Vol. 79 Monday, 

No. 91 May 12, 2014 

Part IV 

Department of Health and Human Services 

Centers for Medicare & Medicaid Services 

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 


emcdonald on DSK67QTVN1PROD with RULES2
27106 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

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. 

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 (§ 482.12) 

2. Medical Staff (§ 482.22) 

3. Food and Dietetic Services (§ 482.28) 

4. Nuclear Medicine Services (§ 482.53) 

5. Outpatient Services (§ 482.54) 

6. Special Requirements for Hospital 

Providers of Long-Term Care Services 

(‘‘swing-beds’’) (§ 482.66) 

D. Transplant Centers and Organ 

Procurement Organizations 

1. Reports to CMS (§ 482.74) 

2. Transplant Outcome Review 

(§§ 482.80(c) and 482.82(c)) 

3. Volume and Clinical Experience 

Requirements (§§ 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 (§ 485.635(a)) 

2. CAH and RHC/FQHC (Rural Health 

Clinics/Federally Qualified Health 

Centers) Physician Responsibilities 

(§§ 485.631(b)(2) and 491.8(b)(2)) 

3. RHC/FQHC Definitions: Physician 

(§ 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 § 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 swingbed services: We are revising the 

requirements by relocating the swingbed 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. 


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• 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 reapproval 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 noncompliance with the CoPs, and (2) that 

compliance with the CoPs is a 

continuous requirement, as already 

specified in § 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 (§ 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 twoyear 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 

§ 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 


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27108 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

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 § 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 § 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 nursemidwife (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 onetime 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): 

Issue Frequency 

Estimated 

savings or 

benefits 

($ millions) 

Ambulatory Surgical Centers: 

• Radiology Services ............................................................................................ Recurring annually .................................... 41 

Hospitals: 

• Food and dietetic services ................................................................................ Recurring annually .................................... 459 

• Nuclear medicine services ................................................................................ Recurring annually .................................... 77 

Transplant Centers: 


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Issue Frequency 

Estimated 

savings or 

benefits 

($ millions) 

• Reports to CMS& Survey Changes .................................................................. Recurring annually .................................... <1 

Long Term Care Facilities: 

• Sprinkler Deadline Extension ............................................................................ One-time ................................................... 22 

Rural Health: 

• CAH & RHC/FQHC Physician responsibilities .................................................. Recurring annually .................................... 76 

• CAH Provision of services ................................................................................. Recurring annually .................................... <1 

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 (http://

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 burdenreducing 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 § 416.2), they may 

provide radiologic services only to the 

extent that such services are an integral 


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27110 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

part of the procedures they perform. 

Section 416.49(b)(1) states that the ASC 

must have procedures for obtaining 

radiological services from a Medicareapproved 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 § 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 § 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 § 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 

§ 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 

§ 482.26(b), (c)(2), and (d)(2). We also 

proposed to remove the existing 

language at § 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 § 416.42(b)(2) of the ASC CfCs 

and proposed to correct this error. 

Paragraph (b)(2) references ‘‘paragraph 

(d) of this section’’ but § 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 

§ 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 § 410.32(b)(3)(i) through 

(b)(3)(iii). 

Response: The regulations referenced 

at § 410.32(b)(3) are located in the 

Medicare payment rules at Part 410, 

Supplementary Medical Insurance 

Benefits General Provisions. They are 

part of § 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 

§ 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 


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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 § 416.49(b) with revisions. 

The revised regulation text at 

§ 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 timelimited 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 

§§ 442.15, 442.109, and 442.110, and by 

removing § 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 § 442.101(d)(3) by removing a 

reference to § 442.105. 

A revision to § 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 § 442.110 in its 

entirety. 

We also proposed to delete language 

in § 442.105 and § 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 § 442.105 and § 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 

§ 442.105 would remove any reference 

to the language in § 442.101, which 

states the requirements for obtaining 

notice of an ICF/IID’s certification 

before a Medicaid agency executes a 

provider agreement under § 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 § 442.105, the commenter 

believes that the only regulatory 

language addressing this need is located 

at § 442.117. However, the commenter 

states that the language at § 442.117 is 

limited to only situations of immediate 

jeopardy. The commenter recommended 

that CMS retain all the language of 

§ 442.105 except § 442.105(d) which 

refers to a prior certification period. 

Response: We appreciate the concerns 

of the commenter that the complete 

removal of § 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 § 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 

§ 442.105 are adequately covered by 

§ 442.101(d)(1) and § 442.117. Therefore 

we are not changing our proposal based 

on this comment and are removing 

§ 442.105 as proposed. 

Comment: The commenter also 

objected to the complete removal of 

§ 442.110. The commenter stated that 

§ 442.110 requires that a facility’s 


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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 § 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 § 442.110 must include 

a reference to automatic cancellation of 

certification. In response to this 

comment, we will retain existing 

§ 442.110 with revisions stating that 

ICFs/IID may be certified with standard 

level deficiencies under § 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 (§ 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, § 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 

§ 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. 


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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 multihospital 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 § 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 § 482.12(a)(5) 

listed above or with § 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. 


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After consideration of the comments 

discussed above, we are finalizing the 

changes to § 482.12 as proposed. 

2. Medical Staff (§ 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 § 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 

§ 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 § 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 

§ 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-ofpractice 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 nonphysician 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 § 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, ‘‘nonphysician,’’ since by the definition 

described at section 1861(r) of the Act, 

the practitioners are ‘‘physicians,’’ they 

cannot also be considered to be ‘‘nonphysicians.’’ 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 

§ 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 § 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 nonphysician 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 § 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 multihospital 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 

§ 482.22(a) has always allowed hospitals 

to grant medical staff membership for 

non-physician practitioners as well as 


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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 § 1861(r) of the Act and listed 

at § 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 § 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 § 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 separatemedical-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 selfgoverning 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 hospitalspecific 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 


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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 multihospital 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 multihospital 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 valuebased 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 multihospital 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 

§ 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 


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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 (multihospital) 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 (§ 482.28) 

We proposed to revise the hospital 

requirements at § 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 § 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 § 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. 


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We received over 100 comments on 

our proposed changes to § 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 § 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 § 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 § 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 longterm care facilities and other healthcare 

facilities in which RDs and nutrition 

professionals play a role. 

Response: We appreciate the 

commenters’ support and suggestions, 


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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 § 482.28 is the 

appropriate place for such a change. 

Additionally, we believe that the recent 

changes to the medical staff CoP 

(§ 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 § 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 § 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 § 482.28 with the 

revisions to the regulatory language as 

noted above. 

4. Nuclear Medicine Services (§ 482.53) 

The current requirement at 

§ 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 batchprepared 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 § 482.53(b)(1) by 

removing the term ‘‘direct.’’ We stated 

that, if finalized, the revised 

requirement would require that inhouse 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 


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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 inhouse 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 § 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 § 482.53(b)(1) as proposed. 

5. Outpatient Services (§ 482.54) 

We proposed changes to the 

requirements at § 482.54, ‘‘Outpatient 

services.’’ Specifically, we proposed to 

add a new standard at § 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 (http://

www.cms.gov/Medicare/ProviderEnrollment-and-Certification/

SurveyCertificationGenInfo/Downloads/

SCLetter11_28.pdf). Among other 

things, this memorandum included 

preliminary guidance on who may order 

hospital rehabilitation (§ 482.56(b)) and 

respiratory care services (§ 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 (http://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 § 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, 

§ 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 

§ 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 

§ 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 


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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 § 482.12(c) 

who are involved in providing medical 

care to the patient; any practice partners 


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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 § 482.54 as 

proposed with two minor revisions. On 

the recommendation of commenters, we 

are revising § 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 § 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’’) (§ 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 § 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 § 482.66, 

Subpart E, to § 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 swingbed 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 § 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 § 482.66. 

In accordance with the comments 

discussed above, we are reassigning all 

of the requirements for swing-bed 

services found currently at § 482.66, 

Subpart E, to § 482.58, Subpart D as 

proposed. We are also making 

conforming amendments to correct 

cross-references in §§ 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 (§ 482.74) 

On March 30, 2007, we published the 

‘‘Hospital Conditions of Participation: 

Requirements for Approval and Reapproval 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 § 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 

§ 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 noncompliance is based on the difference 


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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 

§ 482.82 is unnecessary, confusing, and 

burdensome for transplant centers. 

Therefore, we proposed to eliminate the 

requirement at § 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 § 482.82 

remain unchanged. 

We received a total of six comments 

on our proposed change to § 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 § 482.74(a)(2) as proposed. 

2. Transplant Outcome Review 

(§ 482.80(c) and § 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 centerspecific 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 

§§ 482.80(c) and 482.82(c). 

We received a total of two comments 

on our proposed changes to §§ 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 §§ 482.80(c) and 482.82(c) as 

proposed. 

3. Volume and Clinical Experience 

Requirements (§§ 482.80(c)(2) and 

482.82(c)(2)) 

Regulations at §§ 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 (§ 482.80(b)) or an 

average of 10 transplants each year 

during the approval period 

(§ 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 

§§ 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 

§§ 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 §§ 482.80(c)(2) and 

482.82(c)(2) as proposed. 


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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 noncompliance 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 noncompliance with the requirements at 

§ 482.82(a) for timeliness of data 

submission to the OPTN, or noncompliance with the requirements at 

§ 482.82(b) for clinical experience, or at 

§ 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 datasubmission 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 (§§ 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 

§ 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 

(§ 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 


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approval and remove the prospectively 

scheduled Medicare termination. 

We also proposed to provide at the 

new § 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 § 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 

§ 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 noncompliance 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 § 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 

§ 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 

§ 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 


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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 § 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 § 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 redesignating it so that it is set forth at 

§ 488.61(c)(4)(v). 

After consideration of the comments 

discussed above, we are finalizing the 

changes to § 488.61(c) as proposed, 

except for re-designating proposed 

§ 488.61(c)(3)(v) as § 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 http://

www.cms.gov/Medicare/ProviderEnrollment-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 

§ 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 § 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. 


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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 

§ 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 


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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 

http://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. 


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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 narrowlyconstrued 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 http://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 § 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 (http://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. 


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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 § 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 

(§ 485.635(a)) 

The current CoPs at § 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 nonCAH 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 § 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 § 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 nonCAH 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 § 485.635(a)(2) as proposed. 

2. CAH and RHC/FQHC Physician 

Responsibilities (§§ 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 § 485.631(b)(2) and the RHC/FQHC 

regulations at § 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 § 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 


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the public comments received, we will 

similarly revise § 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 

§§ 485.631(b)(1)(v) and 485.631(b)(2), 

and at § 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 §§ 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 nonphysician 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 nonphysician 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 


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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 § 485.635(a) requires a 

CAH and § 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 

§ 485.631(b)(2), the rule did not propose 

to modify the very similar requirements 

at § 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 § 485.631(b)(1)(vi), 

which are related to the proposed 

regulation but were not addressed in the 

proposed rule. The requirements at 

§ 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 nonphysician practitioners, as set forth at 

§ 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 § 485.631(b)(2). 

We also appreciate the commenter’s 

remarks about the confusion at 

§ 485.631(b)(1)(vi) regarding a 

physician’s responsibility to review 

outpatient records. Section 

§ 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 cosignatures, or both, by a collaborating 

physician.’’ Section 485.631(b)(vi) was 


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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 § 485.631(b)(v). 

Because we recognize that there has 

been confusion about the interaction of 

the current requirements of 

§ 486.631(b)(v) and (vi), we are revising 

the regulatory language at 

§ 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 

§ 485.631(b)(2). We agree with the 

commenters and have removed the 

language requiring biweekly outpatient 

record review. 

Specifically, we will delete 

§ 485.631(b)(1)(vi) and will revise the 

regulatory language at § 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 cosignatures, or both, by a collaborating 

physician. If the applicable State law 

does not require a record review or cosignature, 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 § 485.631(b)(1)(v). The 

commenter wondered whether the term 

‘‘outpatient’’ referred only to hospitalbased 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 § 485.618, 

Condition of Participation—Emergency 

Services, provides for immediate 

physician access in the event emergency 

care is needed. In particular, 

§ 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 §§ 485.631(b)(2) and 

491.8(b)(2), as proposed. We are also 

revising § 485.631(b)(1)(v) to require 

that a sample of outpatient records be 

periodically reviewed. 

3. RHC/FQHC Definitions: Physician 

(§ 491.2) 

We proposed to revise the definition 

of ‘‘physician’’ at § 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 § 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 § 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 

§§ 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 nonphysician 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 


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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 paraprofessionals 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 

§ 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 nonphysician 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. 


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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 allinclusive 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 


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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 faceto-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 allinclusive 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. 


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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 reengineering 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. 


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Comment: Several commenters 

requested that we remove the 

restrictions on contracting with nonphysician 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 SelfManagement 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 onsite 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 HHSapproved 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 HHSapproved 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 onsite, external proctor for PT testing in a 

laboratory, the testing relies in large part 


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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 § 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 

§ 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 


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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 

§ 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 preestablished 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 § 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 longstanding 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 § 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 

§ 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 ‘‘preelectrophoretic 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 


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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 § 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 

§ 493.801(b) and § 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 § 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 


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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 

§ 493.801(b) introductory text and 

§ 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 

§ 493.801(b) and § 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, 


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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 costreducing 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 * 

Issue Frequency 

Number of 

affected 

entities 

Likely savings 

or benefits 

($ 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 Changes ....................... Recurring Annually .......................................... 60 <1 

Long Term Care Facilities: 

• Sprinkler Deadline Extension .................................. One-time ......................................................... 125 22 

Rural Health: 

• CAH & RHC/FQHC Physician responsibilities ........ Recurring Annually .......................................... 9,311 76 

• 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 


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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 × 4 

quarters), the total savings will be $40.7 

million ($16,000 × 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 


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Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 27145 

1Peterson 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. 

2See, 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. 

3Weil, 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. 

radiologists from using their time for 

other valuable activities (such as selfdirected 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 http://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 § 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 § 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 § 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. 

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 


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27146 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

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. 

5Caitlin S. Curtis et al, ‘‘Enteral Feedings in 

Hospitalized Patients: Early versus Delayed Enteral 

Nutrition,’’ Practical Gastroenterology, October 

2009, pp. 22–30. 

6 Kinn TJ. Clinical order writing privileges. 

Support Line. 2011; 33; 4; 3–10. 

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). 

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 × $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. 

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 evidencebased 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. 

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, 


emcdonald on DSK67QTVN1PROD with RULES2
Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 27147 

7Barker 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. 

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 comorbidities, 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. 

The resulting savings estimate is 

$291,104,100 ((3,675 hospitals × 5,600 

inpatient hospital stays × 0.13 hours of 

a physician’s/APRN’s/PA’s/RD’s time × 

$69 per hourly cost difference) + (3,675 

hospitals × 1,400 inpatient hospital 

stays × 0.30 hours of a physician’s/

APRN’s/PA’s/RD’s time × $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 costsaving 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 (§ 482.53) 

We proposed, and are finalizing, a 

change to the current requirement at 

§ 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 offhours 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 


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27148 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

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 

× $192 hourly salary for MD/DO/

PharmD × 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 § 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 § 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 § 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 § 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 × .25 hours = $48 (+) 

$116 hourly cost for administrator × .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 × 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 × $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 × 

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 × $150 

hourly cost = $750). For all 10 surveys, 

we estimate the annual savings will be 

$7,500 ($750 for each survey × 10 

surveys = $7,500). 

We believe that the other changes we 

are finalizing for transplant centers and 

OPOs (at §§ 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 


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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 (§§ 485.631(b)(2) and 

491.8(b)(2)) 

We are revising the CAH regulations 

at § 485.631(b)(2) and the RHC/FQHC 

regulations at § 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 biweekly visits (26 visits per year) to a 

facility to perform the duties required at 

§ 485.631(b)(2). We estimate these visits 

cost $29,952 per CAH per year (6 hours 

per visit × 26 visits × $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 × $0.55 per mile) for a 

total annual burden of $728 per CAH 

($28 per visit × 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 onsite, 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 onsite visits ([$29,952 per CAH/2] × 200 

CAHs = $2,995,200) and $72,800 in 

travel costs ([$728 per CAH/2] × 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 § 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 × 11 percent × 200 

CAHs × 0.25 hour × $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 

§ 491.8(b)(2), each month a physician 

spends approximately 8 hours (4 hours 


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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 × 26 visits per year 

= $1,950 per clinic per year). We 

estimate the costs for time spent for onsite visits to be $19,968 per RHC or 

FQHC per year (4 hours/visit × $192 an 

hour × 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 × 

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 × 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 

× 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 × 5,134 FQHCs = $34,135,966). 

We also estimate the administrative 

expenses associated with the 

documentation requirements at 

§ 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 × 11 percent × [3977 RHCs + 5134 

FQHCs] × 0.25/hour × $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 (§ 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 § 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 × 8 hours = $400 per CAH 

× 665 CAHs = $266,000). 

RHC/FQHC Definition of a Physician 

(§ 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 § 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 § 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 


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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 burdenreducing 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 


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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 http://

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] 

Category Primary 

estimate 

Lower 

bound 

Upper 

bound 

Units 

Year 

dollars 

Discount 

rate 

(percent) 

Period 

covered 

Benefits ........................................................................... None 

Costs: 

Annualized Monetized reductions in Costs .............. ¥$640 ¥$230 ¥$830 2014 7 2014–2018 

¥$640 ¥$230 ¥$830 2014 3 2014–2018 

Transfers ......................................................................... None 


emcdonald on DSK67QTVN1PROD with RULES2
Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 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 

■ 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). 

§ 413.24 [Amended] 

■ 2. In § 413.24, paragraph (d)(5)(i)(A) is 

amended by removing the reference 

‘‘§ 482.66’’ and by adding in its place, 

the reference ‘‘§ 482.58’’. 

§ 413.114 [Amended] 

■ 3. In § 413.114(b), the definition of 

‘‘Swing-bed hospital’’ is amended by 

removing the reference ‘‘§ 482.66’’ and 

by adding in its place, the reference 

‘‘§ 482.58’’. 

PART 416—AMBULATORY SURGICAL 

SERVICES 

■ 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). 

■ 5. Section 416.42 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 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 § 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. 

* * * * * 

■ 6. Section 416.49 is amended by 

revising paragraph (b) to read as follows: 

§ 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 § 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 

■ 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). 

§ 440.1 [Amended] 

■ 8. In § 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 

■ 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. 

■ 10. Section 442.101(d)(3)(ii) is revised 

to read as follows: 

§ 442.101 Obtaining certification. 

* * * * * 

(d) * * * 

(3) * * * 

(ii) The facility submits an acceptable 

plan of correction covering the 

remaining deficiencies. 

* * * * * 

§ 442.105 [Removed and Reserved] 

■ 11. Section 442.105 is removed and 

reserved. 

■ 12. Section 442.110 is revised to read 

as follows: 

§ 442.110 Certification period for ICF/IID 

with standard-level deficiencies. 

Facilities with standard-level 

deficiencies may be certified under 

§ 442.101 with a condition that the 

certification will continue if either of 

the following applies: 


emcdonald on DSK67QTVN1PROD with RULES2
27154 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

(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 

■ 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. 

■ 14. Section 482.12 is amended by 

revising the introductory text and 

adding paragraph (a)(10) to read as 

follows: 

§ 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 multihospital 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). 

* * * * * 

■ 15. Section 482.22 is amended by— 

■ a. Revising the introductory text and 

paragraph (a) introductory text. 

■ b. Adding a new paragraph (b)(4). 

The revisions and addition read as 

follows: 

§ 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 § 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. 

* * * * * 

■ 16. Section 482.28 is amended by 

revising paragraphs (b)(1) and (2) to read 

as follows: 

§ 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. 

* * * * * 

■ 17. Section 482.53 is amended by 

revising paragraph (b)(1) to read as 

follows: 

§ 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. 

* * * * * 

■ 18. Section 482.54 is amended by 

adding paragraph (c) to read as follows: 

§ 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 


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Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 27155 

ordering the applicable outpatient 

services for their patients. 

§ 482.66 [Redesignated as § 482.58] 

■ 19. Redesignate § 482.66 as § 482.58 

and transfer the section from Subpart E 

to Subpart D. 

§ 482.74 [Amended] 

■ 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. 

■ 21. Section 482.80 is amended by— 

■ a. Revising paragraph (c) introductory 

text. 

■ b. Removing paragraph (c)(2). 

■ c. Redesignating paragraph (c)(3) as 

paragraph (c)(2). 

The revision reads as follows: 

§ 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. 

* * * * * 

■ 22. Section 482.82 is amended by— 

■ a. Revising paragraphs (a) and (b). 

■ b. Revising paragraph (c) introductory 

text. 

■ c. Removing paragraph (c)(2). 

■ d. Redesignating paragraph (c)(3) as 

paragraph (c)(2). 

The revisions read as follows: 

§ 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 organspecific 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 

■ 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). 

■ 24. Section 483.5 is amended by 

adding paragraph (f) to read as follows: 

§ 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. 

■ 25. Section 483.70 is amended by 

adding paragraphs (a)(8)(iii) and (iv) to 

read as follows: 

§ 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 

■ 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)). 

§ 485.606 [Amended] 

■ 27. In § 485.606, paragraph (a)(2) is 

amended by removing the reference 

‘‘§ 482.66’’ and by adding in its place, 

the reference ‘‘§ 482.58’’. 

■ 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: 

§ 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, 


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27156 Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 

assistance with medical emergencies, or 

patient referral. 

* * * * * 

■ 29. Section 485.635 is amended by 

revising paragraph (a)(2) to read as 

follows: 

§ 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 

§ 485.631(a)(1). 

* * * * * 

PART 486—CONDITIONS FOR 

COVERAGE OF SPECIALIZED 

SERVICES FURNISHED BY 

SUPPLIERS 

■ 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). 

■ 31. Section 486.306 is amended by 

revising paragraph (a) to read as follows: 

§ 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. 

* * * * * 

■ 32. Section 486.308 is amended by 

revising paragraph (b)(1) to read as 

follows: 

§ 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. 

* * * * * 

■ 33. Section 486.344 is amended by 

revising paragraph (d)(2)(ii) to read as 

follows: 

§ 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 

■ 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. 

■ 35. Section 488.61 is amended by— 

■ a. Removing paragraph (a)(7). 

■ b. Revising paragraphs (c) 

introductory text, (c)(1) introductory 

text, and (c)(1)(ii). 

■ c. Removing paragraph (c)(2) and 

redesignating paragraphs (c)(3), (4), and 

(5) as paragraphs (c)(2), (3) and (4), 

respectively. 

■ d. Revising newly designated 

paragraphs (c)(2), (c)(3)(i) and (c)(3)(ii). 

■ e. Adding paragraph (c)(3)(v). 

■ f. Revising paragraph (e). 

The revisions and addition read as 

follows: 

§ 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 §§ 482.72 through 

482.104 of this chapter, except for 

§ 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 § 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 

§§ 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 

§ 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 

§ 482.74(a)(3) of this chapter. 

PART 491—CERTIFICATION OF 

CERTAIN HEALTH FACILITIES 

■ 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). 

■ 37. Section 491.2 is amended by 

revising the definition of ‘‘physician’’ to 

read as follows: 

§ 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). 

* * * * * 

■ 38. Section 491.8 is amended by 

revising paragraphs (a)(6) and (b) to read 

as follows: 


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Federal Register / Vol. 79, No. 91 / Monday, May 12, 2014 / Rules and Regulations 27157 

§ 491.8 Staffing and staff responsibilities. 

(a) * * * 

(6) A physician, nurse practitioner, 

physician assistant, certified nursemidwife, 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 nursemidwife 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 

■ 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)). 

■ 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: 

§ 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 preestablished criteria for additional 

testing. 

* * * * * 

■ 41. Section 493.801 is amended by 

revising paragraphs (b) introductory text 

and (b)(4) to read as follows: 

§ 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 § 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 


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