Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 65909 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Chapter IV 

[CMS–9070–P] 

RIN 0938–AQ96 

Medicare and Medicaid Program; 

Regulatory Provisions To Promote 

Program Efficiency, Transparency, and 

Burden Reduction 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule identifies 

and proposes reforms in Medicare and 

Medicaid regulations that CMS has 

identified as unnecessary, obsolete, or 

excessively burdensome on health care 

providers and beneficiaries. This 

proposed rule would increase the ability 

of health care professionals to devote 

resources to improving patient care, by 

eliminating or reducing requirements 

that impede quality patient care or that 

divert providing high quality patient 

care. This is one of several rules that we 

are proposing to achieve regulatory 

reforms under Executive Order 13563 

on Improving Regulation and Regulatory 

Review and the Department’s Plan for 

Retrospective Review of Existing Rules. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on December 23, 2011. 

ADDRESSES: In commenting, please refer 

to file code CMS–9070–P. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four ways (please choose only one of the 

ways listed): 

1. Electronically. You may submit 

electronic comments on this regulation 

to http://www.regulations.gov. Follow 

the ‘‘Submit a comment’’ instructions. 

2. By regular mail. You may mail 

written comments to the following 

address ONLY: Centers for Medicare & 

Medicaid Services, Department of 

Health and Human Services, Attention: 

CMS–9070–P, P.O. Box 8012, Baltimore, 

MD 21244–1850. 

Please allow sufficient time for mailed 

comments to be received before the 

close of the comment period. 

3. By express or overnight mail. You 

may send written comments to the 

following address ONLY: Centers for 

Medicare & Medicaid Services, 

Department of Health and Human 

Services, Attention: CMS–9070–P, Mail 

Stop C4–26–05, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

4. By hand or courier. Alternatively, 

you may deliver (by hand or courier) 

your written comments ONLY to the 

following addresses prior to the close of 

the comment period: 

a. For delivery in Washington, DC— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, Room 445–G, Hubert 

H. Humphrey Building, 200 

Independence Avenue, SW., 

Washington, DC 20201. 

(Because access to the interior of the 

Hubert H. Humphrey Building is not 

readily available to persons without 

Federal government identification, 

commenters are encouraged to leave 

their comments in the CMS drop slots 

located in the main lobby of the 

building. A stamp-in clock is available 

for persons wishing to retain a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD— 

Centers for Medicare & Medicaid 

Services, Department of Health and 

Human Services, 7500 Security 

Boulevard, Baltimore, MD 21244–1850. 

If you intend to deliver your 

comments to the Baltimore address, call 

telephone number (410) 786–9994 in 

advance to schedule your arrival with 

one of our staff members. 

Comments erroneously mailed to the 

addresses indicated as appropriate for 

hand or courier delivery may be delayed 

and received after the comment period. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Ronisha Davis, (410) 786–6882. 

We have also included a subject 

matter expert and contact information 

under the ‘‘Provisions of the Proposed 

Regulations’’ section for each provision 

set out in this proposed rule. 

SUPPLEMENTARY INFORMATION: 

Inspection of Public Comments: All 

comments received before the close of 

the comment period are available for 

viewing by the public, including any 

personally identifiable or confidential 

business information that is included in 

a comment. We post all comments 

received before the close of the 

comment period on the following Web 

site as soon as possible after they have 

been received: http:// 

www.regulations.gov. Follow the search 

instructions on that Web site to view 

public comments. 

Comments received timely will also 

be available for public inspection as 

they are received, generally beginning 

approximately 3 weeks after publication 

of a document, at the headquarters of 

the Centers for Medicare & Medicaid 

Services, 7500 Security Boulevard, 

Baltimore, Maryland 21244, Monday 

through Friday of each week from 

8:30 a.m. to 4 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

In January 2011, the President issued 

Executive Order 13563, ‘‘Improving 

Regulations and Regulatory Review.’’ 

Section 6 of that order requires agencies 

to identify rules that may be 

‘‘outmoded, ineffective, insufficient, or 

excessively burdensome, and to modify, 

streamline, expand, or repeal them in 

accordance with what has been 

learned.’’ In accordance with the 

Executive Order, the Secretary of the 

Department of Health & Human Services 

(HHS) published on May 18, 2011, a 

Preliminary Plan for Retrospective 

Review of Existing Rules (http:// 

www.whitehouse.gov/21stcenturygov/ 

actions/21st-century-regulatory-system). 

As shown in the plan, the Centers for 

Medicare & Medicaid Services (CMS) 

has identified many obsolete and 

burdensome rules that could be 

eliminated or reformed to improve 

effectiveness or reduce unnecessary red 

tape and other costs, with a particular 

focus on freeing up resources that health 

care providers, health plans, and States 

could use to improve or enhance patient 

health and safety. CMS has also 

examined policies and practices not 

codified in rules that could be changed 

or streamlined to achieve better 

outcomes for patients while reducing 

burden on providers of care. CMS has 

also identified non-regulatory changes 

to increase transparency and to become 

a better business partner. 

As explained in the plan, HHS is 

committed to the President’s vision of 

creating an environment where agencies 

incorporate and integrate the ongoing 

retrospective review of regulations into 

Department operations to achieve a 

more streamlined and effective 

regulatory framework. The objective is 

to improve the quality of existing 

regulations consistent with statutory 

requirements; streamline procedural 

solutions for businesses to enter and 

operate in the marketplace; maximize 

net benefits (including benefits that are 

difficult to quantify); and reduce costs 

and other burdens on businesses to 

comply with regulations. Consistent 

with the commitment to periodic review 

and to public participation, HHS will 

continue to assess its existing significant 

regulations in accordance with the 

requirements of Executive Order 13563. 


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65910 Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 

HHS welcomes public suggestions about 

appropriate reforms. If, at any time, 

members of the public identify possible 

reforms to streamline requirements and 

to reduce existing burdens, HHS will 

give those suggestions careful 

consideration. Therefore, along with 

this proposed rule, we seek ideas from 

the public to help identify areas for 

possible reform. 

II. Provisions of the Proposed 

Regulations 

The following is a description of each 

of the proposals set forth in this 

proposed rule. We have grouped the 

proposals into three categories—(1) 

Removes unnecessarily burdensome 

requirements; (2) removes obsolete 

regulations; and (3) responds to 

stakeholder concerns. There are 14 

specific reforms included in this 

proposed rule. As noted above, we seek 

comments on additional areas for future 

reforms in these three areas or others. 

A. Removes Unnecessarily Burdensome 

Requirements 

The following proposals seek to 

provide some form of burden relief to 

providers and suppliers by modifying, 

removing, or streamlining current 

regulations that we have identified as 

excessively burdensome. 

1. End-Stage Renal Disease (ESRD) 

Facilities (§ 494.60) 

Current regulations at 42 CFR part 494 

provide Conditions for Coverage (CfCs) 

for Medicare-participating end-stage 

renal disease (ESRD) facilities. Effective 

February 9, 2009, these regulations were 

updated to include Federal Life Safety 

Code (LSC) provisions that we applied 

to ESRD facilities to standardize CMS 

regulations across provider types. When 

the new regulation was first 

promulgated, we believed that 

standardized application of the LSC was 

desirable and that the costs for ESRD 

facilities would not be excessive. 

However, we have since determined 

that standardization may not be 

appropriate given the non-residential 

and unique characteristics of ESRD 

facilities and the increased burden 

created by these requirements without 

the commensurate benefit. Chapters 20 

and 21 of the National Fire Protection 

Agency’s (NFPA) 101 LSC, 2000 

Edition, were incorporated by reference 

in the ESRD regulations at § 494.60(e). 

When implemented, these Federal 

LSC regulations were found to duplicate 

many provisions of already existing 

State and local fire safety codes covering 

ESRD facilities. Although the State and 

local codes protected patients from fire 

hazards, the NFPA 101 LSC 

retroactively imposed some additional 

structural requirements. We believe that 

some of these additional requirements, 

such as smoke compartments (per 

section 20.3.7/21.3.7 of NFPA 101) are 

unnecessary for most ESRD facilities. 

Smoke compartments, for example, are 

required in hospital and ambulatory 

surgical centers where patients are 

anesthetized, unconscious, or sleeping 

overnight. Smoke compartments are 

unnecessary in ESRD facilities as these 

compartments support a ‘‘defend in 

place’’ fire strategy which assumes the 

occupants of a location cannot 

immediately evacuate in case of fire. 

However, in dialysis facilities, the 

evacuation process from fire is rapid 

disconnection from the dialysis 

machine and a quick exit. 

In retrospect, the additional structural 

requirements of NFPA 101 potentially 

could improve patient safety from fire in 

specific dialysis facilities that pose a 

higher risk for life safety from fire by 

their proximity to a potential fire source 

or their barriers to prompt evacuation 

from fire. These higher risk locations are 

those dialysis facilities that are adjacent 

to occupancies that contain ‘‘industrial 

high hazard contents’’ and those 

facilities that do not have a readily 

available exit to the outside for swift, 

unencumbered evacuation. 

Data demonstrate that there is an 

extremely low risk of fire in outpatient 

dialysis facilities, and there are no 

recorded patient injuries or death due to 

fire in the 40 years of the Medicare 

ESRD program. The Federal Emergency 

Management Agency’s (FEMA) Topical 

Fire Report Series (TFRS) documented 

the low fire risk of ESRD facilities, 

which ranked lowest (0.1 percent) in 

fire incidence among all health care 

facilities. (Medical Facility Fires, TFRS 

Volume 9, Issue 4). The reason that the 

fire risk is so low in dialysis facilities is 

due to the following combination of 

factors: 

• ESRD facilities do not have fire 

ignition sources commonly found in 

other medical facilities, for example, 

cooking, anesthesia, paint shops, or 

piped-in gases, and are generally 

configured with open patient treatment 

areas providing exits directly to the 

outside; 

• Dialysis patients are not 

anesthetized and are required at 

§ 494.60(d)(2) of the ESRD regulation to 

be trained in emergency disconnect 

from their dialysis treatment and 

evacuation from the building; 

• Section 494.60(d)(4) of the ESRD 

regulation requires that staff be present 

in the patient treatment area at all times 

during treatment and therefore 

immediately available to assist in 

emergency evacuation. 

While the risks of fire are very low in 

a dialysis facility, the costs of 

complying with the Federal LSC 

requirements in dialysis facilities are 

high. Through research discussed in the 

following paragraph, CMS has learned 

that the actual costs for renovation and 

construction necessary for compliance 

with the additional requirements of 

NFPA 101 for dialysis facilities are 

considerable and profoundly exceed the 

original government estimate of $1,960 

as published in the preamble to the new 

2008 ESRD/LSC regulations. 

To estimate the true costs for 

renovation and construction necessary 

to comply with the requirements for 

NFPA 101, in June 2011, CMS asked 

ESRD providers to provide estimates of 

the financial impact of implementing 

four potentially-costly additional 

requirements of NFPA 101. They 

included smoke compartment barriers, 

occupancy separations, hazardous area 

separations, and upgraded fire alarms. 

Owners of 3,756 of 5,600 existing 

certified dialysis facilities responded to 

the CMS request for cost projections. 

The responders represented 

approximately 70 percent of existing 

dialysis facilities, including hospitalowned facilities and those owned by 

small, medium, and large dialysis 

organizations. 

The data collected showed that 

approximately 50 percent (an estimated 

2,800) of the existing ESRD facilities 

would require renovations or upgrading 

of at least one of the four elements to 

comply with the requirements of NFPA 

101. There are several reasons why, in 

June 2011, approximately 50 percent of 

existing dialysis facilities had not been 

renovated to comply with the February 

2009 implementation date. The primary 

reason is the pervasive inconsistency in 

knowledge, interpretation, and 

application of NFPA 101 to ESRD 

facilities that we have become aware of 

since the 2009 implementation date. 

There was a high variability in the cost 

estimates submitted, ranging from a low 

of $23,500 to a high of $222,000 for an 

existing facility which needed to 

renovate, construct and upgrade all four 

components. The average per facility 

cost estimates submitted for the 

additional structural requirements of 

NFPA 101 are as follows: 

• Smoke compartments—$32,544. 

• Occupancy separation—$28,139. 

• Hazardous areas separation— 

$16,976. 

The total average cost for a facility to 

meet all three would be $77,659. We 

suspect that the variability of the 

estimates may be due to different State 


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and local requirements already in 

existence, differences in contractor 

costs, varying building characteristics 

(for example, age, size, construction 

type), and the inconsistent 

interpretations and applications of 

NFPA 101 that are prevalent across the 

nation. The wide range of estimates 

makes it difficult to determine an 

average cost related to implementation 

of NFPA 101. However, using the 

average costs for the individual 

structural requirements listed above, if 

50 percent or 2,800 facilities required 

only renovation for hazardous area 

separation, the savings would be $47.5 

million. If 2,800 facilities required 

renovation for all three structural 

requirements, the total savings from the 

burden reduction at the average estimate 

for all three would be $217 million. 

These amounts represent a significant 

financial burden on facilities, with little 

or no improvement in patient safety 

from fire for a majority of them. 

Expenditures of this magnitude would 

likely divert resources away from areas 

which do affect dialysis patient safety, 

such as infection control and 

prevention. 

The cost estimates do not account for 

the added burden that renovation to 

comply with NFPA 101 would impose 

on dialysis patients who must be 

relocated to other ESRD facilities for 

their treatments during construction. 

Significant additional costs would also 

be incurred by Federal government 

agencies and State Survey Agencies for 

oversight activities of LSC surveys 

which often duplicate State LSC 

surveys. 

Based on information gained since 

publication of the updated ESRD CfC, 

we have concluded that the enforcement 

of the Federal LSC requirements of 

NFPA 101 add costs out of proportion 

to any added protection that they may 

afford in dialysis facilities which are not 

at higher risk of fire penetration from 

adjacent industrial ‘‘high hazard’’ 

occupancies and where swift, 

unencumbered evacuation to the 

outside is available. Therefore, we 

propose revising § 494.60(e)(1) to 

restrict mandatory compliance with the 

NFPA 101 LSC to those ESRD facilities 

located adjacent to ‘‘high hazardous’’ 

occupancies and those facilities whose 

patient treatment areas are not located at 

grade level with direct access to the 

outside. This revision would retain the 

NFPA 101 LSC protections for those 

facilities in higher-risk locations while 

relieving burden on those for whom the 

subdivision of building space and other 

additional LSC requirements of NFPA 

101 are unnecessary. 

We intend to use the NFPA definition 

of ‘‘high hazard occupancy’’ found at 

A.3.3.134.8.2, Annex A, NFPA 101, Life 

Safety Code 2000, which applies to 

‘‘occupancies where gasoline and other 

flammable liquids are handled, used or 

stored under such conditions that 

involve possible release of flammable 

vapors; where grain dust, wood flour or 

plastic dusts, aluminum or magnesium 

dust, or other explosive dusts are 

produced; where hazardous chemicals 

or explosives are manufactured, stored, 

or handled; where cotton or other 

combustible fibers are processed or 

handled under conditions that might 

produce flammable flyings; and where 

other situations of similar hazard exist.’’ 

We note that all ESRD facilities would 

still be required to comply with State 

and local fire codes and safety standards 

under § 494.20. We also propose 

revising § 494.60(e)(2) to clarify which 

ESRD facilities must use sprinklerequipped buildings: those housed in 

multi-story buildings of lesser fire 

protected construction types (Types 

II(000), III(200), or V(000), as defined in 

NFPA 101), which were constructed 

after January 1, 2008; and those housed 

in high rise buildings over 75 feet in 

height. We note that this revision would 

not change the meaning or intent of 

§ 494.60(e)(2), but instead would clarify 

it. That provision states that dialysis 

facilities participating in Medicare as of 

October 14, 2008, may continue to use 

non-sprinklered buildings if such 

buildings were constructed before 

January 1, 2008, and State law so 

permits. 

The ESRD CfCs also address other 

topics related to fire and building safety 

that will remain in place under our 

proposed revision. These existing CfC 

requirements include specific rules on 

how to handle chemicals related to the 

dialysis process, as well as general 

requirements for appropriate training in 

emergency preparedness for the staff 

and patients, including provisions for 

instructions on disconnecting from the 

dialysis machine during an emergency 

and instructions on emergency 

evacuation. We welcome comments 

from the public on whether the other 

ESRD CfCs can be improved in a way 

that minimizes provider burden while 

protecting patient safety or, alternately, 

the extent to which remaining 

requirements are necessary and 

appropriate for the care and safety of 

dialysis patients. Similarly, we note that 

other CMS regulations include CfCs, 

and we seek comments on whether we 

should revisit these or other regulatory 

provisions or whether existing 

requirements are necessary and 

appropriate. 

Contact: Thomas Hamilton, 410–786– 

9493. 

2. ASC Emergency Equipment 

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

specifies that Ambulatory Surgical 

Centers (ASCs) must meet health, safety, 

and other requirements specified by the 

Secretary in regulation in order to 

participate in Medicare. The Secretary is 

responsible for ensuring that the 

Conditions for Coverage (CfCs) and their 

enforcement are adequate to protect the 

health and safety of all individuals 

treated by ASCs, whether they are 

Medicare beneficiaries or other patients. 

To implement the CfCs, we determine 

compliance through State survey 

agencies that conduct onsite inspections 

using these requirements. ASCs also 

may be deemed to meet Medicare 

standards if they are certified by one of 

the national accrediting organizations 

whose standards meet or exceed the 

CfCs. The ASC regulations were first 

published on August 5, 1982 (47 FR 

34082). Most of the revisions since then 

have been payment related with the 

exception of a final rule published on 

November 18, 2008 (73 FR 68502) that 

revised four existing health and safety 

CfCs and created three new health and 

safety CfCs (42 CFR 416.41 through 

416.43 and 416.49 through 416.52). 

Sections 416.44(c)(1) through (c)(9) 

provide a detailed list of specific 

emergency equipment that must be 

available to the ASC’s operating room, 

for example, emergency call system; 

oxygen; mechanical ventilator 

assistance equipment including airways, 

manual breathing bag, and ventilator; 

cardiac defibrillator; cardiac monitoring 

equipment; tracheotomy set; 

laryngoscopes and endotracheal tubes; 

suction equipment; and emergency 

medical equipment and supplies 

specified by the medical staff. In recent 

years, we have learned from the ASC 

community that some of this equipment 

is outdated, while other equipment is 

not applicable to the emergency needs 

of all ASCs. The emergency equipment 

CfC has not been revised since its 

inception in 1982. To ensure that no 

ASC is burdened with maintaining 

unnecessary equipment, we are 

proposing to revise the requirements for 

this CfC. 

We propose to remove the list of 

emergency equipment at § 416.44(c)(1) 

through (c)(9) and propose at § 416.44(c) 

to require that ASCs, in conjunction 

with their governing body and the 

medical staff, develop policies and 

procedures which specify the types of 

emergency equipment that would be 

appropriate for the facility’s patient 

population, and make the items 


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immediately available at the ASC to 

handle inter- or post-operative 

emergencies. We are also proposing that 

the emergency equipment identified by 

the ASC meet the current acceptable 

standards of practice in the ASC 

industry. We believe that these 

proposed changes would enable ASCs to 

better meet current demands, while also 

ensuring ASCs have the flexibility 

necessary to respond to emergency 

needs and incorporate the use of 

modern equipment most suitable for the 

procedures performed in the facility. 

We note that a potential disadvantage 

of the approach we propose is that, by 

allowing ASCs to identify the 

emergency equipment most appropriate 

for each individual facility, there could 

be increased variation in emergency 

preparedness between different ASCs, 

even among ASCs that provide very 

similar services. We therefore invite 

comment on our proposed approach and 

on any alternatives to our approach. An 

example of such an alternative might be 

for us to categorize ASCs according to 

the major services they provide (such as 

ASCs that typically use general 

anesthesia), and then specify a 

minimum array of equipment tailored to 

the various categories of risk. 

Contact: Jacqueline Morgan, 410–786– 

4282. 

3. Revocation of Enrollment and Billing 

Privileges in the Medicare Program 

(§ 424.535) 

On June 27, 2008, we published a 

final rule in the Federal Register (73 FR 

36448) entitled ‘‘Medicare Program; 

Appeals of CMS or CMS Contractor 

Determinations When a Provider or 

Supplier Fails to Meet the Requirements 

for Medicare Billing Privileges.’’ In that 

rule, we added a new provision at 

§ 424.535(c) to provide that: ‘‘After a 

provider, supplier, delegated official, or 

authorizing official has had their billing 

privileges revoked, they are barred from 

participating in the Medicare program 

from the effective date of the revocation 

until the end of the re-enrollment bar. 

The re-enrollment bar is a minimum of 

1 year, but not greater than 3 years, 

depending on the severity of the basis 

for revocation.’’ The purpose of this 

provision was to prevent providers and 

suppliers from being able to 

immediately re-enroll in Medicare after 

their billing privileges were revoked. 

Section 424.535(a)(1) and 

§ 424.535(c), respectively, provide 

that—(1) Medicare billing privileges 

may be revoked when a provider or 

supplier is determined not to be in 

compliance with our enrollment 

requirements; and (2) a post-revocation 

re-enrollment bar of a minimum of 1 

year shall be imposed. 

We believe that the re-enrollment bar 

is unnecessary in certain situations. 

Accordingly, we propose to eliminate 

the re-enrollment bar in instances when 

providers and suppliers have not 

responded timely to requests for 

revalidation of enrollment or other 

requests for information initiated by 

CMS. Specifically, we propose revising 

§ 424.535(c) to expressly provide that 

the re-enrollment bar would not apply 

if the revocation is based solely upon 

the failure of a provider or supplier to 

respond timely to a revalidation request 

or other request for information. We 

believe that this change is appropriate 

because the re-enrollment bar in such 

circumstances often results in 

unnecessarily harsh consequences for 

the provider or supplier and causes 

beneficiary access issues in some cases. 

We have learned of numerous instances 

when the provider’s failure to respond 

to a revalidation request was 

unintentional; that is, the provider was 

not aware of the request due to, for 

instance, misrouted mail or a clerical 

mistake. This is different from other 

revocation reasons, which may be more 

serious; for example, we revoke 

providers that have been excluded from 

Medicare, Medicaid, or other Federal 

health care programs or that have been 

convicted of a felony under 

§ 424.535(a)(2) and (a)(3), respectively. 

Finally, there is another, less restrictive 

regulatory remedy available for 

addressing a failure to respond timely to 

a revalidation request. This remedy is 

discussed below in section II.A.4.c. 

Contact: Morgan Burns, 202–690– 

5145. 

4. Deactivation of Medicare Billing 

Privileges (§ 424.540) 

On April 21, 2006, we published a 

final rule in the Federal Register (71 FR 

20753) entitled ‘‘Medicare Program; 

Requirements for Providers and 

Suppliers to Establish and Maintain 

Medicare Enrollment.’’ As part of that 

rule, we established provisions for the 

deactivation of Medicare billing 

privileges at § 424.540. 

a. Section 424.540(a)(1) 

Section 424.540(a)(1) specifies that 

Medicare billing privileges may be 

deactivated if Medicare claims are not 

submitted for 12 consecutive months. 

The purpose of this provision was to 

prevent situations in which unused, idle 

Medicare billing numbers could be 

accessed by individuals and entities to 

submit false claims. Currently, Medicare 

provider or supplier enrollment billing 

privileges are deactivated (made 

ineligible for Medicare billing purposes) 

for providers or suppliers that have not 

submitted a Medicare claim for 12 

consecutive months. If the deactivated 

provider does furnish services and 

attempts to submit a claim after the date 

of deactivation, the claim would be 

denied. Therefore, once deactivated, a 

new provider or supplier enrollment 

application must be submitted and 

processed by the Medicare contractor 

before the billing privileges can be 

reactivated. 

We propose to revise § 424.540(a) to 

apply only to those providers and 

suppliers who do not submit a Form 

CMS–855I (the enrollment form for 

individual physicians and nonphysician practitioners) to enroll in the 

Medicare program. Physicians and nonphysician practitioners are deactivated 

most often due to billing inactivity. To 

reactivate their Medicare billing 

privileges, they must resubmit an 

enrollment application. 

We are most concerned with 

organizations that fail to submit a claim 

within a 12-month period, since 

business organizations would generally 

submit a claim on a more frequent basis. 

Conversely, we believe that there are 

instances in which individual 

practitioners may have a valid reason 

for not filing claims within a 12-month 

period. For instance, the practitioner— 

(1) May be enrolled in Medicare, but 

generally only treats non-Medicare 

patients; or (2) may have two separatelyenumerated practice locations listed on 

its Form CMS–855I, yet typically only 

performs services at one of them. 

Further, the 12-month deactivation 

and reactivation processes also increase 

the workload and administrative costs 

of Medicare contractors. Accordingly, 

our proposal to revise § 424.540(a) 

would remove this unnecessary burden 

without jeopardizing our ability to 

detect and prevent fraud and abuse. We 

have issued guidance that requires our 

contractors to conduct certain 

verification activities to guard against 

physician and non-physician 

practitioner identity theft. We believe 

that this would lessen the danger that 

the unused billing numbers of these 

individuals would be accessed by others 

to submit false claims. 

b. Section 424.540(a)(2) 

Section 424.540(a)(2) specifies that a 

provider or supplier’s Medicare billing 

privileges may be deactivated if it fails 

to report a change to its enrollment 

information within 90 calendar days or, 

for changes in ownership or control, 

within 30 calendar days. We are not 

proposing to alter this provision. We 

believe it is necessary for providers and 


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suppliers to understand the importance 

of furnishing updated enrollment 

information to the Medicare program, 

for incorrect or aged data can lead to 

improper payments. 

c. Section 424.540(a)(3) 

We propose to add a new 

§ 424.540(a)(3) that would allow us to 

deactivate, rather than revoke, the 

Medicare billing privileges of a provider 

or supplier that fails to furnish complete 

and accurate information and all 

supporting documentation within 90 

calendar days of receiving notification 

to submit an enrollment application and 

supporting documentation, or resubmit 

and certify to the accuracy of its 

enrollment information. Although the 

deactivated provider or supplier would 

still have to submit a complete 

enrollment application to reactivate its 

billing privileges, it would remain 

enrolled in Medicare and would not be 

subject to other, ancillary consequences 

that a revocation entails: for instance, a 

prior revocation must be reported in 

section 3 of the Form CMS–855I 

application, whereas a prior 

deactivation need not. In fact, it is for 

this reason that we believe our proposal 

would reduce the burden on the 

provider and supplier communities. 

Contact: Morgan Burns, 202–690– 

5145. 

5. Duration of Agreement for 

Intermediate Care Facilities for the 

Intellectually Disabled (Referred to in 

Current Regulations as Intermediate 

Care Facilities for the Mentally 

Retarded) (§ 442.15 Through § 442.109) 

As described elsewhere in this 

preamble, we are replacing the use of 

the term ‘‘mentally retarded’’ with the 

term ‘‘intellectually disabled’’ as 

described in this program, so we have 

used the new term in these proposed 

provisions. 

Section 1910 of the Act provides for 

the certification and approval of 

Intermediate Care Facilities for the 

Intellectually Disabled (ICFs/ID). 

Current regulations at § 442.109 and 

§ 442.110 address ICFs/ID provider 

agreements and limit the ICFs/ID 

provider agreements under Medicaid to 

annual time limits. We propose to 

remove the time limited agreements for 

ICFs/ID at § 442.16. We also are 

proposing to eliminate this requirement 

at § 442.15, § 442.109, and § 442.110. 

We propose to replace the requirement 

with an open ended agreement which, 

consistent with nursing facilities (NFs), 

would remain in effect until the 

Secretary or a State determines that the 

ICF/ID no longer meets the conditions of 

participation for ICFs/ID at subpart I 

part 483. 

Also, we are proposing to add a 

requirement that a certified ICF/ID must 

be surveyed on average every 12 months 

with a maximum 15-month survey 

interval. Current regulations at 42 CFR 

part 442 require that ICFs/ID be 

surveyed for compliance with 

conditions of participation at least every 

12 months on a relatively fixed 

schedule. By contrast, nursing homes 

must be surveyed for compliance with 

certification standards at intervals of 

between 12 and 15 months. We 

anticipate the proposed change in the 

certification period would have positive 

impacts on the care provided in these 

facilities as well as the efficient and 

effective operation of State survey 

agencies responsible for regulating ICFs/ 

ID. We also anticipate that the adoption 

of flexible survey scheduling would 

encourage more consistent staffing at 

levels that support certification 

standards. 

In addition, State survey agency 

resources are strained by the rigid 

timelines imposed in the current 

regulation. For example, if a complaint 

results in an abbreviated survey 10 or 11 

months into the facility’s certification 

period, the current regulation does not 

allow the State agency to expand the 

complaint survey for the purpose of 

completing the requirements of annual 

certification at the same time. Instead, 

the State is required to conduct another 

full survey at 12 months, which is 

duplicative. More flexibility would 

allow States to use their survey staff in 

a targeted fashion, allocating resources 

where needed to assure resident safety 

and quality of care, rather than being 

forced to meet rigid regulatory timelines 

that do not bear a relationship to the 

needs of residents. 

Contact: Thomas Hamilton, 410–786– 

9493. 

B. Removes Obsolete or Duplicative 

Regulations or Provides Clarifying 

Information 

The following proposals seek to 

remove requirements in the Code of 

Federal Regulations (CFR) that are no 

longer needed or enforced. We have 

identified regulations that have become 

obsolete and need to be updated. 

1. OMB Control Numbers for Approved 

Collections of Information (§ 400.300 

and § 400.310) 

Part 400 subpart C requires the 

collection and display of control 

numbers assigned by the Office of 

Management and Budget (OMB) to 

collections of information contained in 

CMS regulations. The chart at § 400.310 

that displays the OMB control numbers 

has not been updated since December 8, 

1995. We believe that, it is no longer 

necessary to maintain the chart, because 

an inventory of currently approved CMS 

information collections, including OMB 

control numbers, is displayed on a 

public Web site at http:// 

www.reginfo.gov/public/do/PRAMain. 

The Web site provides more timely 

access to the OMB control numbers for 

CMS information collection requests 

than the process of publishing updates 

in the CFR. Also, as part of our quarterly 

notice of CMS issuances, which is 

published each quarter in the Federal 

Register, we will remind reviewers 

where they can find the most current 

list of information collections and OMB 

control numbers. For these reasons, we 

are proposing to remove and reserve 

subpart C since the content of the 

information contained in this subpart is 

obsolete and more readily available on 

the public Web site. 

Contact: Ronisha Davis, 410–786– 

6882. 

2. Removal of Obsolete Provisions 

Related to Initial Determinations, 

Appeals, and Reopenings of Part A and 

Part B Claims and Entitlement 

Determinations (§ 405.701 Through 

§ 405.877) 

In this rule, we propose to remove the 

obsolete provisions contained in 42 CFR 

part 405 subparts G and H governing 

initial determinations, appeals, and 

reopenings of Part A and Part B claims, 

and determinations and appeals 

regarding an individual’s entitlement to 

benefits under Part A and Part B of 

Medicare. Section 1869 of the Act and 

42 CFR part 405 subpart I set forth the 

current policies for such 

determinations, appeals, and 

reopenings. 

On November 15, 2002, we published 

a comprehensive proposed rule in the 

Federal Register (67 FR 69312), entitled 

‘‘Changes to the Medicare Claims 

Appeal Procedures,’’ to implement the 

relevant claims and appeals provisions 

contained in the Medicare, Medicaid, 

and SCHIP Benefits Improvement and 

Protection Act of 2000 (BIPA) (Pub. L. 

106–554). In this proposed rule, we 

established, in one location (part 405 

subpart I), provisions governing all 

aspects of Part A and Part B claims 

appeals. In 2003, the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) (Pub. 

L. 108–173) made further changes to the 

Medicare claims appeals process. On 

March 8, 2005, we published an interim 

final rule with comment period in the 

Federal Register (70 FR 11420) to 

implement provisions of the proposed 


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rule, and to explain how the recently 

enacted MMA provisions would be 

implemented. On December 9, 2009, we 

published a final rule in the Federal 

Register (74 FR 65296) entitled, 

‘‘Changes to the Medicare Claims 

Appeal Procedures,’’ responding to 

comments received on the interim final 

rule implementing part 405 subpart I. 

Part 405 subparts G and H contain the 

policies for initial determinations, 

appeals, and reopenings of Medicare 

Part A and Part B claims, before the 

effective date of BIPA (referred to as 

‘‘pre-BIPA appeals’’). In addition, part 

405 subparts G and H contain 

provisions regarding initial 

determinations and appeals with respect 

to an individual’s entitlement to 

Medicare Parts A and B. Under subparts 

G and H, initial determinations and 

appeals with respect to an individual’s 

entitlement to Medicare Parts A and B 

were conducted by the Social Security 

Administration (SSA) and governed by 

the provisions set forth in 20 CFR part 

404 subpart J. Under part 405 subpart I, 

we explain that the SSA makes initial 

determinations regarding an 

individual’s entitlement to Medicare 

Parts A and B, and conducts 

reconsiderations of those initial 

determinations, in accordance with 20 

CFR part 404, subpart J (see 42 CFR 

405.904). However, entitlement appeals 

beyond the reconsideration level (that 

is, to an Administrative Law Judge, the 

Medicare Appeals Council, or Federal 

District Court) are governed by the 

appeals procedures set forth in part 405 

subpart I. 

The provisions in part 405 subpart I 

were intended to replace the provisions 

in part 405 subparts G and H once all 

pre-BIPA appeals were completed. 

However, we determined it was 

necessary to establish a phased-in 

implementation approach for part 405 

subpart I appeals, and to maintain the 

existing provisions in subparts G and H 

until the completion of all pre-BIPA 

appeals (see, 74 FR 11424). With the 

publication of the December 9, 2009 

final rule, some pre-BIPA appeals had 

not been completed. Thus, we were 

unable to remove the appeals provisions 

in subparts G and H at that time. 

In this rule, we propose to remove the 

obsolete provisions since it is our 

expectation that in the 6 years since 

publication of the March 8, 2005 interim 

final rule, any party with a pending preBIPA appeal would have received an 

appeal decision or would have brought 

the pending matter to our attention. We 

believe that removing these regulations 

would eliminate any possible confusion 

among Medicare beneficiaries, 

providers, suppliers, and their 

representatives with respect to the 

applicable appeal rights and procedures. 

However, while we believe that all preBIPA appeals have been processed, we 

cannot be completely certain that no 

pending pre-BIPA appeals currently 

exist. In order to ensure that parties 

receive due process for their claim 

disputes, we propose that any newly 

identified pre-BIPA appeals be handled 

under the current appeals provisions set 

forth in part 405 subpart I. (We note that 

all reopening actions, regardless of 

whether the determination or decision 

was made under the pre-BIPA process, 

initial determinations on claims, and, as 

explained above, initial determinations 

and appeals with respect to Medicare 

entitlement, are currently processed 

under the applicable procedures in part 

405 subpart I.) We believe that 

maintaining a separate pre-BIPA claim 

appeals process in the unlikely event 

such an appeal is discovered is 

inefficient and impracticable. Using the 

current appeals process under subpart I, 

for all appeal requests filed on or after 

the effective date of this rule, as 

finalized, would reduce potential 

confusion about applicable appeal 

procedures, and would enable parties to 

take advantage of the reduced decisionmaking timeframes and other process 

improvements offered throughout part 

405 subpart I (for example, panel 

reviews during the Qualified 

Independent Contractor (QIC) 

reconsideration process for claims 

denied as not medically reasonable and 

necessary (see § 405.968(c)), and the 

right to escalate cases to the next level 

of appeal when the QIC, Administrative 

Law Judge (ALJ) or Medicare Appeals 

Council does not issue a decision within 

the applicable adjudication timeframe 

(see § 405.970, § 405.1104, and 

§ 405.1132). 

Table 1 below illustrates how we 

propose to process any pre-BIPA Part A 

appeals identified after the effective 

date of this rule, as finalized, under our 

current regulations at part 405 subpart 

I. If a party demonstrates that they had 

requested reconsideration under part 

405 subpart G, but did not receive a 

decision or dismissal, the party would 

be entitled to request a redetermination, 

followed by a QIC reconsideration, ALJ 

hearing, Medicare Appeals Council 

review, and judicial review in 

accordance with the provisions in part 

405 subpart I. If a party demonstrates 

that they received a reconsideration 

decision and requested an ALJ hearing 

under part 405 subpart G but did not 

receive an ALJ hearing decision or 

dismissal, the party would be entitled to 

request a QIC reconsideration, followed 

by an ALJ hearing, Medicare Appeals 

Council review, and judicial review in 

accordance with the provisions in part 

405 subpart I. If a party demonstrates 

that they received an ALJ hearing 

decision under subpart G, and requested 

but did not receive a decision, dismissal 

or denial of review notice from the 

Departmental Appeals Board, the party 

would be entitled to request Medicare 

Appeals Council review under part 405 

subpart I. 

TABLE 1—PRE-BIPA PART A APPEALS

Pending Pre-BIPA 

level of appeal in part 

405 subpart G 

Appeal resumes at 

the following level in 

part 405 subpart I 

Reconsideration 

(§ 405.710).

Redetermination 

(§ 405.940). 

ALJ Hearing 

(§ 405.720).

QIC Reconsideration 

(§ 405.960). 

Departmental Appeals 

Board Review 

(§ 405.724).

Medicare Appeals 

Council Review 

(§ 405.1100). 

Table 2 below illustrates how we 

propose to process any pre-BIPA Part B 

appeals identified after the effective 

date of this rule, as finalized, under our 

current regulations at part 405 subpart 

I. If a party demonstrates that they 

requested a carrier review of an initial 

determination under subpart H, but did 

not receive a carrier review 

determination or dismissal, the party 

would be entitled to request a 

redetermination, followed by QIC 

reconsideration, ALJ hearing, Medicare 

Appeals Council review and judicial 

review in accordance with the 

provisions in part 405 subpart I. If a 

party demonstrates that they received a 

carrier review determination and 

requested a carrier hearing but did not 

receive a carrier hearing officer decision 

or dismissal under subpart H, the party 

would be entitled to request a QIC 

reconsideration followed by an ALJ 

hearing, Medicare Appeals Council 

review and judicial review in 

accordance with the provisions in part 

405 subpart I. If a party demonstrates 

that they received a carrier hearing 

officer decision, and requested but did 

not receive an ALJ hearing decision or 

dismissal under subpart H, the party 

would be directed to request a QIC 

reconsideration, followed by an ALJ 

hearing, Medicare Appeals Council 

review and judicial review in 

accordance with the provisions in part 

405 subpart I. Finally, if a party 

demonstrates that they received an ALJ 

hearing decision under subpart H, and 

requested but did not receive a decision, 

dismissal or denial of review notice 

from the Departmental Appeals Board 

under subpart H, the party would be 


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entitled to request Medicare Appeals 

Council review under part 405 

subpart I. 

We are proposing that parties seek a 

QIC reconsideration before requesting 

and receiving a hearing before an ALJ 

under subpart I for several reasons. 

First, we note that several subpart I 

procedural requirements at the ALJ level 

of appeal are predicated on a QIC 

conducting a reconsideration. For 

example, the right to request an ALJ 

hearing under § 405.1000 and 

§ 405.1002 is premised on a party being 

dissatisfied with a QIC reconsideration 

decision. In addition, under 

§ 405.966(a)(2) and § 405.1028, absent a 

showing of good cause, evidence not 

submitted before the issuance of the QIC 

reconsideration by a provider, supplier, 

or beneficiary represented by a provider 

or supplier would be excluded from 

consideration by the ALJ. Thus, 

channeling appeals through the QIC 

reconsideration level would ensure that 

parties are afforded an opportunity to 

submit relevant evidence without 

having to demonstrate good cause for 

not submitting it during the pre-BIPA 

process. Second, we believe channeling 

pre-BIPA appeals through the QIC 

reconsideration process would benefit 

parties. For example, we believe parties 

would benefit from the panel review by 

physicians and other appropriate health 

care professionals at the QIC level when 

claims are denied as not medically 

reasonable and necessary under section 

1862(a)(1)(A) of the Act. We also believe 

the administrative record would be 

more fully developed with respect to the 

medical and scientific evidence 

considered by such panels. Third, in 

order for a party to seek expedited 

access to judicial review under 

§ 405.990, the party must first have 

received a QIC reconsideration, or the 

appeal must have been escalated from 

the QIC to the ALJ level (see, 

§ 405.990(b)). To ensure a party may 

seek expedited access to judicial review, 

if such review is appropriate, we are 

proposing to channel pre-BIPA appeals 

through the QIC reconsideration process 

when the party has not received an ALJ 

decision. Finally, as noted above, we 

believe that having one set of rules 

apply to all appeals would eliminate the 

confusion and uncertainty regarding the 

appropriate procedures to follow should 

there be any existing pre-BIPA appeals. 

TABLE 2—PRE-BIPA PART B APPEALS

Pending pre-BIPA 

level of appeal in part 

405 subpart H 

Appeal resumes at 

the following level in 

part 405 subpart I 

Review of Initial Determination 

(§ 405.807).

Redetermination 

(§ 405.940). 

Carrier Hearing 

(§ 405.821).

QIC Reconsideration 

(§ 405.960). 

ALJ Hearing 

(§ 405.855).

QIC Reconsideration 

(§ 405.960). 

Departmental Appeals 

Board Review 

(§ 405.856).

Medicare Appeals 

Council Review 

(§ 405.1100). 

With very limited exceptions as noted 

below, the provisions in subparts G and 

H related to the processing of initial 

determinations, reopenings, and appeals 

of claims under Part A and Part B of 

Medicare, and determinations and 

appeals regarding an individual’s 

entitlement to benefits under Part A and 

Part B of Medicare are obsolete because 

of the new procedures set forth in 

subpart I. We propose to remove all 

such obsolete provisions. The 

provisions in subparts G and H 

identified below are either unrelated to 

claims or entitlement appeals and are 

still in effect, or were inadvertently not 

included in subpart I, and accordingly, 

would be retained and redesignated to 

subpart I. 

We propose to retain § 405.706, 

‘‘Decisions of utilization review 

committees,’’ and redesignate the 

section as § 405.925 in subpart I. This 

regulatory provision explains that—(1) 

The decisions made by the utilization 

review committees are not initial 

determinations made by the Secretary 

within the meaning of section 1869 of 

the Act; (2) are not subject to the appeal; 

and (3) further explains how utilization 

review committee decisions may be 

used in payment and coverage 

decisions. In drafting the regulations 

under part 405 subpart I, we 

inadvertently omitted this section. For 

clarity, and to ensure that beneficiaries 

and providers understand that 

utilization review committee decisions 

are not appealable, and in furtherance of 

our goal to include all relevant claims 

appeals procedures in one place, we are 

proposing to retain § 405.706, and 

redesignate it as § 405.925. 

In addition, we propose to retain 

§ 405.874, ‘‘Appeals of CMS or a CMS 

contractor,’’ and redesignate the 

provisions as § 405.800, § 405.803, 

§ 405.806, § 405.809, § 405.812, 

§ 405.815, and § 405.818. These 

provisions set forth, among other things, 

the procedures related to denials of 

provider or supplier enrollment 

applications, revocations of Medicare 

provider or supplier billing privileges, 

and the appeal rights afforded to the 

parties to those determinations. As these 

procedures do not relate directly to 

initial determinations and appeals of 

Medicare claims, they were not 

included in part 405 subpart I. However, 

these provisions are not obsolete and are 

still applicable to provider and supplier 

enrollment actions. We also note that 

we are making minor technical edits to 

the current text to refine the section. 

Finally, we also propose to remove 

§ 405.753 and § 405.877 (‘‘Appeal of a 

categorization of a device.’’). These 

regulations are obsolete because they no 

longer comport with the definition of 

‘‘national coverage determination’’ in 

section 1869(f) of the Act, as amended 

by section 522 of BIPA. The Food and 

Drug Administration’s (FDA) 

categorization of a product as a category 

A device is not a determination of 

whether or not the item is covered 

under title XVIII of the Act. Under 

§ 405.203(c), we use the FDA 

categorization in making a coverage 

decision. Thus, our decision (acting on 

the FDA’s categorization) to deny a 

claim for a category A device is an 

initial determination that is subject to 

review through the claims appeals 

process. 

Contact: Flosetta Rowry, 410–786– 

8492. 

3. ASC Infection Control Program 

(§ 416.44) 

In existing regulations at 42 CFR 

416.51, we require all ASCs to adhere to 

regulations regarding Infection Control, 

which include the requirement that all 

ASCs develop an infection control 

program. The regulations also describe 

how ASCs must set up their infection 

control program, such as the 

requirement that the ASC designate a 

qualified professional who has training 

in infection control and the ASC’s 

obligation to establish a plan of action 

regarding preventing, identifying, and 

managing infections and communicable 

diseases. 

Current regulations also contain a 

provision for infection control that is 

located within the physical 

environment standard in 42 CFR 

416.44(a)(3). The requirement states that 

an ASC must establish a program for 

identifying and preventing infections, 

maintaining a sanitary environment, 

and reporting the results to the 

appropriate authorities. This regulatory 

requirement was part of the original 

CfCs first published for ASCs in 1982. 

Publication of the November, 2008 ASC 

final rule elevated the infection control 

requirements from a standard level 

under the Environment condition to a 


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separate condition level requirement, 

thus making the regulatory requirement 

in the Environment CfC duplicative. 

The Infection Control CfC located at 

§ 416.51 expands and broadens the 

infection control requirements that were 

part of the original ASC requirements in 

the Environment CfC. Therefore, we 

propose to remove the requirement at 

§ 416.44(a)(3), located in the 

Environment CfC, as it is unnecessary 

and obsolete. We believe this change 

would alleviate any duplicative efforts 

and confusion regarding the infection 

control requirements. 

Contact: Jacqueline Morgan, 410–786– 

4282. 

4. E-Prescribing (§ 423.160) 

The MMA amended title XVIII of the 

Act to establish a voluntary prescription 

drug benefit program. Under those 

provisions, prescription Drug Plan 

(PDP) sponsors and Medicare Advantage 

(MA) organizations offering Medicare 

Advantage-Prescription Drug Plans 

(MA–PD) are required to establish 

electronic prescription drug programs to 

provide for electronic transmittal of 

certain information to the prescribing 

provider and dispensing pharmacy and 

pharmacist. This includes information 

about eligibility, benefits (including 

drugs included in the applicable 

formulary, any tiered formulary 

structure and any requirements for prior 

authorization), the drug being 

prescribed or dispensed and other drugs 

listed in the medication history, as well 

as the availability of lower cost, 

therapeutically appropriate alternatives 

(if any) for the drug prescribed. The 

MMA directed the Secretary to 

promulgate uniform standards for the 

electronic transmission of this data. 

In the November 7, 2005, final rule 

(70 FR 67568), entitled ‘‘Medicare 

Program; E–Prescribing and the 

Prescription Drug Program,’’ CMS 

adopted three e-prescribing foundation 

standards to be used for e-prescribing 

for the Medicare Part D program. The 

three foundation standards are—(1) The 

National Council for Prescription Drug 

Programs (NCPDP) SCRIPT version 5.0., 

which provides for communications 

between the prescriber and dispenser; 

(2) the NCPDP Telecommunication 

Standard Version 5 release 1 (NCPDP 

Telecom 5.1) and equivalent NCPDP 

Batch Standard Batch Implementation 

Guide version 1.1 which is the 

transaction between the dispenser and 

the Plan, and the ASC X12N 270/271 

Health Care Eligibility Benefit Inquiry 

and Response, Version 4010; and (3) the 

Addenda to Health Care Eligibility 

Inquiry and Response, Version 4010A1 

(4010/4010A) for conducting eligibility 

and benefit inquiries between the 

prescriber and Plan Sponsor. The latter 

two transactions, NCPDP Telecom 5.1 

and the 4010/4010A are also adopted as 

HIPAA transaction standards. 

In the November 7, 2005 final rule, we 

discussed the means for updating the 

Part D e-prescribing standards. In 

instances in which an e-prescribing 

standard has also been adopted as a 

HIPAA transaction standard in 45 CFR 

part 162, the process for updating the eprescribing standard would have to be 

coordinated with the maintenance and 

modification of the applicable HIPAA 

transaction standard. In the January 16, 

2009 final rule, entitled ‘‘Health 

Insurance Reform; Modifications to the 

Health Insurance Portability and 

Accountability Act (HIPAA) Electronic 

Transaction Standards’’ (74 FR 3296), 

we revised § 162.1102, § 162.1202, 

§ 162.1302, § 162.1402, § 162.1502, 

§ 162.1602, § 162.1702, and § 162.1802 

to adopt the ASC X12 Technical Reports 

Type 3, Version 005010 (Version 5010), 

as a replacement of the current X12 

Version 4010 and 4010A1 standards 

(Version 4010/4010A). Covered entities 

conducting HIPAA standards are 

required to use Version 5010 by January 

1, 2012. The complete discussion of 

these standards may be found in the 

January 16, 2009 final rule (74 FR 3296). 

In the same final rule, effective 

January 1, 2012, we revised § 162.1102, 

§ 162.1202, § 162.1302, and § 162.1802 

by adding a new paragraph (c) to each 

of these sections to adopt the NCPDP 

Telecommunication Standard 

Implementation Guide, Version D, 

Release 0 and equivalent NCPDP Batch 

Standard Implementation Guide, 

Version 1, Release 2 (collectively, 

Version D.0) in place of the NCPDP 

Telecommunication Standard 

Implementation Guide, Version 5, 

Release 1 and equivalent NCPDP Batch 

Standard Batch Implementation Guide, 

Version 1, Release 1 (collectively, 

Version 5.1), for the following retail 

pharmacy drug transactions: health care 

claims or equivalent encounter 

information; eligibility for a health plan; 

referral certification and authorization; 

and coordination of benefits. 

Therefore, for consistency with the 

current HIPAA transaction standards, 

and the need for covered entities 

(prescribers and dispensers) to comply 

with HIPPA, we propose to revise 

§ 423.160(b)(3), to—(1) Update Version 

4010/4010A with Version 5010; (2) 

adopt the NCPDP Telecommunication 

Standard Implementation Guide, 

Version D, Release 0 (Version D.0) and 

equivalent NCPDP Batch Standard 

Implementation Guide, Version 1, 

Release 2 (Version 1.2); and (3) retire 

NCPDP Telecommunication Standard 

Implementation Guide, Version 5, 

Release 1 (Version 5.1) and equivalent 

NCPDP Batch Standard Implementation 

Guide, Version 1, Release 1 (Version 

1.1), for transmitting eligibility inquiries 

and responses between dispensers and 

Part D sponsors with an effective date of 

January 1, 2012. 

Contact: Andrew Morgan, 410–786– 

2543. 

5. Physical and Occupational Therapist 

Qualifications (§ 440.110) 

Current regulations detail provider 

qualifications for a ‘qualified physical 

therapist’ under Medicaid at 42 CFR 

440.110(a)(2). Section 440.110(b)(2) 

details the provider qualifications for a 

‘qualified occupational therapist’ under 

Medicaid. These current regulations 

contain outdated terminology 

referencing several professional 

organizations. Also some of the current 

qualification requirements do not 

address individuals who have been 

trained outside of the United States, or 

refer to outdated requirements, which 

could unintentionally exclude 

otherwise qualified therapists resulting 

in diminished access to care for 

Medicaid beneficiaries. 

Medicare regulations at § 484.4 were 

updated through a November 27, 2007 

final rule (72 FR 66406), effective 

January 1, 2008. While these personnel 

qualifications are detailed under home 

health services, we indicated in the 

preamble to the November 27, 2007 

final rule, that therapy services must be 

provided according to the same 

standards and policies in all settings, to 

the extent possible and consistent with 

statute, and revised multiple regulations 

to cross-reference the personnel 

qualifications for therapists in § 484.4 to 

the personnel requirements in many 

other sections. 

We are proposing at § 440.110 to 

remove the outdated personnel 

qualifications language in the current 

Medicaid regulations and instead cross 

reference the updated Medicare 

personnel qualifications for physical 

therapists and occupational therapists 

under § 484.4. This proposal has the 

potential to broaden the scope of 

providers that may be able to provide 

PT and OT services, by streamlining the 

qualifications so that certain providers 

are not excluded from providing 

services under Medicaid. In addition, it 

strengthens the consistency of standards 

across Medicare and Medicaid. 

Contact: Adrienne Delozier, 410–786– 

0278. 


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6. Definition of Donor Document 

(§ 486.302) 

Section 486.302 includes the 

following definition: ‘‘Donor document 

is any documented indication of an 

individual’s choice in regard to 

donation that meets the requirements of 

the governing State law.’’ In recent 

years, the concept of the donor 

document and the opportunities for 

individuals to express their wishes 

concerning organ and/or tissue donation 

have changed. An individual can 

indicate his or her wishes not only on 

a driver’s license through a State’s 

Department of Motor Vehicles, but also 

on various registries or even in separate 

documents. Therefore, we believe that 

our definition in § 486.302 should be 

updated. Moreover, the focus on patient 

rights has increased over the last several 

years. For example, we published a final 

rule on November 19, 2010 entitled, 

‘‘Changes to the Hospital and Critical 

Access Hospital Conditions of 

Participation to Ensure Visitation Rights 

for All Patients’’ (CMS–3228–F). In light 

of this increased focus, we believe that 

the current definition, does not fully 

allow for the various ways individuals 

can express their choices in the donor 

process. In addition, we believe it is 

important to emphasize that the 

decision to donate organs and/or tissue 

before death is the decision of the 

individual. 

We propose replacing the current 

definition of ‘‘donor document’’ in 

§ 486.302 with the following definition, 

‘‘[D]onor document means any 

documented indication of an 

individual’s choice that was executed 

by the patient, in accordance with any 

applicable State law, before his or her 

death, and that states his or her wishes 

regarding organ and/or tissue donation.’’ 

This new definition modifies the 

current definition in two ways. First, 

while the current definition refers to 

‘‘an individual’s choice’’ it does not 

recognize the right of the individual to 

identify their wishes more specifically. 

Donor documents may simply allow for 

the choice of whether or not to be an 

organ and/or tissue donor, however, 

some individuals may choose to use 

documents that allow them to express 

their wishes in more detail. For 

example, some people may choose to be 

an organ donor, but not a tissue donor. 

Others may not want to consent to the 

donation of specific organs. Therefore, 

we believe our proposed definition 

should cover documents or other ways 

for individuals to express their wishes 

more specifically, and we have modified 

the definition accordingly. 

Second, we also believe that it is 

important to include the requirement 

that the donor document be ‘‘executed 

by the patient.’’ While this may appear 

self-evident, we want to emphasize that 

the decision by a living person to donate 

organs and/or tissue after his or her 

death is always a voluntary decision. 

Therefore, we have modified the 

definition to account for this. 

These changes to the definition of the 

donor document only affect the 

documentation of an individual’s 

wishes concerning organ and/or tissue 

donation while they are alive and can 

legally make those decisions. In the 

absence of a valid donor document, the 

donation decisions would rest with the 

individual who is legally responsible for 

making these decisions, usually the 

person’s next of kin. 

Contact: Jacqueline Morgan, 410–786– 

4282. 

7. Administration and Governing Body 

(§ 486.324) 

On May 31, 2006, we published a 

final rule in the Federal Register (71 FR 

30982) entitled, ‘‘Conditions for 

Coverage for Organ Procurement 

Organizations (OPOs).’’ The final rule 

established several requirements, for 

OPOs at § 486.324, including a number 

of requirements related to the 

administration and governing body of 

an OPO. Due to an error in publishing 

the final rule, paragraph (e) was 

inadvertently inserted twice (71 FR 

31052). 

We are proposing to remove the 

duplicate paragraph (e), which appears 

immediately after § 486.324(d). It does 

not alter or change the legal 

requirement, nor does it create a change 

in information collection requirements 

or other regulatory burden. 

Contact: Jacqueline Morgan, 410–786– 

4282. 

8. Requirement for Enrolling in the 

Medicare Program (§ 424.510) 

We have identified an incorrect 

reference in § 424.510(a), due to a 

typographic error. We are proposing to 

replace the incorrect reference to 

paragraph (c) (the effective date for 

reimbursement for providers and 

suppliers seeking accreditation from a 

CMS-approved accreditation 

organization) with a reference to 

paragraph (d) (the enrollment 

requirements). 

Contact: Morgan Burns, 202–690– 

5145 

C. Responds to Stakeholder Concerns 

The following proposals seek to 

respond to some of the concerns and 

feedback that we have received from the 

public. In the comment period 

associated with this proposed rule, we 

welcome additional suggestions from 

stakeholders. We have identified 

nomenclature and definition changes 

that would hopefully increase 

transparency and enhance our 

relationship with the public. 

Nomenclature Changes 

1. Redefining the Term ‘‘Beneficiary’’ 

(§ 400.200 Through § 400.203) 

In response to comments from the 

public to discontinue our use of the 

term ‘‘recipient’’ under Medicaid, we 

have been using the term ‘‘beneficiary’’ 

to mean all individuals who are entitled 

to, or eligible for, Medicare or Medicaid 

services. We are proposing to add a 

definition of ‘‘beneficiary’’ in § 400.200 

that applies to patients under the 

Medicare and Medicaid programs. We 

would remove the terms ‘‘beneficiary’’ 

and ‘‘recipient’’ from § 400.202 and 

§ 400.203, respectively, and we would 

make a nomenclature change to replace 

‘‘recipient’’ with ‘‘beneficiary’’ 

throughout 42 CFR chapter IV. The 

action to refer to beneficiaries instead of 

recipients has already been 

implemented. We are simply 

conforming our regulations to our 

current use of the term ‘‘beneficiary.’’ In 

creating this definition it is not our 

intent to exclude or include anyone who 

would or would not have previously 

been understood to be a beneficiary. We 

welcome comments on whether this 

definition could be improved to attain 

that objective. 

Contact: Ronisha Davis, 410–786– 

6882. 

2. Replace the Terms ‘‘Mental 

Retardation’’ and ‘‘Mentally Retarded’’ 

With ‘‘Intellectual Disability’’ and 

‘‘Intellectually Disabled’’ Throughout 42 

CFR title IV 

We are proposing to change the 

terminology we use in the program 

currently called Intermediate Care 

Facilities for the Mentally Retarded. 

Section 1905(d) of the Act states that, 

‘‘The term ‘‘intermediate care facility for 

the mentally retarded’’ means an 

institution (or distinct part thereof) for 

the mentally retarded or persons with 

related conditions * * *.’’ In 2010, 

Rosa’s Law (Pub. L. 111–256) amended 

statutory language in several health and 

education statues, directing that ‘‘in 

amending the regulations to carry out 

this Act, a Federal agency shall ensure 

that the regulations clearly state—(A) 

That an intellectual disability was 

formerly termed ‘‘mental retardation’’; 

and (B) that individuals with 

intellectual disabilities were formerly 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
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termed ‘‘individuals who are mentally 

retarded.’’ 

CMS regulations at 42 CFR chapter IV 

include numerous references to ‘‘mental 

retardation.’’ These regulatory 

provisions reflect the statutory benefit 

category at section 1905(d) of the Act, 

which uses the term ‘‘mental 

retardation’’ in the facility type 

designation, ‘‘Intermediate Care Facility 

for the Mentally Retarded.’’ Rosa’s Law 

did not specifically list the Act within 

its scope, and therefore did not require 

any change to existing CMS regulations. 

However, consistent with Rosa’s Law 

and in response to numerous inquiries 

from provider and advocate 

organizations as to when CMS will 

comply with the spirit of Rosa’s Law, 

we propose to adopt the term 

‘‘intellectual disability’’ (as used under 

Rosa’s Law) in our regulations at 

§ 400.203. We would define the term 

‘‘intellectually disabled’’ to mean the 

condition that was previously referred 

to as ‘‘mentally retarded’’ in section 

1919(e)(7)(G)(ii) of the Act. This 

nomenclature change does not represent 

any change in information collection 

requirements or other burden for the 

provider community or the State survey 

agencies. Current forms may be used by 

the State survey agencies until current 

supplies are exhausted. The change 

would require revision of forms CMS– 

3070G and CMS–3070H, as discussed 

below. 

Contact: Peggye Wilkerson, 410–786– 

4857. 

III. Collection of Information 

Requirements 

Under the Paperwork Reduction Act 

of 1995, we are required to provide 60- 

day notice in the Federal Register and 

solicit public comment before a 

collection of information requirement is 

submitted to the Office of Management 

and Budget (OMB) for review and 

approval. In order to fairly evaluate 

whether an information collection 

should be approved by OMB, section 

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

Reduction Act of 1995 requires that we 

solicit comment on the following issues: 

• The need for the information 

collection and its usefulness in carrying 

out the proper functions of our agency. 

• The accuracy of our estimate of the 

information collection burden. 

• The quality, utility, and clarity of 

the information to be collected. 

• Recommendations to minimize the 

information collection burden on the 

affected public, including automated 

collection techniques. 

We are soliciting public comment on 

each of these issues for the following 

sections of this document that contain 

information collection requirements 

(ICRs): 

A. Removes Unnecessarily Burdensome 

Requirements 

1. ICRs Regarding End-Stage Renal 

Disease Facilities Condition for 

Coverage: Physical Environment 

(§ 494.60) 

In this rule, we are proposing to limit 

the number of ESRD facilities that must 

meet the LSC requirements found in 

chapters 20 and 21 of NFPA 101. This 

proposal would reduce burden on ESRD 

facilities in terms of costly structural 

modifications. However, this proposed 

change does not impact any information 

collections under the Paperwork 

Reduction Act. 

2. ICRs Regarding Condition for 

Coverage: Emergency Equipment— 

Ambulatory Surgical Centers (ASCs) 

(§ 416.44) 

Proposed § 416.44(c) would require 

ASCs to coordinate, develop, and revise 

ASC policies and procedures that would 

specify the types of emergency 

equipment required for use in the ASC’s 

operating room. The equipment must be 

immediately available for use during 

emergency situations, be appropriate for 

the facility’s patient population and be 

maintained by appropriate personnel. 

The burden associated with these 

requirements is the time and effort 

required by an ASC to develop revised 

policies and procedures governing the 

identification and maintenance of 

emergency equipment that would 

typically be required to address the 

intra- or post-operative emergency 

complications specific to the types of 

procedures performed in the ASC and 

the needs of their specific patient 

population. 

We believe that approximately 5,200 

ASCs would have to comply with these 

requirements. We estimate that 

proposed § 416.44(c) would impose a 

one-time burden of two hours associated 

with revising the policies and 

procedures pertaining to the list of the 

emergency equipment and supplies 

maintained and commonly used by the 

ASC during emergency responses to 

their specific patient population. The 

total burden associated with this task 

would be approximately 5,200 hours. 

The total cost associated with this 

requirement would be $468,000 (5,200 × 

$90—based on an hourly nurse’s salary 

($45.00 × 2 hours), including fringe 

benefits, as specified by the Bureau of 

Labor Statistics for 2009). 

Consistent with this proposed change, 

we will submit a revision to control 

number 0938–1071 (expiration date 

October 31, 2012) to the Office of 

Management and Budget for review. 

3. ICRs Regarding Revocation of 

Enrollment and Billing Privileges in the 

Medicare Program (§ 424.535) 

In this rule, we are proposing to 

eliminate the re-enrollment bar in 

instances when Medicare providers and 

suppliers have not responded timely to 

requests for revalidation of enrollment 

or other requests for information. This 

would allow providers and suppliers to 

attempt to re-enroll in Medicare sooner 

than would be the case if the reenrollment bar applied. However, the 

overall information collection burden 

involved—specifically, the need to 

submit a Form CMS–855 initial 

enrollment application—would not 

change. Our proposed revision would 

therefore neither increase nor decrease 

the existing information collection 

burden related to this requirement. 

4. ICRs Regarding Deactivation of 

Medicare Billing Privileges (§ 424.540) 

In this rule, we are proposing to 

restrict the deactivation provisions in 

§ 424.540(a)(1) to providers and 

suppliers that do not complete the Form 

CMS–855I application. Physicians and 

non-physician practitioners would 

therefore not have their Medicare billing 

privileges deactivated if they did not 

bill Medicare for 12 consecutive 

months. 

We estimate that an average of 

approximately 12,000 physicians and 

non-physician practitioners have been 

deactivated each year pursuant to 

§ 424.540(a)(1). These individuals have 

been required to submit a complete 

Form CMS–855I application to their 

Medicare contractor in order to 

reactivate their Medicare billing 

privileges. With our proposed change, 

however, this step would no longer be 

necessary because the deactivation 

would not have occurred. 

For purposes of this ICR, we estimate 

that 10,800 physicians and nonphysician practitioners (or 90 percent of 

the aforementioned 12,000 total) would 

continue to submit Form CMS–855I 

(OMB No. 0938–0685) reactivation 

applications absent our proposed 

change. The estimated ‘‘per application’’ 

burden of completing the application is 

5 hours, at a per hour cost of $50. This 

results in a total savings in collection of 

information costs for Medicare-enrolled 

physicians and non-physician 

practitioners of approximately $2.7 

million per year (10,800 × 5 × $50). 

Consistent with this proposed change, 

we will submit a revision to control 

number 0938–0685 to the Office of 

Management and Budget for review. 


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5. ICRs Regarding Duration of 

Agreement for ICFs/ID (§ 442.15) 

In this rule, we are proposing to 

remove the time limited agreements for 

intermediate care facilities. There is no 

reduction in burden or cost for the 

intermediate care facility providers but 

the regulation change would help to 

reduce the paperwork and staff time 

required by State agencies in processing 

temporary extensions of the provider 

agreements that are required until the 

onsite survey occurs. In addition, 

providers and State agencies would no 

longer face the uncertainty created by 

the issuance of the multiple temporary 

extensions due to the provider 

agreements. Consistent with this 

proposed change, we will submit a 

revision to control number 0938–0062. 

B. Removes Obsolete or Duplicative 

Regulations or Provides Clarifying 

Information 

1. ICRs Regarding Display of Currently 

Valid OMB Control Numbers (§ 400.310) 

In this rule, we are proposing to 

remove the chart at § 400.310 that 

display OMB control numbers because 

the information has become obsolete. 

This proposal would not produce any 

reduction or increase in burden, but 

would ensure that the public is viewing 

the most current information regarding 

OMB control numbers. 

2. ICRs Regarding Initial 

Determinations, Reconsiderations, 

Appeals, and Reopenings Under 

Medicare Part A and B (§ 405.701 

through § 405.877) 

The provisions in part 405 subparts G 

and H that we are proposing to remove 

primarily are obsolete and no longer in 

use. We do not expect an increase or 

reduction in burden, but believe that it 

would be beneficial to ensure that 

providers or suppliers affected are using 

the post BIPA appeals process. 

3. ICRs Regarding Condition for 

Coverage: Infection Control— 

Ambulatory Surgical Centers (ASCs) 

(§ 416.44) 

In this rule, we are proposing to 

remove the requirement at § 416.44(a)(3) 

regarding infection control that is 

duplicative of § 416.51. The removal of 

this requirement would not result in any 

reduced or additional burden on ASCs, 

but would alleviate any duplicative 

efforts and confusion regarding the 

infection control requirements. 

4. ICRs Regarding Standards for 

Electronic Prescribing (§ 423.160) 

In this rule, we are proposing to 

update the current e-prescribing 

standards to mirror the HIPAA 

standards that will be in effect as of 

January 1, 2012. There is no burden 

(addition or reduction) associated with 

this proposal. 

5. ICRs Regarding Physical Therapy, 

Occupational Therapy, and Services for 

Individuals With Speech, Hearing, and 

Language Disorders (§ 440.110) 

In this rule, we are proposing to 

update and align provider qualifications 

for PT and OT professionals. This 

proposal has the potential to broaden 

the scope of providers that may be able 

to provide PT and OT services, by 

streamlining the qualifications so that 

certain providers are not excluded from 

providing services under Medicaid. 

However, this proposed change does not 

impact any information collections 

under the paperwork reduction Act. 

6. ICRs Regarding Definitions 

(§ 486.302) 

In this rule, we are proposing to 

modify the definition of ‘‘donor 

document’’ to improve the ability of 

patients to indicate their wishes 

regarding the donation of organs and 

tissue, while also emphasizing that the 

patient’s decision is voluntary. We do 

not expect that there would be any 

changes in the collection of information 

requirements for OPOs. We anticipate 

that the enhanced ability individuals 

initially would have to more specifically 

identify their wishes would reduce 

burden associated with vague and 

unclear designations. 

7. ICRs Regarding Condition: 

Administration and Governing Body 

(§ 486.324) 

In this rule, we are proposing the 

removal of the duplicate paragraph (e) 

of § 486.324. This proposal would not 

result in any change in information 

collection or other regulatory burden. 

8. ICRs Regarding Requirement for 

Enrolling in the Medicare Program 

(§ 424.510) 

In this rule, we are proposing to 

correct a typographical error found in 

§ 424.510(a). This proposal would create 

no change in information collection or 

other regulatory burden. 

C. Responds to Stakeholder Concerns 

Nomenclature Changes 

1. ICRs Regarding General Definitions 

(§ 400.200) 

In this rule, we are proposing to add 

a definition of ‘‘beneficiary’’ in 

§ 400.200 that applies to patients under 

the Medicare and Medicaid programs. 

This proposal would create no change 

in information collection or other 

regulatory burden. 

2. ICRs Regarding Definitions Specific to 

Medicaid (§ 400.203) 

In this rule, we are proposing to add 

to the regulations a definition of 

‘‘intellectual disability’’ for purposes of 

the Medicaid program that would define 

it, consistent with Rosa’s law (Pub. L. 

111–256), as the condition formerly 

referred to as ‘‘mental retardation’’ and 

we would replace all references in CMS 

regulations to ‘‘mental retardation’’ with 

‘‘intellectual disability.’’ Furthermore, 

we propose to replace the term 

‘‘mentally retarded,’’ as defined in 

section 1919(e)(7)(G)(ii) of the Act, with 

‘‘intellectually disabled.’’ This proposal 

would create no change in information 

collection or other regulatory burden. 

The change would require revision of 

forms CMS–3070G and CMS–3070H, 

which are approved under OMB control 

number 0938–0062 (expiration date 

April 30, 2013). CMS will submit this 

collection to OMB for review. 

If you comment on these information 

collection and recordkeeping 

requirements, please do either of the 

following: 

1. Submit your comments 

electronically as specified in the 

ADDRESSES section of this proposed rule; 

or 

2. Submit your comments to the 

Office of Information and Regulatory 

Affairs, Office of Management and 

Budget, 

Attention: CMS Desk Officer, [CMS– 

9070–P]; 

Fax: (202) 395–5806; or 

E-mail: 

OIRA_submission@omb.eop.gov. 

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Regulatory Impact Analysis 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (February 2, 

2011), the Regulatory Flexibility Act 

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

354), section 1102(b) of the Social 

Security Act, section 202 of the 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
65920 Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 

Unfunded Mandates Reform Act of 1995 

(March 22, 1995; Pub. L. 104–4), and 

Executive Order 13132 on Federalism 

(August 4, 1999). 

Executive Orders 12866 and 13563 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, 

reducing costs, harmonizing rules, and 

promoting flexibility. A regulatory 

impact analysis (RIA) must be prepared 

for major rules with economically 

significant effects ($100 million or more 

in any 1 year). We estimate that this 

proposed rule would reduce costs to 

regulated entities and to patients by 

more than $100 million, perhaps as 

much as $200 million in the first year. 

It would also create significant life 

savings benefits. It is therefore an 

economically significant rule under 

section 3(f)(1) of Executive Order 12866. 

Accordingly, this proposed rule was 

reviewed by the Office of Management 

and Budget. 

A. Statement of Need 

In Executive Order 13563, the 

President recognized the importance of 

a streamlined, effective, efficient 

regulatory framework designed to 

promote economic growth, innovation, 

job creation, and competitiveness. To 

achieve a more robust and effective 

regulatory framework, the President has 

directed each executive agency to 

establish a plan for ongoing 

retrospective review of existing 

significant regulations to identify those 

rules that can be eliminated as obsolete, 

unnecessary, burdensome, or 

counterproductive or that can be 

modified to be more effective, efficient, 

flexible, and streamlined. This proposal 

responds directly to the President’s 

instructions in Executive Order 13563 

by reducing outmoded or unnecessarily 

burdensome rules, and thereby 

increasing the ability of health care 

entities to devote resources to providing 

high quality patient care. 

B. Overall Impact 

There are cost savings in many areas. 

Two areas of one-time savings are 

particularly substantial. First, as 

indicated earlier in the preamble, we 

estimate that one-time savings to ESRD 

facilities are likely to range from about 

$47.5 to $217 million. Second, we also 

estimate a one-time savings of $18.5 

million to ASCs through reduced 

emergency equipment requirements. 

Both of these estimates are uncertain 

and total savings could be significantly 

higher. Among the many types of 

recurring savings that these proposals 

would create, physicians and other 

providers would avoid business and 

payment losses that are difficult to 

estimate but likely to be in the tens of 

millions of dollars annually through the 

reforms we propose for reenrollment 

and billing processes. We have 

identified other kinds of savings that 

providers and patients will realize 

throughout this preamble. All of these 

are summarized in the table that 

follows. 

TABLE 3—SECTION-BY-SECTION ECONOMIC IMPACT ESTIMATES

Section Frequency 

Likely savings 

or benefits 

($ millions) 

A. Removes Unnecessarily Burdensome Requirements: 

1. End-Stage Renal Disease (ESRD) Facilities (§ 494.60) ............................................... One-Time ................................ 108.7 

2. ASC Emergency Equipment (§ 416.44) ........................................................................ One-Time ................................ 18.5 

3. Revocation of Enrollment/Billing Privileges (§ 424.535) ............................................... Recurring ................................ 10.0 

4. Deactivation of Medicare Billing Privileges (§ 424.540) ................................................ Recurring ................................ 26.7 

5. Duration of Agreement for ICFs/ID (§ 442.15–§ 442.109) ............................................ Recurring ................................ <1 

B. Removes Obsolete or Duplicative Regulations: 

1. OMB Control Numbers for Information Collection (§ 400.300 and § 400.310) ............. Recurring ................................ <1 

2. Removal of Obsolete Provisions Related to Processing Part A and Part B Claims 

and Entitlement Determinations (§ 405.701 through § 405.877).

Recurring ................................ <1 

3. ASC Infection Control Program (§ 416.44) ................................................................... Recurring ................................ <1 

4. E-prescribing (§ 423.160) .............................................................................................. Recurring ................................ <1 

5. Physical and Occupational Therapist Qualifications (§ 440.110) .................................. Recurring ................................ <1 

6. Definition of Donor Document (§ 486.302) .................................................................... Recurring ................................ (1) 

7. Administration and Governing Body (§ 486.324) .......................................................... Recurring ................................ <1 

8. Requirement for Enrolling in the Medicare Program (§ 424.510) ................................. Recurring ................................ <1 

C. Responds to Stakeholder Concerns: 

Nomenclature Changes 

1. Redefining the Term ‘‘Beneficiary’’ (§ 400.200 through § 400.203) .............................. Recurring ................................ <1 

2. Replace ‘‘Mental Retardation’’ terminology with ‘‘Intellectual Disability’’ (throughout 

42 CFR title IV).

Recurring ................................ (1) 

1See Text. 

There are two areas of potentially 

significant benefits, above and beyond 

cost savings to providers. First, 

improved organ donation consent 

language that would enable prospective 

donors to specify their intentions more 

clearly would have a positive effect on 

organ donation. There are 

approximately 8,000 cadaveric organ 

donors annually in the United States. 

These donors provide a total of about 

21,000 transplanted organs (see the 

OPTN/SRTR Annual Report at http:// 

optn.transplant.hrsa.gov/ar2009/). The 

decision to make a firm, written 

decision on whether or not to be a 

potential donor, and on the willingness 

of families to honor that decision, can 

turn on very small issues of personal 

preference. We believe that the change 

we propose could and likely would tip 

that decision in some cases. However, 

we do not have a basis for quantifying 

this potential increase in donations. We 

welcome comment on the extent to 

which this policy change may increase 

organ donation and any information that 

would assist in quantifying these 

impacts. 


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In addition, while Rosa’s Law began 

the elimination of official Federal 

government use of the pejorative term 

‘‘mental retardation,’’ our proposal 

would complete this step for CMS 

regulations. The reform undoubtedly 

has substantial value to millions of 

Americans, not only to the intellectually 

disabled but also to their families and 

friends, and also to the many millions 

who simply object to such labeling. 

However, we have no data that would 

enable a precise calculation of this 

value. 

Taking all of the proposed reforms 

together, we estimate that the overall 

cost savings that this rule would create 

may approach $200 million in the first 

year. This includes the one-time savings 

related to ESRD reforms, as well as the 

savings to providers in lost billings, 

paperwork costs, confusion, and other 

burden reductions discussed throughout 

this preamble. 

C. Anticipated Impacts 

The potential cost savings from 

reduced ESRD requirements are 

discussed extensively in that preamble 

section on those reforms. Assuming that 

the average cost for a facility to meet 

three structural standards would have 

been $77,659, and that one half of all 

facilities would have needed to make 

one half of these investments, total 

savings would be $108.7 million (2,800 

× ($77,659/2)). 

The only other large one-time savings 

estimates are those resulting from 

reforms of Ambulatory Surgical Center 

Emergency equipment requirements, 

and reforms in the revocations or 

deactivation of billing privileges. As to 

ASC, we estimate that the three most 

costly types of equipment are as follows: 

Tracheostomy kit $100.00, 

cricothyrotomy kit $200.00 and 

mechanical ventilator $12,000. We 

utilized fiscal year 2010 surveyor 

worksheets completed by the States 

when conducting ASC surveys to 

project the distribution of the types of 

ASC services nationally. We estimate 

that about two-thirds of the 

approximately Medicare 5,200 certified 

ASCs are functioning as multipurpose 

facilities. Those that are not 

multipurpose facilities would not have 

to spend $12,300 in total for costly 

equipment that would not be utilized. 

We have estimated the savings by 

breaking down each specialty type of 

ASC that would not be considered a 

multipurpose facility and that may not 

eliminate all three pieces of equipment 

or choose just one or two depending on 

the needs of the facility (1,500 ASCs × 

$12,300 = total savings of about $18.5 

million). 

With respect to the revocation reform, 

the number of affected providers is 

certainly very small as a proportion of 

the total universe of over one million 

Medicare providers, of whom over 

900,000 are physicians and other 

practitioners. Based on administrative 

data, we estimate that the number of 

affected physicians and other 

practitioners that would be affected by 

this reform is between 1,000 and 2,000, 

a fraction of one percent of these. We 

have no statistical data on the resultant 

economic effects; but if the average 

provider loses as little as $10,000 in 

billable Medicare patient care services 

as a result of deactivation, total lost 

business for 1,000 providers could be 

$10 million annually. In this regard, 

gross annual physician practice revenue 

in America approaches $1 million a year 

(see, for example, the practice expense 

data in http://www.modernmedicine.

com/modernmedicine/article/

articleDetail.jsp?id=143141). Since 

Medicare pays about one third of 

revenue received for professional 

services such as physician care, the loss 

we estimate is one or two weeks of 

Medicare billing, on average. We 

welcome additional information on the 

likely magnitude and frequency of such 

losses. 

With respect to deactivation of 

Medicare billing privileges, based on 

existing enrollment data we believe that 

about 12,000 physicians and nonphysician practitioners may be affected 

annually. While the information 

collection consequences are relatively 

small (see the Information Collection 

section of this preamble), the problems 

this creates for both providers and 

patients are more substantial, including 

confusion about which bills are paid, 

chains of correspondence between the 

provider, the patient, and the Medicare 

contractor, and even in many cases an 

inability of providers to obtain 

reimbursement for services provided. 

Furthermore, although the direct 

paperwork costs are small, the amount 

of time and effort involved may deter 

some of these providers from even 

attempting to reactivate their billing 

privileges. Nonetheless, even if the 

average lost billing amounts (over and 

above amounts previously calculated for 

deactivations) are only on average 

$2,000, total annual costs in patient 

services that were unbilled or simply 

not provided would be $24 million 

(12,000 providers × $2,000), in addition 

to the $2.7 million we estimate in 

reduced information collection costs. In 

this regard, we point out that $2,000 

represents only a fraction of one percent 

of average annual physician billing to 

Medicare, or less than one week of 

billing lost. We believe that losses are 

likely to be this low because this 

problem is most likely to occur with 

providers whose practices include 

relatively few Medicare patients, or who 

otherwise do not depend heavily on 

Medicare reimbursements (for example, 

part-time practices and those nearing 

retirement). We welcome additional 

information on the likely magnitude and 

frequency of such losses, and on 

physician and other provider situations 

most likely to be affected by such losses. 

Of the remaining reforms, most have 

minor cost savings as shown in Table 1 

through entries of $1 million or less. We 

welcome comments on whether some of 

these proposed reforms may create 

larger savings that we have failed to 

identify. 

D. Uncertainty 

Our estimates of the effects of this 

regulation are subject to significant 

uncertainty. While the Department is 

confident that these reforms will 

provide flexibilities to facilities that will 

yield cost savings, we are uncertain 

about the magnitude of these effects. In 

addition, as we previously explained, 

there may be significant additional 

health benefits. Thus, we are confident 

that the rule would yield net benefits. In 

this analysis we provided some 

illustrative estimates to suggest the 

potential savings these reforms could 

achieve under certain assumptions. We 

welcome comments on ways to better 

estimate the likely effects of these 

reforms. 

E. Accounting Statement 

As required by OMB Circular A–4 

(available at http://www.whitehouse.

gov/omb/circulars/a004/a-4.pdf), we 

have prepared an accounting statement. 

We estimate that the overall cost savings 

that this rule would create may 

approach $200 million in the first year. 

This includes the one-time savings 

related to ESRD reforms, as well as the 

savings to providers in lost billings, 

paperwork costs, confusion, and other 

burden reductions discussed throughout 

this preamble. There are also potentially 

substantial life-saving benefits that 

could reach hundreds of millions of 

dollars annually. Annualized savings 

are shown in the accounting statement 

below. 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
65922 Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 

TABLE 4—ACCOUNTING STATEMENT

[Dollars in millions] 

Category Primary estimate Year dollars Discount rate 

(%) 

Period 

covered 

Benefits: 

Unquantified Qualitative Value of Lives Saved Through 

Increases in Organ Donations.

Potentially hundreds of lives 

saved but no precise estimate.

2012 7 2012–16 

Potentially hundreds of lives 

saved but no precise estimate.

2012 3 2012–16 

Annualized savings from reduced ESRD facility investments and reduced ASC costs (see Table 3).$30 ......................................... 2012 7 2012–16 

$30 ......................................... 2012 3 2012–16 

Annualized savings to providers from billing improvements and other reforms (see Table 3).$40 ......................................... 2012 7 2012–16 

$40 ......................................... 2012 3 2012–16 

Costs: 

None. 

Transfers: 

None. 

F. Regulatory Flexibility Act 

The Regulatory Flexibility Act (RFA) 

requires agencies to analyze options for 

regulatory relief of small entities when 

proposed rules create a significant 

economic impact on a substantial 

number of small entities. For purposes 

of the RFA, small entities include small 

businesses, nonprofit organizations, and 

small governmental jurisdictions. Most 

hospitals and most other Medicare or 

Medicaid providers and suppliers are 

small entities, either by nonprofit status 

or by having revenues of $7.0 million to 

$34.5 million in any 1 year. Individuals 

and States are not included in the 

definition of a ‘‘small entity.’’ This 

proposed rule would reduce costs to 

tens of thousands of physicians, ASCs, 

ESRD facilities, and other small entities. 

Provisions in this proposed rule would 

benefit some providers or suppliers in 

all or virtually all of the industries 

identified as ‘‘Ambulatory Health Care 

Services’’ under the Census Bureau’s 

North American Industry Classification 

System (NAICS, codes 621111 through 

621999). While most of the effects 

would be minimal (for example, 

eliminating obsolete and redundant or 

confusing regulatory requirements), we 

estimate that the impact on at least 

several thousand of these small entities 

would be economically significant. The 

purpose of the RFA is to reduce burdens 

on regulated entities, and HHS 

interprets the RFA as requiring an Initial 

Regulatory Flexibility Analysis (IRFA) 

only when a proposed rule creates an 

adverse economic impact. Accordingly, 

we certify that this proposed rule would 

not have a significant economic impact 

on a substantial number of small 

entities. HHS nonetheless voluntarily 

prepares an IRFA for rules that, like this 

one, create a significant positive 

economic impact by reducing burden on 

small entities. In this case all of the 

economic effects of the proposed rule 

are positive, and some are economically 

significant. In particular, provisions that 

allow physicians and other providers 

and suppliers to continue to participate 

in Medicare despite correspondence 

mishaps would save as many as 12,000 

small entity providers annually 

thousands, and in some cases tens of 

thousands, of dollars in lost revenues, as 

well as reduce costs of confusion and 

correspondence to both these providers 

and their patients. Most of these 

providers are physicians, but other 

affected professionals include clinical 

psychologists, physician assistants, 

nurse practitioners, and physical 

therapists. Substantial savings would 

also accrue to most of about 6,500 ESRD 

providers from our proposal to 

eliminate fire safety requirements that 

are vital in residential provider settings, 

but unnecessary in ambulatory care 

facilities such as these. Approximately 

half of the 5,200 ASCs would benefit 

from more sensible emergency 

equipment policies. In addition, while 

we cannot estimate the number of 

positively affected entities for every 

provision we propose, these reforms 

would benefit about 6,400 Intermediate 

Care Facilities through elimination of 

pejorative nomenclature that 

pervasively affects their names and 

operations. All of the provisions 

included in the proposed rule aim to 

identify and eliminate duplicative, 

overlapping, outdated and conflicting 

regulatory requirements that 

unnecessarily add confusion or costs to 

various providers or patients as they 

attempt to navigate excessive or obsolete 

or contradictory regulatory 

requirements. By making these changes, 

we believe health professionals would 

have increased resources to devote to 

improving patient care, increasing 

accessibility to care and reducing 

associated health care costs. We invite 

and welcome comments on any and all 

of the provisions of the proposed rule 

with regard to the impacts of the burden 

reductions, as well as alternatives, if 

any, we should consider in the final rule 

or in future rulemaking on other 

regulatory provisions. 

In addition, section 1102(b) of the 

Social Security Act requires us to 

prepare a regulatory impact analysis if 

a rule may have a significant impact on 

the operations of a substantial number 

of small rural hospitals. This analysis 

must conform to the provisions of 

section 603 of the RFA. For purposes of 

section 1102(b) of the Act, we define a 

small rural hospital as a hospital that is 

located outside of a metropolitan 

statistical area and has fewer than 100 

beds. This rule has no direct effects on 

hospitals. Therefore, we are not 

preparing an analysis for section 1102(b) 

of the Act because we have determined, 

and the Secretary certifies, that this 

proposed rule would not have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. 

G. Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

also requires that agencies assess 

anticipated costs and benefits before 

issuing any rule whose mandates 

require expenditures in any 1 year of 

$100 million in 1995 dollars, updated 


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Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 65923 

annually for inflation on either State, 

local, or tribal governments, or the 

private sector. In 2011, that threshold is 

approximately $136 million. This 

proposed rule mandates no new 

expenditures by either State, local, or 

tribal governments, or the private sector. 

H. Federalism 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

Since this regulation does not impose 

any costs on State or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

List of Subjects 

42 CFR Part 400 

Grant programs—health, Health 

facilities, Health maintenance 

organizations (HMO), Medicaid, 

Medicare, Reporting and recordkeeping 

requirements. 

42 CFR Part 405 

Administrative practice and 

procedure, Health facilities, Health 

professions, Kidney diseases, Medical 

devices, Medicare, Reporting and 

recordkeeping requirements, Rural 

areas, X-rays. 

42 CFR Part 416 

Health facilities, Health professions, 

Medicare, Reporting and recordkeeping 

requirements. 

42 CFR Part 423 

Administrative practice and 

procedure, Emergency medical services, 

Health facilities, Health Maintenance 

Organizations (HMO), Health 

professionals, Medicare, Penalties, 

Privacy, Reporting and recordkeeping 

requirements. 

42 CFR Part 424 

Emergency medical services, Health 

facilities, Health professions, Medicare, 

Reporting and recordkeeping 

requirements. 

42 CFR Part 440 

Grant programs—health, Medicaid. 

42 CFR Part 442 

Grant programs—health, Health 

facilities, Health professions, Medicaid, 

Nursing homes, Reporting and 

recordkeeping requirements. 

42 CFR Part 486 

Grant programs—health, Health 

facilities, Medicare, Reporting and 

recordkeeping requirements, X-rays. 

42 CFR Part 494 

Health facilities, Kidney diseases, 

Medicare, Reporting and recordkeeping 

requirements. 

For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services proposes to amend 

42 CFR chapter IV as set forth below: 

PART 400—INTRODUCTION; 

DEFINITIONS 

1. The authority citation for part 400 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

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

1395hh) and 44 U.S.C. Chapter 35. 

Subpart B—Definitions 

2. Section 400.200 is amended by 

adding the definition of ‘‘beneficiary’’ in 

alphabetical order to read as follows: 

§ 400.200 General definitions. 

* * * * * 

Beneficiary means a person who is 

entitled to Medicare benefits and/or has 

been determined to be eligible for 

Medicaid. 

* * * * * 

§ 400.202 [Amended] 

3. Section 400.202 is amended by 

removing the definition of 

‘‘beneficiary.’’ 

4. Section 400.203 is amended by 

removing the definition of ‘‘recipient’’ 

and adding the definition of 

‘‘intellectual disability’’ in alphabetical 

order to read as follows: 

§ 400.203 Definitions specific to Medicaid. 

* * * * * 

Intellectual disability means the 

condition that was previously referred 

to as mental retardation. 

* * * * * 

Subpart C—[Removed and Reserved] 

5. Subpart C, consisting of §§ 400.300 

and 400.310, is removed and reserved. 

PART 405—FEDERAL HEALTH 

INSURANCE FOR THE AGED AND 

DISABLED 

6. The authority citation for part 405 

continues to read as follows: 

Authority: Secs. 205(a), 1102, 1861, 

1862(a), 1869, 1871, 1874, 1881, and 1886(k) 

of the Social Security Act (42 U.S.C. 405(a), 

1302, 1395x, 1395y(a), 1395ff, 1395hh, 

1395kk, 1395rr and 1395ww(k)), and sec. 353 

of the Public Health Service Act (42 U.S.C. 

263a). 

7. Redesignate § 405.706 in subpart G 

as § 405.925 in subpart I. 

Subpart G—[Removed and Reserved] 

8. Remove and reserve subpart G 

consisting of § 405.701 through 

§ 405.705 and § 405.708 through 

§ 405.753. 

9. Subpart H is revised to read as 

follows: 

Subpart H—Appeals Under the 

Medicare Part B Program 

Sec. 

405.800 Appeals of CMS or a CMS 

contractor. 

405.803 Appeals rights. 

405.806 Impact of reversal of contractor 

determinations on claims processing. 

405.809 Reinstatement of provider or 

supplier billing privileges following 

corrective action. 

405.812 Effective date for DMEPOS 

supplier’s billing privileges. 

405.815 Submission of claims. 

405.818 Deadline for processing provider 

enrollment initial determinations. 

Authority: Secs. 1102, 1866(j), and 1871 of 

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

1395cc(j), and 1395hh). 

Subpart H—Appeals Under the 

Medicare Part B Program 

§ 405.800 Appeals of CMS or a CMS 

contractor. 

A CMS contractor’s (that is, a carrier, 

Fiscal Intermediary or Medicare 

Administrative Contractor (MAC)) 

determination that a provider or 

supplier fails to meet the requirements 

for Medicare billing privileges. 

(a) Denial of a provider or supplier 

enrollment application. If CMS or a 

CMS contractor denies a provider’s or 

supplier’s enrollment application, CMS 

or the CMS contractor notifies the 

provider or supplier by certified mail. 

The notice includes the following: 

(1) The reason for the denial in 

sufficient detail to allow the provider or 

supplier to understand the nature of its 

deficiencies. 

(2) The right to appeal in accordance 

with part 498 of this chapter. 

(3) The address to which the written 

appeal must be mailed. 

(b) Revocation of Medicare billing 

privileges—(1) Notice of revocation. If 

CMS or a CMS contractor revokes a 

provider’s or supplier’s Medicare billing 

privileges, CMS or a CMS contractor 

notifies the supplier by certified mail. 

The notice must include the following: 

(i) The reason for the revocation in 

sufficient detail for the provider or 

supplier to understand the nature of its 

deficiencies. 

(ii) The right to appeal in accordance 

with part 498 of this chapter. 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
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(iii) The address to which the written 

appeal must be mailed. 

(2) Effective date of revocation. The 

revocation of a provider’s or supplier’s 

billing privileges is effective 30 days 

after CMS or the CMS contractor mails 

notice of its determination to the 

provider or supplier, except if the 

revocation is based on a Federal 

exclusion or debarment, felony 

conviction, license suspension or 

revocation, or the practice location is 

determined by CMS or its contractor not 

to be operational. When a revocation is 

based on a Federal exclusion or 

debarment, felony conviction, license 

suspension or revocation, or the practice 

location is determined by CMS or its 

contractor not to be operational, the 

revocation is effective with the date of 

exclusion or debarment, felony 

conviction, license suspension or 

revocation or the date that CMS or its 

contractor determined that the provider 

or supplier was no longer operational. 

(3) Payment after revocation. 

Medicare does not pay, and the CMS 

contractor rejects, claims for services 

submitted with a service date on or after 

the effective date of a provider’s or 

supplier’s revocation. 

§ 405.803 Appeals rights. 

(a) A provider or supplier may appeal 

the initial determination to deny a 

provider or supplier’s enrollment 

application, or if applicable, to revoke 

current billing privileges by following 

the procedures specified in part 498 of 

this chapter. 

(b) The reconsideration of a 

determination to deny or revoke a 

provider or supplier’s Medicare billing 

privileges is handled by a CMS Regional 

Office or a contractor hearing officer not 

involved in the initial determination. 

(c) Providers and suppliers have the 

opportunity to submit evidence related 

to the enrollment action. Providers and 

suppliers must, at the time of their 

request, submit all evidence that they 

want to be considered. 

(d) If supporting evidence is not 

submitted with the appeal request, the 

contractor contacts the provider or 

supplier to try to obtain the evidence. 

(e) If the provider or supplier fails to 

submit the evidence before the 

contractor issues its decision, the 

provider or supplier is precluded from 

introducing new evidence at higher 

levels of the appeals process. 

§ 405.806 Impact of reversal of contractor 

determinations on claims processing. 

(a) Claims for services furnished to 

Medicare beneficiaries during a period 

in which the supplier billing privileges 

were not effective are rejected. 

(b) If a supplier is determined not to 

have qualified for billing privileges in 

one period but qualified in another, 

Medicare contractors process claims for 

services furnished to beneficiaries 

during the period for which the supplier 

was Medicare-qualified. Subpart C of 

this part sets forth the requirements for 

the recovery of overpayments. 

(c) If a revocation of a supplier’s 

billing privileges is reversed upon 

appeal, the supplier’s billing privileges 

are reinstated back to the date that the 

revocation became effective. 

(d) If the denial of a supplier’s billing 

privileges is reversed upon appeal and 

becomes binding, then the appeal 

decision establishes the date that the 

supplier’s billing privileges become 

effective. 

§ 405.809 Reinstatement of provider or 

supplier billing privileges following 

corrective action. 

If a provider or supplier completes a 

corrective action plan and provides 

sufficient evidence to the CMS 

contractor that it has complied fully 

with the Medicare requirements, the 

CMS contractor may reinstate the 

provider’s or supplier’s billing 

privileges. The CMS contractor may pay 

for services furnished on or after the 

effective date of the reinstatement. The 

effective date is based on the date the 

provider or supplier is in compliance 

with all Medicare requirements. A CMS 

contractor’s refusal to reinstate a 

supplier’s billing privileges based on a 

corrective action plan is not an initial 

determination under part 498 of this 

chapter. 

§ 405.812 Effective date for DMEPOS 

supplier’s billing privileges. 

If a CMS contractor, contractor 

hearing officer, or ALJ determines that 

a DMEPOS supplier’s denied enrollment 

application meets the standards in 

§ 424.57 of this chapter and any other 

requirements that may apply, the 

determination establishes the effective 

date of the billing privileges as not 

earlier than the date the carrier made 

the determination to deny the DMEPOS 

supplier’s enrollment application. 

Claims are rejected for services 

furnished before that effective date. 

§ 405.815 Submission of claims. 

A provider or supplier succeeding in 

having its enrollment application denial 

or billing privileges revocation reversed 

in a binding decision, or in having its 

billing privileges reinstated, may submit 

claims to the CMS contractor for 

services furnished during periods of 

Medicare qualification, subject to the 

limitations in § 424.44 of this chapter, 

regarding the timely filing of claims. If 

the claims previously were filed timely 

but were rejected, they are considered 

filed timely upon resubmission. 

Previously denied claims for items or 

services furnished during a period of 

denial or revocation may be resubmitted 

to CMS within 1 year after the date of 

reinstatement or reversal. 

§ 405.818 Deadline for processing provider 

enrollment initial determinations. 

Contractors approve or deny complete 

provider or supplier enrollment 

applications to approval or denial 

within the following timeframes: 

(a) Initial enrollments—Contractors 

process new enrollment applications 

within 180 days of receipt. 

(b) Revalidation of existing 

enrollments—Contractors process 

revalidations within 180 days of receipt. 

(c) Change-of-information and 

reassignment of payment request— 

Contractors process change-ofinformation and reassignment of 

payment requests within 90 days of 

receipt. 

PART 416—AMBULATORY SURGICAL 

SERVICES 

10. 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 

11. Section 416.44 is amended by— 

a. Removing paragraph (a)(3). 

b. Revising paragraph (c). 

The revisions read as follows: 

§ 416.44 Condition for coverage— 

Environment. 

* * * * * 

(c) Standard: Emergency equipment. 

The ASC medical staff and governing 

body of the ASC coordinates, develops, 

and revises ASC policies and 

procedures to specify the types of 

emergency equipment required for use 

in the ASC’s operating room. The 

equipment must meet the following 

requirements: 

(1) Be immediately available for use 

during emergency situations. 

(2) Be appropriate for the facility’s 

patient population. 

(3) Be maintained by appropriate 

personnel. 

* * * * * 

PART 423—VOLUNTARY MEDICARE 

PRESCRIPTION DRUG BENEFIT 

12. The authority citation for part 423 

continues to read as follows: 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
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Authority: Section 1860D–4(e) of the 

Social Security Act (42 U.S.C 1395w–104(e)). 

Subpart D—Cost Control and Quality 

Improvement Requirements 

13. Section 423.160 is amended by 

revising paragraph (b)(3) to read as 

follows: 

§ 423.160 Standards for electronic 

prescribing. 

* * * * * 

(b) * * * 

(3) Eligibility. (i) The Accredited 

Standards Committee X12N 270/271– 

Health Care Eligibility Benefit Inquiry 

and Response, Version 5010, April 

2008, ASC X12N/005010x279 

(incorporated by reference in paragraph 

(c)(2)(i) of this section), for transmitting 

eligibility inquiries and responses 

between prescribers and Part D 

sponsors. 

(ii) The National Council for 

Prescription Drug Programs 

Telecommunication Standard 

Specification, Version D, Release 0 

(Version D.0), August 2007, and 

equivalent NCPDP Batch Standard 

Batch Implementation Guide, Version 1, 

Release 2 (Version 1.2), January 2006 

supporting Telecommunications 

Standard Implementation Guide, 

Version D, Release 0 (Version D.0), 

August 2007, for the NCPDP Data 

Record in the Detail Data Record 

(incorporated by reference in paragraph 

(c)(1)(iii) of this section), for 

transmitting eligibility inquiries and 

responses between dispensers and Part 

D sponsors. 

* * * * * 

PART 424—CONDITIONS FOR 

MEDICARE PAYMENT 

14. The authority citation for part 424 

continues to read as follows: 

Authority: Secs. 1102 and 1871 of the 

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

1395hh). 

Subpart P—Requirements for 

Establishing and Maintaining Medicare 

Billing Privileges 

15. Section 424.510 is amended by 

revising paragraph (a) to read as follows: 

§ 424.510 Requirements for enrolling in 

the Medicare program. 

(a) Providers and suppliers must 

submit enrollment information on the 

applicable enrollment application. Once 

the provider or supplier successfully 

completes the enrollment process, 

including, if applicable, a State survey 

and certification or accreditation 

process, CMS enrolls the provider or 

supplier into the Medicare program. To 

be enrolled, a provider or supplier must 

meet enrollment requirements specified 

in paragraph (d) of this section. 

* * * * * 

16. Section 424.535 is amended by 

revising paragraph (c) to read as follows: 

§ 424.535 Revocation of enrollment and 

billing privileges in the Medicare program. 

* * * * * 

(c) Reapplying after revocation. After 

a provider, supplier, delegated official, 

or authorizing official has had their 

billing privileges revoked, they are 

barred from participating in the 

Medicare program from the effective 

date of the revocation until the end of 

the re-enrollment bar. The re-enrollment 

bar is a minimum of 1 year, but not 

greater than 3 years, depending on the 

severity of the basis for revocation. The 

re-enrollment bar does not apply in the 

event a revocation of Medicare billing 

privileges is imposed under paragraph 

(a)(1) of this section based upon a 

provider or supplier’s failure to respond 

timely to a revalidation request or other 

request for information. 

* * * * * 

17. Section 424.540(a) is revised to 

read as follows: 

§ 424.540 Deactivation of Medicare billing 

privileges. 

(a) Reasons for deactivation. CMS 

may deactivate the Medicare billing 

privileges of a provider or supplier for 

any of the following reasons: 

(1) The provider or supplier does not 

submit any Medicare claims for 12 

consecutive calendar months. This 

requirement does not apply to suppliers 

that enroll in the Medicare program 

using a Form CMS–855I. The 12-month 

period will begin the 1st day of the 1st 

month without a claims submission 

through the last day of the 12th month 

without a submitted claim. 

(2) The provider or supplier does not 

report a change to the information 

supplied on the enrollment application 

within 90 calendar days of when the 

change occurred. Changes that must be 

reported include, but are not limited to, 

a change in practice location, a change 

of any managing employee, and a 

change in billing services. A change in 

ownership or control must be reported 

within 30 calendar days as specified in 

§ 424.520(b) and § 424.550(b). 

(3) The provider or supplier does not 

furnish complete and accurate 

information and all supporting 

documentation within 90 calendar days 

of receipt of notification from CMS to 

submit an enrollment application and 

supporting documentation, or resubmit 

and certify to the accuracy of its 

enrollment information. 

* * * * * 

PART 440—SERVICES: GENERAL 

PROVISIONS 

18. The authority citation for part 440 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 302). 

Subpart A—Definitions 

19. Section 440.110 is amended by 

revising paragraphs (a)(2) and (b)(2) to 

read as follows: 

§ 440.110 Physical therapy, occupational 

therapy, and services for individuals with 

speech, hearing, and language disorders. 

(a) * * * 

(2) A ‘‘qualified physical therapist’’ is 

an individual who meets personnel 

qualifications for a physical therapist at 

§ 484.4. 

(b) * * * 

(2) A ‘‘qualified occupational 

therapist’’ is an individual who meets 

personnel qualifications for an 

occupational therapist at § 484.4. 

* * * * * 

PART 442—STANDARDS FOR 

PAYMENT TO NURSING FACILITIES 

AND INTERMEDIATE CARE 

FACILITIES FOR THE MENTALLY 

RETARDED 

20. The authority citation for part 442 

continues to read as follows: 

Authority: Sec. 1102 of the Social Security 

Act (42 U.S.C. 1302), unless otherwise noted. 

Subpart B—Provider Agreements 

21. Section 442.15 is revised to read 

as follows: 

§ 442.15 Duration of agreement for ICFs/ 

ID. 

(a) The agreement for an ICF/MR 

remains in effect until the Secretary 

determines that the facility no longer 

meets the applicable requirements. The 

State Survey Agency must conduct a 

survey of the facility to determine 

compliance with the requirements at a 

survey interval of no greater than 

15 months. 

(b) FFP is available for services 

furnished by a facility for up to 30 days 

after its agreement expires or terminates 

under the conditions specified in 

§ 441.11 of this subchapter. 

§ 442.16 [Removed and Reserved] 

22. Section 442.16 is removed and 

reserved. 


srobinson on DSK4SPTVN1PROD with PROPOSALS3
65926 Federal Register / Vol. 76, No. 205 / Monday, October 24, 2011 / Proposed Rules 

Subpart C—Certification of ICFs/ID 

23. Section 442.109 is revised to read 

as follows: 

§ 442.109 Certification period for ICFs/ID: 

General provisions. 

(a) A survey agency may certify a 

facility that fully meets applicable 

requirements. The State Survey Agency 

must conduct a survey of each ICF/MR 

not later than 15 months after the last 

day of the previous survey. 

(b) The statewide average interval 

between surveys must be 12 months or 

less, computed in accordance with 

paragraph (c) of this section. 

(c) The statewide average interval is 

computed at the end of each Federal 

fiscal year by comparing the last day of 

the most recent survey for each 

participating facility to the last day of 

each facility’s previous survey. 

24. Section 442.110 is amended by 

revising paragraph (b) to read as follows: 

§ 442.110 Certification period for ICFs/ID 

with standard-level deficiencies. 

* * * * * 

(b) The survey agency may certify a 

facility for a period that ends no later 

than 60 days after the last day specified 

in the plan for correcting deficiencies. 

The certification period must not exceed 

15 months, including the period 

allowed for corrections. 

* * * * * 

PART 486—CONDITIONS FOR 

COVERAGE OF SPECIALIZED 

SERVICES FURNISHED BY 

SUPPLIERS 

25. The authority citation for part 486 

continues to read as follows: 

Authority: Secs. 1102, 1138, and 1871 of 

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

1320b–8, and 1395hh) and section 371 of the 

Public Health Service Act (42 U.S.C. 273). 

Subpart G—Requirements for 

Certification and Designation and 

Conditions for Coverage: Organ 

Procurement Organizations 

26. Section 486.302 is amended by 

revising the definition of ‘‘donor 

document’’ to read as follows: 

§ 486.302 Definitions. 

* * * * * 

Donor document means any 

documented indication of an 

individual’s choice that was executed 

by the patient, in accordance with any 

applicable State law, prior to his or her 

death, and that states his or her wishes 

regarding organ and/or tissue donation. 

* * * * * 

§ 486.324 [Amended] 

27. Section 486.324 is amended by 

removing the second paragraph (e). 

PART 494—CONDITIONS FOR 

COVERAGE FOR END-STAGE RENAL 

DISEASE FACILITIES 

28. The authority citation for part 494 

continues to read as follows: 

Authority: Secs.1102 and 1871 of the 

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

1395hh). 

Subpart B—Patient Safety 

29. Section 494.60(e) is revised to 

read as follows: 

§ 494.60 Condition: Physical environment. 

* * * * * 

(e) Standard: Fire safety. (1) Except as 

provided in paragraph (e)(2) of this 

section, by February 9, 2009, dialysis 

facilities that are located adjacent to 

high hazardous occupancies or do not 

provide one or more exits to the outside 

at grade level from the patient treatment 

area level, must comply with applicable 

provisions of the 2000 edition of the 

Life Safety Code of the National Fire 

Protection Association (which is 

incorporated by reference at 

§ 403.744(a)(1)(i) of this chapter). 

(2) Notwithstanding paragraph (e)(1) 

of this section, dialysis facilities 

participating in Medicare as of October 

14, 2008 that require sprinkler systems 

are those housed in multi-story 

buildings of construction Types II(000), 

III(200), or V(000), as defined in the 

2000 edition of the Life Safety Code of 

the National Fire Protection Association 

(which is incorporated by reference at 

§ 403.744(a)(1)(i) of this chapter), 

section 21.1.6.3, which were 

constructed after January 1, 2008; and 

those housed in high rise buildings over 

75 feet in height. 

* * * * * 

Nomenclature Changes 

30. In 42 CFR chapter IV, remove 

‘‘Recipient’’ and ‘‘Recipients’’ wherever 

they appear and add in their place 

‘‘Beneficiary’’ and ‘‘Beneficiaries,’’ 

respectively. 

31. In 42 CFR chapter IV, remove 

‘‘Mental Retardation,’’ ‘‘Mentally 

Retarded’’ and the abbreviated form 

‘‘MR’’ wherever they appear and add in 

their place ‘‘Intellectual Disability,’’ 

‘‘Intellectually Disabled’’ and ‘‘ID,’’ 

respectively. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

Dated: July 28, 2011. 

Donald M. Berwick, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: October 6, 2011. 

Kathleen Sebelius, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2011–27176 Filed 10–18–11; 11:15 am] 

BILLING CODE 4120–01–P 


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