Secs. 1102, 1138, and 1871 of the Social Security Act 
(42 U.S.C. 1302, 1320b-8, and 1395hh) and section 371 of the Public 
Health Service Act (42 U.S.C. 273).


0
31. Section 486.306 is amended by revising paragraph (a) to read as 
follows:


Sec.  486.306  OPO service area size designation and documentation 
requirements.

    (a) General documentation requirement. An OPO must make available 
to CMS documentation verifying that the OPO meets the requirements of 
paragraphs (b) and (c) of this section at the time of application and 
throughout the period of its designation.
* * * * *

0
32. Section 486.308 is amended by revising paragraph (b)(1) to read as 
follows:


Sec.  486.308  Designation of one OPO for each service area.

* * * * *
    (b) * * *
    (1) General. An OPO is normally designated for a 4-year agreement 
cycle. The period may be shorter, for example, if an OPO has 
voluntarily terminated its agreement with CMS and CMS selects a 
successor OPO for the balance of the 4-year agreement cycle. In rare 
situations, a designation period may be longer, for example, a 
designation may be extended if additional time is needed to select a 
successor OPO to replace an OPO that has been de-certified.
* * * * *

0
33. Section 486.344 is amended by revising paragraph (d)(2)(ii) to read 
as follows:


Sec.  486.344  Condition: Evaluation and management of potential donors 
and organ placement and recovery.

* * * * *
    (d) * * *
    (2) * * *
    (ii) If the identity of the intended recipient is known, the OPO 
has a procedure to ensure that prior to organ recovery, an individual 
from the OPO's staff compares the blood type of the donor with the 
blood type of the intended recipient, and the accuracy of the 
comparison is verified by a different individual;
* * * * *

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

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

    Authority: Secs. 1102, 1128I and 1871 of the Social Security 
Act, unless otherwise noted (42 U.S.C. 1302, 1320a-7j, and 1395hh); 
Pub. L. 110-149, 121 Stat. 1819.


0
35. Section 488.61 is amended by--
0
a. Removing paragraph (a)(7).
0
b. Revising paragraphs (c) introductory text, (c)(1) introductory text, 
and (c)(1)(ii).
0
c. Removing paragraph (c)(2) and redesignating paragraphs (c)(3), (4), 
and (5) as paragraphs (c)(2), (3) and (4), respectively.
0
d. Revising newly designated paragraphs (c)(2), (c)(3)(i) and 
(c)(3)(ii).
0
e. Adding paragraph (c)(3)(v).
0
f. Revising paragraph (e).
    The revisions and addition read as follows:


Sec.  488.61  Special procedures for approval and re-approval of organ 
transplant centers.

* * * * *
    (c) Re-approval procedures. Once Medicare-approved, transplant 
centers, including kidney transplant centers, must be in continuous 
compliance with all the conditions of participation for transplant 
centers at Sec. Sec.  482.72 through 482.104 of this chapter, except 
for Sec.  482.80 (initial approval requirements).
    (1) CMS will review the transplant center's data on an on-going 
basis and in making re-approval determinations.
* * * * *
    (ii) To determine compliance with the clinical experience and 
outcome requirements at Sec.  482.82(b) and (c) of this chapter, CMS 
will review the data contained in the most recent OPTN Data Report for 
the previous 3 years and 1-year patient and graft survival data 
contained in the most recent SRTR center-specific reports.
    (2) CMS may choose to review the transplant center for compliance 
with Sec. Sec.  482.72 through 482.76 and 482.90 through 482.104 of 
this chapter, using the procedures described at 42 CFR part 488, 
subpart A.
    (3) * * *
    (i) The extent to which outcome measures are met or exceeded.
    (ii) Availability of Medicare-approved transplant centers in the 
area.
* * * * *
    (v) Program improvements that substantially address root causes of 
graft failures or patient deaths, have been implemented and 
institutionalized on a sustainable basis, and that are supported by 
recent outcomes data such that CMS finds that the program demonstrates 
compliance with the requirement at Sec.  482.82(c)(2)(ii)(C) of this 
chapter that the number of observed events divided by the number of 
expected events not be greater than 1.5.
* * * * *
    (e) Transplant Center Inactivity. A transplant center may remain 
inactive and retain its Medicare approval for a period not to exceed 12 
months. A transplant center must notify CMS upon its voluntary 
inactivation as required by Sec.  482.74(a)(3) of this chapter.

PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES

0
36. The authority citation for Part 491 continues to read as follows:

    Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 
1302); and sec. 353 of the Public Health Service Act (42 U.S.C. 
263a).


0
37. Section 491.2 is amended by revising the definition of 
``physician'' to read as follows:


Sec.  491.2  Definitions.

* * * * *
    Physician means the following:
    (1) As it pertains to the supervision, collaboration, and oversight 
requirements in sections 1861(aa)(2)(B) and (aa)(3) of the Act, a 
doctor of medicine or osteopathy legally authorized to practice 
medicine or surgery in the State in which the function is performed; 
and
    (2) Within limitations as to the specific services furnished, a 
doctor of dental surgery or of dental medicine, a doctor of optometry, 
a doctor of podiatry or surgical chiropody or a chiropractor (see 
section 1861(r) of the Act for specific limitations).
* * * * *

0
38. Section 491.8 is amended by revising paragraphs (a)(6) and (b) to 
read as follows:

[[Page 27157]]

Sec.  491.8  Staffing and staff responsibilities.

    (a) * * *
    (6) A physician, nurse practitioner, physician assistant, certified 
nurse-midwife, clinical social worker, or clinical psychologist is 
available to furnish patient care services at all times the clinic or 
center operates. In addition, for RHCs, a nurse practitioner, physician 
assistant, or certified nurse-midwife is available to furnish patient 
care services at least 50 percent of the time the RHC operates.
    (b) Physician responsibilities. The physician performs the 
following:
    (1) Except for services furnished by a clinical psychologist in an 
FQHC, which State law permits to be provided without physician 
supervision, provides medical direction for the clinic's or center's 
health care activities and consultation for, and medical supervision 
of, the health care staff.
    (2) In conjunction with the physician assistant and/or nurse 
practitioner member(s), participates in developing, executing, and 
periodically reviewing the clinic's or center's written policies and 
the services provided to Federal program patients.
    (3) Periodically reviews the clinic's or center's patient records, 
provides medical orders, and provides medical care services to the 
patients of the clinic or center.
* * * * *

PART 493--LABORATORY REQUIREMENTS

0
39. The authority citation for Part 493 continues to read as follows:

    Authority: Sec. 353 of the Public Health Service Act, secs. 
1102, 1861(e), the sentence following sections 1861(s)(11) through 
1861(s)(16) of the Social Security Act (42 U.S.C. 263a, 1302, 
1395x(e), the sentence following 1395x(s)(11) through 1395x(s)(16)).


0
40. Section 493.2 is amended by adding the definitions of 
``confirmatory testing,'' ``distributive testing,'' and ``reflex 
testing,'' in alphabetical order to read as follows:


Sec.  493.2  Definitions.

* * * * *
    Confirmatory testing means testing performed by a second analytical 
procedure that could be used to substantiate or bring into question the 
result of an initial laboratory test.
* * * * *
    Distributive testing means laboratory testing performed on the same 
specimen, or an aliquot of it, that requires sharing it between two or 
more laboratories to obtain all data required to complete an 
interpretation or calculation necessary to provide a final reportable 
result for the originally ordered test. When such testing occurs at 
multiple locations with different CLIA certificates, it is considered 
distributive testing.
* * * * *
    Reflex testing means confirmatory or additional laboratory testing 
that is automatically requested by a laboratory under its standard 
operating procedures for patient specimens when the laboratory's 
findings indicate test results that are abnormal, are outside a 
predetermined range, or meet other pre-established criteria for 
additional testing.
* * * * *

0
41. Section 493.801 is amended by revising paragraphs (b) introductory 
text and (b)(4) to read as follows:


Sec.  493.801  Condition: Enrollment and testing of samples.

* * * * *
    (b) Standard: Testing of proficiency testing samples. The 
laboratory must examine or test, as applicable, the proficiency testing 
samples it receives from the proficiency testing program in the same 
manner as it tests patient specimens. This testing must be conducted in 
conformance with paragraph (b)(4) of this section. If the laboratory's 
patient specimen testing procedures would normally require reflex, 
distributive, or confirmatory testing at another laboratory, the 
laboratory should test the proficiency testing sample as it would a 
patient specimen up until the point it would refer a patient specimen 
to a second laboratory for any form of further testing.
* * * * *
    (4) The laboratory must not send proficiency testing samples or 
portions of proficiency testing samples to another laboratory for any 
analysis for which it is certified to perform in its own laboratory. 
Any laboratory that CMS determines intentionally referred a proficiency 
testing sample to another laboratory for analysis may have its 
certification revoked for at least 1 year. If CMS determines that a 
proficiency testing sample was referred to another laboratory for 
analysis, but the requested testing was limited to reflex, 
distributive, or confirmatory testing that, if the sample were a 
patient specimen, would have been in full conformance with written, 
legally accurate and adequate standard operating procedures for the 
laboratory's testing of patient specimens, and if the proficiency 
testing referral is not a repeat proficiency testing referral, CMS will 
consider the referral to be improper and subject to alternative 
sanctions in accordance with Sec.  493.1804(c), but not intentional. 
Any laboratory that receives a proficiency testing sample from another 
laboratory for testing must notify CMS of the receipt of that sample 
regardless of whether the referral was made for reflex or confirmatory 
testing, or any other reason.
* * * * *

    Dated: October 24, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: March 18, 2014.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2014-10687 Filed 5-7-14; 4:15 pm]
BILLING CODE 4120-01-P