66726 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 416, 482, 485, and 489

[HCFA–3745–P]

RIN 0938–AG79

Medicare and Medicaid Programs;

Hospital Conditions of Participation;

Provider Agreements and Supplier

Approval

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Proposed rule.

SUMMARY: This proposed rule would

revise the requirements that hospitals

must meet to participate in the Medicare

and Medicaid programs. The revised

requirements focus on patient care and

the outcomes of that care, reflect a crossfunctional view of patient treatment,

encourage flexibility in meeting quality

standards, and eliminate unnecessary

procedural requirements. These changes

are necessary to reflect advances in

patient care delivery and quality

assessment practices since the

requirements were last revised in 1986.

They are also 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. In addition, in an effort to

increase the number of organ donations,

we are proposing changes in the

interaction between hospitals and organ

procurement organizations. The

proposed rule also would specify that

HCFA may terminate the participation

agreement of a hospital, skilled nursing

facility, home health agency, or other

provider if the provider refuses to allow

access to its facilities, or examination of

its operations or records, by or on behalf

of HCFA, as necessary to verify that it

is complying with the Medicare law and

regulations and the terms of its provider

agreement.

DATES: Comments will be considered if

received at the appropriate address, as

provided below, no later than 5 p.m. on

February 17, 1998.

ADDRESSES: Mail written comments (one

original and three copies) to the

following address: Health Care

Financing Administration, Department

of Health and Human Services,

Attention: HCFA–3745–P, P.O. Box

7517, Baltimore, MD 21207–0517.

If you prefer, you may deliver your

written comments (one original and

three copies) to one of the following

addresses:

Room 309–G, Hubert H. Humphrey

Building, 200 Independence Avenue,

SW, Washington, DC 20201, or

Room C5–09–26, Central Building, 7500

Security Boulevard, Baltimore, MD

21244–1850.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

HCFA–3745–P. Comments received

timely will be available for public

inspection as they are received,

generally beginning approximately 3

weeks after publication of a document,

in Room 309–G of the Department’s

offices at 200 Independence Avenue,

SW, Washington, DC, on Monday

through Friday of each week from 8:30

a.m. to 5 p.m. (phone: (202) 690–7890).

For comments that relate to

information collection requirements,

mail a copy of comments to: Office of

Information and Regulatory Affairs,

Office of Management and Budget,

Room 10235, New Executive Office

Building, Washington, DC 20503, Attn:

Allison Herron Eydt, HCFA Desk

Officer.

Copies: To order copies of the Federal

Register containing this document, send

your request to: New Orders,

Superintendent of Documents, P.O. Box

371954, Pittsburgh, PA 15250–7954.

Specify the date of the issue requested

and enclose a check or money order

payable to the Superintendent of

Documents, or enclose your Visa or

Master Card number and expiration

date. Credit card orders can also be

placed by calling the order desk at (202)

512–1530 or by faxing to (202) 512–

2250. The cost for each copy is $8.00.

As an alternative, you can view and

photocopy the Federal Register

document at most libraries designated

as Federal Depository Libraries and at

many other public and academic

libraries throughout the country that

receive the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Frank Emerson, (410) 786–4656, Doris

Jackson, RN, (410) 786–0095, Rachael

Weinstein, RN, (410) 786–6775.

SUPPLEMENTARY INFORMATION:

I. Introduction

As part of the President’s and Vice

President’s regulatory reform initiative,

the Health Care Financing

Administration (HCFA) is committed to

changing current regulations that focus

largely on requirements for measuring

procedural standards. One of HCFA’s

key initiatives in Reinventing

Government (REGO) is to revise many of

its conditions of participation (COPs) to

focus on outcomes of care and to

eliminate unnecessary procedural

requirements. HCFA is working in

partnership with the rest of the health

care community to institute better, more

commonsense ways of operating. On

March 10, 1997 we published a

proposed rule (62 FR 11004) that

includes revisions for COPs for HHAs.

Within the coming year, HCFA plans to

propose revisions to the COPs for

hospitals and end stage renal disease

(ESRD) facilities and also to mount

additional research in the area of ESRD

to provide the basis for future changes.

What these efforts have in common

is—

1. Reinventing Government (REGO)

Initiative

To meet our REGO commitment, we

are focusing on an approach for all sets

of COPs that are:

• Transitional toward a patient

outcome based system.

• Intended to stimulate

improvements in processes, outcomes of

care, and patient satisfaction.

• Patient centered.

• Supported by patient outcomes

data.

• Interdisciplinary in the approach to

care delivery, reflecting the team

approach to health care delivery.

The COPs generally adhere to these

basic requirements, varying in some

degree due to the unique environment

and patient case mix of the provider

type.

2. Transitional Framework

The transitional framework for each

set of COPs—

• Begins shifting the oversight focus

toward patient health outcomes and

away from burdensome and costly

procedural requirements, restructures

the traditional COPs along essential

conditions centered on patient care, and

reflects an interdisciplinary team

approach to patient care.

• Prepares the foundation for

provider adoption and use of more

detailed patient outcome measures

developed through private sector

experience and research.

• Provides a flexible framework for

incorporating better measures as they

are developed and tested.

3. Structure

The basic structure of all of the COP

follows the Joint Commission on

Accreditation of Healthcare

Organizations’ (JCAHOs) ‘‘Agenda for

Change.’’ This structure involves

reducing the number of conditions;

focusing on comprehensive assessment

and patient outcomes; and deleting,
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66727

where possible, process requirements

that are not specifically mandated by

the statute or believed likely to produce

outcomes vital to the protection of

patient safety.

Each set of COPs has the same

essential four conditions that reflect the

cycle of patient-centered care. The

essential four conditions are:

• Patient rights.

• Patient assessment.

• Care planning and coordination of

services.

• Quality assessment and

performance improvement.

Each of the sets of COP requirements

are tailored to specific statutory

requirements, the historical context of

the provider type, and the unique form

of care delivery and patient case mix.

4. Professional Input

For each set of COP, national

meetings of provider and practitioner

groups and beneficiary representatives

were held. Our partners in State survey

agencies were also consulted about our

approach and provided comments. Each

proposed set of COP reflects extensive

consultation with these groups. We

recognize the importance of

collaboration and communication with

the industry and invite further comment

on the proposed COP and related rules.

II. Background

A. Statutory Basis

Sections 1861(e) (1) through (8) of the

Social Security Act (the Act) provide

that a hospital participating in the

Medicare program must meet certain

specified requirements. Section

1861(e)(9) of the Act specifies that a

hospital also must meet such other

requirements as the Secretary finds

necessary in the interest of the health

and safety of the hospital’s patients.

Under this authority, the Secretary has

established the requirements that a

hospital must meet to participate in

Medicare in regulations at 42 CFR Part

482, Conditions of Participation for

Hospitals.

Section 1905(a) of the Act provides

that Medicaid payments may be applied

to hospital services. Under regulations

at 42 CFR 440.10(a)(3)(iii), hospitals

generally are required to meet the

Medicare conditions of participation in

order to participate in Medicaid.

The purposes of these conditions are

to protect patient health and safety and

to ensure that quality care is furnished

to all patients in Medicare-participating

hospitals. Surveyors use the conditions

to determine whether a hospital

qualifies for a provider agreement under

Medicare and Medicaid. Under section

1865 of the Act and 42 CFR 488.5 of the

regulations, hospitals that are accredited

by the Joint Commission on

Accreditation of Healthcare

Organizations (JCAHO) or the American

Osteopathic Association (AOA) are not

routinely surveyed for compliance with

the conditions but are deemed to meet

most of the requirements in the hospital

conditions of participation based on

their accreditation. (See 42 CFR part

488, Survey and Certification

Procedures.)

B. Why Revise the Conditions of

Participation

The current conditions of

participation (COPs) were adopted in

1986 and for the most part have not

been revised since that time. They are

organized according to the types of

services a hospital may offer, and

include specific, process-oriented

requirements for each hospital service

or department. Since the current

conditions were developed, however,

significant innovations in hospital

patient care delivery systems and

quality assessment practices have

emerged, as evidenced by the JCAHO’s

recent revision of its accreditation

standards and redesign of its survey

process.

Moreover, as discussed above, the

revision of the hospital requirements is

part of a larger effort by HCFA to bring

about improvements in the quality of

care furnished to Federal beneficiaries

through a new approach to our quality

of care responsibilities. The existing

hospital COPs do not provide patientcentered, outcome-oriented standards,

nor do they provide for the operation of

a quality assessment and performance

improvement program. Historically, we

set requirements for participation in the

Medicare program by establishing

requirements that address the structures

and processes of health care. These

requirements are largely the result of

professional consensus, since there are

no data supporting the link between

structure and process requirements and

positive patient outcomes. The

combination of process-oriented

requirements with an enforcement

approach that focuses on identifying

providers that do not have the required

structures and procedures in place no

longer represents the best available

method for assessing and improving

hospital quality of care. Thus, we have

concluded that significant revisions to

the hospital conditions of participation

are essential.

C. Transforming the Hospital Conditions

of Participation

We are committed to working with

affected parties to implement revised

COPs that impose the minimum burden

on hospitals and allow hospitals

maximum flexibility in meeting the

Federal requirements necessary to fulfill

our quality of care responsibilities.

Thus, in developing revised conditions,

we have solicited suggestions from

organizations representing hospitals,

practitioners, patients, and States,

including distributing an informal,

preliminary draft of the proposed

hospital COPs to approximately 70

groups for comment. We have used

those comments in the development of

the revised COPs contained in this

proposed rule.

The fundamental principles that

guided the development of the proposed

COPs were the need to:

• Focus on the continuous, integrated

care process that a patient experiences

across all aspects of hospital services,

centered around patient assessment,

care planning, service delivery, and

quality assessment and performance

improvement.

• Adopt a patient-centered approach

that recognizes the contributions of

various skilled professionals and how

they interact with each other to meet the

patient’s needs. Thus, we would

eliminate requirements that encourage

‘‘stovepipe’’ administrative and

enforcement structures.

• Stress quality improvements,

incorporating to the greatest possible

extent an outcome-oriented, data-driven

quality assessment and performance

improvement program. Thus, the new

COPs would invest our principal

expectations for performance in an

overarching requirement that each

hospital participate in its own quality

assessment and performance

improvement program.

• Facilitate flexibility in how a

hospital meets our performance

expectations, and eliminate process

requirements unless there is consensus

or evidence that they are predictive of

desired outcomes for patients.

• Require that patient rights are

assured.

Based on these principles, we are

proposing new hospital conditions of

participation that revise or eliminate

many existing requirements and

incorporate critical requirements into

four ‘‘core conditions.’’ These four

COPs—Patient Rights; Patient

Admission, Assessment, and Plan of

Care; Patient Care; and Quality

Assessment and Performance

Improvement—would focus both
66728 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

provider and surveyor efforts on the

actual care delivered to the patient, the

performance of the hospital as an

organization, and the impact of the

treatment furnished by the hospital on

the health status of its patients. The

first, Patient Rights, emphasizes a

hospital’s responsibility to respect and

promote the rights of each hospital

patient. The second proposed core COP,

Patient Admission, Assessment, and

Plan of Care, reflects the critical nature

of a comprehensive assessment and a

resulting plan of care in determining

appropriate treatments and

accomplishing desired health outcomes.

It also would incorporate the need for a

coordinated, team approach to planning

care. The third proposed core COP,

Patient Care, focuses on the actual

delivery of care. Finally, the proposed

Quality Assessment and Performance

Improvement COP would charge each

hospital with responsibility for carrying

out a performance improvement

program of its own design to effect

continuing improvement in the quality

of care furnished to its patients.

In the revised COPs, we are proposing

to include process-oriented

requirements only where we believe

they remain highly predictive of

ensuring desired outcomes or are

necessary to deter or prevent fraud and

abuse (for example, the requirement for

error-free medication administration

under the pharmaceutical services

COP). Far more frequently, however, we

have eliminated process details from the

existing requirements and instead

included the related area of concern as

a component that must be evaluated as

part of the hospital’s overall quality

assessment and performance

improvement responsibilities. For

example, we would no longer specify

that a hospital must make available to

medical staff a written description of its

laboratory services. However, we would

continue to require that a hospital

provide laboratory services needed to

meet its patients’ needs and would

specify under the proposed quality

assessment and performance

improvement condition that a hospital’s

assessment and performance

improvement program must include

evaluation of its diagnostic services. The

practical effect of this approach would

be to stimulate the hospital to find its

own performance problems, fix them,

and continuously strive to improve

patient outcomes and satisfaction, as

well as efficiency and economy.

We believe that the proposed COPs

based on these principles reflect a

fundamental change in HCFA’s

regulatory approach, a change that to a

large extent establishes a shared

commitment between HCFA and

Medicare providers to achieve

improvements in the quality of care

furnished to their patients. The

proposed COPs invest hospitals with

internal responsibility for improving

their performance, rather than relying

on an externally-based approach in

which prescriptive Federal

requirements are enforced through the

punitive aspects of the survey process.

This change would enable HCFA and

the States to focus more resources on

joining with hospitals (in this case,

principally non-accredited hospitals) in

partnerships for improvement. It should

result in fewer compliance surveys and

the reduced need to threaten or take

adverse actions that could jeopardize a

hospital’s reputation, financial viability,

and participation in the Medicare and

Medicaid programs.

Yet these requirements provide the

Secretary and State Medicaid agencies

with more than adequate regulatory

basis for compelling improved

performance or termination of

participation based on failure to correct

seriously deficient performance that can

or does threaten the health and safety of

patients, or seriously impairs the

hospital’s capacity to provide needed

care and services to patients. Under the

current regulations, termination actions

are initiated based on the evidence

found during the survey. We foresee no

changes in that regard in applying the

new COPs.

Thus, as with the current COPs, the

enforceability of the proposed COPs will

be rooted in the evidence found during

the onsite survey when poor

performance is identified and corrective

action is not taken. We believe that if

there is a need to seek a provider

agreement termination based on the

proposed COP, although a hospital may

argue that its performance met the

regulatory standards, HCFA will be

successful at arguing that based on the

evidence found during a survey the

requirements of the regulation were not

met. In fact, we believe the

enforceability is strengthened by

standards that establish outcomeoriented performance expectations.

When poor performance is documented

from the evidence found during a

survey and compared to the

performance expectations embodied in

these patient-centered, outcomeoriented COPs, we believe the contrast

between the poor performance

identified and the performance

expectation of the COP will be clear.

We recognize that an important part

of the successful implementation of

these proposed regulations will depend

on how effectively State and Federal

surveyors are able to learn and

internalize this patient-centered,

outcome-oriented approach and

incorporate it into the survey process.

The proposed approach embodied in

these regulations, in fact, parallels the

approach that we have taken in survey

and certification, beginning as early as

1985 (for intermediate care facilities for

the mentally retarded) and 1986 (for

nursing homes). In concert with the

States, we have trained surveyors to

develop information from the survey

process that leads to conclusions about

how the provider’s performance has

impacted—positively and negatively—

on patients, especially in terms of what

the patients actually experience. For

example, for nearly a decade, nursing

home surveyors have been trained to

interview residents and family

members, seeking information that

contributes to their assessment of how

the nursing home’s performance is

experienced by the residents and their

families. Before the use of outcomeoriented surveys, surveyors focused

almost exclusively on record reviews

and observing care processes and

organizational structures.

These proposed regulations contain

two critical improvements that support

and extend the change to patientcentered, outcome-oriented surveys.

First, the proposed regulations are

designed to enable surveyors to focus

explicitly on assessing outcomes of care,

because the regulations would specify

that each individual receive the care her

or his assessed needs show is necessary,

rather than requiring that certain

services and processes be in place. Also,

the addition of a strong, quality

assessment and performance

improvement requirement not only

stimulates the provider to continuously

monitor its performance and to find

opportunities for improvement, it

affords the surveyor the opportunity to

assess how effectively the provider has

pursued a continuous quality

improvement agenda. All of these

changes are directed toward improving

outcomes of care and satisfaction for

patients.

We have already begun the process of

identifying the tasks necessary to train

surveyors and their supervisors and

managers effectively in this refined,

expanded approach. In addition, HCFA

is implementing a new State survey

agency quality improvement program

that is designed to help State survey

agencies increase their focus on

improvement strategies in the survey

and certification process. As more

sources of performance data become

available, we will be helping State

survey agencies to learn how to use
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66729

these data effectively to target scarce

survey resources and to identify and

implement opportunities for

improvement (e.g., reduction in falls or

in nosocomial infection rates).

The proposed COPs are designed to

decrease the regulatory burden on

hospitals and provide them with greatly

enhanced flexibility. At the same time,

the proposed requirement for a program

of continuous quality assessment and

performance improvement would

increase performance expectations for

hospitals in terms of achieving needed

and desired outcomes for patients and

increasing patient satisfaction with

services provided. We invite public

comment on this fundamental shift in

our regulatory approach. We are

especially interested in comments that

address how HCFA could improve this

approach, what additional flexibility

could be provided, what process

requirements are critical to patient care

and safety and how well HCFA’s

investment in the hospital’s

participation in a strong continuous

quality assessment and performance

improvement program of their own

design will achieve our intended goal of

improving the efficiency, effectiveness

and quality of patient outcomes and

satisfaction.

D. Development of National OutcomeBased Performance Measures for

Hospitals

Before proceeding to a detailed

discussion of the proposed

requirements, we want to touch briefly

on the prospects for standard outcomebased performance measures for

hospital services. As mentioned above,

HCFA is committed, through its

Strategic Plan, to increasing the amount

and quality of information about health

care to beneficiaries, providers, plans,

and the public at large. The purpose of

this effort is to improve the ability of:

• Beneficiaries to make informed

choices about their health care;

• Providers to improve the

effectiveness and efficiency of their

services, improve the outcomes of care

they provide, and increase beneficiary

satisfaction with their services;

• Organizations such as health

maintenance organizations and

insurance companies to choose

providers, and evaluate and improve the

performance of providers with which

they contract; and

• The public to know more about the

availability and quality of health care

services in their communities.

Through various initiatives, such as

the Consumer Information Program’s

mammography screening initiative,

HCFA is implementing its broad-based

information strategy. A strong quality

assessment and performance

improvement (QAPI) requirement in the

proposed hospital conditions of

participation, as well as similar

requirements in proposed HHA,

hospice, and ESRD conditions, is

intended to stimulate providers to

develop and use a wide variety of

information and data, from internal and

external sources, to inform their

improvement efforts. We go into more

detail on this and industry efforts to

implement QAPI later in the discussion

on the QAPI conditions in section II.B.5

of the preamble.

We have proposed requiring that

HHAS and we are contemplating

requiring that ESRD facilities report

certain standard core data to HCFA to

serve as the basis of a national

performance measures data base, which

could then be used for provider

improvement, consumer information

and other purposes. We are able to

suggest this for HHAs and ESRD

facilities because extensive work has

been done on performance measures in

both areas. However, with hospitals the

challenge is greater and sufficient

similar work has not been done on

hospital measures, as described later in

section II.B.5 of this preamble

(§ 482.25), that could produce common

agreement on measures that would be

acceptable for use on a national basis.

Therefore, we have decided not to

include in the hospital COPs any

requirement for hospitals to collect and

report certain standard data items (for

example, nosocomial infection rates,

medication errors, reports of falls and

other injuries, restraint use, various

patient characteristic data elements,

etc.) that could produce quality of care

predictors in the future. Although we

eventually intend to move in that

direction in hospitals, we do not believe

it is reasonable to establish any related

requirements at this time, in view of the

lack of any current consensus or science

that could establish a reliable and valid

set of measures.

However, we invite comments from

the public in response to the following

questions:

1. Should HCFA (either separately or

in a public/private partnership of some

sort) assume a leadership role in

developing and implementing hospitalbased performance measures that would

serve as the basis of a national quality

assessment and performance

improvement data base?

2. If so, how should HCFA proceed to

develop and implement this system?

3. If HCFA does not assume a

leadership role in this area, individual

hospitals invest in the development of

multiple systems, and those systems are

later superseded by a single required

system, would the overall burden be

greater than if a single system had been

imposed at the outset?

4. If HCFA does not assume a

leadership role in this area and

individual hospitals adopt multiple

systems that produce nonstandardized

data, to what extent would it be difficult

or impossible to use these data to make

comparisons between hospitals?

5. Should HCFA require or encourage

hospitals to use the standardized

measures that some accredited hospitals

are using? The advantage would be that

hospitals using such standardized

choices would not have to develop their

own measures and their results could be

compared to other hospitals with

similar characteristics. Examples

include: (1) Number of days from initial

surgery to discharge for patients

undergoing isolated coronary artery

bypass graft procedures; and (2) time

from the emergency department arrival

to procedure for trauma patients

undergoing specified abdominal

surgical procedures.

6. Would it be appropriate for HCFA

to include any ‘‘placeholder’’ language

in the revised COPs concerning the

eventual need for hospitals to report

relevant data, or is this premature?

7. If HCFA should include

placeholder language, what changes

should we make to these proposed

requirements to set the stage for the

development and implementation of

such a system?

Even without a performance measurebased national system, we expect

hospitals to develop and use their own

measures and other available external

information to inform their own quality

assessment and improvement programs,

and to participate in any external

quality improvement programs (such as

a national program to reduce the use of

inappropriate psychoactive medications

in hospitals) as the Secretary may direct.

II. Provisions of the Proposed Rule

A. Overview

Under our proposal, the hospital

conditions of participation would

continue to be set forth in regulations

under 42 CFR part 482. However, since

the majority of the existing requirements

in part 482 would be revised,

consolidated with other requirements,

or eliminated, we are proposing a

complete overhaul of the organizational

scheme. The most significant change

would be our proposal to group together

all COPs directly related to patient care

in Subpart B, Patient Care Activities.

Then, in Subpart C, Organizational
66730 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

Environment, we would group together

those organizational activities the

hospital must perform to support the

delivery of patient care. We believe that

this proposed format would embody the

patient-centered focus of our proposed

changes, emphasizing the continuous,

integrated care processes that a patient

experiences across all aspects of the

hospital environment. Also, because

functions and processes for delivering

patient care often require

interdisciplinary teamwork involving

many hospital departments and

services, the proposed regulations

would incorporate a functional

framework for the COPs rather than

maintaining a stovepipe approach that

gives the appearance that patient care

activities can occur in isolation.

The complete proposed new

organizational format for part 482 is as

follows:

PART 482—CONDITIONS OF

PARTICIPATION FOR HOSPITALS

Subpart A—General Provisions

482.5 Basis and scope.

482.10 Condition of participation: Patient

rights.

Subpart B—Patient Care Activities

482.15 Condition of participation: Patient

admission, assessment, and plan of care.

482.20 Condition of participation: Patient

care.

482.25 Condition of participation: Quality

assessment and performance

improvement.

482.30 Condition of participation:

Diagnostic and therapeutic services or

rehabilitative services.

482.35 Condition of participation:

Pharmaceutical services.

482.40 Condition of participation:

Nutritional services.

482.45 Condition of participation: Surgical

and anesthesia services.

482.50 Condition of participation:

Emergency services.

482.55 Condition of participation:

Discharge planning.

Subpart C—Organizational Environment

482.110 Condition of participation:

Administration of organizational

environment.

482.115 Condition of participation:

Infection control.

482.120 Condition of participation:

Information management.

482.125 Condition of participation: Human

resources.

482.130 Condition of participation:

Physical environment.

482.135 Condition of participation: Life

safety from fire.

482.140 Condition of participation: Blood

and blood product transfusions.

482.145 Condition of participation:

Potentially infectious blood and blood

products.

482.150 Condition of participation:

Utilization review.

Subpart D—Requirements for Specialty

Hospitals

482.155 Special provisions applying to

psychiatric hospitals.

482.160 Condition of participation: Special

medical record requirement for

psychiatric hospitals.

482.165 Condition of participation: Special

staff requirements for psychiatric

hospitals.

482.170 Special requirements for hospital

providers of long-term care services

(‘‘swing-beds’’).

We note that although we are

proposing no changes to the

requirements for specialty hospitals, the

existing requirements would be

redesignated numerically to

accommodate the proposed changes to

the preceding COPs.

B. Discussion of Proposed Conditions

1. Basis and Scope (§ 482.1)

We are proposing to add a new

paragraph (a)(6) to the statutory basis

section for part 482 that sets forth,

under section 1138 of the Act,

requirements for hospital protocols for

organ procurement and standards for

organ procurement agencies’ agreements

with hospitals for organ procurements.

This provision will further the authority

governing organ procurements.

2. Patient Rights (§ 482.10)

Under section 1861(e)(9) of the Act,

an institution may be recognized by

Medicare as a hospital only if, in

addition to meeting the specific

requirements in the preceding sections

of that provision, it meets such other

requirements as the Secretary finds

necessary in the interest of patient

health and safety. In our view, patient

health and safety cannot be protected

simply by avoiding obvious risk factors

such as poor infection control practices

or inadequate nurse staffing (as

documented in recent literature on the

effects of Nursing on patient outcomes

such as morbidity, mortality, length of

stay, and cost—see Keeler, E., et al.,

‘‘Hospital Characteristics and Quality of

Care,’’ JAMA 268 (1992): 1709–1714.;

and Krakauer, H., et al., ‘‘Evaluation of

the HCFA for the Analysis of Mortality

Following Hospitalization,’’ Health

Services Research 27 (1992): 317–335).

Patient rights dealing with freedom from

physical or verbal abuse, harassment, or

inappropriate restraints are examples of

direct protections of patients’ physical

and emotional health and safety. In

addition, patients’ successful recoveries

from illness or injury depend on many

factors related to their psychological

and emotional health, including their

general feeling of well-being. Because of

the importance of these psychological

and emotional factors, we believe

patient health and safety can be

protected adequately only if patient care

is delivered in an atmosphere of respect

for the individual patient’s comfort,

dignity, and privacy.

This view is shared by other parties

involved in the development of these

conditions of participation, many of

whom expressed strong support for the

inclusion of specific provisions

addressing patient rights. Therefore, we

propose to set forth a new condition of

participation that would recognize

explicitly that a hospital must protect

and promote certain patient rights.

The proposed condition is composed

of five standards. The first proposed

standard would require that a hospital

inform each patient of his or her rights

in advance of furnishing care. It also

would require that a hospital have a

grievance process and must indicate

who a patient should contact if he or

she desires to express a grievance. We

are not proposing a specific method as

to how a hospital should notify each

patient of his or her rights, or

establishing structural or procedural

expectations about how a hospital’s

patient grievance process should be set

up. Instead, we believe each hospital

should implement a patient rights

policy that reflects its specific manner

of operations and minimizes

administrative burden, as long as the

hospital meets the underlying

expectation that it informs patients

about their rights and about whom to

contact when patients believe these

rights have been violated.

The remaining four proposed

standards under the patient rights

condition would establish a minimum

set of required patient rights. In

developing these provisions, we closely

examined the regulations concerning

patient rights for other provider types,

such as nursing homes and HHAs.

Because the nature of patient care varies

among provider types, we are proposing

only those patient rights that we believe

are appropriate and necessary in the

hospital setting. Based on the strong

support from all parties involved in the

development of these proposed hospital

conditions, we are proposing that a

patient should have the following rights:

• The right to be informed of his or

her rights, to participate in the

development and implementation of the

individual’s plan of care, and to make

decisions regarding that care.
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66731

• The right to formulate advance

directives and to have those directives

followed.

• The right to privacy and to receive

care in a safe setting.

• The right to be free from verbal or

physical abuse or harassment.

• The right to confidentiality of his or

her clinical records.

• The right to access information

contained in his or her clinical records

within a reasonable time.

• The right to be free from the use of

seclusion and restraints as a means of

coercion, convenience, or retaliation by

staff. If seclusion or restraints are used

(including psychopharmacological

drugs used as restraints) they must be

used in accordance with a patient’s plan

of care and may be used only as a last

resort and in the least restrictive manner

possible, to protect the patient or others

from harm. Restraints must be removed

or seclusion ended at the earliest

possible time.

We believe these proposed patient

rights are clearly necessary in the

interest of patient health and safety and

are for the most part self-explanatory.

We note that the rights concerning

advance directives are tied directly to

the statute (section 1866(f) of the Act),

and the hospital’s responsibilities in

these areas are more fully described in

other sections of the regulations (see

existing § 489.102). However, we believe

it is appropriate to reference advance

directives in the proposed patient rights

section, consistent with the reference to

advance directives in the patient rights

sections of the existing regulations for

both nursing homes and HHAs.

We considered proposing a specific

time period within which a hospital

would be required to provide access to

requested medical records under

proposed § 482.10(d)(2), but concluded

that the proposed requirement that a

hospital provide access to such

information within a ‘‘reasonable’’ time

is more feasible. If a former patient

requests access to 3-year-old closed

medical records, which could be in

storage, a ‘‘reasonable’’ time to retrieve

them likely would be longer than if the

spouse (with appropriate power of

attorney) of an inpatient requests to see

the medical records of her or his spouse

who is still in the hospital. In the former

case, a ‘‘reasonable’’ time might be

measured in days, whereas it could be

hours in the latter example. Thus, we

believe that ‘‘reasonable’’ must be

defined in terms of the individual

circumstances. Most important, we

believe that ‘‘reasonable’’ means that the

hospital will not frustrate the legitimate

efforts of individuals to gain access to

their own medical records and will

actively seek to meet those requests as

quickly as its recordkeeping system

permits. If a hospital receives

complaints from patients or their legal

representatives about delays in gaining

access to properly requested records, we

would expect that the hospital would

both respond quickly to resolve the

complaints and consider the complaints

as an opportunity for improvement as

part of its quality assessment and

performance improvement program. In

summary, we believe that the use of the

word ‘‘reasonable’’ sets the proper

performance standard for the hospital

without imposing an arbitrary burden,

while at the same time enabling

surveyors to take action if a hospital is

systematically frustrating legitimate

efforts to gain access to medical records.

We welcome comments on the

appropriateness of our decision not to

propose any specific timeframe for

providing access to a patient’s records.

We also strongly considered

expanding the proposed patient rights

provisions (or establishing separate

requirements) to provide further detail

related to a patient’s right to be free

from seclusion or restraints. We

recognize that the use of restraints or

seclusion has the potential to produce

serious consequences for a patient’s

health and safety, such as physical and

psychological harm, loss of dignity,

violation of civil rights, and even death.

Thus, our expectation is that a hospital

would impose restraints or seclusion

only when absolutely necessary to

prevent immediate injury to the patient

or others and when no alternative

means are sufficient to accomplish this

purpose. We also expect that when

restraints or seclusion are used, the plan

of care should address how and when

such practices are to be employed, and

patients placed under restraints or in

seclusion would be released as soon as

they no longer pose an immediate threat

of injury to themselves or others.

Although we have built these

expectations into the proposed patient

rights provisions, the question remains

whether it would be advisable to add

further, more prescriptive requirements

concerning the use of seclusion or

restraints. One possibility would be to

incorporate into the regulations a series

of specific requirements governing the

use of restraints and seclusion, as

detailed below:

• Seclusion or restraints may only be

used to the extent authorized by the

signed order of a physician. Written

authorization must include the date and

time of the order, and the reason for

seclusion or restraint. For restraint, the

order must include the type of

restraint(s) and the number of restraint

points.

• Each order for seclusion or

restraints must be in writing, must be

time-limited and specify start and end

times. Implementing a time-limited

order does not require applying the

intervention for the entire period if the

patient demonstrates a reduction or

change in the behavior that led to being

placed in restraint or seclusion.

• A renewal order may be issued if

the physician clinically assesses the

patient face to face and determines that

seclusion or restraint continues to be

necessary to prevent injury to self or

others, and there is no less restrictive

method of preventing the injurious

behavior.

• Orders for seclusion or restraint

must never be written on a standing or

as needed basis.

• Written orders for restraint and

seclusion for adults must be valid for no

more than 6 hours; written orders for

restraint and seclusion for children and

adolescents must be valid for no more

than 2 hours.

• A patient in seclusion or restraint

must be checked by a person trained in

the use of restraints and seclusion at

least every 15 minutes for comfort, body

alignment, circulation, hydration,

feeding, and toilet needs. A patient in

seclusion or restraint must have vital

signs checked a minimum of every 2

hours. Written documentation of checks

must include, at a minimum, the name

of the person doing the check, the date

and time of the check, and the patient’s

condition.

For purposes of this proposed rule,

we have opted not to set forth these

kinds of detailed requirements in the

regulations but instead to require that a

hospital achieve the intended outcome

that restraints or seclusion are never

imposed inappropriately, without

limiting a hospital’s flexibility in how it

meets this requirement. However, we

welcome comments on the prevalence

of the use of restraints and seclusion in

the hospital setting and whether the

above standards, or alternative

requirements, are needed to ensure

patient health and safety.

Subpart B—Patient Care Activities

3. Patient Admission, Assessment, and

Plan of Care (§ 482.15)

The first proposed condition under

proposed Subpart B, Patient Care

Activities, would combine the

requirements for patient admission,

assessment, and care plan development

in a single condition, which would be

followed by a separate condition on

patient care. We believe this
66732 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

organization is in keeping with the

patient centered orientation of these

regulations and would help illustrate

our view that patient assessment and

planning is a prerequisite for the

delivery of high quality care.

The underlying requirements of this

COP would be first that a hospital

ensure that each patient receives a

comprehensive assessment of his or her

care needs, including an initial estimate

of posthospital needs, if any, and then

that the hospital establish a coordinated

plan for how all relevant hospital

disciplines will meet those needs. A

comprehensive assessment of patient

care needs is critical for planning

patient care and achieving desired

health care outcomes. Because patient

assessment activities are performed by

various disciplines within the hospital

setting, coordination of the information

obtained during patient assessment

activities is vital to assuring a welldeveloped plan for meeting the patient’s

identified care needs. Moreover, a

coordinated plan for care delivery is

increasingly important in a health care

environment where payment incentives

encourage shorter hospital stays. We

note for an assessment to be truly

‘‘comprehensive,’’ it must address all of

a patient’s anticipated care needs; thus,

we believe it is appropriate to include

a reference to posthospital needs under

the proposed assessment COP. The

inclusion of posthospital needs in a

comprehensive assessment does not

constitute an added burden on hospitals

but simply reflects current, accepted

practice in patient assessment activities.

For example, in conducting a

comprehensive assessment on a 17-yearold male with no history of medical

problems who will undergo surgery to

repair a fractured femur resulting from

a football injury, it would be

appropriate to gather information on

who will be available to assist the

patient at home, who is available to take

the patient to follow-up medical

appointments, and necessary

instructions for posthospital needs (e.g.,

crutch walking, body positioning,

medication administration, etc). (We

note that, in accordance with section

1861(ee) of the Act, the proposed COPs

would continue to address separately

the formal discharge planning

procedures required to ensure that

patients receive appropriate

posthospital care and services. As

explained in further detail later in this

preamble, we are proposing to retain the

existing discharge planning COP (now

codified at § 482.43) and redesignate it

as proposed § 482.55.)

Under the first proposed standard,

‘‘Admission and comprehensive

assessment’’ (proposed § 482.15(a)), we

propose to retain the current flexible

requirement (at existing § 482.12(c)(2))

under which patients can be admitted to

the hospital by any licensed practitioner

allowed by the State to do so. Then,

with respect to assessment, we would

revise the requirement under existing

§ 482.22(c)(5) that a physical

examination and medical history be

done no more than 7 days before or 48

hours after an admission. Instead, we

propose to require that each patient

receive a comprehensive assessment

that identifies the patient’s condition

and care needs as well as an initial

estimate of posthospital needs, if any, at

the time of admission and is placed in

the patient’s medical record within 24

hours of admission.

We propose to provide the hospital

and medical staff the flexibility to

define the content and activities of the

comprehensive patient assessment. We

recognize that to require, for example,

that every patient have an evaluation of

rehabilitation potential or nutritional

status, is not necessarily appropriate.

The information to be included in the

comprehensive assessment would be

determined by the hospital based on the

characteristics and needs of the specific

patient. For example, when the patient’s

condition or symptoms indicate

possible alcohol or drug abuse, an

alcohol or drug abuse assessment

should be performed as part of a mental

status assessment. Again, the

performance expectation is that a

hospital would ensure that each

patient’s assessment is comprehensive

relative to the reason the patient is in

the hospital. We do not believe it is

appropriate to prescribe how a hospital

meets this responsibility.

We are proposing that the

comprehensive assessment must be

completed in a timely manner

consistent with the patient’s immediate

needs and placed into a patient’s

medical record within 24 hours of

admission. We believe that this

proposed requirement sets a clear

expectation for a close, effective

relationship between assessment and

care planning, a relationship that is

essential to achieving desired health

care outcomes. We view the maximum

24-hour timeframe for completion of the

assessment as essential for adequate

patient care and safety, since by

definition a patient being admitted to a

hospital is at a point of immediate need.

The 24-hour timeframe should pose no

burden for the well-managed hospital,

since in all likelihood it would already

be performing assessments within this

timeframe for initial care planning and

decision making purposes.

We are also proposing a 12-hour

timeframe for placement into the

patient’s medical record of any

assessment information collected before

admission to the hospital. For example,

a patient may have had a health history

and physical examination completed in

the physician’s office before admission.

Allowing a copy of a previously

completed health history and physical

examination to be placed in the hospital

records would eliminate duplication in

the creation of these records, especially

if the findings during the physician

office visit were the basis of the

admission to the hospital. Unlike under

existing regulations, which permit use

of a physical examination or medical

history done within 7 days of a patient’s

admission, the proposed requirements

would not establish an arbitrary limit on

the use of such information. Instead, we

would require that any comprehensive

assessment information recorded before

admission be updated to reflect the

patient’s condition on admission. That

is, a hospital would be expected to

reassess the necessity of the patient’s

admission to the hospital and

document, as appropriate, any changes

in the patient’s condition at the time of

admission. We believe this requirement

would reduce the hospital’s information

collection burden without

compromising patient health and safety.

Because, in such a case, the history

taking and physical examination

activities essentially are completed

before admission, we believe that 12

hours is a reasonable timeframe for

placement of that assessment

information into the medical record.

That is, it should take the hospital less

time to update the assessment

information than the proposed 24-hour

timeframe for a comprehensive

assessment performed after admission.

The second standard under this COP,

proposed § 482.15(b)(1), would require

that each patient have an initial written

plan of care that meets the needs

identified in the comprehensive

assessment and that the plan of care

must be placed in the medical record

within 24 hours of admission. Thus,

each patient would be assured of having

a comprehensive assessment and an

initial care plan within 24 hours of

admission to the hospital. We believe

that this 24-hour timeframe for care

planning is both reasonable and

necessary, given the continuing

decreases in average lengths of stay in

hospitals.

Presently, responsibility for a

patient’s plan of care is addressed under

various separate COPs, including

governing body, medical staff, and

nursing services. In place of this
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66733

fragmented approach, we would focus

on the need for coordination in care

planning for hospital patients by

requiring that the plan include care to

be delivered by all disciplines. We

would not specify which disciplines

must be involved in care planning;

instead, the hospital would have the

flexibility to determine which

disciplines should be involved based on

the nature of a patient’s illness or injury.

Similarly, we are not proposing to

require that a hospital have a single care

plan that documents interdisciplinary

care planning needs, but only that care

planning by all relevant disciplines be

included in the medical record using

whatever organizational structure or

format the hospital believes is

appropriate.

Under proposed § 482.15(b)(2), we

would require that the patient’s plan of

care be modified to meet any changes in

the patient’s condition that affects the

patient’s needs. We believe this

requirement is preferable to a mandate

that reassessments be conducted at

specified time intervals on all patients.

Instead, each practitioner involved in a

patient’s care may perform

reassessments and modify the plan of

care, as needed.

We welcome comments on whether

the specific proposed timeframes in the

regulation text are reasonable and

consistent with current medical practice

and whether the timeframes should be

used as benchmarks to reflect patient

health and safety concerns involving the

timeliness of the assessment

components.

4. Patient Care (§ 482.20)

Patient care activities occur in all

areas and departments of a hospital.

These activities are carried out by a

variety of staff and licensed

practitioners from the medical, nursing,

pharmacy, dietetics, rehabilitation, and

other departments and services. Rather

than describing distinct patient care

responsibilities for each service or

department, we have organized these

regulations to reflect the integrated way

in which a patient experiences care, by

establishing a single, unified patient

care condition. Thus, by consolidating

patient care activities into one COP, the

proposed regulations would no longer

support a ‘‘stovepipe’’ approach to

patient care and instead foster a

hospital’s efforts to integrate,

coordinate, and evaluate patient care in

the same way as the patient experiences

care in a contemporary hospital setting.

Overall, the proposed patient care

COP would require that each Medicare

patient be under the care of an

appropriately qualified practitioner, and

that the care provided to each patient be

coordinated and based on the plan of

care required under proposed § 482.15.

The first standard under the proposed

patient care COP (§ 482.20(a)) concerns

the assignment of a practitioner

responsible for each Medicare patient’s

care. Under this standard, we would

retain, with only minor editorial

changes and one substantive change

(discussed below) the current

requirements in § 482.12(c)(1), (3), and

(4). These requirements, while specific

and detailed, are needed to implement

section 1861(e)(1) of the Act, which

defines a hospital as an institution that

provides services by or under the

supervision of physicians, and section

1861(e)(4) of the Act, which requires

that every Medicare patient be under the

care of a physician. It is necessary to

implement the latter requirement in a

way that recognizes the many types of

practitioners who are authorized by

State scope of practice laws and hospital

staff bylaws to treat patients in

hospitals.

Within this standard, the only

substantive change from current

requirements appears at proposed

§ 482.20(a)(1)(vi), which would permit a

clinical psychologist to admit and treat

patients receiving qualified psychologist

services (as defined in section 1861(ii)

of the Act), to the extent this is

permitted under State law. This change

is needed to implement a change in

section 1861(e)(4) of the Act that was

made by section 104 of Public Law 103–

432, the Social Security Act

Amendments of 1994.

Proposed paragraphs (a)(2) and (3) of

this standard restate current

requirements under § 482.12(c)(3) and

(4) concerning the presence of doctors

and their responsibilities toward

patients.

The second proposed standard,

delivery of patient care (§ 482.20(b)),

would require that each patient be

provided care and treatment

interventions that are coordinated by all

relevant disciplines and conform to the

plan of care. We then would require a

hospital to evaluate the patient’s

progress and adjust care when

appropriate progress is not being

achieved. That is, in keeping with the

requirement under proposed

§ 482.15(b)(2) that the plan of care be

modified as needed, we believe it is

essential to include under this COP the

companion requirement that actual care

provided also be changed as needed,

thus establishing the essential linkage

between evaluation of treatment results

and care plan modification.

We also propose that patient care

services are provided only on the order

of qualified practitioners with

delineated clinical privileges. This

proposed provision is in keeping with

the overall approach of the patient care

COP, that is, the focus on the integration

and coordination of hospital services

rather than the former ‘‘stovepipe’’

approach. Thus, rather than specifying

under the nutrition services COP that

therapeutic diets must be prescribed by

the responsible practitioner (now

required under § 482.28(b)(1)), we

intend that such department-specific

requirements would be encompassed

within the hospital’s overall

responsibility to ensure that all patient

care services be provided in accordance

with the orders of qualified

practitioners. So, if a surveyor finds

evidence that therapeutic diets were

prescribed inappropriately, the hospital

could then be cited for a deficiency

under this standard and, if applicable,

under proposed § 482.40 (Nutrition

services) if the outcome of this problem

was that patients’ nutritional needs

were not met.

Finally, if a hospital provides care to

outpatients, it would be responsible for

ensuring that outpatient care meets the

same quality of care requirements as

inpatient care and that inpatient and

outpatient services are coordinated to

promote continuity of care for patients

who move between levels of care.

Inpatient and outpatient care should be

coordinated, so that a patient does not

experience any disruption of care or

duplication of services simply because

of a change from inpatient to outpatient

status, or vice versa. We recognize that

some procedures can appropriately be

done only on an inpatient basis, and we

do not intend to require that every

service be available on either an

inpatient or outpatient basis. The intent

of this proposed provision is to ensure

that if a service is provided in both the

inpatient and outpatient settings, the

level of quality in each setting is the

same, so that there is a uniform level of

care throughout the hospital. For

example, infection control procedures

and practices should be followed

uniformly throughout the hospital, not

merely in inpatient areas, and we would

expect a hospital to investigate adverse

outcomes among outpatients as

thoroughly as those among inpatients.

Thus, as noted below, we would expect

a hospital’s quality assessment and

performance improvement program to

encompass outpatient services, if the

hospital provides those services.

5. Quality Assessment and Performance

Improvement (§ 482.25)

The current quality assurance

condition of participation (§ 482.21)
66734 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

relies on a problem-focused approach to

identify and correct problems in patient

care delivery. During the last decade,

the health care industry has moved

beyond the problem-focused approach

of quality assurance in favor of focusing

on systemic quality improvements, as

evidenced by the JCAHO’s overhaul of

its accreditation standards over the last

few years. We propose to follow suit by

requiring a Medicare-participating

hospital to participate in a continuous

effort to improve its performance,

incorporating to the greatest extent

possible an approach that focuses on the

hospital’s performance in improving

patient outcomes and satisfaction.

Specifically, we are proposing a new

COP that would require that each

hospital develop, implement, maintain,

and evaluate an effective data-driven

quality assessment and performance

improvement program.

We do not propose to prescribe

specific methodologies to achieve this

objective, with the exception of

retaining the current rule on autopsies

(see below). Instead, we would specify

that a hospital’s quality assessment and

performance improvement program

should reflect the complexity of the

hospital’s organization and services.

Thus, each hospital would be free to

pursue quality improvement in a

manner best suited to its individual

characteristics and resources. However,

every hospital would be responsible for

implementing actions that result in

performance improvements across the

full range of the hospital’s services to

patients. Also, we would require that a

hospital’s quality assessment and

performance improvement program

must use objective measures that make

it possible to track performance to

ensure that improvements are sustained

over time.

The proposed quality assessment and

performance improvement condition

(§ 482.25) contains three standards, the

first addressing the scope and direction

of the performance improvement

program, the second on responsibility

for the program, and the third on

autopsies. The first proposed standard

would require that a hospital’s quality

assessment and performance

improvement program include the use

of objective measures to evaluate

performance changes and would

delineate the minimum items that must

be included in the hospital’s program.

Specifically, we would require that a

hospital objectively evaluate the

following areas that we believe are

critical to hospital performance: Access

to care; patient satisfaction; staff,

administrative, and practitioner

performance; complaints and

grievances; diagnostic and therapeutic

services provided; medication error

incidents, achievement of drug therapy

goals, and incidents of adverse drug

effects; nutritional services, including, if

applicable, patient’s responses to

therapeutic diets and parenteral

nutrition; surgery and anesthesia

services; safety issues, including

infection control and physical

environment; emergency services (if

provided); discharge planning activities;

and the results of autopsies. We

included the first 11 items as the

minimum elements of the performance

improvement program because we

believe they comprise the fundamental

building blocks of a well-managed

hospital, whose primary business is

achieving desired outcomes for patients

and ensuring their satisfaction. We are

proposing the twelfth item, ‘‘results of

autopsies,’’ because we believe that

autopsies can be an important source of

information to both individual

practitioners and hospitals that can

point to opportunities for improvement

in both practitioner and hospital

performance. We are asking for

comments on the minimum content of

the Quality Assessment and

Improvement Program as well as the

twelve elements that are part of the

Whole Quality Assessment standard.

The next standard (proposed

§ 482.25(a)(2)) would then state that for

each of the areas listed above, and any

others the hospital includes, the

hospital must measure, analyze, and

track quality indicators or other aspects

of performance that the hospital adopts

or develops that reflect processes of care

and hospital operations. These measures

must be shown to be predictive of

desired outcomes or be the outcomes

themselves. As explained below, we

also would require a hospital to use

hospital-specific data, as well as Peer

Review Organization (PRO) and other

relevant data, in its quality assessment

and performance improvement strategy.

Again, when we use the word

‘‘measure,’’ we mean that the hospital

must use objective means of tracking

performance that enable a hospital (and

a surveyor) to identify the differences in

performance between two points in

time. For example, we would not

consider a hospital’s subjective

statement that it is ‘‘doing better’’ in a

given performance area as a result of an

improvement process to be an

acceptable measure. There must be

identifiable units of measure that any

reasonably knowledgeable person

would be able to distinguish as evidence

of change. Not all objective measures

must have been shown to be valid and

reliable (that is, subjected to scientific

development) to be useable in

improvement projects, but they must at

least identify a start point and end point

stated in objective terms, most often,

numbers, that actually relate directly to

the objectives and expected/desired

outcomes of the improvement project.

We do not believe it is feasible at this

time to propose that a specific set of

quality indicators or objective

performance measures be used.

However, systematic collection and

analysis of quality indicators or

performance measures that each

hospital identifies should foster the

eventual development of a data-driven

system of hospital indicators. Many

hospitals are already very active in this

area. We recognize that collection and

analysis of clinical outcome data may

represent an increased burden on some

hospitals, particularly on the subset of

hospitals that are routinely subject to

HCFA’s survey process. These nonaccredited hospitals typically are

smaller than JCAHO-accredited

hospitals, are located in more sparsely

populated areas, and may not have the

resources for extensive data gathering

and reporting. However, rather than

mandating specific performance

measures, we would allow each hospital

the flexibility to identify its own

measures of performance for the

activities it identifies as priorities in its

quality assessment and performance

improvement strategy. With this in

mind, we believe the proposed quality

assessment and performance

improvement condition would lay the

foundation for specific hospital quality

indicators that might be developed by

consensus in the future.

We anticipate that hospitals, both

large and small, rural and urban, will or

already use a variety of performance

measures to inform their internal quality

assessment and performance

improvement programs. Some of these

measures may be designed by the

hospital itself, while others will be

developed through research or by

consensus groups or other sources

outside the hospital. Regardless, HCFA

intends, through its survey process, to

assess the hospital’s success in using

performance measures principally in

terms of whether the hospital can

demonstrate with objective data that

sustained improvements have taken

place in: (1) Actual care outcomes,

patient satisfaction levels, or other

performance data, and/or (2) processes

of care and hospital operations that are

predictive of improved outcomes of care

and satisfaction for patients. HCFA does

not intend and would not be in a

position to judge the measures

themselves; instead, we would assess
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66735

their utility for the hospital in its own

efforts to improve its performance.

While we recognize that there is no

single system available for the

measurement of a hospital performance,

we are also aware of efforts in the

hospital industry to find ways to

increase the use of intra- and interhospital performance measurement

systems. For example, under programs

called ORYX and ORYX PLUS JCAHO

plans to require hospitals to use a

defined number of performance

measures that evaluate care to a

percentage of patients in an initiative to

integrate performance measures with

the accreditation process. Initially, we

understand these programs set forth an

initial framework for evaluating a wide

range of performance measurement

systems. The specific attributes of the

measurement systems that will be

evaluated include: the performance

measures and data elements (how they

focus on processes and/or outcomes

related to patient care and

organizational performance); the

construction of the database; the quality

of the database; the extent of risk

adjustment/stratification for patient

factors; performance-related feedback;

and the relevance of the performance

measurement system for accreditation.

Under this proposed rule, we would

require a hospital to engage in a quality

assessment and performance

improvement program that uses

objective measures, but we are not

proposing that a hospital be required to

participate in a system of performance

measurement with other hospitals.

However, we intend to develop such a

requirement for inclusion in our final

rule, and welcome public comments

addressing the appropriateness of such

a requirement or how it could best be

structured. For example, one possibility

is that the final rule would set forth the

requirement as suggested above, and

would include the evaluation criteria for

the system or systems the hospitals

might use. We do not envision that we

would require the use of a specific

system. Again, we are not proposing any

specific provisions at this time, but we

invite comment on whether HCFA

should require non-accredited hospitals

to participate in one or more

performance measurement systems as

part of their overall quality assessment

and performance improvement program

(both internally and externally).

Example of a quality improvement

project. HCFA wants to assure hospitals,

particularly smaller, more rural

hospitals, that our expectations for the

use of performance measures are

commensurate with the size and

resources available to the hospital.

Powerful improvement programs can be

and are often premised on simple,

straightforward designs, using measures

that are direct and uncomplicated. For

example, a hospital might collect

information on a routine, sampled basis

about the rate of utilization of

psychoactive medications that are

initiated during a hospital stay, when

none were used by the patient prior to

hospitalization. This data collection

could be a part of the hospital’s quality

assessment and performance

improvement program associated with

the proposed drug management

requirements (proposed § 482.35(b)).

The data could be collected manually or

electronically and could be analyzed by

case mix, age, physician specific

prescribing patterns, the shift most

likely to request medication orders, etc.

This data would fulfill our requirement

that it be an ‘‘objective measure’’

because the unit of measure in this

example is the number of patients for

whom psychoactive medications are

prescribed after admission. If this data

is taken for 1 month as a start period,

and taken again 6 months later as an

end period, the differences in the

number of patients for whom

psychoactive medications were

prescribed after admission (both

increase and decrease) would inform the

hospital staff responsible for this project

how well (or poorly) their intervention

plan worked.

The hospital’s quality assessment and

performance improvement team could

then use that data to design a specific

improvement project, implement it, and

continue to collect data to demonstrate,

in a nonstatistical way change over time

(for example, a steady reduction in

orders for psychoactive medications

during a hospital stay). The performance

measures for a project like this are

immediate and simple to collect, and

well within the reach of any hospital.

Hospitals that have more resources

could be expected to produce more

sophisticated measures that involve

more complicated issues, but the key

expectation of these requirements is that

the hospital make an aggressive and

continuous effort to improve its

performance across the board. HCFA is

more interested in the outcomes of such

an effort than in the specific processes

the hospital uses to achieve the

performance improvements. We

recognize that: (1) There is not yet a

wide menu of available performance

measures that have been shown to be

reliable and valid that could be offered

to a hospital to use to meet these

requirements; (2) a hospital cannot

control many related nonpatient care

outcomes (such as substance abuse

practices of the patient, or lack of

adequate support systems to ensure

lasting positive outcomes from the

hospital stay, etc.); and (3) many

hospitals will need more experience

with data collection methods and in the

design implementation and monitoring

of improvement projects. However,

experience in many hospitals, other

health care providers, and business and

industry in general has shown

convincingly that creating an

expectation for continuous

improvement is a far more powerful

performance incentive than maintaining

a set of process and structural

requirements.

Therefore, we want to stress that our

emphasis at this time is on the

improvement of processes. The process

of improvement entails: (1)

Identification of an organization’s

critical patient care and services

components; (2) application of

performance measures that are

predictive of quality outcomes that

would result from delivery of the

patient care and services; and (3)

continuous use of a method of data

collection and evaluation that identifies

or triggers further opportunities for

improvement. We do not intend for

hospitals to collect data from

performance measures for the sake of

meeting a regulatory requirement. The

hospital must have the flexibility to

identify the processes targeted for

improvement based on the unique needs

and priorities of the facility and its

patients. Moreover, we would expect

the processes targeted for improvement

to change over time as the hospital

makes the necessary improvement

efforts.

As stated by W. Edwards Deming, the

late quality management expert,

‘‘* * * quality comes from * * *

improvement of process(es)’’ and the

degree to which improvement occurs is

measured through analysis of collected

data. (Katz, Jacqueline, Managing

Quality, St. Louis: Mosby Year Book,

1992, p. 122). Likewise, the intent of

this requirement is that each hospital

will engage in improvement activities,

based on its own analysis of data, that

improve care outcomes and patient

satisfaction and lead to greater

efficiency and economy of operation.

How to Measure Hospital Quality

Improvement Efforts—Options for

Establishing a Required Minimum Level

of Improvement Projects Per Year. As

the preceding discussion illustrates,

even small, rural hospitals and those

without sophisticated ‘‘research’’

capabilities can develop and manage

effective quality assessment and
66736 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

improvement programs that

demonstrate sustained improvement

over time. However, we are concerned

that some hospitals may make token

efforts to meet this requirement, efforts

that are aimed primarily at avoiding

adverse enforcement action resulting

from a survey, rather than at improving

processes and outcomes of care and

satisfaction for patients. Thus,

depending on the comments we receive,

we intend to develop for the final

regulation a requirement that a hospital

engage in a minimum number of

improvement projects that are based

upon the hospital’s own quality

assessments of its performance and that

show measured, sustained results that

actually benefit patients.

We are not proposing specific

language in the regulation text at this

time because we recognize there are

many ways in which a minimum level

of effort can be set.

We are inviting comment not only on

the advisability and necessity of such a

requirement, but also on the best

approaches to achieve this minimum

level of effort. At a minimum, we would

require under the quality assessment

and performance improvement

condition of participation that the

number of distinct successful

improvement activities to be conducted

annually must be proportional to the

scope and complexity of the hospital’s

program. The success of the activity

would be measured in terms of

demonstrated sustained improvement

over time. We intend to then

supplement this underlying requirement

with a more precise explanation of what

would be expected of each hospital.

Among the possible alternatives that we

are considering are the following:

(1) Require the hospital to engage in

a specific number of improvement

projects equal to not less than 1 project

per 1,000 patient discharges.

(2) Require a minimum set number of

projects (e.g., five) that are hospitalwide and most broadly affect patient

outcomes and satisfaction.

(3) Require a minimum set number of

projects (e.g., five) that are not hospitalwide, but that are developed and

implemented in various areas of the

hospital’s range of care and services

(e.g., one project might reduce waiting

time in the emergency room, another

might focus on improving the accuracy

of medication administration, etc.).

(4) Require a minimum number of

projects based on bed-size, rather than

discharges (e.g., 8 projects in a 600-bed

hospital, 2 in a 50-bed hospital).

(5) Rather than requiring a minimum

number of projects, require the hospital

to demonstrate (e.g., to the PRO and/or

survey agency) what projects they are

doing and what progress is being

achieved.

(6) Again, rather than specifying

minimum number of projects, establish

a minimum set of types of projects that

must be done (e.g., hospital operational

processes that are predictive of positive

outcomes, such as infection control

measures, or condition-specific projects

that improve certain clinical outcomes,

such as emergency room responses to

heart attack patients).

We are certain there are many other

ways to approach the ‘‘minimum effort’’

discussion. The examples noted above

illustrate some of the possible

approaches to ensuring that hospitals

invest substantial efforts in quality

assessment and improvement. The

purpose of these examples is to elicit

comment and suggestions in this regard,

and we welcome alternative approaches.

We note that although our intention is

to specify in the final rule a minimum

level of effort, it is also possible that

after reviewing all the comments we

may conclude that it is neither feasible

nor desirable to do so.

Other Elements of the Proposed

Quality Assessment and Performance

Improvement Condition. We propose a

new requirement at § 482.25(a)(3) that a

hospital must use hospital-specific as

well as PRO data and any other

available relevant data, as an integral

part of its quality assessment and

performance improvement strategy, to

develop its improvement plans and

projects. However, if a hospital elects

not to participate in an improvement

project with its PRO, we propose at

§ 482.25(a)(4) that it must be able to

demonstrate a level of achievement

through its own quality assessment and

performance improvement strategy

comparable to or better than that to be

expected from such participation. Thus,

we intend that each hospital have the

responsibility to engage in improvement

projects that are vigorous and needed to

improve performance across the range of

hospital activities that affect patient

outcomes. For example, if a PRO

proposes a cooperative project to

improve the outcomes for Medicare

patients with pneumonia, and the

hospital chooses not to participate,

HCFA surveyors would expect to find

that projects that the hospital designed

and implemented on its own (e.g., an

improvement project to reduce the use

of psychoactive medications and

physical restraints as patient

management tools) achieved

improvements that were demonstrably

as important as the expected outcomes

that would have been expected from the

pneumonia study had the hospital

chosen to participate in that cooperative

study. (In assessing the comparability of

a hospital project with a PRO project,

we would consider the number of

patients affected, the projected

magnitude of the benefit to individual

patients, and the actual changes

achieved by the project to the changes

achieved by participants in the PRO

project.)

We also would require that a hospital

set priorities for performance

improvement, based on the prevalence

and severity of identified problems. Of

course, we expect that a hospital will

immediately correct problems that are

identified through its quality assessment

and performance improvement program

that actually or potentially affect the

health and safety of patients. For

example, if a hospital’s quality

assessment and performance

improvement process identifies

problems with accuracy of medication

administration, it is not enough for the

hospital to consider this area a

candidate for an improvement program

that may or may not be chosen from a

priority list of potential projects. Rather,

since accuracy of medication

administration is critical to the health

and safety of patients, the hospital must

intervene with a correction and

improvement program immediately.

Overall, a hospital would be expected to

give priority to improvement activities

that most affect clinical outcomes.

As noted above, perhaps the most

fundamental change proposed in the

new quality assessment and

performance COP in comparison to the

present condition on quality assurance

is the focus on taking action to correct

problems identified through the

hospital’s quality assessment and

performance improvement program.

This change is reemphasized in the

proposed requirement at § 482.25(a)(6)

that a hospital must take actions based

on measurement and tracking that result

in demonstrable, sustained

improvements. We envision a hospital

meeting this requirement by conducting

a systems/process analysis when

adverse outcomes are identified and

then taking action to afford long-term

correction and improvement of the

identified problems, as illustrated in the

above example concerning medication

administration.

The second proposed standard under

this COP, proposed § 482.25(b),

basically builds on the current

requirement under § 482.21 that the

hospital’s governing body ensures that

there is an effective, hospital-wide

quality assessment and performance

improvement program, as well as on the

current requirements concerning
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66737

medical staff responsibilities under

§ 482.22(b) and (c). Under the new

proposed standard, we would state that

the hospital governing body, medical

staff, and administration officials are

responsible for ensuring that the

hospital-wide quality assessment and

performance improvement efforts

address identified priorities in the

hospital and for implementing and

evaluating improvement actions. We

would, however, eliminate several

procedural requirements under the

current medical staffing provisions,

such as those concerning the

organization of the medical staff.

Finally, in keeping with the crosscutting, hospital-wide approach to

quality improvement that we believe

represents current best practices, the

standard includes a requirement that all

programs, departments, and functions

be involved in the hospital’s quality

assessment and performance

improvement program. This would

include services that are carried out

under contract or by arrangement.

Under the third standard in this COP,

we would retain the current

requirement on autopsies (existing

§ 482.22(d)). Under this requirement a

hospital’s medical staff must attempt to

secure autopsies in cases of unusual

deaths or of medical, legal, or

educational interest. Although this

requirement is somewhat prescriptive,

we believe it is necessary because

autopsies are a valuable educational tool

that contribute to the quality of care in

a hospital and, as we stated above, can

be used by the hospital to improve its

performance.

6. Diagnostic and Therapeutic Services

or Rehabilitative Services (§ 482.30)

We are proposing to restate and

consolidate current standards from

several COPs that relate to required and

optional diagnostic and therapeutic

services into one COP. The condition

would have four standards. The first

standard would require that a hospital

be primarily engaged in providing, by or

under the supervision of one of the

practitioners described in 42 CFR

410.20(b) (which specifies by whom

physician services must be furnished to

be eligible for Medicare Part B

payment), either diagnostic and

therapeutic services to inpatients, or

rehabilitative services to inpatients.

This standard would implement the

statutory requirement at section

1861(e)(1) of the Act. If a hospital does

not meet this standard, it would be

found out of compliance and would risk

termination of its participation in the

Medicare program.

The second standard of this condition

at proposed § 482.30(b) would require

that a hospital furnish diagnostic

radiology services, as required under

existing § 482.26. We would expect a

patient’s initial needs for radiology

services would be identified in the

comprehensive assessment performed at

admission. In addition we are proposing

that a hospital that furnishes emergency

services on a full-time basis must

provide diagnostic radiology services on

a full-time basis.

Separate mention is not made in this

condition of the personnel, safety, and

record standards that are now found

under § 482.26(b), (c), and (d). As

discussed earlier in this preamble,

under our proposed reorganization of

these COPS, we try to deal with such

common elements in one place instead

of repeating them for each condition.

Therefore, the personnel and safety

standards accompanying these

conditions are now encompassed in the

proposed Human Resources and

Physical Environment conditions,

respectively.

In the next standard, proposed

§ 482.30(c), we would require hospitals

to furnish laboratory services, including

24 hour-a-day emergency laboratory

services, as presently required under

existing regulations (see § 482.27). We

are also proposing to retain the current

requirement at § 482.27(a) that

laboratory services provided to patients

in the hospital must meet the

requirements of the Clinical Laboratory

Improvement Amendments of 1988

(CLIA), as codified in 42 CFR part 493.

We propose to delete the requirements

of existing § 482.27(b)(2), (3) and (4).

Section 482.27(b)(3) requires the

hospital laboratory to make provisions

for the proper receipt and reporting of

specimens the laboratory handles. Since

this requirement is covered under CLIA

provisions, it would be redundant to

place it in the proposed hospital COP.

We are requesting comment on our

proposal to eliminate the current

requirements at § 482.27(b)(2) which

requires that a written description of

laboratory services be available to the

medical staff and at § 482.27(b)(4) which

requires the medical staff and a

pathologist to determine which tissue

specimens require a microscopic and/or

macroscopic examination. We recognize

that it is essential for practitioners to

know what laboratory services are

available for diagnosing and delivering

care. However, we believe that hospitals

make their services known to their

practitioners, and we are not convinced

that a regulation is necessary to assure

that this process occurs. In addition,

although microscopic and macroscopic

examination of tissue specimens may

provide valuable information, we are

requesting comment on whether it is

necessary to have a regulation which

states who can determine what tissue

specimens require these examinations.

The fourth proposed standard at

§ 482.30(d) would state that a hospital

may elect to offer services in addition to

these required diagnostic and

therapeutic services, such as nuclear

medicine, ultra sound, rehabilitation

medicine services, psychology services,

respiratory care services, speech and

language pathology services, audiology

services, social work and vocational

rehabilitation services, to name a few.

This listing illustrates but does not limit

the range of diagnostic and therapeutic

services a hospital may provide. If the

hospital elects to offer such additional

optional services, those services must be

delivered in accordance with the

requirements of part 482.

7. Pharmaceutical Services (§ 482.35)

Overview. Under the proposed

condition on pharmaceutical services,

which would replace current § 482.25,

we would require the hospital to

provide needed medication therapy

through a safe, accurate, and effective

system that minimizes adverse drug

events and evaluates the patient’s

response to the therapy.

In general, we propose to adopt

requirements that integrate drug therapy

services and support a coordination of

services by the various disciplines that

provide them (medicine, nursing, and

pharmacy). This integration of services

is intended to protect patients by

establishing a four-layer ‘‘safety net’’ to

prevent adverse drug events (including

medication errors). It is intended also to

detect system errors that result from the

multiple nodes in the drug distribution

process: Ordering, transcription,

dispensing, and administration.

The first layer of this safety net is a

peer review activity for the

identification of events that are

predictive of adverse drug events (see

§ 482.35(a)(1)). The second layer is the

detection of medication errors (see

§ 482.35(a) (2) and (3)). This layer

focuses on the more objective errors of

transcription, dispensing, and

administration, and leaves the more

subjective drug error issues to peer

review and nurse review mechanisms.

The third layer of the net is the

comprehensive drug information

resource, which endeavors to provide

vital drug and patient information at

keys points in the drug distribution

process (see § 482.35(b)(4)). The fourth

layer of the net relies on nursing

personnel to review drug orders for
66738 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

accuracy of the entire system before

drugs are administered (see

§ 482.35(b)(5)).

As a consequence, we are proposing

to delete a number of narrowly focused,

structure and process-oriented

requirements, as follows:

In existing § 482.25(a)—

(1) Requiring a full-time, part-time or

consultant pharmacist.

(2) Requiring the pharmaceutical

service to have adequate personnel.

In existing § 482.25(b)—

(1) All compounding, packaging, and

supervision of drugs must be under the

supervision of a pharmacist.

(2) All drugs must be kept in a locked

storage area. (Note: Locked storage of

only controlled drugs is proposed at

§ 482.35(b)(1).)

(3) Outdated, mislabeled or otherwise

unusable drugs are not available for

patient use.

(4) When the pharmacist is not

available, drugs and biologicals may

only be removed from the pharmacy or

drug storage area by a designated

person.

(6) Drug administration errors,

adverse drug reactions and

incompatibilities are immediately

reported to the attending physician and

the quality assurance program.

(9) A drug formulary system must be

established by the medical staff to

assure quality pharmaceuticals at a

reasonable cost.

A drug formulary is a system for

determining the best quality and least

expensive drugs, listing them in a

formulary, and restricting the medical

staff to the drugs listed in the formulary.

This is a vastly different document than

the ‘‘comprehensive drug information

resource’’ referred to under

§ 482.25(b)(4) of this proposed rule. A

drug formulary is a cost control and

quality mechanism. We do not think it

would be a wise investment of survey

agency time to pursue this cost control

mechanism through enforcement of the

COPs, since current efforts at cost

controls and an emphasis on managed

care will probably be far more effective

at constraining drug costs in hospitals.

Finally, we plan to eliminate the

explicit, process-oriented requirements

for administration of drugs, and

acceptance of telephone and other oral

orders for drugs, that are now set forth

in our nursing services requirements at

§ 482.23(c)(2).

Description of Standards. The first

proposed standard has to do with

monitoring of adverse drug events

(ADEs) and with eliminating or

minimizing medication errors. We

believe a separate standard covering

ADE monitoring is needed because of its

importance to patient care quality and

patient health and safety. This standard

is based on Journal of the American

Medical Association (JAMA) papers on

adverse drug events (see Bates, D. W., et

al., ‘‘Incidence of Adverse Drug Events

and Potential Adverse Drug Events,’’

JAMA, 274 (1995): 29–34, and Leape, L.

L., et al., ‘‘Systems Analysis of Adverse

Drug Events,’’ JAMA, 274 (1995): 35–

43).

These papers make the following

salient points:

• Forty-two percent of serious and

life-threatening ADEs were preventable

(Bates, page 33).

• Adverse drug events have multiple

etiologies, but the lack of readily

accessible and current drug information

along with patient care information is a

significant part of the problem with

adverse drug events (Leape, page 40).

• Computerized detection programs

that search for events likely to be

associated with an ADE (e.g., naloxone,

an opiate antagonist), supplemented by

spontaneous reporting using the

computerized information system and a

dedicated person or group with

responsibility for evaluating these

events have been found to represent an

effective, relatively inexpensive method

for identifying ADEs and will probably

be the strategy of the future (Bates, page

33).

• The most common defects were in

systems to disseminate knowledge about

drugs and to make drug and patient

information readily accessible at the

time it is needed. System changes to

improve dissemination and display of

drugs and patient data should make

errors in the use of drugs less likely

(Leape, page 35).

We have endeavored to implement

the principles established in these

papers in the first standard, ‘‘Adverse

Drug Monitoring.’’ First we propose that

the facility must establish a system of

evaluation of ADEs by searching current

clinical records for events that are

predictive of an ADE and reporting

them to the quality assessment and

performance program for action. We

have not proposed to require that a

computerized system be used by all

hospitals since these regulations

primarily will affect small, rural,

nonaccredited hospitals who may not

have the resources to develop such a

computer system.

The second and third parts of the ADE

standard deal with medication errors. A

longstanding body of research exists

concerning medication errors in

hospitals. In a paper by Allan and

Barker (Allan, Elizabeth L. and Barker,

Kenneth N., ‘‘Fundamentals of

Medication Error Research,’’ American

Journal of Hospital Pharmacy, 47 (1990):

555–71), the authors documented

medication error studies in

approximately 40 hospitals and nursing

homes in the United States and Canada.

These studies covered a period of time

from 1962 to 1987. The hospitals’

medication error rates ranged from a

high of 20.6 percent to a low of 1.6

percent when wrong timing errors were

excluded. When wrong timing errors

were included, the range was 42.9

percent to 4.4 percent.

This proposal would permit an

overall medication error rate in a

hospital of no greater than 2 percent and

require zero tolerance for significant

medication errors. Significant

medication errors are defined as errors

that jeopardize or cause serious

potential for jeopardizing the health and

safety of the patient. HCFA has used

this concept for many years in long-term

care facilities, and has considerable

experience at defining what would

constitute a significant medication error.

The overall error rate would include

significant as well as nonsignificant

(e.g., wrong timing) errors and would

result in a deficiency citation. Setting an

overall limit on medication errors,

including significant errors, does not

mean significant errors are tolerated if

they remain below 2 percent. Rather,

even though the regulation provides

zero tolerance for significant errors, if

significant errors do occur, and they are

added to the nonsignificant errors, a

deficiency occurs where the result is

greater than 2 percent. This deficiency

is in addition to the separate deficiency

for the significant errors. We are

proposing the 2-percent standard

because research and expert opinion has

determined that this is a reasonable

medication error rate to achieve, given

modern drug packaging and drug

information systems. (See Barker,

Kenneth N., et al., ‘‘Consultant

Evaluation of a Hospital Medication

System: Analysis of the Existing

System,’’ American Journal of Hospital

Pharmacy, 41 (1984): 2013).

In the Bates, et al, paper, adverse drug

events are categorized as follows:

Ordering, Transcription, Dispensing and

Administration. It is important to point

out that the medication error regulation

proposal would examine all these

categories except ADEs occurring from

physician ordering questions. For this

issue we would rely on the licensed

nurse (that is, a registered nurse (RN),

licensed practical nurse (LPN), or

licensed vocational nurse (LVN))

review, as proposed under

§ 482.35(b)(5). This is necessary because

physician ordering questions dealing

with the drug, the dose, the route of
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66739

administration, etc., frequently require

consultation before a positive

determination about the occurrence of

an ADE.

The second standard, ‘‘Drug

Management Procedures,’’ has seven

parts. The first one requires that drugs

and biologicals be kept in secure areas;

however, those drugs that are

‘‘controlled’’ must be stored in locked

areas as required by the Comprehensive

Drug Abuse Prevention and Control Act.

(We are not requiring that biologicals be

stored in locked areas because this Act

does not include ‘‘biologicals’’ in its

provisions.) We are not requiring that

the areas where the controlled drugs are

stored be double locked, since what is

usually found in most facilities is an

individual with a ring of keys

containing both keys to the double

locked compartment. In this case

‘‘double locked’’ is hardly an added

security feature. The key to the locked

compartment should be restricted

strictly to individuals who have an

identified need to access these drugs.

The requirement for the facility to

maintain a record of receipt and

disposition of controlled drugs may be

met in ways other than the use of proof

of use sheets for each controlled drug.

For example, the facility may use

existing patient records such as the

medication administration record as a

record of disposition of controlled

drugs. If the facility wishes to maintain

records of receipt and disposition of

controlled drugs by using existing

patient care records, it will reduce its

paperwork burden considerably.

Proposed § 482.35(b)(3) requires that

discrepancies in the record of controlled

drugs be reported to the individual

responsible for pharmaceutical services

and to the hospital administrator.

Discrepancies in these records indicate

that controlled drugs are being used for

unauthorized purposes. Proposed

§ 482.35(b)(3) would require that these

discrepancies be reported to responsible

individuals in the hospital, who will

then decide whether the local police or

the Drug Enforcement Agency should be

involved.

The fourth part of the Drug

Management Procedures standard

would require the hospital to establish

a computerized or hard copy ability to

merge patient information with current

comprehensive drug information at the

points of drug ordering, dispensing, and

administration. This system would

promote the development of

information systems that bring patient

information and drug information

together at critical junctures in the drug

ordering and distribution process.

Comprehensive drug information

resources would include the United

States Pharmacopoeia-Drug Information,

American Medical Association Drug

Evaluations, and the American Hospital

Formulary Service—Drug Information.

(These drug information resources are

those used to establish Medicaid drug

use review under the provisions of

section 1927(g)(1)(B) of the Social

Security Act. Drug information

resources would not include the

Physician Desk Reference since this

reference is not considered

comprehensive and was not listed in the

statute.)

The fifth part of this standard would

require that before medications are

administered, a licensed nurse, or a

physician if he or she is personally

administering the drug, review the

patient’s information and the drug

order. (The comprehensive drug

information would also be available for

review if there was a need for this

information.) The purpose of this

proposal is to support the established

practice of nursing personnel

questioning the drug order from the

standpoint of the correctness of the

order itself in relation to specific patient

and drug information that must be

readily available before or at the point

of drug administration. In reviewing this

information to prevent drug errors, a

nurse would be acting only within the

scope of her or his State licensure. The

expectation is that the nurse would

report any potential errors in drug

prescribing to the physician, so the

physician could determine whether the

order needed to be changed. This

proposed requirement is consistent with

current research. Leape identified a total

of 334 adverse drug events that were

identified by review of all admissions in

11 medical and surgical units in 2

tertiary hospitals for a period of 6

months. Of the 334 adverse drug events,

91 or 27 percent were intercepted

(prevented). Of these 91 prevented

adverse drug events, 86 percent were

prevented by nurses and 12 percent by

pharmacists. This proposed regulation

is intended to strengthen the potential

for nurses and pharmacists to intercept

adverse drug events of all kinds by

providing them with readily available

information necessary to prevent these

events.

The sixth part of the Drug

Management Procedures standard deals

with positive identification of

medication. The current regulations do

not contain a requirement for positively

identifying drugs brought to the facility

by the patient and then obtaining

physician orders before they can be

administered. We are proposing such a

requirement here because when an

individual is hospitalized it indicates a

considerable change in their status.

‘‘Positively identified’’ in the context of

this proposed rule means that a

pharmacist or someone with similar

drug identification skills must make

sure that the drugs brought to the

facility are in fact the same drugs that

the label represents. This is necessary

because patients often mix drugs within

one container, or they separate drugs

from their proper labeling. The drugs

that the individual was taking prior to

this hospitalization should be reviewed

by competent medical personnel to

determine if these drugs are still

necessary, or if they may interfere with

other therapies that are underway in the

hospital.

Unlike current regulations, this

proposed rule would make it clear that

self-administration of drugs is

permitted, but only under orders and

hospital policy. This proposed rule is

important for patients being prepared

for discharge. These patients should

become familiar with selfadministration of drugs (especially eye

drops, inhalers, intramuscular

injections), so they become wellpracticed with this task while still

under competent supervision.

Regarding our seventh proposal,

existing § 482.25(b)(5) requires that

orders for drugs and biologicals be

automatically stopped after a reasonable

period of time as predetermined by the

medical staff. This proposed rule

endeavors to achieve the same objective

as the current rule, that is, the cessation

of drug therapy when it is no longer

necessary. However, our proposal

would not limit the hospital to the

option of automatic stop orders, which

discontinue drug therapy (especially on

holidays and weekends) by

administrative fiat without any medical

assessment as to whether the drug

therapy has achieved its therapeutic

objectives. The proposed rule allows the

hospital to develop its own approaches

for achieving this objective.

The last standard of the

Pharmaceutical Services COP (proposed

§ 482.35(c)) deals with discharge orders

for psychopharmacological drugs.

Under this standard, we would require

that orders for psychopharmacological

drugs be discontinued upon the

patient’s discharge unless the patient

has been diagnosed (using standard

criteria for such diagnoses) with a

mental illness. This will prevent the use

of these drugs (which may be

temporarily necessary during a

hospitalization) from becoming routine

after discharge unless a valid reason for

their use is established. This is

particularly necessary in patients
66740 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

transferred to long-term care facilities,

who can suffer considerable adverse

effects from long-term use of

antipsychotic and antianxiety drugs that

may have been started in the hospital

for very valid reasons but that may no

longer be valid after discharge. A study

by Garrard (Garrard, Judith, et al.,

‘‘Evaluation of neuroleptic drug use by

nursing home elderly under proposed

Medicare and Medicaid regulations,’’

JAMA, 265 (1991): 463–467) showed

that the rate of use of neuroleptic

(antipsychotic) drugs among nursing

home admissions was: 16 percent when

admitted from hospitals, 18 percent

from the community, and 21 percent

from other nursing homes. Regulation of

the use of these drugs (in the absence of

proper differential diagnoses) in nursing

homes have been in effect since 1990

(see 42 CFR 483.25), and we have been

criticized because similar rules were not

imposed on hospital and community

practice (Thurston, Ronald G., Letters,

JAMA, 265 (1991): 2962). We believe

this proposed requirement represents a

fair way to address this issue, but invite

public comment on alternatives for

achieving the same objective.

8. Nutritional Services (§ 482.40)

Currently, the food and dietetic

services requirements that a hospital

must meet are found at § 482.28. These

requirements emphasize the

organizational aspects of a hospital’s

food and dietetic services program,

including provisions that specify

allowable contractual arrangements,

employee qualifications, and other

process-oriented details.

We are proposing extensive revisions

to these provisions under a new

nutritional services condition of

participation. In keeping with the

principles discussed above, the new

condition of participation would

promote a patient-centered approach to

nutrition. Thus, the introductory

language for these proposed

requirements states explicitly that each

patient must receive adequate nutrition,

including therapeutic diets or parenteral

nutrition if needed.

The proposed condition includes only

two standards. The first standard,

‘‘Sanitary conditions,’’ requires that

food provided to patients be obtained,

stored, prepared, distributed and served

under sanitary conditions. (Note that the

term ‘‘food’’ is intended to include all

forms of nutrition, liquid or solid,

provided to patients.) Although this

requirement is not contained in the

current hospital conditions of

participation, we believe that it clearly

is an underlying necessity for any

acceptable nutritional services program.

Thus, we are proposing to include it

explicitly under the nutritional services

condition. The only other standard

would require that menus be prepared

in advance and meet the nutritional

needs of patients based on the

recommended dietary allowances of the

Food and Nutrition Board of the

National Research Council, National

Academy of Sciences. We believe the

Board’s guidelines can appropriately be

used here because they represent

accepted best practices and are already

in widespread use among hospitals.

In developing the proposed

requirements, we have attempted to

incorporate straightforward statements

of a hospital’s responsibilities, while

eliminating procedural requirements

and avoiding unnecessary details of

how the hospital should carry out its

nutritional services function. We believe

that the requirements largely

incorporate current best practices in

hospital nutrition services, while

eliminating several burdensome process

requirements that are not central to

meeting the patient’s dietary needs

(such as the requirement under current

§ 482.28(b)(3) that a current therapeutic

diet manual approved by the dietitian

and medical staff be readily available to

all medical, nursing, and food service

personnel.) We considered

supplementing the requirements with

additional provisions concerning

staffing requirements or qualifications.

Instead, however, we decided that the

staffing requirements set forth under the

proposed human resources condition of

participation are sufficiently broad to

ensure that a hospital has adequate

qualified staff to carry out its nutritional

services function. Rather than

prescribing how a hospital should

organize itself to meet its nutritional

services responsibilities, we prefer to

allow each hospital as much flexibility

as possible in this regard, so that it can

focus on incorporating its nutritional

services program into a cross-cutting

approach toward achieving optimal

patient outcomes. Finally, as discussed

above in section II.B.4 of this preamble,

we note that the existing requirement

under § 482.28(b)(1) that a therapeutic

diet be prescribed by the responsible

practitioner would now be encompassed

within the hospital’s responsibility

under proposed § 482.20(b) to ensure

that all patient care services be provided

in accordance with the orders of

qualified practitioners.

9. Surgical and Anesthesia Services

(§ 482.45)

The proposed condition on surgical

and anesthesia services would replace

the existing regulations at § 482.51

(Condition of participation: Surgical

services) and § 482.52 (Condition of

participation: Anesthesia services). We

have decided to address both areas

under a single condition in order to

simplify the organization of part 482,

and to emphasize the close relationship

between surgery and anesthesia.

In the new condition, we would

delete current process-oriented

standards having to do with the

organization and staffing of the

hospital’s surgical and anesthesia

departments or services (existing

§ 482.51(a) and § 482.52(a)), and with

hospital policies governing surgical and

anesthesia care (existing § 482.51(b) and

§ 482.52(b)). In particular, we propose to

delete the current specific requirements

regarding the types of personnel who

can serve as scrub nurses or perform

circulating duties in the operating room.

We also would eliminate current rules

on which practitioners can administer

anesthesia, and what level of

supervision must be provided to them.

We also propose to delete current

prescriptive requirements specifying the

types of equipment that must be

maintained in operating suites (existing

§ 482.51(b)(3)). We believe those

requirements should be eliminated in

favor of those that focus more directly

on outcomes.

In place of the current requirements,

we propose two basic rules on staffing.

We would require that surgical

procedures be performed only by

practitioners with appropriate clinical

privileges, and that anesthesia be

administered only by a licensed

practitioner permitted by the State to

administer anesthetics.

One effect of our proposed staffing

and equipment requirement would be to

allow more flexibility to certified

registered nurse anesthetists (CRNAs) to

practice without oversight by another

practitioner. Currently, the anesthesia

condition (§ 482.52(a)(4)) requires that a

CRNA administer anesthesia only under

the supervision of the operating

practitioner or of an anesthesiologist

who is immediately available if needed.

To allow greater flexibility to hospitals

and practitioners and to give deference

to State scope of practice law, we

propose to delete this supervision

requirement and allow the CRNA to

function without supervision by another

practitioner, where this is in accordance

with State law. We emphasize that

CRNAs are allowed to practice in this

way only where doing so is consistent

with State law. If State law establishes

a more stringent rule, the hospitals (42

CFR 482.110) would be required to

furnish care in a way that is consistent

with that rule.
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To ensure that our requirements are

consistent across the settings in which

surgery may be performed, we propose

also to eliminate the supervision

requirement for CRNAs in ambulatory

surgical centers (ASCs) (42 CFR 416.42)

and in critical access hospitals (CAHs)

(formerly rural primary care hospitals)

(RPCHs) (42 CFR 485.639) and allow the

CRNA to function without supervision

by another practitioner, where this is in

accordance with State law. In addition,

if State law establishes a more stringent

rule, the ambulatory surgical centers (42

CFR 416.40) and critical access

hospitals (42 CFR 485.608) would be

required to furnish care in a way that is

consistent with that rule.

We believe it is critical to the health

and safety of surgical patients to have

accurate information on each patient’s

condition before anesthesia is

administered and a surgical procedure

is undertaken. Therefore, we would

require under proposed § 482.45(b) that

a comprehensive assessment be

performed before surgery (with a

modified assessment being permitted in

emergency cases) and that a

preanesthesia evaluation be done by an

individual qualified to administer

anesthesia. We also would require that

a postanesthesia evaluation for proper

recovery be done by an individual

qualified to administer anesthesia. We

propose to delete the current

prescriptive rule under which the

postanesthesia evaluation must be done

by the same individual who

administered the anesthesia.

In the standard on documentation of

care, we have included requirements for

entry of specified information in the

medical record. The information that

would be required includes a report of

the comprehensive or modified presurgical assessment, a properly executed

informed consent form, an operative

report describing complications,

reactions, length of time, techniques,

findings, tissues removed or altered, a

record of intraoperative anesthesia, and

a report of the postanesthesia

evaluation. By ‘‘properly executed

informed consent,’’ we mean only that

the patient understands the information

the hospital wishes to convey. The presurgical assessment and informed

consent form would have to be entered

in the record before surgery except in

emergency cases, while the operative

report, intraoperative anesthesia record,

and a report of the postanesthesia

evaluation would have to be entered in

the record promptly following surgery.

(The postanesthesia evaluation report

combines the current requirements for

an inpatient postanesthesia followup

report (§ 482.52(b)(3)), and for an

outpatient postanesthesia evaluation

(§ 482.52(b)(4)) into a single new

requirement.) The hospital also would

be required to maintain a complete, upto-date operating room register. We

recognize that our proposal for the

documentation requirements for the

surgical and anesthesia services COP is

more extensive and specific than many

other requirements in these proposals.

However, such documentation is

common to current practice and

imposes no additional burden to

hospitals as these documentation

requirements are part of the existing

COPs.

10. Emergency Services (§ 482.50)

We propose to delete the existing

regulations at § 482.2 (Condition of

participation: Provision of emergency

services by nonparticipating hospitals),

and to add a single new emergency

services condition that would replace

both current § 482.12(f) (Condition of

participation: Governing body;

Standard: Emergency services) and

current § 482.55 (Condition of

participation: Emergency services). We

believe § 482.2 need not be retained

since the regulations at 42 CFR 424.101

set forth a definition of ‘‘hospital’’ that

is used for purposes of payment for

services to Medicare patients that are

furnished on an emergency basis by a

hospital that does not participate in the

program. By addressing the two latter

areas under a single regulation, we hope

to simplify the organization of the

regulations and eliminate the need for

the user of the regulations to refer to

separate sections to review the rules on

closely related services. For the reasons

explained below, we also are proposing

to add a separate standard for hospitals

that offer emergency services on less

than a full-time basis.

In the standard on hospitals providing

full-time emergency services, we have

emphasized requirements that most

directly affect the safety of patients.

These are the requirements regarding

the personnel who furnish the services,

the appropriateness of the services to

patient needs, and the integration of

emergency services with those of other

hospital departments. Regarding the

proposed requirement for sufficient

numbers of personnel, we note that

some hospitals may choose to meet

patient needs by using a comparatively

smaller, but more highly trained and

skilled staff. In assessing compliance

with this requirement, our primary

concern will be to determine whether

emergency service staffing is adequate

to produce good treatment outcomes.

We are proposing the second

standard, which is applicable only to

hospitals providing part-time emergency

services, in order to allow more

flexibility to hospitals that find it

necessary, because of staffing

limitations, low emergency room

volumes, or other factors, to limit the

times during which emergency services

can be offered. Because of the nature of

emergency services, it clearly would be

desirable to have them available on a

24-hour per day, 7-day per week basis.

However, many hospitals, particularly

those that are small and are located in

remote rural areas, find it difficult to

recruit and pay staff to furnish

emergency services on this schedule. To

avoid a situation in which these

hospitals find it necessary to terminate

emergency services altogether, we

propose that hospitals that are located

in rural areas and have fewer than 100

beds may offer emergency services on a

part-time basis. We propose to use the

definition of ‘‘rural area’’ now set forth

in our regulations at 42 CFR

412.62(f)(1)(ii). Under that definition, an

area is considered ‘‘rural’’ if it is located

outside any Metropolitan Statistical

Area (MSA) or New England County

Metropolitan Area (NECMA), and

outside specified New England

counties.

We emphasize that this flexibility is

not intended to foster development of

dual standards of care—during its stated

hours of operation, a hospital

emergency department or service must

meet exactly the same standards as fulltime departments or services. However,

at the times when it chooses not to offer

emergency services, the hospital would

be required to meet only the standard

for hospitals that do not offer emergency

care.

Section 1867 of the Act (Examination

and Treatment of Emergency Medical

Conditions and Women in Labor)

imposes certain obligations on

Medicare-participating hospitals that

have emergency departments. If an

individual comes to the hospital’s

emergency department and a request is

made on the individual’s behalf for

examination or treatment for a medical

condition, the hospital must provide,

within the capability of its emergency

department, an appropriate medical

screening examination and, if necessary,

either stabilizing treatment or an

appropriate transfer. Section 1867 of the

Act does not deal explicitly with the

situation of a hospital that opens its

emergency department on only a parttime basis. However, it is our policy that

a hospital that offers emergency services

on a regular, part-time basis is not

considered to have an emergency

department under section 1867 at the

scheduled times when emergency
66742 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

services are not available. At those times

only, the hospital is not subject to the

requirements of section 1867 of the Act.

The hospital would remain obligated at

those times to meet the requirements of

proposed § 482.50(c) for appraisals of

emergency cases, initial treatment, and

referral when appropriate. At all other

times (that is, when emergency care is

offered), the hospital is fully responsible

for compliance with the statute (and

with the implementing regulations at 42

CFR 489.24) and also would be

obligated to meet the emergency

services requirements set forth in

proposed § 482.50(a) and (b).

We expect that a hospital offering

part-time emergency services will do so

in good faith, and not ‘‘open’’ and

‘‘close’’ its emergency department

selectively, in an attempt to avoid

meeting its statutory obligations to some

patients based on their perceived

inability to pay. We will continue to

investigate all allegations we receive of

violations of section 1867 of the Act and

will not hesitate to initiate termination

proceedings, or to refer cases to the

Office of Inspector General, if it is clear

that a violation has occurred. We

welcome comments on this proposal.

The third proposed standard deals

with hospitals not offering emergency

services. We propose to continue to

require such a hospital to provide for

appraisal of emergencies, initial

treatment, and referral of patients when

appropriate. However, we propose to

delete current process-oriented

requirements having to do with the

organization of the hospital’s emergency

services (§ 482.55(a)(1)) and with

policies and procedures for the medical

care provided in the emergency

department (§ 482.55(a)(3)). We believe

those requirements should be

eliminated in favor of those that focus

on activities more directly related to

outcomes.

11. Discharge Planning (§ 482.55)

Section 1861(e)(6) of the Act requires

that a hospital have in place a discharge

planning process that meets the

requirements of section 1861(ee) of the

Act. Under section 1861(ee), a discharge

planning process must apply to services

furnished by the hospital to Medicare

beneficiaries, and meet the guidelines

and standards established by the

Secretary of HHS to ensure a timely and

smooth transition to the most

appropriate type of setting for

posthospital or rehabilitative care.

Section 1861(ee)(2) further requires that

the Secretary’s standards and guidelines

include seven specific elements, as

listed in that provision. On December

13, 1994, we published a final rule to

implement the requirements of sections

1861(e)(6) and 1861(ee) of the Act by

adding new § 482.43 (Condition of

participation: Discharge planning) (59

FR 64141). For the reasons explained in

the preamble to that final rule, we

elected under the authority in section

1861(e) of the Act to require a discharge

planning process that applies to all

patients, not just to Medicare

beneficiaries.

On October 31, 1994, Congress

enacted Public Law 103-432, the Social

Security Act Amendments of 1994

(SSAA’94). Section 107 of that

legislation amended section 1861(ee)(2)

effective November 1, 1995, to require

that a discharge planning evaluation for

a Medicare patient include an

evaluation of the need for hospice care

as well as other posthospital care.

Congress included in the Balanced

Budget Act of 1997 (BBA ’97), Public

Law 105–33, enacted August 5, 1997,

several amendments to section

1861(ee)(2) to address concerns about

reports of some hospitals referring

patients only to HHAs with which they

have financial ties. Subsection 4321(a)

of that legislation, effective November 3,

1997, amended the discharge planning

evaluation requirements in section

1861(ee)(2)(D) and added a

subparagraph (H) to section 1861(ee)(2).

These changes are consistent with

patient rights, the first core condition of

patient-centered care in this regulation.

As a result of these changes a Medicare

participating hospital now must: (1)

Include in a patients’s discharge

planning evaluation the availability of

home health services through Medicare

participating HHAs which serve the

patient’s geographic area and which

request the hospital to be listed; and (2)

ensure that a patient’s discharge plan

does not specify or otherwise limit the

qualified participating HHAs and

identify any HHA with which the

hospital has a ‘‘disclosable financial

interest’’ if the patient is referred to

such entities.

We propose to redesignate § 482.43 as

new § 482.55, and to republish it with

only the changes discussed below. In

keeping with the shift in focus of these

regulations from process to outcome, we

propose to delete the requirement that a

hospital’s discharge planning policies

and procedures be specified in writing,

and to add the requirement that the

discharge planning process assure that

appropriate posthospital services are

obtained for each patient, as necessary.

To implement section 107 of

SSAA’94, we would specify under

proposed § 482.55(b)(3) that hospitals

must evaluate the need for hospice as

well as other posthospital care. To

implement section 4321(a) of the BBA

’97 we would specify under proposed

482.55(b)(7) that the discharge planning

evaluation must include a list of home

health agencies that participate in the

Medicare program and whose services

are available to the patient, serve the

area in which the patient resides, and

request to be listed. Since, section

4321(a) requires listing the availability

of individuals and entities, we have

been questioned as to who those

individuals and entities are. We have

determined that since section 1861(m)

of the Act identifies home health

services as items or services furnished

by a home health agency, or by others

under arrangement with the agency,

section 4321(a) is referring to Medicare

participating home health agencies.

Also in § 482.55(b)(7), we have

proposed that the HHA should

determine the geographic area in which

the patient resides. We believe the HHA

should determine the geographic area

because the HHA is in the best position

to know its service area and

presumably, would not misrepresent its

services by requesting to be listed for an

area it does not serve. Discharge

planning is effective if there are

resources available to the patients at

discharge. A hospital’s ability to provide

patients with outside resources for

posthospital care are essential to allow

many patients to stay at home which is

a much less expensive alternative than

institutionalization.

Under proposed 482.55(c)(6), we

propose to require that the hospital

tailor the plan, where possible, to the

preferences of the patient and family.

Specifically, we would state that the

discharge plan must inform the patient

(or patient’s family) of their freedom to

choose among available Medicareparticipating providers that are capable

of furnishing the needed services (such

as SNF or HHA services) and must, if

possible, respect the patient’s or family

expressed preference. Also, the

discharge plan shall not specify or

otherwise limit the qualified providers

that are available to the patient. The

intent of this change is to provide the

patient with the freedom of choice to

determine which HHA will provide care

in accordance with Section 1802 of the

Act, which states that beneficiaries may

obtain health services from any

Medicare participating provider. As

written, section 1861 (ee) of the Act

requires Medicare participating

hospitals, as part of their discharge

evaluation, to provide patients with a

list of Medicare-certified home health

agencies that serve a patient’s
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66743

geographic area and request to be listed

by the hospital.

Hospitals and managed care

organizations (MCO) have expressed

concern as to whether the BBA’97

change was intended to apply to

patients in managed care plans. MCO

members are limited as to what services

they may obtain from sources other than

through the MCO. Therefore, providing

members with a standardized list of all

HHAs in the area can be misleading and

potentially, financially harmful since

MCO enrollees may be liable for

services that they obtain from sources

other than the MCO, and patients may

interpret a list of HHAs that are not

available to them under their health

plan to mean that they are authorized by

the MCO. This does not mean that

Medicare MCO members in particular

are denied the freedom of choice they

are entitled to under section 1802 of the

Act. Medicare beneficiaries exercise

their freedom of choice when they

voluntarily enrolle in the MCO and

agree to adhere to the plans provisions

on coverage.

To alleviate the confusion, hospitals

can provide MCO patients with a list of

available and accessible HHAs approved

by the MCO. Another option is, when

discussing discharge planning with

patients, hospitals can determine

whether the beneficiary has made any

prior commitments through enrollment

in a managed care organization. Where

this is the case, the patient should be

informed of the potential consequences

of going outside the plan for services.

The discharge planning process is

initiated when a patient is admitted to

the hospital. The collection of data

includes verifying the patient’s health

insurance. At this time, the hospital

personnel responsible for discharge

planning activities can retrieve this

information and initiate communication

with the MCO to coordinate available

and accessible posthospital care. We

solicit the public for comments on this

issue.

HCFA has received a number of

questions concerning section 4321(a).

These questions include: How does the

hospital compile the list of agencies?

What is the hospital’s responsibility and

liability for providing a list? Is there a

form for home health agencies to

complete to request placement on a

hospital’s list? We welcome public

comments on these questions and we

will take these comments into

consideration when developing the final

rule.

The process of making a choice

includes being provided options to

make an informed and confident

decision. Hospital providing a list of

available Medicare-certified home

health agencies will assist patients in

making such decisions. Although a

hospital is free to design the list’s

format, the list is neither a

recommendation nor endorsement by

the hospital of any particular home

health agency’s quality of care. If HHAs

do not meet all criteria, the hospitals are

under no obligation to place that HHA

on the list. The list should be legible

and should not be used to specify or

limit the choice of a HHA.

Under proposed § 482.55(c)(7), we

would state that the discharge plan must

identify those entities to whom the

patient is referred in which the hospital

has a disclosable financial interest or

those entities which have a financial

interest in the hospital. ‘‘Disclosable

financial interest’’ will be defined in the

rule-making process which implements

section 1866(a)(1)(S) of the Act. In the

interim, we suggest that hospitals

reference the Disclosure of Ownership

and Control provisions of 42 CFR 420

subpart C, which sets forth requirements

for providers to disclose ownership and

control information and identities of

managing employees. If a hospital refers

patients about to be discharged and in

need of services, only to entities it owns

or controls, then the hospital is

infringing on the rights of the patient to

choose the facility they would like to go

to for services. The proposed disclosable

financial interest requirement is an

effort to increase the beneficiary’s

awareness of the actual or potential

financial incentive a hospital may

receive as a result of the referral. This

regulation supports and extends our

focus on patient-centered outcomes of

care. We invite comments on this

proposed requirement and other

concerns hospitals may have regarding

their ability both operationally and

financially to undertake this approach.

In proposed § 482.55(e), we propose

to add the requirement that the

hospital’s discharge planning process be

an integral part of the hospital’s quality

assessment and performance

improvement program. We believe this

change is needed to enhance the

effectiveness of the hospital’s discharge

planning program and to emphasize the

important role of discharge planning in

contributing to overall quality of care in

a hospital.

We are not proposing any other

changes in the current discharge

planning COP. In view of the specificity

of section 1861(ee) of the Act and the

relatively recent implementation of that

legislation through notice and comment

rulemaking, we do not believe there is

any further benefit to the public to be

obtained by again requesting public

comment on the parts of the regulation

that we are republishing without

change. Thus, with the exception

discussed below, we are soliciting

comments only on the proposed

changes to the discharge planning

requirements, rather than on the entire

discharge planning COP.

Proposed § 482.55(b) (5) and (6)

require that hospital personnel must

complete the required discharge

planning evaluation on a timely basis

and include it in the medical record,

thus ensuring that appropriate

arrangements for posthospital care are

made before discharge and avoiding

unnecessary delays in discharge. We

believe these requirements, which has

been carried over without change from

existing § 482.43(b) (5) and (6), are

useful because they emphasize the need

for prompt action to assess and act on

the discharge planning needs of

patients. We note that we considered

including under proposed § 482.55(c)

similar requirements about the

discharge plan itself; however, we

decided not to do so because we believe

the existing requirements will ensure

that a discharge plan is completed and

available far enough in advance of

discharge to allow it to be put into

practice. Nevertheless, it is conceivable

that some may interpret the absence of

an explicit rule on the timing of the plan

as an indication that it would be

acceptable to have only a partial or

incomplete plan at the time of

discharge, or even to develop an afterthe-fact ‘‘plan’’ that does not anticipate

needs and try to meet them, but instead

merely records and attempts to

rationalize the postdischarge care

already received. We welcome

comments on whether the possibility of

a misunderstanding of this point is

strong enough to warrant adding, in the

final rule, an explicit requirement that

the discharge plan itself must be

completed on a timely basis and entered

into the medical record. We will

consider the comments received on this

issue, and may add an explicit

requirement on this point to the final

rule.

Possible Use of the Uniform Needs

Assessment Instrument. In 1986,

Congress directed the Secretary to

develop a uniform needs assessment

instrument (UNAI), or instruments, to

serve primarily as a standardized means

of evaluating an individual’s needs for

posthospital or supportive care.

Congress also envisioned the possibility

of the UNAI being used for determining

whether individuals should receive

services provided under publicly

funded programs (that is, linking the

individual’s health status per the UNAI
66744 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

to decisions regarding the scope and

duration of services to be covered). In

addition, the UNAI was envisioned as a

vehicle for tracking individual patients

across different Medicare service

providers (primarily HHAs and SNFs).

Although Congress directed the

Secretary to produce the UNAI, there

was no direction concerning its

implementation. Thus, there is no

statutory obligation to use the UNAI in

practice.

The Secretary appointed a panel of

experts, with HCFA providing the staff

support services, to develop the UNAI.

The expert panel was successful in

devising a consensus tool that was brief,

described the patient’s functional status,

nursing and other care requirements,

and available family/care giver

supports. The UNAI was seen as having

content validity and clinical utility as

judged by the comments of a group of

experts and a stratified random sample

of providers. The final UNAI and a

comprehensive report about its

development were submitted to the

Congress in 1992. While the panel was

enthusiastic about the potential for the

UNAI as a posthospital discharge

planning tool and a means of tracking a

patient across provider types, the panel

did not believe the UNAI could be used

to evaluate an individual’s eligibility for

posthospital services under the current

Medicare benefit structure.

The UNAI and the Report to Congress

have been widely disseminated, and

many hospitals have chosen to begin

using the tool because it provides a

useful method to organize their

discharge planning processes. Currently,

HCFA is preparing to field test the

UNAI in hospitals, HHAs, and SNFs.

The field test will rely on provider staff

to complete the UNAI, and will provide

information on the UNAI’s reliability,

validity, and administrative feasibility.

HCFA’s contractor for the field test,

Research Triangle Institute, is also

developing a ‘‘high risk screener,’’

which will be used to identify those

Medicare patients in need of an

intensive discharge planning evaluation

and thereby reduce the number of

patients who would be subject to the

UNAI. For example, a Medicare patient

who has a minor operation and will

return to the home with support from an

able spouse and adult children nearby

likely would pass the screener and not

receive the UNAI as part of the

hospital’s discharge planning effort for

that patient. However, an elderly

beneficiary who suffers a severe stroke,

and has a spouse in frail health and no

children nearby would certainly fail the

screener and would receive the UNAI as

part of the hospital’s discharge planning

for that patient.

In the preamble to our December 13,

1994 final rule on discharge planning

(59 FR 64141), we discussed our work

on the UNAI, but we did not establish

a requirement for its use. Now, with a

comprehensive effort to change the

hospital conditions of participation to a

more patient-centered, outcomeoriented approach, and a strong

emphasis on quality assessment and

performance improvement, coupled

with HCFA’s intention to use data—

particularly functional assessment

data—more widely in care giving,

quality improvement, and consumer

information, we are considering

requiring hospitals to use the UNAI to

assess Medicare patients who are at-risk

of needing posthospital services. The

purposes of imposing the UNAI as a

standard hospital discharge planning

tool for Medicare patients would be to:

(1) Ensure that all relevant factors are

considered in evaluating an individual’s

needs for continuing care; (2) foster

more uniform decisionmaking about the

need for posthospital care services; (3)

direct those patients to the most

effective and efficient approach to

posthospital care services; (4) provide

posthospital care service providers with

more complete and consistent baseline

information about the patient in order to

facilitate continuity of care and early

assessment and care planning by the

posthospital provider; and (5) enable

managed care organizations and HCFA

to track the course of outcomes of

individual patients across provider

types within the same health care

episode. One primary benefit of

standardizing the needs assessment

process is that the use of common

language and definitions enables the

type of quality monitoring and

improvement efforts that depend on

consistent data and health status/

outcome measures.

The establishment of common data

elements will also allow the same types

of measures to be used across care

settings. Another advantage associated

with using the UNAI across provider

types is that we intend that it ‘‘map’’ to

other assessment tools, such as the

Minimum Data Set in SNFs and the

standard core assessment data set we

plan to propose shortly for use in HHAs.

Thus, if a UNAI accompanies a patient

to an HHA, the HHA can use most of the

information on the UNAI to complete a

number of items on the HHA standard

assessment data set. This ultimately

would decrease provider burden by

streamlining the assessment processes

and eliminating the need for assessing

and reporting redundant information. It

also would enable providers and

managed care entities to track and

understand care outcomes more fully.

The UNAI is not a comprehensive

assessment tool, nor is it adequate for

comprehensive care planning. Rather, it

gives a snapshot view of the patient’s

functional status and support systems in

the home and community to help

caregivers direct the patient to the next

source of care and to give the continuing

care provider baseline information to

make initial assessment, care planning,

and service delivery more efficient and

individualized.

Although we are not now formally

proposing to require use of the UNAI,

we invite comment from the hospital

community, especially discharge

planners, as well as from SNFs, HHAs,

and others, about the desirability of

having a standard approach to

posthospital discharge planning for

Medicare patients who fail the high-risk

screener. We invite comment on the

following questions, as well as any other

related comments:

(1) Would the use of a standard

posthospital discharge planning tool for

Medicare patients be helpful to the

hospital, the patients, and the

posthospital care providers in their

efforts to ensure the patient receives the

most effective, efficient, and desirable

posthospital services necessary to

address the patients’ continuing care

needs? If so, why, and if not, why not?

(2) Would a proposal that limits the

required use of the UNAI to Medicare

patients only (the States could impose it

separately if they wished for Medicaid

patients) create duplicate or multiple

systems within a hospital and create

more problems than benefits? Should

the UNAI be used for every patient over

a certain age (e.g., 50) for whom

discharge planning is necessary? How

would other payers (e.g., fee-for-service

or managed care plans) be affected by a

Federal requirement to use the UNAI?

Subpart C—Organizational

Environment

12. Administration of Organizational

Environment (§ 482.110)

The proposed condition on

administration of organizational

environment would replace the existing

regulations at § 482.11 (Condition of

participation: Compliance with Federal,

State, and local laws) and § 482.12

(Condition of participation: Governing

body). Combining these provisions

would simplify the structure of the

regulations. In addition, it would

emphasize that if State or local law

provides for the licensing of hospitals,

and an institution in the State wishes to
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66745

participate in Medicare as a separate

hospital (rather than as an

organizational unit of another provider),

that institution must also show that it is

regarded as a separate entity by the State

for licensure purposes.

In developing the proposed new

condition, we have relocated three of

the standards previously in the current

governing body COP. These are the

standard on medical staff (§ 482.12(a)),

the standard on care of patients

(§ 482.12(c)), and the standard on

emergency services (§ 482.12(f)). Under

the cross-functional approach we are

following in these proposed rules,

medical staff issues would be covered

by the proposed new condition on

human resources (§ 482.125), and

patient care issues would be covered in

the new COP that includes patient care

(§ 482.20). As discussed above, we

propose to create a new condition on

emergency services which would

include the rules now stated under

§ 482.12(f) with respect to appraisal,

initial treatment, and referral of

emergency patients by hospitals that do

not provide emergency services.

The primary requirement under the

proposed governing body COP is that a

hospital’s governing body, other

organized group, or an individual

(hereafter ‘‘governing body’’) is legally

responsible for the management and

provision of all care furnished to

hospital patients, including the

structure needed to administer the

hospital effectively. Thus, the governing

body must create an environment that

helps ensure the provision of high

quality care that is consistent with

patient needs and the effective

administration of the hospital. In the

proposed new condition, we emphasize

the responsibility of the hospital

governing body for the entire operation

of the hospital, including care furnished

under contracts and arrangements, the

appointment of an administrator, the

appointment of the medical staff and its

bylaws, and the implementation of

effective budgeting, accounting, and

quality control programs. Although

these requirements necessitate the use

of certain processes, they are essential to

ensuring that the entity with which the

Secretary has entered into a

participation agreement is in fact able to

ensure patient health and safety. To

help ensure this accountability, we have

specified the responsibility of the

governing body for the hospital’s

compliance with all applicable

conditions of participation and

standards. In addition, performance of

these basic organizational functions is,

in our view, a minimum condition for

the creation of an environment in which

appropriate patient-centered activity

can occur.

We are proposing that a hospital must

notify HCFA or the State survey agency

whenever the hospital adds a new

service category to the list of services it

offers (proposed § 482.110(b)(2)(i)). We

believe this is necessary so that the State

survey agency may determine whether

an onsite survey of the new service is

necessary and to ensure that the survey

team may have the correct number and

type of qualified members when it next

visits the hospital. This should then

improve the speed and efficiency with

which the hospital’s certification

process can be accomplished.

In addition, we are proposing to

require that a hospital notify HCFA

(through its regional offices) whenever it

adds a new service site (proposed

§ 482.110(b)(2)(ii)). For example, a

hospital would need to notify us if it

were to acquire a physician’s office and

consider it an offsite hospital outpatient

clinic. We believe this is necessary so

that we may decide whether an onsite

survey is necessary to assure that the

addition does not alter the previous

certification decision regarding the

hospital. Further, HCFA would need to

review the new service site to assure

that it meets the level of integration

required for inclusion of the new site as

a part of the provider. This will ensure

that appropriate payment is made. We

have issued instructions outlining the

criteria that must be met in order to

demonstrate integration inherent in

classification of an offsite service as part

of the hospital in Program

Memorandum A–96–7.

Proposed § 482.110(b)(3) and (4)

restate with only minor editorial

changes current requirements

concerning the governing body’s

responsibilities for an institutional plan

and budget, as well as the medical

staff’s bylaws. We propose to retain

these requirements, in accordance with

section 1861(e) of the Act.

Under proposed § 482.110(c), we

would redesignate, with changes, the

requirements under existing

§ 482.12(c)(5) concerning a hospital’s

responsibility to identify potential organ

donors. We recognize that these

provisions, in particular the

requirement that a hospital have written

protocols addressing various aspects of

its organ procurement responsibilities,

are more prescriptive and processoriented than other parts of these

proposed rules. However, we believe it

is necessary to retain these regulations

in their existing form to implement

section 1138 of the Act, which

specifically requires written hospital

protocols for organ procurement. The

changes to this section are discussed

below.

We are revising § 482.110(c)(ii)

(formerly § 482.12(c)(5)(i)(A)) and

adding new requirements under

§ 482.110(c)(1)(iv) concerning organ

procurement organizations (OPOs) and

hospitals. The development of these

requirements is in response to issues

raised during public hearings held by

the Department on December 11 through

13, 1996, to examine the allocation

policies for liver transplantation and to

receive comments regarding methods to

increase organ donation. During those

hearings, it became abundantly clear

that there is a critical shortage of organs

available for lifesaving transplantation.

While the science of transplantation has

made progress over the last two

decades, lives that could be saved

continue to be lost because of an

inadequate supply of donor organs. For

example, an estimated 12,000 to 15,000

deaths occur in the United States each

year that could yield suitable donor

organs, yet in 1996 no more than 5,400

resulted in donations. In April 1997,

approximately 52,000 Americans were

waiting for organ transplants. Therefore,

we believe it is appropriate to propose

revisions to the current hospital

conditions relating to organ donation

because we expect these revisions will

result in a significant number of lives

being saved.

The existing regulations merely repeat

the language in section 1138 of the

Social Security Act which requires

hospitals to assure that families are

advised of the right to donate or not

donate organs, encourage discretion and

sensitivity to family values, and notify

an OPO of potential donors. We are

proposing to revise the hospital

conditions of participation regarding

organ donation to emphasize the role

and relationship of the OPO in the

process. Although the proposed changes

increase the importance of the OPO, our

aim is that they will result in a more

collaborative organ donation process

which achieves positive results. That is,

we hope hospitals and OPOs will work

together in dealing with their individual

and unique circumstances and, using

the best available practices, achieve

significant increases in the rate of organ

donations.

Specifically, we are proposing to

specify that the hospital must ensure

that the family is advised, in

collaboration with the OPO with which

the hospital has an agreement, of their

right to donate or decline to donate

(§ 482.110(c)(1)(ii)). This proposal is

based on research in the field of organ

donation that indicates that consent to

donation is highest when the request is
66746 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

made by the staff of the OPO rather than

the hospital. OPO staff are specialty

trained medical personnel. They have

training in bereavement counseling and

extensive experience in dealing with

families undergoing the loss of a loved

one. They have knowledge of brain

death and are particularly skilled in

making complicated medical

terminology understandable to a

grieving family. Most importantly, organ

donation is their principal field,

whereas hospital staff have numerous

other responsibilities. Further, donor

consent rates tend to be higher when

there is a time lapse between the

hospital notifying the family of a death

and the request for organ donation.

In proposing this change, we

considered the possibility that we might

be viewed as holding hospitals

responsible for ensuring that a function,

such as advising a family of their organ

donation rights, be performed without

providing them with the ability to

control the situation. That is, the

hospital cannot control the OPO and

may consider that it may be a victim of

poor OPO performance. However, the

conditions of coverage for OPOs include

performance standards that hold OPOs

accountable for achieving a specified

number of donors and organs based on

the size of the population it serves. We

believe these performance standards

will motivate OPOs to provide

satisfactory service to hospitals.

Moreover, we note that the proposed

hospital conditions hold hospitals

accountable for ensuring that they have

written protocols and do the following:

• Identify potential organ donors as

defined by the OPO with which the

hospital has an agreement;

• Notify the OPO of such potential

donors;

• Assure, in collaboration with the

OPO with which the hospital has an

agreement, that the family of each

potential organ donor knows of its

option either to donate organs or tissues

or to decline to donate;

• Encourage discretion and

sensitivity with respect to the

circumstances, views and beliefs of the

families of potential donors; and

• Ensure that the hospital works

cooperatively with the OPO with which

the hospital has an agreement, in

educating staff on donation issues,

reviewing death records to improve

identification of potential donors, and

maintaining potential donors while

necessary testing and placement of

potential donated organs take place.

We expect that if the hospitals and

OPOs are not achieving the desired

results the hospitals would reevaluate

and revise their protocols. Hospitals

would not be cited for a deficiency of

this standard if the hospital has

appropriate protocols, regardless of the

success of OPO staff in acquiring

donors.

We also are proposing to revise an

existing requirement that specifies that

the hospital must notify OPOs of

potential organ donors. There is a good

deal of variability among hospitals in

referral patterns. Some hospitals do not

call the OPO unless they have

determined that the patient is medically

suited to be a donor and the family has

consented. On the other hand, some

hospitals refer all deaths to the OPO.

Most hospitals have established criteria,

such as age or absence of systemic

disease, to determine if a potential

donor should be referred to the OPO.

In evaluating the organ donor shortage

and the actions that hospitals may take

with regard to donor referral, we

considered the following options:

• Maintain the current requirement

which provides hospitals with the

flexibility to determine appropriate

referrals through their written protocols;

• Require mandatory reporting of all

death of patients under age 75 to the

OPOs; and

• Require mandatory reporting of

deaths to OPOs using protocols defined

by the OPOs.

During our analysis, we identified a

number of advantages and

disadvantages to each of these

alternatives before we concluded with

the proposal to require mandatory

reporting of deaths to OPOs using

protocols defined by the OPO as

discussed below. However, we are

specifically soliciting comments on the

advantages and disadvantages of the

various options, and inviting

identification of additional alternatives

and empirical data supporting various

opinions, during the public comment

period.

The advantages of the current

requirement, which specifies that

hospitals have a protocol for referring

potential donors, are that it provides

hospitals with desired flexibility and it

reiterates the language of the statute.

However, there are significant

disadvantages to this approach. The

primary concern is that many hospitals

have never referred a potential donor.

As noted above, we believe that there

has been a large number of potential

donors that have been missed; that is,

we believe the number of potential

donors is double to triple the number of

current donors. We are concerned that

this flexibility has resulted in a

significant number of hospitals failing to

refer all potential donors and some

hospitals not referring any donors. Some

hospitals view as potential donors only

those in whom consent to donate has

already been obtained and do not even

attempt to ask other families about the

possibility of donating; others refer only

when they consider the deceased to be

a good candidate or when they believe

the family may consent to the donation.

This leads to a loss of opportunity for

families for whom the gift of a loved

one’s organ may be the first step in the

healing process as well as the loss of a

substantial number of life-saving organs.

We also considered the alternative of

requiring referrals of all deaths to the

OPO. The State of Pennsylvania has

implemented this practice. The

resulting increase in donation in Eastern

Pennsylvania has been at least 10-

percent. We believe telecommunication

technology currently exists to permit

low-cost and efficient implementation

of a policy requiring referrals of all

deaths. OPOs that have implemented

such programs indicate that reporting of

an individual’s death and relevant

medical information takes only 5 to 10

minutes of time by hospital staff. Under

such a system of mandatory death

reporting, it is reasonable to assume that

no potential donor will go unidentified

and few, if any, families of potential

donors will go without being given the

opportunity to donate. This system also

has the advantage of relieving hospital

staff of the burden of making any

assessment of donor suitability or the

families’ willingness to donate. Finally,

as more families are educated about

organ donation, even if they decide not

to donate, myths that inhibit organ

donation may be dispelled.

Despite the major advantages to this

alternative, there are potential problems.

There is clearly a significant cost

involved in providing and interpreting

information on over 1 million deaths

annually. Conservative implementation

estimates of this alternative are about $4

million annually (1 million deaths times

5 minutes of hospital and OPO time at

an assumed average salary cost of

$50,000), and may be as great as $8 to

$10 million. Arguably, the saving of

even a single statistical life would

justify such a cost, using standard

benefit-cost analysis assumptions.

Nonetheless, we recognize that these

costs should not be imposed if less

costly approaches can also achieve

increased organ donation. In discussing

this alternative with the OPO industry,

we have been advised by some OPOs

that they are concerned about

implementing such a system because

they would have to handle a large

number of unproductive referrals. That

is, of the approximately 1 million deaths
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66747

annually, only about 12,000 to 15,000

are potential organ donors.

This proposed regulation includes the

requirement that hospitals report all

potential donors using protocols as

defined by the OPO. This alternative has

the advantage of providing support for

OPOs in dealing with low referral

hospitals, while providing a great deal

of flexibility for OPOs to respond to

local community situations and

resource limitations. As noted above, we

solicit comments on alternatives that

could be more responsive to the

national organ shortage. We are also

considering whether to propose in the

OPO conditions of coverage a

performance standard that could be

used to determine the extent of organ

donations. In principle, procedural

standards related to organ procurement

could be replaced by an outcome

standard related to organ recovery.

However, since we are not clear as to

how to design or implement the most

cost-effective, low-cost standard we

would welcome public comment.

We are aware that this proposal, by

giving the OPO responsibility for

defining potential organ donors and the

protocol for referring such donors to the

OPO, raises questions about the impact

that it will have on the donation and

retrieval of a variety of tissues that are

also used in patient care. Tissue

transplants also are important

procedures that improve, and

sometimes save, the lives of recipients.

It is our expectation that hospitals,

OPOs, eye, and tissue banks will work

cooperatively and effectively to

facilitate and enhance both organ and

tissue donation. We recognize that there

is considerable local variation in how

these arrangements are currently carried

out and how they might be done under

our proposed changes. We will

appreciate receiving comments on how

these proposed changes are likely to

impact on tissue donation, as well as

suggestions on what measures we could

appropriately take to maximize both

tissue and organ donation.

Finally, we are proposing to add a

new requirement that specifies that

hospitals work cooperatively with the

designated OPO in educating hospital

staff on donation issues, reviewing

death records to improve identification

of potential donors, and maintaining

patients while necessary testing and

placement of potential donor organs

take place (proposed § 482.110(c)(1)(iv)).

We do not believe this requirement is

unduly burdensome on hospitals since

all reasonable hospital costs incurred

with respect to any organ procurement

effort are paid. To further the

cooperative efforts between hospitals

and OPOs, we are also proposing to add

a requirement that hospitals must

provide requested data related to

patients eligible for transplantation

either directly to the Department or

through the Organ Procurement or

Transplantation Network. This

requirement is explained further in

§ 482.120 ‘‘Information Management’’.

We invite comments on the content of

this new requirement.

13. Infection Control (§ 482.115)

The present requirements on infection

control (§ 482.42) were promulgated as

a separate COP largely due to the

seriousness of the problem of

Nosocomial infections. Nosocomial

infections subject patients to significant

additional pain and risk, prolong

hospital stays, and lead to significant

additional costs in health care spending.

We propose to maintain a separate

COP on infection control because we

believe it is vital for protecting patient

health and safety. We propose to retain

most of the standards under the current

COP, but we would strengthen its focus

by requiring hospitals to take

appropriate actions that result in

improvement when problems are

identified in their infection control

programs. This is in concert with the

proposed quality assessment and

performance improvement COP, of

which infection control must be an

integral part.

The proposed infection control

condition places accountability on

hospitals to prevent, control, and

investigate infections and

communicable diseases, and take

actions that result in improvements.

However, the proposed condition allows

flexibility for hospitals to determine

how to meet these objectives. This

includes the flexibility to determine

how much training in infection control

is necessary for the hospital’s personnel.

We propose to delete the present

requirement that the hospital maintain a

log of incidents related to infections and

communicable diseases. In keeping with

the outcome-oriented approach of this

rule, we propose that the hospital must

have a method of identifying problems

in its infection control program and take

appropriate actions that result in

improvement. Although use of a log

may be one method to identify

problems, we do not intend to prescribe

how a hospital should identify

problems.

We considered requiring hospitals to

meet Centers for Disease Control and

Prevention (CDC) and Occupational

Safety and Health Administration

(OSHA) standards for providing an

environment to avoid sources of

infections and communicable diseases.

However, such a requirement would

raise questions as to which CDC or

OSHA standards must be met.

Moreover, where alternative sets of

professionally recognized standards

exist, we do not wish to restrict hospital

flexibility by mandating compliance

with a particular body of standards.

Therefore, we are not mandating that

hospitals follow any specific set of

infection control guidelines; however,

such guidelines are published by CDC,

the Association of Practitioners in

Infection Control (APIC), the American

Hospital Association (AHA), and the

JCAHO and are available as resources on

infection control practices.

We also considered including specific

requirements concerning employee

health status issues. However, we

believe the hospital’s obligation to

protect patients from employees with

communicable diseases is covered in

the proposed language that states that

the hospital maintains an effective

infection control program that protects

patients and hospital staff by preventing

and controlling infections and

communicable diseases. Adequate

assessments of employee health status

fall under this language as part of the

protective responsibilities of the

hospital.

14. Information Management (§ 482.120)

We propose to consolidate current

§ 482.24 ‘‘Condition of participation:

Medical record services’’, and record

requirements in several other COPs into

a new ‘‘Information management’’ COP

which would reflect the increasing

automation and integration of patient

care data. This new COP would require

that a hospital maintain an information

system to record, communicate, and

measure hospital performance in order

to assure that patient needs are

documented and met. The information

system is also needed to support the

hospital’s quality assessment and

performance improvement program.

The condition consists of two

standards. In both standards, we have

not retained many current processoriented requirements concerning how a

hospital must maintain its medical

records; instead, we have kept only

those requirements needed for accurate

documentation of a patient stay and for

quality assessment and performance

improvement purposes. These

requirements should help ensure that

orders are communicated and

documented accurately, thus reducing

the risk of errors that could jeopardize

patients’ health and safety.

The first standard, ‘‘Health

Information System’’, focuses on patient
66748 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

care and outcomes. First, we would

require the hospital to maintain clinical

records on all patients. This

requirement not only implements a

specific statutory requirement (section

1861(e)(2) of the Act), but also provides

a basis for the quality assessment and

performance improvement activities

that we expect will lead to a high

standard of care for all patients. We

have retained the current record

retention requirement of 5 years because

we believe access to records during this

period is essential to protect the health

and safety of current patients, since

clinicians may well need the details of

prior treatment to assess and treat

current conditions. Five years has been

the minimum requirement since 1986

and it has proved to be a clear,

workable, and not overly burdensome

standard.

One part of this standard on which we

especially seek comment concerns the

authentication of record entries. Under

proposed § 482.120(a)(5), we would

consolidate the present requirements at

§ 482.24(c)(1)(i) and (ii) regarding

authentication of entries in the medical

record to state that all entries must be

legible, dated, and authenticated in

written or electronic form by whomever

is responsible for ordering or providing

the service. We are proposing to delete

the current requirement at

§ 482.23(c)(2)(ii) on verbal orders

because we believe our proposed

requirement at § 482.120(a)(5) would

cover authentication of verbal orders.

The present requirement at

§ 482.24(c)(1)(ii), which states that

authentication may include signatures,

written initials or computer entry,

would also be deleted. Although these

are accepted standards of practice, we

do not believe it is necessary that the

regulations include this level of

prescriptive detail.

We are seeking comment from as

broad a range of interests as possible on

the issue of authentication of medical

record entries. We recognize that there

is a strong interest in the hospital

industry in modifying, if not

eliminating, the requirement for

authentication, because of questions

about whether authentication adds

value to the quality of the medical

record, especially when the

countersignature comes after the service

has been delivered to the patient.

However, others believe that absence of

authentication leads to questions of

accountability. Therefore, we request

comment and suggested language, as

appropriate, on this issue.

Regarding the issue of verbal orders,

the present requirement at

§ 482.23(c)(2)(ii) states that verbal orders

must be signed or initialed by the

prescribing practitioner as soon as

possible. We invite comment on the

issue of whether a timeframe should be

specified for signing verbal orders. We

believe that many States have laws

governing timeframes in which verbal

orders must be signed; therefore a

Federal specification may not be

necessary.

Currently, transplant centers report

data to the Organ Procurement and

Transplantation Network, the Scientific

Registry, and organ procurement

organizations regarding the disposition

of organs made available for transplant.

These data include information

regarding patients waiting for

transplants, information on those who

have received a transplant, follow-up

data on patients who have received a

transplant, and information on those

offered an organ for transplant but

declining to use the organ at the time.

Moreover, the information submission is

voluntary on the part of the transplant

centers.

For the most part, this system of

information exchange has worked very

well. However, from time to time, some

concerns have arisen regarding the

voluntary nature of the data submission,

ownership of the data, and public access

of the information. In an effort to

overcome any confusion surrounding

this information system and to assure

that all facilities submit appropriate

data timely, we are proposing to include

a provision in section 482.120,

information management, related to

transplantation data.

Specifically, we are proposing to add

a requirement that hospitals that

perform transplants, whether they are

approved by Medicare for coverage of

the transplant or not, must provide

requested data related to patients

eligible for transplantation either

directly to the Department or through

the Organ Procurement and

Transplantation Network. The proposal

clarifies that data submission is no

longer voluntary, but is a requirement

for the hospital’s participation in the

Medicare program.

We believe there is authority in both

section 1861(e)(9) and section 1138 of

the Act for this requirement. First,

section 1861(e)(9) provides that the

Secretary may require hospitals

participating in the Medicare program

‘‘to meet such other requirements that

the Secretary finds necessary in the

interests of the health and safety of

individuals who are furnished services

in the institution.’’ When we determine

whether hospitals are fit for inclusion

(or continued inclusion) in the Medicare

program, we have an interest in

knowing how well the hospital is

performing the full range of services it

provides to its patients. A hospital’s

history with respect to the transplant

services it provides is one area, among

many, that helps tell us whether the

institution is providing high quality

services in the safe and healthful

environment the statute requires, and

we believe that reviewing data from this

area of operation is no less useful for

this purpose than evaluating other

surgical or care areas of the hospital.

Second, section 1138 requires hospitals

to abide by the rules and requirements

of the Organ Procurement and

Transplantation Networks (OPTNs).

Where OPTNs require hospitals to

furnish the kind of data addressed in

this proposed rule, hospitals would be

obligated to provide it.

The second standard in the

Information Management COP,

‘‘Management of the Information

Systems’’, contains requirements on the

integrity, effectiveness, confidentiality,

and security of the hospital’s data

systems that are similar to current

requirements shorn of their processoriented details. We are also proposing

in this standard to expand the current

requirement in § 482.25(b)(8), which

discusses the dissemination of a

patient’s drug profile to the hospital’s

professional staff. We propose building

on this to require that all medical

information on a patient be available to

all authorized professional staff who

provide medical care to the patient. This

is consistent with the emphasis on an

interdisciplinary plan of care for each

patient, and an integrated approach

towards a patient’s needs, both of which

depend on practitioners having accurate

and current information to deliver

appropriate and necessary care.

15. Human Resources (§ 482.125)

Current regulations, which are

organized on a department-bydepartment basis, contain scattered

requirements concerning the

qualifications and numerical staffing

standards for nursing and other hospital

staff, and for doctors of medicine or

osteopathy and other practitioners with

privileges to treat hospital patients. For

example, there is a separate condition

on medical staff at § 482.22, and several

COPs, including nursing services

(§ 482.23), medical record services

(§ 482.24), pharmaceutical services

(§ 482.25), and others, contain

requirements for screening and

credentialling of medical staff members

and for employment of (or contracting

with) adequate numbers of qualified

nursing and other nonphysician staff.
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66749

Under the integrated,

interdisciplinary approach inherent to

these proposed regulations, we are

consolidating these scattered references

into a single condition of participation

on human resources. The overall goal of

the new proposed COP would be to

ensure that all hospital areas are staffed

with sufficient qualified personnel to

meet the needs of the hospital’s

patients. We also propose to eliminate

many process-oriented requirements, in

particular those currently set forth in

§§ 482.12(a) and 482.22, relating to the

composition, organization, and conduct

of a hospital’s medical staff. Although a

process-oriented requirement, we have

retained the current requirement that

the medical staff operate under bylaws

because section 1861(e)(3) of the Act

explicitly requires them.

In proposing these changes to the

current medical staff requirements, we

do not intend to discount the value to

a hospital of having a carefully selected

and well-organized medical staff. On the

contrary, we believe it is self-evident

that the medical staff has a critical role

in ensuring that high quality care is

delivered consistently and that any

hazards to patients are promptly

detected and eliminated. However,

individual hospitals, their employees or

contractors, and the professionals who

have been granted practice privileges

may choose to have medical staff

functions performed in a variety of

appropriate ways, and we do not believe

it is necessary to prescribe to a hospital

what the composition or organization of

its medical staff should be. For example,

existing § 482.12(a)(7) has been

interpreted by some to prohibit

hospitals from requiring specialty board

certification or eligibility as a necessary

condition for medical staff membership.

However, there is considerable

disagreement between hospitals and

physicians as to whether board

certification or eligibility is an

important indicator of professional

competence. In view of this diversity of

opinion and absent any indication that

the quality of care would decline if the

current requirement were deleted, we

are proposing to eliminate the current

requirement and to allow each hospital

to determine, in consultation with its

medical staff, whether requiring

certification, fellowship, or membership

in a specialty body or society would

enhance the quality of care for the

hospital’s patients.

The proposed new condition consists

of three standards that support the

COP’s aim that the hospital be staffed

with sufficient qualified personnel. The

first of these has to do with the

qualifications of those individuals who

furnish health care services to patients

of the hospital. We wish to emphasize

that the requirement would apply to all

such persons, whether or not they are

employed or compensated by the

hospital and, if they are compensated,

without regard to whether they are

salaried employees or contractors. The

standard also applies to those separately

licensed practitioners, such as doctors

of medicine or osteopathy, who

typically practice independently and

bill patients or their insurers, rather

than the hospital, for their services.

This proposed standard reflects our

view that the conditions of participation

should not prescribe specific Federal

personnel qualification requirements for

nonphysician personnel, or attempt to

limit or specify the functions they may

perform, unless the Medicare statute

requires us to do so. We believe this is

the best course of action for several

reasons. First, most States have in effect

laws and regulations governing

licensure and scope of practice for

health care workers. We believe

individual hospitals and their medical

staffs, working within the context of

applicable State law and regulations, are

best able to determine which personnel

to use and how to use them. Moreover,

the emphasis of the proposed

requirements in this area, as in other

areas affected by these regulations, is

not on whether staff have specific

credentials or were selected under

formalized procedures, but on whether

the outcome of the hospital’s staffing

practices is the delivery of safe, high

quality care.

We recognize that there may be some

cases in which the absence of any State

requirements for a category of hospital

worker in a particular State may mean

that no specific credential is required

for performance of the function in that

State. However, the hospital would

remain obligated under proposed

§ 482.125(a) to ensure that personnel are

qualified to provide or supervise

services, and would be fully

accountable under this section as well

as under other relevant parts of the

regulations (such as § 482.20, Patient

Care) for the quality of care provided.

Individual hospitals are free to develop

their own specific credential

requirements if they believe that doing

so is in the best interest of their patients.

In addition, we note that among the

resources a hospital has in acquiring

and maintaining qualified staff is the

National Practitioner Data Bank, which

was authorized by the Health Care

Quality Improvement Act (HCQIA) of

1986 (Pub. L. 99–660). The HCQIA

requires that hospitals request

information from the National

Practitioner Data Bank at the time a

physician, dentist, or other health care

practitioner applies for a position on its

medical staff (courtesy or otherwise) or

for clinical privileges at the hospital;

and every 2 years (biennially) on all

physicians, dentists, and other health

practitioners who are on its medical

staff (courtesy or otherwise) who have

clinical privileges at the hospital.

The HCQIA requires that hospitals

report to the National Practitioner Data

Bank all professional review actions,

based on reasons related to professional

competence or conduct, adversely

affecting clinical privileges of

physicians and dentists for a period

longer than 30 days; or voluntary

surrender or restriction of clinical

privileges for physicians and dentists

while under, or to avoid, investigation.

We recognize that some may ask

whether the hospital’s responsibility to

use qualified personnel is sufficient to

assure that qualified staff are used in

States with weak licensure programs

and, in such States, whether Medicare

should impose additional requirements

or undertake a larger role. Therefore, we

specifically invite public comments on

this issue especially with regards to

specific examples where States have

weak or no licensure requirements for

hospital health professions. We hope

that commenters who believe Medicare

should issue additional requirements

would offer specific suggestions and any

available empirical data to support such

suggestions.

The second proposed standard,

‘‘Staffing (§ 482.125(b)), retains all of the

nurse staffing requirements in current

regulations at § 482.23(b) that are

essential to the professional role and

importance of nurses in a hospital. Of

the six requirements in this standard,

the first two are general in nature and

the remaining four deal with specific

nursing needs. Under the first

requirement a hospital’s staffing must

reflect the volume of patients, patient

acuity, and intensity of the services

provided to ensure desirable patient

care outcomes. To enforce this

requirement, and because we are

concerned about an apparent trend in

the country toward reductions in

hospital nurse staffing, we also propose

as a second requirement that a hospital

must develop and use consistently an

explicit process to determine on an

ongoing basis the level of nursing staff

(including registered nurses, licensed

practical nurses, and nursing assistants)

needed to effectively implement the

general requirement for appropriate

staffing. This methodology and evidence

of its use in meeting the nursing staffing

needs of the patients must be available
66750 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

for public inspection. We are interested

in receiving comments on this proposal,

specifically:

(1) Is this process-oriented

requirement needed and is it strongly

predictive of the desired quality

outcomes one would associate with the

proposed staffing requirement at

§ 482.125(b)(1)?

(2) If not, are there other requirements

(such as specific numerical ratios) that

would better achieve the desired

outcomes?

The third requirement under the

staffing standard is that a hospital

maintain 24-hour registered nurse

coverage if it does not have a waiver in

effect under 42 CFR 405.1910(c).

Twenty-four hour nursing coverage is

required under section 1861(e)(5) of the

Act, and thus we are continuing to

include this requirement. The remaining

three requirements under this staffing

standard discuss the availability of

registered nurses for bedside care, the

responsibility of a registered nurse for

managing nursing care for patients,

adherence of nurses to hospital policies

and procedures, and hospital

management of nonemployee nursing

personnel. We recognize that some of

the other nurse staffing requirements are

prescriptive and process-oriented, but

we believe that they help ensure

adequate staffing levels in hospitals. We

welcome comments on how these

requirements could be revised or

simplified without jeopardizing

attainment of this goal.

The third proposed standard is

‘‘Education, Training and Performance

Evaluation’’ (§ 482.125(d)). The

education and training sections are

intended to ensure that hospital staff are

aware of their job responsibilities and

capable of meeting them, and that

reassigned personnel receive the

orientation or training needed to help

them adapt to new or additional job

demands. We emphasize that under this

standard the hospital would be

responsible only for ensuring that the

individual adequately knows the nature

of his or her specific job duties in the

hospital. The individual would

continue to be responsible for his or her

own basic professional education, and

for any continuing education needed to

retain licensure or professional

certification, unless the hospital chooses

to assume this responsibility as part of

a compensation or incentive

arrangement.

The second part of this standard

requires that all personnel who furnish

health care services in the hospital

demonstrate in practice the skills and

techniques necessary to perform their

assigned duties and responsibilities.

While we believe that process

requirements that focus on providing

training and education to those who

provide care and services in the hospital

are predictive of positive outcomes and

satisfaction for patients (and protection

from negative outcomes), we also

believe that the real outcome

expectation of the requirements is

reflected in the demonstrated skills and

techniques staff actually use on a

routine basis. This is why we are

proposing that all personnel furnishing

health care services (which would

include hospital employees, contractors,

and individuals working under

arrangements) demonstrate in routine

practice the skills and techniques

necessary to perform their jobs.

Such a requirement closes the training

and education loop. It is not enough for

the hospital to demonstrate that

individuals have received training, or

how much training has been offered and

provided. For effective patient care, it is

critical that when the staff perform their

duties, they actually use the necessary

skills and techniques they have been

taught to do their jobs correctly. For

example, every hospital employee who

comes into contact with patients is

taught infection control techniques, one

of which is hand washing in between

patient contacts. If a surveyor observes

staff who do not wash their hands

between patient contacts, it is of little

value that the hospital can show that

staff were taught to wash their hands.

One of the tasks of the survey process

will be to determine if a lapse in

performance is simply an isolated

failure of one employee (although that

can be so serious as to pose a threat to

patient health and safety) or if it

represents a systemic failure posing a

widespread danger. Regardless, this

requirement poses no extraordinary

burden on the hospital, since the

performance expectation of all staff—

especially those who directly or

indirectly serve patient needs—is that

they perform their duties competently

and efficiently. This outcome-oriented

requirement simply makes explicit this

expectation.

16. Physical Environment (§ 482.130)

We propose to replace the

requirements on physical environment

now at § 482.41 with a new physical

environment COP that would require in

general that a hospital maintain a

physical environment that is free of

hazards for patients. The current

requirements consist of three safety

standards containing separate

requirements for buildings, life safety

from fire, and facilities. Each of these

standards contains requirements on the

process of implementing safety

standards as well as the physical

structures and property that must be

available in the hospital.

Based on our experience with

applying these current requirements and

suggestions from the parties involved in

the development of these proposed

hospital conditions, we are proposing to

reorganize these requirements into two

physical environment standards and a

separate COP for life safety issues, as

discussed below. We believe this

reorganization emphasizes the role of

physical structures and property in

ensuring the delivery of high quality

care.

In the first proposed standard, ‘‘Safety

management’’ (§ 482.130(a)), we have

set forth four requirements that we

believe are fundamental to effective

management of a hospital’s physical

environment. These include preventing,

reporting, and correcting threatening

situations, equipment failures, and

actual incidents that involve injury to

patients or that involve damage to

property. Also, we believe proper safety

management should include a

requirement that a hospital must have

an emergency preparedness system to

respond to power failures, natural

disasters, or other emergencies that

disrupt the hospital’s ability to provide

care. We have chosen not to prescribe

the frequency of reporting safety

initiatives, such as quarterly reports to

the governing body, because we believe

the wide range of hospital structures

and property requires each hospital to

define its own internal reporting

practices. We considered specifying

which personnel should be responsible

for safety management initiatives, but

we believe no staff should be exempt

from ensuring that the hospital

environment is free of hazards. We also

believe hospitals commonly employ

safety engineers and others who contact

all types of personnel when designing

and managing safety initiatives.

The second proposed standard,

‘‘Physical Plant and Equipment’’

(§ 482.130(b)), combines three current

general requirements for a hospital’s

physical structures and property, but

does not include the level of detail in

current regulations. (For example, a

requirement concerning the location of

diagnostic and therapeutic facilities has

been deleted.) The requirements simply

state that there must be proper storage

and disposal of trash and medical waste,

proper temperature control, light and

ventilation throughout the hospital,

adequate power, light, gas and water for

patient care during emergencies, and

that equipment used for patient care

services must be properly maintained.
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66751

The inclusion of medical waste and air

exchanges is new. These items reflect

health and safety concerns in recent

years over unsafe medical waste

disposal, the proper care of tuberculosis

patients, and the prevention of airborne

particles and bacteria in hospitals,

concerns which led to the publication of

CDC guidelines on the disposal of

medical waste and the prevention of

transmission of mycobacterium

tuberculosis (see Occupational Exposure

to Bloodborne Pathogens, 56 FR 64004,

December 6, 1991 (Final Rule), and

Preventing the Transmission of

Mycobacterium Tuberculosis in Health

Care Facilities, 59 FR 54242, October 28,

1994 (Notice). The requirement on

maintaining equipment is a

consolidation of several references in

the current regulations.

17. Life Safety From Fire (§ 482.135)

The Life Safety Code (LSC) developed

by the National Fire Protection

Association serves as the basis for many

Federal, State, and local fire safety

regulations, including those contained

in the Medicare conditions of

participation for hospitals. The LSC is a

nationally recognized standard that

includes fire protection requirements

necessary to protect patients and

residents in health care facilities.

Designed to provide a reasonable degree

of safety from fire and similar

emergencies, the LSC covers

construction, fire protection, and

occupancy features needed to minimize

danger to life from fire, smoke, and

fumes. The code may be applied to both

new and existing buildings. The

National Fire Protection Association

revises the LSC periodically to reflect

advancements in fire protection.

In the current hospital COPs, the

physical environment COP includes a

standard, ‘‘Life safety from fire,’’ that

requires that hospitals comply with the

1985 edition of the Life Safety Code

(§ 482.41(b)(1)). Section 482.41(b)(1)(i)

then sets forth a ‘‘grandfather’’ clause

specifying that, under certain

circumstances, a hospital that originally

complied with the 1967 or 1981 edition

of the LSC hospitals may be considered

to be in compliance with the life safety

standard. The existing regulations also

provide that HCFA may waive specific

provisions of the LSC that would result

in unreasonable hardship upon a

facility, as long as the waiver has no

adverse effect on patient health and

safety. In addition, the regulations

permit a hospital to meet a fire and

safety code imposed by State law if

HCFA finds that the State-imposed code

adequately protects patients in

hospitals.

In the proposed hospital COPs, we

would continue to incorporate the LSC

by reference. However, in order to stress

the importance of fire safety standards

for patient health and safety, we

propose to establish a separate

condition, ‘‘Life safety from fire,’’ at

proposed § 482.135. We also propose to

update this requirement to specify that

hospitals must meet the 1994 edition of

the LSC, with no ‘‘grandfathering’’

under any of the earlier codes. However,

we are also currently considering

adoption of the later 1997 edition of the

LSC instead of the 1994 edition. We

welcome comments on the proposed

adoption of the 1997 edition also and

will address this issue in the final rule

for this proposed rule.

We consider compliance with the LSC

to be essential to the safety of patients.

As noted above, however, compliance

with the LSC currently is a standard

within the existing Physical

Environment condition of participation.

The surveyor that inspects a hospital for

LSC purposes often works separately

from the team that conducts the rest of

the hospital survey, including those

portions of the survey that involve other

physical environment issues. When the

LSC surveyor determines that the LSC is

not met, the entire Physical

Environment COP is found to be out of

compliance. In practice then, the LSC

standard essentially is treated as a

condition level requirement. Therefore,

we believe that establishing a separate

COP for the Life Safety Code would

accurately reflect its importance for

patient health and safety.

We are proposing to adopt the 1994

edition of the LSC because we believe

that it provides the highest available

level of protection for patients and staff

in hospitals, with little or no additional

burden to providers in existing facilities

and at a lower cost in new construction.

The 1994 edition of the LSC contains

distinct sets of requirements for new

construction and existing facilities.

Newly constructed health care facilities

must have automatic sprinklers

throughout, allowing them to meet

somewhat less rigorous standards in

other areas. For example, under the

1994 LSC, exits may be 150 feet apart

rather than 100 feet, interior finish may

be Class C rather than Class B. Thus, it

may actually cost less to construct a

new building in conformance with the

1994 LSC than under the 1985 LSC.

The 1994 LSC does not impose any

additional requirements for existing

buildings beyond those specified in the

1985 LSC. Thus, an existing hospital

that is in compliance with the 1985 LSC

would not have to make any changes to

come into compliance with the 1994

LSC. Only hospitals that still comply

only with the 1967 LSC may require

some additional features to achieve

compliance with the 1994 LSC. For such

hospitals, we believe it is inappropriate

to require compliance with a code that

relies on outmoded fire protection

methods. We note that we are proposing

to retain both the waiver provision from

the existing regulations and the

provision permitting use of a State code

if HCFA finds that it adequately protects

patients, which should ensure that

hospitals that can demonstrate an ability

to protect patient health and safety are

not faced with unreasonable burdens to

comply with the LSC requirements.

18. Blood and Blood Product

Transfusions (§ 482.140)

We propose establishing this

requirement as a separate COP because

of its importance for patient health and

safety. The transfusion of blood and

blood products requires a high degree of

coordination between medical and

nursing staff. Therefore, it is critical that

a hospital demonstrate practices that

ensure safe and accurate transfusions

with a minimum of transfusion-related

reactions.

Currently, specific, process-oriented

requirements for pre-transfusion testing

of blood and blood products are set

forth at 42 CFR Part 493 (§§ 493.1271,

493.1273, 493.1275, 493.1277, 493.1279,

493.1283, and 493.1285). We considered

proposing to include all these CLIA

requirements in the hospital COPs as

well as requirements for transfusions,

maintaining the same degree of

prescriptiveness. However, we believe

that the transfusion COP should

incorporate the same approach used in

the rest of the proposed rule, that is, a

balanced approach that combines

HCFA’s and the hospital’s responsibility

to ensure that essential health and safety

standards are met. Moreover, many of

the requirements set forth under part

493 are already stated broadly in the

proposed hospital COPs. For example,

the requirement that transfusion

facilities are administered only by

qualified personnel already appears in

general terms in the proposed rule at

§ 482.125, Human Resources. Likewise,

the requirement that blood and blood

products be stored under appropriate

conditions, including proper

temperature, is implicit in § 482.130,

Physical Environment.

Therefore, we are proposing under

§ 482.140 a new COP on blood

transfusions that would require that

hospitals—

(1) Have procedures for averting,

responding promptly to, investigating,

tracking, and reporting blood
66752 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

transfusion reactions to the laboratory

and, as appropriate, to Federal and State

authorities; and

(2) Take appropriate measures to

ensure the positive identification of the

blood or blood product and the

recipient, that blood and blood products

are stored at the appropriate conditions,

including temperature, to prevent

deterioration, and that blood and blood

products are readily accessible to the

appropriate medical and nursing staff.

As noted above, we have included

these requirements because they are

essential to patient safety.

19. Infectious Blood and Blood Products

(§ 482.145)

This condition specifies the steps

hospitals must take when they become

aware that they have administered

potentially HIV (human

immunodeficiency virus)-positive blood

or blood products to a patient. These

requirements restate without change the

requirements in existing § 482.27(c),

Potentially infectious blood and blood

products, which were set forth in our

September 9, 1996 final rule (61 FR

47423). Because these requirements

were so recently established through

notice and comment rulemaking, and

would merely be redesignated under

this proposed rule, we are not accepting

comments on this section.

20. Utilization Review (§ 482.150)

We propose to maintain the present

utilization review (UR) COP as presently

set forth in § 482.30. We believe this is

appropriate because when the current

UR COP was revised in 1986 (51 FR

22010), we strove to delete overly

burdensome requirements and reflect

only the statutory obligations of

hospitals for utilization review. These

obligations have not changed since that

time.

Since all Medicare-participating

hospitals must have an agreement with

the Utilization and Quality Control Peer

Review Organization (PRO) in the State

in which the hospital is located as a

condition of payment in accordance

with the regulations at § 466.86(b), PRO

review activities fulfill the UR

requirements for hospitals. Therefore,

the UR COP has limited applicability in

the survey process. However, in unusual

cases where a PRO does not in fact

perform review provided for in its

contract with the hospital, these

regulations would ensure that the

provisions of sections 1861(e)(6) and (k)

of the Act concerning utilization review

can be applied.

21. Provider Agreement—Surveyor

Access to Provider Records (§ 489.53)

In addition to the changes described

elsewhere in this document, which

would affect only hospitals, we propose

to add a new provision that would

apply to all providers participating in

Medicare. Under this new provision,

which would amend our provider

agreement regulations at 42 CFR 489.53,

HCFA would be authorized to terminate

a provider’s participation in Medicare if

the provider refused to allow access to

its facilities, or examination of its

operations or records, by or on behalf of

HCFA, as necessary to verify that it is

complying with the provisions of title

XVIII and the applicable regulations of

Chapter IV of Title 42 of the Code of

Federal Regulations, or with the

provisions of its provider agreement.

Under Medicare, the surveys needed

to verify compliance with health and

safety requirements or other Medicare

rules are not mere paperwork reviews,

but instead require State surveyors or

HCFA personnel to perform firsthand

observations of facilities and operations

as well as to review relevant records.

The great majority of hospitals and other

providers recognize the need for these

surveys and cooperate willingly with

them. However, in rare cases a provider

may attempt to thwart the survey

process by refusing to allow access to its

facilities, operations, or medical or other

records. Without this access, it may be

difficult or impossible to document

provider noncompliance with

applicable conditions of participation or

other requirements.

We believe that a provider that has

agreed to participate in Medicare and

accept payment for treating Medicare

patients has an inherent obligation to

allow access to its facilities, operations,

and records to the extent that access is

needed to verify that the provider is

complying with all applicable Medicare

requirements. If this access were denied,

we would be unable to carry out our

obligations to administer the Medicare

program. In addition, the health and

safety of both Medicare and other

patients might be jeopardized, since we

would not be able to detect unsafe

practices and identify them for

corrective action. However, our current

regulations do not make this

longstanding obligation explicit. The

proposed rule would correct this

problem by adding new § 489.53(a)(6) to

specify that HCFA may terminate a

provider agreement if the provider

refuses to allow access to its facilities,

or examination of its operations or

records, to verify compliance with

applicable Federal law and regulations.

The specific statutory basis for the

proposed rule is section 1871(a)(1) of

the Act, which authorizes the Secretary

to prescribe such regulations as may be

necessary to carry out the

administration of the Medicare program.

However, we emphasize that this

provision does not create a new

obligation for providers, but merely

codifies an existing obligation. For this

reason, the proposed rule would not

increase the compliance burden for

facilities. Existing limits on the types of

information requested and the uses to

which it can be put would be

maintained. For example, as part of the

review of the hospital’s quality

assessment and performance

improvement program, we would expect

to have access to hospital incident

reports only as a nonpunitive review

function to determine how the hospital

analyzes and tracks these data and

incorporates the data into its quality

assessment and performance

improvement program.

III. Impact Statement

We generally prepare a regulatory

flexibility analysis that is consistent

with the Regulatory Flexibility Act

(RFA) (5 U.S.C. 601 through 612) unless

we certify that a proposed rule such as

this would not have a significant

economic impact on a substantial

number of small entities. For purposes

of the RFA, all non-profit hospitals and

other hospitals with revenues of $5

million or less annually are considered

small entities. States and individuals are

not considered small entities.

In addition, section 1102(b) of the

Social Security Act requires us to

prepare a regulatory impact analysis for

any proposed rule that may have a

significant impact on the operation 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. Although the provisions proposed

in this rule do not lend themselves to a

quantitative impact estimate, we do not

anticipate that they would have a

substantial economic impact on most

hospitals. However, to the extent that

our proposals may have significant

effects on providers or beneficiaries, or

be viewed as controversial, we believe

it is desirable to inform the public of our

projections of the likely effects of the

proposals.

As discussed in detail above, this

proposed rule sets forth new hospital

conditions of participation that revise or
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66753

eliminate many existing requirements

and incorporate critical requirements

into four ‘‘core conditions.’’ These four

COPs—Patient Rights; Patient

Admission, Assessment, and Plan of

Care; Patient Care; and Quality

Assessment and Performance

Improvement—would focus both

provider and surveyor efforts on the

actual care delivered to the patient, the

performance of the hospital as an

organization, and the impact of the

treatment furnished by the hospital on

the health status of its patients. In

developing these proposed COPs, we

have retained structure and processoriented requirements only where we

believe they are essential to achieving

desired patient outcomes or preventing

harmful outcomes (for example,

requiring error free medication

administration). More often though, we

have eliminated structural or processoriented requirements that we no longer

believe are necessary (such as the

prescriptive details concerning bylaws,

medical staff composition, medical

record services, etc.), in favor of an

approach that, through the proposed

core COP on quality assessment and

performance improvement, invests

hospitals with internal responsibility for

improving their performance. This

approach is intended to incorporate into

our regulations current best practices in

well-managed hospitals, relying on the

hospital to identify and resolve its

performance problems in the most

effective and efficient manner possible.

We believe that the proposed COPs

would decrease the administrative

burden on hospitals to comply with

detailed Federal requirements, thus

reducing the costs incurred by the

typical hospital in meeting the Medicare

conditions of participation. (See the

information collection section below for

examples of specific changes in the

recordkeeping and paperwork burden of

hospitals that would be associated with

this proposed rule.) Instead, the

proposed COPs would provide hospitals

with much more flexibility to determine

how best to pursue our shared quality

of care objectives in the most costeffective manner. We expect hospitals to

develop different approaches to

compliance based on their varying

resources and patient populations,

differences in laws in various localities

(such as those concerning personnel

standards), and other factors.

Given the uncertain readiness of some

individual hospitals to comply with

performance expectations under the

proposed COPs, quantitative analysis of

the effects of these proposed changes is

not possible. Hospitals with quality

assessment and performance

improvement programs already in place

that meet these proposed requirements

may see a reduction in administrative

burden because they would no longer

have to comply with many of the

process-oriented requirements of the

current COPs. Other hospitals that do

not currently meet the proposed

requirements for quality assessment and

performance improvement may

encounter an increased burden in the

short term because resources would

have to be devoted to the development

of a quality assessment and performance

improvement program that covers the

complexity and scope of the particular

hospital’s services. However, even in

situations where the proposed

requirements could result in some

immediate costs to an individual

hospital, we believe that the changes

that the hospital would make would

produce real but difficult to estimate

long-term economic benefits to the

hospital (such as cost-effective

performance practices or higher patient

satisfaction that could lead to increased

business for the hospital).

We are considering strengthening

organ procurement standards and we

welcome suggestions for an outcome

standard. However, with or without

such a standard, we believe the resource

implications of the proposed changes

are minimal and may even reduce

hospital costs. When hospitals use organ

procurement organization staff to make

the required requests to the families of

potential donors, it is OPO staff rather

than the hospital staff that must spend

time with the family. As to the option

of reporting all or most deaths to OPOs,

this relieves the hospital of making the

suitability decision. Fewer than 400

patients a year die in an average

hospital. Assuming five minutes a

telephone call, only a few person-days

would be needed to report all such

deaths.

For the reasons explained above, the

Secretary certifies that this proposed

rule will not have a significant

economic impact on a substantial

number of small providers, and that

preparation of an Initial Regulatory

Flexibility Analysis is not required.

In accordance with the provisions of

Executive Order 12866, this proposed

rule was reviewed by the Office of

Management and Budget.

IV. Information Collection and

Recordkeeping Requirements

Under the Paperwork Reduction Act

of 1995, agencies are required to provide

60-day notice in the Federal Register

and solicit public comment before a

collection of information requirement is

submitted to the Office of Management

and Budget (OMB) for review and

approval. In order to fairly evaluate

whether an information collection

should be approved by OMB, section

3505(c)(2)(A) of the Paperwork

Reduction Act of 1995 requires that we

solicit comment on the following issues:

• Whether the information collection

is necessary and useful to carry out the

proper functions of the agency;

• The accuracy of the agency’s

estimate of the information collection

burden;

• The quality, utility, and clarity of

the information to be collected; and

• Recommendations to minimize the

information collection burden on the

affected public, including automated

collection techniques.

This proposed rule contains

information collection requirements that

are subject to OMB review under the

Paperwork Reduction Act of 1995.

These information collection

requirements are discussed below.

This proposed rule revises the

hospital conditions of participation

contained in existing 42 CFR part 482

(§§ 482.1 through 482.66) that are

applicable under the Medicare and

Medicaid programs. The information

collection requirements contained in

these existing regulations are approved

by OMB under approval number 0938–

0328, which expires on July 31, 2000

(§§ 482.12, 482.21, 482.22, 482.27,

482.30, 482.41, 482.43, 482.53, 482.56,

482.57, 482.60, and 482.62) and 0938–

0698, which expires on January 31, 2000

(§ 482.27(c)). For the most part, these

requirements have been in effect for

over 9 years. In this proposed rule, we

would delete some of these

requirements, retain others, and add

some new ones. On balance, the

proposed regulations would result in a

significantly smaller information

collection burden on hospitals.

A. Proposed Deleted Requirements

The existing information collection

requirements that we propose to delete

are:

• § 482.12(e)(2)—The requirement

that a hospital maintain a list of all

contracted services.

• § 482.12(f)(2)—The requirement

that the governing body ensure that the

medical staff has written policies and

procedures for appraisal of emergencies,

initial treatment, and referrals when

appropriate.

• § 482.22(c)—The requirement that a

hospital must have written bylaws for

medical staff.

• § 482.27(a)(2)—The requirement

that a hospital must have written

description of laboratory services.
66754 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

• § 482.41(b)—The requirement that a

hospital use the applicable provisions of

the Life Safety Code of the National Fire

Protection Association. (We are

including application of a later edition

of the Code in proposed § 482.140.)

• § 482.53(d)—The requirement that a

hospital maintain signed and dated

reports of nuclear medicine

interpretations, consultations, and

procedures. (We proposed to delete the

requirement specific to nuclear

medicine records, but expand

recordkeeping requirements to apply to

all services under a new information

management requirement in proposed

§ 482.120.)

B. Proposed Retained Requirements

The existing information collection

requirements that we propose to retain

are:

• § 482.12(c)(5)(i)—The requirement

that a hospital must have written

protocols related to the identification of

potential organ donors (proposed

§ 482.110(c)).

• § 482.12(d)(1), (2), and (4)—The

requirement that a hospital must have

an institutional plan and budget

(proposed § 482.110(b)(3)).

• § 482.27—The requirement that a

hospital undertake certain activities

when it learns that it has received blood

and blood products that are at increased

risk of transmitting HIV, including the

requirement that the hospital have

specified notifications procedures in

place and retain certain documentation

in the medical record (proposed

§ 482.145).

• § 482.30(c)(1) and (d)(3)—The

requirement that a hospital must have in

effect a utilization review plan that

provides for review of services

furnished by the institution and by

members of the medical staff to patients

entitled to benefits under the Medicare

and Medicaid programs (proposed

§ 482.150).

For those information collection

requirements for which we have current

OMB approvals that will expire

sometime in the future (as specified

earlier under this section), we are asking

for public comments only as they

pertain to the overall requirements

under the new proposed structure of

these regulations.

C. Standard Industry Practice

Under 5 CFR 1320.3(b)(2), the burden

associated with the time, effort, and

financial resources that would be

necessary to comply with a collection of

information that would be incurred by

persons in the normal course of

business will be excluded from an

information collection that is subject to

OMB approval. The burden in

connection with these types of

collection activities can be disregarded

if an agency can demonstrate that the

collection activities are usual and

customary. The collection requirements

referenced below are usual and

customary in the conduct of hospital

business. Thus, they fall under this

exclusion:

• § 482.15(a)—The requirement that a

hospital must ensure that each patient

receives a comprehensive assessment

that identifies the patient’s condition

and care needs at the time of admission

as well as an initial estimate of

posthospital needs, if any. Should the

needs of a patient change, the

assessment must be updated to reflect

these changes.

• § 482.15(b)—The requirement that a

hospital must create a plan of care for

all newly admitted patients. The initial

plan of care must be placed in the

medical record within 24 hours of

admission and must include, although

not necessarily in one location in the

medical record, care to be delivered by

all relevant disciplines. This plan must

be modified to meet any changes in the

patient’s condition that affect the

patient’s needs.

• § 482.43—The requirement that a

hospital must have in effect a discharge

planning process, with written policies

and procedures (proposed § 482.55).

• § 482.110(c)(1)(ii)—The

requirement that a hospital must assure,

through the OPO with which the

hospital has an agreement, that the

family of each potential organ donor

knows of its option either to donate

organs or tissues or to decline to donate.

• § 482.120—The requirement that a

hospital must maintain information

systems to record, communicate, and

measure hospital performance. The

information systems may include

manual systems, automated systems, or

both, depending on the complexity of

the hospital, to record and maintain the

clinical and operations data necessary

for patient care.

• § 482.140—The requirement that a

hospital must administer blood and

blood product transfusions according to

approved medical staff and nursing

policies and procedures, and ensure the

safety of individuals being transfused

within the facility.

D. New Information Collection

Requirements

The proposed regulations allow

hospitals greater flexibility in the

utilization of their staff and resources

while strengthening quality control

requirements to assure patient health

and safety. The new proposed

information collection requirements that

are subject to OMB approval represent

minimal, if any, burden on hospitals.

As we have discussed earlier in this

preamble, in order to participate in

Medicare and Medicaid, hospitals must

be certified as meeting the conditions of

participation (and hence the

information collection requirements

contained in the conditions). There are

approximately 6,700 hospitals that

participate in Medicare or Medicaid.

Approximately 5,200 of these hospitals

are accredited by JCAHO or AOA. HCFA

deems these JCAHO and AOA

accredited hospitals to meet the

conditions of participation, except for

utilization review requirements. The

remaining 1,500 non-accredited

hospitals must be surveyed to ensure

compliance with the conditions of

participation. Therefore, only those

hospitals that are not accredited by

JCAHO or AOA would incur burden

from the new information collection

requirements listed below. The

hospitals that would be subject to the

information collection requirements

would include new hospitals

(approximately 2 per year) and current

ones undergoing a recertification

(currently a hospital is resurveyed

approximately every 5 years, so an

average of 20 percent of the 1,500

hospitals (300) are resurveyed each

year). However, we believe that, of the

302 hospitals subject to a survey each

year, the actual number surveyed would

only be 250. We reached this conclusion

because at least 52 of the hospitals are

already implementing these three new

requirements and would incur no

additional burden.

Included in the estimate of burden for

the new information requirements listed

below is the time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing the collection of information.

1. § 482.10(a)—Standard: Notice of

Rights

a. Requirement: This section requires

a hospital to have in effect a grievance

process for patients to follow if they

want to file a grievance. The hospital

must also indicate who the patient

should contact to express a grievance.

b. Burden: We believe the

requirement for a grievance process will

impose an estimated burden of 2 hours

per hospital for a total of 500 annual

burden hours.
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66755

2. § 482.25—Condition of Participation:

Quality Assessment and Performance

Improvement

a. Requirement: This section requires

a hospital to have a quality assessment

and performance improvement program

that reflects the complexity of the

hospital’s organization and services

(including those services provided

under contract or arrangements) and

implements actions that result in

improvements across the full range of

the hospital’s services to patients.

b. Burden: We believe this

requirement would impose an estimated

burden of 3 hours per hospital for a total

of 750 annual burden hours.

3. § 482.125(b)—Standard: Staffing

a. Requirement: This section requires

a hospital to have an explicit process to

determine on an ongoing basis the

needed level of nurse staffing needs.

This methodology and evidence of its

use in meeting the nurse staffing needs

of the patient must be available for

public inspection.

b. Burden: We believe this

requirement would impose an estimated

burden of 3 hours per hospital for a total

of 750 annual burden hours.

The total annual burden hours for

implementation of the new proposed

information collection requirements for

hospitals is estimated to be 2,000 hours.

The paperwork burden for the

proposed new information collection

requirements would not be effective

until it has been approved by OMB. A

notice will be published in the Federal

Register when approval is obtained.

Organizations and individuals desiring

to submit comments on this paperwork

burden should direct them to the Office

of Management and Budget, Human

Resources and Housing Branch, Room

10235, New Executive Office Building,

Washington, D.C., 20503; Attention:

Allison Herron Eydt, HCFA Desk

Officer.

V. Responses to Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, we are not able

to acknowledge or respond to them

individually. We will consider all

comments we receive by the date and

time specified in the DATES section of

this preamble, and, if we proceed with

a subsequent document, we will

respond to the comments in the

preamble to that document.

List of Subjects

42 CFR Part 416

Health facilities, Kidney diseases,

Medicare, Reporting and recordkeeping

requirements.

42 CFR Part 482

Grant programs-health, Hospitals,

Medicaid, Medicare, Reporting and

recordkeeping requirements

42 CFR Part 485

Grant programs-health, Health

facilities, Medicaid, Medicare,

Reporting and recordkeeping

requirements.

42 CFR Part 489

Health facilities, Medicare, Reporting

and recordkeeping requirements.

42 CFR chapter IV would be amended

as set forth below:

A. Part 416 is amended as follows:

PART 416—AMBULATORY SURGICAL

SERVICES

1. The authority citation for part 416

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

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

1395hh).

Subpart C—Specific Conditions for

Coverage

2. Section 416.42(b) is revised to read

as follows:

§ 416.42 Condition for coverage—Surgical

services.

* * * * *

(b) Standard: Administration of

anesthesia. Anesthesia is administered

only by a licensed practitioner

permitted by the State to administer

anesthetics.

* * * * *

B. Part 482 is amended as follows:

PART 482—CONDITIONS OF

PARTICIPATION FOR HOSPITALS

1. The authority citation for part 482

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

Social Security Act, unless otherwise noted

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

Subpart A—General Provisions

§ 482.1 [Redesignated as § 482.5]

2. Section 482.1 is redesignated as

§ 482.5 in subpart A and is amended by

adding a new paragraph (a)(6) to read as

follows:

§ 482.5 Basis and scope.

(a) Statutory Basis.

* * * * *

(6) Section 1138 of the Act sets forth

requirements for hospital protocols for

organ procurement and standards for

organ procurement agencies’ agreements

with hospitals for organ procurement.

§ 482.5 [Removed]

* * * * *

3. Section 482.2 is removed.

4. A new § 482.10 is added to subpart

A to read as follows:

§ 482.10 Condition of participation: Patient

rights.

A hospital must protect and promote

each patient’s rights.

(a) Standard: Notice of rights. A

hospital must inform each patient of his

or her rights in advance of furnishing

patient care. The hospital must have a

grievance process and must indicate

who the patient can contact to express

a grievance.

(b) Standard: Exercise of rights.

(1) The patient has the right to be

informed of his or her rights and to

participate in the development and

implementation of his or her plan of

care.

(2) The patient has the right to make

decisions regarding his or her care.

(3) The patient has the right to

formulate advance directives and to

have hospital staff and practitioners

who provide care in the hospital comply

with those directives, in accordance

with § 489.100, § 489.102, and

§ 489.104.

(c) Standard: Privacy and safety.

(1) The patient has the right to

personal privacy and to receive care in

a safe setting.

(2) The patient has the right to be free

from verbal or physical abuse or

harassment.

(d) Standard: Confidentiality of

patient records.

(1) The patient has the right to

confidentiality of his or her clinical

records.

(2) The patient has the right to access

information contained in his or her

clinical records within a reasonable

timeframe.

(e) Standard: Seclusion and restraint.

The patient has the right to be free from

the use of seclusion or restraint, of any

form, as a means of coercion,

convenience, or retaliation by staff. If

seclusion or restraints are used

(including psychopharmacological

drugs used as restraints), they must be

used in accordance with a patient’s plan

of care. Restraints or seclusion may be

used only as a last resort and in the least

restrictive manner possible, to protect

the patient or others from harm, and

must be removed or ended at the earliest

possible time.
66756 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

Subparts B and C [Removed]

5. Subparts B (§§ 482.11 and 482.12),

C (§§ 482.21 through 482.43), and D

(§§ 482.51 through 482.77) are removed.

6. New subparts B and C are added to

read as follows:

Subpart B—Patient Care Activities

Sec.

482.15 Condition of participation: Patient

admission, assessment, and plan of care.

482.20 Condition of participation: Patient

care.

482.25 Condition of participation: Quality

assessment and performance

improvement.

482.30 Condition of participation:

Diagnostic and therapeutic services or

rehabilitative services.

482.35 Condition of participation:

Pharmaceutical services.

482.40 Condition of participation:

Nutritional services.

482.45 Condition of participation: Surgical

and anesthesia services.

482.50 Condition of participation:

Emergency services

482.55 Condition of participation:

Discharge planning.

Subpart C—Organization Environment

482.110 Condition of participation:

Administration of organizational

environment.

482.115 Condition of participation:

Infection control.

482.120 Condition of participation:

Information management.

482.125 Condition of participation: Human

resources.

482.130 Condition of participation:

Physical environment.

482.135 Condition of participation: Life

safety from fire.

482.140 Condition of participation: Blood

and blood product transfusions.

482.145 Condition of participation:

Potentially infectious blood and blood

products.

482.150 Condition of participation:

Utilization review.

§ 482.15 Condition of participation: Patient

admission, assessment, and plan of care.

The hospital must conduct a

comprehensive assessment of the care

needs of each patient, including an

initial assessment of posthospital needs,

and must establish a coordinated plan

for how all relevant hospital disciplines

will meet those needs.

(a) Standard: Admission and

comprehensive assessment.

(1) A patient is admitted to the

hospital only on the recommendation of

a licensed practitioner permitted by the

State to admit patients to a hospital.

(2) The hospital must ensure that each

patient receives a comprehensive

assessment that identifies the patient’s

condition and care needs at the time of

admission as well as an initial estimate

of posthospital needs, if any. The

assessment must be completed in a

timely manner consistent with the

patient’s immediate needs and placed in

the patient’s medical record within 24

hours of admission. If an assessment is

recorded before a scheduled admission,

the hospital must document any

changes in the patient’s condition on

admission and place the updated

assessment in the medical record within

12 hours of admission. The

comprehensive assessment must be

updated when the patient’s needs

change.

(b) Standard: Plan of care.

(1) Each patient must have an initial

written plan of care that meets the needs

identified in the comprehensive

assessment. The initial plan of care

must be placed in the medical record

within 24 hours of admission and must

include, although not necessarily in one

location in the medical record, care to

be delivered by all relevant disciplines.

(2) The plan of care must be modified

to meet any changes in the patient’s

condition that affect the patient’s needs.

§ 482.20 Condition of participation: Patient

care.

The hospital ensures that each

Medicare patient is under the care of an

appropriately qualified practitioner. The

care provided to each patient is

coordinated and based on the plan of

care.

(a) Standard: Assignment of

responsible practitioner for Medicare

patients.

(1) Every Medicare patient is under

the care of:

(i) A doctor of medicine or osteopathy

who may delegate tasks to other

qualified health care personnel to the

extent recognized under State law or a

State’s regulatory mechanism;

(ii) A doctor of dental surgery or

dental medicine who is legally

authorized to practice dentistry by the

State and who is acting within the scope

of his or her license;

(iii) A doctor of podiatric medicine,

but only with respect to functions

which he or she is legally authorized by

the State to perform;

(iv) A doctor of optometry, but only

with respect to functions which he or

she is legally authorized by the State to

perform;

(v) A chiropractor who is licensed by

the State or legally authorized to

perform the services of a chiropractor,

but only with respect to treatment by

means of manual manipulation of the

spine to correct a subluxation

demonstrated by x-ray to exist; or

(vi) In the case of a patient receiving

qualified psychologist services as

defined in section 1861(ii) of the Act, a

clinical psychologist, but only with

respect to such qualified psychologist

services and only to the extent

permitted by State law.

(2) A doctor of medicine or

osteopathy is on duty or on call at all

times.

(3) A doctor of medicine or

osteopathy is responsible for the care of

each Medicare patient with respect to

any medical or psychiatric problem that

is present on admission or develops

during hospitalization and is not

specifically within the scope of practice

of one of the other practitioners listed in

paragraph (a)(1) of this section, as that

scope is defined by the medical staff,

authorized by State law, and limited,

under paragraphs (a)(1)(v) and (a)(1)(vi)

of this section, with respect to

chiropractors and clinical psychologists,

respectively.

(b) Standard: Delivery of patient care.

(1) For each patient, the hospital

provides care and treatment

interventions that are coordinated by all

relevant disciplines and conform to the

plan of care.

(2) The hospital evaluates the

patient’s progress as appropriate to the

patient’s condition and adjusts care, as

necessary, when progress is not being

achieved.

(3) Patient care services are provided

in accordance with the order of

practitioners who are qualified and have

delineated clinical privileges as

specified under § 482.125(a).

(4) If the hospital provides care to

outpatients, that care meets the same

requirements that apply to inpatient

care. Inpatient care and outpatient care

are coordinated to ensure continuity of

care for patients who move between

levels of care.

§ 482.25 Condition of participation: Quality

assessment and performance improvement.

The hospital must develop,

implement, maintain, and evaluate an

effective, data-driven, quality

assessment and performance

improvement program. The program

must reflect the complexity of the

hospital’s organization and services

(including those services provided

under contract or arrangement). The

hospital must implement actions that

result in improvements across the full

range of the hospital’s services to

patients.

(a) Standard: Program scope.

(1) The hospital’s quality assessment

and performance improvement program

must include, but not be limited to, the

use of objective measures to evaluate—

(i) Access to care;

(ii) Patient satisfaction;

(iii) Staff, administrative and

practitioner performance;
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66757

(iv) Complaints and grievances;

(v) Diagnostic and therapeutic

services;

(vi) Medication error incidents,

achievement of drug therapy goals and

incidents of adverse drug effects;

(vii) Nutritional services, including

patient’s responses to therapeutic diets

and parenteral nutrition, if used;

(viii) Surgery and anesthesia services;

(ix) Emergency services, if provided;

(x) Discharge planning activities;

(xi) Safety issues, including infection

control and physical environment; and

(xii) Results of autopsies.

(2) In each of the areas listed in

paragraph (a)(1) of this section, and any

others the hospital includes, the

hospital must measure, analyze, and

track quality indicators or other aspects

of performance that the hospital adopts

or develops that reflect processes of care

and hospital operations. These

performance measures must be shown

to be predictive of desired outcomes or

be the outcomes themselves.

(3) The hospital must use hospitalspecific data, as well as PRO data and

any other available relevant data, as an

integral part of its quality assessment

and performance improvement strategy.

(4) Although a hospital is not required

to participate in a PRO cooperative

project, the hospital must be able to

demonstrate a level of achievement

through its own quality assessment and

performance improvement strategy

comparable to or better than that to be

expected from such participation.

(5) The hospital must set priorities for

performance improvement, considering

prevalence and severity of identified

problems, and giving priority to

improvement activities that affect

clinical outcomes.

(6) The hospital must take actions that

result in performance improvements

and must track performance to assure

that improvements are sustained.

(b) Standard: Program

responsibilities.

(1) The hospital governing body (or

organized group or individual who

assumes full legal authority and

responsibility for operations of the

hospital), medical staff and

administration officials are responsible

for ensuring that the hospital-wide

quality assessment and performance

improvement efforts address identified

priorities in the hospital and are

responsible for the development,

implementation, maintenance and

evaluation of improvement actions.

(2) All hospital programs,

departments and functions, including

contracted services and services

provided under arrangement, must be

involved in developing, implementing,

maintaining, and evaluating the

hospital’s program of quality assessment

and performance improvement.

(c) Standard: Autopsies. The hospital

must attempt to secure autopsies in all

cases of unusual deaths and of medicallegal and educational interest. The

mechanism for documenting permission

to perform an autopsy must be defined.

There must be a system for notifying the

medical staff, and specifically the

attending practitioner, when an autopsy

is being performed.

§ 482.30 Condition of participation:

Diagnostic and therapeutic services or

rehabilitative services.

(a) The hospital is primarily engaged

in providing, by or under the

supervision of one of the practitioners

described in § 410.20(b) of this chapter,

either diagnostic and therapeutic

services to inpatients, or rehabilitative

services to inpatients.

(b) The hospital must provide

diagnostic radiology services, including

24-hour emergency diagnostic radiology

services, if the hospital provides fulltime emergency services (see

§ 482.50(a)).

(c) The hospital must provide

laboratory services, including 24-hour

emergency laboratory services, to meet

the needs of patients. The laboratory

services must be furnished in

accordance with part 493 of this

chapter.

(d) If the hospital elects to offer other

services in addition to the required

services, they must be delivered in

accordance with the requirements of

this part.

§ 482.35 Condition of participation:

Pharmaceutical services.

The hospital provides medication

therapy, as needed, through a safe,

accurate, effective system that

minimizes adverse drug events and

evaluates the patient’s response to the

medication therapy.

(a) Standard: Adverse drug event

monitoring.

(1) The hospital develops and

operates a system (manual or electronic)

to search active clinical records for

events that are likely to be associated

with adverse drug events and refers

these events to the hospital’s quality

assessment and performance program

for action.

(2) The hospital must ensure that its

overall medication error rate is no

higher than 2.0 percent.

(3) The hospital must ensure that its

patients experience no significant

medication errors. For purposes of this

section, medication errors are

considered ‘‘significant’’ if they actually

jeopardize or cause serious potential for

jeopardizing the health and safety of the

patient.

(b) Standard: Drug management

procedures.

(1) All drugs and biologicals are

stored in secure areas. In addition, all

drugs listed in Schedules II, III, IV, and

V of the Comprehensive Drug Abuse

Prevention and Control Act of 1976

must be stored in locked compartments

within secure storage areas. Only

authorized personnel may have access

to keys.

(2) The hospital keeps current and

accurate records of receipt and

disposition of all controlled drugs.

(3) Discrepancies in controlled drugs

are reported to the individual

responsible for pharmaceutical services

and to the administrator of the hospital.

(4) A comprehensive drug information

resource (computerized or hard copy) is

available to professional staff for

ordering, dispensing, and administering

of medications. This information

resource is readily available at common

points of drug ordering, dispensing and

administration in the facility, and is

merged with, or located in close

proximity to, individual patient

information at those common points.

(5) Before medications are

administered, a licensed nurse (that is,

a registered nurse, licensed practical

nurse, or licensed vocational nurse) or

a doctor of medicine or osteopathy must

review the individual patient’s

information, and the orders of the

practitioner who prescribed the

medication.

(6) Medications brought into the

hospital by the patient are administered

only after positive identification of the

medications, and only on the order of

the practitioner responsible for the care

of the patient under § 482.15(a)(1), in

accordance with hospital policy.

(7) The hospital has policies for

discontinuing medications that are not

specifically limited as to time and/or

number of doses to be administered.

(c) Standard: Discharge orders for

psychopharmacological drugs. Orders

for psychopharmacological drugs are

discontinued upon discharge of the

patient, unless the patient has a

psychiatric diagnosis listed in the Third

or Fourth Edition of the American

Psychiatric Association’s Diagnostic and

Statistical Manual (DSM–III or DSM–

IV), or in Chapter Five (Mental

Disorders) of the International

Classification of Diseases, Ninth

Revision, Clinical Modification (ICD–9–

CM) which is available through the

Government Printing Office,

Washington, DC, stock number 017–

022–01392–4 (1977).
66758 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

§ 482.40 Condition of participation:

Nutritional services.

The hospital must provide each

patient with adequate nutrition,

including therapeutic diets or parenteral

nutrition if needed.

(a) Standard: Sanitary conditions. The

hospital must provide food to the

patient that is obtained, stored,

prepared, distributed and served under

sanitary conditions.

(b) Standard: Menus. The hospital

must prepare menus prepared in

advance and meet the nutritional needs

of the patients in accordance with the

recommended dietary allowances of the

Food and Nutrition Board of the

National Research Council, National

Academy of Sciences.

§ 482.45 Condition of participation:

Surgical and anesthesia services.

If the hospital provides surgical or

anesthesia services, they are provided

through the use of qualified staff. The

patient receives appropriate pre- and

post-procedure evaluations, and all care

is accurately documented.

(a) Standard: Staffing.

(1) Surgical procedures are performed

only by practitioners with appropriate

clinical privileges.

(2) Anesthesia is administered only by

a licensed practitioner permitted by the

State to administer anesthetics.

(b) Standard: Evaluations.

(1) A comprehensive assessment of

the patient’s condition is performed

before surgery, except in emergency

cases where a modified assessment is

acceptable.

(2) A preanesthesia evaluation by an

individual qualified to administer

anesthesia is performed prior to the

administration of anesthesia.

(3) A postanesthesia evaluation for

proper anesthesia recovery is performed

by an individual qualified to administer

anesthesia.

(c) Standard: Documentation of care.

(1) The comprehensive or modified

presurgical assessment described in

paragraph (b)(1) of this section is

entered in the patient record before

surgery, except in emergency cases,

where the assessment may be entered

following surgery.

(2) A properly executed informed

consent form for the operation is

entered in the patient’s record by the

hospital before surgery, except in

emergency cases where the delay

needed to obtain consent would place

the health or safety of the patient in

serious jeopardy.

(3) The hospital maintains a complete,

up-to-date operating room register.

(4) The hospital writes or dictates an

operative report describing

complications, reactions, length of time,

techniques, findings, and tissues

removed or altered immediately

following surgery enters it in the

patient’s record promptly following

surgery.

(5) The hospital maintains an

intraoperative anesthesia record enters

it in the patient’s record promptly

following surgery or any other

procedures requiring anesthesia.

(6) The hospital writes a report of the

results of the postanesthesia evaluation

described in paragraph (b)(3) of this

section and enters it in the patient’s

record promptly following completion

of the procedure for which anesthesia

was required.

§ 482.50 Condition of participation:

Emergency services.

The hospital provides, within its

capabilities and its stated mission,

services appropriate to the needs of

persons seeking emergency care. If the

hospital provides emergency services on

a full-time or part-time basis, it meets

the applicable standard in paragraph (a)

or paragraph (b) of this section,

respectively; if the hospital does not

provide any emergency services, it

meets the standard in paragraph (c) of

this section.

(a) Standard: Hospitals providing fulltime emergency services. If the hospital

provides emergency services on a 24-

hour-per-day, 7-day per week basis, the

hospital meets the following

requirements at all times:

(1) The hospital has sufficient

numbers of personnel, including doctors

of medicine or osteopathy, other

practitioners and registered nurses, to

meet patient needs for emergency care.

(2) The services are appropriate to

patient needs.

(3) The emergency services provided

are integrated with other departments of

the hospital.

(b) Standard: Hospitals providing

part-time emergency services. If the

hospital provides emergency services,

but not on a 24-hour per day, 7-day per

week basis, the hospital meets the

following requirements:

(1) The hospital has fewer than 100

beds and is located in a rural area as

defined in § 412.62(f)(1)(iii) of this

chapter.

(2) The hospital establishes regular

hours and days when the emergency

services are available, and actually has

services available at all of those times.

(3) The hospital notifies local

emergency services personnel, law

enforcement agencies, physician offices,

and other health facilities of when it

does and does not offer emergency

services, and provides those it has

notified with at least 5 calendar days’

advance notice of any changes in its

emergency services schedule.

(4) The hospital posts its days and

hours of operation of emergency

services in a conspicuous place where

the public most commonly is informed

of the hospital’s location.

(5) The hospital complies with the

requirements of paragraphs (a)(1)

through (a)(3) of this section at all times

when it does offer emergency services.

(6) The hospital complies with the

requirements of paragraph (c) of this

section at all times when it does not

offer emergency services.

(c) Standard: Hospitals not providing

emergency services. If the hospital does

not provide emergency services, the

hospital must provide for appraisal of

emergencies, initial treatment, and

referral when appropriate.

§ 482.55 Condition of participation:

Discharge planning.

The hospital must have in effect a

discharge planning process that applies

to all patients. This process assures that

appropriate posthospital services are

obtained for each patient, as necessary.

(a) Standard: Identification of patients

in need of discharge planning. The

hospital must identify, at an early stage

of hospitalization, all patients who are

likely to suffer adverse health

consequences upon discharge if there is

no adequate discharge planning.

(b) Standard: Discharge planning

evaluation.

(1) The hospital must provide a

discharge planning evaluation to the

patients identified in paragraph (a) of

this section, and to other patients upon

the patient’s request, the request of a

person acting on the patient’s behalf, or

the request of the physician.

(2) A registered nurse, social worker,

or other appropriately qualified

personnel must develop, or supervise

the development of the evaluation.

(3) The discharge planning evaluation

must include an evaluation of the

likelihood of a patient needing

posthospital services, including hospice

services, and of the availability of those

services.

(4) The discharge planning evaluation

must include an evaluation of the

likelihood of a patient’s capacity for

self-care or of the possibility of the

patient being cared for in the

environment from which he or she

entered the hospital.

(5) The hospital personnel must

complete the evaluation on a timely

basis so that appropriate arrangements

for posthospital care are made before

discharge, and to avoid unnecessary

delays in discharge.
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66759

(6) The hospital must include the

discharge planning evaluation in the

patient’s medical record for use in

establishing an appropriate discharge

plan and must discuss the results of the

evaluation with the patient or

individual acting on his or her behalf.

(7) The evaluation must include a list

of HHAs that are available to the

patient, that participate in the Medicare

program, the geographic area (as defined

by the HHA) in which the patient

resides, and that request to be listed by

the hospital as available to provide

home health services to patients the

hospital discharges.

(c) Standard: Discharge plan. (1) A

registered nurse, social worker, or other

appropriately qualified personnel must

develop, or supervise the development

of, a discharge plan if the discharge

planning evaluation indicates a need for

a discharge plan.

(2) In the absence of a finding by the

hospital that a patient needs a discharge

plan, the patient’s physician may

request a discharge plan. In such a case,

the hospital must develop a discharge

plan for the patient.

(3) The hospital must arrange for the

initial implementation of the patient’s

discharge plan.

(4) The hospital must reassess the

patient’s discharge plan if there are

factors that may affect continuing care

needs or the appropriateness of the

discharge plan.

(5) As needed, the patient and family

members or interested persons must be

counseled to prepare them for

posthospital care.

(6) The discharge plan must inform

the patient or patient’s family as to their

freedom to choose among participating

Medicare providers of care when a

variety of willing providers is available

and must, when possible, respect

patient and family preferences when

they are expressed. However, the

discharge plan must not specify or

otherwise limit qualified providers that

are available to the patient.

(7) The discharge plan must identify,

in a form and manner specified by the

Secretary, any home health agency to

whom the patient is referred in which

the hospital has a disclosable financial

interest, as specified by the Secretary

consistent with section 1866(a)(1)(S) of

the Act, or those entities that have a

financial interest in the hospital.

(d) Standard: Transfer or referral. The

hospital must transfer or refer patients,

along with necessary medical

information, to appropriate facilities,

agencies, or outpatient services, as

needed, for followup or ancillary care.

(e) Standard: Reassessment. (1) The

hospital must reassess its discharge

planning process on an ongoing basis.

The reassessment must include a review

of discharge plans to ensure that they

are responsive to discharge needs.

(2) The hospital’s discharge planning

process must be an integral part of the

hospital’s quality assessment and

performance improvement program.

Subpart C—Organizational

Environment

§ 482.110 Condition of participation:

Administration of organizational

environment.

A governing body, other organized

group, or an individual has full legal

authority and responsibility for the

management and provision of all

hospital services, and develops and

implements policies and procedures

necessary for the effective

administration of the hospital. This

includes care furnished under contracts

or arrangements, fiscal operations,

continuous quality assessment and

performance improvement, and

appointing a qualified administrator

who is responsible for the day-to-day

operations of the program.

(a) Standard: Federal, State and local

laws. The hospital is in compliance with

applicable Federal, State and local laws

related to the health and safety of

patients and licensure of hospitals.

(b) Standard: Administrative

responsibilities. (1) The governing body,

other organized group, or responsible

individual is responsible for all services

furnished to the hospital’s patients,

including outpatient services and those

provided under contract or

arrangements (including those for

shared services and joint ventures), and

ensures that the hospital is in

compliance with all applicable

conditions of participation and

standards.

(2) The governing body, other

organized group, or responsible

individual must notify HCFA or the

State survey agency when the hospital—

(i) Adds a new service category to the

list of services it offers; or

(ii) Adds a new service site.

(3) The governing body, other

organized group, or individual that

assumes full legal authority and

responsibility for the operation of the

hospital is responsible for development,

implementation, and administration of

the institutional plan and budget. The

institutional plan and budget must

include, but are not limited to:

(i) An annual operating budget that

includes all anticipated income and

expenses related to items that would,

under generally accepted accounting

principles, be considered income and

expense items. (This paragraph does not

require the preparation, in connection

with any budget, of an item-by-item

identification of the components of each

type of anticipated expenditure or

income.)

(ii) A capital expenditures plan for at

least a 3-year period (including the year

to which the operating budget described

is applicable) that includes and

identifies in detail the anticipated

sources of financing for, and the

objectives of, each anticipated

expenditure in excess of $600,000 (or

such lesser amount as may be

established by the State in which the

hospital is located, in accordance with

section 1122(g)(1) of the Act) related to

the acquisition of land, the

improvement of land, buildings, and

equipment, and the replacement,

modernization, and expansion of the

buildings and equipment that would,

under generally accepted accounting

principles, be considered capital items.

(iii) A plan submitted to the agency

designated under section 1122(b) of the

Act, or if no such agency is designated,

to the appropriate health planning

agency in the State (but this shall not

apply in the case of a facility exempt

from review under section 1122 by

reason of section 1122(j)).

(iv) Review and updating at least

annually.

(v) Preparation, under the direction of

the governing body, other organized

group, or responsible individual, by a

committee consisting of representatives

of the governing body, the

administrative staff, and the medical

staff of the institution or agency.

(4) The governing body, other

organized group, or individual that

assumes full legal authority and

responsibility for the operation of the

hospital appoints the medical staff’s

members and approves its bylaws.

(c) Standard: Organ procurement

responsibilities. (1) The governing body,

other organized group, or responsible

individual must ensure that the hospital

has written protocols that—

(i) Identify potential organ donors as

defined by the OPO with which the

hospital has an agreement;

(ii) Assure, in collaboration with the

OPO with which the hospital has an

agreement, that the family of each

potential organ donor knows of its

option either to donate organs or tissues

or to decline to donate;

(iii) Encourage discretion and

sensitivity with respect to the

circumstances, views and beliefs of the

families of potential donors; and

(iv) Ensure that the hospital works

cooperatively with the OPO with which

the hospital has an agreement, in
66760 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

educating staff on donation issues,

reviewing death records to improve

identification of potential donors, and

maintaining potential donors while

necessary testing and placement of

potential donated organs take place;

(2) The hospital must notify the OPO

designated by the Secretary under

§ 486.316(c) of this chapter of all

potential organ donors using protocols

defined by the OPO.

(3) A hospital in which organ

transplants are performed must be a

member of the Organ Procurement and

Transplantation Network (OPTN)

established and operated in accordance

with section 372 of the Public Health

Service (PHS) Act (42 U.S.C. 274) and

abide by its rules. The term ‘‘rules of the

OPTN’’ means those rules provided for

in regulations issued by the Secretary in

accordance with section 372 of the PHS

Act. No hospital is considered to be out

of compliance with section 1138(a)(1)(B)

of the Act, or with the requirements of

this paragraph, unless the Secretary has

given the OPTN formal notice that he or

she approves the decision to exclude the

hospital from the OPTN and has

notified the hospital in writing.

(4) For purposes of this standard, the

term ‘‘organ’’ means a human kidney,

liver, heart, lung, or pancreas.

§ 482.115 Condition of participation:

Infection control.

The hospital maintains an effective

infection control program that protects

patients and hospital staff by preventing

and controlling infections and

communicable disease.

(a) Standard: Sanitary environment.

The hospital must provide a sanitary

environment by following acceptable

standards of practice to avoid sources

and transmission of infections and

communicable diseases.

(b) Standard: Infection control

program. The hospital must maintain an

active program for the prevention,

control, and investigation of infections

and communicable diseases that—

(1) Is under the direction of a

designated infection control officer;

(2) Is an integral part of the hospital’s

quality assessment and performance

improvement program; and

(3) Includes a method of identifying

problems and taking appropriate actions

that result in improvement.

§ 482.120 Condition of participation:

Information management.

The hospital maintains information

systems to record, communicate, and

measure hospital performance. The

information systems may include

manual systems, automated systems, or

both, depending on the complexity of

the hospital, to record and maintain the

clinical and operations data necessary

for patient care.

(a) Standard: Health information

system. (1) The hospital maintains

clinical records on all patients.

(2) The patient record must document

the patient stay (whether inpatient or

outpatient). This includes recording, to

the extent they are performed or used,

the diagnosis, comprehensive

assessment and plan of care,

evaluations, consent forms, notes on

treatments, nursing, medications,

reactions, a summary report with

provisions for followup care, and any

other relevant reports.

(3) The interdisciplinary plan of care

is a part of the patient record, and any

revisions to the plan of care are

accurately documented by the hospital.

(4) The patient record must note,

within 30 days of discharge, the final

diagnosis and clinical outcomes of the

patient stay.

(5) All patient record entries,

including those made as a result of

verbal orders, must be legible, dated,

and authenticated in written or

electronic form by whomever is

responsible for ordering or providing

the service.

(6) Patient records must be retained in

a reproducible format for at least 5

years.

(7) The hospital must retain original

films, scans, and other image records (or

copies), as appropriate, for at least 5

years.

(8) If a hospital performs any type of

transplants, it must provide requested

transplant-related data to the Organ

Procurement and Transplantation

Network, the Scientific Registry, the

organ procurement organizations, and

the Department of Health and Human

Services as requested by the Secretary.

(b) Standard: Management of the

information systems.

(1) The information systems must be

maintained to provide for the timely

recording, integration, and retrieval of

data as well as the transmission of data

to authorized parties.

(2) The information systems must

contain system standards and

procedures to ensure the integrity,

efficiency, confidentiality, and security

of data.

(3) Medical information about the

patient (inpatient or outpatient) must be

available to all authorized professional

personnel providing medical care to the

patient.

§ 482.125 Condition of participation:

Human resources.

All hospital areas are staffed with

qualified personnel, who are present in

sufficient numbers to meet the needs of

the hospital’s patients.

(a) Standard: Credentials/

qualifications. (1) The hospital ensures

that individuals who supervise and/or

furnish services to hospital patients,

including services furnished under

contracts or arrangements, are qualified

to provide or supervise the services, and

that types of practitioners allowed to

practice without direct supervision have

delineated clinical privileges for these

services.

(2) The hospital grants clinical

privileges, and periodically reappraises

and renews (or denies renewal of) those

privileges. If State law requires that an

employee, contractor, or a practitioner

with practice privileges be licensed, the

hospital verifies (and periodically

reverifies) compliance with applicable

licensure requirements, and documents

that verification.

(3) The medical staff operates under

bylaws that are approved by the

governing body, establishes the criteria

for selection of its members, examines

the credentials of candidates and

recommends eligible candidates to the

governing body.

(b) Standard: Staffing. (1) Staffing for

all services provided by the hospital

reflects the volume of patients, patient

acuity, and the level of intensity of the

services provided to ensure that desired

outcomes of care are achieved and

negative outcomes are avoided.

(2) In implementing the requirements

of paragraph (b) (1) of this section, the

hospital must develop and use

consistently an explicit process to

determine on an ongoing basis the

needed level of nursing staff (including

registered nurses, licensed practical

nurses, and nursing assistants). This

methodology and evidence of its use in

meeting the nursing staffing needs of the

patients must be available for public

inspection.

(3) The hospital must provide 24-hour

nursing services furnished or supervised

by a registered nurse, and have a

licensed practical nurse or registered

nurse on duty at all times, except for

rural hospitals that have in effect a

waiver of the 24-hour nursing service

requirement granted under § 488.54(c)

of this chapter.

(4) A registered nurse must be

immediately available for bedside care

of any patient, when needed.

(5) A registered nurse must be

responsible for the provision and

evaluation of nursing care for each

patient and must assign the nursing care

of each patient to other nursing

personnel in accordance with the

patient’s needs and the specialized
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66761

1When this proposed rule is adopted, the 1994

edition of the Life Safety Code will be available for

inspection at the HCFA Information Resource

Center, 7500 Security Boulevard, Central Building,

Baltimore, MD, and at the Office of the Federal

Register, 800 North Capitol Street, NW, Suite 700,

Washington, DC. Copies of this publication may be

purchased from the National Fire Protection

Association, Battermarch Park, Quincy, MA 02269.

qualifications and competence of the

nursing staff available.

(6) The hospital must ensure that all

licensed nurses working in the hospital

adhere to the policies and procedures of

the hospital. The hospital must provide

for the adequate supervision and

evaluation of the clinical activities of

nonemployee nursing personnel.

(c) Standard: Education, training, and

performance evaluation. (1) The

hospital must ensure that all personnel

furnishing health care services in the

hospital are provided with the necessary

education and training on the nature of

their duties so that they can furnish

services effectively, efficiently, and

competently. This education and

training includes, but is not limited to,

the individual job description,

performance expectations, applicable

organizational policies and procedures,

safety responsibilities, infection control

program, and quality assessment and

performance improvement activities

within the hospital.

(2) All personnel furnishing health

care services in the hospital must

demonstrate in practice the skills and

techniques necessary to perform their

duties and responsibilities.

§ 482.130 Condition of participation:

Physical environment.

The hospital must maintain a safe

physical environment free of hazards for

patients.

(a) Standard: Safety management. (1)

The hospital must prevent situations

that pose a threat to health or property

whenever possible; when they do occur,

the hospital must report and correct

them promptly.

(2) The hospital must prevent

equipment failures whenever possible;

when they do occur, the hospital must

report and correct them promptly.

(3) The hospital must promptly report

and investigate all incidents that

involve injury to patients or that involve

damage to property.

(4) The hospital must have an

emergency preparedness system for

managing the consequences of power

failures, natural disasters or other

emergencies that disrupt the hospital’s

ability to provide care.

(b) Standard: Physical plant and

equipment. (1) There must be

procedures for the proper routine

storage and prompt disposal of trash

and medical waste.

(2) There must be proper light,

temperature, and ventilation controls

throughout the hospital including

appropriate air exchanges for patient

care.

(3) There must be emergency power

and lighting for life-support equipment,

regardless of location, and for

emergency exit areas and stairwells. The

hospital must make available in all

other areas not served by the emergency

supply source, battery lamps and

flashlights. The hospital must make

available facilities for emergency gas

and water supply.

(4) All equipment used to furnish

patient care services must be properly

maintained.

§ 482.135 Condition of participation: Life

safety from fire.

Except as provided in paragraphs (a)

and (b) of this section, the hospital must

meet the applicable provisions of the

1994 edition of the Life Safety Code of

the National Fire Protection Association

(LSC), which is incorporated by

reference. Incorporation by reference of

the LSC, 1994 edition, was approved by

the Director of the Federal Register in

accordance with 5 U.S.C. 552(a) and 1

CFR part 51.1

(a) Waivers. After consideration of

State survey agency findings, HCFA

may waive specific provisions of the

Life Safety Code that, if rigidly applied,

would result in unreasonable hardship

upon the facility, but only if the waiver

does not adversely affect the health and

safety of patients.

(b) Exception. The provisions of the

Life Safety Code do not apply in a State

where HCFA finds that a fire and safety

code imposed by State law adequately

protects patients in hospitals.

§ 482.140 Condition of participation: Blood

and blood product transfusions.

The hospital must administer blood

and blood product transfusions

according to approved medical staff and

nursing policies and procedures, and

ensure the safety of individuals being

transfused within the facility.

(a) Standard: Transfusion reactions.

The hospital must have procedures for

identifying, averting, responding

promptly to, investigating, tracking, and

reporting blood and blood product

transfusion reactions to the laboratory

and, as appropriate, to Federal and State

authorities.

(b) Standard: Safety and accessibility.

The hospital must take appropriate

measures to ensure the positive

identification of the blood or blood

product and the recipient. Blood and

blood product must be stored at the

appropriate conditions, including

temperature, to prevent deterioration.

Blood and blood products must be

readily accessible to the appropriate

medical and nursing staff.

§ 482.145 Condition of participation:

Potentially infectious blood and blood

products.

(a) Potentially HIV infectious blood

and blood products. Potentially HIV

infectious blood and blood products are

prior collections from a donor who

tested negative at the time of donation

but tests repeatedly reactive for the

antibody to the human

immunodeficiency virus (HIV) on a later

donation, and the FDA-licensed, more

specific test or other follow-up testing

recommended or required by FDA is

positive and the timing of

seroconversion cannot be precisely

estimated.

(b) Services furnished by an outside

blood bank. If a hospital regularly uses

the services of an outside blood bank, it

must have an agreement with the blood

bank that governs the procurement,

transfer, and availability of blood and

blood products. The agreement must

require that the blood bank promptly

notify the hospital of the following:

(1) If it supplied blood and blood

products collected from a donor who

tested negative at the time of donation

but tests repeatedly reactive for the

antibody to HIV on a later donation.

(2) The results of the FDA-licensed,

more specific test or other follow-up

testing recommended or required by

FDA completed within 30 calendar days

after the donor’s repeatedly reactive

screening test. (FDA regulations

concerning HIV testing and lookback

procedures are set forth at 21 CFR

610.45—et seq.)

(c) Quarantine of blood and blood

products pending completion of testing.

If the blood bank notifies the hospital of

the repeatedly reactive HIV screening

test results as required by paragraph

(b)(1) of this section, the hospital must

determine the disposition of the blood

or blood product and quarantine all

blood and blood products from previous

donations in inventory.

(1) If the blood bank notifies the

hospital that the result of the FDAlicensed, more specific test or other

followup testing recommended or

required by FDA is negative, absent

other informative test results, the

hospital may release the blood and

blood products from quarantine.

(2) If the blood bank notifies the

hospital that the result of the FDAlicensed, more specific test or other

followup testing recommended or

required by FDA is positive, the hospital
66762 Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules

must dispose of the blood and blood

products in accordance with 21 CFR

606.40 and notify patients in accordance

with paragraph (d) of this section.

(d) Patient notification. If the hospital

has administered potentially HIV

infectious blood or blood products

(either directly through its own blood

bank or under an agreement described

in paragraph (b) of this section) or

released such blood or blood products

to another entity or appropriate

individual, the hospital must take the

following actions:

(1) Promptly make at least three

attempts to notify the patient’s attending

physician (that is, the physician of

record) or the physician who ordered

the blood or blood product that

potentially HIV infectious blood or

blood products were transfused to the

patient.

(2) Ask the physician to immediately

notify the patient, or other individual as

permitted under paragraph (h) of this

section, of the need for HIV testing and

counseling.

(3) If the physician is unavailable,

declines to make the notification, or

later informs the hospital that he or she

was unable to notify the patient,

promptly make at least three attempts to

notify the patient, or other individual as

permitted under paragraph (h) of this

section, of the need for HIV testing and

counseling.

(4) Document in the patient’s medical

record the notification or attempts to

give the required notification.

(e) Timeframe for notification. The

notification effort begins when the

blood bank notifies the hospital that it

received potentially HIV infectious

blood and blood products and continues

for 8 weeks unless—

(1) The patient is located and notified;

or

(2) The hospital is unable to locate the

patient and documents in the patient’s

medical record the extenuating

circumstances beyond the hospital’s

control that caused the notification time

frame to exceed 8 weeks.

(f) Content of notification. The

notification given under paragraphs (d)

of this section must include the

following information:

(1) A basic explanation of the need for

HIV testing and counseling.

(2) Enough oral or written information

so that the transfused patient can make

an informed decision about whether to

obtain HIV testing and counseling.

(3) A list of programs or places where

the patient can obtain HIV testing and

counseling, including any requirements

or restrictions the program may impose.

(g) Policies and procedures. The

hospital must establish policies and

procedures for notification and

documentation that conform to Federal,

State, and local laws, including

requirements for confidentiality and

medical records.

(h) Notification to legal representative

or relative. If the patient has been

adjudged incompetent by a State court,

the physician or hospital must notify a

legal representative designated in

accordance with State law. If the patient

is competent, but State law permits a

legal representative or relative to receive

the information on the patient’s behalf,

the physician or hospital must notify

the patient or his or her legal

representative or relative. If the patient

is deceased, the physician or hospital

must continue the notification process

and inform the deceased patient’s legal

representative or relative.

§ 482.150 Condition of participation:

Utilization review.

The hospital must have a utilization

review (UR) plan that provides for

review of services furnished by the

institution and by members of the

medical staff to patients entitled to

benefits under the Medicare and

Medicaid programs.

(a) Standard: Applicability. The

provisions of this section apply except

in either of the following

circumstances—

(1) A Utilization and Quality Control

Peer Review Organization (PRO) has

assumed binding review for the

hospitals.

(2) HCFA has determined that the UR

procedures established by the State

under title XIX of the Act are superior

to the procedures required in this

section, and has required hospitals in

that State to meet the UR plan

requirements under §§ 456.50 through

456.245 of this chapter.

(b) Standard: Composition of

utilization review committee. A UR

committee consisting of two or more

practitioners must carry out the UR

function. At least two members of the

committee must be doctors of medicine

or osteopathy. The other members may

be any of the other types of practitioners

specified in § 482.20(a).

(1) Except as specified in paragraphs

(b)(2) and (3) of this section, the UR

committee must be one of the

following—

(i) A staff committee of the institution.

(ii) A group outside the institution

that is established—

(A) By the local medical society and

some or all of the hospitals in the

locality; or

(B) In a manner approved by HCFA.

(2) If, because of the small size of the

institution, it is impracticable to have a

properly functioning staff committee,

the UR committee must be established

as specified in paragraph (b)(1)(ii) of

this section.

(3) The committee’s or group’s

reviews may not be conducted by any

individual who—

(i) Has a direct financial interest (for

example, an ownership interest) in that

hospital; or

(ii) Has been professionally involved

in the care of the patient whose case is

being reviewed.

(c) Standard: Scope and frequency of

review.

(1) The UR plan must provide for

review for Medicare and Medicaid

patients with respect to the medical

necessity of each of the following—

(i) Admissions to the institution.

(ii) The duration of stays.

(iii) Professional services furnished,

including drugs and biologicals.

(2) Review of admissions may be

performed before, at, or after hospital

admission.

(3) Except as specified in paragraph

(e) of this section, reviews may be

conducted on a sample basis.

(4) Hospitals that are paid for

inpatient hospital services under the

prospective payment system set forth in

part 412 of this chapter must conduct

review of duration of stays and review

of professional services as follows:

(i) For duration of stays, these

hospitals need review only cases that

they reasonably assume to be outlier

cases based on extended length of stay,

as described in § 412.80(a)(1)(i) of this

chapter; and

(ii) For professional services, these

hospitals need review only cases that

they reasonably assume to be outlier

cases based on extraordinarily high

costs, as described in § 412.80(a)(1)(ii) of

this chapter.

(d) Standard: Determination regarding

admissions or continued stays.

(1) The determination that an

admission or continued stay is not

medically necessary—

(i) May be made by one member of the

UR committee if the practitioner or

practitioners responsible for the care of

the patient, as specified in § 482.20(a),

concur with the determination or fail to

present their views when afforded the

opportunity; and

(ii) Must be made by at least two

members of the UR committee in all

other cases.

(2) Before making a determination

that an admission or continued stay is

not medically necessary, the UR

committee must consult the practitioner

or practitioners responsible for the care

of the patient, as specified in

§ 482.20(a), and afford the practitioner
Federal Register / Vol. 62, No. 244 / Friday, December 19, 1997 / Proposed Rules 66763

or practitioners the opportunity to

present their views.

(3) If the committee decides that

admission to or continued stay in the

hospital is not medically necessary,

written notification must be given, not

later than 2 days after the

determination, to the hospital, the

patient, and the practitioner or

practitioners responsible for the care of

the patient, as specified in § 482.20(a).

(e) Standard: Extended stay review.

(1) In hospitals that are not paid under

the prospective payment system, the UR

committee must make a periodic review,

as specified in the UR plan, of each

current inpatient receiving hospital

services during a continuous period of

extended duration. The scheduling of

the periodic reviews may—

(i) Be the same for all cases; or

(ii) Differ for different classes of cases.

(2) In hospitals paid under the

prospective payment system, the UR

committee must review all cases

reasonably assumed by the hospital to

be outlier cases because the extended

length of stay exceeds the threshold

criteria for the diagnosis, as described in

§ 412.80(a)(1)(i). The hospital is not

required to review an extended stay that

does not exceed the outlier threshold for

the diagnosis.

(3) The UR committee must make the

periodic review no later than 7 days

after the day required in the UR plan.

(f) Standard: Review of professional

services. The committee must review

professional services provided, to

determine medical necessity and to

promote the most efficient use of

available health facilities and services.

Subpart E—[Redesignated as Subpart

D]

Subpart E—Requirements for

Specialty Hospitals is redesignated as

Subpart D. Sections 482.60, 482.61,

482.62,and 482.66 are redesignated as

§§ 482.155, 482.160, 482.165, and

482.170, respectively.

C. Part 485 is amended as follows:

PART 485—CONDITIONS OF

PARTICIPATION: SPECIALIZED

PROVIDERS

1. The authority citation for part 485

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

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

1395hh).

Subpart F—Conditions of

Participation: Critical Access Hospitals

(CAHs)

2. Section 485.639(c) is revised to

read as follows:

§ 485.639 Condition of participation:

Surgical services.

* * * * *

(c) Administration of Anesthesia. The

CAH designates the person who is

allowed to administer anesthesia to

CAH patients in accordance with its

approved policies and procedures and

with State scope of practice laws.

Anesthesia is administered only by a

licensed practitioner permitted by the

State to administer anesthetics.

* * * * *

D. Part 489 is amended as follows:

PART 489—PROVIDER AGREEMENTS

AND SUPPLIER APPROVAL

1. The authority citation for part 489

continues to read as follows:

Authority: Secs. 1102 and 1871 of the

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

1395hh).

2. Section 489.53 is amended by

republishing paragraph (a) introductory

text, redesignating paragraphs (a)(6)

through (a)(14) as paragraphs (a)(7)

through (a)(15), respectively, and adding

a new paragraph (a)(6), to read as

follows:

§ 489.53 Termination by HCFA.

(a) Basis for termination of agreement

with any provider. HCFA may terminate

the agreement with any provider if

HCFA finds that any of the following

failings is attributable to that provider:

* * * * *

(6) It refuses to allow access to its

facilities, or examination of its

operations or records, by or on behalf of

HCFA, as necessary to verify that it is

complying with the provisions of title

XVIII and the applicable regulations of

this chapter, or with the provisions of

this agreement. (However, this

paragraph is not to be construed to

require the disclosure of the records of

a skilled nursing facility quality

assessment and assurance committee, if

such disclosure would be inconsistent

with § 483.75(o) of this chapter.)

* * * * *

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare Hospital

Insurance; Program No. 93.778, Medical

Assistance Program)

Dated: November 26, 1997.

Nancy-Ann Min DeParle,

Administrator, Health Care Financing

Administration.

Dated: December 10, 1997.

Donna E. Shalala,

Secretary.

[FR Doc. 97–32793 Filed 12–15–97; 8:45 am]

BILLING CODE 4120–01–P