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[Federal Register Volume 78, Number 26 (Thursday, February 7, 2013)]
[Proposed Rules]
[Pages 9215-9245]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-02421]

[[Page 9215]]

Vol. 78

Thursday,

No. 26

February 7, 2013

Part III

Department of Health and Human Services

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 Centers for Medicare & Medicaid Services

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42 CFR Parts 416, 442, 482, et al.

Medicare and Medicaid Programs; Part II--Regulatory Provisions To 
Promote Program Efficiency, Transparency, and Burden Reduction; 
Proposed Rule

Federal Register / Vol. 78 , No. 26 / Thursday, February 7, 2013 / 
Proposed Rules

[[Page 9216]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 416, 442, 482, 483, 485, 486, 488, 491, and 493

[CMS-3267-P]
RIN 0938-AR49

Medicare and Medicaid Programs; Part II--Regulatory Provisions To 
Promote Program Efficiency, Transparency, and Burden Reduction

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule would reform Medicare regulations that CMS 
has identified as unnecessary, obsolete, or excessively burdensome on 
health care providers and suppliers, as well as certain regulations 
under the Clinical Laboratory Improvement Amendments of 1988 (CLIA). 
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 resources away from 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 April 8, 2013.

ADDRESSES: In commenting, please refer to file code CMS-3267-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-3267-P, P.O. Box 8010, 
Baltimore, MD 21244-8010.
    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-3267-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: Lauren Oviatt, (410) 786-4683. 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.

Executive Summary for This Proposed Rule

A. Purpose

    In Executive Order 13563, ``Improving Regulations and Regulatory 
Review'', the President recognized the importance of a streamlined, 
effective, and 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 proposed rule 
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. Summary of the Major Provisions

    We are proposing to reduce regulatory burden on providers and 
suppliers by modifying, removing, or streamlining current regulations 
that we believe are excessively burdensome.
     Radiology services in ambulatory surgical centers: This 
proposed rule would reduce the requirements Ambulatory Surgical Centers 
(ASCs) must meet in order to provide radiological services to match 
those services they actually perform. ASCs are currently subject to the 
full hospital requirements for radiology services even though they are 
only permitted to provide limited radiologic services integral to the 
performance of certain surgical procedures.
     Hospital registered dietitian privileges: We propose to 
include qualified dietitians as practitioners who may be privileged to 
order patient diets under the hospital conditions of participation 
(CoPs).

[[Page 9217]]

     Hospital supervision of radiopharmaceutical preparation: 
We propose to revise the Nuclear medicine services CoP to remove the 
modifier ``direct'' from the in-house preparation supervision 
requirement. The presence of a pharmacist, MD, or DO would no longer be 
required during the delivery of off-hour nuclear medicine tests. These 
proposed changes are based on the Society of Nuclear Medicine and 
Molecular Imaging recommendations on this issue.
     Hospital reclassification of swing-bed services: We 
propose to revise the requirements by relocating the swing-bed CoPs to 
Subpart D, which would classify swing beds as an optional service. This 
revision would allow a hospital's compliance with ``swing bed'' 
requirements to be evaluated during routine accrediting organization 
surveys. This would reduce the burden on hospitals by not requiring an 
additional survey specifically for ``swing bed'' approval.
     Transplant centers reports to CMS: The CoPs require 
transplant programs to notify CMS of certain changes related to the 
center's transplant program. The current system for transplant center 
data analysis, in effect, requires the centers to submit data which CMS 
routinely receives through other sources. This creates unnecessary 
paperwork and burden on the transplant program and does not contribute 
to Federal oversight. We propose to eliminate this redundant data 
submission requirement.
     Transplant center re-approval process: The current 
transplant survey process and regulatory criteria require programs be 
subject to an automatic onsite review of compliance with key CoPs under 
a 3-year re-approval cycle under particular conditions. This leads some 
transplant programs to undergo an onsite survey that may not be 
necessary to ensure a proper level of federal oversight, and it also 
does not always provide for the most effective method to target survey 
resources where they are most needed. In addition, since we are already 
receiving the data we need to determine if a center is complying with 
outcome requirements, eliminating this automatic re-approval cycle 
would not result in any reduction in Federal oversight of the center. 
It would, however, enable us to more efficiently use our survey 
resources. In lieu of the automatic 3-year re-approval cycle, we 
propose to provide more flexibility in the re-approval cycle to be able 
to focus survey attention where it is most needed. We would also 
clarify the following--(1) the review of mitigating factors process 
could occur at any time there was non-compliance with the CoPs, and (2) 
that compliance with the CoPs would be a continuous requirement, as 
already specified in Sec.  488.61(c).
     Long term care sprinkler waiver: All buildings containing 
long term care (LTC) facilities are required to have automatic 
sprinkler systems installed throughout the building by August 13, 2013 
(Sec.  483.70(a)(8)). Based on recent public feedback, we believe that 
some facilities will not be able to meet the 2013 deadline. In order to 
maintain access to LTC facilities, and in recognition of financing 
difficulties faced by some providers, we are proposing a provision that 
would allow LTC facilities the opportunity to apply for a deadline 
extension, not to exceed 2 years, if certain conditions apply. An 
additional extension may be granted for up to 1 year, depending on the 
need and particular circumstances.
     CAH provision of services: Critical Access Hospital (CAH) 
CoPs require that a CAH must develop its patient care policies with the 
advice of ``at least one member who is not a member of the CAH staff.'' 
We believe that this provision is no longer necessary and that the 
original reasons for including this requirement (lack of local 
resources and in-house expertise) have been effectively addressed. 
Also, based on our experience with CAHs and input from the provider 
community, it is a challenge for facilities to comply with this 
requirement. These challenges include the amount of time it takes to 
familiarize the non-staff member with the CAH's operations, high 
turnover, and, in many cases, the expense of paying outside personnel.
     CAH and RHC/FQHC physician responsibilities: The 
regulations for CAHs, Rural Health Clinics (RHCs), and Federally 
Qualified Health Centers (FQHCs), require a physician to be present for 
sufficient periods of time, at least once in every 2 week period, 
except in extraordinary circumstances. Some providers in extremely 
remote areas or areas that have geographic barriers have indicated that 
they find it difficult to comply with the precise biweekly schedule 
requirement. Many rural populations suffer from limited access to care 
due to a shortage of health care professionals, especially physicians. 
Recent improvements in, and expansion of, telemedicine services allow 
for physicians to provide certain types of care to remote facilities at 
much less cost. We propose to revise the CAH and RHC/FQHC regulations 
to eliminate the requirement that a physician must be onsite at least 
once in every 2-week period.
    Clinical Laboratory Improvement Amendments Revisions: This proposed 
rule would make a number of clarifications and changes pertaining to 
CMS regulations governing proficiency testing referrals under the 
Clinical Laboratory Improvement Amendments of 1988 (CLIA). These 
changes would prevent confusion on the part of laboratories, reduce the 
risk of noncompliance, and establish policies under which certain PT 
referrals by laboratories would not generally be subject to revocation 
of a CLIA certificate, or a two-year prohibition on laboratory 
ownership or operation that may be applied to an owner and an operator 
when a CLIA certificate is revoked.
     Treatment of proficiency testing samples: We are proposing 
to add a clarifying statement that explicitly notes that the 
requirement to treat proficiency testing (PT) samples in the same 
manner as patient specimens does not mean that it is acceptable to 
refer PT samples to another laboratory for testing even if that is the 
protocol for patient specimens.
     Intentional referral carve-out: We are proposing to carve 
out a narrow exception in our long-standing interpretation of what 
constitutes an ``intentional'' referral of PT samples. In these 
instances, the laboratory would be subject to alternate sanctions.
     New definitions: To clarify the stipulations of the 
intentional referral carve-out, we would also add the following terms, 
with their definitions, to the regulation: Reflex testing, Confirmatory 
testing, and repeat PT referral.
    Proposals That Would Remove Obsolete or Duplicative Regulations or 
Provide Clarifying Information: We would remove regulations set out in 
the Code of Federal Regulations (CFR) that have become obsolete and are 
no longer needed or enforced and would clarify other provisions.
     Hospital medical staff: We propose to clarify the 
requirement that a hospital's medical staff must be generally composed 
of physicians but that it may also include, in accordance with State 
laws, including scope-of-practice laws, other categories of non-
physician practitioners who are determined to be eligible for 
appointment by the governing body.
     Transplant centers outcome review: The transplant center 
CoPs state that, ``[e]xcept for lung transplants, CMS will review adult 
and pediatric outcomes separately when a center requests Medicare 
approval to perform both adult and pediatric transplants.'' Changes to 
the transplant center

[[Page 9218]]

reporting system have made the separate review for lung transplant data 
obsolete. Therefore, we are proposing to remove this language.
     Transplant center volume and clinical experience 
requirements: The transplant center CoPs state that ``[t]he required 
number of transplants must have been performed during the time frame 
reported in the most recent SRTR center-specific report.'' The 
Scientific Registry for Transplant Recipients (SRTR) provides 
statistical information about transplant outcomes and transplant 
programs nationwide. Under the current regulations, however, there is 
no requirement that a certain number of transplants be performed during 
a particular period that would be covered in a single SRTR center-
specific report. This has resulted in transplant centers being confused 
about the volume of transplants they are required to perform during any 
particular period of time covered by the SRTR center-specific reports. 
We are proposing changes to clarify the transplant volume and clinical 
experience requirements.
     RHC/FQHC definition of physician: The definition of a 
``physician'' in the RHC/FQHC regulations does not conform to the 
definition of a ``physician'' in the payment regulations. We propose to 
revise the regulation to conform to the definition in the payment 
regulations to eliminate possible confusion in the provider community.
    Proposals that Respond to Stakeholder Concerns: We have identified 
changes that would improve clarity and respond to concerns raised by 
the public.
     Hospital governing body: We are proposing to add a new 
provision to the ``Medical staff'' standard of the governing body CoP. 
This new provision would require a hospital's governing body to 
directly consult at least periodically throughout the calendar year or 
fiscal year with the individual responsible for the organized medical 
staff of the hospital, or his or her designee. For a multi-hospital 
system using a single governing body to oversee multiple hospitals 
within its system, this provision would require the single governing 
body to consult directly with the individual responsible for the 
organized medical staff (or his or her designee) of each hospital 
within its system in addition to the other requirements proposed here. 
We are also proposing to remove the requirement for a medical staff 
member, or members, to be on a hospital's governing body.
     Hospital medical staff: We propose to revise Sec.  482.22 
to require that each hospital must have an organized and individual 
medical staff, distinct to that individual hospital, that operates 
under bylaws approved by the governing body, and which is responsible 
for the quality of medical care provided to patients by that individual 
hospital.
     Practitioners permitted to order hospital outpatient 
services: We propose to revise the Outpatient services CoP to allow for 
practitioners who are not on the hospital's medical staff to order 
hospital outpatient services for their patients when authorized by the 
medical staff and allowed by State law.
     Hospital diet terminology: We propose to update 
terminology related to ``diets'' and ``therapeutic diets'' in the CoPs.
     Request for comment on RHC services: In addition, this 
proposed regulation seeks comment on potential changes we could make to 
regulatory or other requirements that could reduce barriers to the 
provision of telehealth, hospice, or home health services in an RHC.
    Technical Corrections: We are proposing technical corrections to 
some regulations.
     Organ Procurement Organizations (OPOs): We are proposing 
some technical corrections to the CoPs for OPOs.
     Intermediate Care Facilities for Individuals who are 
Intellectually Disabled (ICF/IIDs): We are proposing some technical 
corrections to clarify state survey agency certification survey 
requirements for ICF/IIDs.
     Rural Health Clinics (RHCs): We propose to correct a 
technical error in the regulations by amending Sec.  491.8(a)(6) to 
conform to section 6213(a)(3) of OBRA '89 (Pub. L. 101-239),which 
requires that an NP, PA, or certified nurse-midwife (CNM) be available 
to furnish patient care at least 50 percent of the time the RHC 
operates.

C. Summary of Costs and Benefits

1. Overall Impact
    This proposed rule would create savings and reduce burden in many 
areas. Several of the proposed changes would create measurable monetary 
savings for providers and suppliers, while others would create less 
tangible savings of time and administrative burden. We estimate one-
time savings of $22 million, and annual recurring savings of $654 
million.
2. Section-by-Section Economic Impact Estimates.
    The following table summarizes the provisions, which we are able to 
provide specific estimates for savings or burden reductions (these 
estimates are uncertain and could be substantially higher or lower, as 
explained in the regulatory impact analysis section of this rule):

------------------------------------------------------------------------
                                                             Estimated
                                                            first year
               Issue                      Frequency         savings or
                                                            benefits ($
                                                             millions)
------------------------------------------------------------------------
Ambulatory Surgical Centers:
     Radiology Services...  Recurring annually..             Food and dietetic      Recurring annually..       83 to 528
     services.
     Nuclear medicine       Recurring annually..              39
     services.
Transplant Centers:
     Reports to CMS &       Recurring annually..               Sprinkler Deadline     One-time............              22
     Extension.
Rural Health:
     CAH & RHC/FQHC         Recurring annually..              42
     Physician responsibilities.
     CAH Provision of       Recurring annually..               PT Referral..........  Recurring annually..               2
                                                         ---------------
        Total.....................                            231 to 676
------------------------------------------------------------------------

[[Page 9219]]

Table of Contents

    This proposed rule is organized as follows:
I. Background
II. Provisions of the Proposed Regulations
    A. Ambulatory Surgical Centers
    B. Intermediate Care Facilities for Individuals who are 
Intellectually Disabled
    C. Hospitals
    1. Governing Body (Sec.  482.12)
    2. Medical Staff (Sec.  482.22)
    3. Food and Dietetic Services (Sec.  482.28)
    4. Nuclear Medicine Services (Sec.  482.53)
    5. Outpatient Services (Sec.  482.54)
    6. Special Requirements for Hospital Providers of Long-term Care 
Services (``swing-beds'') (Sec.  482.66)
    D. Transplant Centers and Organ Procurement Organizations
    1. Reports to CMS (Sec.  482.74)
    2. Transplant Outcome Review (Sec. Sec.  482.80(c) and 
482.82(c))
    3. Volume and Clinical Experience Requirements (Sec. Sec.  
482.80(c)(2) and 482.82(c)(2))
    4. Transplant Center Re-approval Process
    5. Technical Corrections
    E. Long-term Care Facilities
    F. Rural Health and Primary Care
    1. CAH Provision of Services (Sec.  485.635(a))
    2. CAH and RHC/FQHC Physician Responsibilities (Sec. Sec.  
485.631(b)(2) and 491.8(b)(2))
    3. RHC/FQHC Definitions: Physician (Sec.  491.2)
    4. Technical Correction
    G. Solicitation of Comments on Reducing Barriers to Services in 
Rural Health Clinics (RHCs)
    1. Telehealth Services
    2. Hospice Services
    3. Home Health Services
    4. Other Services
    H. Clinical Laboratory Improvement Amendments of 1988 (CLIA)
III. Collection of Information Requirements
IV. Response to Comments
V. Regulatory Impact Analysis

I. Background

    In January 2011, the President issued Executive Order 13563, 
``Improving Regulation 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 August 22, 
2011, a 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 regulations 
that could be eliminated or reformed to improve effectiveness or reduce 
unnecessary reporting requirements 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. In addition, CMS has 
identified non-regulatory changes to increase transparency and to 
become a better business partner. For example:
     We have automated our review of Health Services Delivery 
tables, which gives Medicare Advantage (MA) applicants for 
participation as MA plans immediate feedback on their deficiencies 
before submitting applications so that they can address them up-front.
     We have changed the timeframes during which a Medicare 
durable medical equipment (DME) supplier may contact a beneficiary 
concerning refilling an order from 7 days to 15 days before the 
beneficiary's refill date.
     We have streamlined the Skilled Nursing Facility Discharge 
Assessment through Minimum Data Set (MDS) 3.0 which has been designed 
to improve the reliability, accuracy, and usefulness of the MDS. The 
change included the removal of data collections in the MDS that are not 
relevant to the measurement of quality or used for reimbursement 
purposes.
    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 objectives are 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.
    In accordance with these goals, we published two final rules on May 
16, 2012. The first rule, titled ``Reform of Hospital and Critical 
Access Hospital Conditions of Participation,'' finalizes updates to the 
Medicare CoPs and reduces regulatory burden for hospitals and CAHs. The 
second rule, titled ``Regulatory Provisions to Promote Program 
Efficiency, Transparency, and Burden Reduction,'' addresses burdensome 
regulatory requirements for a broader range of healthcare providers and 
suppliers who provide care to Medicare and Medicaid beneficiaries. This 
proposed rule is a continuation of those efforts.

II. Provisions of the Proposed Regulations

A. Ambulatory Surgical Centers

    Section 1832(a)(2)(F)(i) of the Act specifies that Ambulatory 
Surgical Centers (ASCs) must meet health, safety, and other 
requirements as 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 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 CfCs if they are accredited by one 
of the national accrediting organizations that have a CMS-approved 
Medicare ASC accreditation program.
    The ASC CfCs were first published on August 5, 1982 (47 FR 34082), 
and were subsequently amended several times in the last four years: A 
final rule published on November 18, 2008 (73 FR 68502), 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); a 
subsequent final rule amended the Patient rights CfC on October 24, 
2011 (76 FR 65886); and most recently the final rule published on May 
16, 2012, amended the requirements governing emergency equipment that 
ASCs must maintain (77 FR 29002).
    Section 416.49(b) of Title 42 of the Code of Federal Regulations 
outlines the radiologic services requirements that ASCs must meet in 
order to be Medicare-certified. Since ASCs are facilities that operate 
exclusively to provide a specific range of approved procedures (see 
Sec.  416.2), they may provide radiologic services only to the extent 
that such services are an integral part of the procedures they perform. 
It is important to emphasize that radiologic services are only 
permitted in an ASC when they are integral to the procedure being 
performed. Section 416.49(b)(1) states that the ASC must have 
procedures for obtaining radiological services from a Medicare-

[[Page 9220]]

approved facility to meet the needs of patients. Section 416.49(b)(2) 
requires that the ASC's radiologic services must meet the hospital CoPs 
for radiologic services specified in Sec.  482.26. However, since 
adopting this rule in 2008, we have learned that some of the hospital 
CoP requirements are unduly burdensome for ASCs to meet. In particular, 
the hospital CoP requirement to have a radiologist supervise the 
provision of radiologic services is unduly burdensome, as many ASCs are 
having great difficulty locating a radiologist to supervise the ASC's 
radiologic services. In addition, we have discovered the inclusion of 
the radiologist supervision requirement from the overarching hospital 
radiologic services CoP appears to be an overly aggressive measure 
since ASCs do not provide radiologic services that require 
interpretation for diagnosis. The ASC CoPs were first published in 1982 
and did not include a radiologist supervision requirement until the 
2008 final rule. Moreover, the cost of privileging radiologists as 
members of an ASC's medical staff and paying radiologists fees for 
oversight of radiology studies that are limited to those which are 
integral to a surgical procedure, with the results applied immediately 
by the operating physician, is often needlessly burdensome. Supervision 
of radiologic services should be appropriate to the types of procedures 
conducted by the ASC. The ASC governing body, as set out at Sec.  
416.41, is responsible for the oversight and accountability for the 
quality assessment and performance improvement program, and is 
responsible for ensuring that all policies and services provide quality 
healthcare in a safe environment. The ASC governing body is responsible 
for determining if any procedures, now or in the future, require 
additional review by a radiologist. In addition, the Medical staff CfC 
at Sec.  416.45 requires the governing body be accountable for the 
medical staff, and to ensure that such staff members are legally and 
professionally qualified for the positions to which they are appointed 
and for the performance of the privileges granted. It is important to 
note that the operating surgeon is expected, as part of his or her 
qualifications in order to be privileged to perform the procedure, to 
demonstrate competency in using imaging as an integral part of the 
procedure. If finalized, subsequent ASC interpretive guidance would 
include additional information that would assist surveyors in 
determining if the governing body has met these requirements. We 
believe that supervision of radiologic services used in an ASC by a 
doctor of medicine or osteopathy (MD/DO) on the ASC's medical staff 
with appropriate education and experience in radiologic services would 
be effective in assuring the quality and safety of the radiologic 
services provided currently in ASCs. We welcome your comments on 
whether these proposed changes would allow for appropriate oversight of 
radiologic procedures conducted in ASCs.
    We propose to remove Sec.  416.49(b)(1) and replace it with the 
requirement that radiologic services may only be provided when integral 
to procedures offered by the ASC and must meet the requirements 
specified in Sec.  482.26(b), (c)(2), and (d)(2). We also propose to 
remove the existing language at Sec.  416.49(b)(2) and replace it with 
the requirement that an MD/DO who is qualified by education and 
experience in accordance with State law and ASC policy must supervise 
the provision of radiologic services.
    Also, we note that there is a technical error in Sec.  416.42(b)(2) 
of the ASC CfCs and we are proposing to correct this error. Paragraph 
(b)(2) references ``paragraph (d) of this section'' but 42 CFR 416.42 
does not have a paragraph (d). We propose to correct the error by 
referencing paragraph (c) of that section instead.
    We believe these proposed changes to the ASC radiologic services 
requirements will assure the safety of these services while being less 
burdensome for Medicare-certified ASC facilities. We welcome comments 
from the public on these proposed changes.
    Contact for ASC Topics: CAPT Jacqueline Leach, USPHS, 410-786-4282.

B. Intermediate Care Facilities for Individuals Who Are Intellectually 
Disabled

    In the May 16, 2012, final rule ``Regulatory Provisions to Promote 
Program Efficiency, Transparency, and Burden Reduction,'' (77 FR 29002) 
we eliminated the requirement for time-limited agreements for 
Intermediate Care Facilities for Individuals who are Intellectually 
Disabled (ICF/IID's) and replaced it with an open-ended agreement 
which, consistent with nursing facilities, would remain in effect until 
the Secretary or a State determined that the ICF/IID no longer met the 
ICF/IID CoPs. We also added a requirement that a certified ICF/IID 
would be surveyed, on average, every 12 months with a maximum 15-month 
survey interval. This requirement provides States with more flexibility 
relative to the current process. These changes were implemented by 
revising Sec. Sec.  442.15, 442.109, and 442.110, and by the deletion 
of Sec.  442.16.
    The regulation at Sec.  442.105 describes circumstances for when a 
state survey agency may provide an annual certification of a facility 
found out of compliance with standards for ICF/IID's. Since time-
limited certification is no longer required for ICF/IID's, this section 
serves no purpose and is confusing. Therefore, we propose that this 
section be deleted. We also propose to make a corresponding change to 
Sec.  442.101(d)(3) by deleting a reference to Sec.  442.105.
    A revision to Sec.  442.110(b) made in the May 16, 2012 final rule 
extended the time for which a state may certify ICF/IID's with standard 
level deficiencies. However, the section inadvertently and incorrectly 
maintains time-limited certification for this sub-set of facilities. 
This is inconsistent with the revised survey regulation for ICF/IIDs 
put in place in the May 16, 2012 final rule, and will create confusion 
and barriers to its successful implementation. Therefore, we propose to 
delete Sec.  442.110 in its entirety.
    The language in Sec.  442.105 and Sec.  442.110 was deleted to make 
it consistent with the intent of the Burden Reduction I regulatory 
changes to standardize survey processes of ICF/IIDs with those of 
nursing facilities and other certified providers with open-ended 
certification periods.
    Contact for ICF/IID Topics: Martin Kennedy, 410-786-0784.

C. Hospitals

1. Governing Body (Sec.  482.12)
    On May 16, 2012, we published a final rule, entitled ``Reform of 
Hospital and Critical Access Hospital Conditions of Participation'' (77 
FR 29034). In that rule, we finalized changes to the requirements of 
the Governing body CoP, Sec.  482.12, and adopted a policy to allow one 
governing body to oversee multiple hospitals in a multi-hospital 
system. Additionally, we added a requirement for a medical staff 
member, or members, from at least one hospital in the system to be 
included on the governing body as a means of ensuring communication and 
coordination between a single governing body and the medicals staffs of 
individual hospitals in the system. After publication of the rule, we 
received considerable feedback that the mandate requiring medical staff 
representation on the governing body of a hospital could cause 
unanticipated complications for many hospitals,

[[Page 9221]]

especially public and government-owned institutions. We recognized that 
the provision to include a member of the medical staff on a hospital's 
governing body creates conflicts for some hospitals, particularly 
public and not-for-profit hospitals. Issues include, but are not 
limited to, potential conflicts with some State and local laws that 
require members of a public hospital's governing body to either be 
publicly elected or appointed by the State's governor or by some other 
State or local official(s).
    Given the complexity of the issue, and in light of industry 
feedback, we reviewed this requirement and gathered the relevant 
background information on the issues raised by stakeholders. After 
consideration of the issues, we decided to use this proposed rule to 
rescind part of the new requirement and to propose an alternative. 
Therefore, we propose to remove the requirement for a medical staff 
member, or members, to serve on a hospital's governing body. While we 
believe that it is important that our requirements avoid any 
unnecessary conflicts for hospitals, we believe that it is essential 
that the requirements also ensure that the medical staff perspective on 
quality of care is heard by a hospital's governing body. Therefore, we 
propose to add a new provision to the ``Medical staff'' standard of the 
Governing body CoP at Sec.  482.12(a)(10). This new provision would 
require a hospital's governing body to directly consult with the 
individual responsible for the organized medical staff of the hospital, 
or his or her designee. At a minimum, this direct consultation would 
require a discussion of matters related to the quality of medical care 
provided to patients of the hospital and must occur periodically 
throughout the fiscal or calendar year. While the proposed language 
reflects our intention to leave some degree of flexibility for a 
hospital's governing body (or a multi-hospital system's governing body) 
to determine how often during the year its consultations with the 
chief(s) of its medical staff(s) would occur, we would expect that 
these consultations would occur at least twice during either a fiscal 
or calendar year. Moreover, we would expect a hospital (or multi-
hospital system) governing body to determine the number of 
consultations needed based on various factors specific to a particular 
hospital. These factors would include, but are not limited to, the 
scope and complexity of hospital services offered, specific patient 
populations served by a hospital, and any issues of patient safety and 
quality of care that a hospital's quality assessment and performance 
improvement program might periodically identify as needing the 
attention of the governing body in consultation with its medical staff. 
We would also expect to see evidence that the governing body is 
appropriately responsive to any periodic and/or urgent requests from 
the individual responsible for the organized medical staff of the 
hospital (or his or her designee) for timely consultation on issues 
regarding the quality of medical care provided to patients of the 
hospital.
    Additionally, for a multi-hospital system using a single governing 
body to oversee multiple hospitals within its system, we are proposing 
to require the single governing body to consult directly with the 
individual responsible for the organized medical staff (or his or her 
designee) of each hospital within its system in addition to the other 
requirements proposed here. We believe that this proposal represents 
the best solution for those hospitals that were unintentionally 
burdened by the requirement finalized in the May 16, 2012, rule, while 
still addressing the concerns of many stakeholders who responded to the 
final rule, many of whom firmly stated their belief that medical staff 
input on a hospital's governing body is essential to the continuing 
quality of patient care delivered in the hospital.
1. Medical Staff (Sec.  482.22)
    Similar to the issues regarding medical staff representation on the 
governing body that were discussed in the previous section, we also 
received a considerable amount of feedback regarding our responses in 
the May 16, 2012 final rule (77 FR 29061) where we discussed our long-
standing interpretation of the Medical staff CoP at Sec.  482.22 as 
requiring that each hospital have its own independent medical staff. We 
also confirmed in the final rule that we do not allow a single 
corporate medical staff to assume responsibility for the quality of 
medical care at multiple hospitals within a multi-hospital system. 
Despite the fact that over the years some members of the hospital 
industry have repeatedly requested a change to the prohibition in the 
CoPs against a single medical staff for multiple hospitals within a 
corporate system, CMS has maintained the importance of each hospital 
having its own medical staff at the local level and has maintained that 
this is the best model for overseeing care delivery and for moving 
forward with quality improvements.
    Many of the comments that we received in response to the 
corresponding proposed rule (published October 24, 2011 (76 FR 65891)), 
indicated a clear awareness that we had considered a rule change that 
would allow for a single medical staff for multiple hospitals, had 
decided against it, and were nevertheless asking for comments on 
whether we should strengthen the language to more fully articulate our 
long-standing interpretation that each hospital have its own organized 
medical staff. While these commenters did not suggest clarifying 
changes to the regulatory language, a significant number expressed an 
understanding of, and support for, our decision to not propose a change 
and to continue to interpret the CoP as one that does not permit a 
multi-hospital system to have a single medical staff, but that instead 
requires that each individual hospital have its own medical staff. 
Other commenters interpreted our request for comments in the proposed 
rule as an indication that we were in some way proposing a change to 
the requirements or proposing a change in our historical interpretation 
of this CoP.
    We continue to believe that it is important and in the best 
interest of patient care for each hospital to have its own medical 
staff. For example, a large multi-hospital, multi-regional system that 
only has a single medical staff may not appropriately be able to 
address the needs of each individual hospital in each local area. We 
did not receive public comments on the prior rule that would have 
adequately addressed this issue. The mixed response from public 
commenters regarding our confirmation of the requirement and its 
interpretation has led us to consider proposing changes to the 
regulatory language of Sec.  482.22 that would more explicitly 
communicate our longstanding policy that each hospital must have its 
own medical staff. Therefore, we propose to clarify the introductory 
paragraph of Sec.  482.22 to require that each hospital must have an 
organized and individual medical staff, distinct to that individual 
hospital, that operates under bylaws approved by the governing body, 
and which is responsible for the quality of medical care provided to 
patients by that individual hospital.
    Shortly after publication of the May 2012 final rule, it was 
brought to our attention that some of the changes made to the hospital 
requirements at Sec.  482.22(a), ``Medical staff,'' were not clear. Our 
intent in revising the provision was to provide the flexibility that 
hospitals need under federal law to maximize their medical staff 
opportunities for all practitioners, but within the regulatory 
boundaries of their State licensing and scope-of-

[[Page 9222]]

practice laws. We believe that the greater flexibility for hospitals 
and medical staffs to enlist the services of non-physician 
practitioners to carry out the patient care duties for which they are 
trained and licensed will allow them to meet the needs of their 
patients most efficiently and effectively.
    Section 482.22(a) (Standard: Eligibility and process for 
appointment to medical staff) currently requires a hospital's medical 
staff to be composed of doctors of medicine or osteopathy. It also 
allows for a hospital's medical staff to include other categories of 
non-physician practitioners determined as eligible for appointment by 
the governing body, in accordance with State law, including scope-of-
practice laws. With the substitution of the term ``non-physician 
practitioners'' in the final rule (which replaced the term ``other 
practitioners''), we might have unintentionally given the impression 
that the requirements now excluded other types of practitioners 
previously included among those eligible for appointment to the medical 
staff. In our guidance prior to the issuance of this final rule, we 
stated that a medical staff could include ``other practitioners'' such 
as doctors of dental surgery or of dental medicine, doctors of 
podiatric medicine, doctors of optometry, and chiropractors, as those 
terms are defined and specified as physicians under section 1861(r) of 
the Act. Because part of the provision states that a hospital's medical 
staff must include ``doctors of medicine or osteopathy,'' physicians 
such as those listed above are inadvertently excluded from the medical 
staff by the requirement. Similarly, the new term ``non-physician 
practitioner'' therefore might also seem to exclude these other types 
of physicians simply by its use of the modifier, ``non-physician,'' 
since by the definition described at section 1861(r) of the Act, the 
practitioners are ``physicians,'' they cannot also be considered to be 
``non-physicians.'' Our intention was not to exclude these types of 
physicians from the definition described in our regulations. Therefore, 
we believe that it would be appropriate to propose revisions to 42 CFR 
482.22(a) that would clarify that the medical staff requirements still 
allow for these types of physicians as well as other types of non-
physician practitioners to be eligible for appointment to a hospital's 
medical staff.
    At Sec.  482.22(a), we propose to revise the current language to 
require that a hospital's medical staff must be composed of physicians 
and that it may also include, in accordance with State laws, including 
scope-of-practice laws, other categories of non-physician practitioners 
determined as eligible for appointment by the governing body. By the 
proposed substitution of the current terms, ``doctors of medicine or 
osteopathy,'' with the term ``physicians,'' we would be consistent with 
the statutory language. We also propose to substitute ``must include'' 
with ``must be composed of'' since we believe that this would more 
accurately reflect the fact that hospital medical staffs are 
predominantly made up of physicians and that this would also emphasize 
the vital positions that physicians hold on these medical staffs. The 
proposed regulatory language would require that the medical staff must 
be composed of physicians. Finally, we propose to retain the language 
allowing for other types of non-physician practitioners (such as APRNs, 
PAs, RDs, and PharmDs) to be included on the medical staff since we 
continue to believe that these practitioners, even though they are not 
included in the statutory definition of a physician, nevertheless have 
equally important roles to play on a medical staff and on the quality 
of medical care provided to patients in the hospital.
2. Food and Dietetic Services (Sec.  482.28)
    We propose to revise the hospital requirements at Sec.  482.28(b), 
``Food and dietetic services,'' which currently requires that a 
therapeutic diet must be prescribed only by the practitioner or 
practitioners responsible for the care of the patient.
    The Interpretive Guidelines (IGs) for this requirement, which are 
contained in the State Operations Manual (SOM) for surveyors, further 
states that ``[in] accordance with State law and hospital policy, a 
dietitian may assess a patient's nutritional needs and provide 
recommendations or consultations for patients, but the patient's diet 
must be prescribed by the practitioner responsible for the patient's 
care.'' State survey agencies have applied this requirement to mean 
that registered dietitians (RDs) cannot be granted privileges by the 
hospital to order patient diets (or to order necessary laboratory tests 
to monitor the effectiveness of dietary plans and orders, or to make 
subsequent modifications to those diets based on the laboratory tests) 
since these practitioners have never been considered to be among those 
in the hospital who are ``responsible for the care of the patient.'' 
The responsibility for the care of the patient, and the attendant 
hospital privileges that accompany this responsibility, have 
traditionally and exclusively been the provenance of the physician, 
more specifically the MD and DO, and, to a lesser extent, the APRN and 
PA. Understanding the regulatory language and its interpretation, most 
hospitals have taken a very conservative approach toward the granting 
of privileges, especially ordering privileges, to other types of non-
physician practitioners, including RDs. Consequently, most hospitals 
have withheld ordering privileges from RDs absent a clear signal from 
CMS and the subsequent and necessary changes to the CoPs that would 
allow them to do so.
    Through the publication of the October 2011 proposed rule and the 
May 2012 final rule that followed, it has come to our attention that 
the regulatory language and the IGs for Sec.  482.28(b) are too 
restrictive and lack the reasonable flexibility to allow hospitals to 
extend these specific privileges to RDs in accordance with State laws. 
We believe that RDs are the professionals who are best qualified to 
assess a patient's nutritional status and to design and implement a 
nutritional treatment plan in consultation with the patient's 
interdisciplinary care team. In order for patients to receive timely 
nutritional care, the RD must be viewed as an integral member of the 
hospital interdisciplinary care team, one who, as the team's clinical 
nutrition expert, is responsible for a patient's nutritional diagnosis 
and treatment in light of the patient's medical diagnosis. Without the 
proposed regulatory changes allowing them to grant appropriate ordering 
privileges to RDs, hospitals would not be able to effectively realize 
the improved patient outcomes and overall cost savings that we believe 
would be possible with such changes. Please note, because a few States 
elect not to use the regulatory term ``registered'' and choose instead 
to use the term ``licensed'' (or no modifying term at all), we are 
proposing to use the term ``qualified dietitian.'' In those instances 
where we have used the most common abbreviation for dietitians, ``RD,'' 
throughout this preamble, our intention is to include all qualified 
dietitians, regardless of the modifying term (or lack thereof), as long 
as each qualified dietitian meets the requirements of his or her 
respective State laws.
    A review of the literature (Kinn TJ. Clinical order writing 
privileges. Support Line. 2011; 33; 4; 3-10) supports that, in addition 
to providing safe patient care with improved outcomes, RDs with 
ordering privileges contribute to decreased patient lengths of stay and 
provide nutrition services more efficiently, resulting in lower costs 
for hospitals. A 2010 retrospective

[[Page 9223]]

cohort study of 1,965 patients at a 613-bed tertiary academic medical 
center looked at the influence of the RD with ordering privileges on 
appropriate parenteral nutrition (PN) usage (Peterson SJ, Chen Y, 
Sullivan CA, et al. Assessing the influence of registered dietician 
order-writing privileges on parenteral nutrition use. J AM Diet Assoc. 
2010; 110; 1702-1711). The study showed that inappropriate PN usage 
decreased from 482 patients to 240 patients during the pre- and post-
ordering privileges periods, respectively. The data from this study 
also demonstrated a 20 percent cost savings in PN usage, which 
translated to an approximately $300,000 savings to the hospital over 
the two-year period. Additionally, the changes proposed in this rule 
might also help hospitals to realize other significant quality and 
patient safety improvements as well as savings. A 2008 study indicates 
that patients whose PN regimens were ordered by RDs have significantly 
fewer days of hyperglycemia (57 percent versus 23 percent) and 
electrolyte abnormalities (72 percent versus 39 percent) compared with 
patients whose PN regimens were ordered by physicians (Duffy JK, Gray 
RL, Roberts S, Glanzer SR, Longoria SL. Independent nutrition order 
writing by registered dieticians reduces complications associated with 
nutrition support [abstract]. J Am Diet Assoc. 2008; 108 (suppl 1):A9).
    A number of other studies have also shown the prevalence of 
malnutrition among hospital patients, estimating that anywhere between 
20 and 50 percent of hospital inpatients are either malnourished or at 
risk for malnutrition, depending on the particular patient population 
and the criteria used to assess these patients (Barker LA, Gout BS, 
Crowe TC. Hospital malnutrition: prevalence, identification and impact 
on patients and the healthcare system. Int J Environ Res Public Health. 
2011; 8(2); 514-527). Malnourished surgical patients are two to three 
times more likely to experience post-operative complications and 
increased mortality than their more well-nourished counterparts 
(Gallagher-Allred CR, Coble Voss A, Finn SC, McCamish MA. Malnutrition 
and clinical outcomes: the case for medical nutrition therapy. J Am 
Diet Assoc. 1996; 96; 361-369). Physicians, APRNs, and PAs often lack 
the training and educational background to manage the sometimes complex 
nutritional needs of patients with the same degree of efficiency and 
skill as RDs who have benefited from curriculums that devote a 
significant number of educational hours to this area of medicine. The 
addition of ordering privileges enhances the ability that RDs already 
have to provide timely, cost-effective, and evidence-based nutrition 
services as the recognized nutrition experts on a hospital 
interdisciplinary team and saves valuable time in the care and 
treatment of patients, time that is now often wasted as RDs must seek 
out physicians, APRNs, and PAs to write or co-sign dietary orders. A 
2011 review article discusses a number of additional studies that 
provide further evidence for the extensive training and education in 
nutrition that RDs experience as opposed to the limited exposure that 
physicians receive to this area of medicine, along with several other 
studies supporting the cost-effectiveness and positive patient outcomes 
that hospitals might achieve by granting RDs ordering privileges (Kinn 
TJ. Clinical order writing privileges. Support Line. 2011; 33; 4; 3-
10).
    In order for patients to have access to the timely nutritional care 
that can be provided by RDs, a hospital must have the regulatory 
flexibility either to appoint RDs to the medical staff and grant them 
specific nutritional ordering privileges or to authorize the ordering 
privileges without appointment to the medical staff, all through the 
hospital's appropriate medical staff rules, regulations, and bylaws. In 
either instance, medical staff oversight of RDs and their ordering 
privileges would be ensured. Therefore, we are proposing revisions to 
Sec.  482.28(b)(1) and (2) that would require that individual patient 
nutritional needs be met in accordance with recognized dietary 
practices. We would make further revisions that would allow for 
flexibility in this area by requiring that all patient diets, including 
therapeutic diets, must be ordered by a practitioner responsible for 
the care of the patient, or by a qualified dietician as authorized by 
the medical staff and in accordance with State law. We believe that 
hospitals that choose to grant these specific ordering privileges to 
RDs may achieve a higher quality of care for their patients by allowing 
these professionals to fully and efficiently function as important 
members of the hospital patient care team in the role for which they 
were trained. We also believe hospitals would realize significant cost 
savings in many of the areas affected by nutritional care. We welcome 
public comments on this proposed change.
3. Nuclear Medicine Services (Sec.  482.53)
    The current requirement at Sec.  482.53(b)(1) requires that the in-
house preparation of radiopharmaceuticals be performed by, or under the 
direct supervision of, an appropriately trained registered pharmacist 
or a doctor of medicine or osteopathy. Direct supervision means that 
one of these professionals must be physically present in the hospital 
and immediately available during the preparation of all 
radiopharmaceuticals. Hospitals have reported to us that this 
requirement is extremely burdensome when the presence of a pharmacist 
or physician is required for the provision of off-hour nuclear medicine 
tests that require only minimal in-house preparation of 
radiopharmaceuticals. Information from stakeholders regarding this 
issue has revealed that minimal in-house preparation is required for 
most radiopharmaceuticals. Many are batch-prepared by the manufacturer 
for hospital use as a way of reducing radiation exposure of hospital 
personnel, ensuring that on-site hospital preparation of 
radiopharmaceuticals generally requires only a few final steps, if any.
    We propose to revise the current requirement at Sec.  482.53(b)(1) 
by removing the term ``direct.'' The revised requirement would then 
require that in-house preparation of radiopharmaceuticals be performed 
by, or under the supervision of, an appropriately trained registered 
pharmacist or doctor of medicine or osteopathy. The revision to 
``supervision'' from ``direct supervision'' would allow for other 
appropriately trained hospital staff to prepare in-house 
radiopharmaceuticals under the oversight of a registered pharmacist or 
doctor of medicine or osteopathy, but it would not require that such 
oversight be exercised by the physical presence in the hospital at all 
times of one of these professionals, particularly during off-hours when 
such a professional would not be routinely present.
    The proposed changes would allow hospitals to establish their own 
policies on supervision of nuclear medicine personnel and the in-house 
preparation of radiopharmaceuticals. Absent a requirement for 
``direct'' supervision, we would expect most hospitals to follow the 
Society of Nuclear Medicine and Molecular Imaging recommendations on 
this issue and to no longer require a registered pharmacist or MD/DO to 
be on site for direct supervision when radiopharmaceuticals are 
prepared in-house by staff. The proposed change would directly reduce 
the burden of the current direct supervision requirement where it is 
most needed--in-house preparation of radiopharmaceuticals for after-
hours/emergency performance of

[[Page 9224]]

nuclear medicine diagnostic procedures (for example, coronary artery 
disease, pulmonary emboli, stroke, and testicular torsion). Given that 
an estimated 16 million nuclear medicine imaging and therapeutic 
procedures are performed each year in the United States, we would 
expect hospitals to achieve significant cost reductions in this area if 
they take advantage of the proposed change. We welcome the public's 
comments on this proposed change.
4. Outpatient Services (Sec.  482.54)
    We are proposing changes to the requirements at Sec.  482.54, 
``Outpatient services.'' Specifically, we are adding a new standard at 
Sec.  482.54(c), entitled ``Orders for outpatient services.'' We are 
taking the opportunity to propose these revisions in this rule so that 
the regulations would codify Interpretive Guideline (IG) changes that 
we recently made regarding the ordering of outpatient services.
    On May 13, 2011, CMS issued SC-11-28 (http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/SCLetter11_28.pdf). Among other things, this memorandum 
included preliminary guidance on who may order hospital rehabilitation 
(Sec.  482.56(b)) and respiratory care services (Sec.  482.57(b)(3)). 
On November 18, 2011, the final version of the revised IGs for these 
requirements was released. Subsequently, we received considerable 
feedback that this guidance, which was intended to expand the 
categories of practitioners who could order rehabilitation and 
respiratory care services beyond physicians and stated that all 
ordering practitioners had to hold medical staff privileges, was 
actually having the opposite effect and limiting practitioner orders 
for these services. In the area of outpatient rehabilitation services, 
in particular, stakeholders informed us that the revised guidance was 
posing a barrier to care because a substantial percentage of these 
services are provided in hospital outpatient rehabilitation facilities 
to patients referred by practitioners who are not on the hospital's 
medical staff and who do not hold medical staff privileges. We were 
advised that, in many cases, the referring practitioners are based in 
other States where patients have traveled to receive specialized 
services. Clearly, these practitioners do not provide care in the 
patient's local hospital and are not interested in seeking medical 
staff privileges merely to refer patients for outpatient services.
    It was not our intention to create barriers to care or to limit the 
ability of practitioners, who are appropriately licensed, acting within 
their scope of practice, and authorized under hospital policies, to 
refer patients for outpatient services. We distinguish these outpatient 
referral cases from cases where a practitioner provides care in the 
hospital, either to inpatients or outpatients, and must have medical 
staff privileges to do so. We subsequently issued new guidance on this 
rule, which was preceded by discussions with the various stakeholders 
groups that first brought the issue to our attention. On February 17, 
2012, CMS issued SC-12-17 (http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/SurveyCertificationGenInfo/Downloads/SCLetter12_17.pdf), which clarified that outpatient services may be 
ordered by any practitioner responsible for the care of the patient, 
who is licensed and acting within his or her scope of practice in the 
State where he or she provides care to the patient, and who has been 
authorized by the medical staff and approved by the governing body to 
order specific outpatient services.
    In light of the above, we believe it is appropriate to revise Sec.  
482.54, the CoP governing outpatient services, which is silent on the 
issue of who may order such services, in order to explicitly address 
this issue. We propose to revise the requirements to mean that orders 
for outpatient services may be made by any practitioner who is:
     Responsible for the care of the patient;
     Licensed in the State where he or she provides care to the 
patient;
     Acting within his or her scope of practice under State 
law; and
     Authorized in accordance with policies adopted by the 
medical staff, and approved by the governing body, to order the 
applicable outpatient services.
    Further, these proposed requirements would apply to: all 
practitioners who are appointed to the hospital's medical staff and who 
have been granted privileges to order the applicable outpatient 
services; and all practitioners not appointed to the medical staff, but 
who satisfy the above criteria for authorization by the hospital for 
ordering the applicable outpatient services and for referring patients 
for such services. These requirements would also apply to all hospital 
services that may be offered on an outpatient basis, including services 
for which there is regulatory language that, in the absence of the 
clarifying language we propose herein, would appear to impose more 
stringent limits as to the practitioners who are permitted to order 
outpatient services. For example, Sec.  482.53(c)(4) states, ``Nuclear 
medicine services must be ordered only by practitioner whose scope of 
Federal or State licensure and whose defined staff privileges allow 
such referrals.'' In practice, however, it is not unusual for 
physicians without medical staff privileges to refer their patients to 
the hospital for common outpatient nuclear medicine tests, such as 
myocardial perfusion scans used in conjunction with cardiac stress 
tests and hepatobiliary scans used in the detection of gallbladder 
disease. So long as the hospital's medical staff policies and 
procedures permit this, we do not believe our regulations should 
present a barrier. Another example concerns the administration of 
outpatient chemotherapy. In accordance with Sec.  482.23(c), concerning 
preparation and administration of drugs, ``Drugs and biologicals must 
be prepared and administered in accordance with Federal and State laws, 
the orders of the practitioner or practitioners responsible for the 
patient's care as specified under Sec.  482.12(c), and accepted 
standards of practice.'' In the absence of the clarification we propose 
herein, this language could be confusing, as some hospitals might read 
it to preclude providing outpatient chemotherapy on the orders of a 
practitioner without privileges, which may or may not be desirable to 
the hospital. We believe that it is more appropriate if the hospital's 
medical staff and governing body determine what types of outpatient 
services they are comfortable with providing on the basis of an order 
(which might commonly also be called a ``referral'') from a 
practitioner who does not hold medical staff privileges.
    We expect these changes would be primarily neutral in terms of 
regulatory burden reduction for hospitals. Prior to the November 2011 
revisions to the IGs, most, if not all, hospitals were already 
operating under what was considered standard industry practice with 
regard to the ordering of, and referral for, outpatient rehabilitation 
services by practitioners who were not on the hospital's medical staff. 
Since we moved quickly to clarify our outpatient services ordering 
policy through communications with stakeholders and further revisions 
to the IGs, we believe that most hospitals did not make changes to 
their policies and procedures that would have created burdens for them. 
We cannot rule out the possibility that some hospitals were deterred by 
the specific language of other CoPs, such as those governing nuclear 
medicine or administration of drugs, but we have not received 
information that would allow us to quantify this. This proposed change 
would clearly establish in

[[Page 9225]]

regulation CMS policy on the ordering and referral of all outpatient 
services. We welcome the public's comments on these proposed changes.
5. Special Requirements for Hospital Providers of Long-term Care 
Services (``swing-beds'') (Sec.  482.66)
    Currently, these requirements are located in Subpart E of Part 482, 
Requirements for specialty hospitals. As such, the requirements fall 
outside of those requirements that can be surveyed by an Accreditation 
Organization (AO), such as TJC, AOA, or DNV, as part of its CMS-
approved Medicare hospital accreditation program. We believe the 
requirements at Sec.  482.66 would be more appropriately located under 
Subpart D of Part 482, Optional hospital services, since swing-bed 
services are optional hospital services for eligible rural hospitals.
    Therefore, we are proposing to reassign all of the requirements for 
swing-bed services found currently at Sec.  482.66, Subpart E, to Sec.  
482.58, Subpart D. This change would allow compliance with the swing-
bed requirements to be evaluated during routine AO surveys. By no 
longer requiring a deemed hospital to undergo a separate survey by a 
State Survey Agency (SA) to determine continued compliance with the 
swing-bed requirements in addition to the AO survey for the other CoPs, 
this proposed change would likely reduce the burden on such a hospital. 
We welcome the public's comments on this proposed change.
    Contact for all hospital topics: CDR Scott Cooper, USPHS, 410-786-
9465.

D. Transplant Centers and Organ Procurement Organizations

1. Reports to CMS (Sec.  482.74)
    On March 30, 2007, we published the ``Hospital Conditions of 
Participation: Requirements for Approval and Re-approval of Transplant 
Centers to Perform Transplants Final Rule'' (transplant center final 
rule, 72 FR 15198). In that rule, we required that transplant centers, 
among other things, report to CMS any significant changes related to 
the center's transplant program or changes that could affect its 
compliance with the CoPs. One of the instances in which transplant 
centers have to notify us, located at Sec.  482.74(a)(2), is whenever 
there is a decrease in the center's number of transplants or survival 
rates that could result in the center being out of compliance with the 
clinical experience (number of required transplants) or outcome 
(survival) requirements at Sec.  482.82.
    We routinely receive the number of transplants a center performs 
and survival information for all of the transplant centers. All 
transplant centers are required to submit these data to the Organ 
Procurement and Transplantation Network (OPTN) national database for 
transplantation. These data are provided to the Scientific Registry of 
Transplant Recipients (SRTR), which publicly releases outcome 
(survival) information every six months, after the data have been risk-
adjusted. CMS also receives more recent survival information via the 
Social Security Master Death File. CMS receives clinical experience 
data and the Social Security Master Death File quarterly, as well as 
the risk-adjusted outcomes from the SRTR data every six months. Thus, 
CMS is essentially receiving the same information from the transplant 
programs individually that we receive routinely from one or more of the 
resources cited above.
    In addition to the above, this notification requirement has also 
resulted in confusion for the transplant centers. The requirement 
states that transplant centers should notify CMS when they are out of 
compliance with a 3-year average of 10 transplants per year. Since the 
clinical experience standard is based on an average, a transplant 
center may not know if a given year's volume would be low enough to 
have the average fall below 10 per year and trigger reporting to CMS, 
particularly when the number of transplants to be performed in a future 
year is unknown.
    In addition, the requirement for notification of outcomes non-
compliance is based on the difference between the observed and the 
expected outcomes exceeding certain thresholds. However, the expected 
outcomes are not calculated until at least one year later when the one-
year post-transplant tracking period for patient and graft survival is 
complete. The transplant program would not always know whether a given 
death or graft failure would put them out of compliance and require 
notification to CMS. Eliminating this notification requirement will 
also remove this confusion for the transplant centers.
    Thus, the requirement for transplant centers to report a decrease 
in the center's number of transplants or survival rates when those 
results could result in the center being out of compliance with the 
measures in Sec.  482.82 is unnecessary, confusing, and burdensome for 
transplant centers. Therefore, we propose to eliminate the requirement 
at Sec.  482.74(a)(2) that transplant centers notify us. The removal of 
this requirement would have no impact on the quality of care to 
transplant recipients, living donors, or potential donors as our 
identification and follow-up process for programs that do not meet 
Sec.  482.82 would remain unchanged.
2. Transplant Outcome Review (Sec.  482.80(c) and Sec.  482.82(c))
    Subsections Sec.  482.80(c) and 482.82(c) in the transplant center 
CoPs state that, ``[e]xcept for lung transplants, CMS will review adult 
and pediatric outcomes separately when a center requests Medicare 
approval to perform both adult and pediatric transplants.'' At the time 
the transplant center final rule was published (March 30, 2007), the 
adult data cohorts for lung transplants included transplant patients 12 
years of age and older. As of June 2010, the adult data cohort includes 
only those transplant patients that are 18 years of age and older. The 
age categories for lung transplant patients are now the same as for all 
of the other transplants reported in the SRTR center-specific reports 
(See OPTN/SRTR 2010 Annual Data Report, Rockville, MD: Department of 
Health and Human Services, Health Resources and Services 
Administration, Healthcare Systems Bureau, Division of Transplantation: 
2011). We are reviewing the adult and pediatric outcomes separately for 
all programs that request Medicare approval to perform both adult and 
pediatric transplants, including the lung transplant program. This 
language, ``except for lung transplants,'' is no longer necessary. 
Therefore, we are proposing to remove the exception language for lung 
transplants from Sec. Sec.  482.80(c) and 482.82(c).
3. Volume and Clinical Experience Requirements (Sec. Sec.  482.80(c)(2) 
and 482.82(c)(2))
    Regulations at Sec. Sec.  482.80(c)(2) and 482.82(c)(2) both state 
``[t]he required number of transplants must have been performed during 
the time frame reported in the most recent SRTR center-specific 
report.'' We propose to modify this language to make it harmonize with 
other parts of the current rule. Under the current rule, transplant 
centers are generally required, with some exceptions, to perform either 
10 transplants over a 12-month period for initial approval (Sec.  
482.80(b)) or an average of 10 transplants each year during the 
approval period (Sec.  482.82(c)(2)). There is no requirement for a 
certain number of transplants to be performed during a particular 
period that would be covered in a single SRTR center-specific report.

[[Page 9226]]

Thus, this language has resulted in transplant centers being confused 
about the number of transplants they are required to perform during any 
particular period of time covered by the SRTR center-specific reports. 
Therefore, we are proposing to remove both Sec. Sec.  482.80(c)(2) and 
482.82(c)(2), and to redesignate the existing paragraph (c)(3) as 
(c)(2) to clarify the volume and clinical experience requirements.
4. Transplant Center Re-Approval Process
    Since the effective date of the CoPs, June 28, 2007, we have 
completed the initial surveys of all transplant programs that 
participate or seek participation in Medicare (approximately 845 
transplant centers in 245 transplant hospitals), and have started 
conducting re-approval surveys. The current process and regulatory 
criteria require, under particular conditions, an automatic onsite 
review of all CoPs under a 3-year re-approval cycle. Despite this 
requirement, we believe that onsite surveys for some of these 
transplant centers are not necessary to ensure the health and safety of 
the patients who receive a transplant in those centers. Moreover, the 
regulatory requirements described below for selecting the facilities 
that would undergo an onsite survey do not always effectively target 
survey resources where they are most needed.
    We propose to remove the automatic 3-year re-approval process. We 
also propose to (1) clarify that the review of mitigating factors may 
occur at any time if there is non-compliance with the CoPs, and (2) 
remove language stating that a transplant program is approved for three 
years, which conflicts with language in Sec.  488.61(c) specifying that 
compliance with the CoPs is a continuous requirement. The expectation 
that compliance with CMS requirements is continuous is an expectation 
that applies to all Medicare providers and suppliers.
    Currently the regulations require that we review each transplant 
program's data before the end of 36 months after the program's prior 
approval. The regulations require a review of most other CoPs if we 
find that there is non-compliance with the requirements at Sec.  
482.82(a) for timeliness of data submission to the OPTN, or non-
compliance with the requirements at Sec.  482.82(b) for clinical 
experience, or at Sec.  482.82(c) for patient and graft survival 
outcomes. An onsite survey is the most common method of conducting such 
a review, but we have found that an onsite review for deficiencies in 
these areas is not always necessary. We can enforce data submission 
requirements without conducting an onsite survey. In addition, we plan 
to maintain, via CMS policy, a maximum time interval within which we 
expect an onsite survey to occur with respect to individual transplant 
centers.
    For instance, CMS regulations require that transplant programs 
submit 95 percent of their OPTN forms within 90 days of their due date. 
On a quarterly basis, we receive data from the OPTN that provides us 
with the number of forms due for each program and the number that were 
submitted within the required timeframe. Based on the 3-year period 
from mid-2008 through mid-2011, 73 transplant programs had data 
submission rates below 95 percent and, if due for re-approval, would 
have required an onsite survey. Of these 73, most (43 programs) had 
average data-submission rates between 90 and 95 percent. While remedial 
action is necessary in every case, it does not follow that these 43 
programs required an automatic, onsite survey. We propose that we can 
take action to address the non-compliance while reserving for CMS's 
discretion the decision of whether or not to conduct an onsite survey.
    We also receive data on a quarterly basis about the number of 
transplants performed at each center. Because of this data transfer, we 
are routinely aware of the average number of transplants being 
performed by or at a given transplant program. There are circumstances 
where it would not be in the public interest to spend the resources to 
perform a full onsite transplant center survey solely because the 3-
year average volume is low. For example, if a transplant program had 
performed an average of 9.3 transplant surveys over the prior 3-year 
period (fewer than the current requirement of an average of 10 per 
year), and the most recent year indicated 14 transplants performed, 
sending a full team to do an onsite survey of all CoPs, for this reason 
alone, may not make the best use of limited resources for the hospital 
or for CMS.
    Of the approximately 845 total transplant programs, 442 are 
required to meet clinical experience requirements (that is, volume 
requirements). Pediatric transplant programs and adult heart/lung and 
adult pancreas programs do not have to meet clinical experience 
requirements (Sec. Sec.  482.80(d) and 482.82(d)). Using clinical 
experience data from October 1, 2008 through September 30, 2011, 30 
transplant programs that were required to meet experience requirements 
had performed fewer than the required number of 10 transplants per year 
on average. If due for re-approval, these 30 programs would have 
required an onsite survey regardless of any other evidence CMS may have 
had from history, recent program improvements, or the most recent 
clinical experience.
    We monitor and enforce Medicare's requirements for patient and 
graft survival rates every 6 months based on the most recent report 
from the SRTR. A program is out of compliance if its observed patient 
and graft survival is significantly lower than expected to such an 
extent that it crosses three thresholds outlined in the CoPs at Sec.  
482.82: the observed minus expected is greater than 3, the observed 
divided by expected is greater than 1.5, and the one-sided p-value is 
less than .05.
    We follow up with these transplant programs through an offsite 
survey, an onsite complaint survey, or an onsite full re-approval 
survey. These follow-up activities are conducted by the CMS Regional 
Office, a federal contractor, or the State Survey Agency (acting on 
CMS's behalf). The follow-up occurs at the time of non-compliance and 
does not wait until the re-approval survey occurs. Following the 
citation of an outcomes deficiency and the establishment of a date for 
prospective termination from Medicare participation, programs may 
submit an application for mitigating factors (MF) based on non-
compliance with the outcomes CoP. We provide ample time between the 
citation and the prospectively scheduled Medicare termination date for 
the program to provide evidence and, via conference call, discussion of 
the evidence that would support the mitigating factors request. If the 
MF request is approved, we specify the time period for the MF approval 
and remove the prospectively scheduled Medicare termination.
    We also propose to provide at the new Sec.  488.61(c)(3)(v) an 
example of a set of mitigating factors that we would consider. We have 
granted a very small number of MF requests on the basis of the 
categories currently used as examples in the regulation, such as 
natural disasters (one case) or access to care (one case). However, we 
have most frequently granted MF requests in cases where the transplant 
center has implemented substantial program improvements that address 
root causes of past graft failures and/or patient deaths, has 
institutionalized those improvements so they may be sustained over 
time, and has been able to demonstrate recent outcomes data with 
sufficient volume and with sufficient post-transplant survival periods 
such that we conclude that the program is in

[[Page 9227]]

present-day compliance with the outcomes requirements in the 
regulation, but for the data time lag inherent in the SRTR reports upon 
which we otherwise rely. CMS has approved an MF request for 35 
transplant programs on this basis since the implementation of the 
regulation in 2007. In certain cases, the MF approval has been made 
possible pursuant to dialogue and agreement between CMS and the 
transplant center that the hospital will engage in a clear regimen of 
quality improvement and there is substantial completion of that 
regimen. We believe that the addition of this example in the body of 
the regulation will provide better guidance for transplant centers, 
offer encouragement for the productive application of hospital staff 
expertise in making program improvements that increase patient and 
graft survival, and promote government transparency.
    We have a variety of sources we use to generate targeted quality 
information that can be used to determine the circumstances and 
frequency under which an onsite survey is best conducted. Examples 
include previous complaint surveys, prior onsite survey results, issues 
found during surveys of the broader hospital CoPs, data and information 
from the Health Resources and Services Administration (HRSA) and the 
SRTR, notifications of program inactivity, key personnel changes, 
articles from the press about quality issues, and information submitted 
by the program through the MF process.
5. Technical Corrections
    On May 31, 2006, we published the Conditions for Coverage for Organ 
Procurement Organizations (OPOs) Final Rule (OPO final rule 71 FR 
30982). We have discovered that there were some technical errors in 
that rule. Therefore, we are proposing to make the following technical 
corrections:
     Section 486.306 states, in paragraph (a), that ``An OPO 
must make available to CMS documentation verifying that the OPO meets 
the requirements of paragraphs (b) through (d) of this section * * * '' 
This section only contains paragraphs (a), (b), and (c). We propose to 
delete the reference to ``(d)'' in paragraph (a) and insert ``(c)'' in 
its place. This paragraph would then read, ``the OPO meets the 
requirements of paragraphs (b) and (c) of this section * * *.''
     Section 486.308(b)(1) reads, in part, ``if additional time 
is needed to select a successor OPO to an OPO that has been de-
certified.'' We propose to remove the ``to'' between the two ``OPOs'' 
and replace it with ``for'' in this sentence. The paragraph would then 
read, ``if additional time is needed to select a successor OPO for an 
OPO that has been de-certified.''
     Section 486.344(d)(2)(ii) reads, in part, ``If the 
identify of the intended recipient is known * * * '' We intended to say 
the ``identity'' of the intended recipient. We propose to remove the 
word ``identify'' and replace it with ``identity.'' The clause would 
then read, ``If the identity of the intended recipient is known * * * 
''
    Contact for all transplant center and OPO topics: Diane Corning, 
410-786-8486.

E. Long-Term Care Facilities

    On August 13, 2008, we published a final rule requiring all 
buildings containing long term care facilities to have automatic 
sprinkler systems installed throughout the building (73 FR 47075). The 
deadline for meeting this requirement is August 13, 2013. The final 
rule was based on a CMS analysis of fire safety in nursing homes, and 
the agency's conclusion that fire safety protections would clearly be 
improved by ensuring that all facilities be fully sprinklered within a 
reasonable period of time. The Government Accountability Office (GAO) 
also studied this issue and issued a report entitled ``Nursing Home 
Fire Safety: Recent Fires Highlight Weaknesses in Federal Standards and 
Oversight'' (GAO-04-660, July 16, 2004, http://www.gao.gov/products/GAO-04-660). The GAO analyzed two long term care facility fires in 2003 
that resulted in 31 total resident deaths. The report examined Federal 
fire safety standards and enforcement procedures, as well as results 
from the fire investigations of these two incidents. The report 
recommended that fire safety standards for unsprinklered facilities be 
strengthened and cited sprinklers as the single most effective fire 
protection feature for long term care. Based on both CMS's analysis and 
the GAO's report, and under the Secretary's authority at sections 
1819(d)(4)(B) and 1919(d)(4)(B) of the Act, to issue regulations that 
promote the health and safety of the residents of long-term care 
facilities, we finalized a requirement that all long term care 
facilities must be fully sprinklered by August 13, 2013.
    Based on recent public comments and input, we believe that some 
facilities will not be able to meet the August 2013 deadline due to the 
magnitude of the enterprise they are undertaking (such as large scale 
construction of a replacement facility) combined with recent financial 
and construction constraints. We therefore propose to allow a long term 
care facility to apply for a temporary deadline extension of the 
sprinkler system requirement, under very limited circumstances, if they 
are unable to meet the deadline. An extension will avoid spending funds 
on structures that will be obsolete in the near future. Our intent is 
to establish a rigorous review process for all deadline extension 
requests.
    We are proposing to add a provision at Sec.  483.70(a)(8)(iii) that 
would allow long term care facilities the opportunity to apply for a 
deadline extension, not to exceed 2 years, if all of the following 
conditions apply:
     The facility is in the process of replacing its current 
building, or undergoing major modifications in all unsprinklered living 
areas and that requires the movement of corridor, room, partition, or 
structural walls or supports to improve the living conditions for 
residents, in addition to the installation of a sprinkler system;
     The facility demonstrates that it has made the necessary 
financial commitments to complete the building replacement or 
modification;
     The facility has submitted construction or modification 
plans to the State and local authorities that are necessary for 
approval of the replacement building or modification prior to applying 
for the deadline extension; and
     The facility agrees to complete interim steps to improve 
fire safety of the building while the construction is being completed, 
as determined by CMS. This could include a fire watch, installation of 
temporary exits and temporary smoke detection systems, or additional 
smoke detection systems in the area of construction, increased fire 
safety inspections, additional training and awareness by staff, and 
additional fire drills.
    An extension may be granted for up to 2 years, depending on the 
need and particular circumstances. We would determine the length of the 
extension based on the information submitted by the facility.
    Applications for the extension will only be considered if the delay 
in meeting the August 13, 2013 deadline is due to the plan for facility 
replacement or major modification, as described above. A number of 
facilities, for example, have had plans to replace an old structure 
with a new replacement nursing home, but have found that it is 
requiring more time to complete the necessary arrangements and 
construction. The nursing home's residents will benefit from the 
improved living environment of the new facility, and an extension of 
the deadline could avoid wasting funds on sprinklering an

[[Page 9228]]

old structure that will soon be replaced. Similarly, nursing home 
residents may benefit from a nursing home that is undertaking a major 
modification to improve living conditions, such as converting two-
person or three-person rooms to single occupancy. If there is a delay 
due to such plans, and the construction is cost-effective if the 
sprinklering is done at the same time as the major modification of the 
unsprinklered area, then we would consider an extension of the deadline 
date. We are soliciting public comment as to whether the extension 
should be limited to just situations in which a replacement facility is 
being constructed. We are also soliciting public comment regarding 
these or other factors that may be important when determining whether 
to approve or deny an extension request, and when determining the 
appropriate length of the extension time period. However, it is our 
intent to fashion an extension that is very narrowly defined. The 
current rule has provided a five-year implementation period designed to 
ensure time for planning and resource mobilization. We propose to add 
the possibility of a time-limited extension in order to accommodate 
plans for major investments by a nursing home in a replacement facility 
or major modification where the investment, planning, and construction 
time involved may warrant a further extension and yield even better 
long term benefits for residents. We also propose to add a provision at 
Sec.  483.70(a)(8)(iv) that would allow for a renewal of the deadline 
extension for an additional period, not to exceed 1 additional year. We 
propose that a facility could only apply for a single extension 
renewal. The facility may be granted the additional extension if CMS 
finds that there are extenuating circumstances beyond the control of 
the facility that will prevent the facility from being in compliance by 
the end of the first waiver period. An example is a situation where 
residents have not yet been able to move to a substantially completed 
replacement facility due to last minute construction delays outside the 
control of the facility. Additionally, the facility would be required 
to meet all other conditions in paragraph (a)(8)(iii) related to 
applying for the approval by CMS, submitting its plans to the State and 
local authorities, and taking the appropriate interim steps to improve 
safety of the building until the work is completed. We also welcome 
comments on this proposed provision.
    Contact for long term care topics: Kristin Shifflett, 410-786-4133.

F. Rural Health and Primary Care

    We have identified several priority areas in the CoPs for CAHs (42 
CFR part 485), the CfCs for both RHCs and FQHCs (42 CFR part 491), and 
the payment provisions for RHCs (42 CFR part 405) for updates and 
revisions. We believe that these proposed revisions may eliminate or 
significantly reduce burden where CoPs and CfCs are duplicative, 
unnecessary and/or burdensome.
1. CAH Provision of Services (Sec.  485.635(a))
    CAHs are currently required to develop their policies and 
procedures with the advice of a group of professional personnel that 
includes one or more doctors of medicine or osteopathy and one or more 
physician assistants, nurse practitioners, or clinical nurse 
specialists, if they are on staff. At least one member of the 
professional group must not be a staff member. We propose to remove the 
requirement that a CAH must develop its patient care policies with the 
advice of a non-CAH staff member and instead are proposing to allow 
CAHs flexibility in their approach to developing their patient care 
policies and procedures. That is, we are proposing that a CAH will no 
longer be required to include a non-staff member among the group of 
professional personnel to develop its patient care policies. We believe 
that this provision is no longer necessary and that the original 
reasons (lack of local resources and in-house expertise) for including 
this requirement have been effectively addressed. Also, based on our 
experience with CAHs and input from the provider community, we believe 
it is a challenge for facilities to comply with this requirement. These 
challenges include the amount of time it takes to familiarize the non-
staff member with the CAH's operations, high turnover rates of the non-
staff member, and, in many cases, the expense of paying outside 
personnel a consultation fee.
    In 1993, when we finalized the rules on the predecessor to the 
current CAH program, Essential Access Community Hospitals (EACHs) and 
Rural Primary Care Hospitals (RPCHs) (58 FR 30630, May 26, 1993), we 
declined to expand the policy planning requirements at Sec.  485.635 in 
a way that would have been more prescriptive and would have required 
additional sources of expertise and objectivity. At that time, we 
determined that it was not necessary to require the RPCHs to consult 
with rural health networks or to ensure alignment with their State's 
rural health plan when deciding which services to furnish. In 
responding to comments suggesting such coordination, we remarked that 
while such coordination was desirable, no statute actually mandated 
this, and clinics were already free to work out such arrangements 
without regulation.
    Subsequently, changes were made to the law which responded exactly 
to those concerns. The Balanced Budget Act (BBA) of 1997 amended the 
Act at Section 1820 (42 U.S.C. 1395i-4) and replaced the EACH/RPCH 
program with the Medicare Rural Hospital Flexibility Program (MRHFP). 
These changes established the CAH program we know today, and, 
importantly, predicated a State's eligibility to participate in the 
program on its establishment of a State rural health plan providing for 
the creation of one or more rural health networks in that State. As set 
forth in the BBA of 1997, codified at Sec.  1820(b) of the Act, a 
State's rural health plan must promote regionalization of rural health 
services and improved access to hospital and other health services for 
that State's rural residents. Moreover, it must be developed in 
consultation with the hospital association of the State, rural 
hospitals located in the State, and the State Office of Rural Health.
    The plan must also provide for the creation of at least one rural 
health network. A rural health network is an organization consisting of 
at least one CAH and at least one acute care hospital, the members of 
which have entered into agreements regarding patient referral and 
transfer, the development and use of communications systems, and the 
provision of emergency and nonemergency transportation. In addition, 
each CAH in a network must have an agreement for credentialing and 
quality assurance with at least one hospital that is a member of the 
network, or with a QIO or equivalent entity, or with another 
appropriate and qualified entity identified in the rural health care 
plan for the State. Taken together, the statutory requirements for a 
State rural health plan and (at least one) rural network, these 
mechanisms set out specific processes that serve to promote and support 
the sound development of a CAHs' patient care policies, such as are 
required at Sec.  485.635. The additional statutory framework, 
established in the years since these regulations were first set forth, 
provides further support for our proposal to set aside the regulatory 
requirement that a CAH's patient care policies require the input of at 
least one professional who is not a member of the CAH's staff. 
Therefore, we propose to remove the statement at the end of Sec.  
485.635(a)(2) that states, ``* * * at

[[Page 9229]]

least one member is not a member of the CAH staff.''
2. CAH and RHC/FQHC Physician Responsibilities (Sec. Sec.  
485.631(b)(2) and 491.8(b)(2))
    Except in extraordinary circumstances, a physician is required 
under Sec. Sec.  485.631(b)(2) and 491.8(b)(2) to be present in the 
CAH, RHC or FQHC for sufficient periods of time, meaning at a minimum 
at least once in every 2-week period, to provide medical direction, 
medical care services, consultation and supervision of other clinical 
staff. The regulation further requires a physician to be available 
through telecommunication for consultation, assistance with medical 
emergencies or patient referral. Section 1861(aa)(2)(B) of the Act 
requires supervision, guidance, and a periodic physician review of 
covered services furnished by physician assistants and nurse 
practitioners in an RHC or an FQHC but it does not prescribe the 
frequency of the physician visits nor does it require onsite 
supervision. Section 1820(c)(2)(B)(iv) of the Act requires a CAH to 
provide physician oversight by a doctor of medicine (MD) or a doctor of 
osteopathy (DO) for inpatient care that is provided by a physician 
assistant (PA), nurse practitioner (NP), or clinical nurse specialist 
(CNS). The statute does not require the physician to be physically 
present in the facility to provide the required oversight.
    Some providers in extremely remote areas or areas that have 
geographic barriers have indicated that they find it difficult to 
comply with the precise biweekly schedule requirement. Many rural 
populations suffer from limited access to care due to a shortage of 
health care professionals, especially physicians. Oftentimes, non-
physician practitioners provide these important care services to rural 
communities with physicians providing oversight. We believe that 
specifying a specific timeframe for a physician to visit the facility 
does not ensure better health care. With the development of technology 
that facilitates ``telemedicine,'' a physician should have the 
flexibility to utilize a variety of ways and timeframes to provide 
medical direction, consultation, supervision, and medical care 
services, including being on-site at the facility. For example, a 
physician supervising a RHC or FQHC might visit the facility more 
frequently than biweekly during peak seasons for certain illnesses and 
make less frequent visits during other times of the year.
    Among CAHs there is great variation in the size of the populations 
they serve and the range and extent of services they offer. We do not 
believe that a one-size-fits-all requirement as found in the current 
regulation is appropriately responsive to this variation. In the case 
of very small CAHs in frontier areas that offer very limited services 
and have only one physician on staff, the requirement for an onsite 
visit at least every 2 weeks may be unduly burdensome. On the other 
hand, for CAHs that offer a wide range of complex services, have more 
than one physician on staff, and have busy emergency departments and/or 
extensive outpatient services, a visit by a physician only once every 2 
weeks could well be grossly inadequate. By eliminating the required 2-
week visit, we believe CAHs will have the flexibility to determine the 
appropriate frequency of physician visits.
    We therefore propose to revise the CAH regulations at Sec.  
485.631(b)(2) and the RHC/FQHC regulations at Sec.  491.8(b)(2) to 
eliminate the requirement that a physician must be onsite at least once 
in every 2-week period (except in extraordinary circumstances) to 
provide medical care services, medical direction, consultation and 
supervision. For CAHs, we propose that a doctor of medicine or 
osteopathy would be present for sufficient periods of time to provide 
medical direction, consultation and supervision for the services 
provided in the CAH, and is available through direct radio or telephone 
communication for consultation, assistance with medical emergencies, or 
patient referral. For RHCs and FQHCs, we propose that physicians would 
periodically review the clinic or center's patient records, provide 
medical orders, and provide medical care services to the patients of 
the clinic or center.
    We believe that proposing language to remove these barriers will 
enhance patient access to care in rural and remote areas. We note that 
the present review requirements at Sec.  485.631(b)(1)(v) can be 
fulfilled by a physician working from a remote location.
3. RHC/FQHC Definitions: Physician (Sec.  491.2)
    We propose to expand the definition of ``physician'' at Sec.  491.2 
in a way that mirrors the definition of ``physician'' that appears 
under the rules governing payment and Medicare agreements in Part 405 
at Sec.  405.2401(b). We believe that this change will provide clarity 
to the supplier community with respect to the requirements for RHCs and 
FQHCs. We propose to revise the definition as follows: Physician means 
a practitioner who meets the requirements of sections 1861(r) and 
1861(aa)(2)(B) and (aa)(3)(B) of the Act and includes (1) a doctor of 
medicine or osteopathy legally authorized to practice medicine and 
surgery by the State in which the function is performed; and (2) within 
limitations as to the specific services furnished, a doctor of dental 
surgery or of dental medicine, a doctor of optometry, a doctor of 
podiatry or surgical chiropody or a chiropractor (see section 1861(r) 
of the Act for specific limitations).
4. Technical Correction
    We propose to correct a technical error in the regulations by 
amending Sec.  491.8(a)(6) to conform to section 6213(a)(3) of OBRA '89 
(Pub. L. 101-239) which requires that an NP, PA, or certified nurse-
midwife (CNM) be available to furnish patient care at least 50 percent 
of the time the RHC operates. We welcome public comments on this 
correction and on the other changes proposed for rural health care 
providers and suppliers.
    Contacts for rural health and primary care CoP/CfC issues: Mary 
Collins, 410-786-3189; Sarah Richardson Fahrendorf, 410-786-3112.

G. Solicitation of Comment on Reducing Barriers to Services in Rural 
Health Clinics (RHCs)

    We are requesting comment on potential changes we could make to 
regulatory or other requirements to reduce barriers to the following 
services:
1. Telehealth Services
    RHCs that are located in a rural Health Professional Shortage Area 
(HPSA) or in a county outside of a Metropolitan Statistical Area (MSA) 
are authorized by law to be telehealth originating sites (the location 
of an eligible Medicare beneficiary at the time the service being 
furnished via a telecommunications system occurs). However, RHCs are 
not authorized to be distant site providers (practitioners furnishing 
covered telehealth services). Authorized distant site providers include 
physicians, NPs, PAs, CNMs, clinical nurse specialists (CNSs), CPs, 
CSWs, and registered dietitians or nutrition professionals.
    Although RHC practitioners are eligible to furnish and bill for 
telehealth distant site services when they are not working at the RHC, 
they cannot furnish and bill for telehealth services as an RHC 
practitioner because RHCs are not authorized distant site providers. 
Also, these practitioners cannot bill Medicare Part B while they are 
working for a Medicare RHC since Medicare is paying

[[Page 9230]]

the RHC through the Medicare RHC cost report an all-inclusive rate per 
visit that includes all direct and indirect costs, such as the 
practitioner's services, space to provide those services, support staff 
services, related supplies, records costs, and other services. To allow 
separate Medicare Part B physician fee schedule payment to a 
practitioner while that practitioner is working for the RHC would 
result in duplicate Medicare payment for the telehealth service; once 
through the Medicare RHC cost report and again through the Medicare 
Part B physician fee schedule payment.
    We are interested in exploring ways to allow RHC practitioners to 
furnish distant site telehealth services in a way that will not result 
in duplicate payment, especially for services such as mental health 
services, which are particularly limited in rural areas. Therefore, we 
are requesting comments on potential changes we could make to Medicare 
Provider Reimbursement Principles contained in Health Insurance Manual 
15-1, Medicare RHC cost report/instructions contained in Health 
Insurance Manual 15-2, and other Medicare policies that would allow 
RHCs to furnish telehealth services. Commenters should address how any 
suggestions for changes or exceptions would prevent duplicate payment--
that is, ensure Medicare is not paying for the same costs to the RHC on 
the basis of allowable cost and the physician fee schedule under the 
telehealth benefit. We are particularly interested in comments that 
address these concerns without adding undue additional cost reporting 
and compliance burdens on RHCs to ``carve out'' or separate those costs 
that would otherwise be paid under the RHC benefit when Medicare is 
making physician fee schedule payments. Given the interest in 
encouraging the provision of mental health services in rural areas, we 
are interested in comments addressing whether changes should apply to 
all services that could potentially be provided through telehealth or 
only specific services such as mental health. If commenters believe 
these changes should only apply to specific services, we are interested 
in which services should be subject to these special rules and a policy 
justification for why these services are different than other services 
that could potentially be subject to special commingling rules.
2. Hospice Services
    The hospice statute (section 1861(dd) of the Act) authorizes 
physicians and NPs to be attending physicians for Medicare 
beneficiaries that elect the Medicare hospice benefit. RHCs are not 
statutorily authorized to be hospice providers, and can only treat 
hospice beneficiaries for medical conditions not related to their 
terminal illness.
    In some rural areas, the RHC may be the only source of health care 
in the community, and there may be no other providers available during 
RHC hours to provide services that are related to a beneficiary's 
terminal illness. While RHC practitioners are eligible to furnish and 
bill for hospice services when they are not working at the RHC, they 
cannot furnish and bill for hospice services as an RHC practitioner 
because RHCs are not authorized to be attending physicians for hospice. 
Also, these practitioners cannot bill Medicare Part B while they are 
working for a Medicare RHC since Medicare is paying the RHC through the 
Medicare RHC cost report an all-inclusive rate per visit that includes 
all direct and indirect costs, such as the practitioner's services, 
space to provide those services, support staff services, related 
supplies, records costs, and other services. To allow separate Medicare 
Part B physician fee schedule payment to a practitioner while that 
practitioner is working for the RHC would result in duplicate Medicare 
payment for the hospice service; once through the Medicare RHC cost 
report and again through the Medicare Part B physician fee schedule 
payment.
    We are interested in exploring ways to allow RHC practitioners to 
furnish hospice services in a way that will not result in duplicate 
payment, especially in areas with limited hospice providers. Therefore, 
we are requesting comments on potential changes we could make to 
Medicare Provider Reimbursement Principles contained in Health 
Insurance Manual 15-1, Medicare RHC cost report/instructions contained 
in Health Insurance Manual 15-2, and other Medicare policies that would 
allow RHCs to furnish hospice services. Commenters should address how 
any suggestions for changes or exceptions would prevent duplicate 
payment--that is, ensure Medicare is not paying for the same costs to 
the RHC on the basis of allowable cost and the physician fee schedule 
under the hospice benefit. We are particularly interested in comments 
that address these concerns without adding undue additional cost 
reporting and compliance burdens on RHCs to ``carve out'' or separate 
those costs that would otherwise be paid under the RHC benefit when 
Medicare is making hospice payments.
3. Home Health Services
    RHCs that are located in an area in which there exists a shortage 
of home health agencies are authorized to provide nursing care 
furnished by a registered nurse or a licensed practical nurse to a 
homebound individual. The care must be provided under a written 
treatment plan that is established and periodically reviewed by a 
physician, NP, or PA.
    Despite the authority for RHCs to provide home health services, 
there are relatively few RHCs that provide this service. We are seeking 
data and comments on (a) The need for home health services in 
communities served by RHCs; (b) barriers to providing these services, 
(c) data regarding any difficulties beneficiaries face in accessing 
home health services in those communities or any shortages in home 
health agencies; and (d) possible strategies to reduce or eliminate the 
identified barriers that comply with our legislative authority and the 
need for administrative accountability.
4. Other Services
    We welcome comments on other services that RHCs would like to 
provide but are not able to do so. Please include an explanation of why 
the service is needed, the barriers to providing the service, and 
possible solutions that comply with our legislative authority and the 
need for administrative accountability.
    Contact for RHC Comments: Corinne Axelrod, (410) 786-5620.

H. Clinical Laboratory Improvement Amendments of 1988 (CLIA)

    On October 31, 1988, Congress enacted the Clinical Laboratory 
Improvement Amendments of 1988 (CLIA), Public Law 100-578. The purpose 
of CLIA is to provide quality standards for laboratory testing to 
ensure the accuracy and reliability of laboratory test results for all 
Americans. Under the authority of 42 U.S.C. 263a(f), the Secretary 
issued regulations implementing CLIA on February 28, 1992 at 42 CFR 
part 493 (57 FR 7002). The regulations specify the standards and 
specific conditions that must be met to achieve and maintain CLIA 
certification. CLIA certification is required for all laboratories, 
including but not limited to those that participate in Medicare and 
Medicaid, which test human specimens for the purpose of providing 
information for the diagnosis, prevention, or treatment of any disease 
or impairment, or the assessment of health, of human beings.
    The regulations also require laboratories conducting moderate or 
high-complexity testing to enroll in an approved proficiency testing 
(PT) program that covers all of the specialties

[[Page 9231]]

and sub-specialties for which the laboratory seeks certification. There 
are currently 229,815 CLIA certified laboratories. Of these 
laboratories, 35,084 are required to enroll in an HHS-approved PT 
program and are subject to all PT regulations.
    Congress emphasized the importance of PT when it drafted the CLIA 
legislation. For example, the Committee on Energy and Commerce report 
from Sept. 9, 1988 (100th Congress 2nd Session, House of 
Representatives, Report 100-899, page 15, Identified Problems and 
Concerns) noted that ``The Committee's investigation focused 
particularly on proficiency testing because it is considered one of the 
best measures of laboratory performance. It is arguably the most 
important measure, since it reviews actual test results rather than 
merely gauging the potential for good results.'' The Committee surmised 
that, left to their own devices, some laboratories would be inclined to 
treat PT samples differently than their patient specimens, as they 
would know that the laboratory would be judged on its performance. For 
example, such laboratories might be expected to perform repeated tests 
on the PT sample, use more highly qualified personnel than are 
routinely used for such testing, or send the samples out to another 
laboratory for analysis. As such practices would undermine the purpose 
of PT, the Committee noted that the CLIA statute was drafted to bar 
laboratories from such practices, and to impose significant penalties 
on those who elected to violate those bars (H.R.Rep. No. 100-899, 100th 
Congress, 2d Session, at 16 and 24, 1988 U.S.C.C.A.N. 3828).
    We propose to make a number of clarifications and changes to the 
regulations governing PT under CLIA. PT is a valuable tool the 
laboratory can use to verify the accuracy and reliability of its 
testing. During PT, an HHS-approved PT program sends samples to be 
tested by a laboratory on a scheduled basis. After testing the PT 
samples, the laboratory reports its results back to the PT program for 
scoring. Review and analysis of PT reports by the laboratory director 
will alert the director to areas of testing that are not performing as 
expected and may also indicate subtle shifts or trends that, over time, 
could affect patient results. As there is no on-site, external proctor 
for PT testing in a laboratory, the testing relies in large part on an 
honor system. The PT program places heavy reliance on each laboratory 
and laboratory director to self-police their analysis of PT samples to 
ensure that the testing is performed in accordance with the CLIA 
requirements. For each PT event, laboratories are required to attest 
that PT samples are tested in the same manner as patient specimens are 
tested. PT samples are to be assessed by integrating them into the 
laboratory's routine patient workload, and the testing itself is to be 
conducted by the personnel who routinely perform such testing, using 
the laboratory's routine methods. The laboratory is barred from 
engaging in inter-laboratory communication pertaining to results prior 
to the PT program's event cut-off date and must not send the PT samples 
or any portion of the PT samples to another laboratory for testing, 
even if it would send a patient specimen to another laboratory for 
reflex or confirmatory testing.
    By ``reflex testing'' we mean confirmatory or additional laboratory 
testing that is automatically requested by a laboratory under its 
standard operating procedures for patient specimens when the 
laboratory's findings indicate test results that are abnormal, are 
outside a predetermined range, or meet other pre-established criteria 
for additional testing. For patient specimen testing, reflex testing 
may be legitimately performed by the same laboratory that performed the 
initial testing or may be performed by referral of the patient specimen 
for testing at a laboratory operating under a different CLIA 
certificate. For PT, reflex testing is prohibited unless it is 
performed by the same laboratory that performed the initial testing, is 
included in its standard operating procedure, and the results are 
reported as part of the proficiency testing program.
    By ``confirmatory testing'', we mean testing performed by a second 
analytical procedure that could be used to substantiate or bring into 
question the result of an initial laboratory test. For patient specimen 
testing, confirmatory testing may legitimately be performed by the same 
laboratory that performs the initial test or by a second laboratory 
operating under a different CLIA certificate than the laboratory 
performing the initial testing. For PT, confirmatory testing is 
prohibited unless it is performed by the same laboratory that performed 
the initial test, is included in its standard operating procedure, and 
the results are reported as part of the proficiency testing program.
    Any laboratory that we determine intentionally referred its PT 
samples to another laboratory for analysis may have its certification 
revoked for at least one year. The phrase ``intentionally referred'' 
has not been defined by the statute or regulations, but we have 
consistently interpreted this phrase from the onset of the program to 
mean general intent, as in intention to act. Whether or not acts are 
authorized or even known by the laboratory's management, a laboratory 
is responsible for the acts of its employees. Among other things, 
laboratories need to have procedures in place and train employees on 
those procedures to prevent staff from forwarding PT samples to other 
laboratories even in instances in which they would normally forward a 
patient specimen for reflex or confirmatory testing.
    PT samples are not to be referred to another laboratory under any 
circumstances. However, despite the issuance of considerable guidance 
and the near universal inclusion of instructions in laboratory 
operations manuals, there continue to be cases where PT samples are 
forwarded to another laboratory for analysis. Laboratory staff are 
either not being made aware that the prohibition applies even in 
instances where they would normally forward a patient specimen for 
additional testing, or, due to failures in training or the clarity of 
laboratory operating manuals, they fail to abide by the laboratory's 
written policies prohibiting the referral of PT samples to another 
laboratory.
    For example, some laboratories have indicated that they have been 
confused by the requirement at Sec.  493.801(b) that laboratories treat 
PT samples in the same manner as patient specimens. If their standard 
operating procedure is for some types of patient specimens to be sent 
to another laboratory for reflex or confirmatory testing, they have 
erroneously believed that there would be a basis for also referring a 
PT sample. They have strenuously argued that their mistaken 
interpretation was innocent, and that we should find an improper, but 
not intentional, referral of a PT sample in those instances.
    We disagree with any assertions that such referrals are 
``improper'' but not ``intentional'' under our longstanding 
interpretation of ``intentional''. As noted above, we have consistently 
interpreted ``intentional'' to mean general intent, as in intention to 
act, and expansive case law has supported this interpretation. That 
said, we recognize that, in cases of a PT referral involving reflex or 
confirmatory testing under standard operating procedures, the 
revocation of a CLIA certificate, combined with the resulting potential 
prohibition on the owner and operator to own or operate a laboratory 
for 2 years, may create access issues for patients in need of 
laboratory services. We also note that laboratory testing protocols 
have changed over time and reflex or confirmatory testing

[[Page 9232]]

has become more prevalent, resulting in an increased risk of PT 
referral.
    We are mindful that all healthcare beneficiaries depend on a 
functioning PT program conducted in accordance with the regulations and 
statute to ensure that laboratories provide accurate and reliable test 
results; however, we recognize that human error can and does occur. For 
these reasons, we believe it would be appropriate to afford an 
infrequent and narrowly crafted carve-out from the long-standing 
interpretation of ``intentional'' to allow for the imposition of 
alternative sanctions when there is a single instance of PT referral 
related to reflex or confirmatory testing. Laboratories would still be 
obligated to provide staff with clear standard operating procedures and 
effective training for all current and newly hired employees, and must 
ensure continued compliance with those procedures to prevent PT 
referral. Repeat referrals, even if related to reflex or confirmatory 
testing, would be considered ``intentional'' and may be subject to the 
sanctions of revocation and ban against the owner and operator. A PT 
referral is a prohibited act and will always involve consequences.
    In addition to the already extensive campaign to highlight the bar 
on PT referrals, we have considered what more we could possibly do to 
further ensure laboratory awareness of this prohibition. We believe it 
would be appropriate to insert, into that part of the regulation that 
discusses the treatment of PT samples in the same manner as the 
laboratory would treat a patient specimen, a cross reference reminding 
laboratories that such treatment must not include referral of a PT 
sample to another laboratory.
    We therefore propose to make two changes to the CLIA regulations 
relevant to PT referral. The first would be to add a statement to Sec.  
493.801(b) to explicitly note that the requirement to treat PT samples 
in the same manner as patient specimens does not mean that it is 
acceptable to refer PT samples to another laboratory for testing even 
if that is the standard operating procedure for patient specimens. This 
means that in instances where the laboratory's patient testing standard 
operating procedures would normally require reflex or confirmatory 
testing at another laboratory, the laboratory should treat the PT 
sample as they would a patient specimen up until the point they would 
typically refer a patient specimen to a second laboratory for any form 
of further testing. A PT sample must never be sent to another 
laboratory under any circumstances.
    The second proposed change would be to carve out a narrow exception 
in our longstanding interpretation of what constitutes an 
``intentional'' referral. We note, however, that for all other 
instances in which a PT sample is referred, the standard for 
``intentional'' would continue to be a general intent to act--that is, 
to send a PT sample to another laboratory for analysis. For the narrow 
exception to this general rule, we propose that when CMS determines 
that a PT sample was referred to another laboratory for analysis, but 
the requested testing was limited to reflex or confirmatory testing, 
then we would consider the referral to be improper and subject to 
alternative sanctions in accordance with Sec.  493.1804(c), but not 
intentional, provided that, if the specimen were a patient specimen, 
the referral would have been in full conformance with written, legally 
accurate, and adequate standard operating procedures for the 
laboratory's testing of patient specimens, and the PT referral is not a 
repeat PT referral. Alternative sanctions may include any combination 
of civil money penalties, directed plan of correction (such as required 
remedial training of staff), temporary suspension of Medicare or 
Medicaid payments, or other sanctions specified in accordance with 
regulation.
    By ``full conformance'' with the laboratory's written, legally 
accurate and adequate standard operating procedures we mean that the 
procedures adequately describe what is to be done, and that what is to 
be done is in conformance with applicable laws (such as the ban on 
referring PT samples to another laboratory for analysis). Furthermore, 
we mean that the referral policy does not afford any discretion to 
staff as to whether a patient specimen would be forwarded or not. For 
example, standard operating procedures do not allow for selectivity on 
the part of the laboratory staff. Rather, they require the application 
of pre-established criteria that result in a mandate to forward a 
patient specimen to another laboratory for further analysis. For 
example, if standard laboratory protocols dictate that all specimens 
showing HIV-positive test results be sent to a second laboratory for 
confirmatory testing, but we find that the individual referred only 1 
of the 2 positive HIV PT samples, we would consider the referral to be 
not in conformance with the laboratory's own standard operating 
procedure. In this instance, the laboratory may be subject to the 
sanctions of revocation and ban against the owner and operator as 
opposed to alternative sanctions.
    By providing that the referral is not a repeat PT referral, we mean 
that there has not been an instance of identified PT referral in the 
two survey cycles prior to the time of the PT referral in question. Two 
survey cycles generally equates to a four-year period on average. This 
is not a precise calendar time period but is carefully recorded as a 
matter of actual and documented survey event dates. Both CMS and 
accrediting organizations perform initial surveys at least 3 months but 
no later than 12 months from the effective date of CLIA certification. 
Subsequent routine recertification surveys are performed biennially. A 
survey cycle means the time between an initial survey and 
recertification survey or the time between a recertification survey and 
the next recertification survey, and is approximately two years. The 
time interval from the effective date of the CLIA certificate until the 
initial certification is also included as part of the initial 
certification survey cycle. Complaint and validation surveys are 
performed on a non-routine basis, and are considered to be separate 
from survey cycles for the purpose of determining the timeframe for two 
survey cycles.
    In other words, a referral would not be considered ``intentional'' 
if the CMS investigation reveals PT samples were sent to another 
laboratory for reflex or confirmatory testing, it is not a repeat PT 
referral, and it occurred while acting in full conformance with the 
laboratory's written, legally accurate and adequate standard operating 
procedure as outlined in this preamble. The key to this carve-out is 
the expectation that laboratories will ensure that improper referrals 
are addressed and eliminated, or we will find that future referrals are 
intentional. The carve-out is meant to be a one-time exception to a 
finding of an intentional referral by virtue of a general intent to 
forward a PT sample to another laboratory. Upon learning that the 
laboratory's training materials, training, or staff capabilities are 
inadequate to ensure compliance with the PT referral requirements, we 
expect the laboratory to correct the problems, and will treat 
subsequent referrals as ``intentional'' in keeping with our 
longstanding practices. We believe that it is reasonable to expect 
laboratories to maintain a heightened vigilance for this time-frame to 
ensure that they do not have any repeated difficulties. We welcome 
public comments on these proposed changes.
    Furthermore, we note that the ``Taking Essential Steps for Testing 
Act of 2012'' (Pub. L. 112-202), enacted on

[[Page 9233]]

December 4, 2012, amends section 353 of the Public Health Service Act 
to provide the Secretary with the discretion to substitute intermediate 
sanctions in lieu of the 2-year prohibition on the owner and operator 
when a CLIA certificate is revoked due to intentional PT referral, and 
to consider imposing alternative sanctions in lieu of revocation in 
such cases as well. We generally intend to undertake further rule-
making to implement the Taking Essential Steps for Testing Act of 2012, 
and invite comment on such action. In the meantime, since we are 
already proposing changes in this rule to Sec.  493.801, we are 
proposing at this time to change the ``will'' to ``may'' in the second 
sentence of Sec.  493.801(b)(4) to ensure that this section is in 
compliance with the Taking Essential Steps for Testing Act of 2012.
    Contact for CLIA issues: Melissa Singer, (410) 786-0365.

III. Collection of Information Requirements

    This proposed rule does not impose any new information collection, 
recordkeeping or third-party disclosure requirements. However, this 
proposed rule would create certain savings related to information 
collection, recordkeeping or third-party disclosure requirements. While 
we detail all of the estimated savings of this proposed rule in the 
regulatory impact analysis, the following paragraph provides a brief 
summary of the estimated savings associated with the information 
collection request (ICR) approved under OMB control number 0938-1069.
    This proposed rule would reduce the reporting requirements for 
transplant centers and organ procurement organizations. As stated later 
in the regulatory impact analysis, we are proposing to eliminate the 
reporting requirement at 42 CFR 482.74(a)(2). The requirement is 
redundant as it is a duplication of data submission under the Paperwork 
Reduction Act. The same information is currently being collected by the 
Health Services and Resources Administration (HRSA). After the 
requisite notice and comment periods, we will submit a revision of the 
currently approved ICR for OMB review and approval.

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 impacts of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 
1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, 
section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 
1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 
1999) and the Congressional Review Act (5 U.S.C. 804(2).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis (RIA) must be prepared for major rules with 
economically significant effects ($100 million or more in any 1 year). 
We estimate that this rulemaking is ``economically significant'' as 
measured by the $100 million threshold, and hence also a major rule 
under the Congressional Review Act. Accordingly, we have prepared a 
Regulatory Impact Analysis (RIA) that, to the best of our ability, 
presents the costs and benefits of the rulemaking.

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 proposed rule 
continues our direct response 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

    This proposed rule would create ongoing cost savings to providers 
and suppliers in many areas. Other changes we have proposed would 
clarify existing policy and relieve some administrative burdens. We 
have identified other kinds of savings that providers and patients will 
realize throughout this preamble. The financial savings are summarized 
in the table that follows. We welcome public comments on all of our 
burden assumptions and estimates. As discussed later in this regulatory 
impact analysis, substantial uncertainty surrounds these estimates and 
we especially solicit comments on either our estimates of likely 
savings or the specific regulatory changes that drive these estimates.

                             Table 1--Section-by-Section Economic Impact Estimates*
----------------------------------------------------------------------------------------------------------------
                                                                                     Number of    Likely savings
                   Issue                                  Frequency                  affected     or benefits ($
                                                                                     entities        millions)
----------------------------------------------------------------------------------------------------------------
Ambulatory Surgical Centers:
     Radiology Services............  Recurring Annually.................            2544            Food and dietetic services....  Recurring Annually.................           4,900       83 to 528
     Nuclear medicine services.....  Recurring Annually.................  ..............              39
Transplant Centers:

[[Page 9234]]

 
     Reports to CMS & Survey         Recurring Annually.................              60              Sprinkler Deadline Extension..  One-time...........................             125              22
Rural Health:
     CAH & RHC/FQHC Physician        Recurring Annually.................            9311              42
     responsibilities.
     CAH Provision of services.....  Recurring Annually.................             665               PT Referral...................  Recurring Annually.................               3               2
                                                                                 -------------------------------
        Total..............................                                       ..............      231 to 676
----------------------------------------------------------------------------------------------------------------
* This table includes entries only for those proposed reforms that we think would have a measurable economic
  effect

C. Anticipated Effects

1. Effects on Ambulatory Surgical Centers
    The potential cost savings from the reduced ASC radiology services 
requirements are discussed in the preamble section of this rule 
addressing those reforms. We have calculated the savings based on the 
elimination of ASC requirements that are inappropriate and unnecessary 
in the ASC setting, primarily because some of the requirements are 
intended for inpatient hospital patients, which would not be applicable 
in the outpatient ASC setting. We estimate that assuming the average 
cost for affected facilities to meet the radiology services 
requirements would have been $16,000 annually ($4,000 x 4 quarters), 
the total savings would be $40.7 million ($16,000 x 2544 ASCs).
    The assumption for this estimate is based on using ASC facilities 
across the country that provide orthopedic or pain management 
procedures, which are the facilities most likely to require a 
radiologist on staff. We reached out to the Ambulatory Surgery Center 
Association for assistance on the average cost and usage of 
radiologists in ASCs across the United States. Based on a survey of 
ASCs and depending on the market, location of the ASC and frequency of 
the visits, we utilized a $4,000 average cost per quarter that ASCs are 
paying for radiologist fees. In addition, we considered the total 
number of ASCs affected by the current radiology services requirements 
at an average 48 percent, or 2544 ASCs, based on current data and the 
total number of Medicare certified ASCs (5300 as of December 2011).
    We note that the $40.7 million estimated savings to ASCs may 
represent an overstatement of the provision's net social benefits. To 
the extent that radiologists are putting forth effort (for example, 
transporting themselves to ASCs) to perform radiology supervision, 
society's resources would indeed be freed for other uses by the 
proposed change. However, because the radiologic services in question 
do not involve any diagnostic activity, some portion of the radiology 
supervision fees may not represent actual labor costs, but would 
instead involve a transfer of value from radiologists (who currently 
receive supervision fees without having any diagnostics to supervise) 
to ASCs (which, if the proposed rule is finalized, would no longer pay 
those fees). We lack data to estimate how much of the $40.7 million 
total is a transfer of this type, rather than a net social benefit. We 
welcome your comments on these estimates.
2. Effects on Intermediate Care Facilities for Individuals who are 
Intellectually Disabled
    Because we are proposing only technical corrections, we do not 
estimate any costs or savings for ICF/IIDs based on this proposed rule.
3. Effects on Hospitals
    There are about 4,900 hospitals that are certified by Medicare and/
or Medicaid. We use these figures to estimate the potential impacts of 
this proposed rule. We use the following average hourly wages for 
registered dietitians, advanced practice registered nurses, physician 
assistants, pharmacists, and physicians respectively: $35, $57, $57, 
$69, and $124 (BLS Wage Data by Area and Occupation, including both 
hourly wages and fringe benefits, at http://www.bls.gov/bls/blswage.htm 
and http://www.bls.gov/ncs/ect/).
Ordering Privileges for Registered Dietitians (RDs) (Food and Dietetic 
Services Sec.  482.28)
    We propose to revise the hospital requirements at 42 CFR 482.28 
(b), ``Food and dietetic services,'' which currently requires that 
therapeutic diets must be prescribed by the practitioner or 
practitioners responsible for the care of the patients. Specifically, 
we are proposing revisions to Sec.  482.28(b)(1) and (2) that would 
change the CMS requirements to allow for flexibility in this area by 
requiring that all patient diets, including therapeutic diets, must be 
ordered by a practitioner responsible for the care of the patient, or a 
qualified dietitian as authorized by the medical staff and in 
accordance with State law. With these proposed changes to the current 
requirements, a hospital would have the regulatory flexibility either 
to appoint RDs to the medical staff and grant them specific dietary 
ordering privileges (including the capacity to order specific 
laboratory tests to monitor nutritional interventions and then modify 
those interventions as needed) or to authorize the ordering privileges 
without appointment to the medical staff, all done through the 
hospital's medical staff and its rules, regulations, and bylaws. In 
either instance, medical staff oversight of RDs and their ordering 
privileges would be ensured.
    As we discussed previously in this rule, a 2010 retrospective 
cohort study\1\ of 1,965 patients at an academic medical center looked 
at the influence of RDs with ordering privileges on appropriate

[[Page 9235]]

parenteral nutrition (PN) usage and showed a reduction in medically 
inappropriate PN usage, which translated to an approximately $135,233 
annual savings to the hospital after RDs were granted ordering 
privileges; included in this savings estimate were solution, materials 
and pharmacy labor costs specifically related to PN. In order to 
estimate the reduced costs that our proposed changes to Sec.  482.28 
might bring to hospitals, we based our calculations on this study and 
its finding of $135,233 savings for a single hospital that granted 
ordering privileges to RDs. The study presented its figures in 2003 
dollars, and to adjust to a comparable figure in 2012 dollars we used 
the increase in the Consumer Price Index (CPI-U) over this period. 
Since that index is up about 25 percent, our savings estimate, rounded, 
is $169,000.
---------------------------------------------------------------------------

    \1\ Peterson SJ, Chen Y, Sullivan CA, et al. Assessing the 
influence of registered dietician order-writing privileges on 
parenteral nutrition use. J AM Diet Assoc. 2010; 110; 1702 1711.
---------------------------------------------------------------------------

    We estimate that possibly 5 percent (that is, 245) of all hospitals 
are out of compliance with the CoPs and already granting RDs ordering 
privileges through appointment to the medical staff or other mechanisms 
and have already realized these savings (included in this estimate 
would also be those hospitals who might decide against granting these 
privileges and therefore would also not realize these savings). 
Additionally, an October 2008 study\2\ surveyed 1,500 clinical 
nutrition managers in acute healthcare facilities nationwide in an 
attempt to describe the level of RD independent prescriptive authority 
and to explore the barriers to obtaining that authority. The authors of 
the study found that roughly 15 percent of the respondents cited 
``regulatory agencies'' as a barrier to obtaining independent 
prescriptive authority (or dietary ordering privileges as we refer to 
it in this rule). However, several limitations inherent in this study 
led us to question how heavily we should rely on it for the purposes of 
estimating how many hospitals would take advantage of this proposed 
allowance under the CoPs. The survey only looked at the perceptions of 
clinical nutrition managers regarding barriers to RD ordering 
privileges and did not survey hospital administrators or governing body 
members on the reasons why hospitals were unable to grant these 
privileges to RDs at this time. We believe that such a study, had it 
been performed, would have been much more meaningful and reliable for 
our purposes in estimating how many hospitals would possibly implement 
the granting of ordering privileges to RDs. The authors of the study 
also state that ``* * * the limitations of this study must be 
considered and a major limitation was the small response rate (23.4 
percent) * * *'' (or only 351 respondents from the 1,500 clinical 
nutrition managers surveyed). Weil et al. also reference current CMS 
requirements and policy regarding RD ordering privileges in their 
study's discussion where they state, ``* * * independent prescriptive 
authority via clinical privileges would not be a CMS-accepted pathway 
for RDs to write orders * * *'' Mention of the CMS requirements here 
leads us to believe that our requirements (included in the survey 
response ``regulatory agencies'' as used in the study) might present a 
more significant barrier than the results of the survey indicate.
---------------------------------------------------------------------------

    \2\ Weil, Sharon D., Linda Lafferty, Kathryn S. Keim, Diane Sowa 
and Rebecca Dowling. Registered Dietitian Prescriptive Practices in 
Hospitals. J AM Diet Assoc. 2008; 108; 1688-1692.
---------------------------------------------------------------------------

    Because there is still some degree of uncertainty involved in 
estimating how many hospitals would actually take advantage of this 
proposed allowance under the CoPs, we have chosen to present a range of 
savings estimates, using 4,655 (or 95 percent) as both our most likely 
estimate and as the upper bound of affected hospitals and 15 percent 
(from the survey cited above), or 735 hospitals, as the lower bound. 
However, our extensive experience with hospitals, hospital 
organizations, and RD professional organizations leads us to believe 
that if the change proposed here is finalized, a significant number of 
hospitals would move to grant RDs ordering privileges. Therefore, we 
believe that the upper bound estimate of potential hospital savings 
provided here is the more realistic and reliable end of the range.
    We also based our savings estimates on the following assumptions:
     The Peterson et al study was conducted at a 613-bed 
tertiary academic medical center; hospitals smaller than the one 
studied would have lower PN usage due to lower patient censuses and 
would thus have lower savings;
     We adjusted the savings relative to average bed size for 
hospitals of 164 beds (from AHA Hospital Statistics), meaning that 
average annual savings would be $36,513 per hospital using the 2003 
figure, but $45,641 after adjusting for inflation; and
     The savings are based on the impact that RD ordering 
privileges had on reducing inappropriate PN usage alone and do not 
include other positive impacts that RD ordering privileges might have 
on reducing costs to hospitals.
    Based on the studies and these assumptions, we estimate savings 
ranging from $33,546,135 (735 hospitals x $45,641 in savings from 
reduced inappropriate PN usage = $33,546,135) to $212,458,855 (4,655 
hospitals x $45,641 in savings from reduced inappropriate PN usage = 
$212,458,855).
    As noted above, the proposed changes might also help hospitals to 
realize other significant savings. One 2008 study\3\ indicates that 
patients whose PN regimens were ordered by RDs have significantly fewer 
days of hyperglycemia (57 percent versus 23 percent) and electrolyte 
abnormalities (72 percent versus 39 percent) compared with patients 
whose PN regimens were ordered by physicians. This would most likely 
translate into decreased length of stays for these patients as well as 
quicker recovery times and reduced incidents of readmissions after 
discharge from the hospital. However, we do not have any reasonable 
means for estimating these potential cost savings at this time.
---------------------------------------------------------------------------

    \3\ Duffy JK, Gray RL, Roberts S, Glanzer SR, Longoria SL. 
Independent nutrition order writing by registered dieticians reduces 
complications associated with nutrition support [abstract]. J Am 
Diet Assoc. 2008; 108 (suppl 1):A9
---------------------------------------------------------------------------

    More obviously, RDs with ordering privileges would also be able to 
provide medical nutrition therapy (MNT) and other nutrition services at 
lower costs than physicians (as well as APRNs and PAs, two categories 
of non-physician practitioners that have traditionally also devised and 
written patient dietary plans and orders). This cost savings stems in 
some part from significant differences in the average salaries between 
the professions and the time savings achieved by allowing RDs to 
autonomously plan, order, monitor, and modify services as needed and in 
a more complete and timely manner than they are currently allowed. 
While we can estimate with reasonable certainty the savings that might 
be realized by hospitals through our proposed changes in terms of the 
physician/APRN/PA time and salaries saved, it would be more difficult 
to reasonably estimate the potential savings and benefits that would 
result from these professionals now having potentially more time to 
devote their attentions to those aspects of patient care for which they 
are trained and qualified. Physicians, APRNs, and PAs often lack the 
training and educational background to manage the nutritional needs of 
patients with the same efficiency and skill as RDs. The addition of 
ordering privileges enhances the ability that RDs already have to 
provide timely, cost-effective, and evidence-based nutrition services 
as the recognized nutrition experts on a hospital interdisciplinary 
team. A 2011

[[Page 9236]]

review article\4\ discusses a number of additional studies that provide 
further evidence for the significant differences in nutrition education 
that exist between physicians and RDs, along with several other studies 
supporting the cost-effectiveness and positive patient outcomes that 
hospitals might achieve by granting RDs ordering privileges.
---------------------------------------------------------------------------

    \4\ Kinn TJ. Clinical order writing privileges. Support Line. 
2011; 33; 4; 3-10.
---------------------------------------------------------------------------

    To calculate these cost savings for hospitals, we based our savings 
estimates on the following assumptions:
     Using the wide range of estimates established above, 
between 735 and 4,655 hospitals would realize these savings;
     There is an average hourly salary difference of $44 
between RDs on one side ($35 per hour) and the hourly salary average 
for physicians, APRNs, and PAs ($79 per hour) on the other;
     There are on average 7,000 inpatient hospital stays per 
hospital per year (from AHA Hospital Statistics) with each of these 
stays requiring at least one dietary plan and orders;
     The average hospital stay is about 5 days (from AHA 
Hospital Statistics);
     On average, each non-complex dietary order, including 
ordering and monitoring of laboratory tests, subsequent modifications 
to orders, and dietary orders for discharge/transfer/outpatient follow-
up as needed, would take 10 minutes (0.17 hours) of a physician's/
APRN's/PA's/RD's time per patient during an average 5-day stay;
     On average, MNT or more complex dietary orders (for 
example, PN, tube feedings, patients with multiple co-morbidities, 
transition of patient from parenteral to enteral feeding, etc.), 
including ordering and monitoring of laboratory tests, subsequent 
modifications to orders, and dietary plans and orders for discharge/
transfer/outpatient follow-up as needed, would take 25 minutes (0.42 
hours) of a physician's/APRN's/PA's/RD's time per patient during an 
average 5-day stay; and
     The average number of hospital inpatient stays where the 
patient is determined to be either ``at risk for malnutrition'' or 
``malnourished'' and/or requires MNT or a more complex dietary plan and 
orders for other clinical reasons is 1,400 (or 20 percent of inpatient 
hospital stays) \5\ per hospital per year, with a remaining average of 
5,600 (or 80 percent) of hospital inpatient stays per hospital per year 
where the patient is determined to be ``not at risk for malnutrition'' 
and/or requires a less complex dietary plan and orders.
---------------------------------------------------------------------------

    \5\ Barker LA, Gout BS, Crowe TC. Hospital malnutrition: 
prevalence, identification and impact on patients and the healthcare 
system. Int J Environ Res Public Health. 2011; 8(2); 514-527.
---------------------------------------------------------------------------

    The resulting savings estimate ranges from $49,803,600 ((735 
hospitals x 5,600 inpatient hospital stays x 0.17 hours of a 
physician's/APRN's/PA's/RD's time x $44 per hourly wage difference) + 
(735 hospitals x 1,400 inpatient hospital stays x 0.42 hours of a 
physician's/APRN's/PA's/RD's time x $44 per hourly wage difference)) to 
$315,422,800 annually ((4,655 hospitals x 5,600 inpatient hospital 
stays x 0.17 hours of a physician's/APRN's/PA's/RD's time x $44 per 
hourly wage difference) + (4,655 hospitals x 1,400 inpatient hospital 
stays x 0.42 hours of a physician's/APRN's/PA's/RD's time x $44 per 
hourly wage difference)). When combined with the savings estimate of 
$33,546,135 to $212,458,855 from reduced inappropriate PN usage, this 
brings the total savings estimate from the proposed CoP changes 
$83,349,735 to $527,881,655 (or approximately $528 million) annually.
    We acknowledge several additional kinds of uncertainty in our 
estimates of the proposed provision's savings. For instance, we have 
assumed that the time physicians, APRNs or PAs save due to being 
relieved of diet-ordering duties would equal the time spent by RDs on 
those duties. RDs, being the experts in this area and more proficient 
in evaluating and treating the nutritional needs of patients, might 
actually need less time than physicians, PAs, or APRNs. As we have 
stated previously, we have based many of our assumptions and estimates 
on what we believe is the conservative side of the best available 
evidence we have from our review of the literature in this area. We 
have also based our overall assumptions and best estimates on our 
practical, ongoing experiences with hospitals and prevailing 
conventional wisdom in these matters. Finally, we have restricted our 
estimates to inpatient hospital stays and we did not include a 
discussion of hospital outpatient visits for nutritional services and 
the impact that these proposed changes might have on hospital costs in 
this area. We welcome public comments on the assumptions and estimates 
we have put forth in this analysis.
Nuclear Medicine Services (Sec.  482.53)
    We propose a change to the current requirement at Sec.  
482.53(b)(1), which requires that the in-house preparation of 
radiopharmaceuticals be performed by, or under the direct supervision 
of, an appropriately trained registered pharmacist or a doctor of 
medicine or osteopathy. We propose to remove the term ``direct'' from 
the current requirement. This revision would allow for other 
appropriately trained hospital staff to prepare in-house 
radiopharmaceuticals under the supervision or oversight of a registered 
pharmacist or doctor of medicine or osteopathy, but it would not 
require that such supervision or oversight be exercised by the physical 
presence in the hospital of one of these professionals, particularly 
during off-hours when such a professional would not be routinely 
present. The proposed change would directly reduce the burden of the 
current direct supervision requirement where it is most needed-- in-
house preparation of radiopharmaceuticals for after-hours/emergency 
performance of nuclear medicine diagnostic procedures.
    Based on statistics from the Society of Nuclear Medicine and 
Molecular Imaging, an estimated 16 million nuclear medicine imaging and 
therapeutic procedures are performed each year in the United States. We 
based our estimated savings for this change on the conservative 
assumptions that:
     Most hospitals would take advantage of this proposed 
allowance on supervision since it is consistent with the Society of 
Nuclear Medicine and Molecular Imaging recommendations on this issue;
     The percentage of nuclear medicine procedures performed 
off-hours (7 p.m.-7 a.m.) is only 10 percent of all procedures 
performed (or 1.6 million);
     It would require 15 minutes of an MD/DO/PharmD's time for 
direct supervision; and
     The average hourly salary for these two categories of 
practitioners is $97.
    Therefore, we estimate hospitals savings would be $38.8 million for 
the change proposed (1.6 million off-hour procedures x $97 hourly 
salary for MD/DO/PharmD x 15 minutes for direct supervision).
    We proposed other revisions to the Hospital CoPs, but we do not 
believe those provisions would create tangible savings for hospitals. 
We welcome public comments on these assumptions and estimates.
4. Effects on Transplant Centers and Organ Procurement Organizations
    Existing section 482.74(a)(2) requires transplant centers to notify 
CMS whenever there was a decrease in the center's number of transplants 
or survival rates that could result in the center being out of 
compliance with the clinical experience (number of required 
transplants) or outcome (survival) requirements at Sec.  482.82. We are 
proposing to eliminate this requirement,

[[Page 9237]]

which would reduce the burden to any transplant center that must 
currently report this information to CMS. This requirement functionally 
duplicates the data reporting and analysis requirements administered 
through the Health Resources and Services Administration (HRSA) of HHS, 
HRSA's contractor for the Scientific Registry for Transplant Recipients 
(SRTR), and a CMS-funded analysis of these SRTR data. These data 
(hereafter the SRTR data) are equally if not more timely, and equal if 
not better at identifying transplant center performance problems, than 
the data we currently collect directly.
    We estimate that transplant centers make about 60 notifications 
each year to CMS according to Sec.  482.74(a)(2). We believe that a 
staff member, probably the transplant center administrator, who would 
be responsible for this notification would need to review the data and 
notify the medical director of the possibility that the center's volume 
and/or survival statistics may result in failure to comply with the 
requirements in Sec.  482.82 of the CoPs. Then the transplant center 
administrator would need to make the actual submission to CMS. We 
believe this would require 15 minutes, or .25 hours, of the medical 
director's time at an hourly wage of $140 and 30 minutes, or .5 hours, 
of the transplant center administrator's time at an average hourly wage 
of $70 ($140 hourly wage for medical director x .25 hours = $35 (+) $70 
hourly wage for administrator x .5 hours = $35 for a total of $70) for 
each notification to CMS. Based on our experience with transplant 
centers, we estimate that transplant centers make about 60 of these 
notifications each year. Thus, the annual savings to transplant centers 
from eliminating this requirement for all transplant centers would be 
about $4,200 ($70 for each notification x 60 notifications = $4,200).
    In addition to the savings for transplant centers, the federal 
government would also sustain a savings due to federal staff not having 
to review and maintain these 60 notifications. Based on our experience 
with these notifications, we estimate that federal staff spend 20 
minutes or .33 hours for each notification. The federal staff involved 
in reviewing and maintaining these notifications earn an average of $55 
an hour. Thus, we estimate that the federal government would realize a 
savings of $18 ($55 x .33 = $18.15 or about $18) for each notification. 
For all 60 notifications, the federal government would realize an 
annual savings of $1,080 ($18 for each notification x 60 notifications 
= $1,080).
    We expect that the changes proposed to the transplant center survey 
process would improve federal oversight of organ transplant programs by 
allowing more effective targeting of survey and enforcement activities 
to those programs that most need such attention, and would reduce the 
burden of hospitals undergoing surveys that may not be necessary. We 
estimate that the cost of an onsite survey is $10,400 per survey 
multiplied by a reduction of 10 surveys per year for a total of 
$104,000 per year. The per survey cost represents an estimate of the 
cost of personnel time spent during the onsite survey (hourly rate 
multiplied by the amount of time spent during a one-week onsite 
survey). This is consistent with costs reported by several transplant 
administrators which ranged between $7,334 and $15,000.
    The reduction of 10 surveys each year out of the approximately 80 
annual surveys completed each year represents a 12.5 percent reduction 
in the number of surveys. We estimate that these 10 surveys could have 
follow-up through alternative methods (for example, conference calls, 
plans of correction, etc.). This estimate is based on recent 
information that 43 programs that had non-compliance with data 
submission (that would require an onsite survey, if due for re-
approval), were only slightly below the compliance threshold of 95 
percent and effective follow-up could occur in some cases without an 
onsite survey. In addition, as part of our follow-up process every six 
months for non-compliance with patient and graft outcomes, we review 
about 15 programs every 6 months (approximately 30 programs per year). 
We estimate $104,000 in total savings for transplant hospitals each 
year.
    In addition to the savings realized by the transplant centers, the 
federal government would realize savings from both the cost of 
conducting the surveys and the cost of federal staff time in reviewing 
and maintaining the survey results. The surveys of the organ transplant 
facilities are usually conducted by both state surveyors and 
contractors paid by the Federal government. A survey requires an 
average of 182 hours to complete. We estimate that the combined average 
hourly salary for the surveyors is $146. Thus, to conduct a survey 
costs about $26,572 (182 hours x $146 hourly wage = $26,572). By 
reducing the number of surveys by 10, the federal government would 
sustain an annual savings of $265,720 ($26,572 for each survey x 10 
surveys = $265,720).
    The federal government would also realize a savings due to the 
staff time required to review and maintain the results of these 10 
surveys. We estimate that federal staff spend about 5 hours on each 
survey reviewing survey results and maintaining those results. Thus, 
for each survey, we estimate that the federal government would realize 
a savings of $275 (5 hours for each survey x $55 hourly wage = $275). 
For all 10 surveys, we estimate the annual savings would be $2,750 
($275 for each survey x 10 surveys = $2,750).
    We believe that the other changes we have proposed for transplant 
centers and OPOs (at Sec. Sec.  482.80(c), 482.82(c), 486.306, 
486.308(b)(1), and 486.344(d)(2)(ii)) would be burden neutral.
    These reforms will enable all three types of affected 
organizations--hospitals, State survey agencies, and Federal oversight 
staff--to focus resources more effectively and efficiently on detecting 
and dealing with genuine and important problems in transplant center 
performance.
5. Effects on Long Term Care Facilities
    In issuing the original 2008 rule, we anticipated that the cost of 
the sprinkler requirement would be substantially reduced by allowing a 
5-year transition period (2008-2013). The extended transition period 
would permit the cost of new sprinkler systems to be subsumed (at much 
less expense) under a facility's normal (or accelerated) capital 
replacement schedule. Due to the financial recession of 2008 and 
problems in the real estate market, however, the plans for replacement 
or major modification for some nursing homes have been delayed.
    We recently received communications from a number of owners who 
plan to replace or substantially improve an existing structure, but are 
unable to do so by the August 13, 2013 deadline. In such a case, the 
owner is faced with the prospect of investing significant resources to 
install a system of automatic sprinklers in the old structure by August 
13, 2013, only to have those improvements soon superseded by the 
superior environment of the new structure. We wish to avoid the 
unnecessary costs involved in sprinklering an old structure that will 
soon be replaced. We therefore propose to permit time-limited 
extensions of the due date for achieving full sprinkler status. Each 
case-specific extension would then enable more time for full sprinkler 
systems to be implemented through the capital replacement or renovation 
schedule that is feasible for the facility.
    Out of approximately 15,800 nursing homes nationwide, our 
information system indicates that there were 169

[[Page 9238]]

facilities as of January 2012 that were not sprinklered, and another 
1386 that were partially sprinklered for a total of 1555 facilities. 
Nursing homes have made steady progress in sprinkler installation, and 
we expect these numbers to decline considerably as August 13, 2013 
approaches. We therefore project that 50 unsprinklered facilities will 
request and qualify for a deadline extension because they are building 
a full replacement facility that will not be ready by the deadline 
date, and an additional 75 partially-sprinklered nursing homes will 
request and qualify for an extension. These estimates are based on our 
examination of requests we have received from nursing homes in one 
large State, and generalized to the nation. We invite public comment on 
these estimates and on the fiscal savings estimates, described below.
    In the case of a deadline extension for replacement of a nursing 
home, the unsprinklered facilities that are being replaced would still 
incur the cost of installing sprinklers in the new facility, but they 
would not need to pay twice for such installation (once in the old 
facility to meet the August 13, 2013 deadline, and again in the new 
facility). At an average estimated installation cost of $7.95 per 
square foot and an average space of 50,000 square feet, the avoided 
cost would be approximately $19,875,000 (50 facilities times 50,000 
S.F. times $7.95). The partially sprinklered facilities may save some 
expense since they are combining the sprinkler installation with major 
modifications. We assume that the partially sprinklered facilities 
would avoid $1.00 per square foot in savings through such economies, 
and assume that the average unsprinklered area is 25,000 square feet. 
For the partially sprinklered facilities, we therefore project that the 
aggregate savings is approximately $1,875,000. The combined aggregate, 
one-time savings would total $21,750,000.
6. Effects on Rural Health and Primary Care Providers and Suppliers
    CAH and RHC/FQHC Physician Responsibilities (Sec. Sec.  
485.631(b)(2) and 491.8(b)(2))
    We propose to revise the CAH regulations at Sec.  485.631(b)(2) and 
the RHC/FQHC regulations at Sec.  491.8(b)(2) to eliminate the 
requirement that a physician must be on-site at least once in every 2-
week period (except in extraordinary circumstances) to provide medical 
care services, medical direction, consultation, and supervision. Based 
on our experience with CAHs, we estimate that about 15 percent of the 
1,330 CAHs (that is, 200 CAHs) would be affected by the removal of this 
provision and that its removal would produce estimated annual savings 
of nearly $1.6 million for CAHs.
    We estimate that the majority of CAHs do not incur a burden due to 
the relatively large volume of services they provide. For these higher-
volume CAHs, physicians are regularly onsite to supervise and provide 
consultation. We believe that these facilities will continue to have 
frequent physician visits (biweekly or more often), simply as a matter 
of operation. Therefore, for the majority of CAHs, we do not believe 
that eliminating the requirement for a biweekly physician visit will 
significantly reduce their financial and administrative expenses. For 
about 15 percent of CAHs, roughly 200 CAHs, we estimate the current 
burden as follows. First, we estimate that a physician, at an hourly 
salary of $95, spends 6 hours each visit and makes approximately two 
visits per month (26 visits per year) in a facility to perform the 
duties required at Sec.  485.631(b)(2). We estimate these annual visits 
alone cost $14,820 per CAH per year (6 hours per visit x 26 visits x 
$95 an hour = $14,820 per CAH per year).
    Next, we estimate current travel expenses associated with the 
biweekly requirement. Based on our experience with CAHs, we estimate 
that they spend approximately $780 for physician travel expenses each 
year. We estimate that, for each visit, a physician drives an average 
of 50 miles round trip and is reimbursed for gas at a rate of $0.55 
(the IRS mileage reimbursement rate) per mile. Thus, each visit costs 
approximately $30 (50 miles per visit x $0.55 per mile) for a total 
annual burden of $780 per CAH ($30 per visit x 26 visits = $780 annual 
cost per CAH). We understand that a small number of CAHs, such as those 
in Hawaii and Alaska, most likely incur significant additional cost for 
airfare and overnight accommodations. However, we do not have enough 
data to estimate these various costs and request comment in this area.
    We believe that, in the absence of a requirement for biweekly 
physician visits, about half of all CAHs will increase their use of 
telemedicine, where appropriate, and will be able to reduce the total 
number of visits as a result of following efficient, site-specific 
planning efforts prompted by real-time needs. These changes would 
result in savings in both hourly and travel expenses for CAHs that 
choose to increase their use of telemedicine. We believe that 
eliminating the on-site, bi-weekly physician supervision would produce 
an annual estimated savings of half of all current physician 
supervision costs for approximately 200 CAHs. We estimate the savings 
as follows: $1.5 million for on-site visits ($14,820/2 x 200 
CAHs=$1,482,000) and $78,000 in travel costs ($780/2 x 200 = $78,000).
    Since CAHs are required to document the events in which an 
extraordinary circumstance would prevent a doctor from visiting the 
CAH, at a minimum, once in a 2-week period, we estimate the 
administrative expenses associated with the documentation requirements 
at Sec.  485.631(b)(2) to be $2,699.84 per year. Based on sample data 
from the Health Resources and Services Administration (HRSA), we 
estimate that such circumstances may impact about 11 percent of all 
presently required visits for this subset of 200 CAHs. We estimate that 
a clerical worker earning $18.88 per hour would be responsible for 
completing the paperwork, with each incident taking about 0.25 hours to 
record. Assuming 26 visits per year per CAH, with approximately 11 
percent of the required visits being prevented, we estimate that the 
yearly cost of compliance for these 200 CAHs would be $2,670 (26 visits 
per year per CAH x 11 percent x 200 CAHs x 0.25 hour x $18.88 per hour 
=$2,699.84 per year).
    Thus, we estimate a total annual savings for CAHs of nearly $1.6 
million ($2,670 + $1,482,000 + $78,000 = $1,562,670). For RHCs and 
FQHCs, we believe our proposal would reduce burden on all such 
facilities. We estimate that, presently, to perform the duties required 
at Sec.  491.8(b)(2), each month a physician spends approximately 8 
hours (4 hours each visit, twice a month) on-site at an RHC or FQHC and 
that these visits require an additional 4 hours of travel time. We 
estimate a 2-hour round-trip travel time for visits to most RHCs and 
FQHCs, thus approximately 4 hours per month, and we note that many RHCs 
and FQHCs require special means of transport which may be more 
expensive than traveling by car. We estimate travel costs at $1,950 per 
clinic annually ($75 travel cost per visit x 26 visits per year = 
$1,950 per clinic per year). We estimate the costs for time spent for 
on-site visits to be $9,880 per RHC or FQHC per year (4 hours/visit x 
$95 an hour x 26 visits per year = $9,880 per year).
    By eliminating the provision, for each RHC or FQHC we estimate 
travel expenses would drop by about two-thirds (by $1,287, or from 
$1,950 to $663, per year); we further estimate that the time spent on 
biweekly visits would decrease by a third (by $3,260), thus from $9,880 
to $6,620 per year. Just as with CAHs, we believe clinics' and

[[Page 9239]]

centers' travel expenses would decrease in conjunction with an increase 
in the use of telemedicine, where appropriate, and as a result of site-
specific planning efforts prompted by real-time needs rather than 
routine. For RHCs (3,977 total), we estimate an annual savings of $5.1 
million on travel ($1,287 per year x 3,977 = $5,118,399). For FQHCs 
(5,134 total), we estimate they would realize $6.6 million in annual 
savings on travel expenses ($1,287 per year x 5,134 = $6,607,458).
    RHCs would realize $12.9 million, and FQHCs $16.7 million, in 
annual savings from fewer hours for on-site clinician visits ($3,260 
per year per RHC or FQHC per year). For RHCs, ($3,260 x 3,977 = 
$12,965,020); for FQHCs, this means $16.7 million in annual savings 
($3,260 x 5,134 = $16,736,840).
    We also estimate the administrative expenses associated with the 
documentation requirements at Sec.  491.8(b)(2), which are triggered in 
the event of any ``extraordinary circumstances'' preventing any of the 
required bi-weekly physician visits. By comparison to travel and hourly 
visit costs, these expenses are relatively small. As we estimated for 
CAHs, we similarly estimate that such circumstances impact about 11 
percent of the presently required visits for all RHCs and FQHCs. We 
estimate that a clerical worker earning $18.88 per hour would be 
responsible for completing the paperwork, with each incident taking 
about 0.25 hours to record. Assuming 26 visits per year, with 
approximately 11 percent of these being prevented, we estimate the 
yearly cost of compliance for RHCs and FQHCs to be $122,991 (26 visits 
x 11 percent x [3977 RHCs +5134 FQHCs] x 0.25/hour x $18.88 per hour = 
$122,991 per year for RHCs and FQHCs). Eliminating the biweekly 
requirement would eliminate this particular administrative cost 
entirely for all RHCs and FQHCs, producing a total annual savings of 
$53,686 for RHCs and $69,305 for FQHCs, respectively.
    In total, we believe that eliminating the provision would produce 
annual estimated savings of $18.1 million for RHCs in travel, hourly, 
and administrative costs ($5,118,399 travel + $12,965,020 hourly + 
$53,686 administrative = $18, 137,105). For FQHCs, we estimate that 
eliminating the provision would produce $23.4 million in annual 
savings. ($6,607,458 travel + $16,736,840 hourly + $69,305 
administrative = $23,413,603 per year). We note that a portion of these 
savings may be offset by equipment or other costs associated with 
increased use of telemedicine; however, we lack data with which to 
reliably estimate such costs.
    We welcome public comments on these assumptions and estimates.
Provision of Services (Sec.  485.635(a))
    We propose to remove the requirement that CAHs consult an 
individual who is not a member of the CAH staff in the development of 
its patient care policies; instead, we would allow CAHs greater 
flexibility in their approach. We estimate that removing this 
requirement would result in a total annual savings of $266,000 for CAHs 
which are not part of a rural health network and therefore, in the 
absence of this proposed rule, would need to provide orientation for a 
volunteer to be able to serve in this capacity. No original estimates 
were made regarding this requirement, which was in fact initially 
developed for another provider type (43 FR 30520 and 43 FR 5373), but 
later assumed as a requirement for CAHs in 1997 (62 FR 46037).
    Based on our experience, we are aware that many CAHs use 
volunteers, such as current board members, community residents with a 
medical background, or others, to fulfill the current requirements at 
Sec.  485.635(a)(2). That is, many CAHs use a volunteer as the non-CAH 
staff person who provides advice and assists in the development of the 
CAH's patient care policies. In some cases, the CAH must also invest 
time to make such an individual familiar with the CAH's policies and 
procedures. Based on our experience, we estimate that a CAH typically 
spends about $50 an hour for eight hours, annually, including any time 
required for orientation, to involve an outside individual in the 
development of its patient care policies. We also estimate that 665 of 
about 1,330 CAHs are part of a rural health network and can utilize a 
non-staff individual that is part of the network to fulfill this 
requirement. Thus, we estimate the savings based on the CAHs that are 
not in a network and are therefore required to pay an individual to 
assist with developing the policies and procedures. Thus, we estimate a 
total annual savings of $266,000 ($50 x 8 hours = $400 per CAH x 665 
CAHs = $266,000). We welcome public comments on these assumptions and 
estimates.
RHC/FQHC Definition of a Physician (Sec.  491.2)
    The definition of a physician in the RHC/FQHC CoP regulations does 
not conform to the definition of a physician in the payment and 
Medicare agreement regulations in Part 405 for these types of 
suppliers. We propose to revise the regulation at Sec.  491.2 to more 
closely conform with the physician definition in the Part 405 
regulations to eliminate possible confusion in the supplier community 
and to facilitate the development of more specialized primary care 
clinics, such as those providing dental services. We believe that this 
change will allow for an expansion of patient services and for 
additional health benefits for which we do not have a basis to 
estimate.
7. Effects on Laboratories
    In this proposed rule, we would make a number of clarifications and 
changes pertaining to the regulations governing PT referral under CLIA. 
The first would be to add a statement to Sec.  493.801(b) to explicitly 
note that the requirement to treat PT samples in the same manner as 
patient specimens does not mean that it is acceptable to refer PT 
samples to another laboratory for testing even if that is the protocol 
for patient specimens. The second proposed change would carve out a 
narrow exception in our longstanding interpretation of what constitutes 
an ``intentional'' referral. In these instances, the laboratory would 
be subject to alternative sanctions in lieu of potential principal 
sanctions. Alternative sanctions may include any combination of civil 
money penalties, directed plan of correction (such as required remedial 
training of staff), temporary suspension of Medicare or Medicaid 
payments, or other sanctions specified in accordance with CMS 
regulations. Finally, we propose that definitions for the following 
three terms would be added to the regulation: Reflex testing, 
Confirmatory testing, and repeat PT referral.
    From 2007 through 2011 there were 41 cases of cited, intentional PT 
referral. Of these 41 cases, we estimate that 13 would have fit the 
terms of this proposed rule, ranging from a low of 1 in any year (in 
2009) to a high of 5 (in 2011). Based on discussions with the most 
recently affected laboratories, we estimate that the average cost of 
the sanctions applicable under current regulations is approximately 
$578,400 per laboratory. The largest single type of cost is the expense 
to the laboratory or hospital to contract out for management of the 
laboratory, and to pay laboratory director fees, due to the 2-year ban 
of the owner and operator pursuant to revocation of the CLIA 
certificate. We have not included legal expenses in this cost estimate, 
as it is not possible to estimate the extent to which laboratories may 
still appeal the imposition of the alternative sanctions in this 
proposed rule. We therefore estimate the annual

[[Page 9240]]

fiscal savings of the proposed changes to range from a low of $578,400 
(1 laboratory) to a high of $2.9 million (5 laboratories), with an 
annual average estimated savings of $1.7 million (about 3 laboratories 
per year on average). While the macro savings may not be large, the 
costs to the individual laboratory or hospital that is affected can be 
significant.
    We note, however, that the $1.7 million estimated savings to 
laboratories may overstate or understate the provision's net benefits. 
For example, if the prior management is fired instead of being 
reassigned to other duties for the two year period, some of the costs 
of paying for the new management's salaries, benefits and training may 
be able to be drawn from funding that had previously been earmarked to 
pay those expenses for their predecessors. That is, the costs 
associated with the new employee could be offset by the savings gained 
when the former employee is terminated. Any such offset would result in 
lower savings than is estimated above. There are also, however, 
unknowns that may result in larger savings than estimated above. For 
example, we have no data on whether terminated management historically 
received severance packages. If they did, those costs would have to be 
added to the costs we noted above. While we recognize these potential 
inaccuracies in our estimates, we lack data to account for these 
considerations. We welcome comments on this issue.
8. Effects on Small Entities
    The RFA requires agencies to analyze options for regulatory relief 
of small entities, if a rule has a significant impact on a substantial 
number of small entities. For purposes of the RFA, we estimate that the 
great majority of the providers that would be affected by CMS rules are 
small entities as that term is used in the RFA. The great majority of 
hospitals and most other health care providers and suppliers are small 
entities, either by being nonprofit organizations or by meeting the SBA 
definition of a small business. Accordingly, the usual practice of HHS 
is to treat all providers and suppliers as small entities in analyzing 
the effects of our rules.
    This proposed rule would save affected entities almost $700 million 
a year. Most of these savings would accrue to hospitals. While this is 
a large amount in total, the average saving per affected hospital is 
less than one half million dollars per year. Although the overall 
magnitude of the paperwork, staffing, and related cost reductions to 
hospitals and CAHs under this rule is economically significant, these 
savings are likely to be a fraction of one percent of total hospital 
costs. Total national inpatient hospital spending is approximately nine 
hundred billion dollars a year, or an average of about $150 million per 
hospital, and our primary estimate of the net effect of these proposals 
on reducing hospital costs is less than $700 million annually. This is 
an average of about $90,000 in savings for the 6,200 hospitals 
(including CAHs) that are regulated through the CoPs and is well under 
one percent of annual spending. It would be higher in larger hospitals, 
and lower in smaller hospitals, since these savings would be roughly 
proportional to patient volume.
    Under HHS guidelines for RFA, actions that do not negatively affect 
costs or revenues by more than 3 percent a year are not economically 
significant. We believe that no hospitals of any size will be 
negatively affected. Accordingly, we have determined that this proposed 
rule would not have a significant economic impact on a substantial 
number of small entities, and certify that an Initial RFA is not 
required. Notwithstanding this conclusion, we believe that this RIA and 
the preamble as a whole meet the requirements of the RFA for such an 
analysis.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 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. For the preceding 
reasons, we have determined that this proposed rule will reduce costs 
and will therefore not have a significant negative impact on the 
operations of a substantial number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also 
requires that agencies assess anticipated costs and benefits before 
issuing any rule whose mandates require spending in any 1 year of $100 
million in 1995 dollars, updated annually for inflation. In 2012, that 
is approximately $139 million. This proposed rule does not contain any 
mandates.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it issues a proposed rule (and subsequent final 
rule) that would impose substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This rule would not have a substantial direct effect on 
State or local governments, preempt States, or otherwise have a 
Federalism implication.

D. Alternatives Considered

    From within the entire body of CoPs and CfCs, the most viable 
candidates for reform were those identified by stakeholders, by recent 
research, or by experts as unusually burdensome if not unchanged. This 
subset of the universe of standards is the focus of this proposed rule. 
For all of the proposed provisions, we considered not making these 
changes. Ultimately, we saw no good reasons not to propose these burden 
reducing changes. We welcome comments on whether we properly selected 
the best candidates for change, and welcome suggestions for additional 
reform candidates from the entire body of CoPs.
    For LTC facilities, we considered the option of not making any 
changes to the rule. However, we were persuaded by the contacts we 
received that bona fide efforts were being made by the nursing homes in 
question to achieve the best results for residents. We believe that the 
benefits to residents of having new, modern and fully-equipped 
facilities are substantial, and that the public interest is served by 
avoiding wastage of funds spent on retrofitting an older structure when 
that structure is soon to be replaced or substantially improved. We 
also considered the option of granting extensions of the due date when 
a replacement or substantial renovation is not contemplated. However, 
we believe that an approach that limits extensions to situations where 
a replacement facility or substantial renovation is involved would best 
balance the advisability of timely achievement to full sprinkler status 
and the special challenges involved in large-scale construction 
projects.
    Regarding the proposed revisions to the CLIA regulations, we 
focused our proposals exclusively on reflex or confirmatory testing. 
Such cases, where the laboratory has followed its standard operating 
procedure in full, provide a reasonable basis for the Secretary to 
determine that the referral was not intentional.

E. 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 major 
cost savings, there are

[[Page 9241]]

uncertainties 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 will yield substantial 
net benefits. In this analysis we have provided estimates to suggest 
the potential savings these reforms could achieve under certain 
assumptions. We appreciate that those assumptions are simplified, and 
that actual results could be substantially higher or lower. Although 
there is uncertainty concerning the magnitude of all of our estimates, 
we do not have the data to provide probable estimates as to the range 
of possibilities, or to estimate all categories of possible benefits, 
including health effects. We have illustratively presented one possible 
lower bound--for food and dietetic services--in the preceding analysis 
and in the Accounting Statement that follows. We welcome comments 
addressing this lower bound estimate, as well as the missing or 
uncertain effects of other provisions, by professional societies, 
individual providers, provider associations, academics, and others.

F. 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. As previously explained, achieving the full scope 
of potential savings will depend on future decisions by hospitals, by 
State regulators and others. Many other factors will influence long-
term results. We estimate the overall cost savings that this rule would 
create would be approximately $231 million to $676 million in the first 
year, and $209 million to $654 million per year thereafter, or about 
$214 million to $659 million annualized over the next 5 years. Over a 
5-year period, our primary estimate is that cost savings would be 
approximately $3.3 billion, though they could be as low as about $1 
billion.

                  Table 2--Accounting Statement: Classification of Estimated Costs and Savings
                                                 ($ In millions)
----------------------------------------------------------------------------------------------------------------
                                        Primary                                 Units
                                        estimate               --------------------------------------
              Category                 and upper   Lower bound      Year       Discount      Period
                                         bound                    dollars        rate       covered
-----------------------------------------------------------------------------------------------------
Benefits............................                                None
----------------------------------------------------------------------------------------------------------------
Costs:
Annualized Monetized reductions in          -$659        -$214         2012           7%      2013-17
 Costs..............................
                                            -$659        -$214         2012           3%      2013-17
                                                  --------------------------------------------------------------
Transfers...........................                                None
----------------------------------------------------------------------------------------------------------------

    In accordance with the provisions of Executive Order 12866, this 
regulation was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 416

    Health facilities, Health professions, Medicare, Reporting and 
recordkeeping requirements

42 CFR Part 442

    Administrative practice and procedure, Health facilities, Health 
maintenance organizations (HMO), Medicare, Penalties, Privacy, 
Reporting and recordkeeping requirements

42 CFR Part 482

    Grant programs--health, Hospitals, Medicaid, Medicare, Reporting 
and recordkeeping requirements

42 CFR Part 483

    Grant programs--health, Health facilities, Health professions, 
Health records, Medicaid, Medicare, Nursing homes, Nutrition, Reporting 
and recordkeeping requirements, Safety

42 CFR Part 485

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements

42 CFR Part 486

    Grant programs--health, Health facilities, Medicare, Reporting and 
recordkeeping requirements, X-rays

42 CFR Part 488

    Administrative practice and procedure, Health facilities, Medicare, 
Reporting and recordkeeping requirements

42 CFR Part 491

    Grant programs--health, Health facilities, Medicaid, Medicare, 
Reporting and recordkeeping requirements, Rural areas

42 CFR Part 493

    Administrative practice and procedure, Grant programs-health, 
Health facilities, Laboratories, Medicaid, Medicare, Penalties, 
Reporting and recordkeeping requirements
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services proposes to amend 42 CFR as set forth below:

PART 416--AMBULATORY SURGICAL SERVICES

0
1. The authority citation for part 416 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

Subpart C--Specific Conditions for Coverage

0
2. Section 416.42 is amended by revising paragraph (b)(2) to read as 
follows:

Sec.  416.42  Condition for coverage--Surgical services.

* * * * *
    (b) * * *
    (2) A physician qualified to administer anesthesia, a certified 
registered nurse anesthetist (CRNA), or an anesthesiologist's assistant 
as defined in Sec.  410.69(b) of this chapter, or a supervised trainee 
in an approved educational program. In those cases in which a non-
physician administers the anesthesia, unless exempted in accordance 
with paragraph (c) of this section, the anesthetist must be under the 
supervision of the operating physician, and in the case of an

[[Page 9242]]

anesthesiologist's assistant, under the supervision of an 
anesthesiologist.
* * * * *
0
3. Section 416.49 is amended by revising paragraph (b) to read as 
follows:

Sec.  416.49  Condition for coverage--Laboratory and radiologic 
services.

* * * * *
    (b) Standard: Radiologic services. (1) Radiologic services may only 
be provided when integral to procedures offered by the ASC and must 
meet the requirements specified in Sec.  482.26(b), (c)(2), and (d)(2) 
of this chapter.
    (2) A doctor of medicine or osteopathy who is qualified by 
education and experience in accordance with State law and ASC policy 
must supervise the provision of radiologic services.

PART 442--STANDARDS FOR PAYMENT TO NURSING FACILITIES AND 
INTERMEDIATE CARE FACILITIES FOR INDIVIDUALS WITH INTELLECTUAL 
DISABILITIES

0
4. 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 C--Certification of ICF/IIDs

0
5. Section 442.101(d)(3)(ii) is revised to read as follows:

Sec.  442.101  Obtaining certification

* * * * *
    (d) * * *
    (3) * * *
    (ii) The facility submits an acceptable plan of correction covering 
the remaining deficiencies.
* * * * *

Sec.  442.105  [Removed and Reserved]

0
6. Section 442.105 is removed and reserved.

Sec.  442.110  [Removed and Reserved]

0
7. Section 442.110 is removed and reserved.

PART 482--CONDITIONS OF PARTICIPATION FOR HOSPITALS

0
8. The authority citation for part 482 continues to read as follows:

    Authority: Secs. 1102, 1871 and 1881 of the Social Security Act 
(42 U.S.C. 1302, 1395hh, and 1395rr), unless otherwise noted.

Subpart C--Basic Hospital Functions

0
9. Section 482.12 is amended by revising the introductory text and 
adding paragraph (a)(10) to read as follows:

Sec.  482.12  Condition of participation: Governing body.

    There must be an effective governing body that is legally 
responsible for the conduct of the hospital. If a hospital does not 
have an organized governing body, the persons legally responsible for 
the conduct of the hospital must carry out the functions specified in 
this part that pertain to the governing body.
    (a) * * *
    (10) Consult directly with the individual assigned the 
responsibility for the organization and conduct of the hospital's 
medical staff, or his or her designee. At a minimum, this direct 
consultation must occur periodically throughout the fiscal or calendar 
year and include discussion of matters related to the quality of 
medical care provided to patients of the hospital. For a multi-hospital 
system using a single governing body, the single multi-hospital system 
governing body must consult directly with the individual responsible 
for the organized medical staff (or his or her designee) of each 
hospital within its system in addition to the other requirements of 
this paragraph.
* * * * *
0
10. Section 482.22 is amended by revising the introductory text and 
paragraph (a) introductory text to read as follows:

Sec.  482.22  Condition of participation: Medical staff.

    Each hospital must have an organized and individual medical staff, 
distinct to that individual hospital, that operates under bylaws 
approved by the governing body, and which is responsible for the 
quality of medical care provided to patients by that individual 
hospital.
    (a) Standard: Eligibility and process for appointment to medical 
staff. The medical staff must be composed of physicians. In accordance 
with State law, including scope-of-practice laws, the medical staff may 
also include other categories of non-physician practitioners who are 
determined to be eligible for appointment by the governing body.
* * * * *
0
11. Section 482.28 is amended by revising paragraphs (b)(1) and (2) to 
read as follows:

Sec.  482.28  Condition of participation: Food and dietetic services.

* * * * *
    (b) * * *
    (1) Individual patient nutritional needs must be met in accordance 
with recognized dietary practices.
    (2) All patient diets, including therapeutic diets, must be ordered 
by a practitioner responsible for the care of the patient, or by a 
qualified dietician as authorized by the medical staff and in 
accordance with State law.
* * * * *

Subpart D--Optional Hospital Services

0
12. Section 482.53 is amended by revising paragraph (b)(1) to read as 
follows:

Sec.  482.53  Condition of participation: Nuclear medicine services.

* * * * *
    (b) * * *
    (1) In-house preparation of radiopharmaceuticals is by, or under 
the supervision of, an appropriately trained registered pharmacist or a 
doctor of medicine or osteopathy.
* * * * *
0
13. Section 482.54 is amended by adding paragraph (c) to read as 
follows:

Sec.  482.54  Condition of participation: Outpatient services.

* * * * *
    (c) Standard: Orders for outpatient services. Outpatient services 
must be ordered by a practitioner who meets the following conditions:
    (1) Is responsible for the care of the patient.
    (2) Is licensed in the State where he or she provides care to the 
patient.
    (3) Is acting within his or her scope of practice under State law.
    (4) Is authorized in accordance with policies adopted by the 
medical staff, and approved by the governing body, to order the 
applicable outpatient services. This applies to the following:
    (i) All practitioners who are appointed to the hospital's medical 
staff and who have been granted privileges to order the applicable 
outpatient services.
    (ii) All practitioners not appointed to the medical staff, but who 
satisfy the above criteria for authorization by the hospital for 
ordering the applicable outpatient services for their patients.

Subpart E--Requirements for Specialty Hospitals

Sec.  482.66  [Redesignated as Sec.  482.58]

0
14. Redesignate Sec.  482.66 in Subpart E as Sec.  482.58 in Subpart D.

Sec.  482.74  [Amended]

0
15. Section 482.74 is amended by removing paragraph (a)(2) and 
redesignating paragraphs (a)(3) and (4) as paragraphs (a)(2) and (3) 
respectively.
0
16. Section 482.80 is amended by--
0
a. Revising paragraph (c) introductory text.

[[Page 9243]]

0
b. Removing paragraph (c)(2).
0
c. Redesignating paragraph (c)(3) as paragraph (c)(2).
    The revision reads as follows:

Sec.  482.80  Condition of participation: Data submission, clinical 
experience, and outcome requirements for initial approval of transplant 
centers.

* * * * *
    (c) Standard: Outcome requirements. CMS will review outcomes for 
all transplants performed at a center, including outcomes for living 
donor transplants, if applicable. CMS will review adult and pediatric 
outcomes separately when a center requests Medicare approval to perform 
both adult and pediatric transplants.
* * * * *
0
17. Section 482.82 is amended by--
0
a. Revising paragraphs (a) and (b).
0
b. Revising paragraph (c) introductory text.
0
c. Removing paragraph (c)(2).
0
d. Redesignating paragraph (c)(3) as paragraph (c)(2).
    The revisions read as follows:

Sec.  482.82  Condition of participation: Data submission, clinical 
experience, and outcome requirements for re-approval of transplant 
centers.

* * * * *
    (a) Standard: Data submission. No later than 90 days after the due 
date established by the OPTN, a transplant center must submit to the 
OPTN at least 95 percent of the required data submissions on all 
transplants (deceased and living donors) performed during the prior 3 
years. Required data submissions include, but are not limited to, 
submission of the appropriate OPTN forms for transplant candidate 
registration, transplant recipient registration and follow-up, and 
living donor registration and follow-up.
    (b) Standard: Clinical experience. To be considered for re-
approval, an organ-specific transplant center must generally perform an 
average of 10 transplants per year during the prior 3 years.
    (c) Standard: Outcome requirements. CMS will review outcomes for 
all transplants performed at a center, including outcomes for living 
donor transplants, if applicable. CMS will review adult and pediatric 
outcomes separately when a center requests Medicare approval to perform 
both adult and pediatric transplants.
* * * * *

PART 483--REQUIREMENTS FOR STATES AND LONG TERM CARE FACILITIES

0
18. The authority citation for part 483 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh).

Subpart B--Requirements for Long-Term Care Facilities

0
19. Section 483.5 is amended by adding paragraph (f) to read as 
follows:

Sec.  483.5  Definitions

* * * * *
    (f) Major modification means the modification of more than 50 
percent, or more than 4,500 square feet, of the smoke compartment.
0
20. Section 483.70 is amended by adding paragraphs (a)(8)(iii) and (iv) 
to read as follows:

Sec.  483.70  Physical environment.

* * * * *
    (a) * * *
    (8) * * *
    (iii) Subject to approval by CMS, a long term care facility may be 
granted an extension of the sprinkler installation deadline for a time 
period not to exceed 2 years from August 13, 2013, if the facility 
meets all of the following conditions:
    (A) It is in the process of replacing its current building, or 
undergoing major modifications to improve the living conditions for 
residents in all unsprinklered living areas that requires the movement 
of corridor, room, partition, or structural walls or supports, in 
addition to the installation of a sprinkler system.
    (B) It demonstrates that it has made the necessary financial 
commitments to complete the building replacement or modification.
    (C) Before applying for the deadline extension, it has submitted 
plans to State and local authorities that are necessary for approval of 
the replacement building or major modification that includes the 
required sprinkler installation, and has received approval of the plans 
from State and local authorities.
    (D) It agrees to complete interim steps to improve fire safety, as 
determined by CMS.
    (iv) An extension granted under paragraph (a)(8)(iii) of this 
section may be renewed once, for an additional period not to exceed 1 
year, if the following conditions are met:
    (A) CMS finds that extenuating circumstances beyond the control of 
the facility will prevent full compliance with the provisions in 
paragraph (a)(8)(i) of this section by the end of the first waiver 
period.
    (B) All other conditions of paragraph (a)(8)(iii) of this section 
are met.
* * * * *

PART 485--CONDITIONS OF PARTICIPATION: SPECIALIZED PROVIDERS

0
21. The authority citation for Part 485 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395(hh)).

Subpart F--Conditions of Participation: Critical Access Hospitals 
(CAHs)

0
22. Section 485.631 is amended by revising paragraph (b)(2) to read as 
follows:

Sec.  485.631  Condition of participation: Staffing and staff 
responsibilities.

* * * * *
    (b) * * *
    (2) A doctor of medicine or osteopathy is present for sufficient 
periods of time to provide medical direction, consultation, and 
supervision for the services provided in the CAH, and is available 
through direct radio or telephone communication or electronic 
communication for consultation, assistance with medical emergencies, or 
patient referral.
* * * * *
0
23. Section 485.635 is amended by revising paragraph (a)(2) to read as 
follows:

Sec.  485.635  Condition of participation: Provision of services.

    (a) * * *
    (2) The policies are developed with the advice of members of the 
CAH's professional healthcare staff, including one or more doctors of 
medicine or osteopathy and one or more physician assistants, nurse 
practitioners, or clinical nurse specialists, if they are on staff 
under the provisions of Sec.  485.631(a)(1).
* * * * *

PART 486--CONDITIONS FOR COVERAGE OF SPECIALIZED SERVICES FURNISHED 
BY SUPPLIERS

0
24. 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

0
25. Section 486.306 is amended by revising paragraph (a) to read as 
follows:

[[Page 9244]]

Sec.  486.306  OPO service area size designation and documentation 
requirements.

    (a) General documentation requirement. An OPO must make available 
to CMS documentation verifying that the OPO meets the requirements of 
paragraphs (b) and (c) of this section at the time of application and 
throughout the period of its designation.
* * * * *
0
26. Section 486.308 is amended by revising paragraph (b)(1) to read as 
follows:

Sec.  486.308  Designation of one OPO for each service area.

* * * * *
    (b) * * *
    (1) General. An OPO is normally designated for a 4-year agreement 
cycle. The period may be shorter, for example, if an OPO has 
voluntarily terminated its agreement with CMS and CMS selects a 
successor OPO for the balance of the 4-year agreement cycle. In rare 
situations, a designation period may be longer, for example, a 
designation may be extended if additional time is needed to select a 
successor OPO to replace an OPO that has been de-certified.
* * * * *
0
27. Section 486.344 is amended by revising paragraph (d)(2)(ii) to read 
as follows:

Sec.  486.344  Condition: Evaluation and management of potential donors 
and organ placement and recovery.

* * * * *
    (d) * * *
    (2) * * *
    (ii) If the identity of the intended recipient is known, the OPO 
has a procedure to ensure that prior to organ recovery, an individual 
from the OPO's staff compares the blood type of the donor with the 
blood type of the intended recipient, and the accuracy of the 
comparison is verified by a different individual;
* * * * *

PART 488--SURVEY, CERTIFICATION, AND ENFORCEMENT PROCEDURES

0
28. The authority citation for part 488 continues to read as follows:

    Authority:  Secs. 1102 and 1871 of the Social Security Act, 
unless otherwise noted (42 U.S.C. 1302 and 1395(hh)); Section 6111 
of the Patient Protection and Affordable Care Act (Pub. L. 111-148)

Subpart A--General Provisions

0
29. Section 488.61 is amended by--
0
a. Removing paragraph (a)(7).
0
b. Revising paragraphs (c) introductory text, (c)(1) introductory text, 
and (c)(1)(ii).
0
c. Removing paragraph (c)(2) and redesignating paragraphs (c)(3), (4), 
and (5) as paragraphs (c)(2), (3) and (4), respectively.
0
d. Revising newly designated paragraph (c)(2).
0
e. Adding paragraph (c)(3)(v).
0
f. Revising paragraph (e).
    The revisions and addition read as follows:

Sec.  488.61  Special procedures for approval and re-approval of organ 
transplant centers.

* * * * **
    (c) Re-approval procedures. Once Medicare-approved, transplant 
centers, including kidney transplant centers, must be in continuous 
compliance with all the conditions of participation for transplant 
centers at Sec. Sec.  482.72 through 482.104 of this chapter, except 
for Sec.  482.80 (initial approval requirements).
    (1) CMS will review the transplant center's data on an on-going 
basis and in making re-approval determinations.
* * * * *
    (ii) To determine compliance with the clinical experience and 
outcome requirements at Sec.  482.82(b) and Sec.  482.82(c) of this 
chapter, CMS will review the data contained in the most recent OPTN 
Data Report for the previous 3 years and 1-year patient and graft 
survival data contained in the most recent SRTR center-specific 
reports.
    (2) CMS may choose to review the transplant center for compliance 
with Sec. Sec.  482.72 through 482.76 and 482.90 through 482.104 of 
this chapter, using the procedures described at 42 CFR part 488, 
subpart A.
    (3) * * *
    (v) Program improvements that substantially address root causes of 
graft failures or patient deaths, have been implemented and 
institutionalized on a sustainable basis, and that are supported by 
recent outcomes data demonstrating compliance with the requirement at 
Sec.  482.82(c)(2)(ii)(C) that the number of observed events divided by 
the number of expected events not be greater than 1.5.
* * * * *
    (e) Transplant Center Inactivity. A transplant center may remain 
inactive and retain its Medicare approval for a period not to exceed 12 
months. A transplant center must notify CMS upon its voluntary 
inactivation as required by Sec.  482.74(a)(3) of this chapter.

PART 491--CERTIFICATION OF CERTAIN HEALTH FACILITIES

0
30. The authority citation for Part 491 continues to read as follows:

    Authority:  Sec. 1102 of the Social Security Act (42 U.S.C. 
1302); and sec. 353 of the Public Health Service Act (42 U.S.C. 
263a).

Subpart A--Rural Health Clinics: Conditions for Certification; and 
FQHCs Conditions for Coverage

0
31. Section 491.2 is amended by revising the definition of 
``physician'' to read as follows:

Sec.  491.2  Definitions.

* * * * *
    Physician means a practitioner who meets the requirements of 
sections 1861(r) and 1861(aa)(2)(B) and (aa)(3)(B) of the Act and 
includes:
    (1) A doctor of medicine or osteopathy legally authorized to 
practice medicine and surgery by the State in which the function is 
performed; and
    (2) Within limitations as to the specific services furnished, a 
doctor of dental surgery or of dental medicine, a doctor of optometry, 
a doctor of podiatry or surgical chiropody or a chiropractor (see 
section 1861(r) of the Act for specific limitations).
* * * * *
0
32. Section Sec.  491.8 is amended by revising paragraphs (a)(6) and 
(b) to read as follows:

Sec.  491.8  Staffing and staff responsibilities.

    (a) * * *
    (6) A physician, nurse practitioner, physician assistant, certified 
nurse-midwife, clinical social worker, or clinical psychologist is 
available to furnish patient care services at all times the clinic or 
center operates. In addition, for RHCs, a nurse practitioner, physician 
assistant, or certified nurse-midwife is available to furnish patient 
care services at least 50 percent of the time the RHC operates.
    (b) Physician responsibilities. The physician performs the 
following:
    (1) Except for services furnished by a clinical psychologist in an 
FQHC, which State law permits to be provided without physician 
supervision, provides medical direction for the clinic's or center's 
health care activities and consultation for, and medical supervision 
of, the health care staff.
    (2) In conjunction with the physician assistant and/or nurse 
practitioner member(s), participates in developing, executing, and 
periodically reviewing the clinic's or center's written policies and 
the services provided to Federal program patients.
    (3) Periodically reviews the clinic's or center's patient records, 
provides medical orders, and provides medical care services to the 
patients of the clinic or center.
* * * * *

[[Page 9245]]

PART 493--LABORATORY REQUIREMENTS

0
33. The authority citation for Part 493 continues to read as follows:

    Authority:  Sec. 353 of the Public Health Service Act, secs. 
1102, 1861(e), the sentence following sections 1861(s)(11) through 
1861(s)(16) of the Social Security Act (42 U.S.C. 263a, 1302, 
1395x(e), the sentence following 1395x(s)(11) through 1395x(s)(16)).

Subpart A--General Provisions

0
34. Section 493.2 is amended by adding the definitions of 
``confirmatory testing'', ``reflex testing'', and ``repeat proficiency 
testing referral,'' in alphabetical order to read as follows:

Sec.  493.2  Definitions

* * * * *
    Confirmatory testing means testing performed by a second analytical 
procedure that could be used to substantiate or bring into question the 
result of an initial laboratory test.
* * * * *
    Reflex testing means confirmatory or additional laboratory testing 
that is automatically requested by a laboratory under its standard 
operating procedures for patient specimens when the laboratory's 
findings indicate test results that are abnormal, are outside a 
predetermined range, or meet other pre-established criteria for 
additional testing.
    Repeat proficiency testing referral means a second instance in 
which a proficiency testing sample, or a portion of a sample, is 
referred, for any reason, to another laboratory for analysis prior to 
the laboratory's proficiency testing program event cut-off date within 
the period of time encompassing the two prior survey cycles (including 
initial certification, recertification, or the equivalent for 
laboratories surveyed by an approved accreditation organizations).
* * * * *

Subpart H--Participation in Proficiency Testing for Laboratories 
Performing Nonwaived Testing

0
35. Section 493.801 is amended by revising paragraphs (b) introductory 
text and (b)(4) to read as follows:

Sec.  493.801  Condition: Enrollment and testing of samples.

* * * * *
    (b) Standard: Testing of proficiency testing samples. The 
laboratory must examine or test, as applicable, the proficiency testing 
samples it receives from the proficiency testing program in the same 
manner as it tests patient specimens. This testing must be conducted in 
conformance with paragraph (b)(4) of this section. If the laboratory's 
patient specimen testing procedures would normally require reflex or 
confirmatory testing at another laboratory, the laboratory should treat 
the proficiency testing sample as it would a patient specimen up until 
the point it would refer a patient specimen to a second laboratory for 
any form of further testing.
* * * * *
    (4) The laboratory must not send proficiency testing samples or 
portions of proficiency testing samples to another laboratory for any 
analysis for which it is certified to perform in its own laboratory. 
Any laboratory that CMS determines intentionally referred a proficiency 
testing sample to another laboratory for analysis may have its 
certification revoked for at least 1 year. If CMS determines that a 
proficiency testing sample was referred to another laboratory for 
analysis, but the requested testing was limited to reflex or 
confirmatory testing that, if the sample were a patient specimen, would 
have been in full conformance with written, legally accurate and 
adequate standard operating procedures for the laboratory's testing of 
patient specimens, and if the proficiency testing referral is not a 
repeat proficiency testing referral, CMS will consider the referral to 
be improper and subject to alternative sanctions in accordance with 
Sec.  493.1804(c), but not intentional. Any laboratory that receives a 
proficiency testing sample from another laboratory for testing must 
notify CMS of the receipt of that sample regardless of whether the 
referral was made for reflex or confirmatory testing, or any other 
reason.
* * * * *
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical 
Assistance Program)

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: August 1, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: December 26, 2012.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2013-02421 Filed 2-4-13; 11:15 am]
BILLING CODE 4120-01-P
```