50470 Federal Register / Vol. 72, No. 169 / Friday, August 31, 2007 / Proposed Rules 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 416 

[CMS–3887–P] 

RIN 0938–AL80 

Medicare and Medicaid Programs; 

Ambulatory Surgical Centers, 

Conditions for Coverage 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

revise some of the existing conditions 

for coverage (CfCs) that ambulatory 

surgical centers must meet to participate 

in the Medicare and Medicaid programs. 

The proposed modifications are 

intended to update the existing CfCs to 

reflect current practice and set forth 

new requirements to promote and 

protect patient health and safety. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on October 30, 2007. 

ADDRESSES: In commenting, please refer 

to file code CMS–3887–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–3887– 

P, P.O. Box 8017, Baltimore, MD 21244– 

8017. 

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–3887–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. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by mailing 

your comments to the addresses 

provided at the end of the ‘‘Collection 

of Information Requirements’’ section in 

this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Jacqueline Morgan, (410) 786–4282. 

Joan A. Brooks, (410) 786–5526. 

Steve Miller, (410) 786–6656. 

Rachael Weinstein, (410) 786–6775. 

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–3887–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. 

I. Background 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘BACKGROUND’’ at the 

beginning of your comments.] 

As the single largest payer for health 

care services in the United States, the 

Federal Government assumes a critical 

responsibility for the quality of care 

furnished under its programs. 

Historically, the Medicare program’s 

quality assurance approach was focused 

on identifying health care entities that 

furnish poor quality care or that fail to 

meet minimum Federal standards. 

Overall, we have found that this 

problem-focused approach has had 

inherent limitations and does not 

necessarily translate into better care for 

patients. Ensuring quality through the 

enforcement of prescriptive health and 

safety standards alone has resulted in 

expending many of our resources on 

working with marginal providers, rather 

than stimulating broad-based 

improvements in quality of care. 

Section 1832(a)(2)(F)(i) of the Social 

Security Act (the Act) specifies that an 

ASC must meet health, safety, and other 

requirements specified by the Secretary 

of Health and Human Services (HHS) 

(the Secretary) in regulation if it has an 

agreement in effect with the Secretary. 

Under the agreement, the ASC agrees to 

accept the standard overhead amount 

determined under section 1833(i)(2)(A) 

of the Act as full payment for services, 

and to accept an assignment described 

in section 1842(b)(3)(B)(ii) of the Act for 

payment for all services furnished by 

the ASC to enrolled individuals. The 

Secretary is responsible for ensuring 

that the CfCs and their enforcement are 

adequate to protect the health and safety 

of individuals treated by ASCs. 

To implement the CfCs, we determine 

compliance through State survey 

agencies that conduct onsite inspections 

utilizing these requirements. ASCs may 

be deemed to meet Medicare standards 

if they are certified by one of the 

national accrediting organizations 

whose standards meet or exceed the 


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1Only comprehensive rehabilitation facilities and 

rural health clinics have experienced a higher rate 

of growth. Office of Evaluations and Inspections 

(OEI) analysis of Part B Medicare data. See Office 

of Inspector General Quality Oversight of 

Ambulatory Surgical Centers Supplemental Report 

1: The Role of Certification and Accreditation. 

CfCs. Currently, there are four Medicare 

approved national accreditation 

organizations: The Joint Commission; 

American Association for Accreditation 

of Ambulatory Surgical Facilities 

(AAAASF); Accreditation Association 

for Ambulatory Health Care (AAAHC); 

and the American Osteopathic 

Association (AOA). 

The current ASC CfCs were originally 

published on August 5, 1982 (47 FR 

34082), and, for the most part, these 

regulations have remained unchanged 

since that time. From 1990 to 2000, the 

number of ASCs participating in the 

Medicare program has increased at a 

rate of about 175 facilities a year. The 

total number of ASCs more than 

doubled from 1,197 to 2,966 during this 

ten year period, making ASCs one of the 

fastest growing facility types in the 

Medicare program. The annual volume 

of procedures performed on both 

Medicare and non-Medicare patients 

have also tripled. Currently, over 4,600 

ASCs participate in the Medicare 

program.1 This growth is due in part to 

advances in medical technology that 

have produced additional surgical 

procedures that can be safely performed 

outside of a hospital setting and 

increased focus on patient health and 

safety and patient convenience. This 

shift has paved the way for increasing 

numbers of procedures to be performed 

in an ASC. We believe that the changes 

we are proposing will strengthen and 

modernize the CfCs to be more aligned 

with today’s ASC health care industry 

standards. 

In addition, the recent transparency 

initiative directed by President Bush 

requires that more data be made 

available to all Americans as part of the 

Administration’s commitment to make 

health care more affordable and 

accessible. In support of this initiative, 

we announced in August 2006 the 

release of Medicare payment 

information for 61 procedures 

performed in ASCs. The new 

information is available on our Web site 

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

HealthCareConInit/ and will help 

patients undergoing surgical procedures 

select the most appropriate setting for 

the delivery of high quality, efficient 

care. The information will show 

‘‘Commonly Performed Procedures in 

ASCs,’’ and will contain charge and 

Medicare payment data for ASC facility 

costs for a limited number of services 

administered in States and counties. 

The data is broken down at the county, 

State and national level. Moreover, the 

CMS Web site at http:// 

www.cms.hhs.gov/center/ 

ombudsman.asp is available to the 

public and ASC patients to get 

information about the Medicare and 

Medicaid programs, prescription drug 

coverage, and how to coordinate 

Medicare benefits with other health 

insurance programs. The Web site also 

includes information about filing a 

grievance or complaint. 

Section 109 of Division B, Title I of 

the Tax Relief and Health Care Act of 

2006 (Pub. L. 109–432) (TRHCA), 

Quality reporting for hospital outpatient 

services and ambulatory surgical center 

services, requires that the Secretary 

develop measures that are appropriate 

to determine the measurement of quality 

care (including medication errors) 

furnished by ASCs that reflect the 

consensus among affected parties. These 

measures, to the extent feasible and 

practicable, shall include measures set 

forth by one or more national consensus 

building entities. The Secretary is 

authorized to reduce the annual 

payment update for failure to report on 

the chosen quality measures. We expect 

Medicare beneficiaries to receive high 

quality surgical services and for that 

reason, we are proposing to include a 

Quality Assurance Performance 

Improvement Requirement (QAPI) as a 

new condition for coverage (§ 416.43). 

(See section II.B.2 of the preamble of 

this proposed rule for a more detailed 

discussion of the quality assurance 

improvement requirement.) 

We are soliciting public comments on 

quality measures appropriate to ASCs. 

We are interested in public comments 

regarding the extent to which ASCs are 

currently utilizing quality measures, the 

data source for those measures (for 

example, claims data and chart 

abstraction), and the extent to which 

those data are maintained electronically. 

We are also interested in how the 

measures were developed and why they 

are appropriate to measure the care 

provided to Medicare patients in ASCS. 

We have developed a patients’ right 

condition that emphasizes an ASC’s 

responsibility to respect and promote 

the rights of each ASC patient. 

II. Provisions of the Proposed 

Regulation 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘PROVISIONS’’ at the 

beginning of your comments.] 

Eliciting quality health care for 

Federal beneficiaries from CMS-certified 

providers and suppliers requires taking 

advantage of continuing advances in the 

health care delivery field. As a result, 

we are revising the Medicare ASC 

requirements to focus on a patientcentered, outcome-oriented process that 

promotes patient care foremost, rather 

than a prescriptive, inflexible approach 

that penalizes providers of substandard 

care. 

The conditions for coverage (CfCs) for 

ambulatory surgical centers (ASCs) were 

originally issued in 1982. Most of the 

revisions made since then have been 

payment related. Since 1982, significant 

innovations in ASC patient care 

delivery and quality assessment 

practices have emerged. In an effort to 

ensure continued quality in the ASC 

setting, we are proposing to revise three 

of the existing conditions and create 

three new conditions. The proposed 

revised conditions are: Governing body 

and management; Evaluation of quality 

(renamed Quality Assessment and 

Performance Improvement (QAPI); and 

Laboratory and radiologic services. The 

proposed new conditions are: Patient 

rights; Infection control; and Patient 

admission, assessment and discharge. 

Our objective is to achieve a balanced 

regulatory approach by ensuring that an 

ASC furnishes health care that meets 

essential health and quality standards, 

while ensuring that it monitors and 

improves its own performance. 

To achieve this objective, we are 

working to revise not only the ASC 

requirements but the requirements for 

other major health care provider types, 

such as hospitals, home health agencies 

and end-stage renal disease facilities, 

through separate rules. All of the 

revised and new requirements are 

directed towards improving patient 

outcomes of care and satisfaction. 

A. Definitions (§ 416.2) 

Existing § 416.2 sets forth definitions 

for terms used in the ASC CfCs. We are 

proposing to revise the definition of 

‘‘Ambulatory surgical center (ASC).’’

Also, we are proposing to add the 

definition for ‘‘overnight stay.’’

The ASC definition would read as 

follows: 

Ambulatory surgical center or ASC 

would mean any distinct entity that 

operates exclusively for the purpose of 

providing surgical services to patients 

not requiring an overnight stay 

following the surgical services, has an 

agreement with CMS to participate in 

Medicare as an ASC, and meets the 

conditions set forth in subparts B and C 

of this part. 

The overnight stay definition would 

read as follows: 

Overnight stay, for purposes of the 

ASC CfCs, would mean the patient’s 


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recovery requires active monitoring by 

qualified medical personnel, regardless 

of whether it is provided in the ASC, 

beyond 11:59 p.m. of the day on which 

the surgical procedure was performed. 

To provide further clarification on the 

overnight stay definition, we are 

proposing to use the 11:59 p.m. 

threshold as the standard for 

determining a patient’s status when 

receiving services in an ASC facility. In 

the Medicare cost reporting manual 

(Provider Reimbursement Manual, Part 

1, Section 2205 (Medicare Patient Days, 

page 22–16)), we have defined a 

hospital inpatient day as beginning at 

midnight and ending 24 hours later. 

Consistent with this longstanding 

policy, we would codify in regulations 

that any patient whose recovery requires 

active monitoring by qualified 

personnel beyond 11:59 p.m. of the day 

on which the surgical procedure was 

performed, is a patient who may require 

hospitalization or more intensive care. 

Accordingly, ASCs that are Medicarecertified may not keep patients beyond 

11:59 p.m. of the day on which the 

surgical procedure was performed. 

The Medicare Hospital Outpatient 

Prospective Payment System and CY 

2007 Payment Rates proposed and final 

rules (71 FR 49506 and 71 FR 67960) 

address the denial of payment of an 

ASC facility fee for any procedure for 

which prevailing medical practice 

dictates that the beneficiary will 

typically be expected to require active 

medical monitoring and care at 

midnight following the procedure. We 

also note that the patient’s location at 

midnight is a generally accepted 

standard for determining his or her 

status as a hospital inpatient or skilled 

nursing facility patient and as such, it 

is reasonable to apply the same standard 

in the ASC setting. 

B. Specific Conditions for Coverage 

We are proposing to retain many 

current requirements because they still 

reflect current practice and are 

predictive of ensuring desired outcomes 

and preventing harmful outcomes. 

The changes we are proposing to the 

current CfCs are the result of three main 

considerations. 

First, we considered the suggestions 

put forth in a February 2002 report by 

the HHS Office of Inspector General 

(OIG) entitled, Quality Oversight of 

Ambulatory Surgical Centers; A System 

in Neglect [Janet Rehnquist, Inspector 

General, OEI–01–00–00450]. The report 

provided two recommendations 

specifically related to ASC patient 

health and safety. It recommended 

updating the CfCs to include patient 

rights and quality improvement. It also 

recommended that the CfCs be written 

in a manner that takes into 

consideration the scope and severity of 

the different types of surgical 

procedures, thereby establishing varied 

sets of requirements to which ASCs 

would be accountable. 

In response to the suggestions in the 

OIG report, we are proposing to replace 

the current Evaluation of Quality 

requirement with a new QAPI 

requirement and are proposing to add a 

new Patient Rights requirement. 

However, from both a policy perspective 

and an operational perspective, we are 

unable to propose different sets of ASC 

CfCs that are based on the scope of 

severity of the procedures offered by an 

ASC. Since ASCs are free to host a wide 

range of surgical procedures, 

enforcement of a variety of sets of 

requirements based on the type of 

procedures provided would be difficult 

to implement, since this would demand 

changes in the type and frequency of 

State agency oversight. In addition, 

ASCs wishing to upgrade their 

certification (if the regulations were 

approached as a tiered system) would 

require recertification and add 

additional oversight burden to the State 

agencies. This would continue to impact 

available resources. However, we would 

expect each ASC’s QAPI program to 

reflect the scope and severity of the 

surgical services they perform. 

Second, we received feedback from 

the various ASC stakeholders that 

attended a 1996 Town Hall meeting 

sponsored by CMS. Recommendations 

were overwhelmingly directed toward 

payment issues, updating CPT codes, 

coverage of specific procedures, and 

reclassification of the procedure codes. 

However, a number of the commenters 

did favor incorporating a QAPI program 

in place of the existing requirement at 

§ 416.43 (Evaluation of quality) since 

most ASCs had already implemented a 

quality assurance performance 

improvement program as the standard of 

practice. 

Third, this proposed rule is part of a 

larger CMS effort to bring about 

improvements in the quality of care 

furnished to Medicare and Medicaid 

beneficiaries through an outcomeoriented approach. The existing ASC 

CfCs do not, in any practical manner, 

address patient rights or a way to 

incorporate a quality assessment 

program that will assist ASCs in 

managing patient care more effectively. 

Accordingly, in light of such concerns, 

we would revise the CfCs to include a 

QAPI program and patient rights 

requirement. 

1. Condition for Coverage—Governing 

Body and Management (§ 416.41) 

The current regulation contains a 

condition for Governing Body and 

Management. We are proposing new 

language in the condition statement 

which would require the governing 

body to assume direct oversight and 

accountability for the QAPI program. 

The governing body would be 

responsible for ensuring that QAPI 

efforts, at a minimum, focus on 

identifying areas needing improvement 

and that QAPI is implemented in 

accordance with § 416.43 of this part. 

Specific governing body QAPI 

responsibilities are detailed in the 

proposed QAPI requirement at § 416.43. 

By focusing on QAPI, ASC management 

would be expected to be better able to 

improve care being furnished to 

patients. We are also proposing that the 

governing body be responsible for 

creating and maintaining a disaster 

preparedness plan. In addition, we are 

proposing to retain the current 

requirement which provides that the 

ASC can contract for services with an 

outside resource. However, we propose 

to incorporate this language into a 

separate standard, located at § 416.41(a). 

The ASC’s governing body would still 

be responsible for the services that are 

furnished. 

The standard on hospitalization will 

remain the same but has been separated 

into two subparts for purposes of State 

agency survey findings. This would 

enable State surveyors to cite an ASC’s 

compliance with these requirements 

more precisely. All ASCs will still be 

required to transfer patients requiring 

emergency medical care beyond the 

capabilities of the ASC to the nearest 

local, Medicare-participating hospital or 

a local, non-participating hospital that 

meets the requirements for payment for 

emergency services under § 482.2 of this 

chapter. Moreover, the definition of 

local hospital would require the ASC to 

consider the most appropriate facility to 

which the ASC would transport its 

patients in the event of an emergency. 

If the closest hospital could not 

accommodate the patient population or 

the predominant medical emergencies 

associated with the types of surgeries 

performed by the ASC, a more distant 

hospital might also meet the local 

definition. Regardless of any business 

issues that arise between ASCs and their 

local hospital, the ASC would be 

required to transfer patients to the 

nearest, most appropriate local hospital, 

since this would affect patient health. 

Any transfers that do not meet the 

requirements of proposed § 416.41(b)(1) 

and (2) would be determined to be out 


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of compliance with Medicare 

regulations. 

Lastly, we are also proposing the 

addition of a disaster preparedness 

standard at § 416.41(c). In response to 

the problems affecting health care 

facilities across much of the Gulf Coast 

region in September 2005 as a result of 

Hurricane Katrina, we are proposing 

this requirement to ensure the health 

and safety of patients and staff members 

alike. The ASC’s governing Body, as 

part of the ASC leadership component, 

would be responsible for maintaining a 

written disaster preparedness plan that 

would provide for the emergency care of 

patients in the event of fire, natural 

disaster, functional failure of 

equipment, or other unexpected events 

or circumstances that threaten the 

health and/or safety of its patients and 

staff members. We recommend ASCs 

coordinate the plan with their State and 

local agencies, as appropriate. In an 

effort to achieve successful outcomes in 

a real-life disaster emergency, we are 

proposing at § 416.41(c)(3), that ASCs 

conduct annual drills for effectiveness. 

The ASC would then also be required to 

complete a written evaluation of every 

disaster drill and immediately 

implement any corrections to the plan. 

2. Condition for Coverage—Quality 

Assessment and Performance 

Improvement (§ 416.43) 

The existing ‘‘Evaluation of quality’’

requirement found at § 416.43, relies on 

a problem-oriented, reactive approach 

and primarily focuses on ASC selfassessment and evaluation of the 

procedures already performed and 

appropriateness of care issues. However, 

during the last decade, the health care 

industry has moved beyond the 

problem-oriented approach of 

monitoring quality assurance to an 

approach that addresses quality 

improvement prospectively through 

focused projects designed to reduce 

errors and address omissions of care 

before patients are adversely affected. 

We have already introduced the QAPI 

philosophy to the hospital, hospice and 

end stage renal disease facility programs 

either through a final regulation or a 

proposed rule. To raise the performance 

expectations for ASCs seeking entrance 

into the Medicare program, as well as 

the expectations of those ASCs already 

participating in Medicare, we are 

proposing that each ASC also develop, 

implement, and maintain an effective 

QAPI program. Our aim is to support 

the development of patient-centered, 

outcome-oriented efforts that focus on 

patient health and safety. An ASC QAPI 

program would be designed to stimulate 

the ASC to constantly monitor and 

improve its own performance, and to be 

responsive to the needs, desires, and 

satisfaction levels of the patients it 

serves. With an effective QAPI program 

in place, the ASC would be better able 

to identify and reinforce the activities it 

is doing well, identify activities that are 

leading to poor patient outcomes, and 

take actions to improve performance. 

The ASC would be expected to take 

whatever actions are necessary to 

implement improvements in its 

performance as identified through its 

QAPI program. We are also proposing to 

change the CfC title from ‘‘Evaluation of 

quality’’ to ‘‘Quality assessment and 

performance improvement.’’

In proposed § 416.43(a), Program 

scope, we are proposing that the ASC’s 

QAPI program must include, but not be 

limited to, an ongoing program that 

demonstrates measurable improvement 

in patient health outcomes, and 

improves patient safety by using quality 

indicators or performance measures 

associated with improved health 

outcomes and with the identification of 

medical errors. Although ASCs may 

certainly develop their own QAPI 

program, we encourage them to be open 

to considering QAPI programs in use by 

other health care entities since QAPI 

programs in general contain the same 

basic elements. 

Monitoring care in an ASC can be 

challenging since the typical patient 

may be seen for only one visit. 

Therefore, it is critically important that 

an ASC’s QAPI program identify highrisk areas and areas of problematic care 

and conduct follow-up analysis in a 

timely manner to identify specific areas 

in need of improvement. The ASC 

would be expected to measure, analyze 

and track quality indicators, including 

adverse patient events, infection control 

and other aspects of performance that 

include processes of care and services 

furnished in the ASC. Once a problem 

is identified, we would expect the ASC 

to establish and implement a plan to 

correct all deficiencies. We would 

expect the ASC to track its improvement 

and compliance over time to determine, 

in part, if its corrective actions were 

effective. Because staff members are in 

a unique position to provide the ASC 

with structured feedback on its 

performance and suggestions on how 

performance can be improved, we 

would expect the ASC to utilize staff in 

conducting its QAPI program. An ASC 

that decided to utilize an outside 

resource to conduct its QAPI program 

would still need to have its staff 

involved in the process. 

In proposed § 416.43(b), Program data, 

we would require the ASC to utilize 

quality indicator data to monitor the 

effectiveness and safety of services, and 

identify opportunities for improving the 

ASC’s services. Where an ASC 

professional organization has made 

QAPI-related programs available to 

ASCs, we believe an ASC should 

consider exploring the feasibility of 

using such applicable programs to meet 

its needs. We would encourage ASCs to 

use a wide variety of information and 

data, in addition to their own findings, 

to guide improvement efforts. This 

information could include material 

available from national accrediting and 

other ASC organizations such as the 

AAAASF, the AAAHC, The Joint 

Commission, and the AOA. Many 

organizations offer a variety of quality 

improvement-related services such as 

benchmarking, quality indicators and 

quality assurance instructions. For 

example, the AAAHC offers information 

on the AAAHC Institute for Quality 

Improvement at its Web site, http:// 

www.aaahc.org. Information made 

available by these organizations and 

others could provide an opportunity for 

an ASC to learn about and be more 

involved in clinical quality performance 

measurement. 

We are not proposing that an ASC 

utilize specific quality indicators or 

collect specific data. An ASC could 

utilize existing resources or incorporate 

information from an existing QAPI 

program developed by other 

organizations, to potentially elicit a 

greater degree of insight into how to 

improve the quality of its services and 

patient satisfaction rather than 

developing a totally new program. An 

ASC would be free to develop programs 

that meet its individual needs and, in 

some cases, might benefit from an 

internally developed process. 

Regardless of what type of quality 

improvement program is chosen, we 

would require that the governing body 

approve the program. Since ASCs are 

currently required to ‘‘conduct an 

ongoing, comprehensive self-assessment 

of the quality of care provided * * *’’

under the current evaluation of quality 

measurement requirement at § 416.43, 

we do not believe ASCs will experience 

a protracted or difficult transition 

period. 

At proposed § 416.43(c)(1), Program 

activities, we propose to require that the 

ASC set priorities for its performance 

improvement activities that: (1) Focus 

on high risk, high volume and problemprone areas; (2) consider the incidence, 

prevalence and severity of identified 

problems; and (3) give priority to 

improvement activities that affect health 

outcomes, patient safety and quality of 

care. We expect an ASC would take 

immediate action to resolve any 


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2 Department of Health and Human Services 

Office of Inspector General Quality Oversight of 

Ambulatory Surgical Centers, The Role of 

Certification and Accreditation, Supplemental 

Report 1, February 2002, OEI–01–00–00451. 

identified problems that directly or 

potentially threaten the care and safety 

of patients. For example, patients with 

minimal support at home, surgery on 

patients with concurrent health issues, 

and those whose diagnosis and care may 

be unique to the ASC, could be the 

subject of more intense QAPI activity. 

Prioritizing areas of improvement would 

be essential for the ASC to gain a 

strategic view of its operating 

environment and to ensure a consistent 

quality of care provided over time. 

At § 416.43(c)(2), we are proposing 

that the ASC track adverse patient 

events, examine their causes, implement 

improvements aimed at preventing a 

reoccurrence of the adverse events and 

ensure that those improvements are 

sustained over time. We have not 

proposed specific methods that ASCs 

would be required to use in 

implementing these actions. ASCs 

would be free to choose methods that 

are compatible with their operations. 

ASCs would be expected to view their 

staff as partners in the quality 

improvement process. As a follow-up 

requirement to tracking adverse patient 

events, we are proposing at 

§ 416.43(c)(3) that ASCs would 

implement preventive strategies 

throughout the facility targeting any 

adverse patient events and ensuring all 

staff members are familiar with these 

strategies for improvement. 

At § 416.43(d), Performance 

improvement projects, we are proposing 

the number and scope of improvement 

projects conducted annually must 

reflect the scope and complexity of the 

ASC’s services and operations. For 

example, we would expect that where 

endoscopy services constitute the 

majority of an ASC’s services, 

performance projects related to 

endoscopic procedures, issues, and 

follow-up care would be implemented. 

The ASC would be expected to fully 

document the projects that are being 

conducted, and documentation, at the 

very least, would be expected to include 

the reason(s) for implementing the 

project, and a description of the results 

of the project. Through meaningful data 

collection and analysis of adverse 

patient events and outcomes, an ASC 

would be able to determine how best to 

select projects that coincide with its 

existing nature and operations. 

We are proposing at § 416.43(e), 

Governing body responsibilities, that 

the ASC’s governing body would be 

responsible and accountable for 

ensuring that: 

• The ongoing QAPI program is 

defined, implemented and maintained; 

• The program addresses priorities 

and that all improvements are evaluated 

for effectiveness; 

• The QAPI data collection methods, 

frequency and details are appropriate; 

• Safety expectations are established; 

and 

• Adequate resources are allocated for 

implementing the facility’s QAPI 

program. 

Any long-term program would require 

acceptance and direction from an 

organization’s leadership in order to be 

successfully implemented, thus the ASC 

governing body’s role would be critical 

to QAPI success. Once an improvement 

plan is developed and implemented, the 

ASC must track its progress to 

determine its effectiveness. The ASC 

governing body is responsible for 

assuring that the plan is carried out and 

that documentation can support the 

effort. If documentation is not available, 

selected requirements would be marked 

deficient at the time of a State survey. 

We would expect the governing body to 

be involved in the QAPI process. With 

an effective QAPI program in place and 

operating properly, the ASC could better 

identify and reinforce the activities it is 

doing well, identify activities that lead 

to poor patient outcomes, and take 

actions to improve performance. 

3. Condition for Coverage—Laboratory 

and Radiologic Services (§ 416.49) 

The current CfC Laboratory and 

radiologic services, located at § 416.49, 

would require laboratory and 

radiological services to be provided by 

certified facilities, regardless of whether 

the ASC performs the services or if the 

services are referred out to another 

facility. 

In § 416.49, we would divide the 

current condition into two separate 

standards: Laboratory and radiologic 

services; in addition, we are proposing 

the expansion of the radiologic services 

requirement. The laboratory standard 

requirements would not change. 

The proposed changes to the 

radiologic services standard would 

parallel the current laboratory standard 

by including requirements that the ASC 

would be required to meet, if applicable, 

when providing services directly or 

under arrangement. 

The requirement at § 416.49(b)(1) is 

part of the current laboratory and 

radiologic services condition and the 

language would remain unchanged. The 

proposed language at § 416.49(b)(2) 

would require the ASC to meet the 

requirements of the CfCs for portable xray suppliers found at § 486.100 through 

§ 486.110 of this chapter if it is 

furnishing these services directly. We 

have also proposed that radiologic 

services furnished under arrangement 

would be performed by an entity that 

was certified by Medicare as a supplier 

of portable x-ray services by meeting the 

Medicare CfCs for portable x-ray 

services. This change would better 

ensure that high quality radiologic 

services are available to ASC patients. 

4. Condition for Coverage—Patient 

Rights (§ 416.50) 

This proposed new requirement 

would require ASCs to notify patients of 

their rights, provide for the exercise of 

rights, establish the right of privacy and 

safety, and maintain the confidentiality 

of clinical records. Although the 

number of surgical procedures 

performed in ASCs continues to grow 

(for example, from 1990 to 2000,2 the 

annual volume of procedures performed 

by ASCs increased from 1.3 to 4.3 

million), the current ASC regulation 

does not address patient rights. 

In February 2002, the HHS Office of 

the Inspector General (OIG) issued a 

report, ‘‘Quality Oversight of 

Ambulatory Surgical Centers; A System 

in Neglect’’ [Janet Rehnquist, Inspector 

General, OEI–01–00–00450] which was 

based on a 2001 assessment of CMS’s 

quality oversight of ASCs. The OIG 

recommended that CMS include a 

patient rights provision in the CfC for 

ASCs. The report specified that a 

‘‘patients’ rights CfC’’ is necessary to 

address issues such as how ASCs will 

respect patient dignity and resolve 

patient grievances. In developing the 

patient rights requirement we examined 

the current requirements for end stage 

renal disease facilities and hospitals. 

The addition of a patient rights 

provision would be consistent with the 

philosophy of assuring patient 

participation in his or her care. A 

similar provision has been included in 

other recently issued rules (for example, 

Hospital Conditions of Participation: 

Requirements for Approval and ReApproval of Transplant Centers to 

Perform Organ Transplants (72 FR 

15198, March 30, 2007)). 

The proposed standard at § 416.50(a), 

Notice of rights, would require the ASC 

to provide the patient or representative 

with verbal and written notice of the 

patient’s rights in a language and 

manner the patient understands prior to 

furnishing care to the patient. The ASC 

would also be responsible for posting 

written notice of the patient rights in a 

place or places within the ASC where 

they are likely to be noticed by patients 


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waiting for treatment. In addition, the 

notice of patient’s rights must include 

the name, address and telephone 

number for a representative in the State 

agency to whom patients can report 

complaints about ASCs, and the CMS 

Web site for the Medicare Beneficiary 

Ombudsman (http://www.cms.hhs.gov/ 

center/ombudsman.asp.). (Section 923 

of the Medicare Prescription Drug, 

Improvement and Modernization Act of 

2003 (Pub. L. 108–173) (MMA), 

mandated the creation of the Medicare 

Beneficiary Ombudsman at section 

1808(c) of the Act, to ensure that 

Medicare beneficiaries receive the 

information and help they need to 

understand their Medicare options and 

to apply their rights and protections. A 

Medicare Beneficiary Ombudsman 

Open Door Forum (ODF) has been 

established to provide an opportunity 

for beneficiaries, their caregivers and 

advocates to publicly interact with the 

Medicare Beneficiary Ombudsman to 

discuss issues and concerns regarding 

ways to improve the systems and 

processes within the Medicare program. 

The ASC would also be responsible 

for meaningfully disclosing, if 

applicable, physician financial interests 

or ownership in the ASC facility in 

accordance with 42 CFR part 420 

(Program Integrity). The ASC must 

disclose the information in writing and 

furnish it to the patient prior to the first 

visit. 

The disclosure of financial 

information should be such that patients 

and their representatives are able to 

clearly understand if the physician(s) 

who will be performing a procedure has 

a financial relationship with the ASC. It 

is incumbent on the ASC to be able to 

provide information that is not only 

technically correct, but which is also 

easily understood by persons not 

familiar with financial statements, legal 

documents or technical language. The 

ASC should be aware of the age and the 

cognitive abilities of its patients and 

recognize that older patients may be 

confused when presented with a 

document that they cannot readily 

understand at first glance. 

In § 416.50(a)(2), Advance directives, 

the ASC would also be responsible for 

providing the patient or representative 

with verbal and written information 

concerning its policies on advance 

directives, including a description of 

applicable State law and, if requested, 

official State advance directive forms. In 

addition, the ASC would be required to 

inform the patient or representative of 

the patient’s right to make informed 

decisions regarding their care, and to 

document in a prominent part of the 

patient’s current medical record, 

whether or not the individual has 

executed an advance directive. 

We believe that ASCs should be given 

flexibility to meet this requirement 

within the context of their unique 

patient populations. Differences exist 

among ASCs and, therefore, ASCs 

should be allowed to determine the 

process they would use to comply with 

this proposed requirement. As a result, 

we are not establishing specific 

guidelines for implementation. We also 

believe that the ASC should be aware 

that questions may arise when 

informing patients of their rights; and 

therefore, they should provide ample 

time for answering questions. 

If the patient is unable to effectively 

communicate in English, the ASC could 

have the family members assist in 

providing an explanation of rights. If a 

family member is not available, an ASC 

could make arrangements to furnish 

translation services to ensure that 

patients understand their rights. We 

would expect that advance patient 

scheduling would enable the ASC to 

secure the translation services that 

might be necessary. If the ASC is not 

able to furnish translation services and 

believes that neither the patient nor his 

or her representative will understand 

the explanation of rights, the ASC 

would be required to reschedule the 

procedure or request assistance from the 

parties in securing translation services. 

ASCs would have flexibility in 

determining how best to inform patients 

of their rights. We would also require 

that a written explanation of patient 

rights would be made available to the 

patient in a language the patient could 

understand. 

Most Medicare facilities, including 

hospitals, critical access hospitals, 

skilled nursing facilities, nursing 

facilities, home health agencies, and 

hospices are required to maintain 

written policies and procedures that 

meet the requirements for advance 

directives for all adult individuals 

receiving medical care. In § 489.100, an 

advance directive is defined as a written 

instruction, such as a living will or 

durable power of attorney for health 

care, that is recognized under State law, 

whether statutorily or by the courts of 

the State, and relates to the provision of 

health care when the individual is 

incapacitated. 

The current ASC regulation does not 

contain an advance directive provision. 

This is because Medicare suppliers of 

services, of which an ASC is one type, 

are not currently required to maintain 

written policies and procedures 

concerning advance directives. 

However, because ASCs are performing 

an increasing number of surgical 

procedures on Medicare beneficiaries, 

many of which are invasive and require 

general anesthesia, we are proposing 

that advance directives be made 

available in an ASC. 

We are also proposing a requirement 

entitled ‘‘Submission and investigation 

of grievances’’ at § 416.50(a)(3). This 

requirement would respond directly to 

the OIG report referenced earlier 

regarding management of patient 

grievances and any alleged violations 

against patients. 

Grievance procedures are already in 

effect for numerous health care 

providers including ASCs. Similar to 

other internal procedures (for example, 

admission and discharge procedures, 

infection control procedures and others 

that are common to health care entities) 

the development and implementation of 

grievance procedures vary. Therefore, 

we have determined that it would be 

better to allow ASC to establish the 

specifics of a grievance system that may 

match its current one or needs rather 

than requiring that every ASC conform 

to a single grievance system. 

We are proposing that the ASC would 

establish clearly explained procedures 

for documenting the existence, 

submission, investigation, and 

disposition of grievances presented to 

the ASC (either written or verbal) made 

by the patient or the patient’s 

representative. ASCs would document 

all alleged violations related to and 

including, but not limited to, 

mistreatment, neglect, verbal, mental, 

sexual or physical abuse. If other 

allegations of mistreatment arise, such 

as theft of personal property, the ASC 

would document this allegation, as well. 

The ASC would immediately report 

these allegations to a person in authority 

in the ASC, the State, and local bodies 

having jurisdiction, and the State survey 

agency if warranted, to the extent that 

such reports are consistent with the 

Health Insurance Portability and 

Accountability Act of 1996 (Pub. L. 

104–191) (HIPAA) and privacy 

provisions. 

We are proposing that the grievance 

process specify time frames for review 

and response to the grievance. We are 

also proposing the ASC would be 

required to investigate, document, and 

respond to all grievances made by a 

patient or the patient’s representative 

regarding treatment or care that is (or 

fails to be) furnished. 

We are proposing that certain 

information be captured when 

documenting and responding to 

grievances. Proposed documentation 

should include such information as how 

the grievance was addressed, the steps 

taken during the investigation; written 


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notice to the patient or representative of 

the ASC’s decision (containing the name 

of an ASC contact person); the results of 

the grievance process; and the date the 

grievance process was completed 

consistent with HIPAA and privacy 

requirements. ASCs could use different 

approaches to effectively meet this CfC. 

We would set forth the general elements 

that should be common to grievance 

processes across all ASCs, but we are 

not explicitly delineating strategies and 

policies that ASCs are required to use to 

comply with the requirement. Also, we 

would leave the degree of 

documentation to the discretion of the 

ASC. 

The OIG Report specifies the growing 

need for a grievance process which 

would ensure that ASCs provide quality 

care. It also specifies that the process 

should provide Medicare consumers 

with a forum to have their grievances 

about ASCs documented and 

investigated by State agencies and 

accreditors. The process should also 

identify poor or even dangerous ASCs 

for intervention and follow-up. 

Consistent with the recommendations in 

the OIG’s report, we are proposing a 

new standard, ‘‘Exercise of rights and 

respect for property and person,’’ at 

§ 416.50(b) which would specify that 

every patient would have the right to: 

(1) Exercise his or her rights without 

being subjected to discrimination or 

reprisal; (2) voice grievances regarding 

treatment or care that is (or fails to be) 

furnished; and (3) be fully informed 

about a treatment or procedure and the 

expected outcome before it is 

performed. 

In addition, if the patient is 

determined to be incompetent under 

State law by a court of proper 

jurisdiction, the person appointed under 

State law could act on the patient’s 

behalf. If a State court has not adjudged 

the patient incompetent, any legal 

representative designated by the patient 

in accordance with State law could 

exercise the patient’s rights on his or her 

behalf to the extent allowed by State 

law. The ASC would retain flexibility in 

developing the policies that would 

support these rights. Although, we are 

not proposing a specific method stating 

how the ASC would implement 

§ 416.50(b), we expect that an ASC 

would educate its staff on the 

importance of patients’ full exercise of 

their rights and record and maintain 

complete and full documentation with 

respect to allegations concerning 

violation of these rights. 

We would propose at § 416.50(c), 

Privacy and safety, that patients have 

the right to personal privacy and safety, 

to receive care in a safe setting, and to 

be free from all forms of abuse or 

harassment. For example, ASCs would 

be required to provide a private space in 

which patients could disrobe and wait 

until the surgical procedure begins 

because we believe it is inappropriate 

for patients to be required to sit in a 

public waiting area while in a hospital 

gown with other fully clothed or 

similarly gowned patients or be in a 

common patient area without the 

benefit of partitions. This right would 

also allow patients, for example, to 

identify and report dangerous or unsafe 

conditions, harassment or abusive 

behaviors within the ASC that the 

patient believes could negatively impact 

the services received at the ASC. We 

believe this requirement would act as an 

additional safeguard to patient health 

and safety. 

The proposed ‘‘Confidentiality of 

clinical records standard’’ at § 416.50(d) 

is designed to safeguard patients against 

unauthorized use of their clinical 

record. We would assure that the 

patient’s right to confidentiality 

consistent with HIPAA standards and 

that access to or release of patient 

information and clinical records is 

permitted only with written consent of 

the patient or representative or as 

authorized by law. We are proposing to 

add this requirement because patients 

have the right to communicate with 

health care providers in confidence and 

to have the confidentiality of their 

health care information protected. In 

addition, all ASCs would be required to 

comply with the HIPAA health 

information privacy rule at 45 CFR parts 

160 and 164. 

5. Condition for Coverage—Infection 

Control (§ 416.51) 

There is currently a requirement for 

Infection control. The current 

requirements on infection control are 

incorporated within the Physical 

environment standard of the 

Environment Condition for coverage 

(§ 416.44). Current requirements include 

the establishment of a program for 

identifying and preventing infections, 

maintaining a sanitary environment, 

and reporting the results to appropriate 

authorities. 

We propose to establish a separate 

condition for infection control since 

control of infection is critically 

important to overall patient and staff 

health and safety. 

We believe that surgery in an ASC 

must not entail a greater risk of infection 

to the patient than surgery in an 

inpatient setting. Medicare approved 

surgical procedures are performed in a 

variety of settings and we believe that 

an effective infection control program 

should be present in all ASCs. One 

primary cause of infections is poor 

surgical technique and follow-up care. 

The Centers for Disease Control and 

Prevention (CDC) 1999 Guideline for 

Prevention of Surgical Site Infection 

[Infection Control and Hospital 

Epidemiology, Vol. 20 No. 4], also states 

that serious surgical infections can be 

explained by the emergence of 

antimicrobial-resistant pathogens and 

the increased numbers of surgical 

patients who are elderly. Furthermore, 

the CDC also reports that two million 

people are affected by infections that 

annually occur in hospitals and not 

including those healthcare associated 

infections that occur in long-term care 

facilities, ambulatory-care facilities and 

outpatient settings (CDC. Public health 

focus: surveillance, prevention and 

control of nosocomial infections 

(MMWR 1992; 41: 783–7)). A recent 

report on maximizing hand hygiene 

compliance and improved outcomes 

published in Infection Control Today 

reported that healthcare associated 

infections subject patients to increased 

risk of morbidity and mortality, 

increased durations of care and 

increased healthcare treatment costs (E. 

Fendler and P. Groziak; Maximizing 

Hand-Hygiene Compliance to Improve 

Outcomes: A New Tool for Infection 

Control, Infection Control Today, 

November 2001). Furthermore the report 

by Fendler and Groziak, according to 

CDC estimates, states that implementing 

effective infection control programs 

prevents one-third of these infections. 

The proposed infection control 

condition would place accountability on 

ASCs to prevent, control, and 

investigate infections and 

communicable diseases, and take action 

that result in improvements for those 

problematic areas identified and 

monitored as part of the proposed QAPI 

program. However, the proposed 

infection control condition allows 

flexibility for ASCs to determine how to 

meet these objectives. This includes the 

flexibility to determine how much 

training in infection control is necessary 

for the ASCs personnel. 

The first standard, sanitary 

environment, would require the ASC to 

provide a sanitary environment by 

following acceptable infection control 

standards of practice in the ASC setting 

to avoid sources and transmission of 

infections and communicable diseases. 

We have proposed to expand the current 

requirement of maintaining a sanitary 

environment to include the utilization 

of infection control standards of practice 

as guidelines in the ASC infection 

control program. 


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The proposed infection control 

program standard would require the 

ASC to designate a qualified 

professional, such as a registered nurse, 

as the infection control officer. The 

infection control program would operate 

under the direction of that designated 

individual who would be accountable 

for the investigation and resolution of 

infection and communicable disease 

incidents. In addition, the infection 

control program would be required to 

follow an organized plan of action to 

identify infection control problems and 

implement corrective measures and 

preventive mechanisms when 

necessary. We considered requiring 

ASCs to meet CDC and Occupational 

Safety and Health Administration 

(OSHA) standards for providing an 

environment to avoid infections and 

communicable disease. However, such a 

requirement would raise questions as to 

which CDC or OSHA standards must be 

met. Moreover, where dual sets of 

professionally recognized standards 

exist, we would not wish to restrict ASC 

flexibility by mandating compliance 

with a particular body of standards. 

Therefore, we are not mandating that 

ASCs follow any specific set of infection 

control guidelines. 

However, we would strongly 

encourage the ASCs adhere to infection 

control guidelines that are published by 

the CDC, the Association of 

Practitioners in Infection Control (APIC) 

and the JCAHO as a reference for the 

utilization of infection control standards 

of practice. 

As stated in the infection control 

standard, infection control must be an 

integral part of the QAPI program. In 

addition, infection control would also 

be targeted as a required area to be 

monitored in the proposed QAPI 

condition. The designated ASC 

personnel responsible for the infection 

control program would be required to 

coordinate with the QAPI program to 

maintain and improve outcomes in ASC 

infection control. 

We would expect that the ASC will 

integrate knowledge gained from past 

and current experiences to modify 

policies, procedures or practice that 

would lead to improvements for those 

problematic areas identified and 

monitored as part of the QAPI program. 

We also considered including specific 

requirements concerning preoperative 

hand/forearm antisepsis between 

surgical patient contacts. The CDC 

reports that failure to perform 

appropriate hand hygiene is considered 

the leading cause of healthcare 

associated infections and spread of 

multi-resistant organisms and has been 

recognized as a substantial contributor 

to outbreaks. (Centers for Disease 

Control and Prevention, Guideline For 

Hand Hygiene in Health-Care Settings, 

October 25, 2002; Vol. 51; No. RR–16). 

However, we believe the ASC’s 

obligation to protect patients and staff 

from facility acquired infections could 

be assured if an ASC is required to 

follow current infection control 

standards of practice. ASCs would be 

held accountable for establishing hand 

hygiene policies. Adequate policy and 

practice of hand hygiene between all 

patients that addresses antiseptic agents 

used, scrubbing technique, duration of 

the scrub, condition of the hands, and 

techniques used for drying and gloving 

would all fall under the responsibilities 

of the ASC to protect its staff and 

patients from infection. 

In addition, we are not proposing to 

include a prescriptive requirement that 

mandates a specific method of cleaning 

and sterilization of equipment utilized 

in ASC procedures. We would require 

each ASC to be responsible for creating 

and implementing its own policies and 

procedures for proper instrument 

cleaning and maintenance of the 

sterilization equipment to prevent 

patient exposure to infectious organisms 

by ensuring all equipment is properly 

cleaned and sterilized. If an ASC 

utilizes equipment that has been 

improperly sterilized, a potential exists 

to put all of its patients at risk. 

With the increasing popularity of 

ASCs, adherence to the most basic 

elements of infection control, like 

simple hand hygiene techniques, are of 

paramount importance. 

6. Condition for Coverage—Patient 

Admission, Assessment and Discharge 

(§ 416.52) 

This proposed condition continues to 

reflect a more patient-centered approach 

and underscores our view of essential 

steps to improve quality of care and 

patient outcomes. The proposed new 

condition would augment the current 

regulations that require an evaluation of 

the patient for anesthesia risk before 

surgery and proper recovery from 

anesthesia before discharge. 

As noted by the former CMS 

Administrator, Dr. Mark McClellan, 

during his testimony before the Senate 

Finance Committee on May 18, 2006, 

‘‘Medicare payments to ASCs are 

expected to better reflect the resources 

required to perform specific surgical 

procedures and to be similar to 

payments under other payment systems. 

In its 2005 Report to Congress, CMS 

found that many orthopedic surgical 

specialty hospitals were more similar to 

ASCs than to acute care hospitals.’’ To 

address this problem, CMS is 

developing revisions to the payment 

rates and also the list of procedures 

eligible for payment. The payment 

revisions are slated to be in effect by 

January 1, 2008, and it is anticipated 

there will be many more procedures 

performed in ASCs than in the past. We 

believe that with the expansion of 

procedures being performed in ASCs, 

there is a need for a requirement that 

addresses thorough patient assessment 

and recovery issues. 

Older patients generally face greater 

risks when using anesthetics during 

surgical procedures than do younger 

patients. The normal aging process can 

extend healing time, increase the 

recovery time from medications, and 

complications may be more severe 

(Merck Manual of Geriatrics, Section 3, 

Chapter 27, Anesthesia Considerations). 

It is our intent to ensure that accurate 

and thorough assessments would be 

conducted to assure appropriate and 

safe surgery, and that patients would be 

able to tolerate a scheduled surgical 

procedure. 

We are proposing this new condition 

as a method to capture specific patient 

care requirements in the pre-admission, 

pre-surgical, post-surgical and discharge 

phases of the ASC surgery process. The 

core objectives of this condition would 

be to ensure: (1) The patient can tolerate 

a surgical experience; (2) the patient’s 

anesthesia risk and recovery are 

properly evaluated; (3) the patient’s 

post-operative recovery is adequately 

evaluated; (4) the patient receives 

effective discharge planning; and (5) the 

patient is successfully discharged from 

the ASC. 

Under the first proposed standard, 

‘‘Admission and pre-surgical 

assessment’’, we would propose that 

each patient must have a comprehensive 

medical history and physical 

assessment completed not more than 30 

days before the date of scheduled 

surgery by a physician (as defined in 

section 1861(r) of the Act), or other 

qualified practitioner in accordance 

with State law and ASC policy. We are 

proposing the 30-day time limit to 

remain consistent with our hospital 

conditions of participation that also 

requires a medical history and physical 

assessment be completed no more than 

30 days before an elective procedure or 

admission. In addition, to ensure the 

ASC healthcare team would have all 

patient information available if needed, 

the ASC would be required to place the 

medical history and physical 

assessment in the patient’s medical 

record before the surgical procedure is 

started. 

The information to be included in the 

assessment would be determined by the 


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ASC based on accepted standards of 

practice and the characteristics, health 

risks and needs of the patient. ASCs 

would continue to have the flexibility to 

define the content and extent of the presurgical assessment; however, we would 

propose several items that must be 

included. The pre-surgical assessment 

entry in the medical record would be 

required to include an updated entry 

documenting an examination for any 

changes in the patient’s condition since 

the most recently documented medical 

history and physical assessment. In 

addition, we believe that ASCs must 

provide specific documentation 

addressing the patient’s capacity, both 

physically and mentally, to undergo the 

planned surgery and documentation of 

any allergies. As stated in the current 

pre-surgical assessment requirement at 

§ 416.42(a), a physician is required to 

examine the patient immediately before 

surgery to evaluate the risk of anesthesia 

and of the procedure to be performed. 

The proposed additional pre-assessment 

items are to be completed by a 

physician or other qualified practitioner 

in accordance with State law and in 

conjunction with the current presurgical requirements. We believe that 

this proposed standard would set a clear 

expectation for a direct, effective 

relationship between the patient 

medical history and assessment and the 

procedures performed; a relationship 

that is essential for achieving desired 

healthcare outcomes. 

The proposed standard § 416.52(b), 

‘‘Post-surgical assessment’’ would 

require the ASC to ensure that a 

thorough assessment of the patient’s 

post-surgical condition is completed, 

documented in the medical record and 

that any post-surgical needs are 

addressed and included in the discharge 

notes. We propose to retain the current 

standard at § 416.42(a) that requires a 

physician to evaluate each patient for 

anesthesia recovery before discharge. 

The post-surgical assessment must be 

performed by a physician or other 

qualified practitioner in accordance 

with State law. The post-surgical 

assessment would assess all body 

systems and identify any unforeseen or 

unanticipated post-surgical medical 

issues. The goal would be to decrease 

the amount of post-surgical 

complications experienced after 

discharge in the home recovery setting. 

The last proposed standard, 

Discharge, would require the ASC to 

provide each patient with written 

discharge instructions and ensure that 

all patients have the best possible 

transition to home and that all postsurgical needs would be met. In 

addition, we are proposing that each 

patient have a discharge order signed by 

the physician or the qualified 

practitioner who performed the surgery 

or procedure unless otherwise specified 

by State law. The discharge order must 

indicate that the patient has been 

evaluated for proper anesthesia and 

medical recovery. The requirement of a 

signed discharge order would ensure 

our beneficiaries are stable and safe to 

be discharged. We believe it is 

imperative, especially in preparation for 

the upcoming changes to the approved 

procedures in an ASC setting, that a 

physician or the qualified practitioner 

who performed the surgery or procedure 

be available to provide assistance in the 

ASC if needed, until all patients have 

been given a signed discharge order by 

the aforementioned practitioner. We 

believe this would eliminate any 

confusion with respect to the level of 

care and the ability of the ASC to 

respond to a patient emergency before 

the patient is discharged. We have not 

included language specifically requiring 

a physician to be on the premises while 

there are patients in the ASC. However, 

when the discharge order is signed, the 

patient would be expected to be 

discharged, that is, physically leave the 

ASC facility within a reasonable amount 

of time. Fifteen to thirty minutes would 

be a reasonable timeframe for the 

patient to complete the discharge 

process and leave the facility. Although 

most patients know how to contact their 

physician during nonroutine office 

hours, professional standards of practice 

dictate the ASC should include 

physician coverage information in the 

written discharge instructions regarding 

emergency care in the event of any 

postoperative adverse effects. We 

believe adding the three additional 

discharge elements would be essential 

for our beneficiaries because advanced 

age could pose slower healing times, 

unforeseen complications, and 

depending on the individual, difficulty 

with home self-care. The proposed 

discharge standard would not be 

intended to require lengthy and 

burdensome documentation. However, 

the intent is to ensure our beneficiaries 

receive the appropriate care once the 

surgical procedure is completed. 

Lastly, early in the ASC regulation 

drafting process, we considered creating 

a revised list of required emergency 

equipment. However, we decided not to 

create a new list since the emergency 

equipment that is currently stated in 

§ 416.44(c) is what we consider to be the 

minimum requirement. Advances and 

improvements in medical technology 

generate improvements in emergency 

equipment used by medical 

professionals. As a result, a variety of 

applicable equipment is available from 

which to choose. Technology and 

professional judgment should dictate 

the kind of emergency equipment a 

facility should be using. If another list 

of ‘‘current’’ emergency equipment were 

to be created it would soon be outdated. 

Conversely, not specifying any 

emergency equipment would lead to 

ambiguity and there is a need to ensure 

that a minimum amount of emergency 

equipment will be available on-site at 

the ASC. 

We believe that substitutions for a 

specific piece of emergency equipment, 

listed in § 489.44(c), could be 

appropriate if it performs the same 

emergency function for which the 

equipment listed in the current 

regulation was intended. For example, 

in the event a patient experiences 

cardiac fibrillation, it is critical that 

ASCs provide their medical 

professionals with the appropriate 

equipment to respond to this kind of 

emergency. The use of automatic 

external defibrillators (AED) has 

recently increased in various settings 

and in healthcare facilities. The intent 

of the current and proposed regulation 

is to make certain that an ASC uses 

emergency equipment which is deemed 

appropriate. We believe that ASCs 

should be required to have available all 

forms of emergency equipment listed in 

§ 416.44(c), or other equipment which 

can meet the intended purpose. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

3506(c)(2)(A) of the Paperwork 

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements: 


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Conditions for Coverage—Governing 

Body and Management (§ 416.41) 

In summary, this section outlines the 

conditions of coverage related to the 

governing bodies and management of 

ASCs. Ambulatory surgical centers must 

have a governing body that assumes full 

legal responsibility for determining, 

implementing, and monitoring policies 

governing the ASC’s total operation. 

Section 416.41(b)(3) states that as a 

condition of coverage, an ASC must 

have a written transfer agreement with 

the hospital as referenced in 

§ 416.41(b)(1) and § 416.41(b)(2). 

The burden associated with this 

requirement is the time and effort 

involved in the ASC having a written 

transfer agreement with the hospital 

receiving the transfer. While this 

requirement is subject to the Paperwork 

Reduction Act of 1995 (PRA), this 

requirement is currently approved in 

OMB No. 0938–0266, with a current 

expiration date of February 29, 2008. 

Section 416.41(c)(1) requires that an 

ASC maintain a written disaster 

preparedness plan that provides for the 

emergency care of patients in the event 

of fire, natural disaster, functional 

failure of equipment, or other 

unexplained circumstances that 

threaten the health and safety of its 

patients. Section 416.41(c)(3) requires 

that an ASC complete a written 

evaluation of drills conducted to test the 

effectiveness of the disaster 

preparedness plan. 

The burden associated with the 

requirements in § 416.41(c)(1) and 

§ 416.41(c)(3) is the time and effort 

necessary to draft and maintain the 

written disaster preparedness plan. In 

addition, there is burden associated 

with drafting and maintaining the 

reports on the effectiveness of the plan. 

While these requirements are subject to 

the PRA, we believe the burden is 

exempt as stated in 5 CFR 1320.3(b)(2), 

because the time, effort, and financial 

resources necessary to comply with the 

requirement would be incurred by 

persons in the normal course of their 

activities. 

Conditions for Coverage—Quality 

Assessment and Performance 

Improvement (§ 416.43) 

In summary, this section details the 

conditions of coverage for quality 

assessment and performance 

improvement. Ambulatory surgical 

centers, through the governing body and 

with the active participation of the 

medical staff, must develop, implement 

and maintain an ongoing, data-driven 

quality assessment and performance 

improvement (QAPI) program. This 

section outlines the standards for the 

scope of the QAPI programs, the use of 

quality indicator data, the prioritization 

of performance improvement program 

activities, the complexity of 

performance improvement projects, and 

the responsibilities of ASC governing 

bodies. Specifically, § 416.43(d)(2) states 

that an ASC must fully document the 

performance improvement projects that 

are being conducted. The 

documentation at the very least must 

include the reason(s) for implementing 

the project, and a description of the 

results of the project. 

The burden associated with this 

requirement is the time and effort 

involved in documenting the 

performance improvement projects. 

While this requirement is subject to the 

PRA, this requirement is currently 

approved in OMB No. 0938–0266, with 

a current expiration date of February 29, 

2008. 

Conditions for Coverage—Patient Rights 

(§ 416.50) 

This section outlines the requirements 

an ASC must meet when informing a 

patient of his or her rights, in addition 

to the protection and promotion of these 

rights. Section 416.50(a)(1) requires that 

an ASC provide the patient or the 

patient’s representative with verbal and 

written notice of the patient’s rights 

prior to furnishing care to the patient 

and in a language and manner that the 

patient or patient’s representative 

understands. Section 416.50(a)(1)(i) 

requires ASCs to post the written notice 

of patient rights in a place or places 

within the facility that is likely to be 

noticed by patients or their 

representatives. 

The burden associated with these 

requirements is the time and effort 

required to inform the patient or the 

patient’s representative of the patient’s 

rights, and the time and effort associated 

with posting the written notice of 

patient rights. While these requirements 

impose burden, we believe it is exempt 

from the PRA as defined in 5 CFR 

1320.3(b)(2). 

Section 416.50(a)(2)(i) requires ASCs 

to provide the patient or representative 

with verbal and written information 

concerning its policies on advance 

directives, including a description of 

applicable State law. Section 

416.50(a)(2)(iii) requires documentation 

in a prominent part of the patient’s 

medical record that indicates whether or 

not the patient has executed an advance 

directive. The burden associated with 

these requirements is the time and effort 

necessary for disseminating the 

information to the patient, both orally 

and in writing, and maintaining the 

necessary documentation in the medical 

record. While these requirements are 

subject to the PRA, we believe the 

associated burden is exempt from the 

PRA as defined in 5 CFR 1320.3(b)(2). 

Section 416.50(a)(3) imposes both 

recordkeeping and reporting 

requirements. Specifically, 

§ 416.50(a)(3)(iii) states that an ASC 

must fully document all alleged 

violations relating, but not limited to, 

mistreatment, neglect, verbal, mental, 

sexual or physical abuse. In addition, an 

ASC must immediately report the 

allegations to a person in authority in 

the ASC, the State and local bodies 

having jurisdiction, and the State survey 

agency. In addition, § 416.50(a)(3)(iv) 

requires an ASC to document how the 

grievance was addressed. The ASC must 

also provide the patient with a written 

notice of its decision. 

The burden associated with these 

requirements is the time and effort 

involved in documenting the alleged 

violations and reporting the alleged 

violations to the aforementioned 

entities. While this requirement is 

subject to the PRA, the burden is 

exempt as it meets the requirements set 

forth in 5 CFR 1320.3(b)(2). 

Conditions for Coverage—Patient 

Admission, Assessment, and Discharge 

(§ 416.52) 

Section 416.52(a) requires each 

patient to have a comprehensive 

medical history and physical 

assessment prior to the scheduled 

surgery date. The pre-surgical 

assessment must occur upon admission. 

Section 416.52(b) requires that an ASC 

conduct an evaluation of the patient’s 

post-surgical condition. Section 

416.52(c) requires ASCs to establish a 

discharge planning process that is 

applied to all patients. As part of the 

process, each patient must have a 

physician signed discharge order. 

The burden associated with the 

aforementioned requirements in 

§ 416.52 is the time and effort necessary 

to perform the assessments and to 

document the information in the 

medical record. 

While this requirement is subject to 

the PRA, the burden is exempt as it 

meets the requirements set forth in 5 

CFR 1320.3(b)(2). 

If you comment on these information 

collection and recordkeeping 

requirements, please mail copies 

directly to the following: 

Centers for Medicare & Medicaid 

Services, Office of Strategic Operations 

and Regulatory Affairs, Regulations 

Development Group, Attn.: William N. 

Parham, III, [CMS–3887–P], Room C4–


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26–05, 7500 Security Boulevard, 

Baltimore, MD 21244–1850; and 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, Room 10235, New Executive 

Office Building, Washington, DC 20503, 

Attn: Carolyn Lovett, CMS Desk Officer, 

[CMS–3887–P] 

Carolyn_Lovett@omb.eop.gov. Fax (202) 

395–6974. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the ‘‘DATES’’ section 

of this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Analysis 

If you choose to comment on issues in 

this section, please include the caption 

‘‘IMPACT’’ at the beginning of your 

comments. 

A. Overall Impact 

We have examined the impact of this 

proposed 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 is not a major rule, since the 

overall economic impact for all 

proposed new Conditions for coverage 

is estimated to be $21 million annually. 

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. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $6.5 million to $31.5 million in any 

1 year. Individuals and States are not 

included in the definition of a small 

entity. We estimate there are 

approximately 4,600 Medicare 

participating ASCs (that includes both 

deemed and non-deemed facilities) with 

average admissions of approximately 

1000 patients per ASC (based on the 

number of patients in ASCs in 2005 

divided by the number of ASCs in 

2005). Most ASCs are considered to be 

small entities, either by non-profit status 

or by having revenues of $9 million to 

$31.5 million in any one year (for 

details, see the Small Business 

Administration’s regulation that sets 

forth size standards for health care 

industries at 65 FR 69432, November 17, 

2000)). We certify that this rule would 

not have a significant impact on a 

substantial number of small entities 

because the cost of this rule is less than 

1 percent of the total ASC Medicare 

revenue. According to the CMS 2005 

national expenditure data, Medicare 

paid approximately $2.2 billion to ASCs 

in 2005. 

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 and has 

fewer than 100 beds. This regulation 

will not have a significant impact on the 

operations of a substantial number of 

small rural hospitals since ASCs are 

designed to only provide procedures on 

an out-patient basis and thus are not 

competing with rural hospitals for inpatient procedures. In addition, most 

ASCs are located in nonrural areas. 

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. The 

proposed rule will not have an effect on 

the expenditures of State, local or tribal 

governments, and the impact on the 

private sector is estimated to be less 

than $120 million. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it issues 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 has 

no Federalism implications and will not 

affect State and local governments. 

Throughout this document, we have 

noted that a portion of ASCs are already 

implementing the changes that would 

be required if these proposed rules were 

made final. For purposes of burden 

estimates however, we are unable to 

accurately determine the number of 

ASCs that are already compliant with 

these proposed requirements. Therefore, 

we have decided to err on the high cost 

side and apply the derived cost 

estimates to the total number of ASCs 

participating in Medicare. Additionally, 

we believe the increased quality 

initiatives outlined in the regulation 

should have little or no effect on the 

benefit cost of ASC services. 

B. Anticipated Effects on Ambulatory 

Surgical Centers 

As described in the preamble, the 

proposed regulation presents new 

provisions, as well as provisions that are 

carried over from the existing ASC 

regulations. For purposes of this section, 

we have assessed only the impact of the 

new provisions. Other provisions have 

not been revised; and therefore, do not 

present a new burden to ASCs. 

Table 1 contains data that is 

frequently used in this impact 

statement. The salary-related cost data is 

referenced from the Salarywizard.com 

Web site at http:// 

hrsalarycenter.salary.com. Some of the 

requirements contained in the new 

provisions are already standard medical 

or business practices. Therefore, these 

requirements do not present an 

additional burden to ASC providers. 

We recognize that in describing what 

the effect of this rule would be on ASCs, 

suggested burden estimates may not 

accurately reflect the experience of all 

ASCs. Facilities vary in the complexity 

of operations and processes, and 

therefore, associated costs may differ. 

TABLE 1.—DATA USED THROUGHOUT

THE IMPACT ANALYSIS * 

Number of Medicare certified ASCs 

nationwide ................................... 4,600 

Average number of patients per 

ASC ............................................. 1000 

Hourly rate of administrator ............ $46.00 

Hourly rate of registered nurse ...... $39.00 

* Hourly salary rates include base salary, 

bonuses, Social Security, 401k/403b, disability, healthcare, pension, and time off. 

We are proposing revisions to the 

current conditions: Governing body and 

management; Evaluation of quality; and 

Laboratory and radiologic services 

conditions. The following new 

conditions are being proposed: Patient 


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rights, Infection control and Patient 

admission, assessment and discharge. 

1. Anticipated Effects of the Governing 

Body and Management Provision 

(§ 416.41) 

The proposed rule would expand the 

responsibility of the governing body to 

include the QAPI program and the 

creation and maintenance of a disaster 

preparedness plan. The governing 

body’s specific responsibilities for QAPI 

are detailed in the new QAPI condition 

located at § 416.43(e). The assignment of 

burden for this requirement can be 

found under the description of the QAPI 

requirement. 

The existing regulations require that 

ASCs meet certain safety requirements 

under § 416.44, Condition for 

coverage—Environment. We are 

working to establish emergency 

preparedness requirements for all 

providers/suppliers in a proposed rule 

that is currently under development. 

Issues relative to ASC cost and 

resources required to formulate and 

maintain an effective disaster 

preparedness plan will be discussed in 

the global regulation on emergency 

preparedness. In an effort to ensure 

ASCs are equipped to handle 

emergencies and disasters, we are 

proposing that ASCs develop a plan 

specific to disaster preparedness that 

would provide for the emergency care of 

patients in the event of unexpected 

events or circumstances that threaten 

their health. The plan would require an 

ASC to coordinate with appropriate 

State and local agencies and, as 

available, seek their advice on plan 

development. The plan would also 

require an annual review to test its 

effectiveness. It would be added as 

standard (c) under the Governing body 

and management condition. 

In addition to annual review, the 

proposed rule also requires that the ASC 

staff be able to demonstrate, through 

annual drills and written evaluations, 

the ASCs ability to manage emergencies 

that are likely to occur within their 

geographic area. It would be added as 

standard (c) under the Governing body 

and management condition. 

We estimate that an administrator, 

earning $46.00 per hour, would be 

largely responsible for developing the 

plan and for managing the yearly drills 

and evaluations. We are estimating that 

the yearly cost for one ASC to develop 

and implement a disaster preparedness 

plan will be approximately 4 hours at 

$46.00 per hour, with a net cost of 

$184.00 per ASC. Total cost for all ASCs 

would be $846,400. 

2. Anticipated Effects of the Quality 

Assessment and Performance 

Improvement (QAPI) Provision 

(§ 416.43) 

In section § 416.43, we are revising 

the section heading, Evaluation of 

quality, to read as Quality assessment 

and performance improvement. As part 

of the agency’s efforts to establish 

regulatory consistency where possible 

among providers and suppliers, we have 

proposed adding a QAPI program that 

requires ASCs to continuously monitor 

quality improvement through focused 

projects, take efforts to measure 

improvements in patient health 

outcomes, identify barriers to 

improvements, and work to reduce 

medical errors. ASCs would also be 

expected to measure, analyze and track 

quality indicators, including adverse 

patient events, infection control, and 

other aspects of performance, including 

processes of care and services furnished 

in the ASC. 

Once an area of concern is identified, 

the ASC would develop a plan for 

improvement designed to address these 

concerns. The ASC would determine the 

specifics of the plan, assess its 

effectiveness, and would continue to 

monitor the results learned. 

This condition includes five 

standards: program scope, program data, 

program activities, performance 

improvement projects, and governing 

body responsibilities. 

Many providers are already using 

some version of a comprehensive 

quality assessment and performance 

improvement program which they have 

either developed or obtained from other 

sources. We estimate that it would take 

12 hours for ASCs to develop their own 

quality assessment performance 

improvement program. We also estimate 

that ASCs would spend 18 hours a year 

collecting and analyzing the findings. In 

addition, we estimate that ASCs would 

spend 4 hours a year training their staff 

and 18 hours a year implementing 

performance improvement activities. 

Both the program development and 

implementation functions would most 

likely be managed by the ASC’s 

administrator. Based on an hourly rate 

of $46.00, the total cost of the quality 

assessment and performance 

improvement condition for coverage 

would be $2,392 per ASC. 

The hourly burden is based on 

estimates that are found in the Hospital 

Conditions of Participation: Quality 

Assessment and Performance 

Improvement final rule (68 FR 3435, 

January 24, 2003). We estimated that a 

hospital would spend 80 hours 

collecting and analyzing information on 

12 identified measures. According to 

our 2002 statistics, 5,985 hospitals 

discharged 11.8 million patients in 

2000. This means that the statistically 

average hospital discharged 

approximately 2,000 patients that year. 

Collecting and analyzing data for 2,000 

patients, we estimate that the 

implementation burden would take 80 

hours. Based on the estimate, that the 

average ASC treats and discharges 1000 

patients per year, we reduced the 

burden for ASCs to 40 hours. ASCs 

would be required to collect information 

in four areas: adverse patient events; 

infection control; processes of care; and 

services furnished in the ASC. 

A new standard, Program scope, 

would require that the existing 

evaluation activities demonstrate 

measurable improvement in patient 

health outcomes. The proposed rule 

would also require the use of quality 

indicator data in the quality assessment 

and performance improvement program, 

but would not require any specific data 

collection or utilization, nor would it 

require ASCs to report the collected 

data. This would give the ASCs 

flexibility and minimize burden. 

A proposed new standard, Program 

activities, would identify priority areas 

that an ASC must consider in its 

program. ASCs would be expected to 

carry out assessment activities 

according to the scope and complexity 

of their programs. 

The proposed rule would require the 

governing body to become involved in 

all aspects of the quality assessment 

performance improvement program. We 

have estimated the burden based on 

management by an administrator. There 

should be direct and open 

communication between the program 

manager and the governing body. The 

analysis of a variety of reports, program 

prioritization, and allocation of 

resources are all standard business 

practices and therefore, we have not 

assigned additional burden to these 

functions. 


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TABLE 2.—SUMMARY OF QUALITY ASSESSMENT AND PERFORMANCE IMPROVEMENT BURDEN

Standard Time per ASC 

(hours) 

Total time 

(hours) Cost per ASC Total cost 

QAPI development ..................................................................................... 12 55,200 $552 $2,539,200 

QAPI implementation ................................................................................. 40 184,000 1,840 8,464,000 

Total annually ..................................................................................... 52 239,200 2,392 11,003,200 

The various ASC accreditation and 

professional health organizations (that 

is, The Joint Commission; American 

Association for the Accreditation of 

Ambulatory Surgical Facilities; 

Accreditation Association for 

Ambulatory Health Care; and the 

American Osteopathic Association) 

support advances in patient care in a 

number of ways and actively encourage 

health care entities to expand and 

improve their existing programs. These 

organizations are familiar with quality 

improvement programs and are likely to 

have actual or referral information 

available to assist ASCs in setting up 

their QAPI programs. 

In developing a QAPI program, ASCs 

are urged to take advantage of the 

variety of information that exists from 

the industry. ASCs may also find that 

QAPI programs for other entities such as 

hospitals, can be adapted to fit certain 

needs. 

3. Anticipated Effects of the Laboratory 

and Radiologic Services Provision 

(§ 416.49) 

The proposed rule would add a 

specification that an ASC must meet the 

requirements of the Conditions for 

coverage for portable x-ray services 

under § 416.100 through § 416.110 if it 

is furnishing these services directly. In 

addition, there is a new requirement 

that radiologic services furnished under 

arrangement must be performed by an 

entity that is certified by Medicare as a 

supplier of portable x-ray services by 

meeting the Conditions for coverage for 

portable x-ray services. These additions 

reflect standard practice in the industry 

and present no additional burden. 

4. Anticipated Effects of the Patient 

Rights Provision (§ 416.50) 

The existing regulation does not 

contain a condition-level patient rights 

requirement. The proposed rule 

recognizes that ASC patients are entitled 

to certain rights that must be protected 

and preserved, and that all patients 

must be free to exercise these rights. The 

proposed rule details basic information 

that ASCs would be required to provide 

to patients: Notice of rights, exercise of 

patient rights and respect for property 

and person, privacy and safety, and 

confidentiality of clinical records. This 

condition also includes a requirement 

for Advance Directives, as specified at 

subpart I of part 489, and a requirement 

for the submission and investigation of 

grievances. 

We have identified potential burden 

in the following areas. 

a. Effects of the Notice of Rights—Verbal 

and Written Notice Provision 

An ASC would be required to provide 

patients or their representatives with 

verbal and written notice of the rights 

and responsibilities of the patient prior 

to furnishing care to the patient. 

Generally, the most effective and 

efficient manner to furnish a written 

notice of rights is to initially develop a 

general notice which can be 

subsequently distributed as needed. We 

expect that an ASC will use this simple 

and inexpensive approach in order to 

meet this requirement. More than likely, 

this message would be written by a 

registered nurse or similar professional. 

A typical message might be in three 

parts: An introduction; the information 

section; and a section for follow up 

questions and issues. We expect the 

effort to develop this one-time message 

would not exceed 1 hour at a cost of 

$39.00 for each ASC. This would be a 

one-time cost for ASCs and would total 

$179,400 for all ASCs. 

In many cases, notifying patients 

verbally of their rights is already being 

done and some ASCs may already be 

employing interpreters to make certain 

that patients who do not understand 

English fully understand their rights 

and responsibilities. However, for 

purposes of this analysis we will 

assume that all ASCs need to budget for 

this activity. The cost for language 

services can range from moderate hourly 

amounts to daily, full-time interpreters 

at $800 per day. Telephonic services are 

more reasonable and more accessible 

and can be purchased for $2.00 per 

minute. We are not able to determine 

the percentage of non-English speaking 

patients an ASC would care for in a year 

as that depends on a number of 

variables including the ASC’s 

geographic location. In addition, the 

availability of in-person language 

services would also vary from location 

to location and while it may not be 

preferred, in some cases the use of 

family members may be necessary. 

Given this discussion, we estimate 

that 3 percent of an average annual ASC 

caseload of 1000 cases might require 

interpreter services and 15 minutes of 

time would be needed for an interpreter 

to provide a general description of the 

rights to which the patient is entitled. 

We base this estimate on the fact that 

both Spanish and French are commonly 

spoken in some parts of the country. 

(Other than English, Spanish is the 

language most commonly spoken in 42 

States.) We expect that friends and 

relatives of patients speaking these 

languages would be available to assist in 

understanding issues related to his or 

her scheduled procedure. Therefore, the 

need for an ASC to hire an interpreter 

in these cases would be infrequent. The 

ASC may have to take steps to arrange 

for interpreter services for some patients 

when other options are not available. 

• Telephone interpreter services at 

$2.00/minute x 15 minutes = $30.00 per 

patient. The cost for telephone 

interpreter services is, for example, 

dependent upon the language, the 

consumed time, or frequency. Costs 

range from $75.00 an hour to $160.00 or 

more an hour. The figure of $2.00 per 

minute is an estimated average cost. 

• 3 percent × 1000 patient caseload = 

30 patients per year per ASC requiring 

interpreter services. 

• $30.00 × 30 = $900 per ASC 

• $900 × 4600 ASCs = $4,140,000 

estimated cost total for all ASCs 

b. Effects of the Advance Directives 

Provision 

Each ASC would be required to 

establish an advance directive policy, 

and provide the patient or 

representative with verbal and written 

information concerning its policies on 

advance directives, including a 

description of applicable State laws and, 

if requested, official State advance 

directive forms. Each ASC would also 

be required to explain these policies to 

their patients, document whether an 

individual has executed an advance 

directive, and educate staff on the 

importance of advance directives. We 

expect that many ASCs already 


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communicate information about 

advance directives to their patients and 

thus, have already formulated some type 

of advance directives policy. We 

estimate that the development of an 

advance directives document utilizing 

generic advance directives forms 

obtained from existing Web sites or from 

State agency Web sites, by a registered 

nurse or equivalent will take 1 hour at 

$39.00 per ASC. The estimated cost for 

all ASCs is $179,400. We randomly 

queried a small sample of State Web 

sites and found generic advance 

directives forms in English and Spanish 

that were posted and available for 

downloading. The proposed rule would 

also require the ASC to document 

advance directive information in the 

patient’s medical record, and to educate 

staff and patients about advance 

directives. We believe that these 

functions reflect standard industry 

practice, and therefore, would add no 

burden. While this requirement is 

subject to the PRA, we believe the 

burden associated with this requirement 

is exempt from the requirements of the 

Paperwork Reduction Act of 1995 as 

defined in 5 CFR 1320.3(b)(2) because 

the time, effort, and financial resources 

necessary to comply with the 

requirement would be incurred by ASCs 

in the normal course of their activities. 

c. Effects of the Submission and 

Investigation of Patient Complaints 

Provision 

We estimate that an ASC may have to 

investigate complaints from 

approximately 1 percent (10 patients) of 

its caseload due to allegations of 

mistreatment, and neglect, for example. 

We are not aware of an existing 

repository of records that accurately 

identifies the number and exact nature 

of ASC complaints. Therefore, 1 percent 

is an estimate. 

An investigation could average 1 hour 

and would be managed by an 

administrator. Ten hours could be spent 

by each ASC in this activity. 

• 10 hours × $46.00 (administrator s 

hourly salary) = $460 estimated cost for 

each ASC 

• $460 × 4600 ASCs = $2,116,000 

estimated cost for all ASCs 

In its resolution of the grievance, an 

ASC must investigate all allegations, 

document how the violation or 

grievance was addressed, and provide 

the patient with written notice of its 

decision containing the name of an ASC 

contact person, the steps taken to 

investigate the grievance, the results of 

the grievance process, and the date the 

grievance process was completed. 

The burden associated with this 

requirement is the time and effort 

necessary to fully document the alleged 

violation or complaint and to disclose 

the written notice to each patient who 

filed a grievance. We estimate that, on 

average, it will take each ASC 15 

minutes at a cost of $39.00 an hour to 

develop and disseminate 10 notices on 

an annual basis (2.5 hours per ASC), for 

a total ASC burden of 11,500 hours at 

a cost $448,500.00. 

While this requirement is subject to 

the PRA, we believe the burden 

associated with this requirement is 

exempt from the requirements of the 

Paperwork Reduction Act of 1995 as 

defined in 5 CFR 1320.3(b)(2) because 

the time, effort, and financial resources 

necessary to comply with the 

requirement would be incurred by ASCs 

in the normal course of their activities. 

d. Anticipated Effects of the Exercise of 

Rights and Respect for Property and 

Person Provision 

Since ASCs began operating under 

Medicare in 1982, and during that time 

they have had to provide information to 

patients about the procedures to be 

performed and the expected outcomes. 

The proposed rule would require that 

ASCs continue this practice. Therefore, 

we do not anticipate that ASCs will 

incur significant costs associated with 

this proposed requirement. 

e. Anticipated Effects of the Privacy and 

Safety Provision 

The current regulatory language 

requires that an ASC provide a safe and 

sanitary environment to protect the 

health and safety of patients. The 

proposed regulation would add the 

requirement that the patient has the 

right to personal privacy. We are 

defining personal privacy in this case as 

providing the patient access to an area 

of the ASC which is shielded from view 

from others to prepare for the procedure 

to be performed. This would mean a 

place to disrobe, speak with ASC 

personnel about issues and concerns 

and then get dressed following the 

procedure. We believe that if ASCs do 

not now have facilities similar to this, 

they are in the minority and would be 

experiencing criticism and significant 

reduction in patients. At the very least, 

patients expect and will demand 

privacy when disrobing. Consequently, 

we do not believe that this proposed 

requirement would be a significant 

burden to ASCs now operating. 

f. Anticipated Effects of the 

Confidentiality of Clinical Records 

Provision 

The current regulation at § 416.47 (a) 

requires that an ASC develop a system 

for the proper use of patient records. 

The proposed change merely provides a 

formal clarification of the current 

requirement’s approach to how records 

are to be used. Specifically, an ASC is 

to respect the individual’s right to 

maintain some control over his or her 

private medical information. The intent 

of the current regulation remains the 

same. In addition, most health care 

facilities recognize the need for privacy 

regarding patient medical records and 

have already instituted a policy, based 

on the HIPAA regulation that provides 

for a patient to sign a release before 

sensitive information is sent to others. 

Under the HIPAA regulation, patients 

have rights that protect their health 

information. Forty-eight States have 

medical privacy laws and Federal 

regulations at 45 CFR parts 160 and 164 

are applicable to patients’ health 

information. Some State laws are 

specific in prohibiting unlawful 

disclosure of patient information while, 

in other States, prohibitions are linked 

to laws governing specific medical 

entities. At the very least, most health 

care facilities are concerned about 

possible legal repercussions resulting 

from unauthorized use of patient 

clinical record information and have 

already instituted procedures to address 

this issue. Therefore, we do not believe 

this proposed rule will impose any 

significant additional financial or 

resource burdens on ASCs. 

5. Anticipated Effects of the Infection 

Control Provision (§ 416.51) 

We are proposing to elevate the 

current infection control requirements, 

located at § 416.44(a)(3), to the 

condition level. The ASC would be 

required to ensure that the infection 

control program minimizes infections 

and communicable diseases that could 

affect both patients and ASC staff. We 

are also requiring that a designated 

professional in the ASC be responsible 

for the program. We estimate the burden 

increase to be minimal, except for the 

proposed expense to make certain that 

the designated professional is familiar 

with infection control information. 

ASCs are currently required to have a 

program that identifies and prevents 

infections, maintains a sanitary 

environment and reports results to the 

appropriate authorities. The proposed 

condition requires the ASC to designate 

a trained professional to be responsible 

for the ASC infection control program. 

The ASC can continue to designate the 

individual that currently oversees the 

infection control program; however, the 

ASC must also assure that the person 

who is designated has training or 

knowledge in infection control. 

Registered nurses with experience in 


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infection control could assume this 

duty. However, to ensure current 

knowledge of infection control 

methodologies and techniques, the 

designated person would need to engage 

in continuing education in infection 

control on a frequent or at least an 

annual basis. We estimate that an ASC 

would spend approximately $500 per 

calendar year on infection control 

training for the designated individual. 

This cost was based on the quantity of 

technical information that we believe is 

appropriate to be included in an 

infection control program. The cost also 

includes the time spent by the ASC 

infection control officer (the trainee), 

the cost for a qualified trainer and the 

training materials. We estimate that the 

course would run 4 hours. The total 

estimated cost for all ASCs would be 

$2,300,000. 

The proposed infection control 

condition also includes the requirement 

that the infection control program be 

part of the ASC’s QAPI program. We 

have not prescribed specific areas to be 

monitored or a process that must be 

followed to meet the requirement. We 

have not assigned any burden to this 

requirement because the ASC should 

already be evaluating quality activities 

and executing an infection control 

program. This requirement has been 

included as a formal way of ensuring it 

is an integral part of the ASCs QAPI 

process. 

6. Anticipated Effects of the Patient 

Admission, Assessment and Discharge 

Provision (§ 416.52) 

The proposed condition reflects a 

more patient-centered approach, 

improved quality of care, and more 

emphasis on patient outcomes. 

Specifically, we are proposing this new 

condition as a way of capturing specific 

patient care requirements in the preadmission, pre-surgical, post-surgical 

and discharge phases of the ASC surgery 

process. 

a. Effects of the Admission and PreSurgical Assessment Provision 

We are proposing the completion of a 

comprehensive medical history and 

physical assessment no more than 30 

days before the day of the scheduled 

surgery. The comprehensive medical 

history most likely will not be 

completed at the ASC. Therefore, there 

is no ASC burden associated with this 

requirement. 

We are proposing a pre-surgical 

assessment be completed upon 

admission to the ASC. The assessment, 

which would be placed in the patient’s 

medical record, would include a 

determination of the patient’s physical 

and mental ability to undergo the 

surgical procedure. Current regulations 

at § 416.42(a) require a physician to 

examine the patient immediately before 

surgery to evaluate the risk of anesthesia 

and of the procedure to be performed. 

Physicians must determine that 

patients, including those at high risk, 

are able to undergo the surgery itself 

and be able to manage recovery. Presurgical assessments represent a current 

standard of practice and do not pose 

additional burden. 

To ensure the ASC healthcare team 

has all patient information available 

when needed, the medical history and 

physical assessment must be placed in 

the patient’s medical record before the 

surgical procedure is started. There is 

no burden associated with this 

requirement. 

b. Effects of the Post-Surgical 

Assessment Provision 

The post-surgical assessment would 

require the ASC to ensure that a 

thorough assessment of the patient’s 

post-surgical condition is completely 

documented in the medical record and 

that any post-surgical needs are 

addressed and included in the discharge 

notes. We are also proposing to retain 

the current standard at § 416.42(a) that 

requires a physician to evaluate each 

patient for anesthesia recovery before 

discharge. Post-surgical assessments 

reflect current ASC standard of practice, 

and therefore, do not pose additional 

burden. 

c. Effects of the Discharge Provision 

The discharge Standard requires the 

ASC to have a discharge planning 

process that assures all patients will 

have the best possible transition to 

home and that all post-surgical needs 

are met for all patients. The ASC would 

be required to provide each patient with 

a discharge order, signed by a doctor of 

medicine or osteopathy or the qualified 

practitioner who performed the surgery 

or procedure, indicating the patient has 

been evaluated for proper anesthesia 

and medical recovery and that the 

patient is approved for discharge from 

the ASC. Requiring the patient to have 

a signed discharge order by a doctor of 

medicine or osteopathy or the qualified 

practitioner who performed the surgery 

or procedure is standard practice. 

Therefore, we do not believe this is new 

burden for ASCs. 

C. Alternatives Considered 

One alternative was to maintain the 

existing CfCs without revisions; 

however, we concluded this was not a 

reasonable option because our existing 

CfCs are problem-focused. Under a 

problem-focused approach, the goal has 

been to ensure quality through the 

enforcement of prescriptive health and 

safety standards. This after-the-fact 

approach does not generally contribute 

to ASC improvement or stimulate broadbased quality of care initiatives. 

Revising the existing CfCs would take 

advantage of continuing advances in the 

health care delivery field. We believe it 

is necessary to keep pace with growing 

demands for services. In addition, listed 

below are other alternatives. 

1. Alternatives to the Governing Body 

and Management Provision (§ 416.41) 

We considered not including the 

requirement for the disaster 

preparedness plan. However, as 

witnessed by the problems affecting 

health care facilities across the Gulf 

region in September 2005 as a result of 

Hurricane Katrina, we have proposed 

this requirement to ensure the safety of 

patients and staff members alike. 

2. Alternatives to the Quality 

Assessment and Performance 

Improvement (QAPI) Provision 

(§ 416.43) 

We discussed eliminating any 

reference to the use of quality indicator 

data, including patient care data. 

However, in light of the existing and 

proposed hospital, home health and 

rural health clinic quality assessment 

and performance improvement 

requirements, we believe ASCs also 

must begin to build a foundation where 

quality indicator data can be used to 

identify activities that lead to poor 

patient outcomes. 

3. Alternatives to the Patient Rights 

Provision (§ 416.50) 

We considered not requiring that an 

ASC provide both written and verbal 

notice of rights in a language that the 

patient understands as this might pose 

an insurmountable problem for ASCs. 

However, options for furnishing these 

rights are available (as noted earlier). 

4. Alternatives to the Discharge 

Provision (§ 416.52) 

We considered requiring the ASC to 

have a physician on the premises of the 

ASC whenever a patient is in the 

facility. However, we decided this might 

impose undue burden when there are 

circumstances when patients are present 

in the ASC facility before and after 

procedures that do not warrant the need 

for physician coverage. Therefore, we 

believe the proposed requirement of a 

signed discharge order, by a physician, 

that evaluates the patient for proper 

anesthesia and medical recovery will 

provide more flexibility and continue to 


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ensure proper physician coverage until 

the patient has completely recovered 

and physically left the ASC facility. 

D. Conclusion 

We are not preparing analyses for 

either the RFA or section 1102(b) of the 

Act because we have determined, and 

we certify, that this proposed rule 

would not have a significant economic 

impact on a substantial number of small 

entities or a significant impact on the 

operations of a substantial number of 

small rural hospitals. This is not a major 

rule, because the overall impact for all 

proposed new conditions is estimated to 

be $21 million annually. Moreover, a 

detailed assessment of the associated 

costs and benefits, as outlined by 

section 202 of the Unfunded Mandates 

Reform Act, will not be performed since 

the impact of this proposed regulation 

does not reach the $120 million 

threshold. Additionally, the potential 

costs associated with implementing the 

requirements of this regulation could be 

less than anticipated since a portion of 

ASCs have already implemented the 

changes that would be required if these 

proposed rules were made final. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 416 

Health facilities, Health professions, 

Medicare, Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR part 416 as follows: 

PART 416—AMBULATORY SURGICAL 

SERVICES 

1. 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). 

Subpart A—General Provisions and 

Definitions 

2. Section § 416.2 is amended by—

A. Revising the definition of 

‘‘Ambulatory surgical center or ASC.’’

B. Adding the definition of 

‘‘Overnight stay’’ in alphabetical order. 

The revision and addition reads as 

follows: 

§ 416.2 Definitions. 

As used in this part: 

Ambulatory surgical center or ASC 

means any distinct entity that operates 

exclusively for the purpose of providing 

surgical services to patients not 

requiring an overnight stay following 

the surgical services, has an agreement 

with CMS to participate in Medicare as 

an ASC, and meets the conditions set 

forth in subparts B and C of this part. 

* * * * * 

Overnight stay means the patient’s 

recovery requires active monitoring by 

qualified medical personnel, regardless 

of whether it is provided in the ASC, 

beyond 11:59 p.m. of the day on which 

the surgical procedure was performed. 

Subpart C—Specific Conditions for 

Coverage 

3. Section 416.41 is revised to read as 

follows. 

§ 416.41 Condition for coverage—

Governing body and management. 

The ASC must have a governing body 

that assumes full legal responsibility for 

determining, implementing, and 

monitoring policies governing the ASC’s 

total operation; has oversight and 

accountability for the quality assurance 

and performance improvement program; 

and ensures that facility policies and 

programs are administered so as to 

provide quality health care in a safe 

environment, and creates and maintains 

a disaster preparedness plan. 

(a) Standard: Contract services. When 

services are provided through a contract 

with an outside resource, the ASC must 

assure that these services are provided 

in a safe and effective manner. 

(b) Standard: Hospitalization. 

(1) The ASC must have an effective 

procedure for the immediate transfer, to 

a hospital, of patients requiring 

emergency medical care beyond the 

capabilities of the ASC. 

(2) This hospital must be a local, 

Medicare-participating hospital or a 

local, nonparticipating hospital that 

meets the requirements for payment for 

emergency services under § 482.2 of this 

chapter. 

(3) The ASC must—

(i) Have a written transfer agreement 

with a hospital that meets the 

requirements of paragraph (b)(2) of this 

section; or 

(ii) Ensure that all physicians 

performing surgery in the ASC have 

admitting privileges at a hospital that 

meets the requirements of paragraph 

(b)(2) of this section. 

(c) Standard: Disaster preparedness 

plan. 

(1) The ASC must maintain a written 

disaster preparedness plan that provides 

for the emergency care of patients in the 

event of fire, natural disaster, functional 

failure of equipment, or other 

unexpected events or circumstances that 

are likely to threaten the health and 

safety of its patients. 

(2) The ASC coordinates the plan with 

State and local agencies, as appropriate. 

(3) The ASC conducts drills, at least 

annually, to test the plan’s effectiveness. 

The ASC must complete a written 

evaluation of each drill and 

immediately implement any corrections 

to the plan. 

4. Section 416.43 is revised to read as 

follows: 

§ 416.43 Conditions for coverage—Quality 

assessment and performance improvement. 

The ASC must develop, implement 

and maintain an ongoing, data-driven 

quality assessment and performance 

improvement (QAPI) program. 

(a) Standard: Program scope. 

(1) The program must include, but not 

be limited to, an ongoing program that 

demonstrates measurable improvement 

in patient health outcomes, and 

improves patient safety by using quality 

indicators or performance measures 

associated with improved health 

outcomes and with the identification 

and reduction of medical errors. 

(2) The ASC must measure, analyze, 

and track quality indicators, including 

adverse patient events, infection control 

and other aspects of performance that 

includes processes of care and services 

furnished in the ASC. 

(b) Standard: Program data. 

(1) The program must incorporate 

quality indicator data including patient 

care and other relevant data regarding 

services furnished in the ASC into its 

QAPI program. 

(2) The ASC must use the data 

collected to—

(i) Monitor the effectiveness and 

safety of its services, and quality of its 

care. 

(ii) Identify opportunities that could 

lead to improvements and changes in its 

patient care. 

(c) Standard: Program activities. 

(1) The ASC must set priorities for its 

performance improvement activities 

that—

(i) Focus on high risk, high volume 

and problem-prone areas. 

(ii) Consider incidence, prevalence 

and severity of problems in those areas. 

(iii) Affect health outcomes, patient 

safety and quality of care. 

(2) Performance improvement 

activities must track adverse patient 

events, examine their causes, implement 

improvements and ensure that 

improvements are sustained over time. 

(3) The ASC must implement 

preventive strategies throughout the 

facility targeting adverse patient events 

and ensure that all staff are familiar 

with these strategies. 

(d) Standard: Performance 

improvement projects. 


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(1) The number and scope of distinct 

improvement projects conducted 

annually must reflect the scope and 

complexity of the ASC’s services and 

operations. 

(2) The ASC must document the 

projects that are being conducted. The 

documentation at a minimum must 

include the reason(s) for implementing 

the project, and a description of the 

project’s results. 

(e) Standard: Governing body 

responsibilities. The governing body 

must ensure that the QAPI—

(1) Program is defined, implemented 

and maintained by the ASC. 

(2) Program addresses the ASC’s 

priorities and that all improvements are 

evaluated for effectiveness. 

(3) Data collection methods, 

frequency and details are appropriate. 

(4) Program expectations for safety are 

clearly established. 

(5) Resources are adequately allocated 

for implementing the facility’s program. 

5. Section 416.49 is revised to read as 

follows: 

§ 416.49 Condition for coverage—

Laboratory and radiologic services. 

(a) Standard: Laboratory. If the ASC 

performs laboratory services, it must 

meet the requirements of part 493 of this 

chapter. If the ASC does not provide its 

own laboratory services, it must have 

procedures for obtaining routine and 

emergency laboratory services from a 

certified laboratory in accordance with 

part 493 of this chapter. The referral 

laboratory must be certified in the 

appropriate specialties and 

subspecialties of service to perform the 

referred tests in accordance with the 

requirements of part 493 of this chapter. 

(b) Standard: Radiologic services. 

(1) The ASC must have procedures for 

obtaining radiological services from a 

Medicare approved facility to meet the 

needs of patients. 

(2) When radiologic services are 

medically necessary and integral to the 

performance of surgical procedures the 

ASC must meet the requirements of the 

Conditions for Coverage for Portable Xray Services under § 486.100 through 

§ 486.110 of this chapter if it is 

furnishing these services directly. 

Radiologic services furnished under 

arrangement must be performed by an 

entity that is certified by Medicare as a 

supplier of portable x-ray services by 

meeting the Conditions for Coverage for 

Portable X-ray Services. 

6. Add new § 416.50 to read as 

follows: 

§ 416.50 Condition for coverage—Patients’

rights. 

The ASC must inform the patient or 

the patient’s representative of the 

patient’s rights, and must protect and 

promote the exercise of such rights. 

(a) Standard: Notice of rights. 

(1) The ASC must provide the patient 

or the patient’s representative with 

verbal and written notice of the patient’s 

rights prior to furnishing care to the 

patient and in a language and manner 

that the patient or patient representative 

understands. In addition, the ASC 

must—

(i) Post the written notice of patient 

rights in a place or places within the 

ASC likely to be noticed by patients (or 

their representative, if applicable) 

waiting for treatment. Notice of rights 

must include the name, address, and 

telephone number for a representative 

in the State agency to whom patients 

can report complaints about ASCs, as 

well as the Web site for the Medicare 

Beneficiary Ombudsman. 

(ii) Disclose, if applicable, physician 

financial interests or ownership in the 

ASC facility in accordance with part 420 

of this subchapter. Disclosure 

information must be in writing and 

furnished to the patient prior to the first 

visit to the ASC. 

(2) Advance directives. The ASC must 

comply with the following 

requirements: 

(i) Provide the patient or 

representative with verbal and written 

information concerning its policies on 

advance directives, including a 

description of applicable State law and, 

if requested, official State advance 

directive forms. 

(ii) Inform the patient or 

representative of the patient’s right to 

make informed decisions regarding their 

care. 

(iii) Document in a prominent part of 

the patient’s current medical record, 

whether or not the individual has 

executed an advance directive. 

(3) Submission and investigation of 

grievances. 

(i) The ASC must establish clearly 

explained procedures for documenting 

the existence, submission, investigation 

and disposition of a patient’s written or 

verbal grievance to the ASC. 

(ii) All alleged violations/grievances 

relating, but not limited to, 

mistreatment, neglect, verbal, mental, 

sexual or physical abuse, must be fully 

documented. 

(iii) All allegations must be 

immediately reported to a person in 

authority in the ASC, the State and local 

bodies having jurisdiction, and the State 

survey agency if warranted. 

(iv) The grievance process must 

specify time frames for review of the 

grievance and the provision of a 

response. 

(v) The ASC, in responding to the 

grievance, must investigate all 

grievances made by a patient or the 

patient’s representative regarding 

treatment or care that is (or fails to be) 

furnished. 

(vi) The ASC must document how the 

grievance was addressed, as well as 

provide the patient with written notice 

of its decision. The decision must 

contain the name of an ASC contact 

person, the steps taken to investigate the 

grievance, the results of the grievance 

process, and the date the grievance 

process was completed. 

(b) Standard: Exercise of rights and 

respect for property and person. 

(1) The patient has the right to—

(i) Exercise his or her rights without 

being subjected to discrimination or 

reprisal. 

(ii) Voice grievances regarding 

treatment or care that is (or fails to be) 

furnished. 

(iii) Be fully informed about a 

treatment or procedure and the expected 

outcome before it is performed. 

(2) If a patient is adjudged 

incompetent under State law by a court 

of proper jurisdiction, the rights of the 

patient are exercised by the person 

appointed under State law to act on the 

patient’s behalf. 

(3) If a State court has not adjudged 

a patient incompetent, any legal 

representative designated by the patient 

in accordance with State law may 

exercise the patient’s rights to the extent 

allowed by State law. 

(c) Standard: Privacy and safety. The 

patient has the right to—

(1) Personal privacy. 

(2) Receive care in a safe setting. 

(3) Be free from all forms of abuse or 

harassment. 

(d) Standard: Confidentiality of 

clinical records. The patient has the 

right to confidentiality of his or her 

clinical records maintained by the ASC. 

Access to or release of patient 

information and clinical records is 

permitted only with written consent of 

the patient or the patient’s 

representative or as authorized by law. 

7. Add new § 416.51 to read as 

follows: 

§ 416.51 Conditions for coverage—

Infection Control. 

The Ambulatory Surgical Center 

(ASC) must maintain an infection 

control program for patients and ASC 

staff that seeks to minimize infections 

and communicable diseases. 

(a) Standard: Sanitary environment. 

The ASC must provide a functional and 

sanitary environment for the provision 

of surgical services by adhering to 

professionally acceptable standards of 

practice. 


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(b) Standard: Infection control 

program. The ASC must maintain an 

ongoing program designed to prevent, 

control, and investigate infections and 

communicable diseases. The program 

is—

(1) Under the direction of a 

designated and qualified professional 

who has training in infection control. 

(2) An integral part of the ASC’s 

quality assessment and performance 

improvement program; and 

(3) Responsible for providing a plan of 

action for preventing, identifying and 

managing infections and communicable 

diseases and for immediately 

implementing corrective and preventive 

measures that result in improvement. 

8. Add new § 416.52 to read as 

follows: 

§ 416.52 Conditions for coverage—Patient 

admission, assessment and discharge. 

The ASC must develop specific 

assessments for each patient’s medical 

needs with respect to their visit to the 

ASC. 

(a) Standard: Admission and presurgical assessment. 

(1) Not more than 30 days before the 

date of the scheduled surgery, each 

patient must have a comprehensive 

medical history and physical 

assessment completed by a physician 

(as defined in section 1861(r) of the Act) 

or other qualified practitioner in 

accordance with State law and ASC 

policy. 

(2) Upon admission, each patient 

must have a pre-surgical assessment that 

includes, at a minimum, an updated 

medical record entry documenting an 

examination for any changes in the 

patient’s condition since the most 

recently documented medical history 

and physical assessment. The 

assessment must include documentation 

to determine the patient’s physical and 

mental ability to undergo the surgical 

procedure, and any allergies to drugs 

and biologicals. 

(3) The patient’s medical history and 

physical assessment must be placed in 

the patient’s medical record before the 

surgical procedure is started. 

(b) Standard: Post-surgical 

assessment. 

(1) A thorough assessment of the 

patient’s post-surgical condition must 

be completed and documented in the 

medical record. 

(2) Post-surgical needs must be 

addressed and included in the discharge 

notes. 

(c) Standard: Discharge. The ASC 

must—

(1) Provide each patient with written 

discharge instructions. 

(2) Ensure the patient has a safe 

transition to home and that the postsurgical needs are met. 

(3) Ensure each patient has a 

discharge order, signed by a physician 

or the qualified practitioner who 

performed the surgery or procedure 

unless otherwise specified by State law. 

The discharge order must indicate that 

the patient has been evaluated for 

proper anesthesia and medical recovery. 

Authority: (Catalog of Federal Domestic 

Assistance Program No. 93.778, Medical 

Assistance Program). 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: January 30, 2007. 

Leslie V. Norwalk, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: May 22, 2007. 

Michael O. Leavitt, 

Secretary. 

Editorial Note: This document was 

received at the Office of the Federal 

Register on August 21, 2007. 

[FR Doc. 07–4148 Filed 8–24–07; 4:00 pm] 

BILLING CODE 4120–01–P 


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