[Federal Register Volume 72, Number 169 (Friday, August 31, 2007)]
[Proposed Rules]
[Pages 50470-50487]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-4148]



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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Part 416



Medicare and Medicaid Programs; Ambulatory Surgical Centers, Conditions 
for Coverage; Proposed Rule

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

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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.

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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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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.
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    \1\ Only 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.
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    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 (Sec.  
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 patient-
centered, 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 (Sec.  416.2)

    Existing Sec.  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 Medicare-certified 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 Sec.  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 outcome-oriented 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 (Sec.  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 Sec.  416.43 of this part. Specific governing body QAPI 
responsibilities are detailed in the proposed QAPI requirement at Sec.  
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 Sec.  
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 Sec.  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 Sec.  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 Sec.  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 Sec.  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 (Sec.  416.43)
    The existing ``Evaluation of quality'' requirement found at Sec.  
416.43, relies on a problem-oriented, reactive approach and primarily 
focuses on ASC self-assessment 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 Sec.  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 high-risk 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 Sec.  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 Sec.  416.43, we do 
not believe ASCs will experience a protracted or difficult transition 
period.
    At proposed Sec.  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 problem-prone 
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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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 Sec.  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 Sec.  
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 Sec.  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 Sec.  416.43(e), Governing body 
responsibilities, that the ASC's governing body would be responsible 
and accountable for ensuring that:
    <bullet> The ongoing QAPI program is defined, implemented and 
maintained;
    <bullet> The program addresses priorities and that all improvements 
are evaluated for effectiveness;
    <bullet> The QAPI data collection methods, frequency and details 
are appropriate;
    <bullet> Safety expectations are established; and
    <bullet> 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 (Sec.  
416.49)
    The current CfC Laboratory and radiologic services, located at 
Sec.  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 Sec.  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 Sec.  416.49(b)(1) is part of the current 
laboratory and radiologic services condition and the language would 
remain unchanged. The proposed language at Sec.  416.49(b)(2) would 
require the ASC to meet the requirements of the CfCs for portable x-ray 
suppliers found at Sec.  486.100 through Sec.  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 (Sec.  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.
---------------------------------------------------------------------------

    \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.
---------------------------------------------------------------------------

    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 Re-Approval of Transplant Centers to Perform Organ 
Transplants (72 FR 15198, March 30, 2007)).
    The proposed standard at Sec.  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

[[Page 50475]]

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 Sec.  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 Sec.  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 Sec.  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

[[Page 50476]]

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 Sec.  
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 Sec.  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 Sec.  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 
Sec.  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 (Sec.  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 (Sec.  
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.

[[Page 50477]]

    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 
(Sec.  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

[[Page 50478]]

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 pre-surgical 
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 Sec.  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 pre-surgical 
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 Sec.  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 Sec.  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 post-surgical 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 Sec.  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 Sec.  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 Sec.  
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:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> 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:

[[Page 50479]]

Conditions for Coverage--Governing Body and Management (Sec.  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 Sec.  416.41(b)(1) and 
Sec.  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 Sec.  416.41(c)(1) 
and Sec.  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 
(Sec.  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, Sec.  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 (Sec.  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, Sec.  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, Sec.  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 
(Sec.  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 Sec.  
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-

[[Page 50480]]

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] <a href="/cdn-cgi/l/email-protection#cf8caebda0a3b6a19083a0b9aabbbb8fa0a2ade1aaa0bfe1a8a0b9"><span class="__cf_email__" data-cfemail="521133203d3e2b3c0d1e3d24372626123d3f307c373d227c353d24">[email protected]</span></a>. 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 in-patient 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

[[Page 50481]]

rights, Infection control and Patient admission, assessment and 
discharge.
1. Anticipated Effects of the Governing Body and Management Provision 
(Sec.  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 Sec.  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 Sec.  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 (Sec.  416.43)
    In section Sec.  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.

[[Page 50482]]



                   Table 2.--Summary of Quality Assessment and Performance Improvement Burden
----------------------------------------------------------------------------------------------------------------
                                                Time per ASC     Total time
                   Standard                        (hours)         (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 (Sec.  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 Sec.  416.100 through Sec.  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 (Sec.  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.
    <bullet> 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.
    <bullet> 3 percent x 1000 patient caseload = 30 patients per year 
per ASC requiring interpreter services.
    <bullet> $30.00 x 30 = $900 per ASC
    <bullet> $900 x 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

[[Page 50483]]

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.
    <bullet> 10 hours x $46.00 (administrator s hourly salary) = $460 
estimated cost for each ASC
    <bullet> $460 x 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 Sec.  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 (Sec.  
416.51)
    We are proposing to elevate the current infection control 
requirements, located at Sec.  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

[[Page 50484]]

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 (Sec.  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 pre-admission, pre-surgical, 
post-surgical and discharge phases of the ASC surgery process.
a. Effects of the Admission and Pre-Surgical 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 Sec.  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. Pre-surgical 
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 Sec.  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 
broad-based 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 (Sec.  
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 (Sec.  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 (Sec.  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 (Sec.  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

[[Page 50485]]

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 Sec.  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:


Sec.  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.


Sec.  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 Sec.  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:


Sec.  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.

[[Page 50486]]

    (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:


Sec.  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 X-ray Services 
under Sec.  486.100 through Sec.  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 Sec.  416.50 to read as follows:


Sec.  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 Sec.  416.51 to read as follows:


Sec.  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.

[[Page 50487]]

    (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 Sec.  416.52 to read as follows:


Sec.  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 pre-surgical 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 
post-surgical 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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