Federal Register / Vol. 72, No. 125 / Friday, June 29, 2007 / Proposed Rules 35673 

§ 54.4980G–4 [Corrected] 

3. On page 30504, column 3, 

§ 54.4980G–4(f) Example 4., line 9 from 

the top of the column, the language 

‘‘February, 2008. Employer T satisfies 

the’’ is corrected to read ‘‘February, 

2010. Employer T satisfies the’’. 

LaNita Van Dyke, 

Chief, Publications and Regulations Branch, 

Legal Processing Division, Associate Chief 

Counsel (Procedure and Administration). 

[FR Doc. E7–12587 Filed 6–28–07; 8:45 am] 

BILLING CODE 4830–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Parts 424, 488, and 489 

[CMS–2268–P] 

RIN 0938–AO96 

Establishment of Revisit User Fee 

Program for Medicare Survey and 

Certification Activities 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

allow CMS to charge revisit user fees to 

health care facilities cited for 

deficiencies during initial certification, 

recertification, or substantiated 

complaint surveys. Consistent with the 

President’s long-term goal to promote 

quality of health care and to cut the 

deficit in half by fiscal year (FY) 2009, 

the FY 2007 Department of Health and 

Human Services’ (HHS) budget request 

included both new mandatory savings 

proposals and a requirement that user 

fees be applied to health care providers 

that have failed to comply with Federal 

quality of care requirements. The 

‘‘Revisit User Fees’’ would affect only 

those providers or suppliers for which 

CMS has identified deficient practices 

and requires a revisit to assure that 

corrections have been made. The fees 

are estimated at $37.3 million annually 

and would recover the costs associated 

with the Medicare Survey and 

Certification program’s revisit surveys. 

The fees would take effect on the date 

of publication of the final rule, and 

would be available to CMS until 

expended. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on August 27, 2007. 

ADDRESSES: In commenting, please refer 

to file code CMS–2268–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (Fax) 

transmission. 

You may submit comments in one of 

four ways (no duplicates, please): 

1. Electronically. You may submit 

electronic comments on specific issues 

in this regulation to http:// 

www.cms.hhs.gov/eRulemaking. Click 

on the link ‘‘Submit electronic 

comments on CMS regulations with an 

open comment period.’’ (Attachments 

should be in Microsoft Word, 

WordPerfect, or Excel; however, we 

prefer Microsoft Word.) 

2. By regular mail. You may mail 

written comments (one original and two 

copies) to the following address ONLY: 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Attention: CMS–2268–

P, P.O. Box 8016, Baltimore, MD 21244–

8016. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments (one 

original and two copies) to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–2268–P, Mail Stop C4–26–05, 

7500 Security Boulevard, Baltimore, MD 

21244–1850. 

4. By hand or courier. If you prefer, 

you may deliver (by hand or courier) 

your written comments (one original 

and two copies) before the close of the 

comment period to one of the following 

addresses. If you intend to deliver your 

comments to the Baltimore address, 

please call telephone number (410) 786–

7195 in advance to schedule your 

arrival with one of our staff members. 

Room 445–G, Hubert H. Humphrey 

Building, 200 Independence Avenue, 

SW., Washington, DC 20201; or 7500 

Security Boulevard, Baltimore, MD 

21244–1850. 

(Because access to the interior of the 

HHH Building is not readily available to 

persons without Federal Government 

identification, commenters are 

encouraged to leave their comments in 

the CMS drop slots located in the main 

lobby of the building. A stamp-in clock 

is available for persons wishing to retain 

a proof of filing by stamping in and 

retaining an extra copy of the comments 

being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Carla McGregor, (410) 786–0663, 

(Policy). Kathryn Linstromberg, (410) 

786–8279 (Policy). Edward F. 

Mortimore, (410) 786–3509 (Data). 

David Escobedo, (410) 786–5401 

(Budget). 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

policies. You can assist us by 

referencing the file code CMS–2268–P 

and the specific ‘‘issue identifier’’ that 

precedes the section on which you 

choose to comment. 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http://www.cms.hhs.gov/ 

eRulemaking. Click on the link 

‘‘Electronic Comments on CMS 

Regulations’’ on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. Survey & Certification Compliance 

Process 

The Centers for Medicare & Medicaid 

Services (CMS) has in place an 

outcome-oriented survey process that is 

designed to determine whether existing 

Medicare-certified providers and 

suppliers or providers and suppliers 

seeking initial Medicare certification are 

actually meeting statutory and 

regulatory requirements, conditions of 

participation, or conditions for 

coverage. These health and safety 

requirements apply to the environments 

of care and the delivery of services to 

residents or patients served by these 

facilities and agencies. The Secretary of 


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the Department of Health and Human 

Services (‘‘HHS’’) has designated CMS 

to enforce the conditions of 

participation/coverage and other 

requirements with these programs. 

Medicare is a Federal insurance 

program that provides a wide range of 

benefits for specific periods of time to 

Medicare beneficiaries through 

providers and suppliers participating in 

the program. The Social Security Act 

(‘‘Act’’) designates those providers and 

suppliers that are subject to Federal 

health care quality standards. The 

Federal Government makes payment for 

services through designated fiscal 

intermediaries, carriers, and Medicare 

administrative contractors to the 

providers and suppliers. 

• Providers, in Medicare terminology, 

include patient care institutions such as 

hospitals, critical access hospitals, 

hospices, nursing homes, and home 

health agencies. 

• Suppliers, in Medicare terminology, 

include entities for diagnosis and 

therapy rather than sustained patient 

care, such as laboratories, clinics, and 

qualified health centers. 

Medicaid is a State program that 

provides medical services to clients of 

the State public assistance program and, 

at the State’s option, other needy 

individuals. When services are 

furnished through institutions that must 

be certified for Medicare, the 

institutional standards must be met for 

Medicaid as well. State survey agencies, 

under agreements between the State and 

the Secretary, carry out the Medicare 

certification process. Section 1864(a) of 

the Act directs the Secretary to use the 

State health agencies or ‘‘other 

appropriate agencies,’’ also known in 

this context as State survey agencies, to 

determine whether health care 

institutions meet Federal standards. 

B. Authority To Assess Revisit User 

Fees 

The President’s HHS budget for FY 

2007 included $35 million in new user 

fees to finance the costs associated with 

CMS’ Medicare survey and certification 

program’s activities. The President’s 

HHS budget for FY 2007 included 

projections based on FY 2005 numbers. 

CMS has updated that information 

based on FY 2006 actual data and thus 

all other references to the amount 

projected reference $37.3 million 

instead of $35 million. We have 

included these calculations in section 

IV Regulatory Impact Analysis below. 

The Continuing Appropriations 

Resolution (‘‘Continuing Resolution’’) 

budget bill passed by the Congress and 

signed by the President directed HHS to 

implement the fees for FY 2007, as 

follows: 

The Secretary of Health and Human 

Services shall charge fees necessary to cover 

the costs incurred under ‘‘Department of 

Health and Human Services, Centers for 

Medicare and Medicaid Services, Program 

Management’’ for conducting revisit surveys 

on health care facilities cited for deficiencies 

during initial certification, recertification, or 

substantiated complaints surveys. Not 

withstanding section 3302 of title 31, United 

States Code, receipts from such fees shall be 

credited to such account as offsetting 

collections, to remain available until 

expended for conducting such surveys. 

(Pub. L. 110–5, H.J. Res. 20, 

§ 20615(b)(2007)). 

Revisit surveys are conducted pursuant 

to the citing of deficiencies that were 

found during initial certification, 

recertification, or substantiated 

complaint surveys and are conducted 

for the purpose of verifying the fact that 

the deficiencies previously cited have 

been corrected. 

A crucial component to survey 

activities are the agreements established 

under section 1864 of the Act between 

the Secretary and the State survey 

agencies to determine that an institution 

meets the statutory definition for the 

provider type and that it satisfies all 

conditions of participation or regulatory 

requirements, as well as, any additional 

requirements as determined by the 

Secretary. Section 1864(e) of the Act, in 

relevant part regarding the imposition of 

fees involving survey activities, states: 

Notwithstanding any other provision of 

law, the Secretary may not impose, or require 

a State to impose, any fee on any facility or 

entity subject to a determination under 

subsection (a), or any renal dialysis facility 

subject to the requirements of section 

1881(b)(1), for any such determination or any 

survey relating to determining the 

compliance of such facility or entity with any 

requirement of this title (other than any fee 

relating to section 353 of the Public Health 

Service Act). 

The Congress enacted section 

20615(b) of the Continuing Resolution 

with the knowledge of section 1864(e) of 

the Act and took specific action to carve 

out fees for revisits as a result of cited 

deficiencies while being careful not to 

specify fees for initial surveys 

conducted for those newly entering the 

Medicare/Medicaid Program or for 

conducting statutorily based 

recertification surveys. The Secretary 

believes it was the Congress’ intent to 

harmonize the Continuing Resolution 

with section 1864(e) of the Act by 

limiting the fees to those quality 

assurance functions, that is, revisits, 

necessary to confirm the correction of 

previously-identified deficiencies. This 

belief is consistent with the rule of 

statutory interpretation that provides 

that, ‘‘[w]here there are two acts upon 

the same subject, effect should be given 

to both, if possible. See Posadas v. 

National City Bank of New York, 296 

U.S. 497, 503 (1936). 

Although the Secretary believes that 

the Continuing Resolution language 

should be read to coexist with the 

language of the Act, to the extent that 

section 20615(b) of the Continuing 

Resolution and section 1864(e) of the 

Act are perceived to be irreconcilable, 

the Secretary must give effect to the 

more recent Continuing Resolution for 

the period of availability of the 

appropriations. It is well established 

that it is in Congress’ power to abrogate 

or modify a treaty or earlier legislation 

that it created. See Fund for Animals, 

Inc. v. Kempthorne, 472 F.3d 872, 876 

(D.C. Cir. 2006) (citing Fund for 

Animals v. Norton, 374 F.Supp.2d 91, 

103 (D.D.C. 2005)) (‘‘Congress clearly 

has the power to abrogate or modify a 

treaty or earlier legislation, and when it 

does so, that is the final word’’). In 

resolving similar conflicts, the Federal 

courts have applied the principle of lex 

posterior derogate legi priori also known 

as ‘‘lex posterior’’ or the ‘‘last-in-time’’

rule; that is to say, where two statutory 

provisions appear to conflict, the later 

in time prevails. See Fund for Animals, 

472 F.3d at 878 (‘‘[T]he Supreme Court 

has long recognized that a later enacted 

statute trumps an earlier-enacted treaty 

to the extent the two conflict.’’). The 

rule is premised on the idea that the 

interpretation and application of 

statutes should reflect the most recent 

expression of the Congress’ intent. 

Therefore, application of the last-in-time 

rule would result in section 20615(b) of 

the Continuing Resolution superseding 

section 1864(e) of the Act to the extent 

that the two provisions conflict. 

The Secretary believes the intended 

section 20615(b) of the Continuing 

Resolution to apply only during this 

current fiscal year (FY 2007) and that a 

decision on making a permanent change 

to the statute will be deferred until a 

later time. See B–303268 Op. GAO–

Legal (2005), http://www.gao.gov/ 

decisions/appro/303268.htm 

(concluding that a nonpermanent 

provision in an appropriations 

resolution, which conflicts with a prior 

enacted appropriations act, is effective 

under the ‘‘last-in-time’’ rule, but will 

expire at the end of the fiscal year). 

Since the Congress did not expressly 

state otherwise, and the authority under 

section 1864(e) of the Act is permanent, 

the authority under section 20615(b) of 

the Continuing Resolution extends only 

through FY 2007. 


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Accordingly, section 20615(b) of the 

Continuing Resolution would only 

constitute a variation to the general 

prohibition of fees under section 1864(e) 

of the Act through September 30, 2007. 

These considerations lend further 

credence to the Secretary’s belief that it 

was the Congress’ intent to harmonize 

the two provisions. 

Based on the Congress’ knowledge of 

section 1864(e) of the Act, the 

unambiguous nature of section 20615(b) 

of the Continuing Resolution, and the 

principles of lex posterior, the Secretary 

has the authority to propose and 

implement this revisit user fee rule. 

II. Provisions of the Proposed 

Regulations 

Part 424—Subpart P—Requirements for 

Establishing and Maintaining Medicare 

Billing Privileges 

Section 424.535 Revocation of 

Enrollment and Billing Privileges in the 

Medicare Program 

[If you wish to comment on issues in 

this section, please include the caption 

‘‘424.535(a)(1)—REVOCATION OF 

ENROLLMENT AND BILLING 

PRIVILEGES IN THE MEDICARE 

PROGRAM—USER FEE ADDITION’’ at 

the beginning of your comments.] 

We propose to amend § 424.535(a)(1) 

by adding a new sentence to the criteria 

for which a provider or supplier may be 

determined not in compliance and for 

which we may revoke enrollment and 

billing privileges in the Medicare 

program. We propose to add that the 

provider or supplier may also be 

determined not to be in compliance if it 

has failed to pay any user fees as 

assessed under part 488 of this chapter. 

The beginning of the paragraph will 

continue to read the same and the 

ending of the paragraph will continue to 

read that all providers and suppliers are 

granted an opportunity to correct the 

deficient compliance requirement before 

a final determination to revoke billing 

privileges. The addition of this sentence 

does not provide an opportunity for 

additional comments on any other 

component of part 424 or § 424.535. 

Part 488—Survey, Certification, and 

Enforcement: Subpart A—General 

Provisions. 

Section 488.30 Revisit User Fee for 

Revisit Surveys 

We propose a new § 488.30 which sets 

forth proposed regulations that would 

identify the circumstances under which 

providers or suppliers would be 

assessed a user fee for revisit surveys 

connected with deficiencies identified 

during surveys for initial certification, 

recertification, or substantiated 

complaints. This proposed paragraph 

identifies the assessment of fees, criteria 

for which the proposed fee schedule 

will be based, and collection of fees. 

Section 488.30(a)—DEFINITIONS 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(a) 

‘‘DEFINITIONS’’ at the beginning of 

your comments] 

We propose in § 488.30(a) to define 

terms associated with this paragraph. 

Those terms include: ‘‘certification,’’

‘‘complaint surveys,’’ ‘‘substantiated 

complaint survey,’’ ‘‘provider of 

services,’’ ‘‘provider,’’ ‘‘supplier,’’ and 

‘‘revisit survey.’’

‘‘Certification (Initial or 

Recertification)’’

We propose that ‘‘certification’’ (both 

initial and recertification) would 

include those activities as defined in 

§ 488.1. ‘‘Certification’’ as currently 

defined in § 488.1 is a ‘‘recommendation 

made by the State survey agency on the 

compliance of providers and suppliers 

with the conditions of participation, 

requirements (SNFs and NFs), and 

conditions for coverage.’’ Conditions of 

participation apply to providers of 

Medicare services, other than skilled 

nursing facilities, while conditions for 

coverage apply to suppliers of Medicare 

services. 

We propose that a user fee under this 

proposed rule will be assessed for 

revisit surveys conducted to evaluate 

the extent to which deficiencies 

identified during initial certification or 

recertification surveys have been 

corrected. 

‘‘Complaint Surveys’’

We propose that complaint surveys 

are those surveys conducted on the 

basis of a ‘‘substantial allegation of 

noncompliance,’’ as defined in § 488.1. 

The term ‘‘substantial allegation of 

noncompliance’’ means: 

A complaint from any of a variety of 

sources (including complaints submitted in 

person, by telephone, through written 

correspondence, or in newspaper or 

magazine articles) that if substantiated, 

would affect the health and safety of patients 

and raises doubts as to a provider’s or 

supplier’s noncompliance with any Medicare 

condition. (42 CFR 488.1) 

CMS through its authority under the 

certification and survey process 

provisions of sections 1819(g), 1864, 

and 1891(c) of the Act has identified in 

the State Operations Manual (SOM) the 

procedures by which complaints/ 

incidents will be handled by CMS and 

the State survey agencies. CMS 

identifies a complaint as ‘‘an allegation 

of noncompliance with Federal and/or 

State requirements.’’ An allegation is 

further identified as ‘‘an assertion of 

improper care or treatment that could 

result in the citation of a Federal 

deficiency.’’ See U.S. Centers for 

Medicare & Medicaid Services. State 

Operations Manual, ‘‘Complaint 

Procedures.’’ Online. 2006. CMS. 

Available: http://www.cms.hhs.gov/ 

manuals/downloads/som107c05.pdf 

(‘‘SOM–Complaint’’). 

‘‘Substantiated Complaints Surveys’’

The Continuing Resolution includes 

the term ‘‘substantiated complaints 

surveys.’’ We propose that 

‘‘substantiated complaint survey’’

means a complaint survey that results in 

the proof or finding of noncompliance at 

the time of the survey, a finding that 

noncompliance was proven to exist, but 

was corrected prior to the survey, and 

includes any deficiency that is cited 

during a complaint survey, whether or 

not the deficiency was the original 

subject of the substantial allegation of 

noncompliance. The Secretary believes 

its term ‘‘substantial allegation of 

noncompliance’’ identified in § 488.1 is 

the direct correlation for this term in the 

HHS budget. Thus, this proposed 

regulation would consider 

‘‘substantiated complaints surveys’’ to 

be surveys conducted based on CMS or 

the State survey agency receiving a 

‘‘substantial allegation of 

noncompliance’’ where the noncompliance has been confirmed through 

a complaint survey. 

We propose that a user fee under this 

proposed rule will be assessed for 

revisit surveys conducted to evaluate 

the extent to which deficiencies 

identified during a substantiated 

complaint survey have been corrected. 

‘‘Provider of Services, Provider, or 

Supplier’’

The terms ‘‘provider of services,’’

‘‘provider,’’ or ‘‘supplier’’ are already 

defined in § 488.1. We propose that all 

‘‘provider of services,’’ ‘‘providers,’’ or 

‘‘suppliers,’’ as defined in § 488.1, will 

be subject to user fees, unless otherwise 

exempted through the final rule. We 

propose that a ‘‘provider of services’’ or 

‘‘provider’’ subject to user fees, as it 

applies in this proposed rule, includes 

a hospital, critical access hospital, 

skilled nursing facility, duallyparticipating nursing facility (‘‘SNF/ 

NF’’), home health agency (‘‘HHA’’), and 

hospice. Transplant centers will also be 

subject to user fees and have been newly 

defined in § 482.70 of this chapter. See 

Medicare Program; Hospital Conditions 

of Participation: Requirements for 


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Approval and Re-approval of Transplant 

Centers to Perform Organ Transplants, 

published March 30, 2007 (72 FR 15198) 

(codified at 42 CFR part 482). We 

propose that, for FY 2007, ‘‘providers of 

services’’ or ‘‘providers’’ that will not be 

assessed a revisit user fee as defined in 

this proposed rule to be comprehensive 

outpatient rehabilitation facilities and 

providers of outpatient physical therapy 

or speech pathology services. We have 

excluded these providers because the 

time and cost involved in conducting 

revisits to these providers are minimal 

or the nature in which oversight is 

conducted is not the same as for those 

providers included. Medicaid-only 

‘‘providers of services’’ or ‘‘providers’’

will not be assessed a user fee. 

We also propose a ‘‘supplier’’ subject 

to user fees, as it applies in this 

proposed rule includes an end-stage 

renal disease center, a rural health clinic 

(‘‘RHC’’), and an ambulatory surgical 

center (‘‘ASC’’). ASCs must have an 

agreement with CMS to participate in 

Medicare and must meet conditions for 

coverage as defined in part 416 of this 

chapter. 

‘‘Suppliers’’ that would not be subject 

to user fees under this proposed rule are 

independent laboratories, portable x-ray 

centers, physical therapists in 

independent practice, Federally 

Qualified Health Centers (FQHCs), and 

chiropractors. We have excluded these 

suppliers because the time and cost 

involved in conducting revisits to these 

suppliers are minimal or the nature in 

which oversight is conducted is not the 

same as for those suppliers included. 

Medicaid-only ‘‘suppliers’’ will not be 

assessed a user fee. 

This proposed rule would not 

interfere with user fees associated with 

clinical laboratories as established by 

the Congress, which passed the Clinical 

Laboratory Improvement Amendments 

(CLIA) in 1988 and established that 

outpatient clinical laboratory services 

are paid based on a fee schedule in 

accordance with section 1833(h) of the 

Act. 

‘‘Revisit Survey’’

We propose to define the term ‘‘revisit 

survey’’ to mean a survey performed 

with respect to a provider or supplier 

cited for deficiencies during an initial 

certification, recertification, or 

substantiated complaint survey and 

which is designed to evaluate the extent 

to which previously cited deficiencies 

have been corrected. We further propose 

that for purpose of this rule, revisit 

surveys include both offsite and onsite. 

The fees associated with offsite (‘‘desk’’) 

surveys will be less than the fees 

assessed for onsite surveys. Most revisit 

surveys include both onsite and offsite 

time, but a number of revisit surveys 

may be accomplished through desk 

review only. Oftentimes an onsite revisit 

survey will require offsite preparation; 

in these cases only one user fee will be 

assessed for an onsite revisit survey. 

Section 488.26 provides direction as 

to how compliance with the conditions 

of participation, conditions for coverage, 

or other regulatory requirements is 

determined. Specifically, section 488.26 

provides that the compliance 

determination is made by the State 

survey agency and includes a survey 

process that assesses compliance with 

Federal health, safety, and quality 

standards. While the conditions of 

participation, conditions for coverage, 

and requirements for determining 

compliance are unique to each provider 

and supplier, the Secretary has created 

common terms for purposes of survey 

and certification. 

Revisit policies have been established 

based on provider/supplier type. 

Skilled Nursing Facilities/Duallyparticipating Nursing Facilities. The 

current policy for skilled nursing 

facilities and dually-participating 

nursing facilities permits two onsite 

revisits, performed at the discretion of 

CMS or the State. This revisit policy 

indicates circumstances for which 

onsite revisits must occur for certifying 

compliance and circumstances when 

onsite revisits are discretionary. Second 

revisits may be required if the 

deficiencies are not fully corrected, if 

there continue to be negative outcomes 

from the originally-cited 

noncompliance, or if new and serious 

deficiencies are present during the 

revisit. Further, if the State determines 

that a third revisit is necessary, due to 

continuing noncompliance, it must be 

approved at the discretion of the CMS 

Regional Office. CMS does not permit a 

third revisit except in unusual 

circumstances. See U.S. Centers for 

Medicare & Medicaid Services. State 

Operations Manual, ‘‘ Survey and 

Enforcement Process for Skilled Nursing 

Facilities and Nursing Facilities.’’

Online. 2004. CMS. Available: http:// 

www.cms.hhs.gov/manuals/downloads/ 

som107c07.pdf (‘‘SOM–SNF/NF 

Enforcement Process’’). 

Hospitals/Home Health Agencies/ 

Hospices/Ambulatory Surgical Centers/ 

Rural Health Clinics/End-Stage Renal 

Disease Centers. CMS generally permits 

only two revisits for hospitals, home 

health agencies, hospices, ambulatory 

surgical centers, rural health clinics, 

and end-stage renal disease centers. Of 

these two revisits permitted by CMS, 

one revisit within 45 calendar days of 

the initial certification, recertification, 

or substantiated complaint survey, and 

one revisit subject to CMS approval, 

between the 46th and 90th calendar 

days. A revisit is conducted if a State 

survey agency and/or CMS receives 

from the provider or supplier a credible 

allegation that it is in compliance, 

following a determination that the 

provider or supplier had failed to 

substantially meet Federal 

requirements. If a provider or supplier 

fails to make a credible allegation of 

compliance, a revisit is not necessary, 

since the provider agreement is then 

subject to termination. 

Revisits Related to Immediate 

Jeopardy. Revisits are also conducted, if 

possible, before a termination results in 

response to an immediate jeopardy 

situation. An immediate jeopardy 

situation is one in which the provider 

or supplier’s noncompliance with one 

or more requirements of participation 

has caused, or is likely to cause, severe 

temporary or permanent injury, 

disability or death to an individual. A 

provider or supplier in this situation 

will be terminated from the Medicare/ 

Medicaid program within 23 calendar 

days from the day the deficiency was 

cited if no corrective action steps are 

taken and completed. A revisit is 

conducted if there is a credible 

allegation from the provider or supplier 

that it has corrected the threat or the 

deficiency cited as immediate jeopardy. 

If CMS and the State survey agency 

disagree as to whether an immediate 

jeopardy exists, it may be necessary for 

CMS and the State survey agency to 

conduct a revisit together. See U.S. 

Centers for Medicare & Medicaid 

Services. State Operations Manual, 

‘‘Additional Program Activities.’’

Online. 2007. CMS. Available: http:// 

www.cms.hhs.gov/manuals/downloads/ 

som107c03.pdf. 

We welcome public comment regarding 

all definitions proposed in § 488.30(a). 

Section 488.30(b)—Criteria for 

Determining the Fee 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(b) CRITERIA 

FOR DETERMINING THE FEE’’ at the 

beginning of your comments] 

We propose in § 488.30(b) to provide 

the criteria for determining the user fee. 

We propose that for initial 

implementation of revisit user fees in 

FY 2007, we will use the criteria in 

proposed § 488.30(b)(1)(i) and (ii): That 

a provider or supplier will be assessed 

a revisit user fee based on the average 

cost per revisit survey per provider or 

supplier type and the type of the 

revisit—onsite review or offsite review. 


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We welcome public comment 

regarding the criteria we propose to use 

in FY 2007 to establish the revisit user 

fee: That of average cost per revisit 

survey and the provider or supplier type 

and the type of the revisit survey. 

We also propose that exceptions to 

the assessment of a user fee will be 

identified based on the type of visit 

conducted. For example, we propose 

that neither a provider nor a supplier 

will be assessed a fee if the visit is 

considered a ‘‘State monitoring visit’’

unless the visit also meets the definition 

of a revisit. A ‘‘State monitoring visit’’

refers to visits by the State survey 

agency to oversee a provider/supplier’s 

compliance status during bankruptcy, 

after a change of ownership, during or 

shortly after the removal of immediate 

jeopardy when the purpose of the visit 

is to ensure the welfare of the residents/ 

clients/patients by providing an 

oversight presence, and in other 

circumstances as authorized by the CMS 

regional office where the provider/ 

supplier is located. See SOM–

Complaint, § 5077; see also SOM–SNF/ 

NF Enforcement Process, § 7504. 

Likewise, we also propose that neither 

a provider nor a supplier will be 

assessed a fee if the visit is associated 

with Medicare provider or supplier 

compliance with Life Safety Code (LSC) 

requirements. The LSC is a set of fire 

protection requirements, that covers 

construction, protection, and 

operational features designed to provide 

a reasonable degree of safety from fire, 

smoke, and panic. The LSC, which is 

revised periodically, is a publication of 

the National Fire Protection 

Association. The basic requirement for 

facilities participating in the Medicare 

and Medicaid programs is compliance 

with the 2000 edition of the LSC. The 

State survey agency determines whether 

the LSC survey is to occur before, after, 

or simultaneously with the health 

survey. Most States require an initial 

LSC survey before admitting patients 

prior to becoming operational. See U.S. 

Centers for Medicare & Medicaid 

Services. ‘‘Life Safety Code 

Requirements.’’ Online. 2007. CMS. 

Available: http://www.cms.hhs.gov/ 

CertificationandComplianc/ 

11_LSC.asp#TopOfPage. In addition, we 

also propose that neither a provider nor 

a supplier will be assessed a fee if the 

visit is associated with a Federal 

Monitoring Survey, such as a Federal 

look-behind survey. 

We also propose in § 488.30(b)(1)(iii) 

through (b)(1)(iv) that CMS may adjust 

revisit user fees to account for the 

provider or supplier’s size, typically 

determined by capacity (such as the 

number of beds), the number of followup revisits resulting from uncorrected 

deficiencies, and/or the seriousness and 

number of deficiencies (such as the 

scope and severity of cited deficiencies 

and the number of deficiencies cited at 

each scope and severity level), as these 

criteria pertain to particular provider 

types. These factors impact cost in that 

the variance in provider/supplier size, 

the number of follow-up revisits, and 

the type and number of deficiencies 

cited may have an impact on the survey 

hours needed for a revisit. We also 

propose in § 488.30(b)(2) that CMS may 

adjust the fees to account for any 

regional differences in cost. 

We welcome public comment 

regarding the criteria for determining 

the revisit user fee. 

Section 488.30(c)—Fee Schedule 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(c) ‘‘FEE 

SCHEDULE’’ at the beginning of your 

comments] 

We propose in § 488.30(c) that CMS 

will publish in the Federal Register the 

proposed and final notices of a uniform 

fee schedule before it adopts this 

schedule. The proposed and final 

notices would set forth the amounts of 

the assessed fees based on the criteria as 

identified in paragraph (b) of this 

subpart. In future notices, any changes 

to the amounts of the assessed fees 

would include for example, adjustments 

based on increases to cost of living, 

labor and overhead costs. This proposed 

rule also constitutes publication of the 

proposed fee schedule for this fiscal 

year. 

For FY 2007, we based user fee 

calculations on the type of revisit 

(onsite vs. offsite); the type of provider 

or supplier; the average number of hours 

that a revisit requires; and the average 

per hour cost of a revisit. We have 

proposed the user fee costs below under 

section IV, Regulatory Impact Analysis. 

Section 488.30(d)—Collection of Fees 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(d) 

COLLECTION OF FEES’’ at the 

beginning of your comments] 

We propose in § 488.30(d)(1) that fees 

for revisit surveys under this paragraph 

may be deducted from amounts 

otherwise payable to the provider or 

supplier. We also propose that fees will 

be deposited as an offset collection to be 

used exclusively for survey and 

certification activities conducted by 

State survey agencies pursuant to 

section 1864 of the Act or by CMS, and 

will be available for CMS until 

expended. We also propose that CMS 

may devise other collection methods as 

it deems appropriate. In determining 

these methods, CMS will consider 

efficiency, effectiveness, and 

convenience for the providers, 

suppliers, and CMS. Methods may 

include: Credit card; electronic fund 

transfer; check; money order; and offset 

of collections from claims submitted. 

We welcome public comment on the 

forms of payment CMS proposes it will 

accept from providers and suppliers for 

the assessed revisit user fee. 

We propose in § 488.30(d)(2) that fees 

for revisit surveys under this section are 

not allowable items on a cost report, as 

identified in part 413, subpart B of this 

chapter, under title XVIII of the Act. 

Part 413 identifies CMS’ formulating 

methods for making fair and equitable 

reimbursement for services rendered to 

beneficiaries of the program. Payment is 

to be made on the basis of current costs 

of the individual provider, rather than 

costs of a past period or a fixed 

negotiated rate. This cost report also 

designs this reimbursement formulation 

so that at no time is the individual 

provider’s costs borne by other patients. 

CMS believes that the assessed revisit 

user fee is not an allowable item for a 

cost report, as it should not be figured 

into the services provided to 

beneficiaries, nor should it be a cost 

shared amongst non-Medicare patients. 

CMS employs several checks and 

balances to deter this from occurring. 

CMS believes that this proposed 

language in 488.30(d)(2) would prevent 

the inclusion of the revisit user fee costs 

in any future cost reports. This section 

will only apply to a small group of 

providers who receive cost-based 

reimbursement. A significant amount of 

providers and suppliers are reimbursed 

through the prospective payment system 

(PPS). 

We welcome public comment 

regarding the prohibition of the assessed 

revisit user fee being an item on a 

provider or supplier cost report. 

Section 488.30(e)—Reconsideration 

Process for Revisit User Fees. 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(e) 

RECONSIDERATION PROCESS FOR 

REVISIT USER FEES’’ at the beginning 

of your comments] 

We propose in § 488.30(e) that a 

reconsideration process shall be 

available to providers or suppliers that 

have been assessed a revisit user fee if 

a provider or supplier believes an error 

of fact, such as a clerical error, has been 

made. We also propose that a request for 

reconsideration must be received by 

CMS within seven calendar days from 


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the date identified on the revisit user fee 

assessment notice. 

Once CMS has determined that a 

revisit user fee should be put into effect, 

CMS shall notify the provider or 

supplier of its intention to charge a 

revisit user fee and the reasons for 

charging the fee, and shall give the 

provider or supplier an opportunity to 

request a reconsideration due to an error 

of fact. If a provider or supplier believes 

that a revisit user fee should be 

reconsidered, due to an error of fact, it 

should submit to CMS a written 

statement, and any supporting evidence, 

to that effect within seven calendar 

days, either through its authorized 

officials or through its legal 

representative. 

If, upon reconsideration, it was found 

that a revisit fee was assessed due to 

error of fact, and the provider or 

supplier has made a payment of the 

assessed revisit user fee, then CMS shall 

credit the initial revisit payment against 

any future assessments of revisit fees. 

CMS believes this situation will be rare. 

CMS believes given the proposed time 

frame for which providers/suppliers 

have to submit this reconsideration 

request (seven calendar days) and based 

on the proposed regulatory obligation of 

payment (within 30 calendar days, as 

discussed below), there would be a 

limited possibility that payment would 

be sent without CMS providing a 

response to the reconsideration. In the 

case that this does occur and CMS 

credits the initial revisit payment 

against any future revisit fees, CMS will 

provide a refund following its 

reconciliation period. 

We welcome public comment on the 

proposed section on the reconsideration 

of revisit user fees, including discussion 

regarding crediting against future 

assessments and the provision of 

refunds. 

Section 488.30(f)—Enforcement 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 488.30(f) 

‘‘ENFORCEMENT’’ at the beginning of 

your comments] 

We propose in § 488.30(f) that if the 

full revisit user fee payment is not 

received within 30 calendar days or a 

request for reconsideration is not 

received within seven calendar days 

from the date the provider or supplier 

receives written notice of assessment, 

CMS may terminate the facility’s 

provider agreement and enrollment in 

the Medicare program or the supplier’s 

enrollment and participation in the 

Medicare program, and the provider or 

supplier may not seek Medicare 

payment, nor be considered a Medicare 

participating provider or supplier. CMS 

will adhere to the termination process 

as identified in § 489, subpart E, of this 

chapter. 

We welcome public comment on the 

proposed 30 calendar provision for 

receipt of full payment, and the seven 

calendar provision for the receipt of 

request for reconsideration. 

Part 489—Provider Agreements and 

Supplier Approval 

Subpart B—Essentials of Provider 

Agreements 

Section 489.20 Basic Commitments 

Section 489.20(u) 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 489.20(u)—BASIC 

COMMITMENTS’’ at the beginning of 

your comments] 

We propose to add to § 489.20 an 

additional paragraph that would require 

a provider to agree to pay revisit user 

fees when and if assessed. 

Subpart E—Termination of Agreement 

and Reinstatement After Termination 

Section 489.53 Termination by CMS 

Section 489.53(a)(16) 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘Section 489.53(a)(16)—

TERMINATION BY CMS’’ at the 

beginning of your comments] 

We propose to add a new paragraph 

(16) to § 489.53(a) that would create an 

additional basis for termination if a 

provider has failed to pay a revisit user 

fee when and if assessed. 

III. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995. 

IV. Regulatory Impact Analysis 

[If you choose to comment on issues 

in this next section, please include the 

caption ‘‘REGULATORY IMPACT 

ANALYSIS’’ at the beginning of your 

comments] 

A. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), the Regulatory 

Flexibility Act (RFA) (September 19, 

1980, Pub. L. 96–354), section 1102(b) of 

the Social Security Act, the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), and Executive Order 13132. 

Executive Order 12866 (as amended 

by Executive Order 13258, which 

merely reassigns responsibility of 

duties) directs agencies to assess all 

costs and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). 

This proposed rule would not be 

considered a major rule. The aggregate 

costs would total approximately $37.3 

million in any one year. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses. For purposes of the RFA, 

small entities include small businesses, 

nonprofit organizations, and small 

governmental jurisdictions. Individuals 

and States are not included in the 

definition of a small entity. Small 

businesses are small entities, either by 

nonprofit status or by having revenues 

of $6.5 million to $31.9 million or less 

in any one year for purposes of the RFA. 

CMS currently has limited information 

to separate and identify specific 

providers and suppliers that may be 

subject to a revisit user fee by the 

requirements described for purposes of 

the RFA. The percentage by type of 

providers and suppliers that may be 

assessed a revisit user fee is identified 

in Table A below, which discusses the 

overall percentage of providers and 

suppliers impacted. CMS also has 

limited information on the total 

revenues collected by provider or 

supplier type. CMS does collect 

information regarding Medicare and 

Medicaid claims submitted, however 

this would not provide the requisite 

requirements for the RFA regarding total 

revenues. Based on available 

information in 2006 CMS Statistics, at 

the time of publication, CMS does 

collect National level information which 

includes personal health care 

expenditures and payments. Personal 

health care includes hospital care, 

professional services, nursing and home 

health care, all of which cover those 

services provided by the provider and 

suppliers who may be assessed a revisit 

user fee. Personal health care 

expenditures amounted to $1,560.2 

billion dollars in calendar year 2004 for 

which we have the latest information. 

See U.S. Department of Health and 

Human Services, Centers for Medicare & 

Medicaid Services. ‘‘2006 CMS 


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Statistics.’’ Online. 2006. CMS, Office of 

Research, Development, and 

Information. Available: http:// 

www.cms.hhs.gov/CapMarketUpdates/ 

downloads/2006CMSStat.pdf. 

(Published July 2006). Table 36, pg. 31 

[‘‘2006 CMS Statistics’’]. The providers 

and suppliers that may be assessed a 

revisit user fee would fall into the 

category of revenues collected under 

personal health care funds. CMS notes 

it must compare different year data 

sources, calendar year 2004 for personal 

health care funds, and FY 2006 actual 

data to project costs for FY 2007, we 

roughly estimate that the $37.3 million 

that would be assessed for revisit user 

fees would only amount to 2.3% of the 

$1,560.2 million personal health care 

revenues collected and only 1.9% of all 

national health care expenditures of 

which personal health care 

expenditures are included. See ‘‘2006 

CMS Statistics,’’ Table 36, Pg. 31. We 

have determined, and the Secretary 

certifies, that this proposed rule would 

not have a significant impact on small 

entities based on the overall effect on 

revenues. This is a proposed rule and 

we are soliciting public comments 

regarding any available information that 

may affect the percentage of revenues 

estimated with the implementation of 

this rule. 

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 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan statistical Area 

(superseded by Core Based Statistical 

Areas) and has fewer than 100 beds. 

This proposed rule affects those small 

rural hospitals that have been cited for 

a deficiency based on noncompliance 

with required conditions of 

participation and for which a revisit is 

needed to make sure that the deficiency 

has been corrected. Based on FY 2006 

actual data from CMS’s Online Survey, 

Certification and Reporting (OSCAR) 

database of the 7,139 hospitals 

identified 2,776 or 3.8% were classified 

as rural hospitals. Of all hospitals 

identified 285 revisits or 3.9% were 

conducted in rural hospitals to ensure 

that deficiencies identified were 

corrected. Based on the effective time 

period of this proposed rule, less than 

3% of all hospitals may in fact be 

assessed a revisit user fee in this current 

fiscal year (FY 2007), we estimate that 

less than 1% of rural hospitals will be 

impacted by this proposed rule. 

Currently CMS has limited data at this 

time to identify how many of those 

revisits that will be conducted may be 

onsite versus offsite which will 

determine the amount of the revisit user 

fee that may be assessed. We have 

determined, and the Secretary certifies, 

that this proposed rule would not have 

a significant impact on small rural 

hospitals. This is a proposed rule and 

we are soliciting public comments 

regarding any available information that 

may affect rural hospitals as identified. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

That threshold level is currently 

approximately $120 million. This rule 

would have no mandated effect on 

State, local, or tribal governments and 

the impact on the private sector is 

estimated to be less than $120 million 

and would only effect those Medicare 

providers or suppliers for which a 

revisit user fee is assessed based on the 

need to conduct a revisit survey to 

ensure deficient practices that were 

cited have been corrected. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

This rule would not substantially affect 

State or local governments. This 

proposed rule establishes user fees for 

providers and suppliers for which CMS 

has identified deficient practices and 

requires a revisit to assure that 

corrections have been made. Therefore 

we have determined that this proposed 

rule will not have a significant affect on 

the rights, roles, and responsibilities of 

State or local governments. 

B. Impact on Providers/Suppliers 

The source of the data used to 

estimate the number and cost of revisit 

surveys is CMS’s Online Survey, 

Certification and Reporting (OSCAR) 

database. OSCAR is the repository of 

information about CMS and State survey 

agency survey actions. Data collected 

include the dates of surveys, survey 

findings, and the length of time that 

surveyors spent conducting the survey. 

State survey agencies record survey time 

on the CMS–670 form. Data from the 

CMS–670 form are entered into OSCAR 

by the State survey agency. CMS 

analyzed average survey time length 

using actual data from FY 2006. 

Based on information entered into 

OSCAR, we propose user fees in 

accordance with the type of revisit 

survey (onsite vs. offsite); the type of 

provider or supplier; the average 

number of hours that a revisit survey 

requires; and the average per hour cost 

of a revisit survey. 

Overall Effect on Providers and 

Suppliers 

We estimate that there are 47,804 

providers and suppliers. We based this 

estimate on FY 2006 actual data. Of 

those providers and suppliers, as 

identified in Table A below, based on 

FY 2006 actual data 34.8% required a 

revisit survey, this included both onsite 

and offsite revisits. Of this 34.8%, 

skilled nursing facilities (‘‘SNFs’’)/ 

nursing facilities (‘‘NFs’’) made up 

87.9% whereas ambulatory surgical 

centers made up a low of 2.8% of 

providers/suppliers that required a 

revisit survey. We did not include 

transplant centers in FY 2006 and 2007 

calculations due to lack of available cost 

and revisit data at this time. Transplant 

centers will be newly surveyed 

providers starting in FY 2008. 

TABLE A.—PERCENTAGE OF PROVIDERS/SUPPLIERS THAT HAD A REVISIT SURVEY FY 2006 

Total 

providers/ 

suppliers 1

Total revisit 

survey for FY 

2006 (onsite & 

offsite) 

Number of 

providers/suppliers that required revisit 

survey (onsite 

& offsite) 

Percent of provider/suppliers 

that required 

revisit survey 

(onsite & offsite) 

SNF/NF 2 .......................................................................................................... 15,172 29,426 13,350 87.9 

Hospitals 3 ........................................................................................................ 7,139 853 594 8.3 

HHAs ................................................................................................................ 8,901 1,585 1,320 14.8 

Hospices .......................................................................................................... 3,077 307 246 7.9 


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TABLE A.—PERCENTAGE OF PROVIDERS/SUPPLIERS THAT HAD A REVISIT SURVEY FY 2006—Continued 

Total 

providers/ 

suppliers 1

Total revisit 

survey for FY 

2006 (onsite & 

offsite) 

Number of 

providers/suppliers that required revisit 

survey (onsite 

& offsite) 

Percent of provider/suppliers 

that required 

revisit survey 

(onsite & offsite) 

ASC .................................................................................................................. 4,735 188 133 2.8 

RHC ................................................................................................................. 3,828 216 204 5.3 

ESRD ............................................................................................................... 4,952 929 781 15.7 

Total .......................................................................................................... 47,804 33,504 16,662 34.8 

1Providing Data Quickly (PDQ) system, Provider Summary Table, includes providers considered active at any time in the fiscal year. 2Total number does not include Medicaid-only Nursing Facilities. 

3Total includes accredited and non-accredited hospitals, as well as psychiatric hospitals, and critical access hospitals. 

Frequency and Duration of Revisit 

Surveys 

There are numerous differences across 

providers and suppliers in the 

frequency and duration of revisit 

surveys. Skilled nursing facilities/ 

nursing facilities accounted for 83 

percent of total onsite revisit surveys 

conducted in FY 2006 following the 

identification of deficiencies from 

standard surveys. Home health agencies 

accounted for 6 percent of onsite revisit 

surveys in FY 2006, while ESRDs and 

hospitals accounted for 8 percent, 4 

percent each. Hospice facilities, 

ambulatory surgical centers, and rural 

health clinics combined comprised the 

remaining 3 percent of revisits. The 

average length of a standard onsite 

revisit survey varied from 7.6 hours for 

rural health clinics to 22.8 hours for 

hospitals. In comparison, offsite revisit 

surveys conducted averaged one and a 

half hours (1.5) across all providers and 

suppliers. 

Proposed Fee Schedule for Onsite 

Revisit Surveys 

We propose to base the fee schedule 

on the average length of time required 

for revisit surveys by provider or 

supplier type in FY 2006. Averages were 

calculated separately by type of 

provider or supplier, and the hours for 

revisit surveys were separated by either 

standard health surveys, complaint 

surveys, or offsite surveys. A cost of 

$100 per hour was incurred in FY 2005, 

which was the basis of the costs 

estimates in the Continuing Resolution. 

We project that the actual cost in FY 

2007 based on inflation factors and 

processing expenses is $112 per hour 

and we would use this projected cost in 

setting the fee schedule. In order to 

obtain this inflation factor, CMS utilized 

FY 2005 annual expenditures derived 

from CMS–435 form that captures a 

State’s cumulative expenditures and 

divided this by information obtained 

from CMS–670 form that identifies 

State’s workload hours or survey hours, 

as discussed above. The product of this 

calculation resulted in dollars per hour 

or cost incurred for conducting surveys. 

CMS then took this number and 

multiplied this by a composite rate of 

inflation that was obtained from 

percentage change calculations 

identified in annual and semi-annual 

indexes prepared by the U.S. 

Department of Labor’s Consumer Price 

Index for Wage Earners and Clerical 

Workers (CPI–W). See U.S. Department 

of Labor, Bureau of Labor Statistics. 

Summary of Annual and Semi-Annual 

Indexes. Online. 2007. Bureau of Labor 

Statistics. Available: http:// 

www.bls.gov/ro3/fax_9125.htm [22 Feb 

2007]. In our proposed fee schedule, the 

$112 average cost per hour is then 

multiplied by the average hours for the 

revisit surveys to achieve the average fee 

cost per onsite revisit survey as 

identified in Table B below. For Fiscal 

Year 2007, we will not adjust fees based 

on the length of individual revisit 

surveys, but will assess a flat fee per 

revisit survey, based on provider or 

supplier type. We expect these costs to 

increase annually to incorporate 

economic changes, cost of living 

increases, labor and overhead costs 

expenses. 

All revisit user fees will be assessed 

in the last quarter of FY 2007. Revisit 

user fees will be assessed if a revisit 

survey is determined necessary. 

TABLE B.—REVISIT USER FEE ASSESSED BASED ON AVERAGE LENGTH OF ONSITE REVISIT SURVEYS * 

Facility 

Average 

length of onsite revisit survey (hrs) 

Fee assessed 

per revisit 

survey 

(hrs x $112) 

SNF/NF .................................................................................................................................................................... 18.5 $2,072 

Hospitals .................................................................................................................................................................. 22.8 2,554 

HHA ......................................................................................................................................................................... 14.4 1,613 

Hospice .................................................................................................................................................................... 15.5 1,736 

ASC .......................................................................................................................................................................... 14.9 1,669 

RHC ......................................................................................................................................................................... 7.6 851 

ESRD ....................................................................................................................................................................... 13.3 1,490 

* This includes onsite revisit surveys according to both Standard Health Surveys and Complaint Surveys. 

Proposed Fee Schedule for Offsite 

Revisit Surveys 

For offsite revisit surveys, we expect 

a revisit user fee of $168 assessed 

despite provider or supplier type. Based 

again on recorded survey time on the 

CMS–670 form, it was assessed that 

offsite revisit surveys on average take 

one and a half hours (1.5) across all 

providers and suppliers. We calculated 

the base hourly fee of $112 multiplied 

by an average of one and a half hours 


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to arrive at the $168 fee assessed per 

offsite revisit survey. 

All revisit user fees will be assessed 

in the last quarter of FY 2007. Revisit 

user fees will be assessed if a revisit 

survey is determined necessary. 

Costs for all Revisit User Fees Assessed 

We expect the combined costs for all 

providers and suppliers for all revisit 

surveys for FY 2007 to be a little under 

$37.3 million. Onsite revisit surveys 

will total a little under $34.6 million 

and offsite revisit surveys will total 

approximately $2.7 million. The rule 

would take effect the date of publication 

of the final rule. We provide below an 

explanation for quarterly costs listed in 

Tables C and D. 

In Table C below, we provide the 

projected quarterly costs for the final 

quarter of FY 2007. We expect the 

combined costs for all providers and 

suppliers for all onsite revisit surveys 

for one quarter to total approximately 

$8.6 million. We first utilized the total 

number of onsite revisit surveys for FY 

2006, took the expected revisit user fees 

assessed per revisits as calculated in 

Table B above estimated by provider or 

supplier and multiplied this number by 

the number of onsite revisit surveys 

expected for one quarter. We then 

totaled all providers and suppliers to 

achieve the total quarterly costs for all 

onsite revisit surveys. 

TABLE C.—ESTIMATED QUARTERLY COSTS FOR ONSITE REVISIT SURVEYS

Facility 

Number of 

onsite revisit 

surveys 

(FY 2006) 

Fee assessed 

per onsite revisit surveys 

(hrs × $112) 

(see Table B) 

Number of 

onsite revisit 

surveys est. 

for quarter* 

Total costs for 

onsite revisit 

surveys for 

quarter 

SNF & NF ........................................................................................................ 14,288 $2,072 3,572 $7,401,184 

Hospitals .......................................................................................................... 575 2,554 144 367,776 

HHA ................................................................................................................. 1,068 1,613 267 430,671 

Hospice ............................................................................................................ 256 1,736 64 111,104 

ASC .................................................................................................................. 95 1,669 24 40,056 

RHC ................................................................................................................. 149 851 37 31,487 

ESRD ............................................................................................................... 698 1,490 175 260,750 

Total .......................................................................................................... 17,129 ........................ 4,283 8,643,028 

* Total number of onsite revisit surveys divided by 4 and rounded up based on FY 2006 actual data. 

We expect the combined costs for all 

providers and suppliers for all offsite 

revisit surveys to total $687,960. In 

Table D below, we first estimated by 

provider or supplier the number of 

offsite revisit surveys expected for one 

quarter and multiplied this number by 

the expected revisit user fee of $168 per 

offsite revisit survey as discussed above. 

We then totaled all providers and 

suppliers to achieve the total costs for 

all offsite revisit surveys for one quarter. 

TABLE D.—ESTIMATED QUARTERLY COSTS FOR OFFSITE REVISIT SURVEYS

Facility 

Number of 

offsite revisit 

surveys 

(FY 2006) 

Fee assessed 

per offsite revisit surveys 

($112 × 1.5 

hrs.) 

Number of 

offsite revisit 

surveys est. 

for quarter * 

Total costs for 

offsite revisit 

surveys for 

quarter 

SNF & NF ........................................................................................................ 15,138 $168 3,785 $635,880 

Hospitals .......................................................................................................... 278 168 70 11,760 

HHA ................................................................................................................. 517 168 129 21,672 

Hospice ............................................................................................................ 51 168 13 2,184 

ASC .................................................................................................................. 93 168 23 3,864 

RHC ................................................................................................................. 67 168 17 2,856 

ESRD ............................................................................................................... 231 168 8 9,744 

Total .......................................................................................................... 16,375 ........................ 4,095 687,960 

* Total number of offsite revisit surveys divided by 4 and rounded up based on FY 2006 actual data. 

As shown in Table E below, we 

provide the total costs expected for FY 

2007, as well as the costs we expect to 

offset in the final quarter of this fiscal 

year by assessing Revisit User Fees for 

revisit surveys conducted. 

TABLE E.—TOTAL COSTS COMBINED FOR ALL REVISITS SURVEYS PER FISCAL YEAR & QUARTER

FY 2007 Last quarter 

FY 2007 * 

Onsite Revisit Surveys ............................................................................................................................................ $34,565,760 $8,643,028 

Offsite Revisit Surveys ............................................................................................................................................ 2,751,000 687,960 

Total Costs All Revisits .................................................................................................................................... 37,316,760 9,330,988 

* Last quarter FY 2007 costs are based on quarterly revisit surveys rounded up to the nearest whole number as shown in Table C & D, multiplying Table E last quarter numbers in column 2 by 4 would create a slightly larger cost than identified in FY 2007 column 1 above. 


rmajette on PROD1PC64 with PROPOSALS
35682 Federal Register / Vol. 72, No. 125 / Friday, June 29, 2007 / Proposed Rules 

As discussed above, we have 

excluded Medicaid-only facilities, 

comprehensive outpatient rehabilitation 

facilities, providers of outpatient 

physical therapy or speech pathology 

services, independent laboratories, 

portable x-ray centers, physical 

therapists in independent practice, 

federally qualified health centers, and 

chiropractors in all proposed ratesetting calculations. 

We also expect that the revisit user fee 

would have some effect in motivating 

providers and suppliers to improve 

quality, or if quality problems do occur, 

to ensure that quality lapses are 

corrected more quickly than in the past. 

Both of these positive effects would 

result in fewer revisit surveys being 

necessary. However, CMS does 

acknowledge that the revisit user fee 

may have a counter effect of prompting 

providers or suppliers to engage in the 

informal dispute resolution process to 

dispute State survey agency decisions 

more frequently in order to avoid the 

assessment of a fee. 

We welcome public comment 

including data on any additional time 

and costs burden that may affect the 

public by the assessment of a revisit 

user fee. 

C. Alternatives Considered 

The revisit user fee in the Continuing 

Resolution addresses important resource 

issues in the Medicare survey and 

certification programming budget. To 

implement this revisit user fee process, 

CMS is required to promulgate a 

proposed regulation and proposed fee 

schedule. CMS has attempted through a 

variety of methods to address ways of 

providers and suppliers to improve 

quality and thus decrease the need to 

conduct revisit surveys for deficiencies 

cited prior to the inclusion of a revisit 

user fee included in the FY 2007 

Continuing Resolution. CMS continues 

to conduct outreach and educational 

efforts, quality analysis studies, and 

review of current regulatory 

requirements to focus in on health and 

safety measures. In its outreach efforts, 

CMS staff continue to present at trade 

association meetings representing home 

health agencies, hospices, Skilled 

nursing facilities/nursing facilities, and 

other large accreditation organizations. 

CMS staff speak to new developments 

within survey and certification policy, 

updating of regulations, and 

expectations that CMS has for those 

providing services to its Medicare 

beneficiaries. CMS in its continued 

outreach and educational efforts 

surrounding health and safety 

requirements regularly posts and shares 

any modification of policies or program 

on its CMS survey and certification Web 

site and through its survey and 

certification online course delivery 

systems. See U.S. Centers for Medicare 

& Medicaid Services. ‘‘Certification & 

Compliance.’’ Online. 2007. CMS. 

Available: http://www.cms.hhs.gov/ 

SurveyCertificationEnforcement/ 

01_Overview.asp. CMS also devoted a 

substantial part of the work of the 

Quality Improvement Organizations 

(QIOs) to educate providers and 

suppliers on best practices and 

expectations for meeting Federal health 

and safety requirements. Despite these 

efforts, there continue to be many 

providers and suppliers that fail to meet 

Medicare conditions of participation, 

conditions for coverage or requirements 

and require revisit surveys to ensure 

compliance with Federal quality of care 

requirements. In addition, costs for 

these revisits continue to increase. CMS 

believes that the assessment of revisit 

user fees, as directed in the Continuing 

Resolution, is a piece of the larger 

efforts to address health care providers 

and suppliers that have failed to comply 

with Federal quality of care 

requirements. 

We welcome public comment that 

would provide some additional insight 

on other methods that would help to 

decrease the need for conducting 

revisits. We welcome input that would 

address those providers or suppliers 

who continue to fail to meet Federal 

quality of care requirements and how 

we can work collaboratively to ensure 

quality of care for Medicare 

beneficiaries. We also seek data or other 

supported sources that may identify and 

help to solve the concerns regarding 

quality and other policy avenues. 

In accordance with Executive Order 

12866, this proposed rule has been 

reviewed by the Office of Management 

and Budget. 

List of Subjects 

42 CFR Part 424 

Emergency medical services, Health 

facilities, Health professions, Medicare, 

Reporting and recordkeeping 

requirements. 

42 CFR Part 488 

Administrative practice and 

procedure, Health facilities, Medicare, 

Reporting and Recording requirements. 

42 CFR Part 489 

Health facilities, Medicare, Reporting 

and recordkeeping requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR Chapter IV, parts 424, 488, and 

489 as set forth below: 

PART 424—CONDITIONS FOR 

MEDICARE PAYMENT 

1. The authority citation for part 424 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act, unless otherwise noted 

(42 U.S.C. 1302 and 1395hh). 

Subpart P—Requirements for 

Establishing and Maintaining Medicare 

Billing Privileges 

2. Section 424.535 is amended by 

revising paragraph (a)(1) introductory 

text to read as follows: 

§ 424.535 Revocation of enrollment and 

billing privileges in the Medicare program. 

(a) * * * 

(1) Noncompliance. The provider or 

supplier is determined not to be in 

compliance with the enrollment 

requirements described in this section, 

or in the enrollment application 

applicable for its provider or supplier 

type, and has not submitted a plan of 

corrective action as outlined in part 488 

of this chapter. The provider or supplier 

may also be determined not to be in 

compliance if it has failed to pay any 

user fees as assessed under part 488 of 

this chapter. All providers and suppliers 

are granted an opportunity to correct the 

deficient compliance requirement before 

a final determination to revoke billing 

privileges. 

* * * * * 

PART 488—SURVEY, CERTIFICATION, 

AND ENFORCEMENT PROCEDURES 

1. The authority citation for part 488 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act, unless otherwise noted 

(42 U.S.C. 1302 and 1395hh). 

Subpart A—General Provisions 

2. Part 488, subpart A is amended by 

adding a new § 488.30 to read as 

follows: 

§ 488.30 Revisit user fee for revisit 

surveys. 

(a) Definitions. As used in this 

section, the following definitions apply: 

Certification (both initial and 

recertification) means those activities as 

defined in § 488.1. 

Complaint surveys means those 

surveys conducted on the basis of a 

substantial allegation of noncompliance, 

as defined in § 488.1. 

Provider of services, provider, or 

supplier as defined in § 488.1, and 

ambulatory surgical centers and 

transplant centers subject to § 416.2 and 

§ 482.70 of this chapter, respectively, 


rmajette on PROD1PC64 with PROPOSALS
Federal Register / Vol. 72, No. 125 / Friday, June 29, 2007 / Proposed Rules 35683 

will be subject to user fees unless 

otherwise exempted. 

Revisit survey means a survey 

performed with respect to a provider or 

supplier cited for deficiencies during an 

initial certification, recertification, or 

substantiated complaint survey and that 

is designed to evaluate the extent to 

which previously-cited deficiencies 

have been corrected and the provider or 

supplier is in substantial compliance 

with applicable conditions of 

participation, requirements, or 

conditions for coverage. Revisit surveys 

include both offsite and onsite review. 

Substantiated complaint survey 

means a complaint survey that results in 

the proof or finding of noncompliance at 

the time of the survey, a finding that 

noncompliance was proven to exist, but 

was corrected prior to the survey, and 

includes any deficiency that is cited 

during a complaint survey, whether or 

not the cited deficiency was the original 

subject of the complaint. 

(b) Criteria for determining the fee. (1) 

The provider or supplier will be 

assessed a revisit user fee based upon 

one or more of the following: 

(i) The average cost per provider or 

supplier type. 

(ii) The type of revisit survey 

conducted (onsite or offsite). 

(iii) The size of the provider or 

supplier. 

(iv) The number of follow-up revisits 

resulting from uncorrected deficiencies. 

(v) The seriousness and number of 

deficiencies. 

(2) CMS may adjust the fees to 

account for any regional differences in 

cost. 

(c) Fee schedule. CMS will publish in 

the Federal Register the proposed and 

final notices of a uniform fee schedule 

before it adopts this schedule. The 

notices will set forth the amounts of the 

assessed fees based on the criteria as 

identified in paragraph (b) of this 

subpart. 

(d) Collection of fees. (1) Fees for 

revisit surveys under this section may 

be deducted from amounts otherwise 

payable to the provider or supplier. As 

they are collected, fees will be deposited 

as an offset collection to be used 

exclusively for survey and certification 

activities conducted by State survey 

agencies pursuant to section 1864 of the 

Act or by CMS, and will be available for 

CMS until expended. CMS may devise 

other collection methods as it deems 

appropriate. In determining these 

methods, CMS will consider efficiency, 

effectiveness, and convenience for the 

providers, suppliers, and CMS. Methods 

may include: Credit card; electronic 

fund transfer; check; money order; and 

offset collections from claims submitted. 

(2) Fees for revisit surveys under this 

section are not allowable items on a cost 

report, as identified in part 413, subpart 

B of this chapter, under title XVIII of the 

Act. 

(e) Reconsideration process for revisit 

user fees. CMS will review revisit user 

fees if a provider or supplier believes an 

error of fact has been made, such as 

clerical errors. A request for 

reconsideration must be received by 

CMS within seven calendar days from 

the date identified on the revisit user fee 

assessment notice. 

(f) Enforcement. If the full revisit user 

fee payment is not received within 30 

calendar days from the date the provider 

or supplier receives notice of 

assessment, CMS may terminate the 

facility’s provider agreement and 

enrollment in the Medicare program or 

the supplier’s enrollment and 

participation in the Medicare program. 

PART 489—PROVIDER AGREEMENTS 

AND SUPPLIER APPROVAL 

3. The authority citation for part 489 

continues to read as follows: 

Authority: Secs. 1102, 1819, 1861, 

1864(m), 1866, 1869, and 1871 of the Social 

Security Act, 42 U.S.C. 1302, 1395i–3, 1395x, 

1395aa(m), 1395cc, 1395ff, and 1395hh). 

Subpart B—Essentials of Provider 

Agreements 

4. Section 489.20 is amended by 

adding a new paragraph (u) to read as 

follows: 

§ 489.20 Basic commitments. 

* * * * * 

(u) To comply with § 488.30 of this 

chapter, to pay revisit user fees when 

and if assessed. 

5. Section 489.53 is amended by 

adding a new paragraph (a)(16) to read 

as follows: 

§ 489.53 Termination by CMS. 

(a) * * * 

(16) It has failed to pay a revisit user 

fee when and if assessed. 

* * * * * 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: April 9, 2007. 

Leslie V. Norwalk, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: June 6, 2007. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 07–3196 Filed 6–26–07; 4:00 pm] 

BILLING CODE 4120–01–P 


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