67174 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 483

[HCFA–2180–F]

RIN 0938–AE61

Medicare and Medicaid; Resident

Assessment in Long Term Care

Facilities

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Final rule.

SUMMARY: This final rule establishes a

resident assessment instrument for use

by long term care facilities participating

in the Medicare and Medicaid programs

when conducting a periodic assessment

of a resident’s functional capacity. The

resident assessment instrument (RAI)

consists of a minimum data set (MDS)

of elements, common definitions, and

coding categories needed to perform a

comprehensive assessment of a long

term care facility resident. A State may

choose to use the Federally established

resident assessment instrument or an

alternate instrument that is designed by

the State and approved by us. These

regulations establish guidelines for use

of the data set and designation of the

assessment instrument.

The provisions contained in these

regulations implement statutory

requirements. The resident assessment

instrument is intended to produce a

comprehensive, accurate, standardized,

reproducible assessment of each long

term care facility resident’s functional

capacity.

EFFECTIVE DATE: Except for §§ 483.20(f)

and 483.315(h), these regulations are

effective March 23, 1998. Sections

483.20(f) Facility computerization

requirements and 483.315(h) State

computerization requirements are

effective June 22, 1998.

FOR FURTHER INFORMATION CONTACT:

Cindy Hake, (410) 786–3404.

SUPPLEMENTARY INFORMATION:

I. Background

On December 28, 1992, we published

in the Federal Register, at 57 FR 61614,

a proposed rule with an opportunity for

public comment, ‘‘Resident Assessment

in Long Term Care Facilities,’’ which

established a resident assessment

instrument that all long term care

facilities participating in the Medicare

and Medicaid programs must use when

conducting an assessment of a resident’s

functional capacity. We proposed that a

State may choose to use the Federally

established resident assessment

instrument or an alternate instrument

that is designed by the State and

approved by us. We proposed that a

facility must enter information from the

resident assessment into a computer, in

accordance with HCFA-specified

formats. At least monthly, the facility

must transmit electronically the

information contained in each resident

assessment to the State.

The resident assessment instrument

would consist of a minimum data set

(MDS) of screening and assessment

elements, including common definitions

and coding categories for use by a

facility in performing a comprehensive

assessment of a long term care facility

resident. In addition to containing

identifying information such as name,

birthdate, and occupation, the MDS

consists of standardized items that

assess, for example, a resident’s

communication patterns, cognitive

patterns, physical functioning and

structural problems, health conditions,

and medications. The proposed rule

established guidelines for use of the

data set, and designated one or more

assessment instruments that a State may

require a facility to use.

We proposed to add a new § 483.315,

which would require a State to specify

for use in long term care facilities

within the State either the HCFAdesignated resident assessment

instrument or an alternate instrument.

The State would request and receive

approval from us before implementing

or modifying an alternate instrument.

The uniform MDS was included in

§ 483.315(b). We also provided as

attachments to the regulations the

utilization guidelines for the resident

assessment instrument, MDS common

definitions, and resident assessment

protocols (RAPs).

II. Analysis of and Responses to Public

Comments

We received 146 timely letters in

response to our December 28, 1992,

proposed regulation. Most were from

provider organizations and nursing

home staff. We also heard from

consumer organizations, professional

organizations, nursing home residents

and their families, and State and Federal

agencies.

Prior to addressing comments on

specific regulatory sections, we will

provide a summary of public comments

on major topics, and discuss some of the

general issues raised by these

regulations (in the order in which those

issues appeared in the preamble to the

proposed rule).

Summary of Public Comments

Summary of Public Comments on MDS

During the public comment period,

respondents suggested over 70 different

additions to the MDS. Many

commenters suggested modifying items

to increase clarity. For example, the

item ‘‘wheeled self’’ was divided into

two items, ‘‘wheeled self on unit’’ and

‘‘wheeled self off unit’’ to further

differentiate a resident’s capabilities.

Commenters also suggested the addition

of items that provided information

needed by clinical staff caring for

residents. Data suggest that nursing

home residents experience pain on a

regular basis, but the MDS items

associated with pain did not

differentiate the intensity and location

of pain (chest, joint, other). We

expanded MDS items associated with

pain to assist clinicians in determining

the nature and scope of pain for care

planning purposes.

There was a concern expressed by

commenters that the MDS, as originally

designed, could not be used for

determining nursing home payment or

monitoring quality of care, either at the

resident and or the facility level. To

address this concern, we added items to

the MDS that are needed to support a

case-mix classification system for long

term care facility payment known as,

Resource Utilization Groups III, which

is a mechanism for determining the

level of resources necessary to care for

an individual based upon his clinical

characteristics as measured by the MDS.

This classification system was

developed under the auspices of the

HCFA-funded Multistate Nursing Home

Case-mix and Quality demonstration,

whose purpose is to develop, implement

and evaluate a case-mix payment system

for SNF services under Medicare. The

original four States participating in the

demonstration began using the MDS+

(an alternate RAI that consists of the

original MDS, plus additional

assessment items specified by the State

for use in all Medicare and Medicaidcertified nursing homes in the State),

based on the Resource Utilization

Groups III classification system in their

Medicaid programs in 1994, as have

several other States subsequently.

Section 4432 of the Balanced Budget

Act of 1997 (Public Law 105–33),

amends section 1888 of the Social

Security Act (the Act), by adding a new

subsection (e). The Balanced Budget Act

and the Prospective Payment System

(PPS) will require national

implementation in Fiscal Year 1998 of

a casemix payment system for Medicare

that is based on MDS data. The

Secretary determines the manner and
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67175

time frames within which resident

assessment data are collected at the

State and national levels to develop and

implement casemix payment rates. The

resident assessment data submitted to

the State is a resource upon which the

Secretary can draw for development and

implementation of the PPS system.

We added other items to the original

MDS to ensure that key indicators of

quality of care, (known as quality

measures) could be derived from the

MDS and monitored longitudinally at

the resident and facility level. The

addition of items needed to support

payment and quality monitoring

programs will also strengthen the

clinical relevancy of the MDS by

providing important information to

facility staff about the resident’s

potential for achieving the highest level

of functioning. One example of such

items are nursing care interventions

related to rehabilitation and restorative

care for the resident, such as range of

motion, training and skill practice in

walking, transferring, eating, dressing/

grooming, and communication.

Commenters were particularly

concerned with the ability of the MDS

to assist in assessing the quality of life

for nursing home residents. Revisions

we made within the section on mood

and behavior, in particular, have the

potential for providing important

information regarding the resident’s risk

for depression, as well as the presence

of depression. Nursing home residents

have a high risk of developing

depression, with clinical experts

estimating that at least 60 percent of

current nursing home residents have

some level of depression. However,

analysis of MDS records for a large

group of residents showed that the

mood and behavior items were checked

for only 16 percent of the residents. We

found that nursing homes that have

clinical staff with expertise in this area

identify more residents with mood and

behavior problems. Concerned that

residents with, or at risk of, depression

may not be identified, we have modified

the mood and behavior items to help

facility staff identify objective behaviors

frequently associated with depression.

We also added a scale to measure the

frequency with which these symptoms

occur. An item indicating the use of a

behavior management program was

modified to allow the assessor to

identify specific strategies that were

being used with the resident to deal

with mood and behavior symptoms.

Finally, commenters expressed

concern that the MDS was not

appropriate to use with some groups of

nursing home residents, such as the

non-elderly or short term stay

populations. To better understand the

changing nursing home population, we

have added an item in Section P that

identifies different populations often

served by nursing homes (for example,

pediatric resident, hospice care

resident). To address commenters’

concerns, we also added items focusing

more on short-term nursing and therapy

needs, and issues important to terminal

residents, such as pain. We also

expanded the item on discharge

planning to assess the resident’s

potential for discharge, including the

resident’s desire to return to the

community and the presence of a

support person who is positive towards

discharge. This item will also be useful

in developing a RAP on discharge

planning that was suggested by a

number of commenters.

Summary of Public Comments on

Triggers

Commenters believed that the trigger

legend was too complex and needed to

be simplified or eliminated. It is

substantially revised, and we have

reduced the number of triggers for

particular RAPs. We have also

eliminated the categories of automatic

and potential triggers as this had not

been well understood and sometimes

led to unnecessary work by nursing

home staff.

Summary of Public Comments on the

RAP Summary Form

We revised the RAP Summary Form

and accompanying instructions to

reduce confusion regarding their use

that was noted by commenters.

Specifically, the revised form provides a

column for indicating if the RAP was

triggered. It provides more specific

instruction and direction on the type of

information that we would expect a

facility to document for each triggered

RAP, including rationale to support

decision-making regarding whether to

proceed with a care plan for a triggered

RAP. Additionally, because we consider

the RAPs part of the utilization

guidelines for the MDS, we designated

the RAP Summary form as Section V of

the MDS. This will provide nursing

home staff and surveyors with more

complete information on resident care

problems and outcomes. This will also

permit surveyors to monitor the

completion of the RAPs.

Summary of Public Comments on RAPs

Most of the commenters valued the

RAPs as part of the RAI for improving

the quality of care. A number of

commenters indicated the need for the

addition of new RAPs. Specifically, we

received comments suggesting the

creation of RAPs on discharge planning,

pain, terminal care/imminent death,

resident rights, bowel incontinence/

constipation, abnormal lab values, and

foot care. A new RAP on discharge

planning is already developed and we

expect to develop other RAPs during

1997.

There was also concern that many of

the current RAPs do not address the

needs of short-stay residents. Work is

currently in progress and we expect to

publish revised RAP Guidelines that

address the needs of this population in

1997.

Comments on MDS and RAPS

Comment: Most commenters asserted

that the original MDS did not provide

enough information in some areas.

These commenters noted that the areas

of nursing diagnosis and medical needs,

and certain information needed for care

planning, were lacking. Some

commenters stated that professional

nurses are knowledgeable regarding

areas that are not addressed on the MDS

and automatically incorporate them into

the assessment and care plan. Another

commenter pointed out that the MDS+

includes additional information that is

helpful in care planning.

Response: As discussed elsewhere, we

have added a number of items that

nursing home staff have identified as

useful in assessing a resident’s

functional capability and medical

problems. We have also clarified items

that had been confusing for facility staff

in the past. Some of the items added to

the MDS were previously on the MDS+.

We believe that the MDS captures

information on most of the areas of

concern in assessing nursing home

residents. While we agree that there are

additional items that would provide

necessary information for nursing home

staffs’ use in care planning, it is not

possible for us to design an instrument

that covers every potential item that a

nursing home needs to know to provide

care to residents. The RAI is not

intended to replace or substitute for a

resident’s full clinical record. The

facility should document in those

clinical records pertinent information

whether or not required by the RAI. A

facility is responsible for providing care

that is necessary to assist a resident in

attaining or maintaining his or her

highest practicable well-being,

regardless of whether the care areas are

captured on the MDS. A facility may

document additional information

regarding the resident’s status wherever

it chooses in the resident’s clinical

records.

Comment: One commenter urged that

we move cautiously in adding any other
67176 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

data elements to the MDS, explaining

that some States with a non-MDS based

case-mix system are having difficulty

merging the MDS and their

reimbursement system. Other

commenters disagreed regarding the

need to add items to the MDS at this

time. They thought that we should

maintain the status quo until the

industry and surveyors have more fully

understood and integrated the current

instrument into their way of doing

business. Commenters mentioned that

the MDS is a screening tool that already

contains most of the relevant items. One

commenter stated that the original MDS

underwent extensive scrutiny and

testing during its development and

should be kept as is for at least 10 years

in order to maintain consistency for

providers, computer companies,

research, and case-mix reimbursement.

Response: We disagree regarding the

need to maintain the MDS for the next

several years in the form it was

originally issued in 1990 (not as revised

in 1995 in version 2.0). Many of the

changes in version 2.0 of the MDS were

made to address areas that had been

particularly troublesome or poorly

understood by clinicians responsible for

completing the RAI. Moreover, changes

in the MDS have not been frequent

enough to cause significant disruption

for facilities. Nearly all States began to

require use of the original RAI in late

1990 or early 1991, and most did not

require facilities to use the new RAI

until January 1996 (with some States

deferring that requirement to 1997).

This means that the original RAI was in

place for nearly 5 years before facilities

were expected to change to the new

instrument. Additionally, it is less

burdensome and confusing to

incorporate necessary improvements in

the RAI at this time than it will be after

implementation of requirements in this

regulation for facility computerization

of MDS information. Overall, the

advantages of implementing version 2.0

of the RAI in 1996 far outweigh

maintenance of the original assessment

system.

If clinically warranted and supported

by affected parties, we anticipate

reviewing the MDS every 3 to 5 years to

determine whether it needs to be

revised, and sponsoring the

development of a new version of the

RAI approximately every 5 years. For all

RAI refinement activities, we will seek

the input of interested and affected

parties.

Comment: Several other commenters

expressed the belief that we should

conduct more RAI training on a national

level and institute a facility support

effort, rather than making major changes

to the instrument.

Response: We support the need for

more RAI training at all levels and have

numerous activities underway to

strengthen the knowledge of facility

staff and surveyors about

comprehensive assessment and its

linkage to resident care planning and

quality of care. The need for additional

RAI training has been consistently

supported by the States, provider,

consumer and professional associations

with which we have worked to develop

version 2.0 of the RAI. In 1995, we

published a new edition of the Resident

Assessment Instrument User’s Manual

for version 2.0 of the RAI that contains

new information on the use of the RAPs

and linking the RAI to care plans. We

have developed ‘‘train the trainer’’

materials for use in both provider and

surveyor training, and have begun a

multi-year effort to develop educational

materials for both providers and

surveyors at both basic and advanced

levels. We train all long term care

facility surveyors on the RAI as part of

our basic health surveyor course and

have offered specialty courses on

advanced resident assessment issues for

surveyors as well as other State staff on

a routine basis. We also offered a fullday program on resident assessment for

all long term care facility surveyors

during each of the HCFA regional

conferences held during 1994. We are

committed to working in partnership

with providers and States to identify

training needs and develop methods to

facilitate the dissemination of consistent

information and improve providers’ use

of the RAI in order to improve care

outcomes for nursing home residents.

We believe that the industry also

shares a responsibility to promote

understanding of the RAI within

facilities. Provider and professional

organizations should offer sessions on

resident assessment during their annual

meetings or as special continuing

education programs held throughout the

course of the year. Our staff have

participated in a number of national

meetings and will continue to do so, as

warranted. However, we believe that

providers can best learn how to

integrate RAI requirements into their

daily practice from other providers who

have implemented successful programs.

We encourage the use of ‘‘peer

teaching’’ programs in a variety of

forms.

Beneficiary organizations have also

played an important role in getting

information on the RAI out to their

members. The organizations have

educated residents, families and

ombudsmen regarding the role of

resident assessment in quality care and

how to use the RAI in care planning and

conflict resolution. They also provided

invaluable input in modifying the RAI.

As part of a contract with us, the

Research Triangle Institute evaluated

the extent to which facilities had

implemented the RAI as well as the

accuracy of the assessments being

conducted. The Research Triangle

Institute compared available assessment

information for 23 specific assessment

items in facilities both before and after

the implementation of the RAI. Their

sample consisted of over 260 facilities

in 10 States. The Research Triangle

Institute’s results showed that:

• The percent of residents with no

assessment information available for

particular health status issues decreased

on average by 81 percent;

• The percent of residents with

accurate information documented on

assessment items increased on average

by 24 percent;

• The percent of residents with

available information on all 23 items

increased by 53 percent.

The Research Triangle Institute’s

study asserts that facilities are using the

RAI, and that the RAI has resulted in the

presence of more accurate information

on which a facility can base its

individualized care plans.

Comment: Commenters addressed the

usefulness of the RAPs. Of those who

responded to this request for comment,

some said that the RAPs are useful and

provide a structured framework for

making sense of the MDS data through

analysis, interpretation, and synthesis,

believing that the RAPs tie the

assessment process together. A

consumer advocacy organization

believed that the RAPs assist facility

staff in learning causes of problems and

identifying potential risks of decline

that require further staff attention. A few

said that the RAPs have improved the

quality of care in nursing homes, or

could with the appropriate training and

administrative support.

Response: The RAPs are structured

decision frameworks which contain

guidelines for additional assessment of

relevant resident attributes, risk factors,

clinical history and other factors. They

assist with clinical decision-making and

help nursing home staff gather and

analyze necessary information to

develop an appropriate and

individualized care plan.

The Guidelines section of each RAP

assists staff to determine whether a

problem exists and to identify relevant

causal factors that affect the resident’s

condition. The RAPs also offer

suggestions regarding how a facility can

eliminate or minimize factors
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67177

contributing to the resident’s problem,

or how a facility can maximize a

resident’s strengths to achieve the

highest practicable well-being. In this

way, the RAPs help facility staff to

develop an individualized care plan that

meets the needs of the resident.

According to the report of the

Research Triangle Institute’s study,

directors of nursing indicated the RAP

triggers and guidelines were used

routinely in over 90 percent of the

facilities participating in the survey.

Three-quarters of the directors of

nursing stated that they believed that

use of the RAP triggers had increased

their facility’s ability to identify

residents’ clinical problems, and twothirds believed that using the RAPs had

increased their facility’s ability to

identify residents’ potential for

rehabilitation improvement.

Among the 180 directors of nursing

who thought the RAP triggers had

increased identification of clinical

problems, 45 percent were able to

identify, without prompting, specific

RAPs for which this increase was most

pronounced. They most frequently cited

cognitive loss/dementia (21 percent),

ADL/functional rehabilitation potential

(17 percent), delirium (16 percent), and

communication (15 percent). Seventytwo percent of the directors of nursing

interviewed stated that they did not

believe it had been at all difficult for

staff to provide necessary care in

response to the newly identified clinical

problems.

Comment: Some commenters believed

that the RAPs are too prescriptive, and

that we are ‘‘legislating a cookbook

approach.’’

Response: RAPs function as residentcare related assessment tools rather than

as clinical standards. RAPs do not

contain prescriptive mandates to

perform particular diagnostic tests or

specialized assessments. Rather, RAPs

lead facility staff through a process that

enables them to gain a better

understanding of the resident’s status in

a particular area.

For each resident, facility staff are

required to make decisions regarding

whether each RAP that triggered for that

resident identifies a problem that

requires care planning and intervention.

Staff are required to proceed with a care

plan only if clinically appropriate. As

part of the RAP review process, facilities

are required to document key

information regarding a particular area

or condition that includes objective

findings and subjective complaints of

the resident. Irrespective of RAI

requirements, this type of information

should be routinely assessed and

documented by a facility as a part of

good clinical practice. We do not

require that a facility provide

documentation that addresses each

issue or question raised in a particular

RAP guideline. We disagree that the

RAPs represent a cookbook approach.

The RAPs are tested assessment

protocols that lead facility staff through

a focused, logically progressive, clinical

evaluation of the resident, relative to the

particular area addressed by the RAP.

The RAPs are not intended to prescribe

courses of action for a facility. Rather,

they provide a structured, problemoriented framework for organizing MDS

information and additional clinically

relevant information that identifies

medical problems. Upon completion of

the RAPs, the facility staff will have:

• Identified clinical issues unique to

the resident that may adversely affect

his or her highest practicable level of

well-being;

• Identified factors that place the

resident’s highest practicable

functioning at risk;

• Considered whether the identified

potential problems could be prevented

or reversed, or risk factors minimized,

and evaluated the extent to which the

resident is able to attain a higher level

of well-being and functional

independence; and

• Evaluated ongoing care practices for

the individual resident.

Comment: One commenter asked that

we not mandate standards for care

planning until there is better

understanding of how the assessment

process works. The commenter stated

that a great deal of work needs to be

done in setting up appropriate standards

for care planning.

Response: Neither the RAPs, nor any

other component of the RAI contains

required standards of care or standards

regarding the specific interventions and

time frames for evaluation that must be

present in care plans. As noted in the

responses above, the RAPs are a

structured framework that lead the

facility through more in-depth

assessment; they do not mandate a

course of action for care planning. A

facility has a great deal of flexibility in

developing a care plan to meet a

resident’s individual needs.

Comment: Some who commented

thought that the RAPs are too complex

and difficult to use. One expressed the

belief that the RAPs are not the only

correct criteria for providing good care.

Another pointed out that it has been a

difficult learning process for facilities to

understand that the MDS provides only

raw data about a resident. Commenters

recommended that some of the RAP

items be included in the MDS as core

assessment items.

Response: We agree that there has

been a steep learning curve in terms of

facilities’ understanding of the RAPs

and their ability to integrate them into

day-to-day clinical process.

Anecdotally, and more recently

supported in the Research Triangle

Institute study, facilities report that

understanding and use of the RAPs has

lagged well behind that of the MDS.

Recognizing that the system required a

major learning process, we have tried to

address the RAPs in newer versions of

our train-the-trainer courses offered

annually for State RAI coordinators.

Initially, our courses and materials

focused on use of the MDS, then use of

the RAPs, then integration of the RAI in

care planning. Many States are still in

the process of conducting training

sessions for providers on use of the

RAPs and care planning.

We also have made revisions to the

RAP Summary form and our

instructions regarding use of the RAPs

in order to make them easier to

understand and use. We will continue

to refine our training products as well

as evaluate facility staffs’ ability to use

the RAPs. If problems are identified, we

are open to exploring ways to revise the

RAP format or content in order to make

the comprehensive assessment process

more meaningful and productive for

both facility staff and residents. We

have incorporated some additional RAP

triggers into the MDS and integrated

assessment procedures contained in the

RAP Guidelines throughout the

instructions contained in the October

1995 edition of the RAI User’s Manual.

Comment: A few commenters

suggested that we make the RAPs

available to facilities on request.

Commenters asserted that often there is

not a copy at the nurse’s station.

Response: We agree that it is

important for the RAPs to be available

for staff use. In 1990, we sent

information to each nursing home

administrator regarding the RAI, and

this information included a copy of the

RAPs. Additionally, in 1990, we

provided each State with a cameraready copy of the original version of the

RAI, and in 1995, we provided each

State with a camera-ready copy of the

new RAI, version 2.0. States were then

responsible for providing facilities with

a copy of the revised RAI including the

RAPs.

We do not believe it is our

responsibility to ensure that each

nursing home currently has a copy of

the RAPs. Facilities could request a

copy from States, provider organizations

or from other sources. However, we are

exploring strategies to improve

consistent distribution of RAI
67178 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

information to nursing homes and

ensure that clinical staff have access to

the RAI User’s Manual. We believe that

for the RAPs to be used as intended, a

copy of the RAPs should be available at

each nursing station. States are

responsible for communicating with

facilities regarding the State-specified

instrument and should, therefore,

ensure that the facilities have the most

current RAPs.

Comment: Some commenters wanted

more flexibility in using the RAPs. They

thought the RAPs should be adaptable,

and, as professionals, facility staff

should be able to pick and choose

appropriate interventions from those

suggested in the RAPs. Commenters also

suggested that we make the RAPs

optional. One commenter believed that

the final product and process forces

health care professionals into a format

that stifles flexibility and interferes with

the assessment and care planning

process. Another suggestion was to

allow a facility to use the RAPs as a

flexible assistive device in care

planning.

Response: We agree that facility staff

are capable professionals and, as such,

should be able to use the RAPs as is

appropriate for each individual resident.

This has always been our intent

regarding their use. A facility may

supplement the RAP assessment.

We believe that negative feelings

regarding the utility of the RAPs are

associated with lack of understanding of

their use. As aforementioned, our

training in the past did not focus on the

RAPs. It has been our experience that

facility staff who have been properly

trained on the RAPs and integrated

them into their clinical practice are

convinced of their utility and positive

effects on resident outcomes.

We do not believe that use of the

RAPs should be optional, as they reflect

necessary components of a

comprehensive assessment. The RAPs

represent a standard methodology for

assessing and analyzing certain aspects

of resident status. As part of the

utilization guidelines for the RAI, the

RAPs ensure consistent identification of

medical problems and description of

functional capabilities. They

supplement the MDS to provide a

standardized comprehensive assessment

as is required by the Omnibus Budget

Reconciliation Act of 1987 (OBRA ’87).

Comment: A few commenters

suggested that we collaborate with the

Department’s Agency for Health Care

Policy and Research and the industry to

make the RAPs more germane to current

industry practice, knowledge, and

standards. One commenter wanted us to

provide actual assessment tools and

decision trees. A State provider

association recommended that the RAI

contain fewer RAPs, and furthermore,

that we encourage facilities to develop

their own triggers consistent with their

care planning system.

Response: We collaborated

extensively with the industry in

developing the original 18 RAPs. The

Department’s Agency for Health Care

Policy and Research was not yet in

existence when we developed the

original RAPs. In revising the RAPs, we

will seek the input of interested and

affected parties. Regarding the comment

to develop assessment tools and

decision trees, it would be difficult for

us to develop decision trees that cover

all possible scenarios. We do not wish

to require such a methodology for

completing the RAPs, as it would limit

the flexibility of facilities. Most

providers have tended to request that

we develop more RAPs, rather than

fewer. We have an ongoing process for

developing new RAPs by clinical

experts and validating the RAPs through

testing. Also, we will review the content

of the current RAPs to ensure that they

contain information pertinent to the

changing nursing home population. We

do not anticipate issuing changes to the

RAPs more frequently than once a year.

States may, with our approval, revise

their instruments as frequently as they

deem necessary.

Triggers are risk factors or strengths

that are indicative of a need for

additional assessment. They do not

automatically flag all problems worthy

of care planning. The original triggers

were developed using an expert

consensus process and have been

empirically validated. As such, it is

inappropriate to suggest that a facility

identify its own triggers based on their

care planning systems. A facility may

choose to add additional triggers, but

must use at least the triggers identified

in the State RAI. Facility staff may

choose to assess residents using the

RAPs even if the RAPs are not triggered.

Comment: Commenters suggested that

we emphasize that the RAP process is

not limited to the completion of the

RAP Summary form. It includes the

need to understand why the resident’s

condition triggered the RAP. The

commenter also recommended that the

RAI Training Manual contain a set of

examples concerning how to use the

information in the RAPs as part of the

assessment process.

Response: We agree that the RAP

process is not merely filling out the RAP

Summary form, but is an important link

between gathering assessment

information and developing the

appropriate care plan. In April 1992, we

issued guidance to our regional offices

and the States regarding the RAP

process and other policy issues. We also

shared this information with provider

and consumer organizations. We have

revised the RAI User’s Manual to

include this guidance and more specific

instructions and examples, including

RAP documentation and linkages to care

planning. In October 1995, we

distributed to States and associations

‘‘train the trainer’’ materials that

included special course content for RAI

surveyors and trainers. This included

instructions on using the RAPs.

Comment: A commenter urged that

we structure the RAPs so that they

identify resident problems,

complicating conditions and risk

factors. The individual stated that some

RAPs are currently in this structure and

that this would make the RAPs easier to

use.

Response: We believe that all RAPs

presently contain this information.

However, we are open to reviewing the

RAPs to ensure that their format is

consistent as a part of our ongoing RAP

review and refinement process that we

began in 1995.

Comments on the Development of a

Computerized National Data Base of

Assessment Information

Comment: Generally, commenters that

supported the proposed requirement to

computerize the MDS included State

governments and national and State

provider organizations. One State

expressed the belief that

computerization should be optional;

they thought that States should

determine when and whether

participation is feasible given the States’

prevailing conditions.

Response: We intend to implement a

Federal process for assuring and

improving quality in this country’s

nursing homes which relies on residentlevel MDS assessment data reported by

nursing homes participating in

Medicaid and Medicare. Furthermore,

our intention is to improve the Federal

long term care survey process by using

information derived from MDS data to

identify potential quality problems

within nursing facilities. The goals of

this approach are twofold: to improve

care received by beneficiaries by

enhancing the timeliness and

effectiveness of facility monitoring; and

to better utilize survey agency resources

by targeting potential problem facilities

and by focusing onsite survey activities

on specific problem areas within a

facility.

We view the collection of MDS data

and its use within a standardized survey

process, as defined under our State
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67179

Operations Manual as being consistent

with our current practices. Under the

present survey process, the facility must

submit specific information to the State

survey agency, including data on

resident census, facility staffing and

ownership status. These facility-specific

data, along with other information

gathered by the survey team (for

example, facility deficiency

information) are currently maintained

both at State agencies and within a

national data base maintained by HCFA.

In addition, survey teams review

residents’ clinical records and other

resident-specific information. The

submission and use of MDS data within

the context of facility regulation is

entirely consistent with existing

practices and our obligation to collect

the information necessary to ensure the

quality of care provided to residents of

Medicare and Medicaid certified long

term care facilities.

Automated data collection is essential

to meaningful analysis of the quantity of

data collected. The MDS data system

would allow us to expand our existing

system for gathering data related to

quality, and provide us with objective

and detailed measures of the health

status and care outcomes for residents of

a facility. Coupled with facility

characteristic and deficiency history

data, we expect the MDS system will be

more reliable and effective in

supporting early identification of

potential care problems and directing

the survey process towards these

identified problem areas.

In their roles as our agents for

conducting regulatory survey and

quality assurance activities, States will

be required to process and analyze MDS

data reported by facilities to meet the

objectives stated above. MDS

information collected by States will also

be used to construct a national

repository of MDS assessments. The

national data base will be used to serve

numerous functions: to study and refine

the quality measures used to direct

survey activities of State agencies (for

example, to enhance the ability of these

indicators to support survey targeting);

to understand the characteristics of the

nation’s nursing home residents and the

services they receive; to measure the

impact of regulation and assist in the

formulation of national health care

policy; and to provide researchers with

information needed to evaluate the

outcomes of various types of care and to

improve standards of clinical practice.

Our authority to require

computerization of MDS information is

based on our general authority to set

health and safety standards for

providers under sections 1819(f)(1) and

1919(f)(1) of the Act. We will use the

computerized data to establish

standards, evaluate a facility’s

compliance with these standards, and

review the standards’ effectiveness and

their continued appropriateness. For

example, analysis of MDS assessments

within a national repository might

indicate an increase in the number of

residents suffering from depression. We

may then develop standards to assist

facility staff in detecting and treating the

disease. Such a standard could then be

evaluated and its effectiveness assessed

by a process of continually re-analyzing

the MDS data base for changes in the

prevalence of this characteristic over

time.

Computerization of RAI data is also

consistent with our authority under

sections 1819(h)(3) and 1919(h)(3) of the

Act to perform, review and validate

facility surveys. As is discussed above,

we intend to revise the survey process

to utilize computerized assessment data.

The new process will be an informationbased approach, oriented around quality

measures derived from computerized

MDS data, as well as other sources of

information. Furthermore, sections

1819(g)(2)(A)(I) and 1919(g)(2)(A)(I) of

the Act mandate that we subject

facilities to a ‘‘standard’’ survey. The

availability of computerized assessment

data will improve our ability to make

the survey process more standard and

consistently implemented within the

across the States.

Currently, part of the standard survey

includes an assessment of the status of

a sample of residents over time to

determine whether the facility has

assisted the residents to attain or

maintain their highest practicable level

of well-being. Computerized assessment

data will be instrumental in that it will

allow a complete monitoring of

characteristics of ‘‘all’’ residents,

including changes in their functional

status over time. Furthermore, under the

current survey process, we can only

determine changes in resident status

and a facility’s relative success in

maintaining resident well-being crosssectionally during an annual onsite

survey. MDS computerization, on the

other hand, provides the ability to

monitor resident functional status and

other characteristics through a

longitudinal process of continuous

measurement.

These uses of computerized RAI data

also provide justification for requiring

computerization under our overall

program supervision responsibilities

and general rulemaking authority under

section 1102 of the Act, to the extent

that the information will be used for

general monitoring of care and

beneficiary needs. This computerized

information will ensure that program

standards set forth in sections 1819(b)

and 1919(b) of the Act are met, that the

program is being properly administered,

and that beneficiaries are being served,

as contemplated generally by the Act.

We address elsewhere the further uses

of the data for monitoring the Medicaid

and Medicare programs.

In addition to the authority cited

above, to the extent that the RAI data are

collected solely for Medicaid purposes,

section 1906(a)(6) of the Act requires

State agencies to make reports as

required by the Secretary. As discussed

above, the RAI data are essential for the

Secretary’s evaluation and monitoring

responsibilities under the Act.

We disagree with suggestions to offer

States a choice to participate in the

proposed national MDS data base for a

number of reasons. First, the processes

being regulated by Federal authority via

State agencies (healthcare delivery and

associated standards of care) do not

have varying criteria from one State to

the next. In other words, standards of

medical care and health service delivery

do not vary across States; health

standards in New York are the same as

those in Alaska. This commonality has

reasonably led to the formulation of one

national set of regulations to evaluate

provider performance with respect to

these common health standards. It is our

belief that this standard regulatory

approach is in the best interest of the

nation’s healthcare consumers with

respect to both ensuring consistent

delivery of services across States and

with respect to the healthcare industry’s

reasonable expectation to operate under

a single set of rules and requirements.

Thus, as this standard approach to

facility regulation evolves over time,

with its specific objectives for

continuous improvement and

refinement, it is appropriate for us to

require our agents (in other words,

States) to adopt the standard processes

and mechanisms required to

consistently implement these new

approaches.

Specifically, allowing States to choose

not to adopt a standard system for MDS

information will adversely affect our

ability to meet the objectives for these

data. The following goals cannot be met

without consistent implementation of

the MDS system and process standards

across all States:

• The ability to construct a modern

regulatory model provides a reliable and

objective means of measuring facility

performance. MDS information gathered

and maintained by a standard system in

each State provides an information

structure capable of providing this
67180 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

alternate approach to measuring quality

and creates the foundation for an

information-based regulatory model.

The ability to successfully implement

such an approach is directly tied to

process standardization across States.

• If States are allowed to choose not

to operate this standard system, then we

would not be capable of developing and

implementing a facility targeting system

or, information-based survey process

consistently across States; thus, at best,

an environment would exist in which

facilities in one State would be subject

to different quality monitoring and

survey approaches than facilities in a

neighboring State.

• Our ability to build a centralized

national repository to support our

various objectives with respect to

quality monitoring, policy, program and

regulatory development and evaluation,

and to facilitate healthcare research, is

dependent on our ability to receive

reliable and timely MDS information

from each State. Without a standardized

MDS collection system in each State,

the development of this MDS repository

will be severely limited if not entirely

impossible due to the prohibitive costs

associated with interacting with varying

system implementations in each State.

Furthermore, without full participation

of each State in this program, the

general representativeness and

usefulness of the information in the data

base will likely be skewed or biased,

depending on which States choose to

participate. This would affect the

validity of the information and could

seriously limit its application for health

resource planning and research of value

to State and Federal governments,

providers and consumers.

• Finally, States will play a critical

role in informing consumers in that

States will make aggregate MDS

information available. This information

will allow potential residents or their

family members to select a facility that

may best suit their needs. Without a

standard approach and system for

developing these public information

resources, consumers and advocacy

groups will not have reliable, consistent

and comparable information healthcare

providers across States.

Comment: In commenting on what

specific uses States would have for the

computerized data, commenters

discussed using the data in the nursing

home survey process. One State

believed that the data would assist State

survey agencies to focus the survey

process and set norms. A consumer

advocacy organization pointed out that,

based on the strengths and weaknesses

of a facility, a State could individualize

the composition of the survey team sent

to evaluate the facility’s regulatory

compliance. In other words, the number

and type of surveyors sent onsite would

be based on the types of potential care

problems identified at the facility. For

example, if a facility had a high

prevalence of antipsychotic drug use,

the survey team would include a

pharmacist. This approach has the dual

benefits of maximizing limited survey

agency resources by better targeting

them against the most likely problem

areas, and for minimizing the general

invasiveness of the survey process

within the facility by focusing the

process on key problem areas.

The MDS data set provides objective

and consistent measures of a number of

facility care and outcome parameters.

By comparing individual providers to

‘‘gold standards’’ and other peer groupbased norms on each of these

parameters, States can identify high and

low facility performance outliers on

measures associated with the quality of

care and the quality of life for residents

of these facilities. Commenters also

suggested that the data could be used to

replace some resident-level information

currently collected during the survey

process on a form called the Resident

Census and Conditions of Residents

(HCFA–672), as well as other reporting

forms for State and Federal needs,

which would reduce facility burden.

The MDS assessment contains detailed

resident characteristics that can be used

to eliminate all other forms and

resident-level data collected by facilities

to meet State and Federal requirements.

One commenter, however, believed that

the information should not be collected

by the survey agency and used for

investigations or enforcement.

Response: As described in prior

responses, MDS data will assist State

survey agencies in a plethora of ways to

achieve greater efficiencies in

monitoring quality of care and ensuring

the highest levels of quality of care and

quality of life for residents of nursing

facilities. These examples include:

• Problem identification: the

capability to reliably target areas for

investigation of potential resident care

problems prior to and in support of the

onsite survey process;

• Survey targeting and scheduling:

the ability to determine survey

frequency and scope based on specific

indicators of potential care problems;

• Tailoring survey team composition

to specific problem potentials in

facilities to most efficiently use limited

staff and resources. It is important to

note that States currently are not

prohibited from considering nursing

home characteristics when determining

survey team composition, provided that

the team includes a registered nurse.

The State Operations Manual notes in

section 2801 that to the extent practical,

the team’s composition should reflect

the type of facility surveyed; and

• Conducting cost/benefit analysis of

care approaches, based on resident

outcome data adjusted for case-mix

classification categories. This is

consistent with the Department’s

medical treatment effectiveness

initiative.

Many software programs currently

used by nursing homes to enter MDS

information already have the capacity to

generate timely resident census

information such as that found on the

HCFA form 672. Several States are also

developing systems to facilitate this

activity for providers. The availability of

the MDS standard system will provide

significantly more detail on resident

characteristics than general census

information, and will make use of

definitions that have been clinically

developed and refined to maximize both

reliability and validity. As such, the

MDS will create a whole new model for

understanding and communicating

about resident characteristics. This new

model will far outperform the limited

view of residents that can be derived

from information from current sources,

such as the Form 672.

We further believe that automated

resident status information has much

more potential to further decrease the

amount of paper work associated with

the survey process. We have recently

completed an evaluation of the survey

process and intend to make ongoing

refinements to incorporate new

technologies and increase the efficiency

of the survey process.

Comment: One commenter stated that

using computerized data to target

surveys would resemble a ‘‘big brother’’

environment and not one conducive to

accurate assessments for fear of

investigations based upon minimal data.

Response: We disagree that using

assessment data to target the survey

process would resemble a ‘‘big brother’’

environment or that fear of

investigations would affect the accuracy

of assessments. Facilities already submit

significant resident-level information to

support both survey agency functions

and for claims processing under

Medicaid and Medicare. These data

have been collected for years without

the adverse effects suggested by a ‘‘big

brother’’ analogy; instead, to the extent

that facility information has been made

public (for example, release of survey

and complaint results and findings), this

release has served to provide valuable

information to those interested in

promoting the quality of life in nursing
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67181

facilities. There is no reason to believe

that collection and analysis of MDS

information will not similarly be used

in the interests of the general public

with respect to their right to know the

quality of healthcare services delivered

by Medicaid and Medicare providers.

The MDS simply provides a better,

more powerful mechanism than is

currently available to observe and report

resident condition or to monitor facility

quality and safeguard the rights of

residents of these facilities. The MDS is

a tool for measuring healthcare facility

performance, which also creates a

foundation for improving the

effectiveness of regulatory agencies as

well as their operational efficiency.

Having a standard MDS repository

available within State and Federal

agencies provides a rich information

resource to serve many objectives: it

will provide access to reliable

information and standard measures of

resident characteristics for the many

groups interested in improving care and

quality of life in nursing homes,

including consumer advocates and

researchers; and, the MDS will support

many other programs within States

including providing the basis for

Medicaid payments as is currently in

effect in a number of States.

Clearly, the availability of MDS

information within standardized

Federal systems maintained by States

directly benefits the general public as

consumers of healthcare services and

generally enhances the public

knowledge of the quality of these

services.

Furthermore, we expect that the MDS

repository will enable HCFA or its State

agent, or both, to provide facilities with

analytic reports based on aggregated

resident characteristics. This is

consistent with a quality improvement

model, as it allows facilities to compare

themselves to other homes that are

similar in terms of size and resident

demographics. This directly promotes

facilities as they seek to develop their

own in-house quality assurance

programs. Ultimately, facilities may use

the data in ways that would analyze

allocation of resources, and demonstrate

efficiencies in caring for certain types of

residents, and in turn, negotiate with

managed care organizations for

admission of certain types of residents.

We recognize that information

contained within the MDS assessment is

sensitive and must be safeguarded, and

that protecting the privacy of residents

is essential. In establishing a system of

records for storage of MDS data, both

HCFA and the States (as HCFA’s

contractors in performing survey

functions) must comply with the

Privacy Act, which applies to Federal

systems of records containing

individually-identifiable information.

While we can make public aggregate

summaries of the data, there are strict

Federal guidelines for the release of

individually-identifiable information by

Federal agencies to any individual or

organization. We can only release

individually-identifiable information if

a disclosure provision exists in the

Privacy Act System of Records that is

published in the Federal Register. We

review requests on an individual basis,

according to the provisions of the

Privacy Act. Refer to the more detailed

discussion later in this preamble

concerning protection of privacy.

In summary, it is clear that the

availability of structured analyses

derived from MDS information will

empower those working with a variety

of approaches to improve the lives of

residents of nursing homes. Whereas the

big brother term suggests a scenario in

which the interests of the individual are

sacrificed to promote the interests of the

State, this is clearly not the case with

respect to the objectives for MDS

information. Instead, MDS information

will be used to directly support the

interests of individual nursing home

residents by substantially enhancing our

understanding of healthcare delivery in

nursing homes and by creating a

standard framework for monitoring the

quality of this care.

Comment: A few commenters noted

that computerized assessment data

would support a case-mix

reimbursement system, and that it

would be helpful to be able to compare

facilities with similar case-mix levels.

Response: Our Office of Research and

Demonstrations began the Nursing

Home Case-mix and Quality

Demonstration in 1989. One goal of the

demonstration is to design, implement

and evaluate a nursing home payment

and quality monitoring system for

Medicare skilled nursing facilities based

on resident-level information contained

in an expanded set of MDS data. States

participating in the demonstration are

also using MDS data to calculate

reimbursement under Medicaid.

Computerized information from the

demonstration’s data base will provide

information on outcomes and processes

of care, stratified by case-mix and other

characteristics in the six participating

States. This will also provide a

mechanism by which to evaluate the

effect of reimbursement on quality

issues.

Several other Medicaid agencies in

States not participating in the

demonstration have chosen to

independently implement an MDSbased case-mix system for setting

payment rates for facilities and for

determining coverage. Numerous other

States are currently studying moving

toward a case-mix payment system

based on the MDS. Furthermore, States

have identified a plethora of other

functions to be supported by

information contained on the MDS

assessment form, these functions

include: utilization review, service

placement, and improvement in the

States’ ability to monitor and evaluate

the cost-effectiveness and quality of care

and services provided under the

Medicaid program.

At least two States have already

incorporated, or plan to incorporate,

MDS information into their Medicaid

management information system. West

Virginia notes that to do so will allow

the State to fine-tune its long term care

rate setting and payment methodology.

West Virginia integrated its stand-alone

long term care payment process into the

Medicaid management information

system. The system captures monthly

data to calculate the resident-specific

case-mix index. An electronic billing

system was implemented through the

Medicaid management information

system, which calculates the base rate

reimbursement for all Medicaid

beneficiaries, as well as the additional

payment due based on the case-mix

acuity determined from an expanded set

of MDS data. The MDS reporting system

not only enables the Medicaid agency to

conduct utilization review, but also

allows the survey agency to use the

reports for quality of care issues.

Another State has a legislative

mandate to integrate to the fullest extent

possible, its MDS system, preadmission

screening and annual resident review

system, and treatment authorization

request system. The State points out

that, because it uses a composite per

diem rate, the State agency has little

ability to comprehensively review and

adjust approval or reimbursement

systems in order to improve the quality

of care, increase efficiency, or control

costs in long term care. We believe that

integration of the MDS and the

Medicaid management information

system will support the objectives of its

Medicaid program, including provision

of the highest practical level of care and

management of available funds in a

fiscally prudent manner to maximize

purchasing power. The State maintains

that its system will provide information

to facilities, State and Federal agencies,

and to the public that will improve the

quality and cost effectiveness of care

delivered in the State.

Comment: Another use of

computerized resident data that
67182 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

commenters addressed was to support

policy analysis and monitoring of

trends. One State noted that the data

could be used to inform and improve

general Medicare and Medicaid policies.

Another State gave the example of using

the data as a tracking system for

prevalence of pressure sores, restraints,

and drug therapy. A commenter stated

that data could be used by the

appropriate quality monitoring

personnel in the State to increase the

probability of detecting and analyzing

State-wide health care problems.

Another State commenter suggested

using the data at the resident-specific

level to determine an individual’s needs

for assistance with activities of daily

living and other required services. The

commenter also discussed analyzing

aggregate information for residents by

facility.

Response: We agree that these data

will benefit both the policy and

operational components of States and

the Federal Government as well as

provide valuable information to the

consumers of long term care services.

Potential benefits in policy

development and evaluation expected

from this information include the

following:

• Foremost is the added operational

efficiency derived from the MDS’ ability

to support a multitude of applications

and programmatic objectives. As a

single form designed to capture a

comprehensive view of residents and

related facility care practices, when

submitted within the context of a

standardized data management system,

it greatly reduces the operational costs

of data gathering as compared to current

program requirements involving

multiple forms and submissions from

the facility. For example, many States

receive three different categories of

resident information from facilities,

each requiring separate forms and

submission rules: placement

determination forms (for example,

preadmission screening and resident

review), payment-oriented clinical

information to support case-mix

adjustment (for example, Minnesota’s or

West Virginia’s case-mix assessments),

and survey-oriented forms describing

resident characteristics. With the

breadth of data collected on the MDS,

the requirements in each of these

examples can easily be met via a single

submission of MDS data; thus, the

operational overhead and associated

costs for both facility and State are

reduced.

• At the national level, policy

decision-making, development, and

evaluation are supported through the

creation of a standard means to analyze

State differences in the quality of

services and resident care outcomes in

the nation’s 17,000 certified long term

care facilities.

• By deriving both payment and

quality functions from a single

instrument, a framework is developed to

closely monitor the relationship

between payment and corresponding

service delivery, and to provide an

objective basis upon which incentives to

promote and reward outstanding care

patterns and outcomes can be built.

With respect to support for survey

agency operations, creation of a

standardized MDS repository in State

agencies provides the framework for the

development of an information-driven

survey process by which the frequency

and scope of facility review are based on

objective measures of a facility’s

performance in comparison to

established standards. This informationbased survey concept and its benefits

are discussed in prior sections of this

regulation.

Comment: We also received other

suggestions and examples of ways that

States are currently using computerized

MDS data. A few States indicated that

they are using or could use the data for

resident review requirements under the

preadmission screening and resident

review program (PASRR). Other ideas

included:

• Relating to research support, MDS

information will support both basic

clinical research activities as well as

practical applications such as

identifying issues for ‘‘best practice’’

conferences.

• Using the resident data to identify

strengths of each facility, staffing

patterns, common diagnoses, and

resident characteristics (suggested by a

professional organization).

• Using the data for health planning

related to long term care services,

certificate of need decision-support,

projecting nursing home bed need, and

determining characteristics and care

needs of current residents.

• Identifying industry and surveyor

training needs with respect to changing

demographics and industry structural

delivery mechanisms (for example, as

service delivery blends across multiple

traditional care settings).

One State commenter expressed the

belief that the paperwork burden in that

State would be reduced by having MDS

data available for a variety of purposes.

Response: We agree that potential

benefits exist for all of the above listed

uses of automated assessment

information. A standardized system for

MDS data collection and analysis that

we will be providing to States will

facilitate States’ and facilities’ ability to

make use of these data by creating an

infrastructure for managing, analyzing

and distributing information to meet

these varying program objectives.

Comment: A commenter did not think

that a facility could determine staffing

patterns from the MDS data set, which

would negate its ability to be used in

determining differential rates of

payment.

Response: The commenter is partially

correct, in that the RAI does not

explicitly collect information on

staffing. However, staffing standards,

staffing mix, and minimum staffing

requirements are already well

understood with respect to the intensity

of care required for a given resident and

his or her clinical characteristics. There

are, in fact, several commercially

available systems that currently use

MDS data and derived resident

characteristics information to assist

facility administrators in setting

appropriate staffing levels according to

the mix of resident care requirements in

their facility.

Furthermore, with respect to State

payment and rate setting, States that

currently use an MDS-based case-mix

payment approach have adopted the

resource utilization group methodology

for the payment determination. This

methodology is based on resource

groupings that are created through time

studies of facility staff as they carry out

their daily care tasks. These time study

data are then linked to corresponding

resident characteristics data to

determine levels of care resource

utilization (staff time, supplies, etc.) for

given sets of care needs.

Thus, in this approach, staff

requirements are implicit in the

determination of each distinct care

grouping, each of which is then

associated with a specific

reimbursement rate. Residents with

complex care characteristics fall into a

higher reimbursement group which

directly reflects the additional staff

resources required to care for that

resident. In more sophisticated States,

these models have been extended to

allow for staffing pay rate differences

across various regions within the State

(for example, urban vs. rural staff pay

differentials).

The current MDS 2.0 assessment form

includes calculations for several of the

most common variations of the resource

utilization group’s scoring in the

standard specification for MDS data.

Therefore, States that do not currently

use case-mix-based reimbursement will

still have an implicit and proven

method of measuring the relative care

and staffing requirements of residents
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67183

according to widely accepted norms for

such comparisons.

Again, the ability to support this

functionality is created by the

deployment of the standardized system

for managing State MDS data

repositories, upon which such resource

utilization groups-oriented analyses will

be derived.

Comment: We requested public

comment on whether to collect a sample

or 100 percent of MDS data. Of those

who commented, most believed it

would be preferable to collect 100

percent of facility data. One State

thought that collecting only a sample of

data would not produce the necessary

level of detail required for a

multipurpose data base system. The

commenter further stated that

operational activities generally focus on

specific individuals, which would

usually require information on all

residents from all facilities. Another

noted that 100 percent would be

advantageous for rate setting and quality

assurance, recognizing that the intended

use of the data influences the collection

requirements. The commenter said that

an aggregate of 100 percent of facility

data would serve well for the Federal

level data set. A third State believed that

having facilities submit data for all

residents would make the State survey

agency’s sampling procedure in the long

term care survey process more effective,

as well as result in a comprehensive

national data base. One State thought

that sampled data would be

disadvantageous in that it would

provide incomplete or inaccurate

representation and would be influenced

by factors such as population density.

Those opposing collection of 100

percent of the data listed the associated

cost, the size of the data base, and the

man hours involved in collecting and

maintaining the data. Proponents of

collecting a sample of facility data noted

that current survey protocols determine

compliance with State and Federal

requirements based on a sample, and

that MDS data set required for

submission should be no different. A

national provider organization said that

collecting 100 percent of the data would

not meet the underlying intent of the

law pertaining to the implementation of

comprehensive assessments, the

resultant care plans, and improved

quality of care. A national provider

organization believed that if 100 percent

of the data is collected at the facility

level, the State should send us a

stratified sample on a quarterly basis,

while if a sample is gathered at the

facility level, the State should send us

the entire sample on a quarterly basis.

Response: There are many drawbacks

associated with sampling. An

incomplete representation or smaller

number of records would make

estimates of trends more difficult.

Problems with resampling would

prevent the development of longitudinal

measures. Such problems include:

• The retention of any bias in the

initial sample that would increase over

time and would affect the reliability of

the data.

• The unequal burden on facilities in

the sample to correct errors, respond to

inquiries and provide data.

• The need to develop complex

instructions that would direct facilities

how to replenish the sample when

subjects drop out. We would require

other instructions to handle changes of

ownership in facilities, facilities that

leave the Medicare and Medicaid

programs, and facilities that go out of

business.

In short, it would be difficult and

expensive to construct and maintain a

statistically significant sample of

residents for whom we would require a

facility to transmit its MDS records to

the State.

Furthermore, since the facility must

obtain the information required by the

MDS on each resident for clinical care

planning, and given that most facilities

today have already automated this

process, the added requirement of

submission of data adds comparatively

little overhead and associated costs to

this process. Certainly, there is some

fixed cost associated with developing

and supporting transmission of a single

resident’s record to the State, but the

marginal cost of transmitting all

residents’ records is negligible.

Therefore, there is no cost saving to the

facility to transmit MDS assessments for

a sample versus the entire population of

residents.

We agree with the comments that

support requiring facilities to transmit

100 percent of all required MDS

assessments. We are requiring that a

facility submit all initial, annual, and

quarterly reviews, as well as partial

assessments completed upon discharge,

transfer, death, or reentry to the facility,

for all residents, and that a State submit

those assessments to us.

Generally, selection of a statistically

representative sample of MDS

assessments adds another complicated,

costly and unnecessary layer to

producing useful, valid data that can be

used to inform States, nursing homes,

and us about the quality of care and the

status of residents in nursing homes.

One hundred percent of the data is

necessary for the following reasons:

• It is necessary for longitudinal

tracking of residents across time and

facility admissions. This will allow us

to track special subpopulations of

residents such as those with pressure

sores or Alzheimer’s disease. It will

allow the detection of certain trends,

such as characteristics of new

admissions to nursing facilities, and it

will allow the detection of rare but

significant events, such as

hospitalizations for pneumonia,

fractures or other conditions.

• The universe of data is also

necessary to link to facility level data

bases, such as ASPEN deficiency data in

State agencies and the Online Survey,

Certification and Reporting System, and

to link to Medicare and Medicaid claims

files at the national or State level to

determine patterns of utilization and

resource use pre- and post-admission to

nursing homes, and to determine

resource utilization in nursing homes.

• It allows for targeting individual

and aggregate resident outcomes for use

in an information-driven survey process

that would be impossible without a

universal data base.

The universe of MDS assessments

makes possible the analysis of data at

any level (for example, resident, unit

within a facility, facility, State, regional,

national, or for specific resident

populations). An incomplete

representation or smaller number of

MDS assessments, as well as issues

associated with resampling that were

mentioned above, would limit trend

analyses.

Working with the universal

population of resident assessments will

eliminate the technical difficulty and

expense of selecting and maintaining a

representative sample such as will be

necessary to support longitudinal

analyses. Creating and implementing a

complex sampling process would be

burdensome to facilities and States, and

the burden could fall unequally on

selected States or selected facilities. If

facilities were required to perform

sampling, there would be additional

cost to upgrade their software and

training for this capability.

Additionally, some sampling

methodologies would require

complicated survey analyses to adjust

sampling design. This would also be

expensive.

In conclusion, the marginal additional

cost of obtaining the full universe of

assessments will, in fact, be exceeded by

the cost and difficulty of maintaining a

representative sample of assessments

large enough to provide the necessary

information for all the uses proposed for

the data base.
67184 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

Comment: A State suggested

submitting 100 percent of data to the

State, which would then submit only a

sample to us. The State contended that

it needed the most complete data set

possible. The State also noted that its

data base would be manageable and

would not warrant sampling.

Response: We disagree with the

concept of sending a sample of data to

us. Our regional offices have many of

the same needs as State survey agencies

for 100 percent of resident-level data for

certified long term care facilities within

their States as one method to target and

conduct Federal monitoring surveys in

nursing homes. Furthermore, we need

100 percent of the data to develop and

refine quality measures, which will be

an integral part of the data-driven

survey process.

All the factors enumerated in the

above comment regarding the negative

aspects of sampled submissions

between facilities and States apply

equally to the submission between

States and the national data base: there

is no advantage in terms of cost saving

by using a sampling approach as it is no

more costly or complex to transmit

assessments for the full population. In

fact, managing sampled data sets is

actually more costly; and, the ability to

meet the objectives for these data at the

national level in terms of support for

policy decision-making, development

and evaluation, as well as for support

for research initiatives, requires access

to a complete population-based

repository of assessments.

Comment: Commenters discussed

whether a national data base would

provide useful information to States for

making comparisons for management,

performance, measurement, and

research purposes. Of those who

addressed this, all agreed that such

information would be valuable. One

State said that it would be helpful for

them to be able to compare their State

with others regarding length of stay for

residents with certain diagnoses and for

utilization rates of special treatments

and procedures.

Response: As discussed previously,

we agree that there are many useful

purposes for information from this

proposed national MDS data base. One

example of this submitted by a

commenter is that the data base could

provide information for interstate

comparisons of resident lengths of stay

according to diagnoses or outcomes.

Fundamentally, the MDS data,

represented within the context of a

standardized information system,

provides the foundation for organizing

complex clinical and facility

information in ways that can be easily

generalized to support numerous

current and future objectives at the

facility, State, and Federal levels. It

provides a common framework for

communicating about resident clinical

characteristics, care outcomes, and

quality, as well as facilities’ service

delivery and quality. Many of these

specific objectives have been identified

throughout this regulation.

Finally, the RAI has been translated

into at least seven languages and is

being used in several European and

Asian countries for care planning to

improve clinical care and for research

purposes. The international

development of comparable data sets

would facilitate performance of crossnational research studies to examine the

effects of differences in care patterns on

long term care resident outcomes. These

studies may provide a great deal of

information on the geriatric long term

care population across all countries.

Comment: Of those who addressed

how data should flow, the majority of

commenters, including a national

provider organization, stated that data

should flow through the States to us.

Some expressed the belief that States

should also maintain their own data

base. One commenter recommended

that data be transmitted to us by the

States on an annual basis. A few

commenters believed that the States

should send summary information to us.

One commenter said that initially,

facilities will need a great deal of

technical assistance, and it would be

easiest for that to come from the States.

A national provider organization

wanted States mandated to devise

methods for disseminating

computerization information to facilities

and for providing technical assistance.

One State noted, however, that States

should not be required to collect and

store information, if there are no

expectations about how the data will be

used.

Response: We agree that States should

have the responsibility to provide some

level of general and technical assistance

to facilities as relates to our and States’

requirements for encoding and

transmission of MDS data. We

understand that States have varying

levels of experience with the use of

computerized information systems and

data bases. However, several States have

already established an MDS data base

for case-mix, quality assurance or

survey and certification purposes, or

both, and have provided necessary

training and assistance to facilities

which enabled them to successfully

implement automated systems.

We have established technical and

user groups as part of the systems

design process. These groups consist of

States, provider and consumer

representatives and experts in systems

design. Their expertise and knowledge

will be used to facilitate provider and

State automation. We will also work

with States to ensure that personnel

have the necessary technical expertise

and training to fulfill State automation

responsibilities. Also, system

specifications and other relevant

materials are already available via an

internet web-site, initially established to

support MDS software vendors, and

otherwise available from HCFA.

The pilot testing of the MDS standard

system and associated procedures is

another step currently undertaken by us

to ensure that all aspects of this

standard MDS system are fully

understood with respect to technical

operational requirements, State and

facility user support needs, and general

issues associated with deployment and

system acceptance. Information from

this test phase will directly support our

ability to assist States in successfully

installing and operating this system and

ensure that facilities can easily

accomplish their assessment submission

requirements.

We fully appreciate the magnitude of

support and effort that will be necessary

to ensure that appropriate training is

developed and disseminated to all who

will be involved in implementing this

data base, and are in the process of

developing additional procedures and

communication strategies to address

this need.

Finally, a central requirement for the

MDS standard system design is to

ensure that maximum attention is given

to understanding and assessing current

technologies employed by facilities and

States so that the MDS system will best

integrate and accommodate these

existing systems. We intend that this

will both facilitate system acceptance

across all user levels, and minimize

support and other implementation costs.

Also, we will emphasize technologies

that lend themselves to ease of use and

user-friendliness in the selection

process for each level of the standard

systems, but especially as this relates to

systems used by facilities to submit

MDS assessments to their State agency.

Also, one of the implicit benefits of the

decision to develop a standard system

for MDS data management is that this

provides the greatest ability to centralize

support efforts, and also reduces costs

for multi-state facility chains and

software vendors by reducing the

variation of systems with which they

will interface, in that they need only

support access to a single standard

system across States.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67185

Comment: A few commenters thought

that the data should be sent directly to

us without being sent to the State first.

One said that it would be costly and

duplicative if States maintained their

own data base. One State agreed that

State data bases would be duplicative

and suggested that States have access to

a HCFA data base through the Online

Survey, Certification and Reporting

System. The State commenter noted that

this could be difficult for States that

have adopted an alternate Resident

Assessment Instrument, since it would

be necessary to remove extraneous data

collected by the alternate instrument. A

State put forth the idea of creating a

single national entity for the centralized

collection of MDS data. The commenter

suggested that States could then arrange

for periodic digital communications

with the entity, believing that this

method would be more efficient than

each State having to develop the

capacity to receive facility data.

Response: We support having each

facility initially submit 100 percent of

the MDS data to the State. This would

enable States to maintain a data base for

use in Medicare and Medicaid activities

that are primarily State responsibilities:

quality assurance, longitudinal tracking

of care outcomes for survey,

certification and licensing, and in some

States, case-mix reimbursement

classification systems. Several States are

already using computerized MDS

information for this purpose, having

decided that the derived benefits

outweigh the costs of establishing and

maintaining such a system. Our

experience has been that States realize

even more programmatic uses for the

data once it is available to them.

While we could develop a central

mechanism for collecting information

from providers, there are significant

disadvantages associated with this

approach: (1) It would impose an

additional layer between facilities and

States with associated impact on

timeliness and accuracy of information;

(2) With so many of the objectives for

MDS data being at the State level, direct

submission of information to us creates

an unnatural information flow which

will have an impact on the ability of

States to meet these objectives,

especially as many of the objectives,

such as the information-based survey

process, are so dependent on timely

access to MDS assessment information;

(3) With the many State-specific uses for

MDS information, such as case-mix

payment, many of which require

specialized elements recorded in the

State-unique S Section of the MDS, we

could not possibly centralize support for

these functions or even accommodate

all these variations in a central

repository; thus, direct submission to us

would defeat the goal of supporting

unique State objectives; and, (4) States

are in a much more appropriate position

to support their individual facilities

with respect to the MDS assessment,

submission and data validation

processes.

The information provided by a Statemaintained MDS data base is not

duplicative of a national data base.

States vary with regard to their

demographics, licensing policies,

quality assurance and reimbursement

systems. States are a logical level for

maintenance of MDS information since

each State performs and must manage

its own survey and regulation processes.

Information provided by MDS

assessments cannot be obtained from

our Online Survey, Certification and

Reporting System. The Online Survey,

Certification and Reporting System itself

is not designed to provide the quantity

and specificity of the information in the

proposed MDS data base. Furthermore,

a central MDS repository is necessary to

support objectives such as policy and

regulation development, but would not

be as readily available for State

functions as State-specific data. Since

specific functions (for example,

information-based survey process) are

performed from this data base at the

State level, it would be inefficient to

require States to support these functions

via access to a central repository.

We disagree that it will be

significantly more expensive for States

with alternate instruments to collect

MDS data. The design of every aspect of

the standard MDS system, from the

record transmission format to the State

data base repository, is intended to

support the customizations required by

individual States. Thus, although there

will be some additional costs during the

initial system implementation in States

requiring custom formats, the system

design makes these costs insignificant.

At this time, there is no State variant of

the MDS that cannot be accommodated

within the context of the standard

system architecture.

With respect to transmissions

between the State and national

repositories, we are requiring that a

facility transmit only the core MDS

items on the HCFA-designated RAI, the

State will only maintain the Statespecific elements at the State level.

Comment: A State noted that it

currently collects computerized data

from only Medicaid-certified nursing

facilities because the State can

reimburse them. The State asked if

computer requirements apply to

Medicare-certified facilities, and

whether Medicare facilities would

submit directly to us.

Response: The requirement to place

the MDS in machine readable format

applies to all Medicare and Medicaid

certified nursing homes. There are no

plans to have Medicare-only facilities

submit MDS information directly to us.

In the impact statement, we address

how certified facilities will be

reimbursed for information systems

equipment and supplies, as well as data

encoding and transmission. Long term

care facilities certified to participate in

Medicare are required under section

1819(b)(3) of the Act to use the Statespecified RAI. The State’s authority to

collect computerized data from

Medicare facilities springs from its role

as an agent for us in performing

Medicare surveys under section 1864 of

the Act.

Comment: Commenters discussed

auditing procedures that would ensure

the accuracy of the data entered into the

national data base. Some, including

State commenters, believed that the

accuracy of the data should be verified

through the survey and certification

process. A State commenter believed

that it would take surveyors

approximately 5 minutes to compare a

resident’s actual records with a

computer printout. One commenter

pointed out that if the accuracy is

checked during the survey, a facility

will take the assessment seriously and

the assessment would not be viewed as

‘‘paperwork.’’ Another supported using

surveyors to audit the match between a

resident, his or her MDS and a computer

editing software system.

Response: We agree that auditing the

accuracy of MDS data on an on-going

basis is very important in validating the

ability of the data to support key

operational and policy decisions.

Indeed, the establishment of

mechanisms to ensure acceptable

reliability levels is critical to our ability

to move forward with using MDS data

for quality assessment and improvement

activities, as well as other programmatic

purposes. Currently, the survey process

includes evaluation of the accuracy of

assessments, as required by sections

1819(g)(2)(A)(II) and 1919 (g)(2)(A)(II) of

the Act. Surveyors compare information

from the most recently completed RAI

with the current status of a sample of

residents found onsite at the time of

survey. We may modify and enhance

the methods for accomplishing this task

to reflect access to more longitudinal

resident status information.

Several States, particularly those with

case-mix reimbursement systems, have a

separate auditing system in which nurse

reviewers conduct an onsite assessment
67186 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

using the MDS and compare it to that

completed by the facility in order to

verify the accuracy of the facility’s

assessment. We have recently

completed a study of such methods and

will be considering how to most

efficiently assure the quality of MDS

data. The methods under consideration

could involve onsite review by

surveyors or others, as designated by us,

or offsite data analysis and evaluation,

or both. We are also considering

whether auditing would be carried out

in conjunction with the survey process,

as well as the timing and frequency of

audits.

Comment: Commenters discussed

methods for data verification. A few

commenters stated that we should not

require auditing and we should accept

data as submitted. One State noted that

any auditing process will result in cost

increases. Another commenter pointed

out that the data should be error free

before the facility submits it. A

commenter suggested that we not

require auditing unless the MDS data is

used for reimbursement purposes. A few

commenters, including a national

provider organization, disagreed with

the idea of double entering data as a

means of ensuring data integrity. They

stated that it would be too costly,

resulting in an unnecessary expenditure

of time, cost, and effort.

Response: We strongly disagree with

the comments that verifying accuracy of

the data is not necessary. Foremost, it is

imperative that the data be accurate and

reliable for it to be used in any policy

making, planning or resource utilization

capacity. Accurate resident status

information is necessary not only for

reimbursement systems but for the

health planning at the State and Federal

level. Secondly, accurate assessments

are necessary for quality care at the

facility level, given that care planning

should be based on the resident’s

assessment.

While data verification may be costly

in the short run, we believe that it is

cost efficient in the long run, in that

accurate data will help prevent

unnecessary expenditures or poor

policy or reimbursement decisions that

might result from erroneous

information.

Several States that have computerized

MDS data bases have encountered

significant inaccuracies in the data

originally received from facilities. This

problem was rectified by establishing a

process for ongoing validation of the

accuracy of the data through on-line

electronic systems feedback to facilities,

or other systems for frequent cross

checks and communication.

On-line data editing systems can

facilitate timely detection and

correction of inaccuracies. Virtually all

the States that have computerized MDS

data bases have developed built-in edit

checks for obvious inaccuracies which

would disallow entry of conflicting or

invalid data, for example, for a resident

coded simultaneously as comatose yet,

inconsistently, enjoying playing cards.

We agree that double entering data to

ensure validity would be expensive and

we are not requiring it. We emphasize,

however, the important role that

validation plays in the establishment of

a data base. To this end, we published

standardized range and relational edits

in May 1995 that MDS data will have to

pass in order to be accepted at the State

level.

Comment: Some commenters placed

responsibility for the accuracy of the

data on the facility. According to a

commenter, having the edit checking

process occur at the facility is critical,

otherwise the State system would

quickly become overburdened with

rejecting records back to the facility for

correction. One recommendation was

for a facility to have a system for

visually checking MDS information

prior to submitting the data.

Commenters noted that computer

software can validate that the MDS is

complete and that responses are within

an acceptable range, and can also

generate a condensed MDS with the

responses, and staff can compare this to

the MDS to verify accuracy. A State

commenter proposed that we require a

facility to maintain an accuracy rate of

95 percent for its data to be accepted by

the State. Commenters suggested that a

facility only transmit updates and

changes to the data base once the

original assessment is on file. Another

proposal was for us to require a facility

to incorporate surveillance and

correction procedures as part of its

quality assurance program.

Response: We concur that a facility

has a responsibility to submit

assessment data that is accurate, and

there are many ways to accomplish this.

A facility is required by section

1919(b)(3) of the Act to conduct a

comprehensive, accurate, standardized

and reproducible assessment of each

resident’s functional capacity. We are

adding to § 483.20(g) the facility’s

responsibility to accurately assess

residents, as well as § 483.20(f)(3),

which notes the facility’s responsibility

to transmit accurate data to the State.

We believe, however, that the State also

has a role in verifying the accuracy of

the data and systematically monitoring

and evaluating the quality and accuracy

of the assessment data which will be

submitted from facilities.

States will monitor completeness and

accuracy of MDS data submissions from

the facility. A facility will be in

compliance unless an unacceptable

percentage of the records completed by

the facility during a target period are

either not submitted to the State or not

accepted by the State because of data

errors. We will determine compliance

based on a review of missing records for

the target period, allowing sufficient

time after the close of the specified

period for relevant records to be

submitted from the facility to the State.

Our initial plan is to have States

accept required records submitted by

the facility, except when specific data

errors occur. Currently, plans are for

States to reject records only if:

• A submission file has a missing or

misplaced header record or trailer

record;

• Any record in the file does not have

the correct record length with the last

data character being the ‘‘end of record’’

delimiter required by the standard data

specifications;

• The submission file contains an

invalid facility ID code (FaclId in the

data specifications) in the header record

or data record; or

• The total number of records in the

submission file does not correspond to

the record count given in the trailer

record.

We will evaluate this process and make

necessary changes based on experience.

A facility is in compliance unless

there is an unacceptable error rate for

the set of records completed by the

facility during a specified period.

Determination of compliance is based

on a review of records accepted by the

State, allowing sufficient time after the

close of the specified period for relevant

records to be submitted from the facility

to the State. The error rate in question

is the total number of fields in error, due

to either range or consistency errors as

identified in the MDS 2.0 data

specifications in effect, divided by the

total number of required fields across all

records for the specified period. The

fields that we require for each type of

record (for example, admission

assessment, quarterly assessment,

discharge tracking form, etc.) are

detailed in the MDS 2.0 data

specifications.

Further, States have a role in training

facility personnel in methods of

preventing and correcting data errors.

The suggestion by a commenter that we

require a facility to incorporate

surveillance and correction procedures

as part of its quality assurance program

may be a viable option.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67187

Comment: Other commenters believed

that States should bear primary

responsibility for the accuracy of the

RAI data. One State suggested that the

States should provide facilities with

report formats that cross check

interrelated data. Another commenter

proposed that a State keep verification

requirements for transmitting data

separate from verification of clinical

consistency of the data. A commenter

pointed out that it was unclear whether

we intended that States notify a facility

of errant data before transmitting the

data to us. One suggestion was for the

State to check data for completeness,

accuracy and compliance with

processing instructions. Another was

that the State specify a standardized

format for transmitting data that would

require compliance with edits. A few

commenters thought that the States

should be responsible for the quality of

the data transmitted to us.

Response: The responsibility for data

accuracy must reside with the facility,

the source of the data, and a facility

should ensure that MDS data pass all

standard accuracy edits before

transmission to the State. The State does

have a responsibility to monitor

accuracy of data submitted by a facility

and aid the facility in achieving

accuracy. The State will perform

standard accuracy edits on data files as

they are received and report any errors

found to the facility. A State will also

be able to monitor the error rate for a

facility over time and produce an error

summary report to share with the

facility. The State will also have the

ability to monitor the error rates for any

MDS software vendor. When systematic

problems are found for a vendor, the

State will have the opportunity to work

with that vendor to correct the

problems. We may also develop

procedures for onsite data accuracy

visits to the facility when error rates are

high. We will determine the frequency

of such visits during our formal systems

design process. MDS data submitted to

the State will be transmitted to us at

least monthly. We will again edit the

data for accuracy. Accuracy edits will be

performed at the facility, State, and

HCFA levels.

Comment: We received a number of

other suggestions to ensure the accuracy

of data. One was to allow the registered

nurse assessment coordinator to validate

the data. A few suggested a computer

system that has a basic set of edit

checks, like high-low checks,

completeness checks, clinical

inconsistencies, and incorrect data

checks. A consumer advocacy

organization pointed out that some

States currently have special nurse

auditors who validate the match

between a resident and his or her MDS.

A State suggested that the reliability of

MDS data be verified by periodic,

random, onsite review of individual

records performed by either State

program agency staff or by a contracting

organization. Another noted that if

validity becomes an issue, we could

consider a regulatory mechanism for

appointing independent assessors.

Response: We agree that the computer

systems should have basic edit checks,

which ought to be in place both at the

facility level and at the State level. The

standard data specifications we have

developed include valid ranges and

required formatting for MDS items and

consistency between MDS items.

Detailed information concerning these

data specifications is available on our

MDS World Wide Web site (at http://

www.hcfa.gov/Medicare/hsqb/mds20/)

and is otherwise available from us and

the State survey agency. We anticipate

that facilities will be able to select

commercially available software

packages that use these data

specifications. We note that the current

regulation grants States the authority to

take over the assessment process if a

facility knowingly and willfully certifies

false assessment statements. Section

483.20(c)(4) allows the State to require

that assessments be conducted and

certified by individuals who are

independent of the facility and who are

approved by the State. New York, for

example, contracts with their peer

review organization to conduct onsite

audits of the Patient Review Instrument,

used to calculate Medicaid

reimbursement. Nurses sample a certain

number of resident records. If the

records do not pass standards based on

resource utilization group, the facility

loses its ‘‘delegated status’’ to conduct

assessments and must hire an

independent assessor for 1 year.

Comment: Many of the comments we

received regarding privacy and

confidentiality issues demonstrated

concern regarding privacy issues and

indicated that residents’ identities need

to be protected. Some of the

commenters believed that MDS

information should be available or

reported in the aggregate format. A few

commenters wanted identifying data

available at the State level but not in

any public data sets created. One

commenter questioned why we should

have access to assessment information

of private pay residents. A national

provider organization stated that the

need for information in planning and

quality assurance should not be met at

the expense of the resident’s and

facility’s right to confidentiality.

Commenters suggested that we develop

ways to block resident identifiers or

develop an alternate system of

identification like numerical coding.

Response: We agree that protecting

the privacy of the resident is essential.

In establishing this system of records,

both we and the State (as HCFA’s

contractor in performing survey

functions) must comply with the

Privacy Act (5 U.S.C. 552a), which

applies to Federal systems of records

containing individually identifiable

information. While aggregate summaries

of the data can be made public, there are

strict Federal guidelines for the release

of individually identifiable information

by Federal agencies to any individual or

organization. A release of personal

identifiable information can only be

made in limited circumstances

described in the Privacy Act. Disclosure

may be made under the Privacy Act for

‘‘routine uses,’’ which are compatible

with the purpose for which the

information was collected. These

routine uses are described in the Privacy

Act System of Records, which is

published in the Federal Register.

Requirements associated with routine

uses are also set forth in the System of

Records. In most cases, a ‘‘data use

agreement’’ is required with the

recipient being bound, in turn, by the

Privacy Act. Some States have

additional laws strengthening the

protection of privacy of the resident.

We would have difficulty assuring the

quality of care in facilities if we only

had access to periodic aggregate data.

While allowing evaluation of prevalence

rates (percent of residents who have a

particular condition at a given point in

time) over time, such data would largely

preclude any quality of care indicators

based on incidence rates (percent of

residents who acquire a given condition

in a facility between two points in time).

For example, periodic aggregate data

might show the prevalence of decubitus

ulcers in the resident population, but

we could not review it to determine the

incidence of such ulcers while residents

are in the care of the facility. A high

prevalence of ulcers may indicate that

the facility accepts residents with

existing ulcers from the hospital, but a

high incidence may indicate

substandard care. If access were limited

to aggregate data, it would also be

impossible to evaluate other important

outcome measures potentially indicative

of quality of care.

Our quality assurance activities in

Medicare and Medicaid certified

facilities are not limited to selected

residents (for example, Medicare or

Medicaid residents, or both). Our long

term care survey process directs State
67188 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

survey agencies to review the care

provided to all residents of certified

facilities, regardless of payor source. For

example, quality assurance survey

teams review a random sample of

residents without respect to payor. We

would often have difficulties evaluating

the quality of care in Medicare and

Medicaid certified facilities if access to

data is limited to residents who are

Medicare or Medicaid funded. This is

especially true in a facility in which

Medicare or Medicaid residents, or both,

are a minority. This requirement is,

therefore, in keeping with the quality

protections that are afforded to all

residents in certified long term care

facilities. We will not give out

identifying information unless there is a

demonstrated need for it; the routine

use permits disclosure only if we

determine that the research cannot be

reasonably accomplished unless the

record is provided in individually

identifiable form.

Comment: One commenter was

unclear why confidentiality is an issue,

since we already have systems in place

to guard confidentiality, and these

systems could carry over into the MDS

system. A professional organization

recommended developing a software

program that could block identifying

information except when needed by

designated persons.

Some commenters addressed the

question of who should have access to

the data base. Several suggestions were

submitted, including:

• The State survey and certification

agency;

• The reimbursement agency (without

resident identifiers);

• The ombudsman (one commenter

suggested without resident identifiers

while another said consistent with

current access rights for resident

records);

• The submitting facility (with no

access to other facilities); and

• Aggregate data should be available

to the public. Commenters proposed

that a State have access to facility data

in its own State with resident identifiers

and to other States and the national data

without identifiers.

Response: As aforementioned, under

the Privacy Act, when personal

information in the possession of the

Federal Government on an individual is

accessed by name, Social Security

number or any other identifying symbol,

we must publish a system of records

notice. This notifies the public that we

are collecting the information and will

be accessing it in an individually

identifiable way.

The notice lists routine uses for the

information, including a list of entities

to which we may release information

upon request, the uses for which we

may release information, and conditions

under which we may release

individually identifiable information.

The Privacy Act requires that the

routine uses be consistent with the

purpose for which the information is

collected. The Privacy Act does not

mandate us to release the information.

The system of records notice will

support research as a routine use, but

will require safeguards to ensure the

maximum protection of individually

identified information. It requires that

persons or entities requesting the

information sign an agreement to not rerelease the data. The system of records

notice also permits release to

government agencies for purposes of

monitoring nursing home care. We

already have a routine use disclosure

provision in place for handling data

requests by those conducting health

services or other appropriate research

for most of our systems. We evaluate

each request on an individual basis,

including whether it is appropriate to

release any data with identifying

information.

Comment: A few commenters

recommended that we not release

resident-specific information unless the

resident has directly consented. One

State suggested that we and States issue

‘‘designator’’ numbers that would allow

resident-specific information to be

released. A commenter suggested that

we build fines and penalties into the

system for breach of confidentiality.

Response: As aforementioned, we will

follow all provisions of the Privacy Act,

as well as the Freedom of Information

Act in managing the information from

this proposed data base. Our Freedom of

Information Act officer decides whether

to release the records if a request is

made at the Federal level. Under the

Freedom of Information Act,

individually identified RAI data

generally would be exempt from

disclosure as medical (and similar) files,

the disclosure of which would

constitute a clearly unwarranted

invasion of privacy (5 USC 522(b)(6)).

Under the Privacy Act, individually

identified records may not be disclosed,

except for good cause, including routine

uses consistent with the purposes for

which the information was collected (5

USC 522a(b)). (Aggregate data, not

individually identifiable, could be

released under either law.)

For records collected under the

authority of our RAI requirements,

States are bound by the Privacy act as

our agent. In addition, most States have

their own rules governing protection of

privacy for records maintained at the

State level. We expect each State to take

the appropriate steps to ensure that

resident-identifiable information is

protected.

We are adding language to

§ 483.20(f)(5) that prohibits a State from

releasing resident-identifiable

information to the public, and provides

that a facility may release residentidentifiable information to an agent only

in accordance with a contract under

which the agent agrees not to use or

disclose the information except to the

extent the facility itself is permitted to

do so. We note that the Health Insurance

Portability and Accountability Act of

1996 (Public Law 104–191) provides

stiff penalties for persons who

wrongfully disclose individually

identifiable health information. Such

penalties can include fines or

imprisonment, or both.

RAI data would be part of a resident’s

clinical record, and as such, would be

protected from improper disclosure by

facilities under current law. Facilities

are required by sections

1819(c)(1)(A)(iv) and 1919(c)(1)(A)(iv) of

the Act and § 483.75 (l)(3) and (l)(4), to

keep confidential all information

contained in the resident’s record and to

maintain safeguards against the

unauthorized use of a resident’s clinical

record information, regardless of the

form or storage method of the records.

We recognize that there are

circumstances that may necessitate the

release of information from the

resident’s clinical record. However,

these instances are limited by regulation

to circumstances required by (1) transfer

to another health care institution, (2)

law, (3) third party payment contract, or

(4) the resident (§ 483.75(l)(4)).

The transmission is limited to (1)

using a private dial-up network based

on a direct telephone connection from

the facility or (2) mailing a diskette from

the facility. In the case of either

telephone communications or the mail,

the information transmitted is secure,

with interception of information being

prohibited by Federal and State law,

and strong penalties apply. We and the

States both receive large volumes of

unencrypted voice phone calls,

unencrypted data telecommunications

(for example, claims data), and

unencrypted mailings, all including

resident-specific information.

Section 1902(a)(7) of the Act requires

Medicaid agencies to provide safeguards

that restrict the use or disclosure of

information concerning applicants and

recipients to purposes directly

connected with the administration of

the plan. Moreover, under the

agreement between the Secretary and

the State survey agency pertaining to
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67189

section 1864 of the Act, the State is

required to adopt policies and

procedures to ensure that information

contained in its records from the

Secretary or from any provider will be

disclosed only as provided in the Act or

regulations.

States may allow other agencies

within the State to have access to MDS

data to the extent that it is related to the

operation of the Medicaid programs. All

agencies must adhere to the

confidentiality requirements of the

Medicare and Medicaid programs

relative to this information. We are also

providing in § 483.315(j) that a State

may not release resident-identifiable

information to the public. Further, the

State may not release residentidentifiable RAI data to a contractor

without a written agreement under

which the contractor agrees to restrict

access to the data.

We believe that adherence to

§ 483.10(b)(1), Notice of rights and

services, adequately addresses the

commenter’s suggestion that residents

be notified. We believe that using

designator numbers as a vehicle to

permit release of resident-specific

information is not feasible. Because

such a system would require that all

providers use the same number for the

same resident, (in other words, to enable

tracking of residents across different

providers), implementation would be

extremely burdensome.

Comment: Commenters addressed

other issues pertaining to privacy and

confidentiality. We received a

recommendation to contact specific

individuals who could assist in

developing the security of a data base.

Another recommendation was to

carefully control computer access (in

other words who can get to the data via

computer at the facility and at the

State).

Response: Both at the facility and the

State, access to the MDS records for

residents, whether those records are

hard copy or electronic, must be secured

and controlled in compliance with our

requirements for safeguarding the

confidentiality of clinical records. The

facility must take precautions to ensure

that only authorized staff have access to

confidential information. Electronic

MDS data should reside on stand-alone

computers in secured physical

locations, or access to those data should

incorporate standard user ID and

password techniques.

Comment: A few commenters thought

that only the facility in which a resident

resides should be able to make changes

in the data entered. One commenter

proposed that the data system require

the facility to ‘‘close-out’’ a resident’s

information upon discharge or transfer,

which would prevent the facility from

changing that information. It would also

prevent ‘‘a receiving facility’’ from

entering new data on a transferred

resident until the information base is

closed by the transferring facility.

Response: We are in agreement that

no other facility may make changes in

the MDS data. A facility may only

change MDS hard copy and electronic

data as allowed by our policy. This

policy requires that after the facility

performs the assessment, it is ‘‘sealed,’’

and electronic records are ‘‘locked.’’

HCFA policy also require facilities to

complete tracking forms indicating

resident discharge from and reentry to

the facility. The facility must complete

and submit these forms and

corresponding electronic records to the

State within specified time frames. It

would not be appropriate to require one

facility to ‘‘wait for’’ a discharge record

from another facility before entering and

submitting data for Medicaid payment.

This could result in payment delays for

the one facility when another facility is

delinquent on submitting MDS records.

MDS data bases at the State will be

used for a variety of purposes, including

quality monitoring, Medicaid and

Medicare payment, and policy analysis.

It would prove quite cumbersome and,

at times unworkable, for all data

changes to always be made by the

facility of residence and then updated in

the State data bases after resubmission

from the facility.

Comment: Commenters discussed the

schedule for submission of data by

facilities, for example on an annual or

quarterly basis. A national advocacy

organization supported continuous data

flow, pointing out that States need upto-date information due to the survey

cycle and their need to be able to

respond to complaints when they are

received. One commenter said that most

facilities in their State routinely

transmit on a weekly basis. Other

commenters questioned how current

would be the data that are to be

maintained. The few who responded

agreed that the data do need to be upto-date and agreed with others who said

that transmission should coincide with

the RAI requirements. Others addressed

the need for a transaction log to

document transmission.

Some commenters noted that

reimbursement agencies may require

data on a more frequent basis for the

purpose of rate setting. It was also

mentioned that requiring transmission

on a more frequent basis would be an

administrative burden. A few

commenters wanted the quarterly

reviews to be transmitted also. A

national provider group suggested

quarterly submission, staggered in order

to facilitate managing the large volume

of data. For example, at the end of each

month, 1⁄12 of the facilities would

submit data for the preceding 3 months.

One commenter recommended that

States transmit data to us on an annual

basis. There was some support for

collecting data on a quarterly basis. A

few commenters believed that the States

should send us summary information. A

few States suggested submitting data on

the same schedule as the MDS is

completed—that is, upon admission,

within 14 days of a significant change,

and annually. Others agreed that annual

submission would be adequate. A few

proposed that data be transmitted twice

a year. One commenter believed that all

States should submit data on the same

date.

Response: In order for MDS

information to be timely enough for use

in ongoing quality assurance programs,

a facility must submit MDS data at least

monthly to States. This would entail

submitting all full MDS assessments

(initial, annual and significant change),

and any partial assessments (quarterly,

discharge, and reentry) completed since

the facility last transmitted data to the

States.

States will also submit data to us at

least monthly. The regional offices also

need timely information in order to

perform Federal monitoring surveys. To

a certain extent, the role of the regional

office mirrors that of State survey

agencies. Hence, the regional offices

need timely, complete information.

Furthermore, this is necessary to enable

us to timely evaluate State trends or

regional problems. For example, linking

resident status information with SNF

cost report data could identify potential

Medicare utilization problems in

relation to certain outcomes or resident

status changes.

Analysis regarding the timeliness of

MDS data and frequency of transmission

requirements has shown that the MDS

data base must contain quarterly review

information if it is to be used for quality

monitoring purposes by State survey

agencies. Much of the work being done

to develop quality measures relies on

quarterly assessment data for each

resident. Leading researchers and

survey experts agree that the quarterly

review data are needed for the timely

and reliable identification of resident

outcomes for this purpose. There is

under development, discussion and

testing, a case-mix demonstration

payment system using MDS data in

calculating appropriate payment rates.

Comment: Commenters made

suggestions regarding what edits should
67190 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

be allowed without requiring the facility

to produce a new electronic record or

hard copy. One State wanted any

change in MDS information to result in

a new hard copy. Another State

proposed that we allow a typographical

error to be corrected at any time. A

consumer advocacy organization

proposed that if a facility makes changes

to a computerized copy, it should be

held to the same standard as written

records. Another commenter believed

that MDS software should create an

audit trail of changes made to an

assessment that would include the name

of the person making the change, the

date, the old value, and the new value.

The commenter suggested that we

permit a facility to keep the most

current copy in a hard copy format. A

State commenter believed that the

computer program should have the

ability to update the assessment

information without changing the

original version. Another State did not

want to make changes if the data had

been transmitted after the 21st day after

admission. Another State proposed

using those things that meet the criteria

for significant change with regard to

edits.

Response: According to current

policy, a facility may correct

typographical or factual errors within

required time frames. To make revisions

on paper records, a facility enters the

correct response, draws a line through

the previous response without

obliterating it, and initials and dates the

corrected entry. Computer-based

systems must have a way to indicate

and differentiate between the original

and corrected entries on the printout of

the corrected form, and to ensure that

the correct information is transmitted to

the State. Again, we note that the

assessment must be accurate. A

significant correction of prior

assessment is completed at the facility’s

prerogative, because the previous

assessment was inaccurate or completed

incorrectly. Version 2.0 of the MDS

contains an item response that, when

checked, indicates that the assessment

is a significant correction of a prior

comprehensive assessment. A number

of providers have called to our attention

that the wording of this item precludes

its use when the prior assessment that

is being corrected was a Quarterly

Review Assessment. We will add code

to the MDS version 2.0 that will provide

a mechanism for this.

A significant correction of prior

assessment differs from a significant

change in status assessment, in which

there has been an actual change in

resident’s health status. If there has been

a significant change in health status, the

facility cannot merely correct the

affected items on the MDS. The facility

must complete a full new assessment.

Any subsequent changes should be

noted elsewhere in the resident’s record

(for example, in the progress notes). As

stated previously, however, the

procedures and policy governing issues

of data storage, retrieval, validation and

maintenance in facilities will also be

addressed more fully in a forthcoming

HCFA publication, such as a State

Operations Manual.

Comment: Some commenters

requested that the requirements we

issue allow electronic signatures. This

would avoid duplication by not

requiring that the facility keep on file a

hard copy with signatures.

Response: In the development of the

system, we will consider requirements

for electronic signatures.

Comment: Commenters addressed

how and to what extent we should

standardize electronic formats and how

to revise the format to be consistent

with technological changes. One State

did not think that a standardized

electronic format is necessary, and

proposed that we request summary

reports, findings and group data instead

of individualized data, which would

obviate the need for a standard format.

Several others expressed the belief that

we should specify a format. A national

provider organization pointed out that a

standardized format would facilitate

collecting, merging, and analyzing

national data. Another commenter noted

that it would also decrease software

development costs. A State provider

organization pointed out that nothing

would be more frustrating and costly

than software that is not well thought

out and requires several revisions. The

commenter suggested that we already

have experience in formatting because

of the case-mix demonstration project.

A State expressed the belief that it

would be easier to maintain a single

format than have to deal with different

software languages and media types.

The commenter further said that we or

the States should be responsible for

making formatting changes and sharing

them with those affected. Another

recommendation was to use Online

Survey, Certification and Reporting

System and create a subsystem for MDS

data. By accessing an ‘‘enhancement

log,’’ the system would be under

constant review and revision.

Response: We concur that many of

these suggestions have merit. In the

spring of 1995, we developed and

issued a standard record layout and data

dictionary. These were made available

to facilities and software vendors as

well as the States. When these

regulations go into effect, the

assessment records that facilities

transmit to States must conform to the

standard layout. Hence, software

vendors have been strongly encouraged

to use the layout and data dictionary

when developing software products for

MDS version 2.0. We believe that this

will ensure uniformity in format but

still allow facility flexibility and choice

in terms of the software products they

use to encode MDS records.

Comment: A national provider group

proposed that we require States to

develop and make available a software

package that would transmit data in the

appropriate format. A few commenters

expressed the belief that as long as they

meet Federal standards, States and

facilities should be able to develop

additional standards.

Response: We have developed, and

are in the process of testing, a national

system for MDS data transmission that

will be made available to all States that

includes commercially available

standard transmission software. We are

mandating that the facility transmit

MDS data to the State according to

minimum data validity specifications

and using standard communication and

transmission protocols. The State may

choose to impose additional data

validity specifications, exceeding our

mandated minimum specifications.

Comment: We received a few

suggestions regarding specific

organizations with whom we could

consult in developing a standardized

format. One suggestion was to form a

technical advisory board that would

consist of Federal and State personnel,

providers, hardware and software

vendors, and resident advocacy groups.

Another was to contact a specific

standards committee to obtain their

input on developing a format.

Response: We sought technical

assistance from those parties as part of

a technical advisory group that we

organized as part of the systems design

process. We met with several of the

groups mentioned above early in the

design process to get input on a number

of systems development issues. We will

continue to seek input throughout the

development. We are committed to

working closely with interested and

affected parties in the design process.

Comment: Commenters suggested that

the standardized format should be in

either ASCII or EBCDIC, and should

include data item description, data item

beginning and ending column, data item

length, and whether the data is right or

left justified. One State noted that some

States have already begun to

computerize and that the format should

be receptive to those programs,
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67191

particularly for States utilizing our RAI.

A State commenter believed that a data

dictionary should be provided for each

data submission, which would provide

a vehicle for documenting problems

with the data submission.

Response: As previously stated, we

have been working closely with States

that are computerized. Several States

were instrumental in developing the

data dictionary and record layout. With

their expertise, we constructed a

standard layout that still allows

flexibility for States which have added

MDS items. Facilities and States must

conform to the standard record layout,

which is currently constructed in ASCII.

Comment: Several commenters

wondered how facility noncompliance

with the requirement to transmit the

MDS data would be enforced.

Response: As stated earlier in this

preamble, facility noncompliance with

the reporting requirement established by

this final rule will be subject to the full

range of enforcement remedies set forth

in part 488, subpart F, ‘‘Enforcement of

compliance for long-term care facilities

with deficiencies.’’ We will treat a

facility’s failure to comply with MDS

reporting requirements as

noncompliance under the definition in

§ 488.301. At a minimum, we will

require a plan of correction, and will

impose the mandatory denial of

payment for new admissions sanction if

the facility has not achieved substantial

compliance within 3 months from the

date of the finding of noncompliance. In

such a case, if the facility is still not in

compliance with requirements within 6

months from the date of the finding, we

will terminate its provider agreement.

Also, we may impose one or more other

remedies, as determined by us or the

State, in accordance with part 488,

subpart F.

Facility failure to meet acceptable

standards of performance, including

failure to transmit the MDS data, or

failure to otherwise improve upon its

past poor performance, or failure to

transmit or to maintain compliance

relative to this reporting requirement

could be considered by us to be

indicative of the facility’s inability or

unwillingness to perform the resident

assessment itself. We believe that this is

a reasonable conclusion because if the

requirement to conduct a resident

assessment has been satisfied and

completed, then the administrative

reporting requirement would simply

and logically follow. Noncompliance

that is repeated or which recurs

intermittently becomes part of the

facility’s noncompliance history which

is a factor when we or the State selects

the appropriate enforcement response.

We will sanction, accordingly, a facility

that demonstrates little or no

commitment to continual, rather than

cyclical, compliance. A State will be

easily able to ascertain whether a

facility is transmitting the required

information timely and in the manner

that we prescribe, those facilities that

fail to meet the standard may be subject

to the full range of available remedies,

including denial of payment for new

admissions and civil money penalties.

We do not expect perfection relative to

compliance with this reporting

requirement; we will incorporate

limited tolerance into the compliance

assessment process, whereby good faith

efforts made by facilities will be

considered. An additional level of

tolerance will exist during early phases

of implementation of the requirement.

Comment: A number of commenters

addressed a wide variety of issues

relating to the computerization of MDS

information. A State commenter

stressed that we should emphasize the

benefits to facility staff and residents. A

consumer advocacy group expressed the

belief that we should address how

computerization will affect utilization of

the RAPs and the individualization of

the care planning process.

Response: As mentioned in the

previous discussion of data uses, we

believe that the automation of this

information will be extremely helpful to

facilities. We note that computerization

of resident assessment information does

not relieve facilities of their

responsibility to develop, by an

interdisciplinary team, a

comprehensive, individualized care

plan. While software packages exist that

will automatically print a plan of care

based on responses to MDS items that

trigger a RAP, an individual must still

exercise professional clinical judgment

in customizing the care plan to suit each

resident’s individual needs.

Comment: Commenters proposed that

we develop regulations and manual

instructions relating to transmitting

data. A State wanted a

telecommunications program to be

mandated. Another State expressed the

belief that we should penalize facilities

which do not comply with submission

requirements.

Response: Once we develop key

specifications for data transmission, we

will issue clarifying policy and give

instructions to States and providers in a

State Operations Manual transmittal.

We will require that a facility comply

with the policy and regulations covering

this data base in order to participate in

the Medicare and Medicaid programs.

As mentioned above, we are requiring

that a facility electronically transmit its

data via telecommunications

infrastructure to the State. Penalties for

not complying with submission

requirements are addressed with the

comments on proposed § 483.20(b)(6),

Automated data processing requirement.

Comment: Some commenters

discussed software vendors who have

developed RAI packages. Commenters

suggested that we develop a program to

test vendor software for minimal

acceptability.

Response: We are developing several

aids to promote the accuracy of RAI

software packages developed by

commercial vendors. These efforts

include the following documents and

data files, being published on our World

Wide Web site (at http://www.hcfa.gov/

Medicare/hsqb/mds20/) and otherwise

available from us.

• Detailed specifications for data

validity (valid ranges and consistency

requirements for MDS items).

• Detailed logic and a test data base

for RAP determination.

• Detailed specifications for the file

structure, record layout, and field

formatting for MDS files submitted by

facilities.

• Detailed logic, a test data base, and

a test program for Resource Utilization

Group calculation.

We are also developing a standard

State-level MDS processing system to be

distributed to each State. One feature of

this system allows RAI software

developers to transmit test files of MDS

data to the State and receive a detailed

log of all data validity errors

encountered in the test file.

We will continue to promote

processes for assuring the accuracy of

software packages developed by vendors

even though the approaches to this

effort will change over time.

Comment: In the preamble to the

proposed rule, we encouraged comment

on developing a mechanism for advising

us on the need and method to update

the MDS and RAPs. Commenters agreed

that we do need a method to update the

RAI. Several suggested that we establish

a clinical advisory panel or commission

similar to the project team, clinical

panel and advisory committee that

developed the RAI. Other ideas

included an annual update schedule,

including any changes in the MDS as an

addendum; sending periodic

questionnaires to providers, State

agencies and organizations; and a yearly

comment period.

Response: We have always recognized

that the RAI will need to reflect

advances in clinical practice and

assessment technology. We will be

making periodic revisions to the RAI. In

1994, we awarded a contract to the
67192 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

Hebrew Rehabilitation Center for Aged,

under which we will revise the RAI over

a few years. The contractor will convene

representatives of States, provider

organizations, professional associations,

and consumer organizations. These

groups will advise us regarding the need

to add or refine items or definitions, and

regarding areas that are less well

understood, and require clarification. As

in the past, the revision process will be

one in which we seek input from the

many interested and affected groups.

Comment: We solicited comment on

how to coordinate the assessment

process with other assessment protocols

such as home health assessments and

the uniform needs assessment

instrument (comments on coordinating

with PASRR are discussed with the

comments on proposed § 483.20(b)(5),

Coordination). Some who commented

merely agreed that it is necessary to

coordinate assessments. Others gave

suggestions, for example, that we issue

a stronger directive that a facility

provide a copy of the MDS as part of

their post-discharge care, use the RAI in

all long-term care settings, and

coordinate with the home and

community based waiver MDS of OBRA

’90.

Response: We recognize the need to

coordinate an individual’s health care

across various health care settings and

the importance of assessments in this

process. Currently, we have no statutory

authority to require this coordination

except in the case of coordination of the

RAI with preadmission screening

programs for individuals who are

mentally ill and mentally retarded.

However, there is great interest in the

development of clinical data sets like

the MDS for several provider types,

including end-stage renal disease

facilities and home health agencies.

Work is well underway to develop

screening tools in some of these areas.

§ 483.20(b)(1) Resident Assessment

Instrument

Comment: Commenters addressed the

proposed requirement that the

assessment process must include direct

observation and communication with

the resident, as well as communication

with licensed and nonlicensed direct

care staff on all shifts. Most supported

the requirement. A few commenters

were concerned with enforcement of the

requirement. Some wanted us to require

that the facility communicate with the

resident only when clinically feasible,

since the resident may not have the

cognitive skills to verbally

communicate.

Response: The resident is a primary

source of information when completing

the assessment and may be the only

source of information for many items. In

the RAI User’s Manual and in the State

Operations Manual, Transmittal No.

272, we have instructed facility staff to

talk with and observe the resident. It is

still possible to interact with a resident,

even if he or she is unable to

communicate verbally. Staff can closely

observe the resident and respond to

many MDS items based on observation.

We acknowledge that evaluating facility

compliance may be difficult but we

believe that this requirement is too

important to delete. However, we do not

want to require a specific process for

documenting collection of data across

shifts. This would burden facilities and

limit their flexibility to implement a

process that is most appropriate for each

facility’s specific situation and

practices.

Comment: A few commenters

believed that only the direct care staff

responsible for providing care to the

resident on all shifts should be included

in the assessment process. Others

wanted us to require that the facility

talk to other people, such as a resident’s

family members/guardians, the

attending physician, and other licensed

personnel.

Response: We did not limit the

assessment process to only those staff

members responsible for actually

providing hands-on care because we

believe that facility staff who are not the

primary care-givers often have valuable,

first-hand information about a resident.

For example, housekeeping staff who

routinely talk with residents may be

aware that a resident prefers extra

pillows on her bed because it alleviates

her back pain. In the State Operations

Manual Transmittal No. 272 and in the

RAI User’s Manual we suggest that

information sources for the assessment

should include, but are not limited to,

discussion with the resident’s attending

physician, appropriate licensed health

professionals and family members.

Family members are a valuable source

of information regarding the resident,

particularly for cognitively impaired

residents, for whom family is often the

only source of information regarding the

resident. For example; a resident’s

spouse may be the only person who

knows what the resident was like prior

to admission to the nursing home, and

is able to provide background

information that is necessary for staff to

complete the Customary Routine section

of the MDS.

We require that a physician be a part

of the interdisciplinary team that

prepares the care plan. We acknowledge

that a doctor’s schedule may not allow

consistent participation in the

assessment process. While we

encourage facilities to discuss the

resident’s status with the attending

physician to gain and validate

information, we are not requiring it. The

statute is silent regarding the

participation of individuals other than

health professionals.

Comment: Some commenters wanted

us to clarify that communication with

all shifts can be both verbal and written.

For example, information could be

exchanged at pre-shift meetings,

through progress notes or other

documentation in the clinical record, or

by other means.

Response: We agree that information

can be exchanged in a number of ways,

and discuss possible mechanisms in the

RAI User’s Manual. At this time we do

not wish to mandate a communication

process; rather, each facility should

determine how to best exchange

information about the resident.

While we did not receive comments

regarding the facility assessing the

resident using the RAI specified by the

State, we are adding to § 483.315(c) that

the State must obtain our approval of a

State-specified instrument. This is more

consistent with sections 1819(e)(5) and

1919(e)(5) of the Act. Furthermore, we

are specifying those domains or areas

that the facility must assess. We listed

these domains in the assessment

requirement previously, and

inadvertently omitted them at former

paragraph (b)(2); a State suggested that

removing the domains weakened the

requirement. Additionally, surveyors

use the regulatory tags for particular

domains to cite deficiencies when a

facility has problems only in certain

assessment areas. The State is

responsible for obtaining approval from

us for its instrument and to specify its

approved instrument to facilities.

Facilities must therefore rely upon the

State’s assertion that the instrument is

approved by the Secretary.

Proposed § 483.20(b)(2) When Required

Comment: Several commenters

addressed our proposed requirement

that a facility complete the

comprehensive assessment within 14

days after a resident’s admission. Some

commenters agreed with the 14-day

time period, and wanted us to

emphasize that the RAI and quarterly

review are a minimum, stressing that all

the resident’s needs must be identified

and care planned as necessary. A

commenter requested clarification

regarding completion ‘‘within 14 days

after admission,’’ stating that it could be

interpreted differently. For example, the

facility could construe the requirement
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67193

to mean ‘‘14 days after admission’’ or

‘‘the fourteenth day of admission.’’

Response: Completion of the RAI

specified by the State does not

necessarily fulfill a facility’s obligation

to perform a comprehensive assessment.

As previously stated, § 483.25 requires

that a facility ensure that each resident

attains or maintains his or her highest

practicable well-being. A facility is

responsible for assessing areas that are

relevant for individual residents,

regardless of whether they are included

in the RAI. For example, in completing

the MDS, the assessor simply indicates

whether or not a factor is present. If the

MDS indicates the presence of a

potential resident problem, need, or

strength, the assessor should then

investigate the resident’s condition in

more detail. The RAPs may assist in this

investigation.

Other problems that are relevant for

an individual resident may not be

addressed by the RAI at all. For

example, the MDS includes a listing of

those diagnoses that affect the resident’s

functioning or needs in the past 7 days.

While the MDS may indicate the

presence of medical problems such as

unstable diabetes or orthostatic

hypotension, there should be evidence

of additional assessment of these factors

if relevant to the development of a care

plan for an individual resident. Another

example of resident concerns not

addressed by the MDS is sexual

patterns. Some facilities have responded

by creating additional assessment tools

which they complete for all residents in

addition to the State RAI. This is not a

Federal requirement. Additional

assessment is necessary only for factors

that are relevant for an individual

resident. Facility staff have stated that

many of the items added to version 2.0

of the MDS may eliminate the need for

supplementation of items in facility

specific assessments and will hopefully

contribute to a more comprehensive

assessment for each resident.

A facility is also responsible for

assessing and intervening in response to

acute or emergent problems such as

respiratory distress or fever. While this

may seem obvious, surveyors have

reported numerous instances in which

this has not occurred.

A facility must complete the initial

assessment no later than 14 days after a

resident’s admission. For example, if a

resident is admitted on July 1, the

assessment must be completed by July

15. Although Federal requirements

dictate the completion of RAI

assessments according to certain time

frames, standards of good clinical

practice dictate that the assessment

process is more fluid, and should be ongoing.

Comment: A few commenters

recommended that we require the

assessment within the month that the

annual is due and not a narrowly

defined ‘‘every 365 days.’’

Response: The statute requires that a

facility conduct an assessment no less

often than once every 12 months. The

facility should use the completion date

of the last assessment (in other words,

the date the registered nurse coordinator

has certified the completion of the

assessment on the RAP Summary form

in section V) to calculate when the

annual assessment is due. Current

policy is that the next assessment is due

within 365 days. As we are not aware

of any problems regarding this policy, it

will remain unchanged.

Comment: Commenters proposed

alternatives to the requirement that a

facility complete an initial assessment

within 14 days of a resident’s

admission. A commenter suggested that

a facility complete the MDS within 14

days of admission, and the RAPs and

care plan within 7 days of completing

the MDS (instead of completing the

MDS and the RAP process in 14 days).

This would allow adequate time to

complete and document the in-depth

assessment. Others believed that 21

days to complete the assessment and 30

days to complete the care plan is

necessary.

Response: As mentioned above, the

statute currently specifies the time

frame for the initial assessment, which

does not allow us any latitude. We have

defined the RAI to include the MDS,

triggers and utilization guidelines,

including the RAPs. Since the RAPs are

part of the comprehensive assessment,

they too must be completed within 14

days after admission or detection of a

significant change. Current care

planning requirements allow 7 days

after completion of the RAI for

completion of the plan of care.

Comment: A consumer advocacy

group suggested that we require an

assessment similar to the quarterly

review upon the resident’s return from

a hospitalization, since some change in

the resident’s condition had

necessitated the hospital visit. Another

commenter recommended that we

require an assessment when the use of

restraints for an individual increased

over a prescribed threshold.

Response: We agree that it may be

beneficial for the facility to complete

another assessment upon return from

hospitalization or upon an increase in

restraint usage. An increase in restraint

use is an example of a situation in

which a significant change reassessment

is probably necessary. If it becomes

necessary to restrain a resident or

increase restraint usage, it is likely that

the resident’s condition has deteriorated

and there are behaviors of new onset or

increased frequency. In this case, the

facility must revise the care plan. If a

resident’s condition has significantly

changed prior to or after hospitalization,

the facility must complete a

comprehensive, significant change

assessment on the resident’s return to

the facility. Some facilities have

instituted a policy requiring a

comprehensive RAI assessment each

time a resident is readmitted after

hospitalization. We prefer, however, to

leave our requirement so that it is based

on what is clinically warranted (in other

words, whether the resident’s condition

meets the definition of a significant

change).

Comment: Several commenters,

including some State and national

provider organizations, were concerned

with the impact that the 14-day

requirement would have on facilities

whose residents are typically short-stay,

such as residents in hospital-based

SNFs. A few wanted us to exempt

facilities which have an average length

of stay less than 30 days from having to

complete the assessment. Others wanted

all facilities to have 30 days in which to

complete the assessment. Some

commenters suggested that we develop

an alternate instrument that pertains to

the specific care needs of short-stay

residents. For example, they maintained

that the MDS does not contain enough

detail on the rehabilitative aspects of

care, nor does it capture important

information about a post-acute

resident’s health conditions. Others

proposed that we allow a facility to

complete only those MDS items that are

appropriate for short-stay residents and

skip the rest. A few commenters wanted

us to convene a clinical advisory panel

that would assist in identifying the

clinical characteristics of short-stay

populations and determining which

MDS elements are critical for them.

Response: From the comments

received, it is evident that there are a

variety of strategies that people believe

would be useful in dealing with the

assessment of short-stay residents. We

cannot, under the law, extend the time

frame for completion of the RAI. Nor

can we currently exempt any facility

certified under the long term care

facility requirements, even though it

may provide care exclusively or

primarily for individuals needing a

short period of rehabilitation prior to

return to the community. While we are

aware that this has long been a concern

voiced by some providers, various
67194 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

clinical experts have long believed that

the majority of the RAI gathers useful

information for short-stay individuals as

well as long-term residents. In 1992 and

1993, we consulted with several panels

of expert clinicians and health

professional, provider, and consumer

groups to identify MDS items that were

not pertinent for short-stay individuals.

Of the few items that the panels

proposed as not being relevant for shortstay individuals, there was no

consensus on eliminating items, with all

groups in agreement that all individuals

in certified facilities would benefit from

the RAI assessment process.

We agree that the original MDS did

not contain enough relevant information

pertinent to short-stay populations. We

have added some items to version 2.0

related to special therapies and care

needs (previously included in the

MDS+, an alternate RAI used by some

States) that are very relevant for shortstay populations. A national association

representing hospital-based skilled

nursing facilities reported finding these

MDS+ items useful in identifying

nursing and therapy needs for short

term stay residents and for determining

Medicare coverage and subsequent

reimbursement.

We have also added an item to collect

information on pain that will assist

facilities in providing more focused care

for short-stay residents. Furthermore,

we will clarify and add material to

several of the RAPs specific to short-stay

populations as part of our contract with

the Hebrew Rehabilitation Center for

Aged to refine the RAI, in an effort to

facilitate a more effective and efficient

assessment for these residents.

Moreover, as this concern has

continued to be voiced by providers and

as the number of individuals

undergoing a short-term, generally

rehabilitative stay in certified skilled

nursing facilities has continued to

increase, we have begun to revisit this

issue. We are currently consulting with

providers, consumer groups and

professional associations for the

purpose of informing them about our

work on developing a module of

assessment items that would be

completed as an alternative to many of

the core MDS items. In this way,

probably through the use of the ‘‘skip

pattern’’ logic in the MDS, facilities

providing care for ‘‘short term stay’’

individuals could perform a

standardized, reproducible assessment

that is more relevant to the resident

population, while still adhering to the

statutory requirement to perform a

comprehensive assessment based on the

MDS.

Comment: Several commenters

expressed the belief that the MDS is not

appropriate or does not collect enough

information for special care

populations, like pediatrics, individuals

with AIDS, individuals with head

injuries, individuals who are terminal

and are receiving hospice care, and

properly placed residents who have

mental illness or mental retardation.

The concerns were similar to those who

addressed short stay residents. A State

provider organization asserted that the

MDS is designed for a homogeneous,

chronic long term care resident and

suggested that we develop a variety of

assessment parameters. Another State

organization stated that 70 percent of

the MDS+ elements do not apply to

children. The commenter went on to say

that about one-fifth of those that do

apply are demographic in nature.

Commenters noted that facility staff

need to know what kinds of behavior

usually heralded the onset of a

psychiatric crisis for a resident with

mental illness, and that the MDS does

not sufficiently capture behavioral

disorders, mood disturbances, activity

potential, and cognitive functioning for

individuals with mental illness or

mental retardation. To address these

concerns, commenters recommended

that we:

• Waive special care populations

from the RAI requirement;

• Develop additional RAPs to address

specific needs;

• Develop additional MDS elements

in modules for ‘‘special care’’ residents;

• Have skip patterns; or

• Develop a new instrument.

Response: We acknowledge that the

MDS may not be completely responsive

to the needs of special populations in

nursing homes today. We expect to use

MDS data to gain a better sense of the

clinical characteristics and care needs of

the diverse population of long term care

facilities, and to refine the RAI as it

appears warranted over time. In the

meantime, some of the items that were

added to the MDS are more responsive

to the needs of these residents. For

example, items that assess the presence,

type, intensity, and treatment of pain

were added to version 2.0; this is

particularly important for residents in a

hospice program. We have expanded

significantly the MDS items associated

with mood and behavior, and also

included the use of programs for

treatment of mood and behavior

problems. Again, we note that the

statute does not allow us to exempt

certain populations.

Comment: A State commenter

requested that we exempt terminal/

hospice residents from RAI

requirements since the philosophy of

hospice care is vastly different from the

rehabilitative approach of the typical

nursing facility. Another State

commenter noted that SNF/NF residents

who are residents of a certified hospice

will have two assessments and two care

plans because of two sets of

requirements; it is possible that the care

plans may be conflicting.

Response: When a resident of a

Medicare participating SNF/NF elects

the Medicare hospice benefit, the

hospice and the SNF/NF must

coordinate, establish, and agree upon a

plan of care for both providers which

reflects the hospice philosophy and is

based on an assessment of the

individual’s needs and unique living

situation in the SNF/NF. This

coordinated plan of care must identify

the care and services that the SNF/NF

and hospice will provide in order to be

responsive to the unique needs of the

individual and his or her expressed

desire for hospice care. The plan of care

must include directives for managing

pain and other distressing symptoms

and be revised and updated by the SNF/

NF and hospice, as necessary, to reflect

the individual’s current status.

Our policy is that when a resident of

a SNF/NF elects to receive Medicare

coverage of services under the hospice

benefit, both the Medicare hospice

conditions of participation and the SNF/

NF requirements apply. This means that

the facility must assess a resident using

RAI. Some confusion arose among the

SNF/NF providers concerning the

completion of RAPs that were not

clinically appropriate. We have issued a

clarification memorandum reminding

providers that the RAPs are guidelines

for assessment. They are not meant as

prescriptive courses of actions. Rather,

they are intended as frameworks for

assessment that are clinically indicated

depending on the needs of each

individual resident. For example, some

of the RAP guidelines may include

content suggestive of an aggressive

work-up to determine causal factors that

may not be appropriate for individuals

who are terminally ill (for example, an

aggressive work-up to determine the

cause of weight loss would generally not

be appropriate or expected for a resident

receiving hospice care.) Many of the

RAPs, however, such as ‘‘Activities’’ or

maintenance of the resident’s

‘‘Activities of Daily Living’’ should lead

to more aggressive assessment if they

are useful in helping facility staff

increase the resident’s comfort level and

ability to attain or maintain his or her

highest practicable well-being and

create an atmosphere in which the

resident will be able to die with dignity.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67195

It is important to remember that RAP

documentation and the plan of care may

also reflect a resident’s right to refuse

treatment or services.

In summary, we developed the RAPs

to assist facilities in planning

appropriate and individualized care for

residents. As we revise the RAP

guidelines over the next few years, we

intend to incorporate material

specifically related to terminal care to

better address the needs of the hospice

residents residing in SNF and NFs.

Comment: Some commenters wanted

changes in the proposed definition of

‘‘readmission.’’ One asked for

clarification of what a ‘‘temporary’’

absence meant, asserting that a 5-month

absence could be temporary for

someone who has lived in the facility

for 10 years. A State provider

organization thought that ‘‘temporary

absence’’ should not be defined only as

a hospitalization, but should allow for

other absences like doctor’s visits.

Response: We do not consider it to be

a temporary absence when a resident

leaves a facility for a doctor’s visit; we

do not require that a facility conduct a

new assessment merely because of such

a visit. Readmission is defined as a

resident returning to a facility from the

hospital or therapeutic leave. We

consider an absence to be temporary

when the facility fully expects the

resident to return. For example, if a

resident leaves the facility for a few

days during a holiday season, the

nursing home would not need to

complete a new assessment (unless

there has been a significant change). If

the resident is absent for an extended

period of time, however, it may be

difficult for the facility to determine if

a significant change has occurred, and

the facility may wish to conduct an

assessment. Furthermore, if the resident

is absent for a year or more, the facility

must conduct its annual reassessment

upon the resident’s return. However, we

are not attaching a time frame to

temporary absence. This holds

regardless of where the resident went

and how long he or she was absent from

the facility. This policy recognizes that

there is variation in bed hold and

discharge policies in the States.

Comment: A few commenters

expressed concern with the proposed

provision in § 483.20(b)(2)(i) that would

allow a facility to amend assessment

information up to 21 days after

admission in some situations. One

commenter thought the entire MDS was

amendable. A national provider

organization recommended that we

permit a facility to correct ‘‘technical’’

items on the MDS beyond the 21st day

because these items would not alter the

triggers or RAP process.

Response: In the past, we had not

allowed a facility to correct non-factual

errors once the assessment was

completed. Rather, these non-factual

errors were to be noted elsewhere in the

resident’s clinical record (for example

progress notes). A facility corrected nonfactual errors on the next assessment (in

other words quarterly, annual,

significant change). A facility needs to

complete a new MDS when the nonfactual error would have an impact on

the resident’s care plan. In this case, a

facility should perform another

comprehensive assessment (in other

words the MDS and RAPs) within 14

days of noting the error. We would note

that non-factual errors associated with a

resident’s assessment and significant

change associated with the resident are

two different concepts; however, both

can result in completing a new

comprehensive assessment. As

discussed below, we are deleting the 21-

day provision.

Comment: A State provider group

disagreed with our proposed delineation

in § 483.20(b)(2)(i)(B) of categories

within the MDS that can be amended,

because the commenter did not believe

that facilities and surveyors would be

able to consistently differentiate which

items on the MDS could be changed.

The commenter proposed changing the

requirement to read ‘‘Further resident

observation and interaction indicates a

need to alter the initial assessment.’’

Response: The provision to amend

certain sections within 21 days has been

confusing for facilities. We are deleting

the 21-day provision. We require that a

facility complete the MDS and RAPs

within 14 days of a resident’s

admission, within 14 days of a

significant change in a resident’s status,

and at least annually. By the fourteenth

day, the registered nurse must sign and

date the RAP Summary form to signify

that the assessment is complete, within

regulatory time frames. Within 7 days of

completing the assessment, the facility

must:

• Encode the MDS and RAP summary

in a machine readable format;

• Run the encoded MDS through

edits specified by us. The facility must

correct any information on the encoded

MDS that does not pass HCFA-specified

edits.

Within 7 days of completing the

assessment, the facility must be able to

transmit the edited MDS and RAP

Summary form to the State according to

State or Federal time frames. Therefore,

the facility must:

• ‘‘Lock’’ the edited MDS record;

• Certify that the MDS meets HCFAspecified edits; and

• Print the edited MDS and RAP

Summary form and place them in the

resident’s record. The hard copy of the

assessment must match the assessment

that the facility transmits to the State. A

facility must, therefore, correct the hard

copy to reflect changes associated with

the edit correction process.

We believe that this change eliminates

the confusion for facilities as to what

sections could be changed. It will also

decrease the number of corrections the

facility will have to make and

subsequently transmit to the State due

to changed assessment information.

In § 483.20 (b)(2)(ii) and (b)(2)(iii), we

proposed that a facility must assess

current residents of a nursing facility by

October 1, 1991 and residents of a

skilled nursing facility by January 1,

1991. We are deleting paragraphs

(b)(2)(ii) and (b)(2)(iii) because these

requirements are no longer necessary.

They were necessary when the proposed

regulation was written to make sure that

individuals already residing in long

term care facilities were

comprehensively assessed according to

the new requirements.

Comment: There were many

comments related to the definition of

significant change at proposed

§ 483.20(b)(2)(iv). Commenters proposed

amendments to the definition, deletions

to the definition, and additions to the

definition. These comments follow.

Several commenters were concerned

that the definition leaves too much

room for interpretation and were

particularly concerned about how this

would be evaluated during the survey

process. One commenter pointed out

that the definition for significant change

leaves much to the professional

judgment of the surveyor to decide what

constitutes a significant change. A few

suggested that we delete ‘‘or should

have determined’’ from the criterion for

significant change because it invites

surveyor second-guessing of facility

multi-disciplinary staff judgment long

after the fact.

Other comments related to the notion

of permanency in the definition.

Commenters asserted that the

distinction between acute and chronic

changes is often difficult to determine,

and that the emphasis on permanency of

the change is too exclusive. Some

commenters preferred the language in

the State Operations Manual at

Appendix R or in the original RAI

Training Manual. They believed that

there is inconsistency between the

proposed regulation and the State

Operations Manual training manual, for

example, the definition of ‘‘permanent.’’
67196 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

Commenters wanted us to clarify what

permanent means. Another requested

that we delete ‘‘permanent’’ and

‘‘apparently permanent’’ from the

criterion, and that we add ‘‘is significant

(major) or likely to be permanent.’’ The

commenter believes that this will be

more consistent with the State

Operations Manual Transmittal No. 250,

which contains surveyor guidelines and

protocols.

A commenter was concerned about

whether the examples of significant

change in the proposed regulation were

intended to be all-inclusive, and

believed they should be expanded and

clarified. For example, the commenter

believed that the regulation should

clarify what a ‘‘sudden improvement in

resident status’’ means.

A few commenters, including a

national and a State provider

organization, recommended that we

change proposed paragraph (b)(2)(iv) to

read ‘‘within 14 calendar days after the

facility determines * * * that there has

been a significant decline or

improvement in the resident’s physical

or mental condition such that in the

clinical judgment of the assessor the

change in condition appears to be major

or permanent.’’ They believed that this

wording would be more consistent with

the original training manual.

A few commenters believed that

proposed paragraphs (b)(2)(iv) (A) and

(G) are redundant. One commenter was

confused as to which elements of the

MDS the facility reviews in determining

if a significant change has occurred

according to the criterion at paragraph

(b)(2)(iv)(A). A consumer advocacy

organization wanted paragraph

(b)(2)(iv)(A) to read ‘‘Apparent

permanent deterioration or

improvement in two or more activities

of daily living or apparent deterioration

or improvement in any combination of

two or more activities of daily living,

communication or cognitive abilities.’’

A few provider organizations wanted

the criterion revised to read

‘‘Deterioration in behavior or mood to

the point where daily problems arise or

relationships have become

problematic.’’ This wording would be

more consistent with the original

training manual.

A few recommended that we delete

‘‘requires staff intervention’’ or else

clearly define the phrase. Commenters

suggested that we change the wording to

‘‘benefits from staff intervention.’’ One

believed that the criterion should not be

limited to situations requiring staff

interventions because there may be

instances in which deterioration is not

perceived by staff as disruptive or

detrimental, and staff would, therefore,

not intervene. For example, staff would

not intervene, in the commenter’s

scenario, in a case in which a resident

is depressed and whose behavioral

presentation is passive.

One suggestion was to reword

paragraph (b)(2)(iv)(D) to read ‘‘A

marked or sudden deterioration in a

resident’s health status * * *’’. This

would clarify that this criterion does not

include the expected clinical

progression of a given diagnosis or

condition.

A few commenters suggested that we

delete paragraph (b)(2)(iv)(D) because it

is too subjective. One commenter stated

that this criterion would have surveyors

citing facilities for everything; for

example, just the fact that the resident

is old means that their life may be in

danger of ending.

A commenter suggested deleting ‘‘a

factor associated with’’ at paragraph

(b)(2)(iv)(E) because it does not add

anything to the definition. Others

offered suggestions for clarifying the

criterion at paragraph (b)(2)(iv)(E). A

few commenters proposed adding

‘‘* * * that has not responded to

treatment in the last 14 days,’’ which

would give the clinician a time frame in

which to evaluate the effectiveness of an

intervention. Another commenter

proposed adding ‘‘* * * that has not

responded to treatment within clinically

accepted time period standards.’’

A national provider group proposed

that we delete the criterion at paragraph

(b)(2)(iv)(F) and replace it with

‘‘improved behavior, mood, or

functional health status to the extent

that the established plan of care no

longer matches what is needed by the

resident.’’ The commenter believed that

this would confine the definition of

change to a functional measure and

focus the criteria on a positive outcome.

A commenter suggested that we add

two criteria to paragraph (b)(2)(iv):

‘‘(iv)(H) Potentially reversible

deterioration in mental functioning due

to suspected delirium. (iv)(I)

Deterioration in a resident’s family or

social circumstances which places the

resident’s psychosocial well being in

danger.’’ The commenter believed that

the criteria, as published in the

proposed rule, do not identify changes

that may be temporary, but which could

be noteworthy. Furthermore, the

commenter does not believe that enough

attention has been paid to the

psychosocial aspects of change.

One State commented that the

definition should not be in the

regulation text, but should remain in

interpretive guidelines, asserting that it

will affect the objectivity of the

assessors in determining significant

changes since these guidelines will

become more concrete.

Response: These substantial

comments regarding significant change

assessments warranted extensive

evaluation of the definition for

significant change assessment. Over the

past several years, we have been

providing clarification regarding the

significant change reassessment

requirement in surveyor training and

other training that we have conducted,

as well as through verbal and written

communication to States and providers.

We believe that it is necessary to

include the definition of significant

change in the regulation text. However,

the definition contained in this final

regulation is dramatically altered from

that which appeared in our proposed

rule, largely in response to the

comments we received and the

collective experience of providers and

States since implementing the RAI

process in 1990. This changed

definition will remain in the regulation

text to reinforce a facility’s

responsibility to conduct significant

change reassessments.

A key to determining whether a

significant change has occurred is

whether the resident’s status has

changed to the extent that the plan of

care no longer reflects the resident’s

needs and the facility’s plan to address

them.

We are revising the definition of

significant change, as follows: A

significant change means a decline or

improvement in a resident’s status that

will not normally resolve itself without

intervention by staff or by implementing

standard disease-related clinical

interventions, that has an impact on

more than one area of the resident’s

health status, and requires

interdisciplinary review or revision of

the care plan, or both. An example of a

condition that will normally resolve

itself without intervention by staff is a

resident’s 5 pound weight loss, which

would trigger a significant change

reassessment under the old definition.

However, if a resident had the flu and

experienced nausea and diarrhea for a

week, a 5 pound weight loss may be an

expected outcome. If the resident did

not become dehydrated and started to

regain weight after the symptoms

subsided, a comprehensive assessment

would not be required. Generally, if the

condition has not resolved at the end of

approximately 2 weeks, staff should

begin a comprehensive assessment.

A significant change reassessment is

probably indicated if decline or

improvement are consistently noted in

two or more areas of decline, or two or

more areas of improvement:
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67197

Decline

• Any decline in activities of daily

living physical functioning in which a

resident is newly coded as 3, 4 or 8

(Extensive assistance, Total

dependency, Activity did not occur);

• Increase in the number of areas

where Behavioral Symptoms are coded

as ‘‘not easily altered’’ (for example, an

increase in the use of code 1 for E4B);

• Resident’s decision-making changes

from 0 or 1 to 2 or 3;

• Resident’s incontinence pattern

changes from 0 or 1 to 2, 3 or 4, or

placement of an indwelling catheter;

• Emergence of sad or anxious mood

as a problem that is not easily altered;

• Emergence of an unplanned weight

loss problem (5 percent change in 30

days or 10 percent change in 180 days);

• Begin to use trunk restraint or a

chair that prevents rising for resident

when it was not used before;

• Emergence of a condition or disease

in which a facility judges a resident to

be unstable;

• Emergence of a pressure ulcer at

Stage II or higher, when no ulcers were

previously present at Stage II or higher;

or

• Overall deterioration of resident’s

condition; resident receives more

support (for example, in activities of

daily living or decision-making).

Improvement

• Any improvement in activities of

daily living physical functioning where

a resident is newly coded as 0, 1 or 2,

when previously scored as a 3, 4 or 8;

• Decrease in the number of areas

where Behavioral Symptoms or Sad or

Anxious Mood are coded as ‘‘not easily

altered;’’

• Resident’s decision-making changes

from 2 or 3 to 0 or 1;

• Resident’s incontinence pattern

changes from 2, 3 or 4 to 0 or 1; or

• Overall improvement of resident’s

condition; resident receives fewer

supports.

We may revise this list over time,

eliminating or adding items as well as

other situations that meet the significant

change definition. In an end-stage

disease status, a full reassessment is

optional, depending on a clinical

determination of whether the resident

would benefit from it.

We believe that this definition is

clearer than the proposed definition. It

also addresses many of the commenters’

concerns, including noting that the

change can be for improvement or

deterioration, and eliminates the need to

interpret whether a change is

permanent.

A self-limited condition is a condition

that will run its course without

intervention. It is of limited duration.

Because this implies a decline in status,

we are retaining the phrase, ‘‘a sudden

or marked improvement.’’

Comment: Commenters requested that

we specify that the time limits for

reassessments begin once the assessor

makes a clinical determination that the

change in resident status is permanent,

major, or both (in other words, within

14 days). This would prevent an

inconsistent outcome.

Response: In paragraph (b)(2)(iv), we

proposed that the facility must conduct

the reassessment within 14 days after

the facility determines that a significant

change has occurred. We are retaining

this provision (in § 483.20(b)(2)(ii)).

Comment: Some commenters

addressed the overall goal of

reassessments due to significant change.

One commenter stated that the clinical

goal should be to identify functional

changes and evaluate their source. Early

identification of illness, injury, etc., may

allow intervention to reverse and

prevent permanent loss of function. The

commenter cautioned that the

evaluations can be expensive and

counter-productive. Others maintained

that some changes are the natural result

of the aging process or of disease

processes like Alzheimer’s disease.

Some believed that these changes can be

anticipated and care planned without

conducting a new assessment. A

commenter wanted us to add a new

criterion to the definition for potentially

reversible deterioration in mental

functioning due to suspected delirium.

Response: We believe the

commenter’s suggestion for a new

criterion is included under the new

definition. The primary role of the

RAPs, which a facility also must

complete for a significant change

reassessment, is to help the facility to

identify causal or risk factors that can be

eliminated or minimized. Completing

the RAP process helps the facility

determine what services the resident

needs. It would be more costly if the

facility does not detect a significant

change and the resident is allowed to

decline. The resident could develop

complications from the onset of a health

problem or require hospitalization.

Furthermore, significant change

reassessments will help the staff to

determine if a change is the expected

result of a disease process or could be

reversed. Such would be the case in a

drug-induced delirium.

Comment: A few commenters thought

that the final regulation should allow for

consultation with a physician (the

medical director, for example) to

determine the significance or

permanence of a resident’s change.

Therefore, they maintained, the facility

staff would not have the responsibility

to make the determination and would

not be cited for it.

Response: We encourage consultation

with physicians, but it is not our intent

to absolve facilities from their

responsibility to monitor resident status.

The statute requires that a registered

nurse conduct or coordinate the

assessment. The registered nurse, by

virtue of licensure requirements and

State practice acts, has responsibility for

assessing and monitoring an

individual’s status, and notifying a

physician, as is warranted by changes in

the individual’s status.

Proposed § 483.20(b)(3), Quarterly

Review (Redesignated as § 483.20(c))

Comment: Several commenters

discussed the proposed quarterly review

requirements. Most agreed that a facility

should assess a resident at least

quarterly. A few, including a State,

wanted us to mandate the use of a

standard form. They believe that this

would provide consistency.

Response: OBRA ’87 required that a

long term care facility examine each

resident no less frequently than once

every 3 months and, as appropriate,

revise the resident’s care plan. We are

accepting the recommendation to

mandate a standard instrument. Not

only will this provide consistency

across the nation, but it will facilitate

computerization of the quarterly review

assessment items. In keeping with the

Federal requirement for a uniform

resident assessment instrument, the

Quarterly Review form is considered

part of the RAI. States may modify this

form or use an alternate instrument by

submitting a request to us. However,

each State’s Quarterly Review form

must include at least those items on the

HCFA Quarterly Review form.

Comment: One commenter said that

the requirement for a quarterly

assessment should be taken in the spirit

of four times a year and not a rigid every

90 days. This would allow the facility

to be flexible so that a resident’s health

status or the facility schedule could be

taken into account.

Response: If a resident is experiencing

a transient condition or is out of the

facility when his or her quarterly review

is due, the facility can wait until the

resident’s condition stabilizes or the

resident returns to the facility. The

facility should document the

circumstances associated with the delay

in conducting the quarterly review.

Regarding timing of the quarterly

review, we draw from the statutory

language, which states that the facility

must examine each resident no less
67198 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

frequently than once every 3 months.

This is also consistent with the

regulations in effect prior to the

publication of the proposed regulation.

We would also point out that the

calculation of when the quarterly review

is due based on when the last

assessment or quarterly review

completed by the facility. For example,

if a facility completed a quarterly review

March 1, and completed a significant

change reassessment April 15, the

facility must complete the next

quarterly assessment no later than July

15. If there had not been a significant

change, the next quarterly assessment

would have been due no later than June

1.

Comment: A few commenters wanted

us to provide that the quarterly review

determines if a comprehensive

reassessment is necessary. Furthermore,

they stated that the care plan may need

to be revised as a result of the quarterly

assessment. One commenter proposed

that quarterly reviews must also review

any section of the MDS relevant to

problems triggering or found in the

assessment.

Response: The purpose of the

quarterly review is to ensure that the

resident assessment data is accurate,

and that the facility continues to have

an accurate picture of the resident, in

order to monitor and plan care. If the

quarterly review indicates that a

significant change has occurred, the

facility needs to conduct a

comprehensive reassessment. This also

applies to the comment proposing a

requirement to review other areas in the

MDS if the quarterly review finds a

problem. The facility is not limited to

only reviewing the required portions of

the MDS that comprise the quarterly

review. While we encourage facilities to

review any section that might be

relevant to an individual resident, we

are not requiring at this time that a

facility review particular sections. We

are providing in § 483.20(d) that the

facility must revise the plan of care

when indicated by the assessment.

Comment: Several commenters

wanted additional MDS items or

sections required as part of the quarterly

review. One commenter thought that the

quarterly review should include the

entire MDS, providing additional

longitudinal information for an

outcome-based quality assessment

system. Some commenters wanted all or

a portion of Section N, Skin Condition,

from the MDS+, added. One commenter

noted that skin condition is a vital part

of nursing care and the resident’s

psychosocial well-being. Others wanted

at least one item added from former

Sections B, Cognitive Patterns, C,

Communication/Hearing Patterns, E,

Physical Functioning and Structural

Problems, F, Continence in Last 14

Days, H, Mood and Behavior Patterns,

K, Health Conditions, L, Oral/

Nutritional Status, and P, Special

Treatments and Procedures.

Response: We are not requiring that a

facility complete the entire MDS on a

quarterly basis, as we thought the

additional burden this would impose

was not warranted clinically. Based

heavily upon suggestions submitted by

commenters, we have added several

items to the quarterly review, including

an item on skin condition. The primary

use of the quarterly assessments is to

regularly ensure that the care plan is

responsive to the needs of the resident.

A secondary use of the information

collected through quarterly assessments

is that of quality monitoring at the

resident and facility level. Some of the

items on the quarterly review form have

been identified as quality measures. An

example of a quality indicator is urinary

incontinence. The MDS item H.1 is one

of the items that we use to monitor

quality of care associated with urinary

incontinence. A mandated quarterly

review assessment will provide for the

consistent collection and use of such

data.

We are also requiring that a facility

transmit its quarterly review assessment

records to the State. There are several

reasons for this. Analysis of residentlevel data over time is necessary to

generate quality measures (in other

words, a quality indicator system

requires quarterly assessment data for

each resident). As noted in the

discussion on establishment of the

national data base, a facility can identify

opportunities to improve its own

outcome and care practices through the

quality measures. Quarterly data will

also help a facility in its quality

assurance program. Furthermore, if

MDS data is to be used for quality

monitoring purposes by surveyors, it

must be timely. This means that we

must require facilities to transmit their

quarterly review records, in addition to

admission, annual and significant

change assessments, in order to use

MDS data in the long term care survey

process. Leading researchers and survey

experts in this area believe that

quarterly data is absolutely necessary

for the timely and reliable identification

of resident outcomes, both at the facility

level and the resident level.

Proposed § 483.20(b)(4) Use

(Redesignated as § 483.20(d))

Comment: A few commenters

requested a definition of maintaining

‘‘all resident assessments.’’ They were

confused as to whether this meant just

the MDS, or also the Identification Face

Sheet, documentation of the quarterly

reviews, the RAP Summary sheet, and

information pertaining to the decision to

proceed to care planning.

Response: ‘‘All resident assessments’’

includes all the documents mentioned

by the commenters—all MDS forms

(Sections AA through R, and V—the

RAP Summary Form), the Quarterly

Review forms, and Discharge and

Reentry forms. The RAP Summary form

indicates which RAPs were triggered,

whether care planning was done for

each of the RAP conditions, and where

data from the RAP assessment process is

documented.

We also require that a facility

complete a subset of items when a

resident is discharged, which includes

identifying information about the

resident, the type of discharge and the

destination upon discharge. As

mentioned in the discussion on the

national data base, we are also requiring

that the facility transmit this

information to the State and to us. This

will allow for the closure of a resident’s

current stay at the facility. Furthermore,

we are requiring that a facility complete

a subset of MDS items upon a resident’s

reentry to the facility (§ 483.20(f)). This

will allow the facility to ‘‘reopen’’ the

resident’s record in the facility system

as well as at the State and national

levels.

Comment: We requested that the

public advise us on what the

requirements should be for facilities to

keep a hard copy of the MDS on a

resident’s file if the assessment is

computerized. A few commenters urged

us to allow flexibility. One pointed out

that society is making large strides

toward paperless environments, and a

Federal regulation should not inhibit

such progress. Other commenters

thought that a hard copy should remain

in the resident’s record even if the

assessment is computerized.

Commenters recommended that hard

copies stay in the record for 2 years, as

the proposed regulation discussed.

Another commenter suggested 1 year. A

consumer advocacy group noted that

hard copies should always be accurate

because it is the copy most likely to be

used by direct care staff. A State said

that a hard copy on the record is

essential because appropriate staff may

not always be available to retrieve data

from the computer. A few commenters

did not want us to require that a facility

keep a hard copy of the MDS in a

resident’s active record. Commenters

believed that paper records are

expensive to maintain, and it should be

acceptable if a hard copy were readily
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67199

accessible to staff, residents, and

surveyors. A State commenter thought

that a coding system would need to be

created to handle old assessments and

reassessments. Commenters submitted

other ideas. One suggestion was to keep

the original MDS on the chart and not

require a computerized copy. Another

was to allow either the original or a

computerized version. A State suggested

printing a hard copy at the time of

survey, and that all electronic

assessment records should be created

according to the intervals called for

under the MDS. The commenter

believed that the computerized system

should be able to save or change

information as needed. Another State

said that we should require no further

storage of a hard copy version once the

facility produces and transmits a

computer version.

Response: In order to be used as

intended, by clinical staff at all levels,

we believe that it is necessary for the

facility to keep a hard copy in the

resident’s record of all assessments for

the past 15 months. This issue is also

discussed in responses to comments on

§ 483.20(b)(5). We agree that direct care

staff would be most likely to use a hard

copy of the assessment, and believe that

it would be problematic for clinical staff

to be expected to retrieve assessments

from the computer, both in terms of

their ability and willingness to do so

and also having the necessary

equipment available on all clinical

units. Unless all charting is

computerized, we believe that a facility

should maintain RAI assessments as a

part of the resident’s clinical record.

However, if a facility has a ‘‘paperless’’

system in which each resident’s clinical

record is entirely electronic, the facility

does not need to maintain a hard copy

of the MDS. To qualify for this

exception, the facility’s MDS system

must meet the following minimum

criteria:

• The system must maintain 15

months’ worth of assessment data (as

required in § 483.20(d)) and must be

able to print all assessments for that

period upon request;

• The facility must have a back-up

system to prevent data loss or damage;

• The information must always be

readily available and accessible to staff

and surveyors; and

• The system must comply with

requirements for safeguarding the

confidentiality of clinical records.

Furthermore, the facility must

maintain evidence that identifies the

Registered Nurse Assessment

Coordinator and other staff members

that completed a portion of the

assessment.

Comment: Commenters expressed

concern with the proposed requirement

to maintain assessments from the

previous 2 years on the resident’s

clinical record. One stated that the

intent of this requirement is unclear, as

it does not appear to serve any purpose

for facility staff in care planning, in that

facility staff will be using the most

recent assessment information they have

to aid them in the development of the

care plans. According to commenters,

maintaining 2 years’ worth of

assessment data in the resident’s active

record would be too bulky and

cumbersome. It could even add to

facility costs associated with purchasing

large chart binders and chart racks. One

commenter stated that the full 2-year

cycle of a resident would have

approximately 42 pages of assessment

documentation in the chart. If the

resident had two episodes of

‘‘significant change’’ in that time period,

this would add an additional 18 pages.

Commenters maintained that a thick

record would be prohibitive and

intimidating, adding that quantity does

not always translate into quality.

Several commenters maintained that

surveyors look at only the previous

year’s assessment information. Also, the

MDS does not require that the assessor

look back over more than 180 days, so

1 year’s worth of data would be

sufficient. They stated that earlier

assessment information would be easily

retrievable from the record if needed.

Commenters asserted that medical

information that is more than 12 months

old is likely irrelevant and outdated. A

commenter believed that the

regulation’s intent could be met if

historic materials were retrievable and

available to the assessor during the

reassessment and course of care. A

commenter suggested that we require

that the facility maintain all full

comprehensive resident assessments

completed within a 12-month period in

a resident record. One commenter

wanted the 2-year requirement to be

effective on the date of the final rule.

Response: The original intent of the

proposed requirement was to enable a

facility to better monitor a resident’s

decline and progress over time. We are

not able to determine if requiring that a

facility maintain assessment

information for a 2-year period has

facilitated the analysis of this

longitudinal data. We believe that the

information is necessary to evaluate the

resident’s plan of care, but have

decreased the required time period to 15

months of assessment records, since the

survey cycle allows for up to 15 months

between surveys. Additionally,

computerizing MDS records will allow

a facility to access prior assessments in

a timely and more efficient manner.

Comment: A professional organization

did not believe that 2 years of

assessment data was enough to capture

a decline in the resident’s status and

thought that we should require a facility

to maintain 3 years of assessment data.

Another suggestion was that we require

a facility to maintain at least two

comprehensive assessments in the

record with the appropriate quarterly

review and RAP summary forms.

Response: Requiring that a facility

maintain assessment data on a resident’s

record for 3 years would be too

cumbersome for most facilities;

however, a facility can maintain as

many years of assessment information

as it likes. It is possible that having this

amount of longitudinal data would be

helpful for a facility in tracking resident

progress. However, we are only

requiring that a facility keep 15 months

of the documentation associated with

the RAI in the resident’s active record.

Comment: Commenters requested that

we permit a facility to keep prior

assessment data in a ‘‘thinned’’ chart or

another appropriate location as opposed

to on the active chart. A few

commenters did not feel that we should

mandate where the facility keeps

documentation. Commenters suggested

that we revise the requirement to

provide that the facility must maintain

in active status all resident assessments

completed within the previous 2 years

and use the results of the assessments to

develop, review and revise the

resident’s comprehensive plan of care.

Response: As stated above, we are

revising the regulation to require that a

facility maintain 15 months of

assessment records. We would note,

however, that a facility need not store

assessment data in one binder to meet

this requirement. A facility may choose

to maintain the data in a separate binder

or kardex system, as long as the

information is kept in a centralized

location and is accessible to all

professional staff members (including

consultants) who need to review the

information to provide care to the

residents. It is not acceptable for the

assessment data to be stored where staff

cannot easily use it.

Comment: Another suggestion was we

require the facility make available the 2

years of data within 1 hour of request.

Response: We emphasize that the

primary purpose of maintaining the

assessment data is so that a facility can

monitor resident progress over time.

The information should be readily

available at all times.
67200 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

Proposed § 483.20(b)(5) Coordination

(Redesignated as § 483.20(e))

Comment: Commenters addressed the

proposed requirement that the facility

coordinate the assessment with any

State-required preadmission screening

program. Most who addressed this issue

agreed that coordination was needed to

prevent duplicative efforts, particularly

as part of the Level II PASRR. Some,

including States and provider

organizations, stated that the

responsibility for coordination should

be a State function and not the facility’s

responsibility, noting that a facility has

little or no control over the screenings.

One commenter noted that the facility

should not be penalized during a survey

because the State mental health

authorities are unable to do appropriate

plans of care. A commenter requested

that we not mandate this coordination

because, in most States, coordination

will be extremely difficult to

accomplish. A commenter suggested

that we provide, instead, that the facility

coordinate assessments to the maximum

extent possible.

Response: We agree that coordinating

the MDS with Federal PASRR

requirements, to the extent practicable,

will prevent duplicative efforts and the

unnecessary expenditure of resources.

The proposed regulation required that

the facility coordinate ‘‘to the maximum

extent practicable’’ with the PASRR

program and we are retaining this

language as is.

With respect to the responsibilities

under the PASRR program, the State is

responsible for conducting the screens,

preparing the PASRR report, and

providing or arranging the specialized

services that are needed as a result of

conducting the screens. The State is

required to provide a copy of the PASRR

report to the facility. This report must

list the specialized services that the

individual requires and that are the

responsibility of the State to provide.

All other needed services are the

responsibility of the facility to provide.

The PASRR report also lists some

nursing facility services the State

PASRR evaluator recommends for the

facility to consider including in the plan

of care. We note that the survey agency

should not cite a facility when the State

fails to fulfill its responsibility.

However, if a facility fails to fulfill its

responsibilities to, for example, prepare

fully developed care plans, then the

survey agency may cite it.

We would also like to point out that

the requirements relating to the

preadmission screening and annual

resident review program were amended

on October 19, 1996 by Public Law 104–

315. In summary, the legislation

amended section 1919(e)(7) of the Act

by removing the Federal requirement for

the annual resident review. Section

1919(b)(3)(E) of the Act was also

amended by the addition of a

requirement that a nursing facility

notify the State mental health authority,

mental retardation, or developmental

disability authority, as applicable,

promptly after there is a significant

change in the physical or mental

condition of a resident who is mentally

ill or mentally retarded. Finally, the

legislation amended section

1919(e)(7)(B) of the Act to require that

the State mental health or mental

retardation authorities conduct a review

and determination after the nursing

facility has informed them that there has

been a significant change in the

resident’s physical or mental condition.

In developing regulations to implement

the new provisions of the law, we will

try to ensure that States and facilities

are not be subjected to duplicative

requirements or the unnecessary

expenditure of resources.

Comment: Commenters were

concerned that the condition of a

resident may necessitate a new

comprehensive assessment done earlier

than annually, which would be

administratively problematic for State

mental health authorities trying to

coordinate their reviews.

Response: From the beginning of the

PASRR program, a significant change in

the condition of a resident with mental

illness or mental retardation has

required a judgement call to be made

concerning whether an annual resident

review was necessary. While this

requirement may initially have caused

some difficulty in scheduling, these

procedures should already be in place.

Comment: A few commenters

submitted suggestions as to specific

ways that the RAI and PASRR could be

coordinated. One suggested that we

expand items 11 and 12 in the former

Section I, Identification Information,

which pertain to mental health history

and conditions related to mental illness

or mental retardation. Another

suggested that we grant psychologists

the same status under these regulations

to practice to the full extent of their

licensure as has been recognized under

the PASRR regulations. One commenter

believed that Level II screening could

serve as part of the cognitive,

psychosocial, mood, and behavior

RAPs. A State commenter recommended

that the mental health authority use the

MDS for nursing decisions to refer

someone into the community mental

health system for further review.

Another commenter proposed that the

facility forward a copy of the MDS to

the State mental health authority, and

that relevant information from hospital

admissions be incorporated into the

MDS.

Response: There are several elements

of the MDS that could assist in

determining if the resident has mental

illness or mental retardation and

whether nursing home level of care or

specialized services, or both, are

necessary. We have changed the

language in the Section AB,

Demographic Information of the MDS to

be consistent with PASRR language and

definition regarding mental illness and

developmental disabilities. We will

further consider the coordination of the

RAI and PASRR in the development of

the regulations to implement the new

legislation.

Comment: A commenter suggested

that we add paragraph (b)(5)(i), which

would provide that State mental health

and mental retardation authorities may

determine for those residents whose

mental status and/or intellectual

functioning has remained stable over a

2-year period, based on annual resident

review criteria, as defined under subpart

C, § 483.100 et seq., and on-site

evaluation and record review, whether

the data contained in the annual RAI/

MDS is sufficient to make a

determination of continued need for NF

services and/or specialized services, or

whether further evaluation is required.

The commenter believed that much of

the information needed for Level II

screening can be obtained from the RAI,

especially for long-standing nursing

home residents with mental illness or

mental retardation. The State mental

health authority would still be making

the determination of level of services as

required under the PASRR

requirements.

Response: We agree, as noted above,

that the RAI data may serve as the basis

for State mental health and mental

retardation authorities to evaluate and

make determinations about the need for

NF care and for specialized services.

However, section 1919(e)(7) of the Act

prohibits a State mental retardation

authority and a State from delegating

their responsibilities to a nursing

facility or to an entity that has a direct

or indirect affiliation or relationship

with a facility. However, those

responsible for conducting the

evaluations should use applicable up-todate data from the MDS.

Comment: A State commenter

suggested including results of the

PASRR reviews on the MDS, for

example the dates of the reviews,

special needs, dates of recent
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67201

hospitalizations, and whether the

resident needs specialized services.

Response: We encourage facilities to

keep the results of a resident’s PASRR

with his or her MDS. We are not

mandating that a facility record PASRR

information on the MDS. The decision

about how much information to share

with a facility is up to the State’s

discretion, as is the choice of

assessment instrument and the

coordination of the various assessments.

We believe that a State should have the

flexibility to determine what a facility

must retain.

Comment: A State commenter

submitted several MDS elements that

help them identify residents who have

mental illness or mental retardation

(including a list of ICD–9 codes

recorded in the former Section J that

would indicate a developmental

disability). The commenter noted that

RAI software exists that enables them to

make this determination. Other MDS

items are useful in deciding if someone

is exempt from PASRR because of

terminal illness, dementia, or a severe

medical condition.

Response: We concur that several

MDS items would be helpful in

identifying residents with mental illness

or mental retardation. We encourage

States to develop or refine PASRR

programs, or individuals performing

surveys of the facilities, as well as those

conducting preadmission screening

under Public Law 104–315, to use the

information to the maximum extent

possible. We disagree with the

commenter who suggested that an

individual with a terminal illness,

dementia or a severe medical condition

is exempt from the screening

requirements. We believe the

commenter misconstrued the current

requirement at § 483.130, which permits

a State to make advance group

determinations when included in an

approved State plan. Categorical

determinations are categories for which

the State mental health or mental

retardation authorities may make an

advance determination that nursing

home services or specialized services

are needed for an individual with

mental illness or mental retardation.

These categories may include cases in

which the resident has received

convalescent care after an acute

physical illness that required

hospitalization and do not meet the

criteria for an exempt hospital

discharge. Dementia is not considered a

serious mental illness for the purposes

of PASRR. Therefore, a person with a

primary diagnosis of dementia would

not be considered to have mental illness

and would not be subject to PASRR

screening (unless he or she is also

mentally retarded).

Proposed § 483.20(b)(6) Automated Data

Processing Requirement (Redesignated

as § 483.20(f))

Comment: Several commenters

believed that the proposed October 1,

1994 date for capability of

computerization was unrealistic. A

national provider organization stated

that, based on the regulation process

and time frames, it was possible that we

would require that the systems be in

place before the final rule was

published, and this would be unfair.

Commenters offered alternative dates,

which included an implementation date

of October 1, 1995; at least 2 years from

the effective date of the final rule; and

postponing implementation until a

reimbursement mechanism is in place.

Another suggestion was that we publish

a rule specifically on computerization.

Response: We agree that an

implementation date for facility

computerization of October 1, 1994

should be deferred until June 22, 1998.

To redesignated § 483.20(f), we are

adding the requirement that a facility

transmit at least monthly to the State all

assessments completed in the previous

month. This includes admission

assessments, significant change

reassessments, annual reassessments,

quarterly reviews, and information

captured upon reentry to the facility,

transfer, discharge and death. We are

requiring the latter information for a

number of reasons. States that are

already computerized have noted that

this information is required to close out

the resident’s record at the State level

for the facility from which the resident

was discharged. We are aware that there

are some States which, for Medicaid

payment purposes, must know where

Medicaid recipients are every 24 hours.

Information upon reentry, transfer,

discharge and death will allow State

and Federal agencies to analyze long

term trends in resource utilization,

particularly in regards to movement

across various types of care providers.

Additionally, discharge information will

permit facilities to close out residents’

records on their system. In the State

Operations Manual, we will provide

facilities with instructions on which

MDS items must be completed to

document this information.

Furthermore, as discussed elsewhere,

we believe that the information will

provide facilities with invaluable data

they can use in a variety of ways.

Comment: A State commenter

asserted that we should develop

penalties for non-compliance regarding

the computerization requirement. The

commenter questioned whether the

penalties would fall on individual

facilities, States, or both. The State

suggested that, as an alternate to

penalties, we could provide monetary

incentives for timely and accurate

submission.

Response: The requirements to

encode the assessments in a machine

readable format and transmit the

information to the State are like all other

requirements that a facility must meet to

participate in the Medicare and

Medicaid programs. We believe that

computer-aided data analysis facilitates

a more efficient, comprehensive and

sophisticated review of health data.

Manual record reviews, on the other

hand, are labor intensive and more time

consuming, and may, therefore, tend to

be more occasional or anecdotal.

Additionally, utilization of the quality

measures and other types of quality

monitoring, such as observation of

trends and patterns, is enhanced

through computer aided data analysis.

Facility noncompliance with

requirements established by this final

rule will be subject to the full range of

enforcement remedies set forth in part

488, subpart F, Enforcement of

Compliance for Long-Term Care

Facilities with Deficiencies. However, at

a minimum, we will require that a

facility complete a plan of correction

and we will impose the mandatory

denial of payment for new admissions

sanction if the facility has not achieved

substantial compliance within 3 months

from the date of the finding of

noncompliance. Further, if the facility is

still not in compliance within 6 months

from the date of the finding, we will

terminate its provider agreement. We

may impose one or more other

remedies, as determined by us or the

State in accordance with part 488.

Additionally, noncompliance that is

repeated or that recurs intermittently

becomes part of the facility’s

noncompliance history, which is a

factor when we or the State selects the

appropriate enforcement response. A

facility that demonstrates little or no

commitment to continual, rather than

cyclical, compliance will be sanctioned

by us accordingly. We are not offering

incentives for timely and accurate

submission at this time, but may

consider such a concept as we revise the

survey process.

Proposed § 483.20(c) Accuracy of

Assessments (Redesignated as

§ 483.20(g))

Proposed paragraph (c) described the

requirements regarding who conducts

and coordinates the assessment,

certifying its completion and accuracy,
67202 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

and penalties for knowingly and

willfully falsifying the assessment. In

this final rule, we are redesignating

content of proposed paragraph (c)

related to accuracy of assessments as

paragraph (g), coordination, as

paragraph (h), certification, as paragraph

(i), and penalties for falsification, as

paragraph (j).

Proposed § 483.20(c)(1) Coordination

(Redesignated as § 483.20(h))

Comment: Commenters requested

clarification on the definition of ‘‘health

professionals.’’ Some, including a State

commenter, wanted to know if nurse

aides who are on the State’s nurse aide

registry could complete and document

portions of the assessment.

Response: A licensed health professional,

as defined at § 483.75(e), includes a

physician, physician assistant, nurse

practitioner, physical, speech or occupational

therapist, physical or occupational therapy

assistant, registered professional nurse,

licensed practical nurse, or licensed or

certified social worker. Furthermore, the

definition of nurse aide, at § 483.75(e),

specifically excludes licensed health

professionals.

A facility may assign responsibility

for completing the RAI to a number of

qualified staff members. It is the

facility’s responsibility to ensure that all

participants in the assessment process

have the requisite knowledge to

complete an accurate and

comprehensive assessment. In most

cases, participants in the assessment

process are licensed health

professionals. Some State licensure and

practice acts specifically prohibit

nursing assistants, and in some cases

licensed practical nurses, from

conducting assessments. While nurse

aides certainly can and should

contribute their knowledge of the

resident to the assessment process,

nurse aides typically are not trained in

specific assessment skills, some of

which require a significant amount of

knowledge.

Comment: A commenter stated that

staff that are mandated to complete

certain sections of the assessment, like

gait and movement, behavior, and

aspects of incontinence, do not have the

appropriate skills, clinical experience,

or training to understand and assess the

issues involved. The commenter stated

that surveyors lack this expertise and

training also.

Response: We are not requiring that

specialized professionals complete any

sections of the MDS. As stated in the

previous response, a facility must

ensure that staff conducting the

assessment have the requisite

knowledge to accurately complete the

assessment. We disagree with the

generalization that facility staff and

surveyors do not have the skills and

training necessary to accurately assess

residents. We conduct a significant

amount of training for surveyors on how

to gauge the accuracy of assessments.

Provider groups and facilities also

conduct training in these areas.

Comment: A commenter expressed

concern that requiring the participation

of professionals other than registered

nurses could place a burden on a facility

that does not employ staff in certain

disciplines. The commenter

recommended that the we combine the

requirements for coordination and

certification to provide that each

assessment must be conducted or

coordinated by a health professional, in

cooperation with other health

professionals, as desired, and that a

registered nurse must review, sign and

certify the completion of the

assessment.

Response: See previous responses. We

do not require the participation of

specialized professionals other than

registered nurses. The personnel

participating in an assessment are

determined by the needs of the

individual resident. For someone who

has significant rehabilitation potential,

for example, it would be reasonable for

a physical therapist to conduct part of

the assessment. It is acceptable, though,

for a registered nurse to conduct the

entire assessment as long as it is

accurate.

Comment: A consumer advocacy

organization suggested that we prohibit

the use of assessment nurses hired

solely for the purpose of completing the

MDS and who have no relationship to

care provided. This suggestion was

based on a reference in the preamble to

the proposed rule (p. 61633) to staff who

have clinical knowledge about the

resident, such as staff nurses.

Response: The requirements for care

planning state that a registered nurse

with responsibility for the resident be a

part of the interdisciplinary team that

prepares the care plan. This implies that

the registered nurse is directly involved

in the resident’s care and is fully

knowledgeable about the resident. We

believe that the assessment is conducted

most accurately and efficiently in

conjunction with the registered nurse

who has primary responsibility for the

resident’s care. We believe that this is in

line with the intent of Congress.

However, it would be beyond our

purview to prohibit ‘‘assessment

nurses.’’ A facility is required by the

statute to complete an accurate

assessment.

An evaluation of the RAI process,

conducted by the Research Triangle

Institute in 1993, under contract with

us, indicates that it is rare for a facility

to designate a sole staff member to

conduct the entire assessment.

Registered nurses, who are often the

primary assessors get substantial

contribution from others in at least some

MDS domains, even in facilities which

designate an ‘‘assessment specialist

nurse.’’ We cannot necessarily state that

a nurse hired solely to conduct

assessments does not have the necessary

clinical knowledge. Additionally, the

survey process would detect

inaccuracies in the assessment if an

assessor did not have the necessary

clinical knowledge to accurately

complete resident assessments.

Proposed § 483.20(c)(2) Certification

(Redesignated as § 483.20(i))

Comment: Commenters suggested that

we require that an individual who

completes portions of the assessment

date his or her signature. This would

also apply to the assessment coordinator

when he or she signs and certifies the

completion of the assessment.

Response: We agree with this

suggestion and have changed the form

to reflect this.

Proposed § 483.20(c)(3) Penalty for

Falsification (Redesignated as

§ 483.20(j))

Comment: Commenters, including a

national provider organization,

supported the distinction between

clinical disagreement and false

statements. A commenter requested a

definition of clinical disagreement. One

commenter expressed concern regarding

guidelines for surveyors and protections

to ensure hard copy validity. For

example, if there is oversight in

completing a section of the MDS, but

the registered nurse signs to certify

completion, we could cite the facility

for falsification. A commenter also

suggested that clinical disagreement on

the RAP Summary form does not

constitute a material or false statement.

Response: It is the responsibility of

the nurse coordinating the assessment to

make sure that the MDS is complete

before he or she certifies completion.

Failure to do so could result in a

deficiency, based upon information

gathered by the surveyor.

For purposes of this regulation,

clinical disagreement pertains to coding

an item based on observation of the

resident over time and on clinical

judgment. If, based on observation, one

nurse codes a resident as needing

supervision for locomotion while

another nurse codes the same resident

as needing limited assistance based on

her observation, we would consider that
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67203

to be clinical disagreement and not

falsification. However, if an assessor

were to complete the assessment

without observing the resident and

gathering data, we would consider that

to be a material and false statement.

Clinical disagreement applies to the

entire RAI, including the RAP Summary

form, and care planning decision

making process. The survey process is

not intended to usurp clinical decisions

from the facility.

§ 483.315 Specification of Resident

Assessment Instrument

This section describes requirements

for the States in specifying a resident

assessment instrument. It also lists the

components an instrument must contain

if a State wishes to specify an

instrument other than the Federally

designated RAI.

Our December 28, 1992 proposed rule

placed the entire MDS and instructions

for its use in the regulation text. The

proposed rule also required that a

facility encode the MDS in a machinereadable format, in accordance with

HCFA-specified formats. We are

removing the MDS from the regulation

text. Because the law requires a

standard assessment, the regulation

mandates that a State instrument

contain, in its exact form, the contents

of our designated instrument, as set

forth in the State Operations Manual.

This instrument is comprised of the

MDS and common definitions, the

triggers and utilization guidelines

(including resident assessment

protocols (RAPs)). We will ordinarily

not approve an instrument that does not

contain the HCFA-designated resident

assessment instrument (RAI). The States

may add items to the Federal

instrument, but may not change the

MDS items, definitions or triggers,

delete any items, or alter the utilization

guidelines pertaining to the RAPs. This

is necessary for the standardization and

consistency required by law. We believe

that removing the MDS from the

regulations text is advantageous. It will

allow us to easily modify the MDS so

that it requires collection of information

that is clinically relevant and meets

evaluative needs as clinical practice

evolves. By directly discussing and

negotiating with affected parties, it will

be possible to maintain a resident

assessment process that reflects current

standards of clinical practice while

obtaining public comment.

It has always been our intent that we

would revise the RAI on an ongoing

basis to reflect changes in clinical

practice and advances in assessment

technology. The first revision of the

MDS and RAPs, known as version 2.0,

was published in Transmittal No. 272 of

the State Operations Manual in April,

1995, and is contained in the preamble

of this rule. For the purpose of this rule,

State and provider requirements related

to the RAI pertain to the most current

version of the RAI that has been

published by us (that is, presently dated

10/18/94H, but subject to future

revision). We expect to publish

revisions to the RAI, such as new or

revised RAPs, in the State Operations

Manual no more frequently than

annually, in order to minimize the

burden on providers of transitioning to

a revised RAI.

We believe that the regulatory

provisions that we are including in the

final rule adequately describe the

fundamental MDS requirements and

that the form and details of the MDS are

best set forth in interpretive issuances.

This will permit us to easily modify

details such as the measurement scales

for a particular condition, or the

symptoms that may be relevant to that

condition, and to respond to advances

in clinical standards.

We relied heavily on public

comments received on the proposed

rule in modifying the MDS and RAPs

contained in version 2.0 of the RAI. We

also drew on the expertise of a small

work group comprised of

representatives of three States that had

extensive experience in working with

the industry to successfully implement

the RAI requirements. In this way, we

were able to address ‘‘real world’’

concerns as well as misinterpretations

regarding individual MDS items. We

also received comments on a draft of the

revised RAI during a public meeting

with national associations representing

nursing home providers, professional

disciplines and consumers on December

10, 1993. Under HCFA contract, Dr.

John Morris of the Hebrew

Rehabilitation Center for Aged led the

RAI revision effort from 1993 to 1994

and oversaw field testing.

Proposed § 483.315(a) State

Responsibilities (Redesignated as

§ 483.315(c))

Comment: A State commenter noted

that 30 days to specify an instrument

after we designate or change its

instrument is not enough time. The

commenter stated that the survey

agency would need to coordinate with

the State Medicaid agency. Furthermore,

any change to the HCFA-designated RAI

would require the State to study the

benefits and costs of modifying the

State-specified RAI vs. the revised

HCFA-designated RAI, notifying and

training facilities, modifying computer

systems, etc. The commenter suggested

180 days. For the aforementioned

reasons, a commenter recommended

that providers have advance notice of

changes to the RAI. Another commenter

asked if we would extend the time

without specifying the number of days.

Response: We agree that 30 days may

not be enough time for a State to decide

whether to adopt our changes or seek

approval for an alternate instrument.

However, we believe that the

commenter’s recommendation of 180

days is too long. Therefore, we are

changing the requirement to give States

90 days to decide whether they accept

our changes or wish to specify an

alternate.

Comment: Commenters questioned

whether the State would be required to

seek approval from us to re-adopt our

forms every time we make a revision to

the forms. One commenter asked if a

State that has already specified the

HCFA-designated RAI will now have to

respecify it. Commenters suggested that

a State that has specified our instrument

should be expected to automatically

adopt any revisions without additional

paper work.

Response: Our State Operations

Manual Transmittal No. 272 contains

information on a State’s responsibilities

related to respecification of its RAI. We

require that a State notify us of its intent

to use our revised RAI or alternate

instrument and specify the effective

date for its use. A State will continue to

respecify its instrument whenever we

change the Federally-designated RAI.

This enables us to monitor when a State

decides that it no longer wishes to use

our instrument. As the quarterly review

form is now part of the Federallydesignated RAI, we require a State to

specify the form to their facilities or to

include an alternative form in the

package that it submits to us.

Comment: Commenters suggested

revisions to paragraph (a)(2). A

commenter wanted to change ‘‘* * *

State must assure implementation’’ to

read ‘‘must assist with implementation

of RAI through training and technical

assistance.’’ The commenter stated that

training and technical assistance does

not ensure implementation, and

proposed that we add paragraph

(a)(2)(I), which would provide that

States must assure implementation of

RAI through the survey process.

Another suggested that we require that

the State ensure facility implementation

by providing the necessary technical

direction and education and training to

facilities at least annually. This would

accommodate changes in facility and

surveyor staff, facilitate proficiency and

maintenance of assessment skills.
67204 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

Response: We accept an amended

version of the first two suggestions. We

are providing in § 483.315(c)(3) that,

after specifying an instrument, the State

must also provide periodic educational

programs for facility staff to assist with

implementation of the RAI. This

parallels sections 1819(g)(1)(B) and

1919(g)(1)(B) of the Act. We

acknowledge that training does not

necessarily mean implementation. We

do not wish to specify intervals at

which training must be conducted.

Training should be based on provider

needs and should be targeted to focus

on identified facility weaknesses. We do

not wish to take away State discretion

in this area. We are also providing in

§ 483.315(c)(4) that a State must audit

implementation of the RAI through the

survey process. Furthermore, we are

reordering the text to be more sequential

in regard to the action the State must

take.

Comment: A commenter stated that

the proposed requirement at

§ 483.315(a)(3) could have a negative

impact on facility assessment and care

planning schedules. The commenter

suggested that we permit a facility to

use its current RAI until we approve an

alternative. Another commenter

requested that we allow States 180 days

to secure approval for an alternative

instead of the proposed 4 months.

Response: It appears that the

commenter misunderstood when we

would require a facility to implement a

newly specified RAI. A facility does not

have to use a newly specified RAI or

State alternate RAI until the date that

the State requires it, which would be

well after the State receives approval

from us. Once the State receives our

approval for an alternate instrument, the

State must specify the instrument for

use in all Medicare and Medicaid

certified long term care facilities. The

State would need a realistic

implementation time frame which

would not unreasonably have an impact

on facilities. This time frame should

accommodate training and the

absorption of change.

With respect to the proposed

requirement that States have 4 months

to obtain our approval, we are

eliminating the time frame entirely. The

time frame was necessary initially when

States were specifying instruments for

the October, 1990 implementation of

OBRA ’87. Furthermore, our experience

working with States that are developing

alternate instruments is that a State may

require more than 4 months.

In § 483.315(a)(4), we proposed that,

within 30 days of receiving our approval

of an alternate RAI, the State must

specify the RAI for use by all Medicare

and Medicaid facilities. We are

changing the requirement to allow

States 60 days to specify the instrument

to their long term care facilities

(redesignated § 483.315(c)(2)). This will

give the State time to contact each of

their certified facilities as well as

reproduce the form for distribution to

them. Additionally, we are deleting the

provision that says that HCFA approval

of an alternate RAI continues for 2

years. Our experience shows that many

States make changes to their instrument

on a more frequent basis.

Comment: A few commenters

questioned whether a State would need

to notify us if it redesigns the RAP

Summary sheet.

Response: Since the RAP Summary

sheet is part of the State-specified and

HCFA-approved RAI, the State would

need to obtain our approval to alter the

sheet. Since we are removing the MDS

from the regulations text, we are making

substantial changes to § 483.315, which

addresses the contents of the HCFAdesignated RAI. We are adding to the

regulations text the major domains

contained on the revised MDS. This

reemphasizes the statutory mandate that

alternate instruments contain at least all

the MDS elements. For the same reason,

we are also listing the assessment

domains addressed in our RAPs.

Proposed § 483.315(c) Secretarial

Approval (Redesignated as § 483.315(g))

Comment: Commenters suggested that

we delete this paragraph. According to

commenters, if States are allowed to

reorder sections of the MDS, use other

RAPs, etc. it would be difficult to have

consistency in data collection and

submission to us. The commenter

suggested that we require a State that

wants an alternate instrument to include

a HCFA section that would incorporate

our system.

Response: We agree with the

commenters’ suggestion to delete most

of the content of proposed paragraph (c).

We are replacing it with a provision that

requires the State’s alternate instrument

to comply with the standard format,

vocabulary and organization

requirements set forth in the State

Operations Manual (redesignated

paragraph (g)). There are a number of

factors that warrant consistent ordering

of data and assessment items across all

States. First, nursing home chains that

operate facilities in a number of States

would benefit from some consistency in

the ordering of the MDS items, if not

simply to facilitate effective use of their

training and education resources.

Second, software vendors would also

welcome standardization of the ordering

of the MDS items in all States, as many

of them market their software to

facilities throughout the country and to

nursing home chains that operate in a

number of States. It also would

minimize the effort in revising their

software. Third, we could also achieve

consistency in training State surveyors

on use of the RAI. Fourth, educational

materials, resources, and education

programs for nursing homes and schools

that prepare health care professionals

could be developed more costeffectively and distributed more widely

with some consistency in how the MDS

is ordered. Finally, data submission to

us and States will require

standardization in the ordering of the

MDS items. Therefore, to facilitate

standardization across States, we are

requiring consistent ordering of MDS

sections. We will require that States

desiring to add additional data and

assessment items, add those items in

section S of the MDS, which has been

designated as the section for Statespecific items.

Comment: A few commenters thought

that we should convene a clinical

advisory panel to evaluate any alternate

RAPs that States submit. They were

concerned that the proposed supporting

documentation could merely be the

consensus of the same experts who

designed the alternates. This would not

protect the scientific integrity of the

assessment system.

Response: We will convene a clinical

panel periodically to evaluate the need

to modify the RAI, and to review and

evaluate newly developed RAPs,

including those developed both by us

and States. The process by which Statedeveloped RAPs are submitted for our

approval is also described in the State

Operations Manual. We intend to have

an open, inclusive revision process.

Comment: Commenters suggested that

we require that any alternate instrument

be cross-validated with the MDS on a

large sample of residents. States should

submit the data from the crossvalidation to us for comparison of

outcomes between States who use the

HCFA-designated RAI and those that do

not.

Response: Alternate instruments must

contain all MDS items. This negates the

need to cross-validate with the MDS.

We have reviewed the revised items and

new items added to the MDS for face

validity, and we tested the individual

items in early 1994. We encourage

States to field test and validate the new

items, as well as allow review by other

qualified individuals prior to including

the additional items on their instrument

and submitting it for approval.
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67205

State Requirement to Establish a Data

Base of Resident Assessment

Information

Consistent with the purpose of the

proposed rule and, after considering the

comments submitted, we are adding a

new paragraph (h) to § 483.315, which

delineates State requirements in

establishing a data base of resident

assessment information. In the proposed

rule, we posed questions about the

State’s role in collecting and

maintaining the RAI data base, and we

concluded that specific requirements

are necessary to ensure uniformity.

Furthermore, we believe these

requirements are necessary to

successfully design and implement a

national data base of resident

assessment information. Paragraph (h)

includes provisions for specifying a

transmission method for a facility to

send information to the State, specifying

edits that the data must pass, and

provisions to transmit the data to us. A

State will also be responsible for

resolving incorrect data submitted by a

facility. While the facility will edit the

data before transmission to the State, the

State, which has already computerized

assessment information, may note that

the data transmitted is not entirely

complete or accurate, and must send it

back to the facility for correction.

Additional edits at the State level will

help identify incorrect assessment

information.

A State must edit the data it receives

from a facility according to formats we

specify, but may add State-specific edits

that do not cancel or interfere with

HCFA-specified edits. This will help

ensure that the data we receive is

uniform, complete and accurate.

Furthermore, we are requiring that a

State generate reports and analyze data,

as specified by us. For example, we

could require States to run a profile of

each facility, which would allow the

facility to analyze the prevalence of a

certain medical diagnosis amongst its

residents.

For a number of reasons, as discussed

below, we are requiring each State to

use a complete system that is developed

or approved by us. We will develop a

single, open system by which States will

manage and analyze data. We believe

that there are a number of advantages to

standardizing both the data analysis and

the data management functions which

outweigh potential disadvantages.

Cost

Initial system costs will be

substantially reduced by producing a

single system versus funding the

development of 50 different systems.

Ongoing maintenance costs will be

substantially higher if States implement

their own proprietary MDS systems. The

costs associated with modifying

individual State systems to incorporate

changes in the MDS or HCFA

specifications, formats or edits would be

50 times those associated with

modification of a standardized system

and distribution of new software or

other specifications to each State.

Additional cost savings for data

analysis activities will be realized by us.

Given that we envision standardizing

the State data analysis function, system

standardization at the data management

level will ensure that the necessary

infrastructure to support data analysis is

already in place. If States develop

proprietary data management systems,

we would probably have to fund

additional system/structural costs when

our proposed data analysis requirement

becomes effective.

Data Reliability

It would be difficult to maintain

quality controls and ensure adequate

data reliability across 50 State systems.

For example, each time we issue a

change in transmission specifications or

data fields, each of 50 States would have

to modify their proprietary systems to

accommodate the requirement. Past

experience with MDS software vendors,

as well as other Federal systems,

demonstrates that there is a great degree

of variation in the ability of vendors or

agencies to consistently implement

system changes. This would pose a

serious threat to the long term integrity

of the national MDS data repository.

Standardization would ensure that

changes are implemented completely,

reliably, timely and in a coordinated

manner across all States.

Programmatic Needs

Our desire to implement an MDS

data-driven long term care survey

process based on quality measures

cannot be efficiently realized without

standardization at the initial ‘‘data

management’’ level. Assuming that we

are redesigning our provider survey

model as an automated, data-driven

system, each survey agency will have to

be able to integrate directly with the

State MDS repository. If each State has

a unique design for this repository, this

integration will not be possible in a

cost-effective manner. Each State would

have to use HCFA-developed MDS data

format specifications to extract MDS

data into the standardized survey

system. Allowing the development of 50

State proprietary systems would also

result in long term inefficiencies in that

each State would be required to rewrite

their data extraction procedures each

time we want to make a change to the

survey process, quality measures or in

the MDS itself. Even if we had

unlimited resources for State

customization, this would have a

serious impact on our ability to

introduce changes in a timely and

consistent manner.

HCFA Initiatives to Implement

Standardized Clinical Data Sets

These changes are an integral part of

the Administration’s efforts to achieve

broad-based improvements in the

quality of care furnished through

Federal programs and in the

measurement of that care, while at the

same time, reducing procedural burdens

on providers. Quality assessment and

performance improvement rests on the

assumption that a provider’s own

quality management system is the key to

improved performance. Our objective is

to achieve a balanced approach

combining our responsibility to ensure

that essential health and quality

standards are achieved and maintained

with a provider’s responsibility to

monitor and improve its own

performance. To achieve this objective,

we are now developing revised

requirements for several major health

care provider types. All of these

proposals are directed at (1) improving

outcomes of care and satisfaction for

patients, (2) reducing burden on

providers while increasing flexibility

and expectations for continuous

improvement, and (3) increasing the

amount of, and quality of, information

available to everyone on which to base

health care choices and efforts to

improve quality. We note that our

revised approach to quality assurance

responsibilities is closely linked both to

the Administration’s commitment to

reinventing health care regulations and

to our own strategic plan. These

initiatives have three common themes.

First, they promote a partnership

between us and the rest of the health

care community, including the provider

industry, practitioners, health care

consumers, and the States. Second, they

are based on the belief that we should

retain only those regulations that

represent the most cost-effective, least

intrusive, and most flexible means of

meeting our quality of care

responsibilities. Finally, they rely on the

principle that making powerful data

available to consumers and providers

can produce a strong nonregulatory

force to improve quality of care.

The MDS is the first of several clinical

data sets we envision creating and

implementing in various care settings.

Standardized information on clinical
67206 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

status and health care outcomes is

necessary for more objective and

focused quality monitoring.

Consequently, interest in standardized

clinical data sets has skyrocketed, with

much activity occurring in this arena in

both the public and private sectors. We

view our efforts with the MDS as a

prototype for the next several years,

during which we propose to build and

implement clinical data sets across

several provider types. These data sets

will feed into quality indicator systems,

which will supplement our traditional

survey processes. At this point, we are

beginning work on designing a

comprehensive standardized assessment

tool for home health agencies as well as

field testing the uniform needs

assessment instrument, which we are

evaluating for use by all providers and

view as forming the ‘‘core’’ of all caresetting specific data sets. Additionally,

we propose development of

standardized patient process and

outcome measures for the End Stage

Renal Disease program and a

standardized instrument for the

Intermediate Care Facility for the

Mentally Retarded program in fiscal

years 1996–97. In view of these

initiatives, it would be much more

economical and efficient to put in place

now, within each State, standardized

system designs and structures to

support increased clinical data

management and analysis. Otherwise,

we will be responsible for funding and

coordinating State efforts to implement

data systems for each provider type as

we implement new requirements.

In the system design process we

explored several options, particularly

regarding State systems and gathered a

significant amount of information about

current status of State systems. For

example, we sent two questionnaires to

the States to determine whether they

had developed an MDS system, what

the configuration might be, and what

sort of direction and assistance noncomputerized States would want from

us. We convened several meetings

across the country which were attended

by more than 45 States. At these

meetings we presented the concept of

standardization. Reaction was quite

supportive. We are aware that States

which already have systems will have to

make significant adjustments and will

provide assistance in the process.

III. Provisions of the Final Rule

In summary, in this final rule, we are

adopting, without change, the

provisions of the proposed rule with the

exception of the following.

• We are adding greater specificity to

the proposed requirement that each

facility establish a data base of resident

assessment information and transmit

MDS data to the State at least monthly

(§ 483.20(f)).

• We are adding a new requirement

that each State establish a data base of

resident assessment information

received from facilities, using a system

to manage and analyze data that is

developed or approved by us, and

transmit that information to us at least

monthly (§ 483.315(h)).

• We are adding a definition of

‘‘significant change’’ in a resident’s

physical or mental condition to clarify

when a facility must conduct a

comprehensive assessment of a resident

(§ 483.20(b)(2)).

• Instead of including the entire

content of the MDS, the utilization

guidelines for resident assessment

instruments, common definitions,

resident assessment protocols and

instructions in the regulations text or in

an appendix to the text, we are

providing descriptions of the RAI, the

MDS, and RAPs. We are providing a

description of the assessment areas

included in the MDS (§ 483.315(e)), and

a description of the domains addressed

in the RAPs (§ 483.315(f)), both of which

must be included in the RAI specified

by a State (§ 483.20(b)(1)).

• To address concerns about

confidentiality of resident data, we are

providing that a facility and a State may

not release resident-identifiable

information to the public, and may not

release the information to an agent or

contractor without certain safeguards

(§§ 483.120(f)(5) and 483.315(j)).

• In this final rule, we are not

adopting the proposed technical

revisions to part 456 concerning

inspection of care reviews of SNFs and

ICFs. We will include these revisions in

another document.

IV. Regulatory Impact Statement

A. General

Consistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601

through 612), we prepare a regulatory

flexibility analysis unless we certify that

a rule will not have a significant

economic impact on a substantial

number of small entities. For purposes

of the RFA, all nursing homes are

considered to be small entities.

Individuals and States are not included

in the definition of a small entity.

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. Such an 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 50

beds.

B. Affected Entities

We require that all certified nursing

homes assess residents using a

standardized data set known as the

MDS. Nursing homes have been

collecting this information manually

since October 1990. Most States

implemented a second generation

assessment instrument, known as MDS

2.0, on January 1, 1996. The use of the

MDS as the core of the comprehensive

assessment requirement has improved

the quality of nursing home services by

ensuring that the assessment is

consistently based on all information

that is necessary to evaluate a resident’s

needs. Accurate and comprehensive

resident assessments have improved the

accuracy of the care planning process

and, ultimately, the care provided by

the nursing home. The myriad benefits

associated with the MDS have been well

documented in a study we

commissioned to evaluate the outcomes

of using the MDS. One of the more

striking changes documented by the

study was an association of the use of

the MDS with a significant reduction in

hospitalization among more cognitively

impaired nursing home residents,

without a concomitant increase in

mortality. The study also identified

major reductions in rates of decline

(especially among various types of

residents) in important areas such as

nutritional status, vision, and urinary

incontinence. However, in order to

realize the full benefits of the MDS, the

information needs to be computerized,

and configurable as an analytical tool.

Publication of this rule will allow this

goal to be realized.

The automation and transmission of

MDS data by nursing homes and States

to us will improve the delivery of

quality care in the nation’s nursing

homes in several ways. An automated

MDS data base will provide information

that will benefit both the policy and

operational components of State and

Federal governments, as well as furnish

valuable information to long term care

providers. The MDS system will also

establish a means of providing

consumers with quality-related

information to make health care

decisions.

More specifically, the MDS data base

will enable us and the States to provide

nursing homes with aggregated State

and national resident status information

and trends. This will allow nursing
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67207

homes to compare themselves to similar

homes and is consistent with a quality

improvement model. Furthermore, by

establishing their own in-house quality

assurance analyses from these

computerized data, nursing homes will

be able to evaluate the effectiveness of

treatment modalities given a certain

outcome. This type of information will

assist nursing homes in making better

use of their staff and other resources,

and also eliminate the allocation of

resources that do not achieve desired

outcomes. In short, the MDS data base

will provide nursing homes with the

information to identify and correct their

own problems.

States will have access to timely MDS

data that will improve their ability to

focus on-site inspection activities

associated with the long term care

survey process. Since we require MDS

data for all residents regardless of payor

source in nursing homes, these data

elements can be configured into quality

measures. The quality measures flag

individual residents and facilities when

there may be a problem with the quality

of care provided. For example, the

indicators may identify those residents

who were admitted to a nursing home

without pressure sores, but who

developed sores in the nursing home.

Similarly, a nursing home that has a

relatively high percentage of residents

with pressure sores may indicate a

problem when compared to other

facilities. This resource will

significantly improve States’ ability to

identify areas of potential quality

concerns in an effective and efficient

manner, and facilitate the partnership of

States and industry in identifying

opportunities to improve care. At both

the Federal and State level, information

from the MDS data base will provide a

valid and reliable tool for evaluating

and improving the efficacy and

effectiveness of survey and certification

activities.

States have also identified a myriad of

other intended uses for MDS data that

include Medicaid payment, utilization

review, preadmission screening and

resident review, Medicaid coverage

authorization, and State policy analysis

and trending. It is our intention that a

standardized MDS data system will

support States’ unique needs and

should not necessitate the creation of

distinct and duplicative data bases at

the State level.

C. Costs Associated With Automating

the MDS

We anticipate that both nursing

homes and States will incur some

incremental costs from computerizing

and transmitting the MDS. We estimate

total start-up costs of $20.3 million,

which represents costs incurred by

nursing homes (we will be supplying

the MDS systems directly to the States).

We also estimate total ongoing annual

costs of about $34.7 million, which

includes $27 million in costs for nursing

homes and $7.7 million in costs for

States. Total costs include Medicare

benefit costs of $9.5 million. Total costs

also include an annual administrative

cost of $3.5 million that will be

absorbed within HCFA’s program

management appropriation. However,

the benefits associated with

computerizing the MDS far outweigh

the additional costs of automating the

data. The following represents our

estimates of the individual costs

associated with this effort.

Nursing Homes

Upon publication of this rule, all

nursing homes must computerize the

MDS. Most costs associated with

computerizing the MDS will be related

to hardware and software. At the current

time, we estimate that approximately 70

percent of the nation’s 17,000 Medicare,

Medicaid or dually certified nursing

homes have already computerized the

MDS or have the capability to do so.

Another 16 percent of nursing homes

already have some kind of computer

system that will require upgrading to

meet the requirements for MDS, and

only 14 percent have no computer

system at all. Additionally, some

facilities with currently operating MDS

systems may require hardware and

software upgrades to support aspects of

the national MDS system (for example,

a faster modem or installation of the

Windows operating system).

Under the Balanced Budget Act of

1997, nursing homes will be reimbursed

for Medicare under a prospective

payment system for cost reporting

periods beginning on or after July 1,

1998. Prior to July 1, 1998, costs

incurred by nursing homes associated

with computerizing the MDS will be

paid on a reasonable cost basis.

Generally, these costs are considered

capital costs and are subject to the

applicable Medicare rules. Additionally,

it is likely that nursing homes will also

incur certain routine services costs

which will also be paid on a reasonable

cost basis. These costs are subject to cost

limits. In the past, the routine cost

limits have included an add-on to

account for the costs associated with the

Omnibus Budget Reconciliation Act of

1987 (OBRA 1987), including the cost of

conducting resident assessment. When a

provider incurs cost related to OBRA

1987 that exceed its limit (including the

add-on), we have allowed the fiscal

intermediary to make an adjustment to

the costs limits. This policy is described

in a notice published in the Federal

Register on October 7, 1992 (57 FR

46177).

The Balanced Budget Act of 1997 also

prescribes a public process for the

determination of rates for payment

under Medicaid State Plans for nursing

home services in which the proposed

rates, the methodologies underlying the

establishment of such rates, and the

justifications for the proposed rates are

published, thereby giving providers,

beneficiaries and their representatives,

and other concerned State residents an

opportunity for review and comment.

States have flexibility in designing the

details of their payment systems for NF

care, and to the extent that NFs incur

costs in computerizing the MDS (such

as the acquisition of hardware or

software, staff training, or additional

staffing), the State may take these costs

into account in setting its rates.

• Hardware: We estimate total

hardware costs associated with

automating the MDS to be

approximately $2,500 for a typical

nursing home, which includes the

computer and communications

components capable of running MDS

software and transmitting MDS

assessments, and a laser printer. This

estimate is based on the most recent cost

data available for a system that includes

an Intel Pentium processor. As noted

earlier in this rule, we expect that only

14 percent of all nursing homes will

need to buy an entirely new system.

Seventy percent of all nursing homes

are already using an automated MDS

collection tool (although some may

require upgrading in order to transmit

the MDS data), and the remaining 16

percent already have some sort of

computer system that simply requires

upgrading.

The aforementioned cost estimate is

based on the type of system that we

anticipate many nursing homes will

choose to purchase. At a minimum, a

nursing home should have at least a 486

personal computer, either connected to

a network or as a stand-alone, with 8

megabytes of RAM, at least 100

megabytes of available hard disk space,

a 14 inch color monitor, keyboard,

mouse, a 3.5 floppy drive and a laser

printer. To operate the transmission

software, this machine must run the

Windows operating system, version 3.1

or higher. All nursing homes will also

need a 28.8 Kbps modem for

telecommunication of data, as well as a

common data communications software

package to transmit MDS assessments to

the State. This communications package

must meet our specifications related to
67208 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

transmission of MDS data and

represents current technology.

Ongoing hardware maintenance costs

for nursing homes are expected to

average about $100 annually.

• Software: Nursing homes desiring

to meet only the requirement for data

submission can use a less costly

software package to accomplish the

basic encoding and formatting

functions. A nursing home must submit

MDS records to the State that conform

to a specific ASCII layout and

incorporate them into files with header

and trailer records that conform to

required formatting standards. However,

we anticipate that most nursing homes,

seeking to gain efficiency in general

operations, will choose more capable

programs, some of which could be used

to meet (1) other clinical or operational

needs (for example, care planning, order

entry, quality assurance, billing) or, (2)

other regulatory requirements for

reporting resident information. The

standardized record formatting

specifications and additional policies on

MDS automation that we developed

should be used by individual nursing

homes, multi-facility chains, and

software vendors to develop products

for encoding and transmission of MDS

2.0 data. This information has been

available to the public for about two

years through the Internet, and is

located on the HCFA Web site.

There are currently over 100 vendors

marketing MDS software products.

While we are not requiring record

specifications and automation policies

until this rule is published, we

developed them earlier to provide

guidance to the industry and to

minimize the need for a facility to

modify and replace systems once this

regulation is published. At this time, we

estimate that such software packages

will be available on the market for

approximately $1,250 for those nursing

homes that have not yet become MDS

automated. We expect that a nursing

home’s private sector software vendor

will provide primary support to the

facility in terms of MDS encoding and

transmission to the State. State

personnel, however, will work with

facilities and software vendors in

educating them about this process.

• Supplies: Supplies necessary for

collection and transmission of data

including diskettes, computer paper,

and toner, will vary according to the

size of the nursing home in terms of

residents served and assessments

required. Dividing the nursing homes

into groups, supply costs are estimated

at the following three levels: small

facilities (with less than 145 residents),

$175/year; medium facilities (with 145

to 345 residents), $225/year; and large

facilities (with greater than 345

residents), $275/year.

• Maintenance: There are costs

associated with normal maintenance of

computer equipment, such as the

replacement of disk drives or memory

chips. Typically, such maintenance is

provided via extended warranty

agreements with the original equipment

manufacturer, system reseller, or a

general computer support firm. These

maintenance costs are estimated to

average no more than $100 per year.

• Training: Nursing home staff will

need training on automating the MDS.

Since many nursing homes will choose

to have their staff input MDS data at the

time of the resident assessment, we

estimate that a typical nursing home

will train two nurses for about 3 hours

each. We expect that this training will

be supplied by the vendor supplying the

MDS encoding software, and estimates

that the training will cost an average

nursing home about $144 based on an

average hourly rate for nurses of $24.

Other nursing home staff will need

training in transmitting the data to the

State and interpreting messages of

record errors. We expect that this

training will require about 3 hours of

staff time, and will cost an average

nursing home about $66, based on an

average hourly rate of $12 for technical

staff. This cost also includes travel

expenses and travel time, since facility

staff may need to travel to a centralized

training site within the State (we

anticipate that training will be provided

in multiple sites in the State once the

system is implemented). We expect that

the State survey agencies will supply

this training.

• Data entry: Nursing homes will

have flexibility in the method used to

enter data, but the method must comply

with our requirements for safeguarding

the confidentiality of clinical records.

Data can be entered directly by a

clinical staff member (that is, the nurse

responsible for coordinating or

completing the assessment), from a hard

copy of a completed MDS by a clerical

staff member, or by a data entry operator

with whom the nursing home may

contract to key in the data. We estimate

that data entry staff could require

approximately 15 minutes to enter each

MDS. Nursing homes must collect and

transmit MDS data, which for the

admission assessment, annual updates,

as well as significant changes in the

resident’s status, significant correction

assessments, quarterly review

assessments, which include a subset of

the MDS items, discharge records, and

reentry records. Additionally, nursing

homes must allow time for data

validation and preparation of data for

transmission, as well as for correction of

returned records that failed checks at

the State data-editing level. We estimate

that a 100 bed facility will incur an

annual data entry cost of $1,250, (or

$12.50 per resident per year), based on

an estimate of five MDSs per bed

(annual plus ‘‘significant changes’’) and

an hourly rate of $10.

• Data Transmission: The State

agencies will fund the costs of

transmitting data from the nursing

homes to their respective States.

However, nursing home staff time must

manage the data transmission function,

correct communications problems, and

manage reports logs transmitted from

the State agency. We estimate that it

will take an additional hour of staff time

to perform data transmission related

tasks each month. This staff time will

cost an average size nursing home about

$144 per year.

States

We expect that overall responsibility

for fulfilling requirements to operate the

State MDS system will rest with the

survey agency. However, the State may

enter into an agreement with the State

Medicaid agency, another State

component, or a private contractor to

perform day-to-day operations of the

system. If the State MDS system is

operated by an entity other than the

survey agency, the State must ensure

that the survey agency has suitable

access to this system to fully support all

MDS-driven functions that the State will

require of the survey agency (for

example, quality indicator reporting,

survey targeting). The State is also

responsible for reporting MDS data to a

central repository to be established by

us.

States will primarily use the MDS

data to focus the long term care survey

process and to provide nursing homes

and consumers with MDS-derived

information. A State’s MDS system

includes the following components:

computing hardware that includes data

base, communication, supporting file,

and print servers for client workstations;

local and wide-area data networks; and

application software for performing all

aspects of MDS-related functions and

tasks. As such, the MDS system will be

designed and developed within a broad

class of systems known as Client/Server

architecture.

We plan to provide each State with a

standardized hardware environment

scaled to meet each State’s anticipated

processing volumes. Additionally, a

standardized suite of software

applications will be provided to each

State to perform all MDS-related
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67209

functions, including receipt and

validation of MDS records, posting of

records to the master repository, and

analytical applications to be used to

inform and support the long term care

survey process. A HCFA contractor will

work closely with each State to

customize the ‘‘turn-key’’ MDS system

to integrate it into a State’s current

computer and network structure. The

contractor will visit each State to install

and test equipment, and ensure that the

MDS system is fully operational. We

currently plan to phase in State

deployment of the system, roughly from

August through December 1997.

We will place this system in each

State and it will be operated by

personnel within the designated State

agency. We are requiring that the State

systems do the following: receive MDS

records from nursing homes;

authenticate and validate the records

received from nursing homes; provide

feedback to the nursing homes by

indicating acknowledgment of the

transmission of the data and specifying

the status of record validation; store the

MDS records in a permanent data base

within the State; create system

management reports and logs; generate

provider performance reports including

quality indicator reports designed to

support a future data-driven survey

process and provider survey targeting

functions; perform other analytical

functions, as defined by us; create adhoc reports; and retransmit validated

MDS records from each State agency to

a national MDS data repository

developed and maintained by us.

Just as in nursing homes, some States

are already using some sort of an

automated MDS collection tool. At least

12 States have already developed MDS

data bases. In nearly all cases, the State

Medicaid agency has been the driving

force in getting MDS data to the State

level. System designs and approaches

have varied considerably (that is, while

two States have recently moved to

modem transmission, other States still

perform data entry at the State level

from hard copies forwarded by nursing

homes).

We are providing the MDS system to

States primarily for use in the Survey

and Certification program. As such,

most Federally reimbursable costs

incurred by the States for automating

the MDS will be funded through that

program. However, we anticipate that

many States will also choose to use

MDS data in administering their

Medicaid programs. When that is the

case, Federal reimbursement is

applicable to the extent a State uses the

MDS for administering its Medicaid

program. As a result, it may be

appropriate for a State to allocate some

MDS costs to its Medicaid

administrative cost claims.

When a State does use MDS in

administering its Medicaid programs, it

should apportion Federal costs

associated with automating the MDS

and operating the data system between

the Medicare and Medicaid Survey and

Certification program, and the Medicaid

program (as administrative costs, when

applicable). The State should apportion

MDS costs to these programs based on

the State’s determination of each

program’s utilization of the MDS

system. Costs charged to the Medicare

and Medicaid Survey and Certification

program will be prorated in terms of the

proportion of SNFs and NFs in the State

that participate in the Medicare and

Medicaid programs. Costs for SNFs and

NFs are split equally between the two

programs. The Federal financial

participation rate for the Medicaid

Survey and Certification Program is 75

percent. The Federal financial

participation rate for costs apportioned

as Medicaid administrative costs is 50

percent. When the State licensure

program benefits from the automation of

the MDS, the State should also share in

the MDS automation costs.

Several States asked if we could

reimburse Medicaid administrative

costs associated with the development

of MDS at Federal financial

participation rates greater than 50

percent, the rate used in computing

Medicaid reimbursement for general

administration of the program.

Specifically, they asked if we will

reimburse these costs at the same rates

used to reimburse the costs of designing,

developing, implementing and

operating a Medicaid Management

Information Systems (MMIS).

Section 1903(a)(3) of the Act and

implementing regulations at § 433.111

describe the MMIS as a mechanized

claims processing and information

retrieval system. Federal financial

participation is available at 90 percent

in expenditures for design,

development, installation or

enhancement of the system, while 75

percent is available for costs relating to

its operations (namely, processing

claims and producing related

management information). The MDS is

not a Medicaid claims processing and

information retrieval system. We

reimburse other systems not directly

related to performing MMIS functions,

such as the MDS, at the 50 percent level

of Federal financial participation.

Commenters asked whether

automated systems to collect and

analyze data for rate setting purposes

meet the MMIS definition. Because rate

setting is outside the claims payment

and information retrieval processes

required by section 1903(a)(3) of the

Act, those costs are not eligible for

enhanced Medicaid reimbursement

under the MMIS definition. However, in

those instances when specific data

elements from a separate system like

MDS must be transferred to the MMIS

in order to calculate individual provider

payments, the cost of modifying and

operating the MMIS to accept and use

the data from the outside source

qualifies for enhanced Federal financial

participation if the State follows the

regulations and guidance found in

§§ 433.110 through 433.112, 433.116

and in Part 11 of the State Medicaid

Manual.

For example, a major function of the

MMIS is to produce both beneficiary

and provider profiles for program

management and utilization review

purposes. NF resident and provider

profiles are required by § 433.116(g).

However, both NF resident and NF

provider profiles historically have been

very limited because the data elements

on a nursing facility claim provide few

details of services provided. A State

may wish to improve the MMIS

profiling capability by importing MDS

data to prepare augmented profiles of

nursing facility and nursing facility

residents. If the State does that, the

enhanced Federal financial

participation will be available for the

costs of modifying and operating the

MMIS to accept and use the data from

MDS if the State acts in accordance with

the regulations in §§ 433.110 through

433.112, 433.116 and the guidance in

Part 11 of the State Medicaid Manual.

Please note that we currently encourage

States to modify their MMIS to accept

encounter documents from Medicaid

managed care organizations to extend

the MMIS profiling capability to cover

both managed care and fee-for-service

providers and patients. Therefore, it

seems appropriate that we would

reimburse the cost of modifying MMIS

to accommodate MDS usage also at the

enhanced MMIS rates, if the State meets

the conditions in the aforementioned

regulations and State Medicaid Manual.

The following is our estimate of State

costs for automating the MDS:

• Hardware: We will hire a contractor

to purchase, deliver, and install the

MDS equipment in each State. Since we

will be providing the equipment to the

States, the States will not incur any cost

for hardware. This equipment will

include both a communications server

and a data base server. The number of

nursing homes within each State will be

the driving factor in determining each

State’s computer needs. We will scale
67210 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

system requirements to meet the data

storage and transmission needs of the

individual State.

• Software: Since we are developing

the software for each State’s MDS

system, we will pay the costs associated

with this system and supply the system

directly to the States. Software that we

will supply to the States will include

communications software and data base

software, as well as customized

analytical software to generate reports.

When a State develops its own

customized MDS applications, the costs

of developing and maintaining these

additional software applications (and

any related hardware components) will

not be Federally funded.

• Operational Staff Time: States may

plan to reassign existing staff or hire

additional full-time equivalents to

manage the automation project and

perform day-to-day operation of the

standardized MDS system. The staff

members assigned to MDS automation

tasks will need to have skills in a variety

of areas: technical computer, network,

and telecommunication skills; data

processing operations; and, user support

and training (including support for both

State and facility users). In hiring or

reassigning staff, we encourage States to

recruit generalists who can perform a

wide range of the above tasks.

Each State’s actual staffing

requirements will vary depending on

the State’s size (that is, as measured by

the number of nursing homes regulated).

To assist in determining staffing

requirements within particular States,

we assigned States to one of three

categories based on the number of

certified nursing homes in their

jurisdiction: less than 144, 144 to 356,

and those greater than 356 facilities. We

estimate that 1.5 full-time equivalents

will be required to manage all MDSrelated operations for each of the three

categories; for instance, States in the

smallest group should budget for 1.5

full-time equivalents, 3 full-time

equivalents in the second group, and 4.5

full-time equivalents in the largest

group. This includes an MDS

Automation Project Coordinator.

Specifically, an average sized State

regulating about 300 nursing homes will

require about three full-time equivalents

to fulfill the following MDS-related

tasks: MDS project coordination

(oversight of daily operations); technical

operations (systems management,

configuration and troubleshooting);

training and support operations (facility

and MDS software vendor startup

training); and operations (functions

associated with transmission logging

and error tracking and resolution). We

estimate that MDS-related staffing costs

for an average size State will be about

$133,000 per year.

• Supplies and Maintenance of

Equipment: States can expect about

$600 per year in additional costs for

products that are consumed, such as

printer toner and paper. The MDS data

management and analysis equipment to

be installed within each State is

comprised of standard ‘‘off-the-shelf’’

hardware and software components that

are generally covered under typical

service agreements that the States may

already have in place. We will ask

States to extend these agreements to

cover hardware components delivered

as part of the MDS project. These costs

will again vary according to the size of

the State requirements, but on average,

the typical State will incur about $750

per year in additional cost for systems

maintenance. We will maintain and

upgrade centrally the standardized MDS

software components that we develop

and distribute to States.

• Training: We plan to centralize

training of State personnel who will be

responsible for administrative and

technical aspects of system operations.

Additionally, we will provide separate

training on the technical aspects of the

system including its communications,

networking, data base and software

application functions, daily operations

and on-going systems management.

In order to promote national

consistency in MDS system operations

and troubleshooting, we request that

each State designate one individual as

the MDS Automation Project

Coordinator. This person will be our key

contact within each State for managing

MDS system issues. We are planning to

convene at least one national meeting of

the MDS Automation Project

Coordinators each year. We will use this

forum to present new information,

gather suggestions for system

improvements, exchange ideas on MDS

system operations, administration and

troubleshooting issues, and to discuss

objectives for future system

development and refinement.

With our technical support and

guidance, States will work closely with

the provider community in providing

information on specific requirements

related to the submission of MDS

assessments to a repository maintained

by the State. The standardization of the

State MDS system extends back to the

provider communications function, in

that nursing homes will use a common

data communications software package

to transmit MDS assessments to the

State. State personnel will work with

the nursing homes and software vendors

in educating them about this process.

We expect that the commitment of staff

resources to this task will be most

intensive during the first 6 months of

this process. However, States should

also expect some ongoing allocation of

full-time equivalents to support this

process on an ongoing basis.

We anticipate annual travel costs

associated with training for an average

size State to be about $2,700 per year.

• Data Transmission: States will

incur data communication costs for

transmission of MDS assessments from

nursing homes. These costs have two

basic elements:

(1) Fixed monthly line fees of

approximately $32.50 per line per

month. The number of lines required

varies from 4 to 16 according to the

number of nursing homes supported by

a State. On average, a State’s fixed line

cost will be $3,806 per year.

(2) Line connect and long distance

charges of approximately $.27 per

minute. We estimate that the typical

nursing home will require, on average,

5 minutes ($1.35) of connection time per

month for MDS submissions. This

translates into an average connection

cost of $5,376 per year per State.

We will fund the cost of the States

transmitting their MDS data to our

central repository. Therefore, we do not

expect that States will incur data

transmission costs to us.

D. Conclusion

While we acknowledge that nursing

homes and States will bear some

incremental costs associated with this

proposal, these costs are well justified

when considered within the context of

the anticipated increased quality of care

for nursing home residents, as well as

the potential uses of the automated data

by the facilities, States, and us. The

foregoing estimates may actually

overstate anticipated costs because they

do not take into account cost-savings

achieved by improving nursing homes’

management information systems, as

well as potential improvements in

resident’s overall health status. Nor do

they represent the savings inherent in a

more focused, uniform approach by

both the States and us in assessing

quality of care in the nation’s nursing

homes.

For these reasons, we are not

preparing analyses for either the RFA or

section 1102(b) of the Act because we

have determined, and we certify, that

this rule will not have a significant

economic impact on a substantial

number of small entities or a significant

impact on the operations of a substantial

number of small rural hospitals.

In accordance with the provisions of

Executive Order 12866, this regulation
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67211

was reviewed by the Office of

Management and Budget.

V. Information Collection Requirements

Sections 4204(b) and 4214(d) of

OBRA ’87 provide a waiver of Office of

Management and Budget review of

information collection requirements for

the purpose of implementing the

nursing home reform amendments.

Therefore, the information collection

requirements referenced in this rule are

exempt from the Paperwork Reduction

Act of 1995.

List of Subjects in 42 CFR Part 483

Grant programs—health, Health

facilities, Health professions, Health

records, Medicaid, Medicare, Nursing

homes, Nutrition, Reporting and

recordkeeping requirements, Safety.

42 CFR chapter IV is amended as

follows:

PART 483—REQUIREMENTS FOR

STATES AND LONG TERM CARE

FACILITIES

1. The authority citation for part 483

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

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

1395hh).

2. In § 483.20, paragraphs (d) through

(f) are redesignated as (k) through (m),

respectively, paragraphs (b) and (c) are

revised and new paragraphs (d) through

(j) are added to read as follows:

§ 483.20 Resident assessment.

* * * * *

(b) Comprehensive assessments.

(1) Resident assessment instrument. A

facility must make a comprehensive

assessment of a resident’s needs, using

the resident assessment instrument

(RAI) specified by the State. The

assessment must include at least the

following:

(i) Identification and demographic

information.

(ii) Customary routine.

(iii) Cognitive patterns.

(iv) Communication.

(v) Vision.

(vi) Mood and behavior patterns.

(vii) Psychosocial well-being.

(viii) Physical functioning and

structural problems.

(ix) Continence.

(x) Disease diagnoses and health

conditions.

(xi) Dental and nutritional status.

(xii) Skin condition.

(xiii) Activity pursuit.

(xiv) Medications.

(xv) Special treatments and

procedures.

(xvi) Discharge potential.

(xvii) Documentation of summary

information regarding the additional

assessment performed through the

resident assessment protocols.

(xviii) Documentation of participation

in assessment.

The assessment process must include

direct observation and communication

with the resident, as well as

communication with licensed and

nonlicensed direct care staff members

on all shifts.

(2) When required. A facility must

conduct a comprehensive assessment of

a resident as follows:

(i) Within 14 calendar days after

admission, excluding readmissions in

which there is no significant change in

the resident’s physical or mental

condition. (For purposes of this section,

‘‘readmission’’ means a return to the

facility following a temporary absence

for hospitalization or for therapeutic

leave.)

(ii) Within 14 calendar days after the

facility determines, or should have

determined, that there has been a

significant change in the resident’s

physical or mental condition. (For

purposes of this section, a ‘‘significant

change’’ means a major decline or

improvement in the resident’s status

that will not normally resolve itself

without further intervention by staff or

by implementing standard diseaserelated clinical interventions, that has

an impact on more than one area of the

resident’s health status, and requires

interdisciplinary review or revision of

the care plan, or both.)

(iii) Not less often than once every 12

months.

(c) Quarterly review assessment. A

facility must assess a resident using the

quarterly review instrument specified

by the State and approved by HCFA not

less frequently than once every 3

months.

(d) Use. A facility must maintain all

resident assessments completed within

the previous 15 months in the resident’s

active record and use the results of the

assessments to develop, review, and

revise the resident’s comprehensive

plan of care.

(e) Coordination. A facility must

coordinate assessments with the

preadmission screening and resident

review program under Medicaid in part

483, subpart C to the maximum extent

practicable to avoid duplicative testing

and effort.

(f) Automated data processing

requirement. (1) Encoding data. Within

7 days after a facility completes a

resident’s assessment, a facility must

encode the following information for

each resident in the facility:

(i) Admission assessment.

(ii) Annual assessment updates.

(iii) Significant change in status

assessments.

(iv) Quarterly review assessments.

(v) A subset of items upon a resident’s

transfer, reentry, discharge, and death.

(vi) Background (face-sheet)

information, if there is no admission

assessment.

(2) Transmitting data. Within 7 days

after a facility completes a resident’s

assessment, a facility must be capable of

transmitting to the State information for

each resident contained in the MDS in

a format that conforms to standard

record layouts and data dictionaries,

and that passes standardized edits

defined by HCFA and the State.

(3) Monthly transmittal requirements.

A facility must electronically transmit,

at least monthly, encoded, accurate,

complete MDS data to the State for all

assessments conducted during the

previous month, including the

following:

(i) Admission assessment.

(ii) Annual assessment.

(iii) Significant change in status

assessment.

(iv) Significant correction of prior full

assessment.

(v) Significant correction of prior

quarterly assessment.

(vi) Quarterly review.

(vii) A subset of items upon a

resident’s transfer, reentry, discharge,

and death.

(viii) Background (face-sheet)

information, for an initial transmission

of MDS data on a resident that does not

have an admission assessment.

(4) Data format. The facility must

transmit data in the format specified by

HCFA or, for a State which has an

alternate RAI approved by HCFA, in the

format specified by the State and

approved by HCFA.

(5) Resident-identifiable information.

(i) A facility may not release

information that is resident-identifiable

to the public.

(ii) The facility may release

information that is resident-identifiable

to an agent only in accordance with a

contract under which the agent agrees

not to use or disclose the information

except to the extent the facility itself is

permitted to do so.

(g) Accuracy of assessments. The

assessment must accurately reflect the

resident’s status.

(h) Coordination. A registered nurse

must conduct or coordinate each

assessment with the appropriate

participation of health professionals.

(i) Certification. (1) A registered nurse

must sign and certify that the

assessment is completed.

(2) Each individual who completes a

portion of the assessment must sign and
67212 Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations

certify the accuracy of that portion of

the assessment.

(j) Penalty for falsification. (1) Under

Medicare and Medicaid, an individual

who willfully and knowingly—

(i) Certifies a material and false

statement in a resident assessment is

subject to a civil money penalty of not

more than $1,000 for each assessment;

or

(ii) Causes another individual to

certify a material and false statement in

a resident assessment is subject to a

civil money penalty of not more than

$5,000 for each assessment.

(2) Clinical disagreement does not

constitute a material and false

statement.

* * * * *

3. Subpart F consisting of § 483.315 is

added to read as follows:

Subpart F—Requirements That Must

be Met by States and State Agencies,

Resident Assessment

§ 483.315 Specification of resident

assessment instrument.

(a) Statutory basis. Sections 1819(e)(5)

and 1919(e)(5) of the Act require that a

State specify the resident assessment

instrument (RAI) to be used by long

term care facilities in the State when

conducting initial and periodic

assessments of each resident’s

functional capacity, in accordance with

§ 483.20.

(b) State options in specifying an RAI.

The RAI that the State specifies must be

one of the following:

(1) The instrument designated by

HCFA.

(2) An alternate instrument specified

by the State and approved by HCFA,

using the criteria specified in the State

Operations Manual issued by HCFA

(HCFA Pub. 7) which is available for

purchase through the National

Technical Information Service, 5285

Port Royal Rd., Springfield, VA 22151.

(c) State requirements in specifying an

RAI.

(1) Within 30 days after HCFA notifies

the State of the HCFA-designated RAI or

changes to it, the State must do one of

the following:

(i) Specify the HCFA-designated RAI.

(ii) Notify HCFA of its intent to

specify an alternate instrument.

(2) Within 60 days after receiving

HCFA approval of an alternate RAI, the

State must specify the RAI for use by all

long term care facilities participating in

the Medicare and Medicaid programs.

(3) After specifying an instrument, the

State must provide periodic educational

programs for facility staff to assist with

implementation of the RAI.

(4) A State must audit implementation

of the RAI through the survey process.

(5) A State must obtain approval from

HCFA before making any modifications

to its RAI.

(6) A State must adopt revisions to the

RAI that are specified by HCFA.

(d) HCFA-designated RAI. The HCFAdesignated RAI is published in the State

Operations Manual issued by HCFA

(HCFA Pub. 7), as updated periodically,

and consists of the following:

(1) The minimum data set (MDS) and

common definitions.

(2) The resident assessment protocols

(RAPs) and triggers that are necessary to

accurately assess residents, established

by HCFA.

(3) The quarterly review, based on a

subset of the MDS specified by HCFA.

(4) The requirements for use of the

RAI that appear at § 483.20.

(e) Minimum data set (MDS). The

MDS includes assessment in the

following areas:

(1) Identification and demographic

information, which includes

information to identify the resident and

facility, the resident’s residential

history, education, the reason for the

assessment, guardianship status and

information regarding advance

directives, and information regarding

mental health history.

(2) Customary routine, which

includes the resident’s lifestyle prior to

admission to the facility.

(3) Cognitive patterns, which include

memory, decision making,

consciousness, behavioral measures of

delirium, and stability of condition.

(4) Communication, which includes

scales for measuring hearing and

communication skills, information on

how the resident expresses himself or

herself, and stability of communicative

ability.

(5) Vision pattern, which includes a

scale for measuring vision and vision

problems.

(6) Mood and behavior patterns,

which include scales for measuring

behavioral indicators and symptoms,

and stability of condition.

(7) Psychosocial well-being, which

includes the resident’s interpersonal

relationships and adjustment factors.

(8) Physical functioning and

structural problems, which contains

scales for measuring activities of daily

living, mobility, potential for

improvement, and stability of

functioning.

(9) Continence, which includes

assessment scales for bowel and bladder

incontinence, continence patterns,

interventions, and stability of

continence status.

(10) Disease diagnoses and health

conditions, which includes active

medical diagnoses, physical problems,

pain assessment, and stability of

condition.

(11) Dental and nutritional status,

which includes information on height

and weight, nutritional problems and

accommodations, oral care and

problems, and measure of nutritional

intake.

(12) Skin condition, which includes

current and historical assessment of

skin problems, treatments, and

information regarding foot care.

(13) Activity pursuit, which gathers

information on the resident’s activity

preferences and the amount of time

spent participating in activities.

(14) Medications, which contains

information on the types and numbers

of medications the resident receives.

(15) Special treatments and

procedures, which includes

measurements of therapies, assessment

of rehabilitation/restorative care, special

programs and interventions, and

information on hospital visits and

physician involvement.

(16) Discharge potential, which

assesses the possibility of discharging

the resident and discharge status.

(17) Documentation of summary

information regarding the additional

assessment performed through the

resident assessment protocols.

(18) Documentation of participation

in assessment.

(f) Resident assessment protocols

(RAPs). At a minimum, the RAPs

address the following domains:

(1) Delirium.

(2) Cognitive loss.

(3) Visual function.

(4) Communication.

(5) ADL functional/rehabilitation

potential.

(6) Urinary incontinence and

indwelling catheter.

(7) Psychosocial well-being.

(8) Mood state.

(9) Behavioral symptoms.

(10) Activities.

(11) Falls.

(12) Nutritional status.

(13) Feeding tubes.

(14) Dehydration/fluid maintenance.

(15) Dental care.

(16) Pressure ulcers.

(17) Psychotropic drug use.

(18) Physical restraints.

(g) Criteria for HCFA approval of

alternate instrument. To receive HCFA

approval, a State’s alternate instrument

must use the standardized format,

organization, item labels and

definitions, and instructions specified

by HCFA in the latest issuance of the

State Operations Manual issued by

HCFA (HCFA Pub. 7).

(h) State MDS collection and data

base requirements. (1) As part of facility
Federal Register / Vol. 62, No. 246 / Tuesday, December 23, 1997 / Rules and Regulations 67213

survey responsibilities, the State must

establish and maintain an MDS

Database, and must do the following:

(i) Use a system to collect, store, and

analyze data that is developed or

approved by HCFA.

(ii) Obtain HCFA approval before

modifying any parts of the HCFA

standard system other than those listed

in paragraph (h)(2) of this section

(which may not be modified).

(iii) Specify to a facility the method of

transmission of data to the State, and

instruct the facility on this method.

(iv) Upon receipt of data from a

facility, edit the data, as specified by

HCFA, and ensure that a facility

resolves errors.

(v) At least monthly, transmit to

HCFA all edited MDS records received

during that period, according to formats

specified by HCFA, and correct and

retransmit rejected data as needed.

(vi) Analyze data and generate

reports, as specified by HCFA.

(2) The State may not modify any

aspect of the standard system that

pertains to the following:

(i) Standard approvable RAI criteria

specified in the State Operations

Manual issued by HCFA (HCFA Pub. 7)

(MDS item labels and definitions, RAPs

and utilization guidelines).

(ii) Standardized record formats and

validation edits specified in the State

Operations Manual issued by HCFA

(HCFA Pub. 7).

(iii) Standard facility encoding and

transmission methods specified in the

State Operations Manual issued by

HCFA (HCFA Pub. 7).

(i) State identification of agency that

collects RAI data. The State must

identify the component agency that

collects RAI data, and ensure that this

agency restricts access to the data except

for the following:

(1) Reports that contain no residentidentifiable data.

(2) Transmission of data and reports

to HCFA.

(3) Transmission of data and reports

to the State agency that conducts

surveys to ensure compliance with

Medicare and Medicaid participation

requirements, for purposes related to

this function.

(4) Transmission of data and reports

to the State Medicaid agency for

purposes directly related to the

administration of the State Medicaid

plan.

(5) Transmission of data and reports

to other entities only when authorized

as a routine use by HCFA.

(j) Resident-identifiable data. (1) The

State may not release information that is

resident-identifiable to the public.

(2) The State may not release RAI data

that is resident-identifiable except in

accordance with a written agreement

under which the recipient agrees to be

bound by the restrictions described in

paragraph (i) of this section.

(Catalog of Federal Domestic Assistance

Program No. 93.778, Medical Assistance

Program; and No. 93.773, Medicare—

Hospital Insurance)

Dated: December 3, 1997.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Dated: December 9, 1997.

Donna E. Shalala,

Secretary.

[FR Doc. 97–32828 Filed 12–22–97; 8:45 am]

BILLING CODE 4120–01–P