25550 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

have concluded this action is one of a 

category of actions that do not 

individually or cumulatively have a 

significant effect on the human 

environment. This rule is categorically 

excluded, under figure 2–1, paragraph 

(34)(g), of the Instruction. The rule 

involves establishing a safety zone. An 

environmental analysis checklist and a 

categorical exclusion determination are 

available in the docket where indicated 

under ADDRESSES. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, and 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard amends 33 

CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

■ 1. The authority citation for part 165 

continues to read as follows: 

Authority: 33 U.S.C. 1226, 1231; 46 U.S.C. 

Chapter 701; 50 U.S.C. 191, 195; 33 CFR 

1.05–1(g), 6.04–1, 6.04–6, and 160.5; Pub. L. 

107–295, 116 Stat. 2064; Department of 

Homeland Security Delegation No. 0170.1. 

■ 2. Add § 165.1184 to read as follows: 

§ 165–1184 Safety Zone; Coast Guard Use 

of Force Training Exercises, San Pablo Bay, 

CA 

(a) Location. This safety zone will 

apply to the navigable waters in the San 

Pablo Bay, and will encompass an area 

beginning at position 38°01′44′′ N, 

122°27′06′′ W; 38°04′36′′ N, 122°22′06′′ 

W; 38°00′35′′ N, 122°26′07′′ W; 

38°03′00′′ N, 122°20′20′′ W (NAD 83) 

and back to the starting point. 

(b) Enforcement. The Coast Guard will 

notify the public via a Broadcast Notice 

to Mariners prior to the activation of 

this safety zone. The safety zone will be 

activated on average two times per 

month, but could be activated up to six 

times per month. It will be in effect for 

approximately three hours from 9 a.m. 

to 11:59 p.m. If the exercises conclude 

prior to the scheduled termination time, 

the Coast Guard will cease enforcement 

of this safety zone and will announce 

that fact via Broadcast Notice to 

Mariners. Persons and vessels may also 

contact the Coast Guard to determine 

the status of the safety zone on VHF–16 

or the 24-hour Command Center via 

telephone at (415) 399–3547. 

(c) Definitions. As used in this 

section, designated representative 

means a Coast Guard Patrol 

Commander, including a Coast Guard 

coxswain, petty officer, or other officer 

operating a Coast Guard vessel and a 

Federal, State, and local officer 

designated by or assisting the Captain of 

the Port San Francisco (COTP) in the 

enforcement of the safety zone. 

(d) Regulations. (1) Under the general 

regulations in § 165.23, entry into, 

transiting, or anchoring within the 

safety zone is prohibited unless 

authorized by the COTP or the COTP’s 

designated representative. 

(2) The safety zone is closed to all 

vessel traffic, except as may be 

permitted by the COTP or the COTP’s 

designated representative. 

(3) Vessel operators desiring to enter 

or operate within the safety zone must 

contact the COTP or the COTP’s 

representative to obtain permission to 

do so. Vessel operators given permission 

to enter or operate in the safety zone 

must comply with all directions given to 

them by the COTP or the COTP’s 

designated representative. Persons and 

vessels may request permission to enter 

the safety zone on VHF–16 or the 

24-hour Command Center via telephone 

at (415) 399–3547. 

Dated: March 31, 2011. 

Cynthia L. Stowe, 

Captain, U.S. Coast Guard, Captain of the 

Port San Francisco. 

[FR Doc. 2011–10930 Filed 5–4–11; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 482 and 485 

[CMS–3227–F] 

RIN 0938–AQ05 

Medicare and Medicaid Programs: 

Changes Affecting Hospital and 

Critical Access Hospital Conditions of 

Participation: Telemedicine 

Credentialing and Privileging 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule will revise the 

conditions of participation (CoPs) for 

both hospitals and critical access 

hospitals (CAHs). The final rule will 

implement a new credentialing and 

privileging process for physicians and 

practitioners providing telemedicine 

services. Currently, a hospital or CAH 

receiving telemedicine services must go 

through a burdensome credentialing and 

privileging process for each physician 

and practitioner who will be providing 

telemedicine services to its patients. 

This final rule will remove this undue 

hardship and financial burden. 

DATES: Effective Date: These regulations 

are effective on July 5, 2011. 

FOR FURTHER INFORMATION CONTACT: CDR 

Scott Cooper, USPHS, (410) 786–9465. 

Jeannie Miller, (410) 786–3164. 

SUPPLEMENTARY INFORMATION:

I. Background 

This final rule reflects the Centers for 

Medicare and Medicaid Services’ 

commitment to the general principles of 

the President’s Executive Order released 

January 18, 2011, entitled ‘‘Improving 

Regulation and Regulatory Review.’’ The 

rule revises the conditions of 

participation (CoPs) for both hospitals 

and critical access hospitals (CAHs) to: 

(1) Make current Federal requirements 

more flexible for rural and/or small 

hospitals and for CAHs; and (2) 

encourage innovative approaches to 

patient-service delivery. 

CMS regulations currently require a 

hospital to have a credentialing and 

privileging process for all physicians 

and practitioners providing services to 

its patients. The regulations require a 

hospital’s governing body to appoint all 

practitioners to its hospital medical staff 

and to grant privileges using the 

recommendations of its medical staff. In 

turn, the hospital medical staff must use 

a credentialing and privileging process, 

provided for in CMS regulations, to 

make its recommendations. CMS 

requirements do not take into account 

those practitioners providing only 

telemedicine services to patients. 

Consequently, hospitals apply the 

credentialing and privileging 

requirements as if all practitioners were 

onsite. This traditional and limited 

approach fails to embrace new methods 

and technologies for service delivery 

that may improve patient access to high 

quality care. 

This final rule will permit hospitals 

and CAHs to implement a new 

credentialing and privileging process for 

physicians and practitioners providing 

telemedicine services. The removal of 

unnecessary barriers to the use of 

telemedicine may enable patients to 

receive medically necessary 

interventions in a more timely manner. 

It may enhance patient follow-up in the 

management of chronic disease 

conditions. These revisions will provide 

more flexibility to small hospitals and 

CAHs in rural areas and regions with a 

limited supply of primary care and 

specialized providers. In certain 

instances, telemedicine may be a costeffective alternative to traditional 

service delivery approaches and, most 


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importantly, may improve patient 

outcomes and satisfaction. 

As noted above, the current Medicare 

Hospital conditions of participation 

(CoPs) for credentialing and privileging 

of medical staff at 42 CFR § 482.12(a)(2) 

and § 482.22(a)(2) require the governing 

body of the hospital to make all 

privileging decisions based upon the 

recommendations of its medical staff 

after the medical staff has thoroughly 

examined and verified the credentials of 

practitioners applying for privileges, 

and after the staff has applied specific 

criteria to determine whether an 

individual practitioner should be 

privileged at the hospital. The current 

critical access hospital (CAH) CoPs at 42 

CFR 485.616(b) similarly require every 

CAH that is a member of a rural health 

network to have an agreement for 

review of physicians and practitioners 

seeking privileges at the CAH. The 

agreement must be with a hospital that 

is a member of the network, a Medicare 

Quality Improvement Organization 

(QIO), or another qualified entity 

identified in the State’s rural health 

plan. In addition, the services provided 

by each doctor of medicine or 

osteopathy at the CAH must be 

evaluated by one of these same three 

types of outside parties. These 

requirements apply to all physicians 

and practitioners seeking privileges at 

the hospital or CAH, respectively, 

regardless of whether services will be 

provided in person and onsite at the 

hospital or CAH, or remotely through a 

telecommunications system. 

While hospitals may use third-party 

credentialing verification organizations 

to compile and verify the credentials of 

practitioners applying for privileges, the 

hospital’s governing body is still legally 

responsible for all privileging decisions. 

Similarly, each CAH is required to have 

its privileging decisions made by either 

its governing body or the person 

responsible for the CAH. 

In the past, hospitals that were 

accredited by The Joint Commission 

(TJC) were deemed to have met the 

Medicare CoPs, including the 

credentialing and privileging 

requirements, under TJC’s statutory 

deeming authority. Section 125 of the 

Medicare Improvements for Patients and 

Providers Act of 2008 (Pub. L. 110–275, 

July 15, 2008) (MIPPA), terminated the 

statutory recognition of TJC’s hospital 

accreditation program, effective July 15, 

2010. The law now requires TJC to 

secure CMS approval of its standards in 

order to confer Medicare deemed status 

on hospitals. 

Under its previous statutory deeming 

authority, TJC has permitted 

‘‘privileging by proxy,’’ which had 

allowed TJC-accredited hospitals to 

privilege ‘‘distant-site’’ (as that term is 

defined at section 1834(m)(4)(A) of the 

Social Security Act (the Act)) physicians 

and practitioners. TJC privileging by 

proxy standards allowed for one TJCaccredited facility to accept the 

privileging decisions of another TJCaccredited facility utilizing a 

streamlined independent determination 

process, rather than making an 

individualized decision based on the 

practitioner’s credentials and record. 

Even though they were TJC-accredited, 

hospitals that have used this method to 

privilege distant-site medical staff 

technically did not meet the CMS 

requirements that applied to other 

hospitals. When we learned of specific 

instances of such noncompliance 

through on-site validation surveys by 

State survey agencies, the hospital was 

required to change its policies to come 

into compliance. However, the majority 

of Joint Commission-accredited 

hospitals were not routinely subjected 

to validation surveys of their privileging 

practices, and it appears that many of 

them were employing the practices 

permitted by The Joint Commission. 

With the loss of statutory status for its 

hospital accreditation program, The 

Joint Commission is now required to 

conform its accreditation program to the 

Medicare requirements, including the 

provisions governing credentialing and 

privileging, and enforce it accordingly 

in all of its accredited hospitals. 

TJC-accredited hospitals, therefore, 

have been concerned that they may be 

unable to meet the long-standing CMS 

privileging requirements while 

sustaining their current telemedicine 

agreements. Small hospital medical 

staffs, in particular, are concerned about 

the burden of privileging hundreds of 

specialty physicians and practitioners 

that large academic medical centers 

make available to them. Because of the 

complexity of the issues, and to 

minimize disruption to accredited 

hospitals and CAHs, we decided to 

allow additional time for The Joint 

Commission to ensure conformity to the 

Medicare Conditions of Participation 

(CoPs). Accordingly, we notified TJC 

that we would expect implementation of 

its new accreditation standards no later 

than the effective date of this final rule. 

Upon reflection, we came to the 

conclusion that our present requirement 

is a duplicative and burdensome 

process for physicians, practitioners, 

and the hospitals involved in this 

process, particularly small hospitals and 

CAHs, which often lack adequate 

resources to fully carry out the 

traditional credentialing and privileging 

process for all of the physicians and 

practitioners that may be available to 

provide telemedicine services. In 

addition to the costs involved, small 

hospitals and CAHs often do not have 

in-house medical staff with the clinical 

expertise to adequately evaluate and 

privilege the wide range of specialty 

physicians that larger hospitals can 

provide through telemedicine services. 

The public comments we received on 

the proposed rule, which we discuss in 

this final rule, overwhelmingly 

reinforced this perception. 

II. Provisions of Proposed Rule and 

Response to Comments 

We published a proposed rule in the 

Federal Register on May 26, 2010 (75 

FR 29479). In that rule, we proposed to 

revise both the hospital and CAH 

credentialing and privileging 

requirements to eliminate regulatory 

impediments and to allow for the 

advancement of telemedicine 

nationwide. 

While telemedicine is included under 

the broader scope of telehealth, we 

consider telemedicine, as the term is 

used in the proposed rule and as we use 

it here in this final rule, to be the 

provision of clinical services to patients 

by practitioners from a distance via 

electronic communications. The distantsite telemedicine physician or 

practitioner provides clinical services to 

the hospital or CAH patient either 

simultaneously, as is often the case with 

teleICU services, for example, or nonsimultaneously, as may be the case with 

many teleradiology services. 

‘‘Simultaneously’’ would mean that the 

clinical services (for example, 

assessment of the patient with a clinical 

plan for treatment, including any 

medical orders needed) are provided to 

the patient in ‘‘real time’’ by the 

telemedicine practitioner, similar to the 

actions of an on-site practitioner when 

called in by a patient’s attending 

physician to see the patient. Generally, 

payment for telehealth services under 

section 1834(m) of the Act, 

distinguished from ‘‘telemedicine 

services’’ as discussed here, requires that 

services be provided to a patient in real 

time while the patient is physically 

present at the originating site. ‘‘Nonsimultaneously’’ means that while the 

telemedicine practitioner still provides 

clinical services to the patient upon a 

formal request from the patient’s 

attending physician, such services may 

involve after-the-fact interpretation of 

diagnostic tests in order to provide an 

assessment of the patient’s condition 

and do not necessarily require the 

telemedicine practitioner to directly 

assess the patient in ‘‘real time.’’ This 

would be similar to the services 


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25552 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

provided by an on-site radiologist who 

interprets a patient’s x-ray or CT scan 

and then communicates his or her 

assessment to the patient’s attending 

physician who then bases his or her 

diagnosis and treatment plan on these 

findings. In fact, the actual location 

(distant-site versus on-site) of the 

radiologist performing the readings is 

often the major distinguishing factor 

between in-house radiologists and 

teleradiologists. These services are not 

payable as ‘‘telehealth services’’ under 

section 1834(m) of the Act because in 

addition to not meeting the ‘‘real time’’ 

requirements, these services do not meet 

the telehealth patient location 

requirements also contained under this 

section of the Act and upon which the 

CMS telehealth payment requirements 

are based. 

We also indicated that the proposed 

revisions would preserve and strengthen 

the core values of the credentialing and 

privileging process for all hospitals, 

provide accountability to all patients, 

and assure that medical staff are 

privileged to provide services in the 

hospital based on evaluation of the 

practitioner’s medical competency. 

We provided a 60-day public 

comment period in which we received 

a total of 113 timely comments from 

hospitals, CAHs, physicians, 

professional organizations, providers of 

teleradiology interpretation services, 

other specialty practitioners providing 

telemedicine services, and hospital 

systems. Overall, the majority of 

commenters were supportive of the 

proposed changes, but many also raised 

several separate issues. The most 

common comment expressed was that 

the proposed regulation did not go far 

enough in restructuring privileging and 

credentialing requirements for 

telemedicine providers. Summaries of 

the major issues and our responses are 

set forth below. 

Hospital CoPs (§ 482.12 and § 482.22) 

The proposed revisions to the hospital 

CoPs for the credentialing and 

privileging of telemedicine physicians 

and practitioners are contained within 

two separate CoPs: § 482.12, ‘‘Governing 

body,’’ and § 482.22, ‘‘Medical staff.’’ 

For the Governing body CoP, we 

proposed to add a new paragraph, 

§ 482.12(a)(8), which would require the 

hospital’s governing body to ensure that, 

when telemedicine services are 

furnished to the hospital’s patients 

through an agreement with a Medicareparticipating hospital (the ‘‘distant-site’’ 

hospital as defined at section 

1834(m)(4)(A) of the Act), the agreement 

must specify that it is the responsibility 

of the governing body of the distant-site 

hospital providing the telemedicine 

services to meet the existing 

requirements in § 482.12(a)(1) through 

(a)(7) with regard to its physicians and 

practitioners who are providing 

telemedicine services. These existing 

provisions cover the distant-site 

hospital’s governing body 

responsibilities for its medical staff that 

all Medicare-participating hospitals 

must meet. 

We proposed at § 482.12(a)(8) to allow 

the governing body of the hospital 

whose patients are receiving the 

telemedicine services to grant privileges 

based on its medical staff 

recommendations, which would rely on 

information provided by the distant-site 

hospital, as a more efficient means of 

privileging the individual distant-site 

physicians and practitioners providing 

the services. 

This provision would be accompanied 

by the proposed requirement in the 

‘‘Medical staff’’ CoP at § 482.22(a)(3), 

which would provide the basis on 

which the hospital’s governing body, 

through its agreement as noted above, 

could choose to have its medical staff 

rely upon information furnished by the 

distant-site hospital when making 

recommendations on privileges for the 

individual physicians and practitioners 

providing such services. We specified 

that this option would allow the 

hospital’s medical staff to rely upon the 

credentialing and privileging decisions 

of the distant-site hospital in lieu of the 

current requirements at § 482.22(a)(1) 

and (a)(2), which require the hospital’s 

medical staff to conduct individual 

appraisals of its members and examine 

the credentials of each candidate in 

order to make a privileging 

recommendation to the governing body. 

In the proposed rule, we stated that this 

option would not prohibit a hospital’s 

medical staff from continuing to 

perform its own periodic appraisals of 

telemedicine members of its staff, nor 

would it bar them from continuing to 

use the traditional credentialing and 

privileging process required under the 

current regulations. Our intent of this 

proposed requirement was to relieve 

burden for smaller hospitals by 

providing for a less duplicative and 

more efficient privileging scheme with 

regard to physicians and practitioners 

providing telemedicine services. 

However, in an effort to ensure 

accountability to the process, we 

proposed within this same provision 

(§ 482.22(a)(3)) that the hospital, in 

order to choose this less burdensome 

option for privileging, would have to 

ensure that—(1) The distant-site 

hospital providing the telemedicine 

services was another Medicareparticipating hospital; (2) the individual 

distant-site physician or practitioner 

was privileged at the distant-site 

hospital providing telemedicine 

services, and that this distant-site 

hospital provides a current list of the 

physician’s or practitioner’s privileges; 

(3) the individual distant-site physician 

or practitioner held a license issued or 

recognized by the State in which the 

hospital whose patients are receiving 

the telemedicine services is located; and 

(4) with respect to a distant-site 

physician or practitioner granted 

privileges by the hospital, the 

originating-site hospital had evidence of 

an internal review of the distant-site 

physician’s or practitioner’s 

performance under these telemedicine 

privileges and sent the distant-site 

hospital this information for use in its 

periodic appraisal of the individual 

distant-site physician or practitioner. 

We also proposed that the information 

sent for use in the periodic appraisal 

would, at a minimum, have to include 

all adverse events that did result or 

could have resulted from telemedicine 

services provided by the distant-site 

physician or practitioner to the 

originating hospital’s patients, and all 

complaints the originating site hospital 

had received about the distant-site 

physician or practitioner. 

Within the revisions to the hospital 

CoPs, we also proposed that additional 

language be added to the current 

requirement at § 482.22(c)(6), which 

requires that the hospital’s medical staff 

bylaws include criteria for determining 

privileges and a procedure for applying 

the criteria to individuals requesting 

privileges. We proposed to add language 

to stipulate that in cases where distantsite physicians and practitioners were 

requesting privileges to furnish 

telemedicine services through an 

agreement between hospitals, the 

criteria for determining those privileges 

and the procedure for applying the 

criteria would be subject to the 

proposed requirements at § 482.12(a)(8) 

and § 482.22(a)(3). 

Comment: We received several 

comments that are outside the scope of 

this rule. Specifically, several 

commenters requested that we consider 

establishing a central credentialing bank 

that would provide overall clearance for 

telemedicine services, possibly through 

regional compacts or reciprocity 

agreements. A number of commenters 

recommended that all TJC-accredited 

facilities (including hospitals) be able to 

share credentialing. A few commenters 

suggested that we establish a national 

licensing process for physicians and 

other practitioners in order to ease the 


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burden associated with credentialing 

and privileging. 

Response: We thank all commenters 

for their comments, but are not 

responding to these comments here 

because they are outside the scope of 

this rulemaking. 

Comment: The majority of 

commenters supported the changes 

proposed. However, most of these 

commenters felt that the revisions to the 

CoPs did not go far enough in 

addressing the burdens borne by those 

small hospitals and CAHs that, through 

agreements and/or contracts, use the 

telemedicine services of practitioners 

who are not part of the medical staff of 

a Medicare-participating hospital. The 

commenters pointed out that, under the 

proposed requirements, small hospitals 

and CAHs would still be required to 

perform the duplicative and 

burdensome process of credentialing 

and privileging practitioners that 

provide telemedicine services through a 

distant-site telemedicine entity that is 

not a hospital. 

Several commenters provided 

examples of simultaneous and nonsimultaneous telemedicine services, 

such as teleradiology, teleICU, 

teleneurology, and telepathology, where 

distant-site physicians and practitioners 

provide radiology, ICU/critical care 

medicine, neurology, and pathology 

services to hospital and CAH patients 

under the auspices of a non-hospital 

entity that is nationally accredited as 

having met a national accreditation 

organization’s (AO) standards for 

credentialing and privileging of medical 

staff (in addition to other standards 

established by the national AO). Many 

commenters specifically mentioned the 

TJC’s Ambulatory Care accreditation 

program, which surveys and accredits 

nearly 2,000 ambulatory care entities (of 

which these non-hospital telemedicine 

entities, along with ambulatory surgery 

centers, imaging centers, and dentist 

offices, are included) out of 

approximately 30,500 ambulatory care 

entities nationwide. Commenters 

suggested that CMS include these 

telemedicine entities in the 

requirements so that small hospitals and 

CAHs would be able to enter into 

agreements with them. 

Many commenters stated that 

including the medical staff of these 

distant-site telemedicine entities as part 

of an optional and streamlined 

credentialing and privileging process, as 

we have already proposed for distantsite Medicare-participating hospitals, 

would increase the overall effectiveness 

of this rule. They posited that if the 

goals of this rule were to greatly 

improve patient care by increasing 

patient access to specialty services and 

reduce the burdens and costs for 

hospitals and CAHs by removing the 

impediment of the traditional 

credentialing and privileging process, 

then excluding distant-site telemedicine 

entities would severely limit such goals. 

In addition, commenters stated that 

telemedicine practitioners are part of a 

growing national network that is 

supported by both hospitals and nonhospital telemedicine entities. 

Response: We appreciate the 

comments supporting the rule as well as 

the suggestions for improving the rule. 

When drafting the proposed rule, we 

gave much thought and consideration to 

ideas that were similar to those that 

commenters have expressed regarding 

the inclusion of non-hospital 

telemedicine entities as part of these 

requirements. After careful 

consideration of the comments and the 

options available to us for revising the 

proposed rule, we have concluded that 

it is important that the medical staff of 

a distant-site telemedicine entity, which 

is not a Medicare-participating hospital, 

be included in an optional and 

streamlined credentialing and 

privileging process for those hospitals 

and CAHs electing to enter into 

agreements for telemedicine services 

with such entities. We believe that this 

inclusion would draw us significantly 

closer to accomplishing the stated goals 

of this rule, which are—(1) Increasing 

patient access to specialty services; and 

(2) reducing burden on small hospitals 

and CAHs. 

However, this decision presented 

significant challenges to us as we sought 

to balance our desire to achieve the 

worthy goals noted above with the 

equally important mission of ensuring, 

through our regulatory authority and 

responsibility, the health and safety of 

all patients. As we contemplated 

revisions to the proposed rule that 

would broaden its application, the most 

significant challenge that we faced was 

reconciling inclusion of distant-site 

telemedicine entities into this new 

streamlined process without CMS 

having any regulatory or oversight 

authority over these entities. We also 

note that we do not have any oversight 

or approval process for accreditation 

programs (such as that of TJC) for these 

entities. This situation differs greatly 

from our proposed inclusion of other 

Medicare-participating hospitals, where 

we are assured through the State survey 

or Medicare-approved accreditation 

processes that distant-site hospitals 

providing telemedicine services are in 

compliance with our CoPs, particularly 

those pertaining to credentialing and 

privileging of medical staff. 

In addition, we note that there is no 

statutory definition for a telemedicine 

entity contained in the Act. Therefore, 

for the purposes of this rule, we are 

defining a distant-site telemedicine 

entity as one that—(1) Provides 

telemedicine services; (2) is not a 

Medicare-participating hospital 

(therefore, a non-Medicare-participating 

hospital that provides telemedicine 

services would be considered a distantsite telemedicine entity also); and 

(3) provides contracted services in a 

manner that enables a hospital or CAH 

using its services to meet all applicable 

CoPs, particularly those requirements 

related to the credentialing and 

privileging of practitioners providing 

telemedicine services to the patients of 

a hospital or CAH. 

Taking all of these factors into 

consideration, we came to the 

conclusion that any revisions to the 

regulatory language finalized here 

would need to hold distant-site 

telemedicine entities accountable to the 

originating-site hospital for meeting 

CMS practitioner credentialing and 

privileging standards. Likewise, 

hospitals and CAHs using telemedicine 

services will need to provide, upon 

request when surveyed, the most 

current telemedicine services agreement 

showing that the distant-site entities 

providing the services are required to 

comply with the CMS standards (even 

though CMS has no direct authority 

over those entities) in order for the 

hospital or CAH to make use of the more 

streamlined process when credentialing 

and privileging practitioners from these 

distant-site telemedicine entities. 

Similar to our regulations proposed for 

hospitals and CAHs using the 

telemedicine services of distant-site 

Medicare-participating hospitals, the 

written agreement between the hospital 

or CAH and the distant-site 

telemedicine entity will be the 

foundation for ensuring accountability 

on both sides. However, due to the 

differences already discussed between 

Medicare-participating distant-site 

hospitals providing telemedicine 

services and distant-site telemedicine 

entities providing similar services, there 

must also be differences in the way the 

regulations are written. 

Therefore, in addition to the proposed 

requirements, we are also finalizing new 

provisions that will apply to the 

credentialing and privileging process 

and the agreements between hospitals or 

CAHs and distant-site telemedicine 

entities (§ 482.12(a)(9) and § 482.22(a)(4) 

for hospitals; § 485.616(c)(3) and (c)(4) 

for CAHs). These new provisions will 

require the governing body of the 

hospital (or the CAH’s governing body 


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25554 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

or responsible individual), through its 

written agreement with the distant-site 

telemedicine entity, to ensure that the 

distant-site telemedicine entity, acting 

as a contractor of services, furnishes its 

services in a manner that enables the 

hospital (or CAH) to comply with all 

applicable conditions of participation 

and standards. For the contracted 

services, the applicable CoPs and 

standards include, but are not limited 

to, the credentialing and privileging 

requirements for distant-site physicians 

and practitioners providing 

telemedicine services. 

For hospitals, we have directly linked 

this new requirement to an existing 

requirement at § 482.12(e), which 

requires the hospital’s governing body 

to ensure that a contractor of services to 

the hospital (in this case, the distant-site 

telemedicine entity) furnishes services 

that permit the hospital to comply with 

all applicable conditions of 

participation and standards for 

contracted services. The applicable 

conditions of participation and 

standards would include the 

credentialing and privileging 

requirements as currently found at 

§ 482.12(a)(1) through (a)(7) of this 

section and would apply (in accordance 

with the hospital’s policy) to the 

telemedicine entity’s physicians and 

practitioners that provide telemedicine 

services to the hospital’s patients. 

For CAHs, we also linked these new 

requirements to an existing requirement 

(at § 485.635(c)(4)) that, like § 482.12(e) 

for hospitals, pertains to contactors of 

services and the CAH governing body’s 

(or responsible individual’s) obligation 

to ensure that contracted services are 

furnished in a manner that enables the 

CAH to meet all applicable conditions 

of participation and standards. The 

standard also contains a provision, at 

§ 485.635(c)(1), that requires the CAH to 

have agreements or arrangements with 

one or more Medicare-participating 

providers or suppliers in order to 

furnish other services to its patients. We 

see the ‘‘Medicare-participating’’ 

modifying provision as an impediment 

to the type of agreements that CAHs 

may now have with distant-site 

telemedicine entities under this final 

rule. Since these entities are not 

considered Medicare-participating 

providers or suppliers by CMS, we 

needed to make an exception to the 

requirement at § 485.635(c)(1). 

Therefore, in this final rule, we are 

adding a new paragraph at 

§ 485.635(c)(5) to provide an exception 

to this ‘‘Medicare-participating’’ 

requirement for telemedicine entities in 

cases where a written agreement exists 

between a CAH and such entity. 

We believe that the combination of 

the new requirements, as finalized here, 

and the existing requirements cited 

above and in the final requirements, 

which place responsibility on hospitals 

and CAHs to ensure that contracted 

services fully enable them to meet the 

CoPs, will allow hospitals and CAHs to 

make full use of the telemedicine 

services offered by non-hospital 

telemedicine entities without 

duplicating the credentialing and 

privileging process. This final rule will 

now allow hospitals and CAHs to take 

advantage of these streamlined 

credentialing and privileging options 

when using the telemedicine services of 

other Medicare-participating hospitals, 

non-Medicare-participating 

telemedicine entities, or a combination 

of both types of service providers. And 

with these new requirements dually 

aimed at increasing patient access to 

care and reducing the regulatory burden 

on hospitals and CAHs, CMS believes 

that the potential of telemedicine can be 

more fully realized while still 

maintaining essential health and safety 

protections. 

Comment: A number of commenters 

stated that practitioner-to-practitioner 

‘‘tele-emergency’’ video communications 

should not require credentialing and 

privileging of the distant-site 

practitioner. Another commenter 

requested that CMS consider that full 

credentialing and privileging should not 

be required when telemedicine services 

are only consultative in nature. 

However, the commenter did not clarify 

what he or she meant by ‘‘consultative’’ 

services. 

Response: Any time services are 

provided to a patient in a hospital or 

CAH, the requirements regarding the 

credentialing and privileging of the 

practitioners providing the services 

would apply, whether such 

practitioners were onsite or available to 

the patient through telemedicine 

services. 

Regarding ‘‘consultative’’ services as 

mentioned by the commenter, it is 

important to distinguish between 

informal consultation among 

practitioners (traditionally known as a 

‘‘curbside consult’’), and the furnishing 

of professional consultation services, 

which would include providing medical 

diagnosis and treatment 

recommendations to patients after a 

formal request for such services by the 

practitioner responsible for patient’s 

care. The CMS privileging requirements 

do not apply in instances where, for 

example, the attending physician of 

record seeks informal advice from 

another physician(s) by whatever 

communications media the physicians 

choose to use. The physician whose 

advice is being sought is not providing 

clinical services to the patient, but is 

merely rendering an informal opinion 

on the patients’ condition to the 

patient’s attending physician, who may 

or may not make use of the opinion 

when treating the patient. Such 

discussions between medical 

professionals occur on a routine basis in 

hospitals across the nation and do not 

require that the practitioners involved 

be privileged at the same hospital in 

order for this exchange of medical 

opinions to take place; in fact, we 

believe such communications may 

promote safer, more effective care for 

patients. Only the attending physician, 

who is providing clinical services to the 

patient, would need to be privileged by 

the hospital or CAH to provide such 

services. However, a formal consult 

provided by a specialty or other type of 

practitioner, where the hospital or CAH 

patient receives clinical services from 

the specialty practitioner after the 

patient’s attending physician requests 

such services be provided (either 

simultaneously as is often the case with 

teleICU services, or non-simultaneously 

as may be the case with many 

teleradiology services), would require 

that the practitioner is privileged to do 

so at the hospital or CAH where the 

patient is located. 

Comment: One commenter stated that 

to further reduce burden, we should 

consider a ‘‘contract’’ approach to 

credentialing and privileging for 

telemedicine services, particularly for 

consultations requested by referring 

providers. Some commenters stated that 

such agreements or contracts, which 

essentially allow for credentialing and 

privileging by proxy, leave hospitals 

vulnerable to legal liabilities and risks 

and, therefore, should be prohibited 

under this rule. Another commenter 

suggested that, with regard to legal risks 

and liabilities, mandatory language 

addressing these issues should be 

required within the written agreements 

between distant-site hospitals and the 

hospital or CAH where the patient 

receives the services. 

Response: The requirements, as 

proposed, are aimed at reducing the 

telemedicine credentialing and 

privileging burden for small hospitals 

and CAHs by specifically allowing for 

contracts or, as we refer to them, 

‘‘agreements,’’ between a distant-site 

hospital or telemedicine entity 

providing the telemedicine services and 

a hospital or CAH that uses these 

services for the benefit of its patients. In 

these agreements, it is the responsibility 

of the hospital or CAH using the 

services to ensure that the specifics of 


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the proposed requirements in this rule 

are explicitly laid out before entering 

into such an arrangement. Along these 

lines, we have corrected an oversight in 

the proposed rule and have revised the 

requirements in this final rule to clarify 

that these agreements must be ‘‘written.’’ 

It has always been the intent of this rule 

to allow for hospitals and CAHs to have 

the option of credentialing and 

privileging the distant-site telemedicine 

practitioners using the traditional 

process. Hospitals and CAHs electing to 

use the traditional credentialing and 

privileging process must not be 

compelled by a distant-site telemedicine 

hospital (or distant-site telemedicine 

entity) to enter into an agreement that 

requires the use of the more streamlined 

approach as outlined here. 

Regarding the legal risks and 

liabilities of such agreements, the 

governing body of each individual 

hospital and CAH must weigh the risks 

and benefits of opting for this more 

streamlined process of credentialing and 

privileging telemedicine practitioners. 

We understand that there are many 

complex legal issues, including issues of 

liability, inherent to contracts and 

agreements between institutions. 

However, we believe that these issues 

are beyond the scope of this rule, and 

that any relevant legal issues must be 

worked out between the parties entering 

into the agreements in accordance with 

other laws and regulations governing 

such contracts or agreements. 

Comment: One commenter cited 

§ 482.12(b), under the ‘‘Exercise of 

rights’’ standard in the Patients Rights 

CoP, to state that the rule must contain 

language that requires the hospital or 

CAH to inform the patient about the use 

of telemedicine services for diagnostic 

care, so that the patient (or the patient’s 

representative as allowed under State 

law) may make an informed decision 

about whether to accept or decline care 

provided in this way. The commenter 

believes that the patient’s informed 

consent must be obtained by the 

hospital or CAH before it makes use of 

the telemedicine services. 

Response: We respectfully disagree 

with the commenter. In accordance with 

42 CFR 482.24(c)(2)(v), the medical staff 

generally specifies procedures and 

treatments, in addition to those required 

by applicable Federal or State law, that 

require informed consent. As long as the 

telemedicine practitioner is performing 

his or her duties within the privileges 

granted by the hospital or CAH, there is 

no difference between distant-site 

practitioners and in-house or on-site 

practitioners in this regard. If they 

provide treatment that, under medical 

staff policy, requires informed consent, 

then this consent must be obtained, 

regardless of whether the treatment is 

furnished using telemedicine or not. 

Likewise, if, as is typical, hospital 

medical staff or CAH professional staff 

policies do not require the patient’s 

informed consent in order for an on-site 

radiologist to interpret an x-ray or CT 

scan that had been performed on the 

patient, then consent also would not be 

required when a distant-site 

telemedicine radiologist, who is 

privileged by the hospital or CAH to 

interpret such diagnostic radiological 

tests, performs the same services. 

Comment: One commenter expressed 

concern that there is no incentive for a 

distant-site hospital to provide these 

services for independent physician 

groups without corporate affiliation, 

even if they happen to be on the distantsite hospital medical staff. 

Response: While it is not clear to 

whom this comment is referring (‘‘* * * 

independent physician groups without 

corporate affiliation, even if ‘they’ 

happen to be on the distant-site hospital 

medical staff * * *’’), the intent of this 

rule is not to provide business 

incentives for the provision of 

telemedicine services (as we believe 

they exist already), but to provide a 

more streamlined process for 

credentialing and privileging 

telemedicine practitioners that would be 

more efficient and less burdensome for 

all of the hospitals, CAHs, and distantsite hospitals involved in this process. 

We believe that by allowing for such an 

optional process, the incentives for 

distant-site hospitals to provide 

telemedicine services and for hospitals 

and CAHs to make use of these services 

will not diminish, but will greatly 

increase. Ultimately, we believe this 

will lead to even greater patient access 

to timely care that might not otherwise 

be available. 

Comment: A commenter questioned 

the long-run sustainability of increased 

workload associated with telemedicine 

(both at the patient-site and at the 

distant-site facility), which, in the 

commenter’s opinion, seems inevitable. 

The commenter also questioned 

whether our revisions would meet 

quality of care objectives within the 

commenter’s facility. 

Response: The goal of this proposed 

rule is to ensure that all patients have 

access to quality care in their 

communities. We believe that this rule 

provides the framework for such care. 

We also believe that providers and 

practitioners will continue to schedule 

patient visits and appropriately refer 

patients in such a manner as to not 

overwhelm either facility or its 

practitioners. We believe that this rule 

will increase patient access to specialty 

services and reduce burden on facilities 

and providers. 

Comment: One commenter believes 

that CMS should assess the impact of 

the final rulemaking on practitioners. A 

few commenters stated that these 

requirements will increase burden on 

practitioners, because they will 

experience significant downstream 

reporting requirements for purposes of 

medical licensure renewal. 

Response: It is not clear from the 

comments as to whom the commenters 

are referring with the term, 

‘‘practitioners.’’ Assuming that the 

commenters means those physicians 

and practitioners who are providing 

telemedicine services, we do not believe 

that this rule will increase the burden of 

reporting requirements for license 

renewal any more than the traditional 

credentialing and privileging processes 

presently do. 

Comment: Two commenters 

expressed support for the proposed 

regulation and requested that it be 

expanded to include small hospitals 

under 100 beds, as opposed to just rural 

hospitals that are participating in a 

State-approved telemedicine program. 

One commenter expressed concern that 

community-based facilities, which are 

neither hospitals nor CAHs (such as 

rural health clinics and federally 

qualified health centers), are not 

included in this rule as patient-site 

facilities. Another commenter requested 

that we expand the scope of the rule to 

all facilities regulated by Medicare. 

Response: We would like to thank the 

commenters for their support of the 

proposed rule. However, we would like 

to clarify that this rule applies to all 

Medicare-participating hospitals, 

regardless of facility size, as well as to 

all Medicare-participating CAHs. Rural 

health clinics and federally qualified 

health centers are subject to separate 

Medicare Conditions for Coverage that 

do not require credentialing and 

privileging of their physicians and 

practitioners, and thus there is no basis 

for extending this rule to those types of 

facilities. However, it should be noted 

that many insurers, including Medicare, 

may place limits or restrictions on their 

payment for telehealth services, 

depending on the location of the patient 

who receives those services. 

Comment: Two commenters stated 

their opposition to the proposed rule 

because they felt that it allowed 

privileging by proxy to which they are 

opposed. One commenter stated that the 

changes only invite misuse by hospital 

and CAH governing bodies seeking to 

sidestep medical staff decisions 

regarding credentialing and privileging 


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and to place direct economic pressure 

on hospital-based practitioners (with the 

threat of replacing them with distantsite practitioners). The commenter 

further stated that the changes will 

effectively remove the local medical 

staff from any obligation that they may 

have in determining the qualifications 

of each individual applying for 

privileges. 

Response: We respectfully disagree 

with the commenter. As we have stated 

previously, the requirements being 

finalized here are an option for hospitals 

and CAHs as they approach the 

credentialing and privileging process for 

telemedicine practitioners. Though we 

cannot estimate the numbers, we fully 

expect some hospitals and CAHs to 

continue credentialing and privileging 

telemedicine practitioners through the 

traditional process. Such decisions will 

have to be determined and agreed upon 

by each hospital and CAH, after the 

risks and benefits of each process are 

fully analyzed. Furthermore, since the 

practice of privileging by proxy has 

been common for TJC-accredited 

hospitals for several years now, there 

has been ample time for problems, such 

as the ones the commenter mentions, to 

come to light. We are not aware of any 

evidence that indicates these problems 

have arisen from this process. 

Comment: A few commenters 

expressed belief that some language we 

used throughout the proposed rule is 

ambiguous and confusing and suggested 

that the terms ‘‘distant-site hospital’’ and 

‘‘patient-site facility’’ be used 

consistently. Another commenter 

requested that we use the terms ‘‘distant 

site’’ and ‘‘originating site’’ to ensure 

consistency among CMS publications 

and avoid confusion. Another 

commenter requested that we clarify the 

nomenclature within the regulation so 

the responsibilities of each facility are 

explicit. 

Response: In drafting the proposed 

rule, we gave much thought to the terms 

that we would use to describe, and 

distinguish between, the hospital that 

provides the telemedicine services and 

the hospital or CAH that receives the 

telemedicine services on behalf of its 

patients. We came to the conclusion that 

it would only be more confusing (for a 

number of reasons) to use the terms 

‘‘distant site’’ and ‘‘originating site,’’ as 

they are contained in both the Act and 

the payment rules. First among these 

reasons is the fact that, under the Act, 

there are sites (for example, rural health 

clinics, federally qualified health 

centers, and physician and practitioner 

offices) that are defined as ‘‘originating,’’ 

but which do not apply in the context 

of the hospital and CAH CoPs. 

Additionally, the Act applies 

restrictions to these originating sites for 

specific Medicare payment purposes, 

which have no bearing on the hospital 

and CAH CoPs. 

We also considered other terms, such 

as ‘‘patient-site facility,’’ but found them 

too vague and inappropriate as well. 

Upon final analysis and consideration, 

we decided that distant-site hospital 

was an appropriate term to describe 

those larger hospitals that provide 

telemedicine services to patients of 

smaller hospitals and CAHs. 

In considering which term to use for 

a hospital or CAH whose patients 

receive telemedicine services, it became 

readily apparent to us that the clarity of 

the language in the proposed 

requirements was best served if we 

continued to use the terms used 

throughout the current hospital and 

CAH CoPs to describe the facility to 

which the CoPs applied and to which a 

survey (through either the State agencies 

or the national accreditation 

organizations) for compliance with the 

CoPs would be performed. Put simply, 

the hospital would be referred to as the 

‘‘hospital’’ and the CAH as the ‘‘CAH.’’ 

Any qualifying language preceding 

these terms might change the meaning 

and confuse which facility these CoPs 

applied. In some areas, we found it 

necessary to use qualifying phrases such 

as ‘‘the distant-site hospital providing 

the telemedicine services’’ and ‘‘the 

hospital (or CAH) whose patients are 

receiving the telemedicine services.’’ 

Therefore, we are finalizing these terms 

as proposed. 

Comment: One commenter requested 

that we define and distinguish the 

differences between telemedicine and 

telehealth. 

Response: In drafting this rule, we 

reviewed a variety of existing 

definitions of telemedicine and 

telehealth. The American Telemedicine 

Association states that 

‘‘videoconferencing, transmission of still 

images, e-health including patient 

portals, remote monitoring of vital signs, 

continuing medical education, and 

nursing call centers are all considered 

part of telemedicine and telehealth.’’ 

Other organizations describe 

telemedicine as one part of a larger 

category of telehealth. The Institute of 

Medicine of the National Academy of 

Science defines telemedicine as ‘‘the use 

of electronic information and 

communication technologies to provide 

and support health care when distance 

separates the participants.’’ According to 

the California Telemedicine and eHealth 

Center, ‘‘telehealth refers to a broader 

scope of services that includes 

telemedicine, but it also includes other 

services that can be provided remotely 

using communication technologies.’’ 

And the federal Office for the 

Advancement of Telehealth, describes 

telehealth as ‘‘including telemedicine 

and a variety of other services.’’ In 

addition, Section 1834(m) of the Social 

Security Act (the Act) addresses 

Medicare payment for ‘‘telehealth 

services.’’ In accordance with those 

statutory provisions, telehealth services 

are certain services provided by 

practitioners via a telecommunications 

system to patients of certain types of 

healthcare facilities (including hospitals 

and CAHs) and physician or practitioner 

offices that are located in rural areas. 

The consensus in the telemedicine/ 

telehealth community appears to be that 

telemedicine refers to the provision of 

clinical services to patients by 

practitioners from a distance via 

electronic communications and that it is 

included under the broader scope of 

telehealth, while the statutory Medicare 

telehealth payment provisions are 

considerably narrower. At § 1834(m) of 

the Act, telehealth services are defined 

as professional consultations, office 

visits, and office psychiatry services, 

and any additional service specified by 

the Secretary. Most significantly, the 

statute allows payment for services that 

are provided to patients in a variety of 

settings (otherwise known as 

‘‘originating sites’’ and which include 

physician or practitioner offices, CAHs, 

rural health clinics, and hospitals), but 

requires that all of these originating sites 

must be located in one of three areas: (1) 

An area that is designated as a rural 

health professional shortage area under 

section 332(a)(1)(A) of the Public Health 

Service Act (42 U.S.C. 254e(a)(1)(A)); (2) 

in a county that is not included in a 

Metropolitan Statistical Area; or (3) 

from an entity that participates in a 

Federal telemedicine demonstration. 

However, for the purposes of this rule, 

we see telemedicine as encompassing 

the overall delivery of healthcare to the 

patient through the practice of patient 

assessment, diagnosis, treatment, 

consultation, transfer and interpretation 

of medical data, and patient education 

all via a telemedicine link (for example, 

audio, video, and data 

telecommunications as may be utilized 

by distant-site physicians and 

practitioners), and which is not 

restricted to only patients in rural areas 

of the nation. Therefore, in order to 

make clear that the credentialing and 

privileging provisions finalized here 

apply to all Medicare-participating 

hospitals and CAHs and not to the 

narrower subset of services and sites 

eligible for Medicare telehealth 

payment, we chose to use the term, 


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‘‘telemedicine,’’ throughout this rule 

instead of ‘‘telehealth.’’ 

Comment: Two commenters stated 

that they do not support using the 

phrase ‘‘hospital’s patients.’’ They stated 

that often individuals who are not 

registered patients make use of a rural 

hospital’s telemedicine facilities 

without being registered patients. Two 

other commenters encouraged us to 

recognize and apply the proposed 

credentialing and privileging model to 

‘‘all types of patients.’’ One commenter 

requested clarification of the word 

‘‘patient’’ and suggests we further define 

that any reference to patient applies 

solely to inpatient services. 

Response: We are aware that 

individuals that are not patients 

sometimes make use of a rural hospital’s 

or CAH’s facilities and telemedicine 

equipment in order to effect what are 

essentially office visits with distant-site 

telemedicine practitioners. Since these 

individuals are not patients of the 

hospital or CAH, and the distant-site 

telemedicine practitioners are not seeing 

them as patients of the hospital or CAH, 

the CoPs would not apply in these 

situations. This speaks directly to the 

other comments above requesting that 

these requirements be applied to all 

types of patients and, conversely, that 

we clarify that these requirements apply 

only to inpatients. Simply stated, the 

hospital and CAH CoPs are intended to 

ensure the health and safety of those 

patients, inpatients as well as 

outpatients, who are hospital and CAH 

patients. 

Comment: A commenter expressed 

concern that patient-site hospitals may 

not have staff with appropriate expertise 

that would allow them to evaluate 

credentialing and privileging 

information for specialists. 

Response: The proposed and final 

rules address the commenter’s concern. 

Small hospitals and CAHs that believe 

they lack the expertise to perform 

credentialing and privileging for the 

telemedicine services of specialized 

practitioners already privileged at a 

distant-site hospital or telemedicine 

entity would have the option of relying 

upon the distant site’s privileging 

process instead. 

Comment: A commenter questioned 

whether it is sufficient for a distant-site 

hospital to provide the information in 

an agreement with the partnering 

patient-site institution. The commenter 

asked if the distant-site hospital is 

expected to provide the patient-site 

hospital with detailed information that 

may be contained in the physician’s 

credentialing file at the distant-site 

hospital. 

Response: We would expect the 

parties engaged in the agreement to 

determine, within the written details of 

the agreement or contract, how much 

information would need to be included 

and sent for each practitioner providing 

telemedicine services to the hospital or 

CAH. At the very least, as part of its 

agreement with the distant-site hospital, 

we would expect a hospital or CAH to 

have access to the complete 

credentialing and privileging file upon 

request for each practitioner who is 

covered by the agreement. 

Comment: We received a number of 

comments concerning the issue of State 

licensure and telemedicine 

practitioners. A few commenters stated 

that a telemedicine practitioner must be 

licensed in the State in which he or she 

is located as well as in any State(s) that 

he or she provides telemedicine services 

to patients. Other commenters asked for 

clarification on the term ‘‘recognized’’ as 

used in the proposed rule and asked if 

it was equivalent to the ‘‘privilege to 

practice’’ authority provided for by 

Nurse Licensure Compact States. A few 

commenters also stated that the 

licensure language was not clear and 

further stated that if it was intended that 

the requirements would allow for 

reciprocity agreements, endorsements, 

other compact arrangements, or 

situations where a State does not require 

local licensure, then the requirements 

should be amended to reflect this. 

Response: We appreciate the 

suggestions offered by commenters. 

However, we believe that the proposed 

licensure language provides enough 

flexibility to hospitals and CAHs so that 

they may address these issues in their 

required agreements with distant-site 

telemedicine hospitals and entities. In 

fact, our intention was that they should 

address such licensure issues in 

accordance with their respective State 

laws and regulations. We neither 

endorse nor prohibit licensure 

arrangements among States, which are 

mentioned above. Practitioners 

providing telemedicine services, as well 

as the distant-site hospitals and entities 

under whose auspices they provide 

these services, must be aware of the 

licensure laws in the States where they 

are located in addition to the laws, 

compacts, and arrangements of those 

States in which they look to provide 

their services to patients. 

CMS recognizes that practitioner 

licensure laws and regulations have 

traditionally been, and continue to be, 

the provenance of individual States, and 

we are not seeking to pre-empt State 

authority in this matter. We believe that 

the proposed requirements regarding 

State licensure leave room for the laws 

that exist today as well as any changes 

to these laws that may occur in the 

future, including any increase in the 

number of States that decide to engage 

in compacts, privilege to practice or 

reciprocity agreements, endorsements, 

and other arrangements regarding 

practitioner licensure. Therefore, we are 

finalizing this aspect of the 

requirements as proposed. 

Critical Access Hospital (CAH) CoPs 

(§ 485.616 and § 485.641) 

We proposed to make revisions to the 

CAH CoPs at § 485.616, ‘‘Agreements,’’ 

and § 485.641, ‘‘Periodic evaluation and 

quality assurance review.’’ We specified 

in the proposed rule that the majority of 

the proposed revisions, particularly 

those which mirror the proposed 

hospital revisions, are found in the 

‘‘Agreements’’ CoP, specifically 

§ 485.616(c). At § 485.616(c), we 

proposed a new standard entitled, 

‘‘Agreements for credentialing and 

privileging of telemedicine physicians 

and practitioners.’’ 

The proposed telemedicine 

credentialing and privileging 

requirements for CAHs are modeled 

after the hospital requirements, with 

almost no differences in the regulatory 

language. Since the only existing 

requirements in the CAH CoPs specific 

to the responsibility of the governing 

body to grant medical staff privileges 

concerns surgical privileges for 

practitioners, we proposed to add 

language that follows the language in 

the hospital requirements at § 482.12(a). 

This language delineates the 

responsibilities of the governing body 

for the professional staff privileging 

process. 

At § 485.641(b)(4)(iv), which does not 

have an equivalent provision in the 

hospital CoPs, we proposed to make a 

minor change to the CAH CoPs here. We 

proposed to add a new provision that 

would allow the distant-site hospital to 

evaluate the quality and appropriateness 

of the diagnosis and treatment furnished 

by its own staff when providing 

telemedicine services to the CAH. This 

proposed change would add distant-site 

hospitals to the three other entities 

already allowed to perform this function 

under the existing regulations. 

Comment: One commenter noted that 

we use slightly different language in the 

requirements for CAHs than we do for 

the hospital requirements, and stated 

that we do not discuss the reasons for 

the differences in the preamble to the 

proposed rule. The commenter noted 

that we state at § 485.616(c)(2) that the 

CAH’s ‘‘governing body or responsible 

individual may choose to rely upon the 

credentialing and privileging decisions 


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25558 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

made by the governing body of the 

distant-site hospital regarding 

individual distant-site physicians or 

practitioners.’’ 

Response: We thank the commenters 

for pointing out the discrepancy 

between the regulatory language for 

hospitals and that for CAHs in this 

instance. We have revised the hospital 

language to be consistent with that for 

CAHs. 

III. Provisions of the Final Rule 

Based on public comment and our 

own internal discussions, we are adding 

new provisions to this final rule that 

will apply to the credentialing and 

privileging process and the agreements 

between hospitals and CAHs and nonhospital, distant-site telemedicine 

entities that provide telemedicine 

services (§ 482.12(a)(9) and 

§ 482.22(a)(4) for hospitals; 

§ 485.616(c)(3) and § 485.616(c)(4) for 

CAHs). These new provisions will 

require the governing body of the 

hospital (or the CAH’s governing body 

or responsible individual), through its 

written agreement with the distant-site 

telemedicine entity, to ensure that the 

distant-site telemedicine entity, acting 

as a contractor of services, furnishes its 

services in a manner that enables the 

hospital (or CAH) to comply with all 

applicable conditions of participation 

and standards for the contracted 

services, including, but not limited to, 

the credentialing and privileging 

requirements regarding its physicians 

and practitioners providing 

telemedicine services. 

Essentially, the new provisions will 

allow for the governing body of the 

hospital (or the CAH’s governing body 

or responsible individual) to rely upon 

the credentialing and privileging 

decisions made by the distant-site 

telemedicine entity when making its 

own decisions on privileges for the 

individual distant-site physicians and 

practitioners providing such services, if 

the hospital’s governing body (or the 

CAH’s governing body or responsible 

individual) ensures, through its written 

agreement with the distant-site 

telemedicine entity, that the distant-site 

telemedicine entity’s medical staff 

credentialing and privileging processes 

and standards meet or exceed the 

standards at § 482.12(a)(1) through 

§ 482.12(a)(7) and § 482.22(a)(1) through 

§ 482.22(a)(2) for hospitals, and at 

§ 485.616(c)(1)(i) through 

§ 485.616(c)(1)(vii) for CAHs. 

Additionally, the hospital’s governing 

body (or the CAH’s governing body or 

responsible individual) must ensure that 

the distant-site telemedicine entity, 

through a written agreement, meets 

three other provisions finalized here 

(and similar to those proposed and 

finalized here for agreements between 

hospitals/CAHs and distant-site 

hospitals providing telemedicine 

services). 

Accordingly, we have made revisions 

to § 482.22(c)(6) and § 485.641(b)(4) to 

reference these new provisions 

pertaining to distant-site telemedicine 

entities as finalized in this rule. 

Additionally, we have made a 

revision to § 485.635(c). This standard 

currently requires a CAH to have 

agreements or arrangements with one or 

more Medicare-participating providers 

or suppliers in order to furnish other 

services to its patients. We saw that as 

an impediment to the agreements that 

CAHs may have with distant-site 

telemedicine entities under this final 

rule. Since these entities do not 

participate in Medicare, we needed to 

make an exception to the requirement at 

§ 485.635(c)(1). We have added a new 

paragraph at § 485.635(c)(5) to provide 

an exception to this requirement in 

cases where a written agreement exists 

between a CAH and a distant-site 

telemedicine entity for the entity’s 

distant-site physicians and practitioners 

to provide telemedicine services to the 

CAH’s patients. 

In this final rule, we have made two 

significant clarifying revisions to the 

language of the proposed rule. 

In the requirements for both hospitals 

and CAHs pertaining to the agreement 

with a distant-site hospital providing 

telemedicine services, we have 

corrected an oversight in the proposed 

rule and have revised the requirements 

in this final rule to clarify that these 

agreements or contracts must be written. 

We have also revised the hospital 

language to be more consistent with that 

for CAHs, where we now state that the 

hospital’s governing body may choose to 

have its medical staff ‘‘rely upon the 

credentialing and privileging decisions 

made by the governing body of the 

distant-site hospital regarding 

individual distant-site physicians or 

practitioners.’’ 

Finally, we have made a few minor 

clarifying revisions to the proposed rule 

in those places where we found 

inconsistencies in regulatory language 

and/or instances where we believe the 

language was not as clear as it should 

have originally been. 

IV. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 

30-day notice in the Federal Register 

and solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

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

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We solicited public comment on each 

of these issues for the following sections 

of this document that contain 

information collection requirements 

(ICRs): 

A. ICRs Regarding Condition of 

Participation: Governing Body (§ 482.12) 

Section 482.12(a)(8) requires the 

governing body of a hospital to ensure 

that, when telemedicine services are 

furnished to the hospital’s patients 

through an agreement with a distant-site 

hospital, the agreement is written and 

specifies that it is the responsibility of 

the governing body of the distant-site 

hospital to meet the requirements in 

paragraphs (1) through (7) of this section 

with regard to its physicians and 

practitioners providing telemedicine 

services. The burden associated with 

this requirement is the time and effort 

necessary for a hospital’s governing 

body to develop, review, and update as 

necessary the agreement with a distantsite hospital. We estimate that 4,860 

hospitals (not including 1,314 CAHs) 

must develop the aforementioned 

written agreement. We also estimate that 

the initial development of the agreement 

will take 1,440 minutes at an estimated 

cost of $1,996. Assuming at most an 

annual update, the review will take 360 

minutes at an estimated cost of $516. 

The total cost associated with this 

requirement is $2,512. 

Section 482.12(a)(9) requires the 

governing body of a hospital to ensure 

that, when telemedicine services are 

furnished to the hospital’s patients 

through an agreement with a distant-site 

telemedicine entity, the agreement is 

written and specifies that the distantsite telemedicine entity is a contractor 

of services to the hospital and as such, 

in accordance with § 482.12(e), 

furnishes services that permit the 

hospital to comply with all applicable 

conditions of participation and 

standards for the contracted services, 


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including, but not limited to, the 

requirements in paragraphs (a)(1) 

through (a)(7) of this section with regard 

to its physicians and practitioners 

providing telemedicine services. The 

burden associated with this requirement 

is the time and effort necessary for a 

hospital’s governing body to develop, 

review, and update as necessary the 

agreement with a distant-site 

telemedicine entity. While this 

requirement is subject to the PRA, the 

associated burden is accounted for in 

our discussion of § 482.12(a)(8). 

B. ICRs Regarding Condition of 

Participation: Medical Staff (§ 482.22) 

Section 482.22(a)(3) states that when 

telemedicine services are furnished to a 

hospital’s patients through an agreement 

with a distant-site hospital, the 

governing body of the hospital whose 

patients are receiving the telemedicine 

services may choose to have its medical 

staff rely upon the credentialing and 

privileging decisions made by the 

distant-site hospital when making 

recommendations on privileges for the 

individual physicians and practitioners 

providing such services. To do this, a 

hospital’s governing body must ensure 

that all of the provisions listed at 

§ 482.22(a)(3)(i) through (iv) are met. 

Specifically, § 482.22(a)(3)(iv) contains a 

third-party disclosure requirement. 

Section 482.22(a)(3)(iv) requires that 

with respect to a distant-site physician 

or practitioner, who holds current 

privileges at the hospital whose patients 

are receiving the telemedicine services, 

the hospital has evidence of an internal 

review of the distant-site physician’s or 

practitioner’s performance of these 

privileges and sends the distant-site 

hospital such information for use in the 

periodic appraisal of the distant-site 

physician or practitioner. At a 

minimum, this information must 

include all adverse events that result 

from the telemedicine services provided 

by the distant-site physician or 

practitioner to the hospital’s patients 

and all complaints the hospital has 

received about the distant-site physician 

or practitioner. 

The burden associated with this thirdparty disclosure requirement is the time 

and effort necessary for a hospital to 

send evidence of a distant-site 

physician’s or practitioner’s 

performance review to the distant-site 

hospital with which it has an agreement 

for providing telemedicine services. We 

estimate 4,860 hospitals (not including 

1,314 CAHs) must comply with this 

requirement. We estimate that each 

disclosure will take 60 minutes and that 

there will be approximately 32 annual 

disclosures. The estimated cost 

associated with this requirement is 

$1,088. 

Section 482.22(a)(4) states that when 

telemedicine services are furnished to 

the hospital’s patients through an 

agreement with a distant-site 

telemedicine entity, the governing body 

of the hospital whose patients are 

receiving the telemedicine services may 

choose, in lieu of the requirements in 

paragraphs (a)(1) and (a)(2) of this 

section, to have its medical staff rely 

upon the credentialing and privileging 

decisions made by the distant-site 

telemedicine entity when making 

recommendations on privileges for the 

individual distant-site physicians and 

practitioners providing such services, if 

the hospital’s governing body ensures, 

through its written agreement with the 

distant-site telemedicine entity, that the 

distant-site telemedicine entity 

furnishes services that, in accordance 

with § 482.12(e), permit the hospital to 

comply with all applicable conditions of 

participation and standards for the 

contracted services. To do this, a 

hospital’s governing body must ensure 

that all of the provisions listed at 

§ 482.22(a)(4)(i) through (iv) are met. 

Specifically, § 482.22(a)(4)(iv) contains a 

third-party disclosure requirement. 

Section 482.22(a)(4)(iv) states that with 

respect to a distant-site physician or 

practitioner, who hold current 

privileges at the hospital whose patients 

are receiving the telemedicine services, 

the hospital has evidence of an internal 

review of the distant-site physician’s or 

practitioner’s performance and sends 

the distant-site telemedicine entity such 

information for use in the periodic 

appraisal of the distant-site physician or 

practitioner. At a minimum, this 

information must include all adverse 

events that result from the telemedicine 

services provided to the hospital’s 

patients by the distant-site physician or 

practitioner and all complaints the 

hospital has received about the distantsite physician or practitioner. While this 

requirement is subject to the PRA, the 

associated burden is accounted for in 

our discussion of § 482.22(a)(3). 

C. ICRs Regarding Condition of 

Participation: Agreements (§ 485.616) 

Section 485.616(c)(1) states that the 

governing body of the CAH must ensure 

that, when telemedicine services are 

furnished to the CAH’s patients through 

an agreement with a distant-site 

hospital, the agreement is written and 

specifies that it is the responsibility of 

the governing body of the distant-site 

hospital to meet the requirements listed 

at § 485.616(c)(1)(i) through (vii) and 

§ 485.616(c)(2). The burden associated 

with this requirement is the time and 

effort necessary for a CAH’s governing 

body to develop, review, and update as 

necessary the agreement with a distantsite hospital. We estimate that 1,314 

CAHs must develop and review the 

aforementioned written agreement. We 

also estimate that development of the 

agreement will take 1,440 minutes 

initially and, assuming at most an 

annual update, the review will take 360 

minutes annually. The total cost 

associated with this requirement is 

$2,512. 

Section 485.616(c)(2) states that when 

telemedicine services are furnished to 

the CAH’s patients through an 

agreement with a distant-site hospital, 

the CAH’s governing body or 

responsible individual may choose to 

rely upon the credentialing and 

privileging decisions made by the 

governing body of the distant-site 

hospital for individual distant-site 

physicians or practitioners, if the CAH’s 

governing body or responsible 

individual ensures that all of the 

provisions listed at § 485.616(c)(2)(i) 

through (iv) are met. The burden 

associated with this third-party 

disclosure requirement at 

§ 485.616(c)(2)(iv) is the time and effort 

necessary for a CAH to send evidence of 

a distant-site physician’s or 

practitioner’s performance review to the 

distant-site hospital with which it has 

an agreement for providing telemedicine 

services. We estimate 1,314 CAHs must 

comply with this requirement. We 

estimate that each disclosure will take 

60 minutes and that there will be 

approximately 32 annual disclosures. 

The estimated cost associated with this 

requirement is $1,088. 

Section 485.616(c)(3) states that the 

governing body of the CAH must ensure 

that, when telemedicine services are 

furnished to the CAH’s patients through 

an agreement with a distant-site 

telemedicine entity, the agreement is 

written and specifies that the distantsite telemedicine entity is a contractor 

of services to the CAH and as such, in 

accordance with § 485.635(c)(4)(ii), 

furnishes services that enable the CAH 

to comply with all applicable conditions 

of participation and standards for the 

contracted services, including, but not 

limited to, the requirements in this 

section with regard to its physicians and 

practitioners providing telemedicine 

services. 

The burden associated with this 

requirement is the time and effort 

necessary for a CAH’s governing body to 

develop, review, and update as 

necessary the agreement with a distantsite telemedicine entity. We estimate 

that 1,314 CAHs must develop and 

review the aforementioned written 


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25560 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

agreement. We also estimate that 

development of the agreement will take 

1,440 minutes (that is, 24 hours) 

initially and, assuming at most an 

annual update, the review will take 

360 minutes (six hours) annually. The 

total cost associated with this 

requirement is $2,512. 

Section 485.616(c)(4) states that when 

telemedicine services are furnished to 

the CAH’s patients through an 

agreement with a distant-site 

telemedicine entity, the CAH’s 

governing body or responsible 

individual may choose to rely upon the 

credentialing and privileging decisions 

made by the governing body of the 

distant-site telemedicine entity 

regarding individual distant-site 

physicians or practitioners. The CAH’s 

governing body or responsible 

individual must ensure, through its 

written agreement with the distant-site 

telemedicine entity, that all of the 

provisions listed at § 485.616(c)(4)(i) 

through (iv) are met. The burden 

associated with this third-party 

disclosure requirement at 

§ 485.616(c)(4)(iv) is the time and effort 

necessary for a CAH to send evidence of 

a distant-site physician’s or 

practitioner’s performance review to the 

distant-site telemedicine entity with 

which it has an agreement for providing 

telemedicine services. While this 

requirement is subject to the PRA, the 

associated burden is accounted for in 

our discussion of § 485.616(c)(2). 

TABLE 1—ANNUAL REPORTING, RECORDKEEPING AND DISCLOSURE BURDEN

Regulation section(s) OMB Control 

No. 

Respondents Responses 

Burden per 

response 

(hours) 

Total annual burden 

(hours) 

Hourly 

labor cost 

of 

reporting 

($) 

Total labor 

cost of 

reporting 

($) 

Total capital/maintenance 

costs 

($) 

Total cost 

($) 

§ 482.12(a)(8) and 

(9).

0938–New .... 4,860 4,860 24 116,640 ** 9,700,560 0 9,700,560 

...................... 4,860 4,860 6 29,160 ** 2,507,760 0 2,507,760 

§ 482.22(a)(3) and 

(4).

0938–New .... 4,860 155,520 1 155,520 34 5,287,680 0 5,287,680 

§ 485.616(c)(1) and 

(3).

0938–New .... 1,314 1,314 24 31,536 ** 2,622,744 0 2,622,744 

...................... 1,314 1,314 6 7,884 ** 678,024 0 678,024 

§ 485.616(c)(2) and 

(4).

0938–New .... 1,314 42,048 1 42,048 34 1,429,632 .................. 1,429,632 

Total ................ ...................... 6,174 209,916 .................. 382,788 .................. .................. .................. 22,226,400 

** Wage rates vary by level of staff involved in complying with the information collection request (ICR). The wage rates associated with the 

aforementioned information collection requirements are listed in Tables 2–7 in the regulatory impact analysis of this final rule. 

V. Regulatory Impact Analysis 

A. Statement of Need 

Currently, a hospital or CAH receiving 

telemedicine services must go through a 

burdensome credentialing and 

privileging process for each physician 

and practitioner who will be providing 

telemedicine services to its patients. In 

the past, under the Joint Commission’s 

(TJC) statutory deeming authority, 

hospitals that were accredited by TJC 

were deemed to have met the CMS 

credentialing and privileging 

requirements. TJC’s ‘‘privileging by 

proxy’’ standards allowed for one Joint 

Commission-accredited facility to 

accept the privileging decisions of 

another Joint Commission-accredited 

facility. TJC has been statutorily 

required to meet or exceed our 

requirements regarding credentialing 

and privileging since July 15, 2010. 

This final rule will revise the 

conditions of participation (CoPs) for 

both hospitals and critical access 

hospitals (CAHs) and will implement a 

new credentialing and privileging 

process for physicians and practitioners 

furnishing telemedicine services. 

Additionally, and perhaps more 

significantly, failure to publish this final 

rule will place undue hardship and 

financial burden on those hospitals and 

CAHs who have been credentialing and 

privileging telemedicine practitioners 

under TJC’s ‘‘privileging by proxy’’ 

model. These hospitals and CAHs will 

have to take on the burden of 

credentialing and privileging a 

significant number of telemedicine 

practitioners in a relatively short period 

of time or they will have to consider 

canceling their telemedicine services. 

Cancellation of telemedicine services by 

small hospitals and CAHs will 

drastically reduce access to needed 

specialty services for a great number of 

patients, many of whom are Medicare 

beneficiaries. 

B. Overall Impact 

We have examined the impacts of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (February 2, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Social 

Security Act, section 202 of the 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), 

Executive Order 13132 on Federalism 

(August 4, 1999), and the Congressional 

Review Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

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

This rule is not an economically 

significant rule and does not impose 

significant costs. The benefits of 

finalizing this rule greatly outweigh any 

costs imposed. Conversely, the negative 

impacts on overall patient health and 

safety as well as on the operating costs 

of individual hospitals and CAHs were 

this rule not to be finalized would be 

significant compared to the minimal 

cost imposed by finalizing it here. 

Accordingly, we have prepared a 

regulatory impact analysis, which to the 

best of our ability, presents the costs 

and benefits of the rulemaking. 

A regulatory impact analysis (RIA) 

must be prepared for major rules with 

economically significant effects ($100 


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million or more in any 1 year). The RFA 

requires agencies to analyze options for 

regulatory relief of small businesses, if 

a rule has a significant impact on a 

substantial number of small entities. For 

purposes of the RFA, we estimate that 

the great majority of hospitals, including 

CAHs, are small entities as that term is 

used in the RFA. Individuals and States 

are not included in the definition of a 

small entity. While we do not believe 

that this final rule will have a 

significant impact on small entities, we 

do believe that this rule will have a 

positive impact by providing immediate 

regulatory relief for these small entities 

and will negatively impact them if not 

finalized here. Therefore, we are 

voluntarily preparing a Regulatory 

Flexibility Analysis. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 604 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a metropolitan statistical area and has 

fewer than 100 beds. This rule will not 

have a significant impact on small rural 

hospitals as it is intended to relieve the 

burden on hospitals, particularly on 

small rural hospitals and CAHs, and to 

reduce or eliminate the impact of the 

current regulatory impediments to 

efficient operation and patient access to 

essential healthcare services. Therefore, 

the Secretary has determined that this 

final rule will not have a significant 

negative impact on the operations of a 

substantial number of small rural 

hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require spending in any 1 year of $100 

million in 1995 dollars, updated 

annually for inflation. In 2011, that 

threshold is approximately $136 

million. This rule does not contain 

mandates that will impose spending 

costs on State, local, or tribal 

governments in the aggregate, or by the 

private sector, of $136 million. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

This final rule will not have a 

substantial direct effect on State or local 

governments, preempt State laws, or 

otherwise have a Federalism 

implication. 

C. Anticipated Effects 

1. Effects on Hospitals and Critical 

Access Hospitals (CAHs) 

We estimate the costs to hospitals and 

CAHs to implement this final rule with 

comment period to be minimal, 

particularly when weighed against the 

significant benefits that the rule would 

bring about by reducing the regulatory 

burden for hospitals and CAHs. The 

major costs are related to developing the 

agreement between the distant-site 

hospital or distant-site telemedicine 

entity and the hospital or CAH at which 

patients who receive the telemedicine 

services are located. Many hospitals and 

CAHs may already have such 

telemedicine service agreements in 

place and therefore would not incur the 

initial costs of developing such an 

agreement. 

Our figures, as of March 31, 2010, 

indicate that there were 4,860 hospitals 

and 1,314 CAHs (for a total of 6,174) 

participating in Medicare in the United 

States. However, we have no way of 

determining an exact number on which 

of these hospitals provide telemedicine 

services and which of these hospitals 

and CAHs receive telemedicine services, 

nor can we determine how many 

hospitals and CAHs already have 

telemedicine agreements. We do not 

have any reliable figures on the number 

of non-hospital, distant-site 

telemedicine entities that provide 

telemedicine services to hospitals and 

CAHs. Accordingly, we have based our 

cost estimates on the higher costs that 

would be incurred if every hospital and 

CAH in the United States was required 

to develop an agreement and review and 

update it annually. We prepared the 

cost estimates for hospitals and CAHs 

separately. However, all sides of this 

equation will require the initial services 

of a hospital or CAH attorney at an 

average of $86/hour; a hospital or CAH 

chief of the medical/professional staff (a 

physician) at an average of $103/hour; 

and a hospital or CAH administrator at 

an average of $69/hour. For the thirdparty disclosure requirements, we also 

prepared the cost estimates for hospitals 

and CAHs separately, though both will 

require the annual services of a medical 

staff credentialing manager or a medical 

staff coordinator at an average of $34/ 

hour. Our salary figures are the most 

recent wage estimates from the Bureau 

of Labor Statistics (http://www.bls.gov/ 

home.htm) with 33% added to the 

hourly wage to account for benefits. Our 

estimates of time and cost for each 

aspect of the agreement (development 

and initial cost, and annual review), as 

well as for the third-party disclosure, is 

as follows: 

TABLE 2—INFORMATION COLLECTION REQUIREMENTS FOR A HOSPITAL TO DEVELOP AN AGREEMENT FOR TELEMEDICINE

SERVICES: INITIAL COST

Individual Hourly wage Number of 

hours 

Cost per 

individual Total cost 

Attorney ............................................................................................................ $86 12 $1,032 ........................

Physician .......................................................................................................... 103 4 412 $1,996 

Hospital Administrator ...................................................................................... 69 8 552 ........................

TABLE 3—INFORMATION COLLECTION REQUIREMENTS FOR A HOSPITAL TO REVIEW AND UPDATE AN AGREEMENT FOR

TELEMEDICINE SERVICES: ANNUAL COST

Individual Hourly wage Number of 

hours 

Cost per 

individual Total cost 

Attorney ............................................................................................................ $86 2 $172 ........................

Physician .......................................................................................................... 103 2 206 $516 

Hospital Administrator ...................................................................................... 69 2 138 ........................


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Therefore, we estimate the total initial 

cost to develop the agreement for all 

4,860 hospitals to be $9.7 million. The 

annual cost to review agreements for all 

hospitals is estimated at $2.5 million. 

TABLE 4—INFORMATION COLLECTION REQUIREMENTS FOR A CAH TO DEVELOP AN AGREEMENT FOR TELEMEDICINE

SERVICES: INITIAL COST

Individual Hourly wage Number of 

hours 

Cost per 

individual Total cost 

Attorney ............................................................................................................ $86 12 $1,032 ........................

Physician .......................................................................................................... 103 4 412 $1,996 

CAH Administrator ........................................................................................... 69 8 552 ........................

TABLE 5—INFORMATION COLLECTION REQUIREMENTS FOR A CAH TO REVIEW AND UPDATE AN AGREEMENT FOR

TELEMEDICINE SERVICES: ANNUAL COST

Individual Hourly wage Number of 

hours 

Cost per 

individual Total cost 

Attorney ............................................................................................................ $86 2 $172 ........................

Physician .......................................................................................................... 103 2 206 $516 

Hospital Administrator ...................................................................................... 69 2 138 ........................

Therefore, we estimate the total initial 

cost to develop the agreement for all 

1,314 CAHs to be $2.6 million. The 

annual cost to review agreements for all 

CAHs is estimated at $678,024. 

TABLE 6—INFORMATION COLLECTION REQUIREMENTS FOR A HOSPITAL TO PREPARE AND SEND INDIVIDUAL PERFORMANCE

REVIEWS FOR TELEMEDICINE SERVICES (THIRD-PARTY DISCLOSURE): ANNUAL COST

Individual Hourly wage Number of 

hours Total cost 

Medical Staff Coordinator or Medical Staff Credentialing Manager ............................................ $34 32 $1,088 

Therefore, we estimate the total 

annual cost to prepare and send 

individual performance reviews for 

telemedicine services (third-party 

disclosure) for all 4,860 hospitals to be 

$5.3 million. 

TABLE 7—INFORMATION COLLECTION REQUIREMENTS FOR A CAH TO PREPARE AND SEND INDIVIDUAL PERFORMANCE

REVIEWS FOR TELEMEDICINE SERVICES (THIRD-PARTY DISCLOSURE): ANNUAL COST

Individual Hourly wage Number of 

hours Total cost 

Medical Staff Coordinator or Medical Staff Credentialing Manager ............................................ $34 32 $1,088 

Therefore, we estimate the total 

annual cost to prepare and send 

individual performance reviews for 

telemedicine services (third-party 

disclosure) for all 1,314 CAHs to be $1.4 

million. 

The total cost of the information 

collection requirements for both 

hospitals and CAHs is estimated to be 

$22.2 million. 

D. Conclusion 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

List of Subjects 

42 CFR Part 482 

Grant programs—health, Hospitals, 

Medicaid, Medicare, Reporting and 

recordkeeping requirements. 

42 CFR Part 485 

Grant programs—health, Health 

facilities, Medicaid, Medicare, 

Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR 

chapter IV as set forth below: 

PART 482—CONDITIONS OF 

PARTICIPATION FOR HOSPITALS 

■ 1. The authority citation for part 482 

continues to read as follows: 

Authority: Secs. 1102, 1871 and 1881 of 

the Social Security Act (42 U.S.C. 1302, 

1395hh, and 1395rr), unless otherwise noted. 

Subpart B—Administration 

■ 2. Section 482.12 is amended by 

adding new paragraphs (a)(8) and (a)(9) 

to read as follows: 

§ 482.12 Condition of participation: 

Governing body. 

* * * * * 

(a) * * * 


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Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 25563 

(8) Ensure that, when telemedicine 

services are furnished to the hospital’s 

patients through an agreement with a 

distant-site hospital, the agreement is 

written and that it specifies that it is the 

responsibility of the governing body of 

the distant-site hospital to meet the 

requirements in paragraphs (a)(1) 

through (a)(7) of this section with regard 

to the distant-site hospital’s physicians 

and practitioners providing 

telemedicine services. The governing 

body of the hospital whose patients are 

receiving the telemedicine services may, 

in accordance with § 482.22(a)(3) of this 

part, grant privileges based on its 

medical staff recommendations that rely 

on information provided by the distantsite hospital. 

(9) Ensure that when telemedicine 

services are furnished to the hospital’s 

patients through an agreement with a 

distant-site telemedicine entity, the 

written agreement specifies that the 

distant-site telemedicine entity is a 

contractor of services to the hospital and 

as such, in accordance with § 482.12(e), 

furnishes the contracted services in a 

manner that permits the hospital to 

comply with all applicable conditions of 

participation for the contracted services, 

including, but not limited to, the 

requirements in paragraphs (a)(1) 

through (a)(7) of this section with regard 

to the distant-site telemedicine entity’s 

physicians and practitioners providing 

telemedicine services. The governing 

body of the hospital whose patients are 

receiving the telemedicine services may, 

in accordance with § 482.22(a)(4) of this 

part, grant privileges to physicians and 

practitioners employed by the distantsite telemedicine entity based on such 

hospital’s medical staff 

recommendations; such staff 

recommendations may rely on 

information provided by the distant-site 

telemedicine entity. 

* * * * * 

Subpart C—Basic Hospital Functions 

■ 3. Section 482.22 is amended by— 

■ A. Adding new paragraphs (a)(3) and 

(a)(4). 

■ B. Revising paragraph (c)(6). 

The addition and revision read as 

follows: 

§ 482.22 Condition of participation: 

Medical staff. 

* * * * * 

(a) * * * 

(3) When telemedicine services are 

furnished to the hospital’s patients 

through an agreement with a distant-site 

hospital, the governing body of the 

hospital whose patients are receiving 

the telemedicine services may choose, 

in lieu of the requirements in 

paragraphs (a)(1) and (a)(2) of this 

section, to have its medical staff rely 

upon the credentialing and privileging 

decisions made by the distant-site 

hospital when making 

recommendations on privileges for the 

individual distant-site physicians and 

practitioners providing such services, if 

the hospital’s governing body ensures, 

through its written agreement with the 

distant-site hospital, that all of the 

following provisions are met: 

(i) The distant-site hospital providing 

the telemedicine services is a Medicareparticipating hospital. 

(ii) The individual distant-site 

physician or practitioner is privileged at 

the distant-site hospital providing the 

telemedicine services, which provides a 

current list of the distant-site 

physician’s or practitioner’s privileges 

at the distant-site hospital. 

(iii) The individual distant-site 

physician or practitioner holds a license 

issued or recognized by the State in 

which the hospital whose patients are 

receiving the telemedicine services is 

located. 

(iv) With respect to a distant-site 

physician or practitioner, who holds 

current privileges at the hospital whose 

patients are receiving the telemedicine 

services, the hospital has evidence of an 

internal review of the distant-site 

physician’s or practitioner’s 

performance of these privileges and 

sends the distant-site hospital such 

performance information for use in the 

periodic appraisal of the distant-site 

physician or practitioner. At a 

minimum, this information must 

include all adverse events that result 

from the telemedicine services provided 

by the distant-site physician or 

practitioner to the hospital’s patients 

and all complaints the hospital has 

received about the distant-site physician 

or practitioner. 

(4) When telemedicine services are 

furnished to the hospital’s patients 

through an agreement with a distant-site 

telemedicine entity, the governing body 

of the hospital whose patients are 

receiving the telemedicine services may 

choose, in lieu of the requirements in 

paragraphs (a)(1) and (a)(2) of this 

section, to have its medical staff rely 

upon the credentialing and privileging 

decisions made by the distant-site 

telemedicine entity when making 

recommendations on privileges for the 

individual distant-site physicians and 

practitioners providing such services, if 

the hospital’s governing body ensures, 

through its written agreement with the 

distant-site telemedicine entity, that the 

distant-site telemedicine entity 

furnishes services that, in accordance 

with § 482.12(e), permit the hospital to 

comply with all applicable conditions of 

participation for the contracted services. 

The hospital’s governing body must also 

ensure, through its written agreement 

with the distant-site telemedicine entity, 

that all of the following provisions are 

met: 

(i) The distant-site telemedicine 

entity’s medical staff credentialing and 

privileging process and standards at 

least meet the standards at § 482.12(a)(1) 

through (a)(7) and § 482.22(a)(1) through 

(a)(2). 

(ii) The individual distant-site 

physician or practitioner is privileged at 

the distant-site telemedicine entity 

providing the telemedicine services, 

which provides the hospital with a 

current list of the distant-site 

physician’s or practitioner’s privileges 

at the distant-site telemedicine entity. 

(iii) The individual distant-site 

physician or practitioner holds a license 

issued or recognized by the State in 

which the hospital whose patients are 

receiving such telemedicine services is 

located. 

(iv) With respect to a distant-site 

physician or practitioner, who holds 

current privileges at the hospital whose 

patients are receiving the telemedicine 

services, the hospital has evidence of an 

internal review of the distant-site 

physician’s or practitioner’s 

performance of these privileges and 

sends the distant-site telemedicine 

entity such performance information for 

use in the periodic appraisal of the 

distant-site physician or practitioner. At 

a minimum, this information must 

include all adverse events that result 

from the telemedicine services provided 

by the distant-site physician or 

practitioner to the hospital’s patients, 

and all complaints the hospital has 

received about the distant-site physician 

or practitioner. 

* * * * * 

(c) * * * 

(6) Include criteria for determining 

the privileges to be granted to 

individual practitioners and a procedure 

for applying the criteria to individuals 

requesting privileges. For distant-site 

physicians and practitioners requesting 

privileges to furnish telemedicine 

services under an agreement with the 

hospital, the criteria for determining 

privileges and the procedure for 

applying the criteria are also subject to 

the requirements in § 482.12(a)(8) and 

(a)(9), and § 482.22(a)(3) and (a)(4). 

* * * * * 


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25564 Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 

PART 485—CONDITIONS OF 

PARTICIPATION: SPECIALIZED 

PROVIDERS 

■ 4. The authority citation for part 485 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

Social Security Act (42 U.S.C. 1302 and 

1395(hh)). 

Subpart F—Conditions of 

Participation: Critical Access Hospitals 

(CAHs) 

■ 5. Section 485.616 is amended by 

adding a new paragraph (c) to read as 

follows: 

§ 485.616 Condition of participation: 

Agreements. 

* * * * * 

(c) Standard: Agreements for 

credentialing and privileging of 

telemedicine physicians and 

practitioners. (1) The governing body of 

the CAH must ensure that, when 

telemedicine services are furnished to 

the CAH’s patients through an 

agreement with a distant-site hospital, 

the agreement is written and specifies 

that it is the responsibility of the 

governing body of the distant-site 

hospital to meet the following 

requirements with regard to its 

physicians or practitioners providing 

telemedicine services: 

(i) Determine, in accordance with 

State law, which categories of 

practitioners are eligible candidates for 

appointment to the medical staff. 

(ii) Appoint members of the medical 

staff after considering the 

recommendations of the existing 

members of the medical staff. 

(iii) Assure that the medical staff has 

bylaws. 

(iv) Approve medical staff bylaws and 

other medical staff rules and 

regulations. 

(v) Ensure that the medical staff is 

accountable to the governing body for 

the quality of care provided to patients. 

(vi) Ensure the criteria for selection 

are individual character, competence, 

training, experience, and judgment. 

(vii) Ensure that under no 

circumstances is the accordance of staff 

membership or professional privileges 

in the hospital dependent solely upon 

certification, fellowship or membership 

in a specialty body or society. 

(2) When telemedicine services are 

furnished to the CAH’s patients through 

an agreement with a distant-site 

hospital, the CAH’s governing body or 

responsible individual may choose to 

rely upon the credentialing and 

privileging decisions made by the 

governing body of the distant-site 

hospital regarding individual distantsite physicians or practitioners. The 

CAH’s governing body or responsible 

individual must ensure, through its 

written agreement with the distant-site 

hospital, that the following provisions 

are met: 

(i) The distant-site hospital providing 

telemedicine services is a Medicareparticipating hospital. 

(ii) The individual distant-site 

physician or practitioner is privileged at 

the distant-site hospital providing the 

telemedicine services, which provides a 

current list of the distant-site 

physician’s or practitioner’s privileges 

at the distant-site hospital; 

(iii) The individual distant-site 

physician or practitioner holds a license 

issued or recognized by the State in 

which the CAH is located; and 

(iv) With respect to a distant-site 

physician or practitioner, who holds 

current privileges at the CAH whose 

patients are receiving the telemedicine 

services, the CAH has evidence of an 

internal review of the distant-site 

physician’s or practitioner’s 

performance of these privileges and 

sends the distant-site hospital such 

information for use in the periodic 

appraisal of the individual distant-site 

physician or practitioner. At a 

minimum, this information must 

include all adverse events that result 

from the telemedicine services provided 

by the distant-site physician or 

practitioner to the CAH’s patients and 

all complaints the CAH has received 

about the distant-site physician or 

practitioner. 

(3) The governing body of the CAH 

must ensure that when telemedicine 

services are furnished to the CAH’s 

patients through an agreement with a 

distant-site telemedicine entity, the 

agreement is written and specifies that 

the distant-site telemedicine entity is a 

contractor of services to the CAH and as 

such, in accordance with 

§ 485.635(c)(4)(ii), furnishes the 

contracted services in a manner that 

enables the CAH to comply with all 

applicable conditions of participation 

for the contracted services, including, 

but not limited to, the requirements in 

this section with regard to its physicians 

and practitioners providing 

telemedicine services. 

(4) When telemedicine services are 

furnished to the CAH’s patients through 

an agreement with a distant-site 

telemedicine entity, the CAH’s 

governing body or responsible 

individual may choose to rely upon the 

credentialing and privileging decisions 

made by the governing body of the 

distant-site telemedicine entity 

regarding individual distant-site 

physicians or practitioners. The CAH’s 

governing body or responsible 

individual must ensure, through its 

written agreement with the distant-site 

telemedicine entity, that the following 

provisions are met: 

(i) The distant-site telemedicine 

entity’s medical staff credentialing and 

privileging process and standards at 

least meet the standards at paragraphs 

(c)(1)(i) through (c)(1)(vii) of this 

section. 

(ii) The individual distant-site 

physician or practitioner is privileged at 

the distant-site telemedicine entity 

providing the telemedicine services, 

which provides a current list to the CAH 

of the distant-site physician’s or 

practitioner’s privileges at the distantsite telemedicine entity. 

(iii) The individual distant-site 

physician or practitioner holds a license 

issued or recognized by the State in 

which the CAH whose patients are 

receiving the telemedicine services is 

located. 

(iv) With respect to a distant-site 

physician or practitioner, who holds 

current privileges at the CAH whose 

patients are receiving the telemedicine 

services, the CAH has evidence of an 

internal review of the distant-site 

physician’s or practitioner’s 

performance of these privileges and 

sends the distant-site telemedicine 

entity such information for use in the 

periodic appraisal of the distant-site 

physician or practitioner. At a 

minimum, this information must 

include all adverse events that result 

from the telemedicine services provided 

by the distant-site physician or 

practitioner to the CAH’s patients and 

all complaints the CAH has received 

about the distant-site physician or 

practitioner. 

■ 6. Section 485.635 is amended by 

adding a new paragraph (c)(5) to read as 

follows: 

§ 485.635 Condition of participation: 

Provision of services. 

* * * * * 

(c) * * * 

(5) In the case of distant-site 

physicians and practitioners providing 

telemedicine services to the CAH’s 

patients under a written agreement 

between the CAH and a distant-site 

telemedicine entity, the distant-site 

telemedicine entity is not required to be 

a Medicare-participating provider or 

supplier. 

* * * * * 

■ 7. Section 485.641 is amended by 

revising paragraph (b)(4) to read as 

follows: 


jlentini on DSKJ8SOYB1PROD with RULES
Federal Register / Vol. 76, No. 87 / Thursday, May 5, 2011 / Rules and Regulations 25565 

§ 485.641 Condition of participation: 

Periodic evaluation and quality assurance 

review. 

* * * * * 

(b) * * * 

(4) The quality and appropriateness of 

the diagnosis and treatment furnished 

by doctors of medicine or osteopathy at 

the CAH are evaluated by— 

(i) One hospital that is a member of 

the network, when applicable; 

(ii) One QIO or equivalent entity; 

(iii) One other appropriate and 

qualified entity identified in the State 

rural health care plan; 

(iv) In the case of distant-site 

physicians and practitioners providing 

telemedicine services to the CAH’s 

patients under a written agreement 

between the CAH and a distant-site 

hospital, the distant-site hospital; or 

(v) In the case of distant-site 

physicians and practitioners providing 

telemedicine services to the CAH’s 

patients under a written agreement 

between the CAH and a distant-site 

telemedicine entity, one of the entities 

listed in paragraphs (b)(4)(i) through (iii) 

of this section; and 

* * * * * 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, Medicare 

Supplementary Medical Insurance Program). 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

Dated: January 27, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: April 29, 2011. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. 2011–10875 Filed 5–2–11; 11:15 am] 

BILLING CODE 4120–01–P 

DEPARTMENT OF DEFENSE 

Defense Acquisition Regulations 

System 

48 CFR Parts 211 and 237 

RIN 0750–AG72 

Defense Federal Acquisition 

Regulations Supplement; Guidance on 

Personal Services (DFARS Case 2009– 

D028) 

AGENCY: Defense Acquisition 

Regulations System, Department of 

Defense (DoD). 

ACTION: Final rule. 

SUMMARY: DoD has adopted as final, 

with changes, the interim rule that 

amended the Defense Federal 

Acquisition Regulation Supplement 

(DFARS) to implement section 831 of 

the National Defense Authorization Act 

for Fiscal Year 2009, which required 

DoD to develop guidance on personal 

services contracts. 

DATES: Effective Date: May 5, 2011. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Dustin Pitsch, 703–602–1014. 

SUPPLEMENTARY INFORMATION:

I. Background 

Section 831 required DoD to mitigate 

the risks associated with personal 

services by developing guidance 

enabling contracting officers to better 

distinguish between personal services 

and nonpersonal services. The interim 

rule amended DFARS parts 211 and 237 

to (1) require that statements of work or 

performance work statements clearly 

distinguish between Government 

employees and contractor employees 

and (2) ensure that procedures are 

adopted to prevent contracts from being 

awarded or administered as 

unauthorized personal services 

contracts. The interim rule included an 

internal requirement for a program 

manager, or equivalent, certification that 

the service contract requirement does 

not include an unauthorized personal 

services arrangement. Because of the 

differing missions of DoD agencies, the 

interim rule required agencies to adopt 

their own procedures. 

DoD published an interim rule at 75 

FR 54524 on September 8, 2010, to 

implement section 831 of the National 

Defense Authorization Act for Fiscal 

Year 2009 (Pub. L. 110–417, enacted 

October 28, 2009). The period for public 

comment closed on November 8, 2010. 

Five respondents provided public 

comments on the interim rule. 

II. Discussion and Analysis 

A. Support for DoD Actions 

Comment: A respondent noted the 

DFARS requirement for agency-level 

procedures to ensure that service 

contract requirements are vetted and 

approved in a manner that will prevent 

them from being awarded or 

administered as unauthorized personal 

services contracts. The respondent 

stated its support for Defense agencies 

taking internal action to ensure that no 

unauthorized personal services 

contracts are requested. Another 

respondent expressed support for the 

rule and stated that it ‘‘helps create a 

boundary separating contractor and 

government employees in all workplace 

environments.’’ 

Response: The respondents’ support 

is noted. No change to the DFARS in 

this area was requested or made. 

B. Limit Applicability 

Comment: Two respondents specified 

that the DFARS should highlight and 

limit applicability of this rule solely to 

personal services contracts, not the 

general service contract population. 

Response: No change was made in the 

final rule in response to this comment. 

It is precisely because of the potential 

for a migration of a ‘‘general service 

contract’’ into what is effectively a 

‘‘personal services contract’’ that the rule 

is necessary. DoD, with strong 

encouragement from the DoD Office of 

Inspector General, has determined that 

there is a need to review all services for 

the purpose of ensuring the services do 

not become personal services. 

C. Add More Guidance 

Comment: A respondent stated that 

DFARS 211.106 provides no actual 

guidance to the agencies as to what the 

distinction between Government 

employees and contractor employees is 

or how an agency is to make such a 

determination. At a minimum, the 

respondent states, it may be appropriate 

to include in DFARS 211.106 a cross 

reference to the characteristics and 

descriptive elements in FAR 37.104. 

The respondent thinks the rule does not 

provide any actionable direction to 

contractors on what behaviors would be 

acceptable for contractor employees 

based on the policies and practices of 

the location where the contractor 

employee is assigned. 

Response: A cross reference to FAR 

37.104 and the characteristics and 

descriptive elements therein has been 

added to DFARS 211.106. However, the 

DFARS cannot unnecessarily repeat, 

paraphrase, or otherwise restate material 

contained in the FAR (see FAR 

1.304(b)), so the DFARS addition was 

limited to a reference. Further, the 

agency-level procedures are the 

appropriate location for the actionable, 

agency-specific direction to contractors 

on acceptable behaviors. 

D. Add More Specific Contract 

Administration Procedures 

Comment: A respondent noted the 

absence in the interim rule, in DFARS 

parts 237 or 242, of procedures, 

guidance, or information focusing on 

postaward contract administration to 

prevent actual administration of a 

contract as an unauthorized personal 

services contract. The respondent 

recommended (a) referencing FAR 

37.104(d) in DFARS 237.503 and (b) 


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